Securities and Exchange Board of India (SEBI) proposes mandatory colour-coded Credit Risk-o-Meter for debt securities

Key facts

• SEBI has proposed making the Credit Risk-o-Meter a mandatory additional disclosure mechanism for debt securities.
• The proposed framework maps credit ratings into six risk levels, from lowest credit risk to high to very high risk of default.
• AAA-rated securities will be shown in Irish Green, while ratings from B+ to D will be shown in Red.
• AA+, AA and AA- ratings will be represented by Chartreuse; A+, A and A- by Neon Yellow; BBB+, BBB and BBB- by Caramel; and BB+, BB and BB- by Dark Orange.
• Issuers and Online Bond Platform Providers (OBPPs) will have to display the Credit Risk-o-Meter in offer documents, abridged prospectuses, private placement memorandums, advertisements, and on web and mobile platforms.
• Where a debt security has multiple ratings, the Credit Risk-o-Meter will be based on the lowest rating, and all ratings must be disclosed alongside it.
• For unsecured debt instruments, issuers and OBPPs must prominently disclose the unsecured nature in bold red text below the meter.
• SEBI has proposed disclaimers stating that the Credit Risk-o-Meter is not investment advice and that debt securities remain subject to market and liquidity risks.
• A separate disclaimer has been proposed for unsecured perpetual bonds such as AT1 bonds, highlighting their structural risks and the possibility of total loss of invested capital.
• SEBI has invited public comments on the consultation paper latest by September 3, 2026.