SEBI RELAXES DISCLOSURES REQUIREMENTS UNDER INDUSTRY STANDARDS FOR RELATED PARTY TRANSACTIONS
In continuation of SEBI’s efforts to enhance governance while promoting ease of doing business, SEBI has issued a circular dated 13th October, 2025 (SEBI/HO/CFD/CFD-PoD-2/P/CIR/2025/135) (“October Circular”), modifying the framework relating to ‘Minimum information to be provided to the Audit Committee and Shareholders for approval of Related Party Transactions’ (“RPT Industry Standards”).
This October Circular follows SEBI’s earlier circular dated 26th June, 2025 (SEBI/HO/CFD/CFD-PoD-2/P/CIR/2025/93) (“June Circular”), which introduced the RPT Industry Standards formulated by the Industry Standards Forum (“ISF”) in consultation with SEBI and the stock exchanges. (Refer to our July 2025 edition article titled ‘SEBI Issues Circular on Industry Standards for Related Party Transaction (RPT) Disclosures’ for more information on the original framework.)
1. Background
The ISF had submitted a representation to SEBI seeking relaxation from the applicability of certain provisions of the RPT Industry Standards. The matter was deliberated upon by SEBI and a public consultation paper was issued on 4th August, 2025. (Refer to our August 2025 edition article titled ‘SEBI issues Consultation Paper on Ease of Doing Business – Amendments to RPT provisions under LODR’ for detailed information on the consultation paper). Pursuant to these consultations, SEBI approved the proposal to relax the minimum information requirements for RPT disclosures.
2. Key Modifications to the Master Circular
The October Circular amends Section III-B of SEBI’s Master Circular for compliance with provisions of SEBI LODR Regulations by listed entities dated 11th November, 2024 (“Master Circular”) as well as Paragraph 7 of the June Circular. The key changes are as follows:
| Threshold | Disclosure |
| Transactions up to ₹1 crore | No disclosure as per RPT Industry Standards |
| Transactions above ₹1 crore but not exceeding 1% of the annual consolidated turnover of the listed entity or ₹10 crore | Disclosure as per newly inserted Annexure–13A |
| Transactions above 1% of the annual consolidated turnover of the listed entity or ₹10 crore | Disclosure as per RPT Industry Standards |
3. Simplifies Disclosure Requirements under Annexure–13A
The October Circular which introduced Annexure–13A, prescribes a simplified disclosure format for low-value RPTs. Listed entities are now required to furnish only essential details such as the type, value, and tenure of the transaction, the relationship with the related party, and a justification of its business rationale. In case of financial transactions like loans or guarantees, information on the source and purpose of funds must be included. Where applicable, any external valuation or third-party report relied upon should also be disclosed.
4. Applicability and Implementation
The October Circular is effective immediately and requires listed entities to align their Audit Committee and shareholder approval formats in accordance with the revised provisions of the Master Circular and RPT Industry Standards. Stock exchanges have been advised to bring the October Circular to the notice of all listed entities.
Editorial Comment
SEBI’s latest circular strikes a balanced approach between regulatory compliance and operational efficiency. While the June Circular established comprehensive industry-wide disclosure standards, this October Circular amendment provides much-needed flexibility for smaller-value or routine RPTs thereby promoting the ease of doing business.