The amendments also strengthen record-keeping norms, expand the scope of ratings, exempt private ratings from mandatory public disclosure, and align the framework with global best practices.
Credit rating agencies (CRAs) operating in GIFT City in Gujarat will now have to give issuers an opportunity to review and clarify factual errors, omissions or misperceptions that could materially affect a credit rating before it is made public, under revised rules issued by the International Financial Services Centres Authority (IFSCA).The requirements are part of the amendments to the Master Circular for Credit Rating Agencies issued by the regulator this week, following consideration of stakeholder representations received during a public consultation and a review of global best practices. The revised framework comes into force with immediate effect. The regulator, however, clarified that this requirement will not apply to unsolicited ratings and private credit rating assignments.Under the amended norms, a CRA must, before issuing a rating action, provide the issuer with the “critical information and principal considerations upon which a credit rating will be based” and allow it to clarify “any factual errors, factual omissions, or factual misperceptions” that have or are likely to have a material effect on the rating.Issuers can verify facts, but cannot influence ratingsExplaining the rationale behind the move, a senior IFSCA official told the businessline that the earlier Master Circular required credit rating agencies to seek the issuer’s acceptance of a rating before disseminating it. The revised framework replaces that requirement with an opportunity for issuers to verify the factual accuracy of the information underpinning the rating, in line with global best practices and the International Organisation of Securities Commissions’ (IOSCO) Code of Conduct Fundamentals for Credit Rating Agencies.“This is to ensure that the issuer gets an opportunity to clarify the factual position. However, the rating is independent and is not based on whether the rating is acceptable to the issuer or not,” the official said.The regulator also sought to allay concerns that the new framework could allow issuers to influence rating outcomes. “The role of the issuer is limited to clarifying the factual accuracy of the information on which the rating is based. It does not provide issuers any right to negotiate, approve or challenge the analytical judgement or rating opinion of the CRA. The analytical assessment, application of methodology and final rating decision remain the independent responsibility of the CRA,” the official said.Concerning the additional step that could slow down the rating process, the official said the amendments were not intended to delay rating actions, as the previous framework already required agencies to seek an issuer’s acceptance before publication. “The mandate is now to provide issuers an opportunity to identify factual errors before publication instead of seeking acceptance from the issuer,” the official said, adding that CRAs should provide a reasonable opportunity for factual verification while ensuring timely dissemination of rating actions.Record-keeping norms tightened; scope of ratings expandedCurrently, CareEdge Global IFSC Ltd and S&P Global Ratings Singapore Pte. Ltd are the two credit rating agencies registered in GIFT City. CARE Ratings (CareEdge) was the first to establish a base in GIFT IFSC through its subsidiary CareEdge Global IFSC Ltd in October 2024. The firm has since rolled out its first sovereign ratings of global economies, assigning ratings to 39 countries, including a BBB+ rating for India. The businessline in March 2026 had also reported that Moody’s Investors Service Singapore Pte. Ltd has also applied to IFSCA to establish a presence in GIFT City.Meanwhile, apart from introducing the pre-publication review mechanism in the amendments, the IFSCA has also tightened record-keeping requirements for CRAs. The revised framework requires agencies to maintain information and records that are accurate, sufficiently detailed and comprehensive enough to reconstruct the credit rating process for any rating action, including the key factors underlying the rating.In addition, CRAs will now be required to maintain a summary of the material considerations and analytical reasoning behind every rating decision, including the key arguments for and against the final rating, without attributing comments to individual analysts. The records must be retained in accordance with the IFSCA (Capital Market Intermediaries) Regulations, 2025, even after a rating has been withdrawn or discontinued.The regulator has also broadened the scope of credit ratings covered under the framework. It clarified that credit ratings may relate not only to financial instruments but also to issuers, and expanded the definition of credit ratings to include credit quality ratings and other similar services relating to credit ratings. It has also introduced provisions relating to financial strength ratings, adding a new category of ratings under the Master Circular.Private and unsolicited ratings kept outside disclosure requirementFurther, IFSCA has exempted private credit rating assignments from mandatory website disclosure requirements. The regulator said private ratings are generally made available only to a restricted, controlled set of recipients and, therefore, mandatory public disclosure of such ratings is neither appropriate nor in line with global best practices. It also clarified that unsolicited ratings are prepared without the issuer’s engagement and have been kept outside the mandatory disclosure framework, although CRAs may choose to disclose them.The amendments have been issued under the powers conferred by the International Financial Services Centres Authority Act, 2019, read with the IFSCA (Capital Market Intermediaries) Regulations, 2025, and are effective immediately.Published on July 18, 2026
