Policy for Appeal by issuers/borrowers (Archive)

Archive

Policy for Appeal by Issuers

(in supercession of policy dated February 2022)

Review Committee

Appeals in respect of Investment Grade (IG) cases would be handled by Rating Review Committee (RRC) while the Non-Investment Grade (NIG) cases would be handled by External Rating Committee (ERC).

Process

  1. Once the representation/request for review of rating is received from the client, the same shall be reviewed by CRO and the group head concerned for investment grade cases; and any Senior Director and the group head for below investment grade cases, to examine if the criteria as set out below are met and to refer the case to the relevant review committee. If the review criteria are met, the case is referred to the relevant review committee. In case the review criteria are not met, an internal rating committee will consider the same and record the decision with appropriate rationale (in the form of minutes of the meeting).
  2. In respect of cases referred to the review committee, if there is a specific written request from the issuer as to make personal representation before the Committee, the same may be admitted subject to extant SEBI regulations.
  3. The agenda for the review committee shall be prepared by the concerned Analytical team who had originally dealt with the case. Thereafter, the review request shall be placed before the relevant Review Committee. The decision of the Review Committee, as the case may be, on the review shall be final and is communicated to the client immediately.
  4. For fresh (initial) cases, the relevant review committee  shall dispose of the case within 15 days from the date of receipt of appeal. For surveillance cases, the review committee shall dispose of the case within 5 days from the date of the initial rating committee.

Minimum Eligibility Criteria for Review of Cases

  1. If there is any additional information which was not available/provided at the time of initial rating/ surveillance;
  2. If there is any new significant development post initial rating/ surveillance.
  3. If the appeal is not based on additional information and the issuer provides a new perspective on the existing information, then provided point wise mitigating factors or arguments for the key rating factors as provided by the client in its representation are available and, it is different from the analysis captured at the time of the initial rating.
  4. The Review criteria will be applicable for both Surveillance and Fresh cases.

*Policy on Appeal by Issuer/Borrowers (Version V) is approved in the BM dated 04th July 2023.

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Review Committee

Appeals in respect of IG cases would be handled by Rating Review Committee (RRC) while the NIG cases would be handled by External Rating Committee (ERC).

Process

  1. Once the representation/request for review is received, the same shall be reviewed by the CRO and the group head concerned, to examine if the criteria as set out below are met and to refer the case to RRCM. If the review criteria are met, the case is referred to the RRCM. In case the review criteria are not met, an internal rating committee will consider the same and record the decision with appropriate rationale (in the form of minutes of the meeting).
  2. In respect of cases referred to RRCM, if there is a specific written request from the issuer as to make personal representation before the RRC, the same may be admitted subject to extant SEBI regulations.
  3. The agenda for the RRCM shall be prepared by the concerned Analytical team who had originally dealt with the case. Thereafter, the review request shall be placed before the Rating Review Committee of Infomerics. The decision of the Review Committee, as the case may be, on the review shall be final and is communicated to the client immediately.
  4. For fresh (initial) cases, the RRC shall dispose of the case within 15 days from the date of receipt of appeal. For surveillance cases, the RRC shall dispose of the case within 5 days from the date of receipt of appeal.

Minimum Eligibility Criteria for Review of Cases

  1. If there is any additional information which was not available/provided at the time of initial rating/surveillance;
  2. If there is additional perspective given by the client on aspects of the rationale
  3. If there is any new significant development post initial rating surveillance.
  4. The Review criteria will be applicable for both Surveillance and Fresh cases.

Appeal Policy (Version IV) approved by board in its meeting dated 01st February 2022.

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Policy for Appeal by Issuers

Review Committee

Infomerics has Internal Rating committee (IRC) comprising of the senior management of the company and the External Rating Committee (ERC) comprising independent eminent professional members who are not employees of the company. ERC considers all the proposals for investment grade rating assessed and recommended by the Rating Team consisting of the Rating Analysts and Rating Heads through the Chief Rating Officer. All non-investment grade rating proposals are placed before the Internal Rating Committee (IRC) as per the policy of the company. Once the rating/ is assigned by the ERC/IRC, the same is communicated to the client.

According to SEBI circular, SEBI/HO/MIRSD/DOS3/CIR/P/2018/130, dated September 19, 2018, which inter alia states that;

“…cases of requests by an issuer for review of the rating(s) provided to its instrument(s) shall be reviewed by a rating committee of the CRA that shall consist of majority of members that are different from those in the Rating Committee of the CRA that assigned the earlier rating, and at least one-third of members are independent.”

In line with SEBI’s guidelines, Infomerics Ratings currently has a Rating Review Committee to consider all cases of requests by Issuers for review of the Investment Grade rating(s) assigned to their instrument(s) / bank facilities. In line with SEBI’s requirement that the Review Committee of a CRA shall consist of majority of members that are different from those in the Rating Committee of the CRA that assigned the earlier rating and at least one-third of members should be independent (members not having any pecuniary relationship with the CRA or any of its employees).

