SEBI Revises RPT Disclosure Norms with 1% or Rs. 10 Crore Threshold

Circular No. SEBI/HO/CFD/CFD-PoD-2/P/CIR/2025/135, Dated: 13.10.2025

1. Background

The Securities and Exchange Board of India (SEBI) has modified Section III-B of the Master Circular on Compliance with the Provisions of the LODR Regulations. This modification aims to streamline and clarify the minimum information that listed entities must furnish to the Audit Committee and shareholders while seeking approval for Related Party Transactions (RPTs).

2. Revised Information Requirements

Under the revised framework, listed entities are now required to provide the Audit Committee with information as specified in the Industry Standards on

“Minimum Information to be Provided to the Audit Committee and Shareholders for Approval of Related Party Transactions.”

This ensures that all entities follow a standardised and transparent disclosure format, thereby enhancing comparability and governance oversight across listed companies.

3. Simplified Disclosure for Low-Value Transactions

SEBI has introduced a threshold-based relaxation for furnishing limited disclosures:

• Where a transaction with a related party—individually or cumulatively during a financial year, including those ratified later:

1. 1. does not exceed 1% of the annual consolidated turnover or ₹10 crore, whichever is lower,
   2. the entity may furnish only the minimum information prescribed under the simplified disclosure format notified by SEBI.

In effect, the maximum value eligible for simplified disclosure is capped at ₹10 crore.

4. Exemption for Transactions up to ₹1 Crore

Transactions that do not exceed ₹1 crore in value are completely exempt from the requirement of providing even the simplified disclosure format.
This exemption recognises that very low-value RPTs pose minimal governance or shareholder risk.

5. Full Disclosure Requirement for Higher-Value Transactions

When the value of a related party transaction exceeds the specified limits (i.e., over 1% of turnover or ₹10 crore, whichever is lower):

• The listed entity cannot rely on the simplified format.
• It must furnish complete details of the transaction as per the disclosure requirements under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, along with the applicable industry standards.

This ensures that material transactions are disclosed in full detail for informed decision-making by the Audit Committee and shareholders.

6. Key Takeaway

The amendment establishes a tiered disclosure regime for RPTs—

• Full disclosures for significant transactions;
• Simplified disclosures for smaller ones; and
• Complete exemption for very minor transactions.

This calibrated approach aims to reduce compliance burden for listed entities while maintaining transparency in related party dealings.

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