Sebi panel proposes overhaul of norms governing related party transactions

Under the proposal, related party should be any person or entity belonging to the promoter or promoter group of the listed entity

A Sebi-appointed panel has proposed sweeping changes to strengthen the monitoring and enforcement of norms pertaining to related party transactions.

Tweaking the definition of Related Party and Related Party Transactions (RPTs) and revising thresholds for classification of such transactions as material, are among the recommendations.

Also, the committee has proposed changes to the process followed by a company's audit committee for approval of RPTs that are material. Further, a format for reporting of RPTs to the stock exchanges has been mooted.

In November 2019, the markets watchdog constituted a Working Group to review the policy space pertaining to RPTs under