RPT tweak ups compliance burden: How Sebi changes rules of the game

The new definition of RPTs under Sebi's LODR Regulations impacts its coverage, method of approval and disclosures

A major overhaul is in the offing in the way corporate India treats related-party transactions (RPTs) as a result of the Securities and Exchange Board of India’s (Sebi’s) decision on Tuesday to tighten the norms governing RPTs.

This may necessitate a relook at dealings between listed parent entities and their subsidiaries. Sebi’s move to widen the scope of RPTs entails higher compliance burden for businesses, say experts.

“The revision is a result of the experience of round tripping. It is a positive vote in favour of companies who have been following good governance practices,” says MP Vijay Kumar, chief financial officer at