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Sebi Overhauls RPT Rules for Listed Firms
23 Nov, 2025
Summary
- Sebi introduced a new threshold-based framework for related party transactions.
- Materiality thresholds are now based on a listed entity's annual consolidated turnover.
- Disclosure requirements for smaller related party transactions have been simplified.
The Securities and Exchange Board of India (Sebi) has introduced a new, threshold-based framework to determine the materiality of related party transactions (RPTs) for listed entities. This revised approach is pegged to the annual consolidated turnover of companies, replacing the previous uniform Rs 1,000 crore or 10% materiality threshold that was criticized for being a one-size-fits-all measure.
These updated norms are designed to address practical difficulties and remove ambiguities in existing Listing Obligations and Disclosure Requirements (LODR) regulations. They aim to strike a better balance between safeguarding investor interests and facilitating ease of doing business. Sebi has also simplified disclosure requirements for smaller RPTs and revised approval thresholds for subsidiaries' transactions, offering a more nuanced regulatory environment.
Significant changes include tiered materiality thresholds based on turnover ranges, with an upper ceiling of Rs 5,000 crore for large entities. Furthermore, omnibus approvals for material RPTs granted by shareholders will now be valid until the next Annual General Meeting (AGM). These revisions reflect Sebi's commitment to adapting regulations to the evolving market landscape and addressing stakeholder feedback.
