Policy on Review/ Appeal of Ratings by Rated Entities

Introduction

As part of the BWR rating process, in case a rated entity does not agree with BWR’s rating action (rating assignment/rating action arising out of periodic reviews), it can prefer an appeal for a review of such a rating. The process followed for consideration of appeal requests is detailed below:

1. For periodical surveillance of a rated entity the communication of the rating to the issuer should be immediately but not later than 1 working day of the Rating Committee of the meeting, while an outer timeline of 1 working day has been specified by SEBI, we are required to communicate the rating to the issuer on the same as the rating Committee meeting.
2. An appeal request by a rated entity for a review of the rating should be received by BWR in writing (letter duly signed by an authorised signatory of the rated entity/email from the official email ID of the authorised signatory of the rated entity) within 5 working days from the date of the communication of the rating to the rated entity in the case of an initial rating and immediately but not later than within 3 working days of the Rating Committee meeting in the case of periodic surveillance of ratings.
3. An appeal request should be accompanied by additional or new relevant information with adequate supporting Such information should be material and useful to the rating and critically address the points impacting the rating.

The rated entity should submit such supplementary details as follows

• Either along with or within 2 working days of the appeal request in the case of Initial ratings.
• Either along with or within 1 working day of the Appeal request in case of surveillance ratings.

Appeal Screening Committee

An Appeal Screening Committee (ASC) shall examine the merits of the appeal requests received and take an independent view about the prima facie eligibility of the appeal to be heard by the Appeal Committee. The process is as follows:

1. The “Appeal Screening Committee” (ASC) comprising of any two senior rating officers of BWR shall decide on acceptance/non acceptance of appeal requests. Such Committee members should not have participated in the decision process of the rating being appealed.
2. The rating team shall analyze the additional, material information submitted by the rated entity in the light of the relevance of the additional/new information in support of the appeal and place its recommendation to the ASC.
3. If the ASC determines that the grounds for appeal are not tenable (no additional or substantive information submitted/appeal made only to delay the rating action, the timelines have not been adhered to etc), the ASC shall deny the appeal request and the rated entity shall be advised appropriately. In cases where the ASC decides that the appeal request merits consideration by the Appeal Committee, the appeal shall be placed before the Appeal Committee at the earliest.
4. In the case of an initial rating, if the rated entity still does not accept the rating assigned, the pre-appeal rating shall be disclosed on BWR website under “Nonaccepted ratings” in accordance with the extant regulatory guidelines and BWR policy. In the case of rating action arising out of periodic surveillance, acceptance of rating by the rated entity is not required and accordingly, after examination of the appeal request by the ASC and conclusion that the grounds for appeal are not tenable, the rating decided and communicated by BWR (prior to the appeal request) shall be disseminated by way of a rating rationale/press release.

Appeal Committee

1. The Appeal Committee at BWR consists of a majority of members that are different from those in the Rating Committee that assigned the earlier rating and at least one-third of the members are independent. In cases where requests are made by the appellant entities for an opportunity to present their views before the Appeal Committee, the same may be provided.
2. The Appeal Committee decides whether the appeal is to be upheld or not and the decision of the Appeal Committee is final and binding on the rated entity.
3. The final rating shall be disseminated on BWR website by way of a rating rationale/press release immediately but not later than within one working day of the conclusion of the Appeal process in case of Initial Rating and immediately but not later than 7 working days of the Rating Committee meeting in the case of periodic Surveillance. The timeline for appeal following review of rating or periodic surveillance shall be applicable for all ratings reviewed at rating committees held on or after August 1, 2024.
4. In the case of an initial rating, if the rated entity does not accept the rating post the decision of the Appeal Committee, the rating assigned shall be disclosed on BWR website under “non-accepted ratings” in accordance with the extant regulatory guidelines and BWR In the case of rating action arising out of periodic surveillance, the rating as decided by the Appeal Committee shall be disseminated by way of a rating rationale/press release.
5. BWR shall make best efforts to conclude the appeal by publishing the final rating rationale within Regulatory timelines. However, in cases where the appeal process is not concluded within regulatory timelines, BWR shall publish the Rating Rationale based on the original decision of the Rating Committee, while the rating is under appeal. If the rating changes post appeal, BWR shall disseminate such revised rating through a fresh Rating Rationale.

The Appeal Committees shall consider only those requests for review/appeal of ratings which have been cleared by the Appeal Screening Committee.

All requests for review/appeal of ratings shall be resolved as per the timelines stipulated in the BWR policy and in accordance with regulatory guidelines.

Format for Request for Appeal by the client

Dear Sir/Madam,

This is with reference to rating of instrument/s (BLR/NCD/other instrument) of <name of rated entity> communicated to us vide your mail dt ………….your email/letter dated …………..

As informed/ discussed, we wish to prefer appeal against the rating decision referred to above. Please find below the additional information.

We request you to consider the same and review the rating assigned to us.

Thank you. Yours faithfully

Authorised Signatory