SEBI makes a six-colour credit risk meter mandatory for bond offers and bond platforms, effective 45 days after 7 October 2026
A SEBI circular dated 7 October 2026 requires issuers and online bond platforms to show a colour-coded Credit Risk-o-Meter, built from the bond's credit rating, in offer documents and on platforms. It takes effect 45 days after issue.
The Securities and Exchange Board of India (SEBI), the market regulator, has made a colour-coded “Credit Risk-o-Meter” mandatory for debt securities such as bonds. Under a circular dated 7 October 2026, companies issuing bonds and online bond platforms must show the meter wherever a bond is offered, so a buyer can see the bond’s credit risk as a colour. The circular comes into force 45 days after it was issued, which is 21 November 2026 by our count.
Credit risk is the risk that the issuer does not pay interest or repay the money on time. A credit rating is a grade given by a credit rating agency (CRA), such as AAA or BB, that reflects this risk. The meter takes that grade and shows it as one of six levels and colours. An online bond platform provider (OBPP) is an entity that runs a platform on which bonds can be bought online.
Where the meter must appear
The circular says the meter must be part of:
- the offer document and the abridged prospectus (the shortened version of the offer document);
- the private placement memorandum (the offer document for bonds sold privately to selected investors);
- all advertisements by issuers and OBPPs;
- the web and mobile platforms of OBPPs. On an OBPP, it must appear on the bond’s listing and details page, ahead of the buttons used to invest.
It covers all listed bonds and bonds proposed to be listed, whether sold through a public issue or a private placement. The circular names non-convertible securities (NCS), commercial paper, securitised debt instruments, security receipts, and structured debt or market linked debentures.
The six levels
The circular maps long-term ratings, AAA to D, to six levels. Short-term ratings are mapped as well.
| Level | Long-term ratings | Short-term ratings | Colour |
|---|---|---|---|
| Lowest credit risk | AAA | A1+ | Irish Green |
| Very low credit risk | AA+, AA, AA- | A1 | Chartreuse |
| Low credit risk | A+, A, A- | A2 | Neon Yellow |
| Moderate credit risk | BBB+, BBB, BBB- | A3 | Caramel |
| Moderate risk of default | BB+, BB, BB- | A4+ | Dark Orange |
| High to very high risk of default | B+, B, B-, C+, C, C-, D | A4, D | Red |
What must be shown with it
- Below the meter, the issuer or OBPP must state in text the name of the credit rating agency and the bond’s actual rating.
- For an unsecured bond, meaning one with no specific asset backing it, the word “unsecured” must be shown in bold red text.
- If a bond has ratings from more than one agency, the meter reflects the lowest rating. All ratings may also be shown beside it.
- The meter must be described as representing only the credit risk of the bond.
- Offer documents, abridged prospectuses and private placement memorandums, and the platforms, must carry a disclaimer. It says the meter is based on the issuer’s credit risk, is not investment advice or a recommendation to invest, and that debt securities also carry market and liquidity risk.
- For unsecured perpetual bonds such as AT1 bonds, a separate disclaimer is required. It says the meter does not reflect the structural risks of these bonds, which may carry the risk of total loss of invested capital.
- Where the CRA has recorded “Issuer Not Cooperating”, the meter must be shown in a specified way, with an arrow pointing to that status, and the status must also appear in the text below.
Extra rules for online bond platforms
- In all forms of advertisement by a platform that explicitly reference a bond’s rating, the meter must be displayed or printed. In black-and-white advertisements, a QR code must be provided so the colour version can be viewed on the OBPP or issuer website.
- Ratings used for the meter must come only from SEBI-registered credit rating agencies.
- A change in a bond’s meter must be shown on the platform within 24 hours of the platform receiving word of a rating change from NSDL or CDSL, the depositories that hold bonds in electronic form.
- Platforms must keep an automated update system, must not manually override a meter classification, and must keep an audit trail of all meter updates and rating changes.
Other provisions
- SEBI is adding a new Chapter II-C to its Master Circular for non-convertible securities dated 15 October 2025, and adding “Credit Risk-o-Meter” as item 14 of the minimum details an OBPP must show for each bond. All other provisions of that master circular stay unchanged.
- Stock exchanges and depositories must put in place the systems needed and bring the circular to the notice of issuers.
- The circular was issued under Section 11(1) of the SEBI Act, 1992 and Regulation 55(1) of the SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021.
Basis of these figures
All provisions, rating-to-colour mappings and dates are from the text of SEBI circular HO/17/11/22(1)2026-DDHS-POD1/I/23092/2026 of 7 October 2026, listed on SEBI’s circulars page. The circular states the start date only as 45 days after issue; 21 November 2026 is our count (7 October plus 45 days), and Vinod Kothari Consultants, a law and advisory firm, gives the same date in its note on the circular. The meter shows only credit risk as measured by ratings. This article reports the rule and does not say whether any bond suits any investor.