INSITE - India- Feb 2025
- sukhwinder21
- Mar 21
- 2 min read
SEBI ISSUES INDUSTRY STANDARDS FOR RELATED PARTY TRANSACTIONS
Summary: The Securities and Exchange Board of India (SEBI) issued a circular (SEBI/HO/CFD/CFD-PoD-2/P/CIR/2025/18) on February 14, 2025, establishing industry standards for the review and approval of related party transactions (RPTs) by audit committees and shareholders.
In Detail:Â SEBI has issued a new circular (SEBI/HO/CFD/CFD-PoD-2/P/CIR/2025/18) setting industry standards for the review and approval of RPTs by audit committees and shareholders.
This initiative aligns with Regulation 23(2), (3), and (4) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR Regulations) and was developed by the Industry Standards Forum (ISF) a body comprising representatives from ASSOCHAM, CII, and FICCI, with guidance from stock exchanges and in consultation with SEBI.
Key Highlights
Amendment to SEBI’s Master Circular – The new requirements modify Section III-B of the Master Circular (dated November 11, 2024) to ensure uniformity and transparency in RPT disclosures across all listed entities.
Minimum Information Requirement – Audit committees and shareholders must receive specific, standardized information before reviewing and approving RPTs.
Mandatory Adoption of Industry Standards – Listed entities must adhere to these standards when submitting RPT proposals for audit committee and shareholder approval.
Effective Date – The revised framework will come into effect on April 1, 2025.
Compliance Oversight – Stock exchanges are directed to inform listed entities and ensure strict compliance with these new regulations.
SEBI ESTABLISHES INDUSTRY STANDARDS FOR LODR REGULATION 30 COMPLIANCE
Summary: The Securities and Exchange Board of India (SEBI) has introduced industry standards to streamline compliance with Regulation 30 of the LODR Regulations, 2015. Developed by the Industry Standards Forum (ISF) in collaboration with industry bodies and stock exchanges, these standards aim to enhance transparency and ease of doing business. Listed entities must adhere to them, with stock exchanges ensuring compliance.
In Detail: SEBI has established industry standards to enhance compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR Regulations). These standards aim to ensure uniformity in the disclosure of material events and improve transparency in the securities market.
The Industry Standards Forum (ISF), comprising representatives from ASSOCHAM, CII, and FICCI, developed these guidelines under the supervision of stock exchanges and in consultation with SEBI. The finalized standards will be made available on the websites of industry associations and stock exchanges for easy reference by all stakeholders.
All listed entities are required to follow these industry standards to ensure accurate and timely disclosure of material events or information. Stock exchanges will be responsible for informing listed companies about these requirements and ensuring compliance. This initiative aligns with SEBI’s broader objective of fostering transparency, protecting investor interests, and facilitating ease of doing business in the Indian securities market.
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