SEBI Issues A Circular Enabling Environmental, Social And Governance ("ESG") Rating Providers ("ERPs") To Undertake ESG Rating Activities Under IFSCA

Under the SEBI (Credit Rating Agencies) Regulations, 1999 and the Master circular of ERPs, an ERP may undertake or offer ESG rating of any product or issuer, as may be required by another financial sector regulator or authority, under the guidelines of such regulator or authority. In furtherance of the same, the capital markets regulator added the International Financial Services Centres Authority ("IFSCA") which will now enable ERPs to undertake ESG rating activities in the International Financial Services Centre, Gujarat International Finance Tech-city. The SEBI circular, however, categorically mentions that the ESG ratings undertaken by an ERP under the guidelines of IFSCA will be under the purview of IFSCA only. Therefore, IFSCA has been empowered to oversee ERPs operating within the IFSC-GIFT City.

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