SEBI Expands Rating Agencies' Mandate, Bridging Regulatory Gaps

• SEBI board approved expanding the scope of credit rating agencies (CRAs) to include financial instruments regulated by other bodies.
• The move aims to address regulatory gaps and provide a rating framework where none existed, as stated by SEBI Chairman Tuhin Kanta Pandey.
• CRAs must segregate business processes, ensure clear disclosures, and use separate communication for non-SEBI regulated activities.
• Users must be informed when a rating does not fall under SEBI's regulatory and investor protection framework.
• The expanded framework applies to unlisted entities and subsidiaries, reducing compliance friction while maintaining clarity.

Why It Matters: SEBI expands CRA mandate to non-regulated instruments, ensuring transparency and filling market gaps.