{"id":364326,"date":"2025-10-18T15:00:36","date_gmt":"2025-10-18T09:30:36","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=364326"},"modified":"2025-10-20T13:14:04","modified_gmt":"2025-10-20T07:44:04","slug":"disclosure-framework-related-party-transactions-sebi-disclosure-2025","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2025\/10\/18\/disclosure-framework-related-party-transactions-sebi-disclosure-2025\/","title":{"rendered":"SEBI\u2019s Revises Disclosure Framework for Related Party Transactions"},"content":{"rendered":"<div style=\"text-align: justify; line-height: 150%;\">\n<p style=\"margin-bottom: 3%;\">On 13-10-2025, the Securities and Exchange Board of India (SEBI) circulated a notification titled &#8220;<span style=\"font-weight: bold;\">Minimum information to be provided to the Audit Committee and Shareholders for approval of Related Party Transactions (&#8216;RPTs&#8217;)<\/span>&#8221;. This notification marks a significant shift in the compliance landscape for listed entities, aiming to streamline disclosures while preserving transparency and governance integrity. This circular came into effect immediately.<\/p>\n<h3>Key Takeaways:<\/h3>\n<ol style=\"list-style-type: decimal;\">\n<li>\n<p><span style=\"font-weight: bold;\">Related Party Transactions<\/span> involve dealings between entities with a preexisting business relationship, which may pose conflicts of interest. These transactions are critical to corporate governance and require careful oversight to prevent misuse of company resources.<\/p>\n<\/li>\n<li>\n<p>To enhance transparency and protect shareholder interests, the SEBI has mandated specific disclosures under the Listing Obligations and Disclosure Requirements (&#8216;LODR&#8217;) Regulations, now standardized through the <span style=\"font-weight: bold;\">Industry Standards on Minimum Information for RPT Approval<\/span>.<\/p>\n<\/li>\n<li>\n<p>SEBI modified the RPT disclosure norms, following recommendations from the <span style=\"font-weight: bold;\">Advisory Committee<\/span> on <span style=\"font-weight: bold;\">Listing Obligations and Disclosures<\/span> (&#8216;ACLOD&#8217;) and public feedback on a consultation paper released in August 2025.<\/p>\n<\/li>\n<li>\n<p>The Board approved these relaxations in its <span style=\"font-weight: bold;\">211<span style=\"vertical-align: super;\">th<\/span> meeting<\/span> held on 12-9-2025, aiming to streamline compliance for listed entities while maintaining governance standards.<\/p>\n<\/li>\n<li>\n<p>Under the revised framework, listed entities must provide the following <span style=\"font-weight: bold;\">minimum information to the Audit Committee<\/span> when seeking approval for an RPT:<\/p>\n<ul style=\"list-style-type: disc;\">\n<li>\n<p>Type, material terms, and particulars of the transaction<\/p>\n<\/li>\n<li>\n<p>Name of the related party and nature of relationship<\/p>\n<\/li>\n<li>\n<p>Tenure and value of the transaction<\/p>\n<\/li>\n<li>\n<p>Percentage of annual consolidated turnover impacted<\/p>\n<\/li>\n<li>\n<p>For loans\/investments: source of funds, indebtedness details, terms, security, and purpose of utilization<\/p>\n<\/li>\n<li>\n<p>Justification for the transaction<\/p>\n<\/li>\n<li>\n<p>Valuation or external report, if relied upon<\/p>\n<\/li>\n<li>\n<p>Voluntary disclosure of counter-party turnover impact<\/p>\n<\/li>\n<li>\n<p>Any other relevant information<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<li>\n<p>When shareholder approval is required, the explanatory statement in the notice will include:<\/p>\n<ul style=\"list-style-type: disc;\">\n<li>\n<p>Summary of information provided to the Audit Committee<\/p>\n<\/li>\n<li>\n<p>Justification for the transaction<\/p>\n<\/li>\n<li>\n<p>Loan\/investment details<\/p>\n<\/li>\n<li>\n<p>Statement on availability of valuation\/external reports via registered email<\/p>\n<\/li>\n<li>\n<p>Voluntary disclosure of counter-party turnover impact<\/p>\n<\/li>\n<li>\n<p>Any other relevant information<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<li>\n<p>To ease compliance, SEBI has introduced thresholds for reduced disclosures:<\/p>\n<ul style=\"list-style-type: disc;\">\n<li>\n<p>Transactions with a value of &#8377;1 crore or less are fully exempt from minimum disclosure requirements.<\/p>\n<\/li>\n<li>\n<p>Transactions up to &#8377;10 crore or 1% of annual consolidated turnover require disclosures in the Annexure-13A format.<\/p>\n<\/li>\n<li>\n<p style=\"margin-bottom: 3%;\">Transactions exceeding &#8377;10 crore or 1% of turnover must comply with the full RPT Industry Standards.<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<\/ol>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p style=\"font-style: italic;\">SEBI&#8217;s simplifies disclosure requirements for Related Party Transactions to ease compliance.<\/p>\n","protected":false},"author":67525,"featured_media":364327,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[4,1193],"tags":[91129,91128,31731,25624,52650,50742,82321,35080,91127,2563,35980],"class_list":["post-364326","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-legislationupdates","category-notifications","tag-aclod","tag-audit-committee","tag-compliance","tag-corporate-governance","tag-disclosure-requirements","tag-lodr-regulations","tag-regulatory-update","tag-related-party-transactions","tag-rpt","tag-SEBI","tag-sebi-circular"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.4 (Yoast SEO v27.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>SEBI Updates on Related Party Transactions | SCC Times<\/title>\n<meta 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