Latest news with #Sebi-regulated
Economic Times
09-07-2025
- Business
- Economic Times
Sebi mulls allowing CRAs to rate instruments outside its regulatory purview
Markets watchdog Sebi on Wednesday proposed permitting credit rating agencies (CRAs) to undertake the rating of financial instruments that may come under other financial sector regulators, even if they have not issued any rating-related guidelines. ADVERTISEMENT Under the current CRA regulations, credit rating agencies are only allowed to rate securities that are listed or proposed to be listed on a stock exchange recognised by Sebi. However, the regulations do not stop CRAs from rating products, securities, or issuers if such ratings are done under the guidelines of another financial sector regulator or any authority specified by Sebi. In its consultation paper, Sebi proposed that CRAs may be permitted to undertake activities that are not regulated by it, subject to certain conditions."CRA may undertake rating of financial instruments, which fall under the purview of any other FSR, provided it shall comply with the regulatory framework, if any, as may be specified by the respective FSR for the matters relating to policy, eligibility criteria, risk management, investor grievance or dispute handling mechanism, inspection, enforcement and claims," Sebi proposed. The regulator suggested that CRAs may undertake only those rating activities that are fee-based and non-fund-based. Additionally, such activities should be carried out strictly on an arm's length basis through one or more Separate Business Units (SBUs), which should be segregated by a Chinese Wall and ring-fenced from Sebi-regulated functions. ADVERTISEMENT The regulator further stated that CRAs should ensure the transfer of all non-Sebi-regulated activities to these separate business units within six months from the date of notification of the SBUs would also be required to establish distinct grievance redressal mechanisms, including escalation procedures, which are separate from those applicable to Sebi-regulated activities. ADVERTISEMENT Moreover, CRAs should maintain independent records within the SBU for such non-Sebi-regulated activities, and the personnel engaged in these functions must be distinct from those involved in Sebi-regulated crossing the Chinese Wall may be permitted for staff, subject to due procedures approved by the Board of Directors and proper documentation. ADVERTISEMENT Notably, this restriction does not apply to key managerial personnel. Sebi also clarified that the minimum net worth requirement of a CRA, as specified under the CRA Regulations, should be protected from any impact arising out of non-Sebi-regulated activities. ADVERTISEMENT A CRA will be required to disclose on its website the list of activities that are not regulated by Sebi, along with a disclaimer clearly stating that Sebi's investor protection mechanisms will not apply to any grievances or disputes related to such activities. This disclosure should also be prominently displayed in rating reports associated with non-Sebi-regulated to undertaking any such activities, the CRA should provide an upfront written disclosure to all relevant stakeholders, including clients, beneficiaries, and counterparties. This disclosure should be included in all engagement letters, contracts, agreements, and business communications, indicating that the activities do not fall within Sebi's regulatory stakeholders should confirm, at the time of engagement, that they understand the nature of the activities, associated risks, and the non-availability of Sebi's investor protection existing and ongoing arrangements related to non-Sebi-regulated activities, CRAs should make the necessary disclosures and obtain acknowledgements from stakeholders. A compliance report on this should be submitted to Sebi within six months of the addition, every CRA undertaking any activity outside the purview of Sebi should submit an undertaking as part of its half-yearly internal audit report, confirming compliance with the specified requirements. This report should be duly reviewed and approved by the CRA's board of has invited public comments on the proposal until July 30, 2025. The move comes in response to representations from industry participants and stakeholders, who have requested that CRAs be allowed to rate financial products and instruments under the purview of other FSRs, even where no rating-related guidelines exist. It was highlighted that such rating activities are closely aligned with CRAs' current business, and allowing them could lead to operational synergies while filling an existing gap in the market.
