In a move to check the problem of pick and choose as well as rating shopping spree among the CRAs, SEBI on Wednesday allowed debt issuing companies to review ratings by credit rating agencies.
With this provision, debt issuers can now approach the agencies in case they are not satisfied with the rating and produce supporting documents.
In the circular SEBI said, "In the interest of transparency and fairness, it has been decided that all cases of requests by an issuer for review of the rating(s) provided to its instrument(s) by the CRA, shall be reviewed by a rating committee of the CRA that shall consist of a majority of independent members".
The market regulator added that the move is aimed at increasing accountability, functioning and accountability of the credit rating agencies.
SEBI said that all non-accepted ratings will need to be first disclosed on the website of the credit rating agencies in a prescribed format for a period of 1 year.
The capital market authority has also defined "independent" members as people who do not share any pecuniary relationship with the CRA or any of its employees.