The Securities and Exchange Board of India on 13th October 2022, notified the process for cancellation, suspension, or surrender of certificate of registration of a CRA.On and from the date of the Order, or the date of submission of request for surrender of certificate of registration to SEBI, as applicable, the concerned CRA shall –
- Disclose prominently on its website, the Order or the Request, as the case may be, and communicate the same to its clients within 15 days of the Order or the Request;
- Not take any new clients or fresh mandates;
- Alow its clients to withdraw any assignment given to the CRA, without any additional cost to such clients;
- facilitate an orderly migration of assignments as desired by clients to other CRA(s) holding a certificate of registration under CRA Regulations;
- continue to comply with the provisions of the CRA Regulations and circulars thereunder, till the time the CRA holds the certificate of registration;
- continue to co-operate with SEBI with regard to sharing of information when requested and payment of fees as required under CRA Regulations;
- take such other action including providing any records or documents within the time period and in the manner, as may be required under the CRA regulations or as may be directed by SEBI.
In case of cancellation of certificate of registration, the credit ratings assigned by the CRA shall be valid till such time the client withdraws the assignment and/or migrates the assignment to other CRA as specified or the CRA is wound-up, whichever is earlier.
In case of surrender of certificate of registration, the credit ratings assigned by the CRA whose certificate of registration is being surrendered, shall be valid till such time the client withdraws the assignment and/or migrates to another CRA, or the date of acceptance of surrender by SEBI, whichever is earlier.
Upon cancellation or surrender or suspension of certificate of registration of a CRA, the concerned CRA’s services cannot be used by listed entities or issuers for compliance with requirements of various SEBI regulations which require credit ratings from a CRA registered with SEBI.
Listed entities or issuers who have obtained credit rating from a CRA whose registration is cancelled or suspended or surrendered, desirous of obtaining credit rating for regulatory purposes, shall obtain credit rating(s) from another SEBI registered CRA(s) holding a valid certificate of registration under CRA Regulations.
