BCAS asks SEBI to permit Chartered Accountant firms to monitor issue proceeds

The Bombay Chartered Accountants Society (BCAS) formally requested the Securities and Exchange Board of India (SEBI) to allow Chartered Accountant (CA) firms to monitor fund utilization in smaller public issues. This representation seeks to leverage professional auditing expertise to ensure proceeds are deployed as stated in offer documents. The proposal addresses governance gaps in smaller capital-raising exercises. Monitoring agency requirements ensure that funds raised from the public are utilized strictly for the stated corporate objectives without unauthorized diversions.

In practice, appointing independent professional firms adds an extra layer of fiduciary oversight for public investors. The old position restricts monitoring agency mandates primarily to larger institutional intermediaries, whereas the new proposal advocates for opening this role to qualified CA firms. Chartered Accountant practitioners and compliance consultants should monitor SEBI's response and any prospective amendments to listing regulations.

Professional firms should prepare capacity for monitoring engagements if the regulatory framework expands. Bottom line: regulatory approval could unlock new professional advisory and compliance monitoring opportunities for accounting practices.