**Executive Summary**
This circular, issued on July 16, 2026, amends the "Master Circular for Credit Rating Agencies in the IFSC" to refine the operational framework for Credit Rating Agencies (CRAs). The amendments expand the scope of credit ratings, introduce stricter record-keeping standards, and update disclosure protocols for rating actions. These provisions come into force with immediate effect.
**Key Points / Main Content**
**Expanded Definitions and Scope**
* **Inclusion of Issuers:** The scope of credit ratings is broadened to explicitly include the "issuer" in addition to financial instruments.
* **Credit Rating Services:** Credit ratings now formally include credit quality ratings and any other similar services relating to credit assessment.
* **Financial Strength Rating:** "Financial Strength Rating" is officially added as a sub-category under the regulatory framework.
**Record-Keeping and Documentation**
* **Process Reconstruction:** CRAs must maintain accurate and comprehensive records that allow for the complete reconstruction of the credit rating process and its underlying factors.
* **Analytical Reasoning:** Records must include a summary of material considerations and analytical reasoning, detailing key arguments both for and against a rating decision without attributing comments to specific individuals.
* **Retention Period:** Documentation must be maintained for the period specified under the IFSCA (Capital Market Intermediaries) Regulations, 2025, calculated from the date a rating is withdrawn or discontinued.
**Disclosure and Communication Protocols**
* **Rating Dissemination:** All initial and subsequent rating actions must be disseminated on the CRA’s website alongside the rating rationale.
* **Issuer Review Rights:** Before disseminating a rating, CRAs must provide the issuer with the critical information and principal considerations underlying the rating to allow for the correction of factual errors or omissions.
* **Exemptions:** The requirement to afford issuers a prior review and the mandatory website disclosure rules do not apply to unsolicited ratings or private credit rating assignments.
**Impact Analysis**
**Credit Rating Agencies (CRAs)**
**Impact**
CRAs are subject to more rigorous documentation standards and must ensure their internal processes allow for issuer feedback before a rating is published.
**Action Required**
Update internal record-keeping systems to include detailed analytical reasoning; establish a workflow to provide rationales to issuers for factual verification prior to public dissemination.
**Issuers**
**Impact**
Issuers benefit from increased transparency and the formal opportunity to correct factual inaccuracies before a credit rating is made public.
**Action Required**
Promptly review pre-dissemination information provided by CRAs to identify and clarify any factual errors or omissions that could materially affect the rating.
**Recognised Stock Exchanges in the IFSC**
**Impact**
Exchanges are informed of the updated regulatory standards governing the CRAs that provide ratings for instruments traded on their platforms.
**Action Required**
Note the changes in CRA obligations to ensure alignment with exchange-level compliance and reporting requirements.
Key Entities Referenced
Master Circular for Credit Rating Agencies in the IFSC: The primary operational framework governing Credit Rating Agencies (CRAs) within the International Financial Services Centre.
IFSCA (Capital Market Intermediaries) Regulations, 2025: The specific regulations under which this circular is issued and which govern record maintenance and regulatory compliance for intermediaries.
International Financial Services Centres Authority Act, 2019: The principal legislation that confers powers to regulate financial services and products in International Financial Services Centres.
International Financial Services Centre (IFSC): The specialized jurisdiction and location central to the applicability of these credit rating regulations and amendments.
CIRCULAR
e.F.No. IFSCA-CMIR/1/2026-CMIR July 16, 2026
To,
All Credit Rating Agencies in the International Financial Services Centre (IFSC)
All Recognised Stock Exchanges in the IFSC
Subject: Amendment to the Circular titled “Master Circular for Credit Rating Agencies
in the IFSC”
1. Reference may be drawn to the circular titled “Master Circular for Credit Rating Agencies
in the IFSC” dated August 05, 2025 (hereinafter referred to as the “Master Circular”).
The Master Circular, inter-alia, specifies the operational framework for regulating Credit
Rating Agencies (“CRAs”) registered with the Authority.
2. Upon consideration of the representations and comments received from stakeholders
in the public consultation and the review of global best practices undertaken in this
regard, it has been decided to amend the provisions of the Master Circular as under:
2.1. In sub-paragraph 5.1.1, in Explanation 1, after the words “financial instrument”
and before the words “in the IFSC”, the following words shall be inserted, namely:
“or issuer”.
2.2. In sub-paragraph 5.1.1, after Explanation 2, the following explanation shall be
inserted, namely:
“Explanation 3: Credit ratings shall include credit quality ratings and other similar
services relating to credit rating by, whatever name called.”
1 | Page2.3. After sub-paragraph 5.1.6, the following sub-paragraph 5.1.7. shall be inserted,
namely:
“5.1.7. Financial Strength Rating.”
2.4. The sub-paragraph 13.1.10. shall be substituted with the following, namely:
“13.1.10. The CRA shall maintain such information and records that are accurate
and sufficiently detailed and comprehensive to reconstruct the credit rating
process for a given credit rating action including the important factors underlying
the credit rating.”
2.5. After sub-paragraph 13.1.10., the following shall be inserted, namely:
“13.1.11. The records maintained by CRA shall include a summary of material
considerations and analytical reasoning, including key arguments for and against
the rating decision, without attribution of comments to specific individuals.
13.1.12. The CRA shall maintain records in the manner and for such period, from
the date any rating is withdrawn or discontinued, in the manner as provided under
the IFSCA (Capital Market Intermediaries) Regulations, 2025.”
2.6. Para 17.1. shall be substituted with the following para, namely:
“17.1. All the rating actions on initial rating assignments and subsequent rating
actions shall be disseminated by the CRA on its website along with the rating
rationale. The CRA shall, prior to issuance of the rating action, afford the issuer
of critical information and principal considerations upon which a credit rating will
2 | Pagebe based, prior to disseminating a credit rating that is the result or subject of the
credit rating action and afford such issuer an opportunity to clarify any factual
errors, factual omissions, or factual misperceptions that have or likely to have a
material effect on the credit rating:
Provided that the said requirements shall not be mandatory for unsolicited ratings
and private credit rating assignments.”
2.7. The following shall be inserted under para 25.1., namely:
“Provided that the above requirement relating to disclosure on website shall not
be mandatory for information in relation to private credit rating assignments.”
3. This Circular is issued in exercise of powers conferred under Sections 12 and 13 of the
International Financial Services Centres Authority Act, 2019, read with regulation 45 of
the IFSCA (Capital Market Intermediaries) Regulations, 2025, and shall come into force
with immediate effect.
A copy of this circular is available on the website of IFSCA at www.ifsca.gov.in.
Yours faithfully
Pawan Kumar Chowdhary
Deputy General Manager
Department of Capital Markets
pawan.kc@ifsca.gov.in
079-61809854
3 | Page