Mint
09-07-2025
- Business
- Mint
Sebi proposes broadening Credit Rating Agencies' mandate amid regulatory gaps
The Securities and Exchange Board of India (Sebi) has issued a proposal to clarify and expand the scope of activities that Credit Rating Agencies (CRAs) in India can undertake, especially in areas regulated by other financial sector authorities. The proposals are open for public comment till 30 July. Currently, Sebi's rules restrict CRAs to rating securities that are listed or proposed to be listed on recognized stock exchanges. However, CRAs are not barred from rating other financial products if permitted by guidelines from other financial sector regulators (FSRs) like the Reserve Bank of India (RBI) or the Insurance Regulatory and Development Authority (IRDA). The industry pointed out a regulatory gap: financial products under other FSRs lack specific rating guidelines. This has led to confusion about whether CRAs can rate such products, such as unlisted securities. Sebi's new consultation paper seeks to address this ambiguity, responding to feedback from industry stakeholders who believe that allowing CRAs to rate a wider range of products would bring synergies and fill an important gap in the market. Sebi is considering allowing CRAs to rate financial instruments under the jurisdiction of other FSRs, even if those regulators have not issued explicit rating guidelines. However, this expanded role comes with strict conditions designed to protect investors and ensure transparency. CRAs must ensure that the existing non-Sebi-regulated activities are transferred to a separate business unit (SBU) within six months of the new rules coming into effect. Each SBU must have its own grievance redressal mechanism, separate from that for Sebi-regulated activities. SBUs must maintain their own records and employ staff distinct from those handling Sebi-regulated work. Staff movement across the Chinese Wall is allowed only with proper board-approved procedures. The minimum net worth required for a CRA under Sebi regulations must be protected from any risks arising out of non-Sebi regulated activities. CRAs must clearly disclose all non-Sebi regulated activities on their website and in related rating reports, along with a disclaimer that Sebi's investor protection mechanisms do not apply. Market participants, investors and other stakeholders have until 30 July to share their views.
Time of India
09-07-2025
- Business
- Time of India
Sebi mulls allowing CRAs to rate instruments outside its regulatory purview
Markets watchdog Sebi on Wednesday proposed permitting credit rating agencies (CRAs) to undertake the rating of financial instruments that may come under other financial sector regulators, even if they have not issued any rating-related guidelines. Under the current CRA regulations, credit rating agencies are only allowed to rate securities that are listed or proposed to be listed on a stock exchange recognised by Sebi. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Free P2,000 GCash eGift UnionBank Credit Card Apply Now Undo However, the regulations do not stop CRAs from rating products, securities, or issuers if such ratings are done under the guidelines of another financial sector regulator or any authority specified by Sebi. Play Video Pause Skip Backward Skip Forward Unmute Current Time 0:00 / Duration 0:00 Loaded : 0% 0:00 Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 1x Playback Rate Chapters Chapters Descriptions descriptions off , selected Captions captions settings , opens captions settings dialog captions off , selected Audio Track default , selected Picture-in-Picture Fullscreen This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Text Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Transparent Caption Area Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Drop shadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. In its consultation paper, Sebi proposed that CRAs may be permitted to undertake activities that are not regulated by it, subject to certain conditions. "CRA may undertake rating of financial instruments, which fall under the purview of any other FSR, provided it shall comply with the regulatory framework, if any, as may be specified by the respective FSR for the matters relating to policy, eligibility criteria, risk management, investor grievance or dispute handling mechanism, inspection, enforcement and claims," Sebi proposed. Live Events The regulator suggested that CRAs may undertake only those rating activities that are fee-based and non-fund-based. Additionally, such activities should be carried out strictly on an arm's length basis through one or more Separate Business Units (SBUs), which should be segregated by a Chinese Wall and ring-fenced from Sebi-regulated functions. The regulator further stated that CRAs should ensure the transfer of all non-Sebi-regulated activities to these separate business units within six months from the date of notification of the proposal. These SBUs would also be required to establish distinct grievance redressal mechanisms, including escalation procedures, which are separate from those applicable to Sebi-regulated activities. Moreover, CRAs should maintain independent records within the SBU for such non-Sebi-regulated activities, and the personnel engaged in these functions must be distinct from those involved in Sebi-regulated operations. However, crossing the Chinese Wall may be permitted for staff, subject to due procedures approved by the Board of Directors and proper documentation. Notably, this restriction does not apply to key managerial personnel. Sebi also clarified that the minimum net worth requirement of a CRA, as specified under the CRA Regulations, should be protected from any impact arising out of non-Sebi-regulated activities. A CRA will be required to disclose on its website the list of activities that are not regulated by Sebi, along with a disclaimer clearly stating that Sebi's investor protection mechanisms will not apply to any grievances or disputes related to such activities. This disclosure should also be prominently displayed in rating reports associated with non-Sebi-regulated activities. Prior to undertaking any such activities, the CRA should provide an upfront written disclosure to all relevant stakeholders, including clients, beneficiaries, and counterparties. This disclosure should be included in all engagement letters, contracts, agreements, and business communications, indicating that the activities do not fall within Sebi's regulatory framework. Also, stakeholders should confirm, at the time of engagement, that they understand the nature of the activities, associated risks, and the non-availability of Sebi's investor protection mechanisms. For existing and ongoing arrangements related to non-Sebi-regulated activities, CRAs should make the necessary disclosures and obtain acknowledgements from stakeholders. A compliance report on this should be submitted to Sebi within six months of the notification. In addition, every CRA undertaking any activity outside the purview of Sebi should submit an undertaking as part of its half-yearly internal audit report, confirming compliance with the specified requirements. This report should be duly reviewed and approved by the CRA's board of directors. Sebi has invited public comments on the proposal until July 30, 2025. The move comes in response to representations from industry participants and stakeholders, who have requested that CRAs be allowed to rate financial products and instruments under the purview of other FSRs, even where no rating-related guidelines exist. It was highlighted that such rating activities are closely aligned with CRAs' current business, and allowing them could lead to operational synergies while filling an existing gap in the market.
