SEBI Eases Disclosure Norms for Related Party Transactions

In a step aimed at achieving regulatory balance between transparency and ease of doing business, the Securities and Exchange Board of India (SEBI) has issued Circular No. SEBI/HO/CFD/CFD-PoD-2/P/CIR/2025/135, revising the disclosure framework for Related Party Transactions (RPTs). The circular amends Section III-B of SEBI’s Master Circular dated November 11, 2024, and partially modifies its earlier Circular dated June 26, 2025, which had introduced the Industry Standards on Minimum Information for RPT Approvals developed by the Industry Standards Forum (ISF).

Following industry-wide feedback on the complexity of the earlier disclosure requirements, the Industry Standards Forum (ISF) had submitted representations to SEBI seeking relaxation for routine or low-value transactions. SEBI, in consultation with its Advisory Committee on Listing Obligations and Disclosures (ACLOD), subsequently issued a Consultation Paper on August 4, 2025, to solicit public comments.

After due deliberations, the SEBI Board, in its 211th meeting held on September 12, 2025, approved the proposed relaxations. The resulting 2025 Circular, effective immediately upon issuance, seeks to rationalize information requirements and streamline approval processes for smaller transactions without compromising regulatory oversight.

Under the revised framework listed entities must continue to provide to the audit committee and, where required, to shareholders, the information prescribed under the Industry Standards on Minimum Information to be provided to the audit committee and shareholders for approval of RPT.

1. Simplified Disclosures for Small-Value RPTs

• For transactions not exceeding 1% of annual consolidated turnover of the listed entity or Rs. 10 crore, whichever is lower, whether individually or cumulatively during a financial year only minimum information in the Annexure-13A format needs to be furnished.
• Transactions not exceeding Rs. 1 crore are fully exempt from the detailed disclosure requirements.

These thresholds apply both for Audit Committee review and shareholder approval, ensuring uniformity across compliance stages.

2. Minimum Information Requirements (Annexure-13A)

The new Annexure-13A introduces a concise format requiring key transaction details, including:

• Type, material terms, tenure, and value of the proposed transaction;
• Name of the related party, relationship with the listed entity or subsidiary, and nature of interest;
• Source and purpose of funds, and where relevant, details of financial indebtedness or security;
• Justification of the transaction being in the company’s interest;
• Any valuation or external reports relied upon; and
• (Optionally) Percentage of the counterparty’s annual consolidated turnover represented by the transaction value.

This ensures that even small-value RPTs remain subject to informed scrutiny while reducing unnecessary administrative burden.

The 2025 Circular formally substitutes Paragraphs 4 and 6 under Part A and Part B of Section III-B of the Master Circular to incorporate these relaxations. It also confirms the continued applicability of the Rs. 1 crore exemption threshold specified in Paragraph 3(c) of the RPT Industry Standards.

SEBI’s revised RPT disclosure norms mark a meaningful recalibration of India’s corporate governance framework. For listed entities, the reform translates into simplified documentation, faster approvals, and lower compliance costs, while audit committees retain full access to material transaction details necessary for effective oversight.

By shifting the focus from the volume of disclosures to their substance, SEBI reinforces its commitment to a regulatory regime that is transparent, proportionate, and conducive to ease of doing business, a key element in deepening trust in India’s capital markets.