Summary: SEBI’s consultation paper dated 13 October 2026 seeks public comments on proposals to strengthen monitoring and disclosure of the utilization of issue proceeds under the LODR and ICDR Regulations. Based on Chapter I of the Working Group’s first report, it proposes direct submission of monitoring agency reports to stock exchanges, reports based on the best available information with statements of non-cooperation, and mandatory monitoring agency appointment for all issuances irrespective of issue size, excluding the offer-for-sale component. Other recommendations address gross issue proceeds, reporting formats, transitional arrangements, revised Regulation 32 and a separate Regulation 32A. SEBI’s additional proposals clarify that non-payment of monitoring fees would not itself constitute non-cooperation; agreements could provide for advance fees and proportionate refunds following early termination. Once an entity supplies complete information and rectifies non-cooperation, the monitoring agency would submit a complete report within 15 days, expressly recording rectification. Stock exchanges would prominently display reports and non-cooperation statements. The proposed enforcement process includes a Rs. 50,000 fine per instance, notices to listed entities within 30 days of the reporting due date, escalation to promoters after 15 days, and initiation of promoter demat-account freezing after a further 10 days if specified defaults remain unresolved. An entity would be barred from replacing its monitoring agency until non-cooperation is rectified and the complete report is submitted. Reporting timelines would be consolidated under LODR, with consequential ICDR amendments. These are consultation proposals. Comments with rationale are invited by 3 November 2026 through SEBI’s public-comment portal, with an email alternative for technical difficulties.
Securities and Exchange Board of India
CONSULTATION PAPER
Recommendations of the Working Group for review of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015: Review of framework for monitoring and disclosure of utilization of issue proceeds
SEBI- Oct 13, 2026 | Reports : Reports for Public Comments
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OBJECTIVE
1. The objective of this consultation paper is to seek comments / views / suggestions from the public and other stakeholders on the recommendations of the Working Group (“Working Group”) constituted for review of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR Regulations”).
BACKGROUND AND CONSTITUTION OF THE WORKING GROUP
2. LODR Regulations, were published in the Gazette of India on September 2, 2015. The objective of bringing LODR Regulations, was to consolidate, streamline, and harmonize the various existing listing agreements into a single, unified framework and strengthen corporate governance, transparency, and protection of the interests of investors.
3. Since 2015, LODR Regulations have been periodically amended, which may have led to various interpretation issues arising out of multiple amendments.
4. Accordingly, the Working Group, chaired by Shri V S Sundaresan, Former Executive Director, SEBI, on the review of LODR Regulations was constituted with an aim to streamline the regulations, simplify the structure and language, remove ambiguities and redundancy, etc.
5. The Working Group has submitted its first report. The report consists of three chapters:
5.1. Chapter I of the report deals with recommendations relating to monitoring and disclosure of utilization of issue proceeds;
5.2. Chapter II of the report deals with recommendations relating to review of penal provisions and actions by stock exchanges (SEs) for non-compliance with SEBI regulations by listed companies including standard operating procedure (SOP) for action by stock exchange.
5.3. Chapter III of the report deals with recommendations relating to clarifications on Related Party Transaction (RPT) Provisions under the LODR Regulations.
6. Subsequently, the first report of the Working group was placed for consideration before the Advisory Committee on Listing Obligations and Disclosures (“ACLOD”) of SEBI. The proposals of the Working Group were also deliberated internally by SEBI.
7. The proposals in this Consultation Paper pertain to the Chapter I of the report on review of the framework for monitoring and disclosure of utilization of issue proceeds.
RECOMMENDATIONS OF THE WORKING GROUP
8. The recommendations of the Working Group in Chapter I recommendations relating to monitoring and disclosure of utilization of issue proceeds, can be accessed at
https://www.sebi.gov.in/sebi_data/commondocs/oct-2026/working_group_report_lodr_p.pdf
9. The recommendations of the Working Group in Chapter I includes the following:
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.
8.5 Harmonization between the provisions of SEBI (Issue of Capital and Disclosure Requirements) Regulation, 2018 (“ICDR Regulations”) and LODR Regulations with respect to Monitoring and Disclosure of Utilization of issue proceeds, and certain other consequential amendments.
8.6 Mandatory appointment of monitoring agency, for all issuances irrespective of the size of the issue (excluding size of offer for sale).
8.7 Clarification with respect to monitoring of gross issue proceeds.
8.8 Modification(s) in the existing format of report of monitoring agency.
8.9 Deletion of sub-regulation (5) of Regulation 262 of the ICDR Regulations and Modification in Regulation 262(6) of the ICDR Regulations.
8.10 Alignment of terminologies under Regulation 32 of the LODR Regulations and other consequential amendments.
8.11 Regulation 32 of the LODR Regulations to deal with ‘Statement of utilization including variation(s)’, if any and to be made applicable to listed entities which are exempt from appointment of Monitoring Agency under the relevant provisions of the ICDR Regulations.
