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SEBI asked ratings agency Brickwork to wind down operations in six months and cancelled its certificate of registration and banned it from taking new clients. Brickwork is one of the seven registered credit rating agencies (CRA) and SEBI found repeated lapses, noticed across multiple inspections. SEBI investigations showed that governance changes recommended in earlier inspections, and monetary penalties imposed did not prove effective or deter the rating agency in addressing very basic requirements of running a CRA.
SEBI said Brickwork had violated the provisions of the CRA Regulations and the SEBI circulars. According to SEBI, the contraventions/deficiencies observed in the first and second inspections led to initiation of separate adjudication proceedings against Brickwork.
Earlier, a joint inspection by SEBI and the RBI had shown that Brickwork had failed to exercise proper due diligence and considerably delayed the disclosures about non-cooperation of the issuer.
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