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Sebi to probe rating agencies

Amid a global market mayhem triggered by a rating cutdown of the US, the Securities and Exchange Board of India (SEBI) has decided to keep a watch on the role of credit rating agencies and risks they might pose to the market.

business Updated: Aug 12, 2011 02:34 IST
HT Correspondent

Amid a global market mayhem triggered by a rating cutdown of the US, the Securities and Exchange Board of India (SEBI) has decided to keep a watch on the role of credit rating agencies and risks they might pose to the market.

The regulator will revisit the regulations for credit rating agencies (CRAs) after monitoring the domestic and global developments in this regard, a senior official said.

In a memorandum to its board, the market regulator said that it has laid down comprehensive framework for regulation of CRAs and also to address conflicts that may arise in the their activities.

"As the area of CRA regulations is undergoing changes in the developed countries too, SEBI may keep an intent watch on both international and domestic developments and revisit CRA regulations from time-to-time to address any emerging issues in connection with the role of CRAs and the risks they may pose to the market," it noted.

The issue was discussed by the SEBI board in its last meeting and the regulator would propose required changes, if required.

In its new guidelines, the International Organisation of Securities Commissions, a global body of regulators, has called for CRAs being subjected to adequate oversight and a regulatory system for their registration and supervision.