<p>New Delhi: Markets regulator <a href="https://www.deccanherald.com/search?q=sebi">Sebi </a>on Thursday proposed guidelines for credit rating agencies (CRAs) to include detailed reasons for rating actions, especially in cases of default and upgrades of default ratings.</p>.<p>In its consultation paper, the regulator has recommended removing "technical default" from policies due to potential negative market signals and covenant triggers.</p>.<p>CRAs have cited operational issues like force majeure events or bank strikes that should be considered in their policies.</p>.Sebi extends timeline to submit comments on proposal to facilitate ease of doing business.<p>The proposed guidelines should consider situations like force majeure events, incorrect investor accounts, or government freezes, alongside significant changes to the company's credit risk profile.</p>.<p>Under the current guidelines, any delay of one day or shortfall of even Re 1 in payment (principal or interest) from the scheduled repayment date must be recognised as a default, unless rescheduled by lenders before the due date.</p>.<p>At present, CRAs can classify certain situations (like minor delays due to operational issues) as technical defaults.</p>.<p>The Securities and Exchange Board of India (Sebi) has sought feedback on these proposed changes from the public till August 15 to ensure clarity and consistency in CRA policies.</p>
<p>New Delhi: Markets regulator <a href="https://www.deccanherald.com/search?q=sebi">Sebi </a>on Thursday proposed guidelines for credit rating agencies (CRAs) to include detailed reasons for rating actions, especially in cases of default and upgrades of default ratings.</p>.<p>In its consultation paper, the regulator has recommended removing "technical default" from policies due to potential negative market signals and covenant triggers.</p>.<p>CRAs have cited operational issues like force majeure events or bank strikes that should be considered in their policies.</p>.Sebi extends timeline to submit comments on proposal to facilitate ease of doing business.<p>The proposed guidelines should consider situations like force majeure events, incorrect investor accounts, or government freezes, alongside significant changes to the company's credit risk profile.</p>.<p>Under the current guidelines, any delay of one day or shortfall of even Re 1 in payment (principal or interest) from the scheduled repayment date must be recognised as a default, unless rescheduled by lenders before the due date.</p>.<p>At present, CRAs can classify certain situations (like minor delays due to operational issues) as technical defaults.</p>.<p>The Securities and Exchange Board of India (Sebi) has sought feedback on these proposed changes from the public till August 15 to ensure clarity and consistency in CRA policies.</p>