Sebi plans to ease related-party transaction rules for big companies

Move to lead to fewer approvals from shareholders, audit panel

In a revamp of related-party transaction (RPT) norms, the Securities and Exchange Board of India (Sebi) on Monday proposed linking materiality thresholds of such transactions to a listed company’s turnover, a move that is expected to benefit bigger firms more.

 

The proposed changes may reduce the number of RPTs requiring shareholders’ approval by around 60 per cent for the top 100 listed companies, according to a back-test conducted by the securities regulator.

 

Under the current regulations, an RPT is considered material if the transaction exceeds ₹1,000 crore or 10 per cent of the annual consolidated turnover of the listed company,