CURRENT AFFAIRS

Detailed explanation-1: -Restriction on Crossholding in SEBI registered CRAs: a. No CRA shall, directly or indirectly, hold more than 10% of shareholding and/ or voting rights in another CRA and shall not have representation on the Board of the other CRA.

Detailed explanation-2: -To protect the interest of investors, SEBI has mandated that every credit rating agency shall, during the lifetime of the securities rated by it, continuously monitor the rating of such securities and carry out periodic reviews of all published ratings.

Detailed explanation-3: -The credit rating industry is dominated by three big agencies, which control 95% of the rating business. The top firms include Moody’s Investor Services, Standard and Poor’s (S&P), and Fitch Group.

Detailed explanation-4: -In the Indian context, debt instruments rated ‘BBB-’ and above are classified as investment grade ratings. Instruments that are rated ‘BB+’ and below are classified as speculative grade category ratings in which case the ability to meet the payment obligations is considered to be “speculative”.

Detailed explanation-5: -The global credit rating industry is highly concentrated, with three agencies: Moody’s, Standard & Poor’s, and Fitch.