SEBI Expands Eligibility Criteria for Internal Audit Teams of Credit Rating Agencies (CRAs) [Read Circular]

The Securities and Exchange Board of India (SEBI) issued a circular dated May 14, 2025, notifying changes to the rules for the composition of internal audit teams in Credit Rating Agencies (CRAs). According to the circular, internal audit teams in CRAs can now include Cost Accountants along with Chartered Accountants.

SEBI has added a new qualification for information systems audit professionals to ensure robust audits in the digital age.

What Has Changed?

Previously, SEBI required that internal audit teams of CRAs must include:

• A Chartered Accountant (ACA or FCA), and
• An Information Systems Auditor holding either a CISA (Certified Information Systems Auditor) or DISA (Diploma in Information Systems Audit)

With the revised rule, SEBI has expanded the eligibility to now allow:

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• Either a Chartered Accountant (ACA/FCA) or a Cost Accountant (ACMA/FCMA), and
• An Information Systems Auditor with one of the following qualifications:
  • CISA (Certified Information Systems Auditor)
  • DISA (Diploma in Information Systems Audit)
  • DISSA (Diploma in Information System Security Audit), which is offered by the Institute of Cost Accountants of India (ICMAI)

This change gives CRAs access to a larger pool of professionals for internal audits, especially those with a background in cost accounting and information system security. It also acknowledges the importance of cybersecurity and digital systems in today’s financial reporting and credit assessment processes.

The inclusion of DISSA-certified professionals adds a layer of expertise in information system security, which is becoming increasingly important as financial institutions rely more on digital tools and data systems.

SEBI has stated that this change is effective immediately. It amends paragraph 33.1.3 of the Master Circular for CRAs issued on May 16, 2024.

This circular has been issued under Section 11(1) of the SEBI Act, 1992 and in accordance with the SEBI (Credit Rating Agencies) Regulations, 1999. The objective is to promote better regulatory oversight, protect investors, and improve the functioning of the securities market.

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