Regulatory Alerts2025-04-29
Clarificatory and Procedural Changes to Aid and Strengthen ESG Rating Providers
SEBI issued this circular to clarify and modify procedural requirements for ESG Rating Providers, specifically addressing rating withdrawal conditions for both subscriber-pays and issuer-pays business models. The regulator mandated that stock exchanges prominently disclose ESG ratings on their websites and adjusted internal audit and governance norms to provide a two-year compliance grace period for Category-II ERPs. Additionally, the document established standardized formats for rated entities to comment on ratings and defined strict confidentiality boundaries for the clarifications ERPs must provide in response.
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