SEBI proposes a mandatory colour-coded Credit Risk-o-Meter for debt securities in offer documents, advertisements and bond platforms; comment window closed on 3 September 2026
A SEBI consultation paper issued on 13 August 2026 proposes that issuers and Online Bond Platform Providers must display a “Credit Risk-o-Meter” — a six-level colour-coded scale mapped to credit ratings from AAA to D — in offer documents, abridged prospectuses, private placement memoranda, advertisements and OBPP web and mobile platforms. Comments were due by 3 September 2026; the window has closed.
Key facts
- In force
- Proposal only; comments were due by 3 September 2026 (window closed)
- Who it affects
- Issuers of debt securities (public issue and private placement), Online Bond Platform Providers, stock exchanges, depositories, retail bond investors
- What it is
- Comments invited
- Section
- SEBI
- Published
- 13 August 2026
In 30 seconds
- The Credit Risk-o-Meter would be an additional disclosure showing only the credit risk of a debt security.
- Six levels: AAA is “Lowest credit risk”; B+ and below, down to D, is “High to Very high risk of Default”.
- Where a security has ratings from multiple CRAs, the meter is based on the lowest rating; all ratings are disclosed alongside.
- For unsecured instruments, the word “unsecured” is to appear in bold red text below the meter.
- A specific disclaimer is proposed for unsecured perpetual bonds such as AT1 bonds.
- OBPPs would update the meter by automated system within 24 hours of intimation of a rating change from NSDL/CDSL, with no manual overrides.
हिंदी में सार
SEBI ने 13 अगस्त 2026 के कंसल्टेशन पेपर में प्रस्ताव रखा है कि डेट सिक्योरिटी के ऑफ़र दस्तावेज़, विज्ञापन और ऑनलाइन बॉन्ड प्लेटफ़ॉर्म पर रंगों वाला “Credit Risk-o-Meter” दिखाना अनिवार्य हो। इसमें AAA से D तक की रेटिंग को छह स्तरों में बाँटा गया है; एक से ज़्यादा रेटिंग हों तो सबसे निचली रेटिंग मानी जाएगी और असुरक्षित बॉन्ड पर “unsecured” लाल अक्षरों में लिखा जाएगा। यह सिर्फ़ प्रस्ताव है; टिप्पणी की आख़िरी तारीख़ 3 सितंबर 2026 थी, जो निकल चुकी है।
What the paper is about
SEBI issued a consultation paper on 13 August 2026 proposing the mandatory adoption of a “Credit Risk-o-Meter” as an additional disclosure for debt securities. This is a proposal for public comment, not a decision. Comments were to be submitted latest by 3 September 2026; that window has closed.
SEBI’s reasoning: credit ratings are given in alphanumeric formats (AAA, AA+, BBB- and so on) that retail investors unfamiliar with fixed-income markets may not readily understand. Inspired by the mutual fund framework, the proposed meter turns the rating into a standardised colour-coded visual. The proposal was reviewed by the OBPP working group and deliberated in the Corporate Bonds and Securitization Advisory Committee.
Where it would appear
- Offer document
- Abridged Prospectus
- Private Placement Memorandum
- All advertisements of the issuer / OBPPs
- Web and mobile platforms of OBPPs
The six levels
| Risk-o-Meter level | Credit rating range | Colour |
|---|---|---|
| Lowest credit risk | AAA | Irish Green |
| Very low credit risk | AA+, AA, AA- | Chartreuse |
| Low credit risk | A+, A, A- | Neon Yellow |
| Moderate credit risk | BBB+, BBB, BBB- | Caramel |
| Moderate risk of default | BB+, BB, BB- | Dark Orange |
| High to Very high risk of Default | B+, B, B-, C+, C, C-, D | Red |
Disclosures below the meter
- A clear statement that the meter represents only the credit risk associated with the debt security.
- The name of the credit rating agency and the actual rating, in text. With multiple ratings, the meter follows the lowest rating and all ratings are disclosed.
- For unsecured debt instruments, “unsecured” in bold red text.
- A disclaimer that the meter is based on evaluation of the credit risk of the issuer, is not investment advice or a recommendation, and that investments in debt securities are subject to market and liquidity risks.
- For unsecured perpetual bonds (such as AT1 bonds), a disclaimer that the meter does not reflect their unique structural risks and that they may carry the risk of total loss of invested capital.
- A disclaimer that investors should consult their financial advisers if unclear about suitability.
In the draft circular
- A new Chapter II-C would be inserted in the NCS Master Circular. It would apply to all issuances of non-convertible securities, commercial papers, securitised debt instruments, security receipts and structured debt / market linked debentures, by public issue or private placement, to all categories of issuers, and to OBPPs.
- OBPPs would show the meter on the bond listing and bond details pages before the investment action buttons, and in all advertisements that explicitly reference the rating.
- OBPPs would use only ratings assigned by SEBI-registered CRAs, update the meter within 24 hours of intimation of a rating change from NSDL/CDSL, prohibit manual overrides and keep audit trails.
- The draft says the circular would apply after 30 days of its issuance.
What to note
The Credit Risk-o-Meter is not yet mandatory. As proposed, it would sit alongside the rating, not replace it, and would not capture market or liquidity risk.
Questions and answers
What is the Credit Risk-o-Meter?
A proposed standardised, colour-coded visual scale that maps the credit rating of a debt security (AAA to D) to six levels of risk, from “Lowest credit risk” to “High to Very high risk of Default”. It is a proposal in a SEBI consultation paper dated 13 August 2026.
Where would it have to be shown?
In the offer document, abridged prospectus, private placement memorandum, all advertisements of the issuer or OBPPs, and on the web and mobile platforms of OBPPs.
What if a bond is rated by more than one agency?
The meter would be based on the lowest rating, and all ratings would be disclosed alongside it.
Does the meter cover all risks of a bond?
No. Issuers and OBPPs would have to state that it represents only the credit risk. The proposed disclaimer adds that investments in debt securities are subject to market and liquidity risks, and a separate disclaimer is proposed for unsecured perpetual bonds such as AT1 bonds.
Is the comment window still open?
No. Comments were to be submitted latest by 3 September 2026.
Published 13 August 2026. Updated 7 October 2026. This report is for general information and is not professional advice. Read the source document before acting on it.