SEBI Reviews Framework for Monitoring Issue Proceeds and Related-Party Transactions

Market regulator the Securities and Exchange Board of India (SEBI) is currently reviewing the framework for monitoring and disclosing the utilisation of issue proceeds. The move aims to improve timely disclosures and streamline the overall compliance process for listed entities.

Speaking at the Institute of Directors' Annual Directors' Conclave 2026, SEBI Chairman Tuhin Kanta Pandey emphasized that corporate transparency extends beyond the sheer volume of information provided by a company. According to Pandey, true transparency relies on the quality, timeliness, and usefulness of the data provided to investors.

"We are reviewing the framework for monitoring and disclosure of utilisation of issue proceeds, with the objective of improving timely disclosures and streamlining the compliance process," Pandey stated during the address. He further noted that a company merely issuing disclosures does not automatically equate to being transparent.

Pandey highlighted that the regulator has progressively strengthened the framework governing the disclosure of material events and information. These measures include specific materiality thresholds and timelines designed to bring greater consistency to market disclosures.

In addition to issue proceeds, SEBI proposes to further clarify the regulatory framework governing related-party transactions. Pandey stated that the objective is to ensure requirements remain clear and workable for issuers while maintaining necessary safeguards to protect investor interests.

Addressing the broader topic of regulatory compliance, the SEBI chairman noted that good governance requires regulations to remain proportionate and avoid unnecessary duplication. As part of this effort, SEBI is proposing a framework to prevent the duplication of fines levied by multiple stock exchanges on entities listed on more than one exchange for the same compliance matter.

"The objective is to make regulation more efficient while preserving its purpose," Pandey added, underscoring the regulator's focus on balancing compliance efficiency with robust market oversight.

"SEBI's initiative to review disclosure frameworks and streamline compliance processes is a positive step toward improving ease of doing business for companies while safeguarding investor interests. For growing businesses and emerging enterprises looking to enter public markets in the Indian ecosystem, clearer guidelines on issue proceeds and related-party transactions will reduce compliance friction. Reducing duplicate penalties across multiple exchanges also demonstrates a practical approach to regulatory governance that benefits listed entities." — Dr. Shishir Gupta, Founder & CEO, StartupLanes