The maximum tenure for independent directors should not exceed three years and they can serve for not more than two terms, although not consecutively, said people familiar with the matter.“None of the rating agencies has a majority of independent directors on their boards and in some cases, they (independent directors) are not there at all,” said another person familiar with the development.It is proposed that rating companies would put in place a remuneration and compensation committee, where most of the members are independent. The committee will frame broad policies on the remuneration of employees designated as analysts who are directly involved in recommending or deciding the rating of an issuer. Currently, rating companies only provide a rating outlook and not a sectoral outlook. “Globally, rating agencies disclose the rate card,” said an official with a rating company.Rating companies would have to disclose their whistleblower policy and create a transparent and anonymous system that’s available to the board and Sebi. Hence, it is recommended that all data and related technology to be hosted in a location based out of India and appropriate disaster recovery mechanism to be built,” Sebi has proposed.

Source: Economic Times June 12, 2019 01:12 UTC