SEBI Proposes RPT Norms Changes Under LODR for Compliance Relief

SEBI Report; Dated: 04.08.2025

SEBI Proposes Amendments to LODR for Related Party Transactions

The Securities and Exchange Board of India (SEBI) has issued a consultation paper suggesting key amendments to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR Regulations). These proposed changes aim to simplify and streamline compliance obligations concerning Related Party Transactions (RPTs) for listed entities and their subsidiaries. SEBI’s objective is to strike a balance between regulatory oversight and ease of doing business.

Revised Materiality Thresholds and Disclosure Norms

One of the major proposals includes revising the thresholds for determining material RPTs. The current requirements often lead to extensive disclosures even for transactions with negligible impact. SEBI intends to ease this burden by recalibrating these thresholds, which would allow companies to focus on truly significant transactions. Additionally, there is a move to simplify disclosure obligations for Audit Committees and shareholders, ensuring that information presented is relevant, concise, and easier to comply with.

Clarification on Omnibus Approvals and Ambiguities

The consultation paper also seeks to bring clarity to the process and scope of omnibus approvals, which allow Audit Committees to pre-approve a category of transactions without examining them individually. This clarification will help in removing interpretational inconsistencies and bring uniformity across listed entities. SEBI further aims to resolve existing ambiguities in the application of RPT provisions, especially concerning subsidiaries and cross-border transactions.

Invitation for Public Comments by August 25, 2025

SEBI has invited public comments on the proposed amendments, with the consultation window open until August 25, 2025. Stakeholders, including listed companies, institutional investors, legal experts, and the general public, are encouraged to submit their views and suggestions. The feedback received will play a crucial role in shaping the final regulatory framework, ensuring it is both effective and practical for real-world application.

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