 Appeal Case Process

It is felt that there may be spate of the appeals as we grow and placing all the appeals before the review committee will add uncalled for burden on the committee of such senior members. Hence to streamline the process of handling appeal case the following process shall be followed:-

1. Once the request for review is received, the same shall be placed before the appeal admission committee consisting of the following members: -

i). Group Head, who is/are not involved in the initial rating/surveillance exercise,

ii). One independent ERC member who was not involved in the assignment of rating.

iii). Chief Rating Officer

2. The committee will go through the documents to evaluate whether the request for review meets the review criteria as stated in the subsequent paragraphs. If the review criteria is met, then all the additional facts are analysed by the appeal admission committee and decision is arrived to either recommend placing the appeal before the RRCM or reject the same and advice the issuer accordingly.

3. The agenda for the RRCM shall be prepared by the concerned Analytical team who had originally dealt with the case. Thereafter, the review request shall be placed before the Rating Review Committee of Infomerics. The decision of the Review Committee, as the case may be, on the review shall be final and is communicated to the client immediately.

4. For fresh (initial) cases, the Appeal Admission Committee will pronounce its verdict within 7 days from the date of receipt of the appeal and RRC shall dispose of the case within 15 days from the date of receipt of appeal. For surveillance cases, the Appeal Admission Committee will pronounce its verdict within 2 days from the date of receipt of the appeal and RRC shall dispose of the case within 5 days from the date of receipt of appeal.

Minimum Eligibility Criteria for Review of Cases

  1. If there is any additional information which was not available at the time of initial rating/surveillance; and/or,
  2. If there is any new development post initial rating/surveillance (which appears to be significant.
  3. In case of the rating assigned by the ERC being divergent than that of the rating proposed by the Analytical team, and the observation of the ERC that is recorded in the ERC meeting minutes for the same being satisfactorily replied by the issuer.
  4. The Review criteria will be applicable for both Surveillance and Fresh cases.

Appeal Policy (Version III) approved by board in its meeting dated 26th November 2021.

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Policy for Appeal by Issuers

Infomerics has the External Rating Committee (ERC) comprising independent eminent professional members. Rating Committee considers all the proposals for rating and grading coming through the Rating Team which includes senior employees of the company engaged in rating function, except proposals for rating decided by the Internal Rating Committee (IRC) as per the policy of the company. Once the rating/grading is assigned by the ERC/IRC, the same is communicated to the client.

Client has the right to request for review of such rating/grading by placing new facts and figures, if any. Once the request for review is received, the senior level Rating Analyst(s)/Group Head, who is/are not involved in the initial rating/surveillance exercise, shall go through the papers to evaluate whether the request for review meets the review criteria as stated in the subsequent paragraphs. If the review criteria are met, then all the new facts are analysed by the concerned Analysts & the Rating Team. Thereafter, the review request shall be placed before the Review Committee of Infomerics. The decision of the Review Committee, as the case may be, on the review is communicated to the client immediately.

Review Criteria

  1. If there is any additional information which was not available at the time of initial rating/surveillance; and/or,
  2. If there is any new development post initial rating/surveillance (which appears to be significant.

Appeal Case Process

  1. In the event of an Appeal, the case documents will be reviewed by a Rating Head who was not involved originally with the concerned case. He will comment on the need for the case to be put up before a higher committee.
  2. Post comments from the other Rating Head, the CRO will comment on whether the appeal should be put up before a higher committee.
  3. In the event of divergence in views between the Rating Head and CRO, the CRO’s decision will stand as final.

Appeal Policy (Version II) approved by board in its meeting dated 11th January 2021.

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Policy for Appeal by issuers/borrowers

Infomerics has the External Rating Committee (ERC) comprising independent eminent professional members. Rating Committee considers all the proposals for rating and grading coming through the Rating Team which includes senior employees of the company engaged in rating function, except proposals for rating decided by the Internal Rating Committee (IRC) as per the policy of the company. Once the rating/grading is assigned by the ERC/IRC, the same is communicated to the client. Client has the right to appeal against such rating/grading by placing new facts and figures, if any. Once the request for review is received, all the new facts are analysed by the Analysts & the Rating Team and thereafter the same is placed before the IRC. If the IRC feels that no change in rating/grading is necessary, the review proposal is disposed of by the IRC even if the initial rating/grading decision is made by ERC. Otherwise the review proposal is placed before ERC. The decision of the ERC or IRC, as the case may be, on the review is communicated to the client immediately. The review process is generally completed within a period of 30 days in case of new rating/grading proposal and in 20 days in case of surveillance.