Economic Times
01-07-2025
- Business
- Economic Times
Singapore's GIC gets CCI approval to buy stake in IPO-bound Groww
Viggo Investment, a subsidiary of Singapore's sovereign fund GIC, has received approval of Competition Commission of India (CCI) to acquire stake in the Billionbrains Garage Ventures, the IPO-bound owner of stockbroker Groww. GIC had approached the competition regulator in May, seeking approval for acquiring a 2.14% stake in the Bengaluru-based fintech startup. The investment is part of a larger funding round estimated at $250-300 million. GIC is expected to lead the round with an infusion of around $150 million, while Groww has also engaged with existing investor Tiger Global to participate. ET had first reported on the financing on March Investment is a special purpose vehicle wholly owned by Enterprise Holdings, which in turn is held by GIC Ventures. Groww recently closed a $250 million funding round led by GIC at a valuation of around $6.5 billion. On May 26, the company filed its draft red herring prospectus (DRHP) for a public listing with the markets regulator Securities and Exchange Board of India (Sebi). The IPO size is estimated to be in the range of $700 million to $1 billion, people in the know told ET. Diversification push In the run-up to its IPO, Groww is planning to apply for an Online Bond Platform Provider (OBPP) licence and expand into offering corporate bond transactions through its mobile app, according to people in the know. Groww, a Sebi-regulated stockbroker, already offers primary sale of freshly listed corporate bonds and will expand into offering trades in corporate bonds once it secures an OBPP licence, the people is part of the company's broader strategy to go beyond core stockbroking services and become a full-stack financial services platform. From credit to wealth management and now bond distribution, Groww is slowly expanding its product suite as it prepares for a public listing. This move will enable Groww to compete with other OBPPs, including Wint Wealth and Grip Invest. These platforms offer listed bonds through their mobile applications. These instruments are a more secured asset class than equity investments and typically offer higher rates of interest than banks' fixed deposits.
Time of India
01-07-2025
- Business
- Time of India
Sebi Cybersecurity Framework: Sebi Grants Additional Two-Month Extension for Cybersecurity Compliance, ET CISO
Markets regulator Sebi on Monday extended the deadline by two months till August for regulated entities to adopt and implement the cybersecurity and cyber resilience framework. The framework is designed to ensure that Sebi-regulated entities (REs) maintain a robust cybersecurity posture, remain equipped with adequate cyber resiliency measures and can withstand, respond to, and recover from cyber threats, effectively. The move came after Sebi received multiple requests for extension of timelines to ensure ease of compliance for them. "Therefore, it has been decided to extend the compliance timelines by two months, i.e., till August 31, 2025 to all REs, except Market Infrastructure Institutions (MIIs), KYC Registration Agencies (KRAs), and Qualified Registrars to an Issue and Share Transfer Agents (QRTAs)," Sebi said in a circular. Advt This marks the second extension granted by the the need for robust cybersecurity measures and protection of data and IT infrastructure, Sebi issued the Cybersecurity and Cyber Resilience Framework (CSCRF) for its regulated entities in August receiving various queries from REs seeking clarification on the framework, the Securities and Exchange Board of India (Sebi) issued a clarification in CSCRF is a significant step in adapting towards evolving cyber risks and technological regulator emphasised that the framework aims to enhance the resilience of regulated entities, enabling them to withstand and recover from cyber incidents regulator said the stock exchanges and depositories have been directed to inform their members and participants of the updated compliance deadline and disseminate the circular on their respective websites. Join the community of 2M+ industry professionals. Subscribe to Newsletter to get latest insights & analysis in your inbox. All about ETCISO industry right on your smartphone! Download the ETCISO App and get the Realtime updates and Save your favourite articles.
