SEBI Revises CRA Policies on Post-Default Curing and Removes the Term ‘Technical Default’ from Master Circular
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- Last Updated on 20 November, 2024
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Circular No. SEBI/HO/DDHS/DDHS-PoD-3/P/CIR/2024/16, Dated 18.11.2024
SEBI has notified amendment in Para 15 of the Master Circular for Credit Rating Agencies, removing the term ‘technical default’ from Para 15.3 & providing clarity on treatment of specific non-payment scenarios caused by factors beyond the issuer’s control, such as incorrect investor account details or government-instructions. CRAs shall confirm & verify the availability of adequate funds with the issuer and must also verify issuer funds, reasons for non-payment, and escrow account deposits.
Further, the CRAs shall furnish the following details to the Stock Exchanges, Depositories and Debenture Trustee on the same day as the dissemination of the rating Press Release on the CRA’s website:
- Name of the security
- ISIN
- Amount to be paid
- Due date of payment
- Amount of payment made
- Amount of payment failed
- Reasons for failure of payment
Also, CRAs shall sensitise their clients, i.e. the issuers, to avail of the penny-drop verification facility offered by banks to avoid occurrence of failure to remit the required payments of debt (principal and/ or interest) and/or other suitable measures to prevent such occurrence.
The circular shall be applicable with immediate effect.
Click Here To Read The Full Circular
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