SEBI Slaps ₹13.05 Lakh Penalty on CARE Ratings for Alleged Violations in Credit Rating Practices
The Securities and Exchange Board of India (SEBI), the regulator of capital markets, has ordered CARE Ratings to pay ₹13.05 lakh as a settlement fee for alleged violations.
What Happened?
SEBI took action against CARE Ratings for allegedly violating specific guidelines related to how credit rating agencies should monitor and review ratings. The violations in question were linked to a SEBI circular issued on June 30, 2017, and the SEBI (Credit Rating Agencies) Regulations of 1999.
SEBI’s Investigation
SEBI appointed an officer, Barnali Mukherjee, to look into the matter. A notice was sent to CARE Ratings, asking them to explain why an inquiry shouldn’t be held and a penalty imposed.
Settlement Process
While the investigation was still ongoing, CARE Ratings requested to settle the issue without admitting or denying the allegations. SEBI’s internal committee met on May 29, 2024, and recommended that CARE Ratings pay ₹13.05 lakh as the settlement amount. This proposal was then approved by SEBI’s High-Powered Advisory Committee (HPAC) on June 14, 2024.
Final Decision
After CARE Ratings agreed to the settlement terms and paid the amount, SEBI closed the case. However, the order allows SEBI to reopen the case if it later finds that CARE Ratings didn’t fully disclose all necessary information or violated any agreements.
The settlement order was signed by Barnali Mukherjee and issued on Friday, August 23, 2024.
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