new delhi concerned over severe spillover impact of recent drastic downgrades by rating agencies market regulator sebi plans to strengthen its disclosure guidelines for issuance and review of the ratings by such entitiesbesides sebi is also considering asking the credit rating agencies cras to hive off their activities involving rating of instruments other than securities as they do not fall under sebis jurisdiction a senior official saidbesides debt and other securities the cras also give ratings for various financing facilities projects and fixed deposits while some of them also undertake works like grading of ngos and real estate propertieshiving off such activities will also ensure that there is no dual reporting or action by two or more regulators for the same violation the official addedsebi had set up a committee comprising members from all credit rating agencies cras to review the functioning of cras in order to enhance the standards and procedures related to assignment of ratings and review of the samethe committee submitted its report after incorporating recommendations and suggestions of all cras besides the issues related to functioning of cras have also been deliberated upon by the international advisory board of sebithe markets regulator is now finalising its policy actions with regard to cras after taking into account the suggestions made by the expert committee as well as by its international advisory boardamong the proposed measures cras would have to adopt a policy regarding suspension and subsequent withdrawal of rating and disclose the same publiclyit has also been suggested that sebi would provide a format of the press release regarding suspension to remove any ambiguity and ensure uniformity across various crassebi also wants disclosure of all ratings assigned by the cra whether accepted or not by the issuer even in case of nonpublic issuesother proposed measures include strengthening the agreement between the issuer and cra to improve client cooperation public disclosure of the cras procedures for ongoing monitoring of credit ratings and disclosure of rating transition of the issuerthe cras would also need to publicly disclose various criteria used for rating and the same would need to be referenced in their press releasesthere would be a periodic review of the criteria used for rating and public disclosure of the periodicity of reviewthe internal document governing rating process would need to be made available on the website of crassebi also plans to put in place a mechanism for evaluating and enhancing the performance of cras along with terms of reference for internal audits of crasaccountability of the cras rating committee analysts including provisions for checks and balances would need to be clearly defined in the internal governing document and rating manual of the crathere would be restrictions on participation of business development team and other employees with revenue targets in analytical processes besides a defined process would be required for evaluating performance of rating committee members