A panel reviewing India's securities market rules has called for tighter scrutiny of company equity fundraises, with monitoring agencies reporting directly to stock exchanges, which would be empowered to fine non-cooperating firms.
The recommendations are part of a consultation paper published by the Securities and Exchange Board of India on Tuesday on proposed rule changes for listed companies.
Reuters reported in May that rules were likely to be tightened to boost investor confidence and issuer accountability, as fundraising cooled amid an equity selloff following the Iran war.
Here are the key recommendations:
Companies should appoint a monitoring agency for all issuances, irrespective of issue size, excluding the size of offer for sale
Monitoring agencies should be allowed to submit reports directly to stock exchanges within prescribed timelines
Stock exchanges should levy fines on companies when agency reports non-cooperation
If a company fails to cooperate, the agency should submit its report based on the best available information, with a statement of non-cooperation
If an agreement between a listed entity and a monitoring agency is terminated before full utilisation of the issue proceeds, both parties should ensure timely submission of monitoring reports to stock exchanges