IFSCA Expands Rating-Withdrawal Flexibility for IFSC Credit Rating Agencies
The International Financial Services Centres Authority (IFSCA) has amended the withdrawal-of-rating provisions in its Master Circular for Credit Rating Agencies (CRAs) in the IFSC, giving registered CRAs more room to specify circumstances in which an outstanding rating may be withdrawn under an approved internal policy.
The amendment was issued on September 8, 2026 through circular e.F.No. IFSCA-CMIR/1/2026-CMIR. It applies to all Credit Rating Agencies in the International Financial Services Centre and recognised stock exchanges in the IFSC, and came into force with immediate effect.
What changed in paragraph 18.2
The August 5, 2025 Master Circular states as a general rule that a CRA should not withdraw a rating while obligations under the rated security, instrument or facility remain outstanding. Paragraph 18.2 then identified circumstances in which withdrawal could nevertheless be permitted.
The September 8 amendment inserts the words “certain situations as per the approved policy of the CRA, including but not limited to” into paragraph 18.2. The effect is that the circumstances already listed in the Master Circular are no longer framed as an apparently closed list; a CRA’s approved withdrawal policy can identify other situations, subject to the governing regulations and the CRA’s policy framework.
Existing examples remain relevant
The underlying Master Circular already identifies examples where withdrawal may be permitted: where the rated entity is wound up, merged or amalgamated; where there is issuer non-cooperation or non-payment of agreed fees; at the issuer’s request, provided the request is not used to avoid an imminent rating change; or where the CRA is constrained from providing the service because of events beyond its control.
The Master Circular also requires the reason for withdrawal to be stated in the CRA’s press release and requires the CRA to establish and prominently disclose a policy on withdrawal of ratings on its website.
Why the amendment matters for issuers and assurance teams
For issuers, treasury teams and debt-market advisers, the wording makes the CRA’s approved withdrawal policy more important when assessing whether a rating can be discontinued before the underlying obligation has ceased to exist. A request from the issuer is not, by itself, a free route to remove a rating, especially where a rating action is imminent.
For CRA compliance, internal audit and governance functions, the wider wording increases the importance of having a clearly approved policy with objective criteria, appropriate approval trails and consistent disclosure. A policy that creates additional withdrawal situations should still operate within the IFSCA regulatory framework and should be capable of being defended against concerns about selective or opportunistic rating withdrawal.
Regulatory basis and immediate effect
IFSCA said the circular followed the notification of the International Financial Services Centres Authority (Capital Market Intermediaries) (Second Amendment) Regulations, 2026. The circular was issued under sections 12 and 13 of the IFSCA Act, 2019 read with regulation 45 of the IFSCA Capital Market Intermediaries Regulations, 2025.
The practical takeaway for IFSC issuers and CRAs is to re-check the currently approved rating-withdrawal policy rather than relying only on the four examples in the earlier Master Circular. The September 8 language gives policy-based flexibility, but it also makes governance, consistency and transparent disclosure around withdrawals more important.
Official source: View the official source document
Key takeaway
IFSCA has amended paragraph 18.2 of its CRA Master Circular so rating withdrawals may occur in situations set out in an approved CRA policy, including but not limited to the existing examples.
