The Securities and Exchange Board of India (SEBI) on August 13, 2026, issued a consultation paper proposing the mandatory introduction of a ‘Credit Risk-o-Meter’ as an additional disclosure mechanism for debt securities. The Credit Risk-o-Meter will provide a colour-coded visual representation of the credit risk associated with debt securities, based on their existing credit ratings ranging from AAA to D.
The proposed framework will apply to Non-Convertible Securities (NCS), Commercial Papers (CPs), Securitised Debt Instruments (SDIs), Security Receipts (SRs), and Structured Debt/Market Linked Debentures (MLDs) issued through public issue or private placement, and will cover all categories of issuers and Online Bond Platform Providers (OBPPs). The Credit Risk-o-Meter will be required in offer documents, abridged prospectuses, private placement memorandums, advertisements, and OBPP web and mobile platforms.
The risk levels will be mapped as follows: AAA – Lowest Credit Risk; AA – Very Low Credit Risk; A – Low Credit Risk; BBB – Moderate Credit Risk; BB – Moderate Risk of Default; and B/C/D – High to Very High Risk of Default. Where multiple credit ratings are available, the meter will be based on the lowest rating, while all ratings must be disclosed. For unsecured instruments, the word “unsecured” must be displayed in bold red text.
Issuers/OBPPs will also be required to disclose the name of the Credit Rating Agency, the actual credit rating and prescribed disclaimers alongside the Credit Risk-o-Meter. Any change in the Credit Risk-o-Meter must be immediately communicated on the OBPP platform. The proposed circular is intended to become applicable 30 days after its issuance.
Public comments on the consultation paper may be submitted to SEBI by September 03, 2026.
Please refer to the document attached below for more details.
