CRAs need to maintain additional net worth: Sebi

Mumbai: The Securities and Exchange Board of India (Sebi) on Tuesday said credit rating agencies (CRAs) should maintain additional net worth if they are undertaking rating of instruments falling under the purview of other financial sector regulators.

At present, Sebi rules mandate CRAs to have a minimum net worth of ₹25 crore, and to undertake credit ratings of only listed or proposed to be listed securities, or rating of financial instruments under the guidelines of a regulator as specified by Sebi.

Sebi has received representation from the industry on permitting rating agencies to undertake rating of financial products under the purview of other financial sector regulators (FSR), even where no rating related guidelines may have been issued by the relevant FSR.

These include the rating of unlisted securities.

“It has also been represented that since rating of said products/entities is adjacent to the current business of credit rating agencies, permitting the same may lead to significant synergies, while also addressing a gap in the industry,” Sebi had said earlier in its discussion paper.