Securities And Exchange Board Of India - Subsection
Section 27(2) in Securities and Exchange Board of India (Credit Rating Agencies) Regulations, 1999
(2)No credit rating agency shall rate a security issued by its associate or subsidiary, if the credit rating agency or its rating committee has a Chairman, director or employee who is also a Chairman, director or employee of any such entity.[Provided that the Credit Rating Agency may, subject to the provisions of sub-regulations (1), rate a security issued by its associate having a common independent director with it or rating committee if,-(i)such an independent director does not participate in the discussion on rating decisions, and(ii)the Credit Rating Agency makes a disclosure in the rating announcement of such associate (about the existence of common independent director) on its Board or of its rating committee, and that the common independent director did not participate in the rating process or in the meeting of its Board of Directors or in the meeting of the rating committee, when the securities rating of such associate was discussed.]Explanation:- (1) For the purposes of this sub-regulation the expression `independent director' means a director who, apart from receiving remuneration as a director, does not have any other material pecuniary relationship or transactions with the company, its promoters, its management or its subsidiaries, which in the judgment of the board of the company, may affect the independence of the judgment of such director.] [Inserted by S.O. 203(E), dated 19.2.2003]
