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Unit 10: Credit Rating and Consumer Finance

Every credit rating agency has to, at the close of each accounting period, furnish to the Board Notes
copies of its balance sheet and profit and loss account.
All the credit rating agencies have to comply with such guidelines, directives, circulars and
instructions as may be issued by the Board from time to time, on the subject of credit rating.

10.1.9 Appointment of Compliance Officer

Every credit rating agency has to appoint a compliance officer who is responsible for monitoring
the compliance of the Act, rules and regulations, notifications, guidelines, instructions etc. issued
by the Board or the Central Government.
The compliance officer immediately and independently reports to the SEBI any non-compliance
observed by him.

10.1.10 Maintenance of Books of Accounts, Records, etc.

Every credit rating agency has to keep and maintain, for a minimum period of five years, the
following books of accounts, records and documents, namely:

1. copy of its balance sheet, as on the end of each accounting period;
2. a copy of its profit and loss account for each accounting period;
3. a copy of the auditor's report on its accounts for each accounting period;
4. a copy of the agreement entered into, with each client;

5. information supplied by each of the clients;
6. correspondence with each client;
7. ratings assigned to various securities including upgradation and down gradation (if any)
of the ratings so assigned;
8. rating notes considered by the rating committee;
9. record of decisions of the rating committee;
10. letter assigning rating;

11. Particulars of fees charged for rating and such other records as the Board may specify from
time to time.
Every credit rating agency has to intimate to the Board the place where the books of account,
records and documents required to be maintained under these regulations are being maintained.
Every credit rating agency has to, within two month's from the date of the auditor's report, take
steps to rectify the deficiencies if any, made out in the auditor's report, insofar as they relate to
the activity of rating of securities.

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Caution Every credit rating agency has to treat, as confidential, information supplied to it
by the client and no credit rating agency can disclose the same to any other person, except
where such disclosure is required or permitted by under or any law for the time being in
force.

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