India Tightens Credit Rating Norms After Defaults, Downgrades

India’s market regulator on Thursday ordered enhanced disclosure norms for credit rating agencies in an effort to increase transparency as the country reels under a slew of rating downgrades and defaults that have roiled debt and equity markets, Reuters reported. The Securities and Exchange Board of India (SEBI) directed ratings agencies to formulate a uniform benchmark for the “probability of default” for each rating category and disclose that on their website for the ratings of long-term and short-term instruments. SEBI also asked them to disclose in their press release factors to which a rating is sensitive and explain operating and financial performance that could trigger a rating change. "Such factors shall be disclosed in quantitative terms to the extent possible, discernible to the investors, and should not read like a general risk factor," SEBI said in a circular. Read more