SEBI Proposes Mandatory Monitoring Agency for All Public Issues with Rs 50,000 Fine for Non-Cooperation

Key facts

• The Securities and Exchange Board of India (SEBI) released a consultation paper proposing mandatory appointment of an independent monitoring agency for all public issuances irrespective of issue size, excluding only the offer-for-sale component.
• The proposals stem from a working group chaired by former SEBI Executive Director V S Sundaresan to review the SEBI Listing Obligations and Disclosure Requirements Regulations, 2015, and recommend insertion of a new Regulation 32A.
• Stakeholder comments on the consultation paper have been sought until November 3, 2026.
• A monitoring agency, typically a scheduled commercial bank or credit rating agency, verifies whether a company deploys fresh issue proceeds according to objectives stated in its offer documents.
• If an issuer delays or refuses to furnish financial documents, the monitoring agency can bypass the company and submit its report directly to stock exchanges, and SEBI has outlined a time-bound standard operating procedure escalating to promoters with a Rs 50,000 fine for non-cooperation.
• If a company rectifies its default and provides required records, the monitoring agency must file a revised comprehensive report with stock exchanges within 15 days.
• SEBI clarified that non-payment of monitoring fees by an issuer cannot be used by agencies as a ground to submit a statement of non-cooperation.