Panel favours tighter rules for rating agencies1 min read . Updated: 03 Mar 2010, 11:41 PM IST
Panel favours tighter rules for rating agencies
Mumbai: The committee on comprehensive regulation of credit rating agencies, appointed by the ministry of finance, on Wednesday recommended that though there is no immediate concern about the operations and activities of credit rating agencies, or CRAs, there is a need to strengthen existing regulations.
The committee suggests that the Securities and Exchange Board of India (Sebi) could regulate CRAs. However, it added that prior to formulating any regulation, “Sebi needs to consult other regulators’’.
It has also recommended the need for enhanced disclosure, continuation of the issuer-pays model, strengthened process and compliance audit, reporting of ownership changes, disclosure of default and transition statistics and strengthening of the regulation of CRAs in tune with these suggestions, said the Reserve Bank of India in a press statement.