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Informist, Friday, Sept. 12, 2025

 

--SEBI tweaks listing norms on cos' related party trade, to cut ambiguities

--SEBI introduces scale-based turnover thresholds for related party trades 

 

NEW DELHI – The Securities and Exchange Board of India has approved amendments in norms pertaining to related party transactions under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and the circulars thereunder. These amendments aim to address practical challenges, remove ambiguities, and strike a balance between investor protection and ease of doing business, the markets regulator said in a press statement released after its board meeting Friday.

 

SEBI had released a consultation paper on the subject last month and invited public comments. The regulator has approved the introduction of a scale-based threshold mechanism linked to the annual consolidated turnover of a listed company to determine material related party transactions. As per the existing threshold, a listed company must seek shareholder approval for any related party transaction exceeding INR 10.00 billion or 10% of its latest annual consolidated turnover.

 

As per the amendments, the threshold for companies with an annual consolidated turnover of up to INR 200.00 billion remains unchanged at 10%. For firms with an annual consolidated turnover above INR 200.00 billion but below INR 400.00 billion, the threshold has been set at INR 20.00 billion plus 5% of the annual consolidated turnover. For companies with an annual consolidated turnover above INR 400.00 billion, the new threshold is INR 30 billion plus 2.5% of the annual consolidated turnover, or INR 50.00 billion, whichever is lower.

 

For related party transactions by subsidiaries, SEBI said deals above INR 10.00 million will require the approval of the audit committee if they exceed either 10% of the subsidiary's annual standalone turnover or the new scale-based threshold for the parent, whichever is lower. For subsidiaries without full-year audited financials, the bar has been set at 10% of the aggregate value of the paid-up share capital and securities premium account or the listed parent company's threshold, whichever is lower.  End

 

Reported by Shakshi Jain

Edited by Rajeev Pai

 

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