SEBI mandates color coded credit risk o meter for investors
Business
SEBI just made it easier to spot risky debt investments.
It has introduced a color-coded credit risk-o-meter, which now has to appear on all key documents and online platforms for bonds and similar products.
This move is meant to help investors assess credit risk before investing.
Six color scale AAA to D
The risk-o-meter uses six colors, each representing a risk level, matching up with existing credit ratings like AAA down to D.
If a bond is unsecured, it will be clearly marked in bold red text.
When there are multiple ratings, you will see the lowest one, but others can also be shown.
Any changes in rating must show up on the meter within 24 hours.
These rules kick in 45 days after SEBI's latest circular (issued today).