2 weeks ago

SEBI proposes colour-coded Credit Risk-o-Meter for debt securities

SEBI proposes colour-coded Credit Risk-o-Meter for debt securities
SEBI Credit Risk-o-Meter: Regulator proposes colour-coded scale for debt securities · thehindubusinessline.com

SEBI is a regulator that watches over investing in India.

When people buy bonds, they are lending money to a company.

Some companies are safe to lend to, and some are risky.

SEBI has a new idea called a Credit Risk-o-Meter.

It is a colour chart, like a traffic light, that shows how risky a bond is.

Green means very safe, and red means there is a big chance the company may not pay back.

The chart has six colours from green to red.

Companies that sell bonds would have to show this chart so investors can understand the risk easily.

People can tell SEBI what they think about the idea until September 3.

Key facts

Regulator
Securities and Exchange Board of India (SEBI)
Proposal
Mandatory colour-coded 'Credit Risk-o-Meter' for debt securities
Risk levels
Six: Irish Green, Chartreuse, Neon Yellow, Caramel, Dark Orange, Red
Lowest risk colour
Irish Green
Highest risk colour
Red (high to very high risk of default)
Multiple ratings rule
Meter based on the lowest rating; all ratings disclosed
Comment deadline
September 3, 2026

Quotes

SEBI representative

Official from India’s securities regulator

“"By simplifying risk evaluation, this tool enhances market transparency, improves investor understanding while supporting regulatory goals of investor protection and market development," SEBI said.”
thehindubusinessline.com

Sources

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