SEBI (Credit Rating Agencies) (Amendment) Regulations, 2023

The Securities and Exchange Board of India (SEBI) (Credit Rating Agencies) (Amendment) Regulations, 2023, which particularly target Environmental, Social, and Governance (ESG) rating providers. These regulations, which aim to regulate the actions of ESG rating organizations and ensure transparency and dependability in their operations, are a significant advance for the ESG rating business. The provisions of these regulations shall be applicable to ESG rating providers.

Application for grant of certificate

(1) Any person intending to undertake business as an ESG rating provider, on or after this chapter coming into force, shall make an application to the Board for grant of a certificate.

(2) An application for the grant of a certificate to act as an ESG rating provider shall be made to the Board, in Form A of the Fifth Schedule.

(3) The application shall be accompanied by a non–refundable application fee, as specified in Part A of the Sixth Schedule, to be paid in the manner specified in Part B of the Sixth Schedule.

(4) The application under sub-regulation (2) shall be made for seeking registration in any one of the following categories,

  • Category I
  • Category II.

Eligibility criteria

For the purpose of the grant of certificate, the applicant shall fulfil the following criteria namely, —

(a) the applicant shall be incorporated as a company under the Companies Act, 2013 (18 of 2013);

(b) the applicant shall have specified ESG rating activity, as the main object in its Memorandum of Association;

(c) the applicant shall have submitted, to the Board, its business plan pertaining to providing ESG ratings, along with the following information, namely –

  • a target breakeven date;
  • target revenue and the targeted number of clients it plans to service, within two years of obtaining a certificate; and
  • cumulative cash losses that the applicant projects to incur until the targeted breakeven date, along with the activities or areas in which such losses shall be incurred; Explanation. – The targets mentioned in clause (c) of this regulation shall:
    1. be set by the applicants themselves;
    2. be limited to their operations in securities markets, i.e. related to issuers that are listed, or proposed to be listed, or whose securities are listed or proposed to be listed, on a recognized stock exchange.
    3. be reasonable

For more details, Click on the below-given link.

Download – SEBI (Credit Rating Agencies) (Amendment) Regulations, 2023


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