Indian investor associations fought for five long years to get SEBI to accept the need for grading of initial public offerings (IPOs). When the grading process was finally adopted, it was done in a half-hearted manner and a key demand of the investors was ignored. It was that the rating agencies must be paid through investor protection funds available in plenty with the Ministry of Corporate Affairs, stock exchanges and, now, SEBI. This would have ensured that the rating agencies were accountable to investors and not to the issuers who paid their fees and have longstanding business and consulting relationships with them. Now that we are in the middle of a global financial crisis, the very same issues are being raised around the world, turning the heat on the big two raters – Moody’s and Standard & Poor’s (S&P). The latter has reacted with a quick nine-page White Paper which admits to the need for a code of ethics, greater regulatory oversight over the rating business and more ‘robust’ disclosures. However, it still does not touch upon the issue of compensation. Ratings are key to price discovery in all markets and one reason for the global financial crisis is that credit ratings of a vast range of structured financial instruments became untrustworthy. India too was in the middle of overhauling the extremely weak regulatory oversight that SEBI exercises over rating agencies. The finance ministry was in charge of this, but nothing has been heard on that front for a long time, since the ministry is busy cleaning up the mess over SEBI’s independence and leadership. Will Indian investor groups ensure that the rating process tackles the key issue of compensating raters and separating their consulting and advisory relationships from the rating process?