Disclosures :
In case of listed securities, the CRA shall also make disclosures to the stock exchanges as specified in the SEBI (Credit Ratings) Regulations, 1999. For ratings assigned and their periodic reviews, the CRA shall issue press releases which shall also be kept on their websites. Where a specific format has been prescribed, the disclosures shall be made in that format. A CRA shall make all the disclosures stipulated below on their websites:
• A CRA shall formulate and disclose its policies, methodology and procedures in detail regarding solicited and unsolicited credit ratings;
• A CRA shall disclose in the formats prescribed about details of new credit ratings assigned during last six-months; Movement of credit rating of all outstanding securities during the last six-months;
• Movement of each credit rating;
• Movement of each credit rating from investment grade to non investment grade and vice versa
• Movement of each credit rating that has moved by more than one notch;
• The history of credit rating of all outstanding securities;
• On annual basis, the list of defaults separately for each rating category (e.g. AAA, AA, A, BBB, BB, B, C) This shall include the initial credit rating assigned by the CRA, month and year of initial rating, month and year of default, last credit rating assigned by the CRA before the issuer defaulted, comments of CRAs, if any.
• On annual basis, the average one-year and three-year cumulative default rates (based on weighted average), for the last 5 years, separately for each following category:
each credit rating category (e.g. AAA, AA, A, BBB, BB, B, C), separately;
structured instruments and non-structured instruments, separately
• A CRA shall disclose the general nature of its compensation arrangements with the issuers.
• A CRA shall disclose, in case of accepted ratings, its conflict of interest, if any, including the details of relationship – commercial or otherwise – between the issuer whose securities are being rated / any of its associate of such issuer and the CRA or its subsidiaries.
• A CRA shall disclose annually its total receipt from rating services and non-rating services, issuer wise percentage share of non-rating income of the CRA and its subsidiary to the total revenue of the CRA and its subsidiary from that issuer, and names of the rated issuers who along with their associate contribute 10% or more of total revenue of the CRA and its subsidiaries.
• While publishing the ratings of structured finance products and their movements, a CRA apart from following all the applicable requirements in case of non-structured ratings shall also disclose the track record of the originator and details of nature of underlying assets while assigning the credit rating. The track record shall include a brief description of the financials of the originator, rating migrations to speculative categories and defaults.
• A CRA shall also disclose at least once in every six months, the performance of the rated pool, i.e., collection efficiency, delinquencies. A CRA shall also provide a detailed description of the underlying pools including ageing, Credit enhancements such as liquidity supports, first and second loss guarantee provided shall also be disclosed.
• While publishing unsolicited ratings and their movements, a CRA apart from following all the applicable requirements in case of solicited ratings shall make the following disclosures:
the extent of participation by the issuer, its management, bankers and auditors in the credit rating process.
the information used and its source in arriving at and reviewing the credit rating.
• A CRA shall disclose annually all the unsolicited ratings carried out in the last three financial years; names of issuers, which were given, solicited rating in the last financial year.
• A CRA shall disclose its shareholding pattern as prescribed by stock exchanges for a listed company under clause 35 of Listing Agreement.
• A CRA shall disclose the compliance status of each provision of IOSCO code of conduct.