Page 251 - DMGT512_FINANCIAL_INSTITUTIONS_AND_SERVICES

Financial Institutions and Services

Notes The holding of such an enquiry shall not be necessary in cases where:
1. the credit rating agency is declared insolvent or is wound up; or
2. the credit rating agency fails to pay to the Board registration fees or renewal fee as per
these regulations.
An opportunity of hearing shall be given before any action against the credit rating agency is
taken.

Manner of Holding Enquiry before Suspension or Cancellation

1. For the purpose of holding an enquiry, the Board may appoint one or more enquiry
officers.
2. The enquiry officer issues to the credit rating agency a notice at the registered office or the
principal place of business of the credit rating agency, setting out the grounds on which
action is proposed to be taken against it and calling upon it to show cause against such
action within a period of fourteen days from the date of receipt of such notice.

3. The credit rating agency, may, within fourteen days from the date of receipt of such notice,
furnish to the enquiry officer a written reply, together with copies of documentary or
other evidence relied on by it or sought by the Board from the credit rating agency.

4. The enquiry officer has to give a reasonable opportunity of hearing to the credit rating
agency, to enable it to make its submission in support of its reply.
5. Before the enquiry officer, the credit rating agency may either appear in person or through
any person duly authorised on this behalf.
No lawyer or advocate is permitted to represent the credit rating agency at the enquiry. However,
where a lawyer or an advocate has been appointed by the board as a presenting officer, it is
lawful for the credit rating agency to present his case through a lawyer or advocate.
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.

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