To promote good corporate governance and enhance disclosure requirement in Related Party Transactions (RPTs), SEBI vide Circular dated February 14, 2025 issued Industry Standards on “Minimum information to be provided for review of the Audit Committee and shareholders for approval of RPTs”, which will be effective from April 1, 2025.
Regulations 23(2), (3), and (4) of the SEBI (LODR) Regulations, 2015, mandate RPTs be approved by the Audit Committee and, if material, by the shareholders. Section III-B of SEBI's Master Circular, dated November 11, 2024, specifies the information that must be placed before the Audit Committee and shareholders for their consideration of RPTs.
To facilitate a uniform approach and assist listed entities in complying with these requirements, the Industry Standards Forum (ISF) has formulated industry standards in consultation with SEBI.
Listed entities shall adhere to these industry standards to ensure compliance with Section III-B of the Master Circular, read in conjunction with Regulations 23(2), (3), and (4) of the LODR Regulations.
𝐓𝐡𝐞 𝐤𝐞𝐲 𝐝𝐢𝐬𝐜𝐮𝐬𝐬𝐢𝐨𝐧 𝐩𝐨𝐢𝐧𝐭𝐬 𝐨𝐟 𝐭𝐡𝐞 𝐰𝐞𝐛𝐢𝐧𝐚𝐫 𝐚𝐫𝐞:
- Issues and concerns before these Standards;
- Key objective and purpose of these Standards;
- Applicability Matrix of these Standards;
- Types of disclosures specified in these Standards;
- Balance sheet and P&L items specified in these Standards;
- Standards & Format on Minimum Information required for Audit Committee Review;
- Standards on Minimum Information required for Shareholders Approval.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