8.12 Insertion of separate Regulation 32A under LODR Regulations, dealing with monitoring agency report related aspects.
8.13 Transitory Provisions for implementation of the amended provisions under ICDR Regulations and LODR Regulations.
10. Additional Recommendations of SEBI:
Pursuant to discussion with the ACLOD and subsequent internal discussion, additional recommendations/ clarifications are proposed by SEBI in respect of certain recommendations under ‘Chapter I of the report of Working Group pertaining to monitoring and disclosure of utilization of issue proceeds’, as detailed hereunder in Table 1:
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Table:1 |
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| Para/ Sub-para of the Working Group Report | Recommendation of the Working Group | Final additional proposals of SEBI for public comments |
| Recommendation 1: Empowering monitoring agency to directly submit its report to SEs within prescribed timelines under LODR Regulations
(Page no. 9 to 11 of the report of Working Group) |
Para 1.2(ii) of the Report states need for review in case of non-cooperation by listed entities during the process of monitoring such as: not providing information to monitoring agency, delay in sharing the required information, information not substantiated with requisite supporting documents, non-payment of fee to monitoring agency, etc.
Para 1.3.2 read with Para 1.4, inter-alia, recommends that- In the event of non-cooperation by listed entity, during the process of monitoring, the report directly submitted by monitoring agency to SEs shall be based on best available information and accompanied by “Statement of non-cooperation”. |
Monitoring agencies may deal with such scenario, by having suitable clauses in the agreement with the listed entity (Issuer), for payment of entire fee for the monitoring period, in advance, if considered appropriate. In case, where monitoring agency has received entire fee in advance, however, the agreement between the monitoring agency and the listed entity is terminated before 100% utilization of the issue proceeds, the monitoring agency may be required to refund to the listed entity (Issuer), the proportionate amount for the remaining monitoring period. This will discourage instances of non-payment of fees.
To address this, it is also proposed that in case a listed entity rectifies the non-cooperation status for a reporting period, for which monitoring agency has submitted direct report to the stock exchanges, the monitoring agency shall, within 15 days of receipt of complete information from listed entity, submit a subsequent complete report to the stock exchanges. This Report shall explicitly state that the listed entity has rectified its non-cooperation status for the said reporting period.
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| Recommendation 2: Action against listed entity in case of non-cooperation by listed entity reported by monitoring agency
(Page no. 11 to 12 of the report of Working Group) |
Para 2.3 read with Para 2.4 recommends that a fine of Rs. 50,000/- per instance reported by monitoring agency in a quarter may be levied by Stock Exchange(s). Subsequent action post levy of fine shall be in accordance with the Standard Operating Procedure laid down in Section VII-A of the Master Circular. | For the sake of clarity and to keep stakeholders informed, stock exchanges have submitted process to be followed (action to be taken) in terms of Standard Operating Procedure (SOP) laid down in Section VII-A of the Master Circular by Exchanges, which is summarized hereunder–
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| Recommendation 3: Termination of monitoring agency agreement before hundred percent of the proceeds of the issue have been utilized
(Page no. 12 of the report of Working Group) |
Para 3.3, read with Para 3.4, recommends in case of termination of agreement between listed entity and monitoring agency before hundred percent utilization of the issue proceeds, both the listed entity and existing monitoring agency shall ensure timely submission of quarterly Monitoring Agency Report to stock exchanges during the transition period. | Recommendation of the Working Group is proposed to be accepted. It is further proposed that 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. |
| Recommendation 4: Harmonization between the provisions of ICDR Regulations and LODR Regulations
(Page no. 12 to 15 of the report of Working Group) |
Para 4.1 read with 4.2, it is inter-alia proposed to delete timelines for submission of monitoring agency report from ICDR Regulations and the same may be brought out under LODR Regulations. | Recommendation of the Working Group is proposed to be accepted. To align with said recommendation and avoid any inconsistency, it is further proposed that in addition to amendments under ICDR Regulations suggested by Working Group (placed as Annexure II of the Report) the words “on a quarterly basis” may be omitted from the following Regulations under the ICDR Regulations dealing with monitoring agency:
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PUBLIC COMMENTS
1. Public comments are invited on the recommendations of the Working Group. The comments or suggestions, along with rationale, may be submitted latest by November 03, 2026 through the following link: https://www.sebi.gov.in/sebiweb/publiccommentv2/PublicCommentAction.do?doPublicComments=yes
2. In case of any technical issue in submitting your comments through web based public comments form, you may send your comments through e-mail to [email protected] with the subject “Recommendations of the Working Group for review of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015: Review of framework for monitoring and disclosure of utilization of issue proceeds.”
