Market regulator Securities and Exchange Board of India (SEBI) has proposed stricter action against listed companies that fail to cooperate with monitoring agencies tracking the utilisation of funds raised through public issues, including freezing promoters’ demat accounts if the non-compliance persists.
Under the proposals outlined in a consultation paper, stock exchanges would levy a fine of Rs 50,000 for each instance of non-cooperation reported by a monitoring agency during a reporting quarter or half-year, as applicable. If a company fails to rectify the non-compliance or pay the fine despite subsequent notices, exchanges would inform depositories to initiate the freezing of promoters’ demat accounts under the prescribed framework.
Moneycontrol had exclusively reported on February 9, 2026 that SEBI is considering such a proposal.
SEBI’s working group has also proposed making the appointment of a monitoring agency mandatory for all issuances, irrespective of issue size, excluding the offer-for-sale component.
The proposals form part of a broader review of the listing and disclosure requirements governing the utilisation of issue proceeds.