Page 247 - DMGT512_FINANCIAL_INSTITUTIONS_AND_SERVICES

Financial Institutions and Services

Notes 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.

17.1.11 Rating Process

1. Every credit rating agency has to:
(a) specify the rating process;
(b) file a copy of the same with the Board for record; and file with the Board any
modifications or additions made therein from time to time.
2. Every credit rating agency shall, in all cases, follow a proper rating process.
3. Every credit rating agency shall have professional rating committees, comprising members
who are adequately qualified and knowledgeable to assign a rating.
4. All rating decisions, including the decisions regarding changes in rating, are taken by the
rating committee.

5. Every credit rating agency has to be staffed by analysts qualified to carry out a rating
assignment.
6. Every credit rating agency has to inform the Board about new rating instruments or
symbols introduced by it.
7. Every credit rating agency, has to, while rating a security, exercise due diligence in order
to ensure that the rating given by the credit rating agency is fair and appropriate.
8. A credit rating agency cannot rate securities issued by it.
9. Rating definition, as well as the structure for a particular rating product, cannot be changed
by a credit rating agency, without prior information to the Board.
10. A credit rating agency has to disclose to the concerned stock exchange through press
release and websites for general investors, the rating assigned to the securities of a client,
after periodic review, including changes in rating, if any.

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