SEBI Consultation Paper on Recommendations of Working Group for review of SEBI LODR Regulations 2015

SEBI has released Consultation Paper on Recommendations of the Working Group for review of SEBI LODR Regulations, 2015 – Review of Framework for Monitoring and Disclosure of Utilization of Issue Proceeds.

On October 13, 2026, the Securities and Exchange Board of India released a Consultation Paper on the Review of the Framework for Monitoring and Disclosure of Utilization of Issue Proceeds.

This consultation paper covers Chapter I of the first report by a SEBI Working Group, chaired by V S Sundaresan (former Executive Director of SEBI). The primary objective is to tighten how listed companies track, utilize, and disclose the funds they raise from public markets while removing regulatory ambiguities.

Key Recommendations Proposed by the Working Group

Mandatory Monitoring Agencies (MAs): The panel proposes making independent Monitoring Agencies mandatory for all public issuances regardless of size (excluding Offer for Sale).

Direct Reporting: MAs will submit monitoring reports directly to stock exchanges to prevent filtering or delays.

Non-Cooperation Clause: Uncooperative companies will prompt an MA report based on “best available information” and a “Statement of Non-Cooperation”.

Regulatory Updates & Restrictions: A new Regulation 32A is proposed under SEBI LODR, and companies cannot change MAs while non-cooperation remains unresolved.

Proposed Penalties and Enforcement Mechanisms

A stringent Standard Operating Procedure applies for non-cooperation:

Initial Fine: Stock exchanges levy ₹50,000 per instance.

Notices & Escalation: Compliance notice within 30 days, followed by promoter notices after 15 days of unpaid fines.

Freezing Accounts: Continued default for 10 days results in depositories freezing promoters’ demat accounts.

The draft proposal is open for public comments until November 3, 2026. Click here to provide your comments.

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