SEBI Eases Disclosure Requirements for Related Party Transactions [Read Circular]

The Securities and Exchange Board of India (SEBI) issued a circular dated October 13, 2025, announcing a major relaxation in disclosure requirements for Related Party Transactions (RPTs) by listed companies.

This circular simplifies the compliance process for listed companies when providing information to their Audit Committees and shareholders for the approval of Related Party Transactions (RPTs).

It modifies earlier provisions contained in:

• SEBI’s Master Circular dated November 11, 2024, and
• SEBI Circular dated June 26, 2025.

These earlier circulars required companies to furnish a detailed set of disclosures based on Industry Standards created by the Industry Standards Forum (ISF).

Following feedback from the industry and recommendations by SEBI’s Advisory Committee on Listing Obligations and Disclosures (ACLOD), SEBI has now introduced relaxations to reduce the compliance burden for small-value related party transactions.

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Key Changes Introduced

1. Relaxation Thresholds

SEBI has introduced tiered thresholds for disclosure requirements:

• Full disclosure under Industry Standards is required for RPTs exceeding the higher limits.
• Simplified disclosure format (Annexure-13A) can be used if the transaction:
• Does not exceed 1% of the company’s annual consolidated turnover, or
• Is below Rs. 10 crore, whichever is lower.
• No detailed disclosure at all is required if the transaction value is below Rs. 1 crore in a financial year (individually or together with prior transactions).

2. Modifications to Information Provided

The changes affect two main sections of SEBI’s Master Circular:

A. Information to the Audit Committee

Earlier, all RPTs, regardless of size, required full Industry Standard disclosures. Now, companies only need to provide Annexure-13A information if the RPT falls below the 1%/Rs. 10 crore threshold.

B. Information to Shareholders

Similarly, when seeking shareholder approval for RPTs, the explanatory statement in the notice needs to include:

• Full Industry Standard details for larger RPTs, but
• Only Annexure-13A details for smaller RPTs.

3. Continuing Exemption

SEBI clarified that the Rs. 1 crore exemption threshold (previously set in Para 3(c) of the RPT Industry Standards) continues to apply. This means transactions below Rs. 1 crore do not require detailed reporting or inclusion in the audit committee’s approval pack.

4. Annexure-13A - Simplified Disclosure Format

A. Information to Audit Committee

Listed companies must provide the Audit Committee with the following basic details for approval of RPTs:

• Type, nature, and terms of the transaction.
• Name of the related party and its relationship with the company or subsidiary.
• Tenure and total value of the transaction.
• Percentage of annual consolidated turnover represented by the transaction.
• Source of funds, if the transaction involves loans or advances.
• Purpose and justification for the transaction.
• Any valuation report relied upon.
• Voluntary disclosure of the counterparty’s turnover percentage.

B. Information to Shareholders

When shareholders’ approval is required, the notice must include:

• A summary of details shared with the Audit Committee.
• Justification explaining why the transaction is in the company’s interest.
• Loan or advance-related details, if applicable.
• A statement that any valuation report will be made available to shareholders via registered email.

To facilitate ease of doing business for listed entities while maintaining transparency in related party transactions. The circular is effective immediately (from October 13, 2025).

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