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Corporate Laws Central Ministry of Finance Securities and Exchange Board of India Act, 1992

SEBI - FAQs on Applicability of the Industry Standards on Minimum Information to be provided for Review of the Audit Committee and Shareholders for Approval of Related Party Transaction (RPT)

04-Sep-2025 | 20250904-59

Securities and Exchange Board of India (SEBI) has issued FAQs on Applicability of the Industry Standards on Minimum information to be provided for Review of the Audit Committee and Shareholders for Approval of Related Party Transaction (RPT).

Key Highlights of the FAQs:
1. Replacement of Old Formats - The new RPT Industry Standards replace earlier disclosure formats under Master Circular issued by SEBI. However, if they conflict with SEBI LODR Regulations or later circulars, those will prevail.
2. Applicability & Scope - These standards apply to all related party transactions (RPTs) from 1st September 2025, including those involving foreign or domestic subsidiaries, if Audit Committee or shareholder approval is required.
3. Thresholds - RPT Industry Standards apply once the total value of transactions with a related party exceeds Rs. 1 crore in a financial year. Below this threshold, compliance is not mandatory, though companies may still follow internal policies.
4. Audit Committee Role - The Audit Committee can ask for extra information (like valuation, benchmarking, fairness, or transfer pricing reports) to assess RPTs. If it rejects an RPT, reasons must be recorded in the meeting minutes.
5. Certification & Disclosures - A joint certificate signed by the CEO/MD/WTD/Manager and CFO (two different individuals) must be submitted. Disclosures for multiple RPTs can be aggregated, but material modifications must be highlighted.
6. Shareholder Information - Shareholders must be given detailed disclosures (with weblink + QR code for reports). Certain sensitive details may be redacted, but only with Audit Committee and Board approval.


For more information, please refer to the attached document.

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