The Securities and Exchange Board of India (SEBI) has decided that the prior approval of shareholders of listed entities required for material-related party transactions (RPTs) having a threshold of less than Rs. 1000 crore or 10% of the consolidated annual turnover of the listed entity.
The Board considered and approved the amendments to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, in relation to regulatory provisions on RPTs.
The definition of RPT shall include transactions between the listed entity or any of its subsidiaries on one hand and a related party of the listed entity or any of its subsidiaries on the other hand; and the listed entity or any of its subsidiaries on one hand, and any other person or entity, on the other hand, the purpose and effect of which is to benefit a related party of the listed entity or any of its subsidiaries w.e.f. April 1, 2023.
Approval of the Audit Committee shall be required for all RPTs and subsequent material modifications as defined by the Audit Committee; RPTs where the subsidiary is a party but the listed entity is not a party subject to a threshold of 10% of the consolidated turnover of the listed entity, and 10% of the standalone turnover of the subsidiary w.e.f. April 1, 2023.
The enhanced disclosure of information related to RPTs to be a. placed before the audit committee, provided in the notice to shareholders for material RPTs, and provided to the stock exchanges every six months in the format specified by the Board with the timelines namely within 15 days from the date of publication of financials; and simultaneously with the financials w.e.f. April 1, 2023.
The amendments shall come into force with effect from April 1, 2022, unless otherwise specified above.
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