SEBI's CRA ring-fencing norms take effect: rating agencies segregate non-SEBI activities
SEBI's February 2026 circular tightening the framework for credit rating agencies that rate instruments regulated by other financial regulators has begun taking effect, with the 60-day implementation window for most provisions now lapsed.
The circular followed the regulator's December 2025 board decision to expand the permitted scope of SEBI-registered CRAs, but it drew a firm line: rating activities for bank loans, insurance products and pension-regulated instruments must be ring-fenced from SEBI-regulated work.
What CRAs must now do
- Maintain separate grievance-redressal email IDs and distinct website sections.
- Clearly label which regulator governs each instrument in rating reports and press releases.
- Keep marketing for non-SEBI activities separate, with explicit disclaimers.
- Obtain written client confirmation before undertaking non-SEBI ratings.
- Report board-approved compliance undertakings in half-yearly internal audits.
The one-year timeline for segregated grievance channels and existing-client intimations means full compliance lands in February 2027. For issuers, the takeaway is greater clarity — but also more documentation — around who governs a given rating. PreRatings, which is not a SEBI-registered CRA, sits outside this framework but benefits from the broader push toward disclosure and accountability.