Amendment to the Circular titled “Master Circular for Credit Rating Agencies in the IFSC"

International Financial Services Centres Authority (IFSCA), vide Circular IFSCA-CMIR/1/2026-CMIR dated July 16, 2026, has announced an important update regarding amendments to the Master Circular for Credit Rating Agencies in the IFSC.

Key Details of the Update –

• Applicability: The circular is applicable to all Credit Rating Agencies (CRAs) and Recognised Stock Exchanges operating in the International Financial Services Centre (IFSC).

• The Master Circular dated August 5, 2025 has been amended after considering stakeholder representations, public consultation feedback and a review of global best practices.

• Key Changes: Explanation 1 under paragraph 5.1.1 has been amended to clarify that credit ratings may relate to a financial instrument or issuer in the IFSC.

• Key Changes: A new Explanation 3 has been inserted under paragraph 5.1.1, clarifying that credit ratings include credit quality ratings and other similar services relating to credit ratings, irrespective of nomenclature.

• Key Changes: A new sub-paragraph 5.1.7 has been inserted introducing Financial Strength Rating.

• Key Changes: Paragraph 13.1.10 has been substituted to require CRAs to maintain accurate, detailed and comprehensive records sufficient to reconstruct the credit rating process and the important factors underlying each rating action.

• Key Changes: New paragraphs 13.1.11 and 13.1.12 require CRAs to maintain records containing a summary of material considerations and analytical reasoning, including key arguments for and against the rating decision without attributing comments to individuals, and to retain records in accordance with the IFSCA (Capital Market Intermediaries) Regulations, 2025, even after a rating is withdrawn or discontinued.

• Key Changes: Paragraph 17.1 has been substituted to require CRAs to disseminate all initial and subsequent rating actions along with the rating rationale on their website. Before issuing a rating action, CRAs must provide issuers with critical information and principal considerations underlying the proposed rating and an opportunity to correct factual errors, omissions or misperceptions that may materially affect the rating. These requirements are not mandatory for unsolicited ratings and private credit rating assignments.

• Key Changes: A proviso has been inserted under paragraph 25.1 exempting private credit rating assignments from the requirement to disclose information on the CRA's website.

• Effective Date: The amendments come into force with immediate effect, i.e., July 16, 2026.

Actions if Any –

• Credit Rating Agencies should update their internal policies, operational processes and record-keeping practices to align with the amended Master Circular.

• Ensure compliance with the revised disclosure, record maintenance, rating dissemination and issuer engagement requirements.

• Update website disclosure practices in accordance with the amended provisions, including applicable exemptions for private credit rating assignments.

Compliance Deadline –

• The amendments are effective immediately from July 16, 2026.