To safeguard investors’ interest, Sebi today asked credit rating agencies to give a 30-day notice before withdrawal of ratings in case of open-ended mutual funds, even as it relaxed various disclosure norms for the CRAs. The decision has been taken in consultation with (credit rating agencies (CRAs) and representations received from the industry. Sebi said withdrawal of rating of is permitted in case of open ended mutual fund scheme, being perpetual in nature and having no specified maturity. Besides, such facilities are allowed in bank loans.
“However, as units of such schemes are held by many investors, such ratings shall be placed on notice of withdrawal for at least 30 days, which shall be publicly available on the CRA’s website,” Securities and Exchange Board of India (Sebi) said in a circular. It further said that ratings can be withdrawn after receiving request for withdrawal from the asset management company in case of mutual funds. In case of bank facilities, ratings can be withdrawn on request from the borrower along with no-objection from the lending bank.
