Rules for SMERA’s Analytic Firewalls

Last Reviewed On: 01 July, 2015 (Version 1.0)

  1. Objective:
  2. The aim of the Analytic Firewalls Rules is to ensure that the Rating Analysts have the necessary independence to express their opinions free from the influence of other employees in SMERA and from the financial / commercial transactions between SMERA and its clients. SMERA recognizes the paramount importance of maintaining the independence of the rating process and ensuring the objectivity, confidentiality and proper use of client information.

  3. Analytic Firewalls:
    1. SMERA’s Rating Analysts shall arrive at their opinion by following SMERA’s processes, methodologies, policies and procedures and shall not be influenced by any financial / commercial dealings between SMERA and its client or with any third party.
    2. No employee of SMERA shall attempt to exert influence on the opinion of rating analyst with or without referring to the financial and commercial relationship between SMERA, its clients and/or any third party.
    3. Rating Analysts shall not disclose any confidential information to any other SMERA employee outside of the Ratings team. They are prohibited from disclosing confidential information to other Rating Analysts who are not directly involved in the rating process for the rated entity to which such information pertains.
    4. Only employees who are involved in the rating operations of the Ratings team shall be the member(s) of the Rating Committee and allowed access to the Rating Committee and its resources. Other employees require prior written approval of the Head - Compliance to have access to the Rating Committee or its resources.
    5. The Rating Analysts are prohibited from participating in any discussion or in rating fee negotiations for an issue or issuer. However, this does not preclude the Rating Analyst from quoting the standard rating fee of SMERA to the issuer.
    6. In case a Rating Analyst accompanies other SMERA employees on a marketing call, the Rating Analyst must not give any indication of any possible rating that the issuer may receive. However, the Rating Analyst can discuss the general rating methodology and any possible rating approach that may be adopted.
    7. Rating Analysts must not participate in consulting or advisory services for the clients they are rating. They must not have any business or financial dealings with the clients / issuers they rate.

  4. Protection of Confidential Information Held by Ratings Division of SMERA:
  5. The confidentiality of all non-public information provided to SMERA by an issuer pursuant to any rating exercise must be safeguarded. Information about a ratings action or potential ratings action is confidential and may not be shared with anyone other than:

    1. Ratings employees who need to know such information, and the issuer and persons acting on behalf of the issuer

  6. Application of These Rules with Other Rules, Policies and Procedures:
  7. These Rules are complementary to all the other Rules, Policies and Procedures currently in force and/or that may be adopted by SMERA from time to time.

    Any employee who needs any clarification on these Rules should contact the Vice President - Rating Operations or Head - Compliance. Any exceptions to the Rules must be approved by the Chief Executive Officer of SMERA and the same must be formally documented.