SEBI notifies revised RPT Industry Standards

Introduction

The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR Regulations) require Related Party Transactions (RPTs) to be approved by

the Audit Committee and
where applicable, by the shareholders

The Securities and Exchange Board of India (SEBI) issued a Master Circular on 11 November 2024, providing broad requirements on the information to be placed before the Audit Committee and shareholders for approval of RPTs under Section III-B of the said SEBI Circular. However, the circular did not provide any specific format in which RPT information could be provided to Audit Committee and shareholders.

Uniform approach

To facilitate a uniform approach and assist listed entities in complying with RPTs’ approval requirements, SEBI issued a circular on 14 February 2025 (earlier circular on RPT standards).

The circular specified that listed entities should comply with the Industry Standards on ‘Minimum information to be provided for Review of the Audit Committee and Shareholders for approval of an RPT’ (RPT Industry Standards). These RPT Industry Standards were originally made applicable in respect of RPTs entered by the listed entity on or after 1 April 2025. However, following stakeholders feedback requesting extension, the effective date was deferred to 1 July 2025.

New development

Based on the feedback received from stakeholders on simplification and review of the RPT Industry Standards, the Industry Standards Forum in consultation with the SEBI, issued the revised Industry Standards on ‘Minimum information to be provided to the Audit Committee and Shareholders for approval of Related Party Transactions (Revised RPT Standards) on 26 June 2025.

These Revised RPT Standards would be effective from 1 September 2025 and supersede the earlier circulars issued by SEBI. The listed entities will now be required to follow the Revised RPT Standards to ensure compliance with LODR Regulations.