Operating Guidelines & Policies (Disclosure as per SEBI Circular SEBI/HO/MIRSD/MIRSD4/CIR/P/2016/119)
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INTRODUCTION

SEBI vide its circular SEBI/HO/MIRSD/MIRSD4/CIR/P/2016/119 directed all Credit Rating Agencies to disclose their operating policies and guidelines. This document outlines the relevant policies, guidelines, rating process and criteria applicable to all rating assignments that fall within the purview of SEBI Regulations and Circulars.

Any rating product or service that meets all the three conditions mentioned below shall come under the purview of these guidelines:

  • Ratings on public issues and right issue of securities (SEBI CRA Regulation,1999 ), other securities / instruments and loans / facilities provided by banks (SEBI circular, 2012)
  • Ratings assigned using a symbol standardized by SEBI (SEBI circular 2011)
  • Ratings assigned through a rating agreement entered into with the issuer (SEBI CRA Regulation,1999 )

In addition Issuer Ratings, will also be subject to these guidelines.


POLICIES & GUIDELINES GOVERNING RATING PROCESS

Acuité follows stringent policies and guidelines to ensure independence, quality, timeliness and objectivity in assigning ratings that are unbiased.

  1. General Nature of Compensation Arrangements with Rated Entities
  2. Policy for Appeal
  3. Policy for Placing Ratings on Credit Watch
  4. Guidelines on What Constitutes Non-Cooperation
  5. Guidelines on Gifts
  6. Confidentiality Policy
  7. Policy on Outsourcing of Activities
  8. Policy on Provisional Ratings
  9. Disclosure on Managing Conflict of Interest
  10. Policy regarding Monitoring & Review of Ratings
  11. Policy on Withdrawal of Ratings
  12. Policy on Internal Approvals
  13. Functioning of Rating Committee
  14. Guidelines on Minimum Information Required for the Rating
  15. Guidelines on Seeking Information from External Entities
  16. Roles and Responsibilities of Credit Rating Analyst
  17. IOSCO Code of Conduct adopted by Acuite
  18. SEBI Code of Conduct adopted by Acuite
  19. Guidelines on debt servicing confirmations pertaining to unlisted debt instruments (Retail Debentures / Retail Deposits)
  20. Guidelines on Key Financial Indicators in case of non-cooperation by the issuer (unlisted entity)
  21. Guidelines on interaction with Audit Committee of entities with listed NCDs
  22. Guidelines for assigning non-‘D’ rating to entities with an outstanding ‘D’ rating by other credit rating agencies
  23. Guidelines for site visit
  24. Independent Credit Evaluation: Fee Structure and internal controls
  25. Rules for Acuité’s Analytic Firewalls

RATING CRITERIA

Acuité has well defined rating criteria and methodologies, models that form the analytical basis for all the ratings assigned. The rating criteria and methodology is reviewed once in three years or earlier if regulations/ circumstances warrant. These criteria help the analyst to ensure that all ratings can be benchmarked against a common reference.

  1. Criteria for Rating Process and Timeline
  2. Criteria for Rating of Manufacturing Entities
  3. Criteria for Rating of Trading Entities
  4. Criteria for Rating of Entities in Services Sector
  5. Criteria for Rating of Non-Banking Financing Entities
  6. Criteria for Rating of Banks and Financial Institutions
  7. Criteria for Rating of Entities in Infrastructure Sector
  8. Criteria for Default Recognition
  9. Application of Financial Ratios and Adjustments
  10. Criteria for Consolidation of Companies
  11. Criteria for Group and Parent Support
  12. Criteria for Public Finance - State Government Ratings
  13. Criteria for Rating of Securitized Transactions
  14. Criteria for Rating Commercial Paper
  15. Criteria for complexity Level Of Financial Instruments
  16. Criteria for Rating of Fixed Deposit Programme
  17. Criteria For Rating of Hybrid Instruments Issued By NBFCs & HFCs
  18. Criteria For Public Finance - Urban Local Bodies
  19. Criteria For Rating of Real Estate Entities
  20. Criteria For Rating of Insurance Companies
  21. Criteria For Explicit Credit Enhancements
  22. Criteria For Methodology For Resolution Plan Ratings
  23. Criteria For Methodology For Rating Of Security Receipts
  24. Criteria For Infrastructure Investment Trust (InvIT)
  25. Criteria For Covered Bonds
  26. Criteria For Real Estate Investment Trust (REIT)
  27. Criteria For Rating Of Asset Reconstruction Companies

APPLICABLE REGULATORY GUIDELINES