Sebi revokes cancellation of Brickworks licence, but restrains company from onboarding new clients

Mumbai: The Securities and Exchange Board of India (Sebi) has revoked its earlier order cancelling the licence of Brickwork Ratings and passed several directions on the rating agency.

Sebi's move follows the Securities Appellate Tribunal's directive in June to reconsider the quantum of penalty.

In a fresh order, Sebi has restrained Brickwork Ratings from onboarding new clients or taking fresh mandates from existing clients for six months.


The regulator has asked the rating firm to broad-base its board to nine and to ensure that only an independent director not related or connected to the founding management of the company is appointed as the chairperson of its board.

Sebi said Brickwork Ratings should ensure that the members of the founding management of the company are not part of any rating committees constituted by the firm or involved in the rating process.

Also, the rating company should not appoint any person related or connected to the founding management to the audit committee or the rating sub-committee of the board.

The regulator said the company should also ensure that the person functioning as CRO (chief rating officer) has adequate experience in credit rating and risk management, and should also undergo in-depth training by an entity not related/connected to the firm to familiarise himself/ herself with the regulatory framework. Such person should also ensure that systems and rating models are in place at the firm that are fully compliant with the credit rating agency regulations, Sebi said.