SEBI makes a colour-coded Credit Risk-o-Meter mandatory in debt offer documents, advertisements and online bond platforms: Circular HO/17/11/22(1)2026-DDHS-POD1/I/23092/2026

What SEBI has decided

By a circular dated 7 October 2026, SEBI has introduced a Credit Risk-o-Meter for debt securities. The circular says the purpose is to assist investors in assessing credit risk through colour-coded visualisation before they invest. The meter becomes a mandatory component of:

• the offer document;
• the abridged prospectus;
• the private placement memorandum;
• all advertisements of the issuer or of Online Bond Platform Providers (OBPPs);
• the web and mobile platforms of OBPPs.

To give effect to this, a new Chapter II-C, “Disclosure of Credit Risk-o-Meter for debt securities”, is inserted in the NCS Master Circular dated 15 October 2025, and a new clause 14 is added to Annexure-XXIB under Chapter XXI, making the meter part of the minimum disclosures for each security offered on an online bond platform.

Which securities are covered

The framework applies to all listed and proposed-to-be-listed issuances of non-convertible securities (NCS), commercial papers, securitised debt instruments, security receipts and structured debt / market linked debentures, whether issued by public issue or by private placement.

The six levels

This colour scheme applies to all digital and polychrome printed promotion material for a debt security. Issuers and OBPPs must clearly indicate that the meter represents only the credit risk associated with the security.

What must appear with the meter

• The name of the credit rating agency (CRA).
• The actual credit rating of the security, in text.
• For unsecured debt instruments, the word “unsecured” in bold red text.

Where a security carries ratings from multiple CRAs, the meter must reflect the lowest rating, though all ratings may be disclosed alongside. Where a CRA mentions “Issuer is Not Cooperating” (INC), the meter is to be displayed with the arrow directed towards INC, and the INC status is to be reflected in the text below it.

Disclaimers

A prescribed disclaimer goes below the meter in the offer document, abridged prospectus and private placement memorandum, and is to be displayed suitably on web and mobile platforms. It states that the meter is based on evaluation of the credit risk of the issuer, does not constitute investment advice or a recommendation to invest, and that investments in debt securities are also subject to market and liquidity risks.

For unsecured perpetual bonds (such as AT1 bonds) a separate disclaimer applies. It states that the meter does not reflect the unique structural risks of such bonds and that these instruments may carry the risk of total loss of invested capital.

Additional requirements for OBPPs

• Derive the information for the meter solely from credit ratings assigned by SEBI-registered CRAs.
• Maintain an automated system to update the meter within 24 hours of receiving intimation of a rating change from NSDL/CDSL, and communicate the change on the platform within the same time.
• Strictly prohibit manual overrides of the classification, and maintain audit trails of all updates and rating changes.
• Display the meter on the Bond Listing and Bond details page, before the investment action buttons.
• Show the meter in all forms of advertisements that explicitly reference the rating of the security, whatever the medium or format.
• In monochrome advertisements, provide a QR code along with the meter that leads to the website of the OBPP or issuer, where the meter can be seen in colour.
• On mobile, the meter may be condensed, but selecting the information (“i”) icon must display the detailed meter as in the web view.

When it applies

The provisions come into force after 45 days from the date of issuance of the circular. Stock exchanges and depositories are directed to put systems and processes in place, amend their bye-laws, rules and regulations where applicable, and bring the circular to the notice of existing and prospective issuers.