Business Standard

Sebi revokes Brickwork's wind up order, bars taking clients for 6 months

In June, the Securities Appellate Tribunal (SAT) set aside a Sebi ruling cancelling the licence of the credit rating agency and asked the regulator to pass a fresh order

SEBI

Press Trust of India New Delhi

Listen to This Article

Capital markets regulator Sebi has revoked its wind up order against Brickwork Ratings India and barred the credit rating agency to onboard new clients for a period of six months.

In June, the Securities Appellate Tribunal (SAT) set aside a Sebi ruling cancelling the licence of the credit rating agency and asked the regulator to pass a fresh order.

Brickwork Ratings India Pvt Ltd is a Sebi and RBI-accredited registered credit rating agency.

In an order on Wednesday, the markets regulator directed Brickwork Ratings India to strengthen its board and appoint an "independent professional chief executive officer and an independent director as chairperson".

 

It has also directed Brickwork to increase the number of directors to nine from the current five and ensure that the new members of the newly constituted board are unconnected to the present management/founders of the company.

According to Sebi, the credit rating agency will ensure that members of the founding management are not part of any rating committee constituted by the noticee (Brickwork Ratings India) or involved in the rating process.

All people undertaking rating function, including the analysts, are adequately trained by an entity and not related to the noticee, and should be fully aware of the regulatory framework governing ratings.

"The noticee shall ensure compliance with the directions within a period of five months from the date of this order. Sebi shall conduct a review after the period of five months to examine the compliance by the noticee with the directions issued in this order.

"The noticee shall be restrained from onboarding new clients or taking fresh mandates from existing clients for a period of six months from the date of this order or till such time it ensures satisfactory compliance with the directions contained in this order, whichever is later," Sebi's Whole Time Member Ashwani Bhatia said in the order.

The order came after the Securities Appellate Tribunal (SAT) in June set aside a Sebi order cancelling the licence of the credit rating agency.

However, the appellate tribunal partly affirmed some of the violations and referred the matter back to Sebi to issue a fresh order on the quantum of the penalty.

In October 2022, the regulator cancelled the registration of Brickwork and directed it to wind up operations within six months for violations of regulatory norms. Following this, the rating agency approached SAT.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: Sep 15 2023 | 8:40 PM IST

Explore News