Sebi approves key changes to Related Party Transaction rules to ease compliance

For companies that have a market cap between Rs 1 lakh crore and Rs 5 lakh crore, SEBI has called for a minimum public offer of up to Rs 6,250 crore or 2.75 percent of the post-issue market capitalisation.

In an effort to simplify compliance and improve the ease of doing business, while retaining investor safeguards, capital market regulator Sebi has approved a series of amendments to the Listing Obligations and Disclosure Requirements (LODR) Regulations, 2015.

During a press briefing on September 12 in Mumbai, Sebi chairman Tuhin Kanta Pandey shared updates on the decisions announced.

Follow the details of the press briefing right here

One of the changes is the introduction of scale-based thresholds for determining material Related Party Transaction (RPT). Under the revised framework, thresholds will now depend on the annual consolidated turnover of the listed entity.

For entities with turnover up to Rs 20,000 crore, materiality will be set at 10% of consolidated turnover. For turnover between Rs 20,001–40,000 crore, the threshold will be Rs 2,000 crore plus 5% of turnover above Rs 20,000 crore.

For companies with turnover above Rs 40,000 crore, the RPT limit will be Rs 3,000 crore plus 2.5% of turnover above Rs 40,000 crore or Rs 5,000 crore, whichever is lower.

Read More: Sebi extends timelines by up to 10 years to meet minimum public shareholding requirements

These measures replace the earlier fixed benchmark of Rs 1,000 crore or 10% of turnover, whichever was lower.