INSITE - India- July 2025

STANDARDS FOR DISCLOSURES TO AUDIT COMMITTEES AND SHAREHOLDERS IN THE APPROVAL OF RELATED PARTY TRANSACTIONS

Summary: The Securities and Exchange Board of India (SEBI) has issued a circular introducing revised Industry Standards for disclosures to be made to Audit Committees and Shareholders when seeking approval for Related Party Transactions (RPTs). Developed by the Industry Standards Forum (ISF), a collaboration of ASSOCHAM, CII, and FICCI, these standards aim to streamline and standardize RPT-related information as per the SEBI (LODR) Regulations, 2015.

In Detail: SEBI has released a circular. SEBI/HO/CFD/CFD-PoD-2/P/CIR/2025/93 introducing revised Industry Standards for the minimum information to be provided to Audit Committees and shareholders when seeking approval for RPTs. These standards have been developed by the ISF, a collaborative platform comprising ASSOCHAM, CII, and FICCI in consultation with SEBI, with the objective of bringing greater uniformity, transparency, and ease of understanding to disclosures made under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The initiative was undertaken following extensive stakeholder feedback, which led SEBI to simplify the originally proposed format and extend the implementation timeline. The revised standards will be effective from September 1, 2025, and will apply to all listed companies for RPT proposals submitted to their Audit Committees and for disclosures included in shareholder meeting notices. As part of the implementation, the ISF member associations and stock exchanges will publish the final standards on their respective websites and prepare a set of frequently asked questions to support consistent adoption and address queries from companies and stakeholders. This circular also expressly supersedes all previous SEBI circulars issued about RPT disclosure requirements. Companies are encouraged to align their internal processes well ahead of the effective date to ensure smooth compliance.

Key Links:  SEBI | Industry Standards on “Minimum information to be provided to the Audit Committee and Shareholders for approval of Related Party Transactions”