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SEBI Mandates Segregation of Non-Regulated CRA Activities Within Six Months


Updated: July 09, 2025 16:52

Image Source: Adda247
India’s market regulator SEBI has issued a directive requiring Credit Rating Agencies (CRAs) to transfer all activities not regulated by the Board into a separate business unit within six months of notification.
 
Key Highlights:
  • CRAs must establish distinct units for nonSEBIregulated services such as securitization trusteeship, escrow agency, and monitoring roles.
  • These units must operate with separate staff, records, and grievance redressal mechanisms, ensuring clear boundaries from SEBIregulated functions.
  • Shared infrastructure like IT systems may be permitted with board approval, but legal liabilities must remain segregated.
Governance Measures:
  • CRAs must disclose on websites and client communications that certain services are outside SEBI’s regulatory purview.
  • Clients must acknowledge this distinction in writing, reinforcing transparency and investor awareness.
  • A halfyearly compliance report, approved by the board, will be mandatory to confirm adherence.
This move aims to enhance regulatory clarity, protect investors, and streamline CRA operations.
 
Sources: TaxGuru, NDTV Profit, News9Live

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