The Securities and Exchange Board of India has mandated a Credit Risk-o-Meter for all listed and proposed to be listed nonconvertible securities, commercial paper, securitised debt instruments, security receipts and structured or market linked debt instruments. Issuers and online bond platform providers must display the visual measure in offering documents, private placement memoranda, advertisements and online platforms, adding a standardized disclosure layer to SEBI’s broader efforts to make bond information more accessible. The meter maps existing long and short term credit ratings into six colour coded risk levels. It must identify the credit rating agency and actual rating, mark unsecured instruments in bold red text and reflect the lowest rating where multiple agencies have rated a security. Disclosures must clarify that the meter covers credit risk rather than market or liquidity risk, while unsecured perpetual bonds such as additional tier 1 bonds require a warning that their structural features may expose investors to a total loss of capital. Online bond platform providers must source ratings solely from SEBI registered credit rating agencies, automate changes within 24 hours of receiving rating updates through the depositories, prohibit manual overrides and retain audit trails. The requirements take effect 45 days after issuance, with stock exchanges and depositories required to implement the necessary systems and regulatory amendments.
Securities and Exchange Board of India mandates colour coded Credit Risk-o-Meter for listed debt securities
The Securities and Exchange Board of India has mandated a six level, colour coded Credit Risk-o-Meter for listed and proposed debt securities across offering documents, advertisements and online bond platforms. The meter must reflect the lowest available rating, identify unsecured instruments and carry relevant risk disclaimers. Online bond platforms must automate rating changes within 24 hours, prohibit manual overrides and maintain audit trails.