According to a discussion paper released by Sebi, a monitoring agency will be mandatory for all issues, irrespective of the issue size. In an earlier report on Monitoring Agency and Related Disclosures, it was proposed that such an agency would be mandatory only for issues wherein the size is more than Rs 500 crore.
Deviating from the earlier report, the capital market watchdog has also proposed that the monitoring agency should submit its report on a quarterly basis. The report will have to be submitted to the stock exchanges for public dissemination within 45 days from the end of the quarter.
The requirement of a monitoring agency is currently laid down under the Sebi (Issue of Capital and Disclosure Requirements) Regulations and also the Listing Agreement.
The regulator wants the monitoring agency to also state on a two-digit scale the deviation from the stated objects of the issue in the offer document. Further, the audit committee and the board/management will be required to comment on the deviation, if any, pointed out by the agency.
Sebi also wants companies to form a committee of board of directors to oversee the monitoring of utilisation of the issue proceeds before the opening of the issue.