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Indian Financial System
Notes If it is considered necessary, the enquiry officer may request the Board to appoint a presenting
officer to present its case. The enquiry officer, after taking into account all relevant facts and
submissions made by the credit rating agency, submits a report to the Board and recommend the
penalty, if any to be imposed upon the credit rating agency as also the grounds on the basis of
which the proposed penalty is justified.
Show-cause Notice and Order
On receipt of the report from the enquiry officer, the Board shall consider the same and issue a
show-cause notice to the credit rating agency, as to why the penalty as proposed by the enquiry
officer should not be imposed.
The credit rating agency has to, within fourteen days of the date of receipt of the show-cause
notice, send a reply to the Board. And the Board, after considering the reply of the credit rating
agency to the show-cause notice, shall as soon as possible passes such order as it deems fit.
Every order passed by the Board is self-contained and has to give reasons for the conclusions
stated therein, including justification of the penalty if any imposed by that order. The Board also
sends to the credit rating agency, a copy of the order passed.
10.1.15 Effect of Suspension and Cancellation of Registration of Credit
Rating Agency
On and from the date of suspension of the certificate of registration, the credit rating agency
ceases to carry on any rating activity during the period of suspension and shall be subject to such
directions of the Board with regard to any records, documents securities or reports that may be
connected with in its rating activities, as the Board may specify.
On and from the date of cancellation of the certificate of registration, the credit rating agency:
1. ceases to carry in any rating activity; and
2. is subject to such directions of the Board with regard to the transfer of records, documents,
securities or reports connected with its rating activities which may be in its custody or
control as the Board may specify.
Notwithstanding the suspension or cancellation of certificate of a credit rating agency, if the
Board is satisfied that it is in the interest of the investors to grant such permission, the Board
grants to the credit rating agency permission to carry on such activities relating its assignments
undertaken prior to such suspension or cancellation, as the Board may specify.
Publication of Order of Suspension or Cancellation
The order of suspension or cancellation of certificate of registration is published by the Board in
at least two daily newspapers.
Appeal to the Securities Appellate Tribunal
Any person aggrieved by an order of the Board made, on and after the commencement of the
Securities Laws (Second Amendment) Act, 1999, (i.e., after 16th December 1999), under these
regulations may prefer an appeal to a Securities Appellate Tribunal having jurisdiction in the
matter.
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