1. Every credit rating agency shall carry out periodic reviews of all published ratings during the lifetime of the securities

2. If the client does not co-operate with the credit rating agency so as to enable the credit rating agency to comply with its obligations under regulation 15 of this regulation, the credit rating agency shall carry out the review on the basis of the best available information. Provided that if owing to such lack of co-operation, a rating has been based on the best available information, the credit rating agency shall disclose to the investors the fact that the rating is so based.

3. A credit rating agency shall not withdraw a rating so long as the obligations under the security rated by it are outstanding, except where the company whose security is rated is wound up or merged or amalgamated with another company

Every credit rating agency shall frame appropriate procedures and systems for monitoring the trading of securities by its employees in the securities of its clients, in order to prevent contravention of -

1. the Securities and Exchange Board of India (Insider Trading) Regulations, 1992;

2. the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to the Securities Market) Regulations, 1995; and

3. other laws relevant to trading of securities.

1. Every credit rating agency -

   1. shall make public the definitions of the concerned rating, along with the symbol and,

   2. shall also state that the ratings do not constitute recommendations to buy, hold or sell any securities

2. Every credit rating agency shall make available to the general public information relating to the rationale of the ratings, which shall cover an analysis of the various factors justifying a favourable assessment, as well as factors constituting a risk.

1. Where any information is called for by the Board from a credit rating agency for the purposes of these regulations, including any report relating to its activities, the credit rating agency shall furnish such information to the Board -

   1. within a period specified by the Board or

   2. if no such period is specified, then within a reasonable time.

2. Every credit rating agency shall, at the close of each accounting period, furnish to the Board copies of its balance sheet and profit and loss account

Every credit rating agency shall comply with such guidelines, directives, circulars and instructions as may be issued by the Board from time to time, on the subject of credit rating.

1. Every credit rating agency shall appoint a compliance officer who shall be responsible for monitoring the compliance of the Act, rules and regulations, notifications, guidelines, instructions etc issued by the Board or the Central Government

2. The compliance officer shall immediately and independently report to the Board any non-compliance observed by him.

Confidentiality (Regulation 23)

Every credit rating agency shall treat, as confidential, information supplied to it by the client and no credit rating agency shall disclose the same to any other person, except where such disclosure is required or permitted by under or any law for the time being in force.

1. Every credit rating agency shall -

   1. specify the rating process;

   2. file a copy of the same with the Board for record; and file with the Board any modifications or additions made therein from time to time.

2. Every credit rating agency shall, in all cases, follow a proper rating process.

3. Every credit rating agency shall have professional rating committees, comprising members who are adequately qualified and knowledgeable to assign a rating.

4. All rating decisions, including the decisions regarding changes in rating, shall be taken by the rating committee.

5. Every credit rating agency shall be staffed by analysts qualified to carry out a rating assignment.

6. Every credit rating agency shall inform the Board about new rating instruments or symbols introduced by it.

7. Every credit rating agency, shall, while rating a security, exercise due diligence in order to ensure that the rating given by the credit rating agency is fair and appropriate.

8. A credit rating agency shall not rate securities issued by it.

9. Rating definition, as well as the structure for a particular rating product, shall not be changed by a credit rating agency, without prior information to the Board.

10. A credit rating agency shall disclose to the concerned stock exchange through press release and websites for general investors, the rating assigned to the securities of a client, after periodic review, including changes in rating, if any.

1. No credit rating agency shall rate a security issued by its promoter.

2. In case promoter is a lending institution, its Chairman, director or employee shall not be a Chairman, director or employee of credit rating agency or its rating committee.

"promoter" means a person who holds ten percent or more, of the shares of the credit rating agency.

1. No credit rating agency shall, rate a security issued by an entity, which is ;-

   1. a borrower of its promoter; or

   2. a subsidiary of its promoter; or

   3. an associate of its promoter, if

   1. there are common Chairman, Directors between credit rating agency and these entities.

   2. there are common employees.

   3. there are common Chairman, Directors, Employees on the rating committee.

"associate" , in relation to a promoter, includes a body corporate in which the promoter holds ten percent or more, of the share capital;

2. No credit rating agency shall rate a security issued by its associate or subsidiary, if the credit rating agency or its rating committee has a Chairman, director or employee who is also a Chairman, director or employee of any such entity.

       Provided that the Credit Rating Agency may, subject to the provisions of sub-regulation (1), rate a security issued by its associate having a common independent director with it or rating committee if, -

   1. such an independent director does not participate in the discussion on rating decisions, and

   2. the Credit Rating Agency makes a disclosure in the rating announcement of such associate (about the existence of common independent director) on its Board or of its rating committee, and that the common independent director did not participate in the rating process or in the meeting of its Board of Directors or in the meeting of the rating committee, when the securities rating of such associate was discussed.

Explanation: - (1) For the purposes of this sub-regulation the expression 'independent director' means a director who, apart from receiving remuneration as a director, does not have any other material pecuniary relationship or transactions with the company, its promoters, its management or its subsidiaries, which in the judgment of the board of the company, may affect the independence of the judgment of such director."

• Inspection and Investigation - Powers/Procedure - Chapter V

• Action in Case of Default -Powers/Procedure -Chapter -VI

1. A credit rating agency in the conduct of its business shall observe high standards of integrity and fairness in all its dealings with its clients.

2. A credit rating agency shall fulfil its obligations in an ethical

3. A credit rating agency shall render at all times high standards of service, exercise due diligence, ensure proper care and exercise independent professional judgement. It shall wherever necessary, disclose to the clients, possible sources of conflict of duties and interests, while providing unbiased services.

4. The credit rating agency shall avoid any conflict of interest of any member of its rating committee participating in the rating analysis. Any potential conflict of interest shall be disclosed to the client.

5. A credit rating agency shall not indulge in unfair competition nor shall they wean away client of any other rating agency on assurance of higher rating.

6. A credit rating agency shall not make any exaggerated statement, whether oral or written, to the client either about its qualification or its capability to render certain services or its achievements in regard to services rendered to other clients.

7. A credit rating agency shall always endeavor to ensure that all professional dealings are effected in a prompt and efficient manner.

8. A credit rating agency shall not divulge to other clients, press or any other party any confidential information about its client, which has come to its knowledge, without making disclosure to the concerned person of the rated company / client.

9. A credit rating agency shall not make untrue statement or suppress any material fact in any documents, reports, papers or information furnished to the Board or to public or to stock exchange.

A credit rating agency shall not generally and particularly in respect of issue of securities rated by it be party to -

1. creation of false market;

2. passing of price sensitive information to brokers, members of the stock exchanges, other players in the capital market or to any other person or take any other action which is unethical or unfair to the investors.

A credit rating agency shall maintain an arm's length relationship between its credit rating activity and any other activity.

A credit rating agency or any of his employees shall not render, directly or indirectly any investment advice about any security in the publicly accessible media, whether real - time or non- real time, unless a disclosure of his interest including long or short position in the said security has been made, while rendering such advice. In case an employee of the credit rating agency is rendering such advice, he shall also disclose the interest of is dependent family members and the employer including their long or short in the said security, while rendering such advice.