SEBI drafted rules to improve market effeciency, ehance the governance accountability and functioning of credit agencies.
- Few Rules are :
- Restrict the cross- shareholding between rating agency.
- increase in minimum networth from 5 crore to 50 crore.
- atleast 5 years of experience for new promoters
- proposed the disclosures norms to improve the investors concern.
- Why SEBI took this step :
- Currently most of the credit agencies are not investor friendly rather they are tilted towards the borrower which has resulted in huge default.
- Current Regime provide even rating agency to do not put negatives of a borrowers into the ratings.
- Way Ahead,
- Hoping to improve the credit rating agencies health in terms of paying way for new alternative credit ratiing agencies to took over from existing and create competitiveness.
- Article Link : http://www.thehindu.com/todays-paper/tp-opinion/search-for-quality/article19657439.ece