SEBI's consultation paper of 13 October 2026 proposes that monitoring agencies report directly to stock exchanges, and that stock exchanges fine listed companies that do not cooperate. It also proposes that every issue have a monitoring agency, whatever its size (excluding the offer for sale portion). These are proposals only, and comments are due by 3 November 2026.
- Monitoring agencies may file their reports directly with stock exchanges, based on the best available information.
- Proposed fine for non-cooperation: Rs. 50,000 per instance reported in a quarter or half year.
- Proposed mandatory monitoring agency for all issuances, irrespective of issue size (excluding offer for sale).
- Timelines for monitoring agency reports to move from the ICDR Regulations to the LODR Regulations.
- Public comments are invited until 3 November 2026.
What changes
The paper takes up Chapter I of the first report of the Working Group reviewing the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR). It deals with how the use of money raised from the public is monitored and disclosed. The main proposals are:
- The monitoring agency submits its report directly to the stock exchanges within the prescribed timelines.
- If the listed company does not cooperate, the report is based on the best available information and carries a "Statement of non-cooperation".
- If the company later rectifies the default, the agency files a complete report within 15 days of receiving the full information. The report states that the default has been rectified.
- Non-payment of the agency's fee is not a ground for reporting non-cooperation. Agencies may instead ask for the full fee in advance and refund the unused part if the agreement ends early.
- A company with a reported non-cooperation can neither terminate its agency nor appoint a new one until it rectifies the default.
- Stock exchanges must display the agency report and any statement of non-cooperation prominently on their websites.
- A monitoring agency becomes mandatory for all issuances, irrespective of issue size (excluding the size of the offer for sale).
- A new Regulation 32A in the LODR Regulations will cover monitoring agency reports. Regulation 32 will cover the statement of utilisation, including variations, and will also apply to companies exempt from appointing an agency.
Who it applies to
Listed companies and issuers raising funds through an IPO, rights issue, further public offer, preferential issue, QIP or SME IPO. It also applies to their promoters, to monitoring agencies and to stock exchanges.
From when / key dates
- Issued: 13 October 2026
- Comments due by: 3 November 2026
The paper proposes transitory provisions for implementation. Nothing takes effect until SEBI amends the regulations.
Context: why SEBI is acting
The LODR Regulations have been amended many times since 2015. SEBI set up the Working Group, chaired by Shri V S Sundaresan, to simplify the structure and language and to remove ambiguity and redundancy. SEBI also discussed the proposals with its Advisory Committee on Listing Obligations and Disclosures (ACLOD).
Background: the earlier position
Timelines for monitoring agency reports currently sit in the ICDR Regulations. The paper proposes deleting them there and placing them in the LODR Regulations. To keep the two sets consistent, the words "on a quarterly basis" are to be omitted from ICDR Regulations 41(2), 82(2), 137(2), 162A(2), 173A(2) and 262(2). Sub-regulation (5) of Regulation 262 is to be deleted and Regulation 262(6) modified.
Effect in practice
If adopted, a company that holds back information from its monitoring agency can no longer delay the quarterly report. The exchange will receive the report anyway and can fine the company Rs. 50,000 per instance. The enforcement steps follow the exchanges' SOP:
- Exchanges issue notice within 30 days of the report's due date.
- The company has 15 days to pay the fine or rectify the default.
- The exchange then issues notice to the promoters, who get 10 days.
- If the default continues, the exchange asks depositories to initiate freezing of the promoters' demat accounts.
Finance teams should keep utilisation records and supporting documents ready for the agency. They should also check that agency agreements deal with fee payment and early termination. Comments may be filed on the SEBI public comments page or by email to consultationcfd@sebi.gov.in.
| Provision | Before | Now | What it means |
|---|---|---|---|
| Monitoring agency report (LODR Regulations) | The listed entity is the route for the report; timelines for the report sit in the ICDR Regulations. | The agency submits the report directly to stock exchanges; timelines are brought under the LODR Regulations. | Non-cooperation by the company can no longer stop the exchange from receiving a report. |
| Non-cooperation by listed entity | No fine is stated in the paper. | Rs. 50,000 per instance reported in a quarter or half year, levied by stock exchanges. | Promoters face notice and possible demat freezing if the default and fine remain unresolved. |
| ICDR Regulations 41(2), 82(2), 137(2), 162A(2), 173A(2), 262(2) | The words "on a quarterly basis" appear. | The words "on a quarterly basis" are omitted. | Aligns the ICDR Regulations with the timelines moved to the LODR Regulations. |
| ICDR Regulation 262(5) and 262(6) | Sub-regulation (5) is in force. | Sub-regulation (5) is deleted and sub-regulation (6) is modified. | Removes overlap for SME IPOs. |
| Appointment of monitoring agency | Not stated in the paper. | Mandatory for all issuances irrespective of issue size (excluding offer for sale). | Smaller issuers also need an agency. |
8.1 Empowering monitoring agency to directly submit its report to Stock Exchanges within prescribed timelines.
8.2 In the event of non-cooperation by listed entity, during the process of monitoring, the report directly submitted by monitoring agency to Stock Exchanges shall be based on best available information and accompanied by "Statement of non-cooperation”.
8.3 Levy of fine by stock exchanges, in case of non-cooperation by listed entity reported by monitoring agency.
8.4 In case of termination of agreement before hundred percent utilization of the issue proceeds, both the listed entity and existing monitoring agency to ensure timely submission of monitoring agency report to Stock Exchanges during the transition period.
Mandatory appointment of monitoring agency, for all issuances irrespective of the size of the issue (excluding size of offer for sale).
Non-payment of fee to monitoring agency, shall not be considered as ground for reporting non-cooperation.
the monitoring agency shall, within 15 days of receipt of complete information from listed entity, submit a subsequent complete report to the stock exchanges.
in the event of non-cooperation reported by a MA for one or more reporting quarter(s), the listed entity shall neither terminate its agreement with the existing monitoring agency nor appoint a new monitoring agency, until it rectifies the non-cooperation status and enables existing monitoring agency to submit a complete report for that reporting quarter.
- Monitoring agency
- An independent agency, usually a bank or financial institution, that tracks how a company uses the money raised in an issue and reports to the stock exchanges.
- LODR
- SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 - the rulebook for listed companies.
- ICDR
- SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 - the rules for raising capital from the public.
- Statement of non-cooperation
- A statement attached to the agency's report when the listed company does not provide the information the agency needs.
- ACLOD
- SEBI's Advisory Committee on Listing Obligations and Disclosures.
- Master Circular
- A single circular that consolidates all earlier circulars of a regulator on one subject.
This update summarises an official document for general information. It is not legal advice; please consult us before acting on it.