Minimum Information for Audit Committee & Shareholders in RPT Approval

SEBI Circular No.:  SEBI/HO/CFD/CFD-PoD-2/P/CIR/2025/93 dated June 26, 2025

Ref: BSE Notice No. 20250627-1 dated June 27, 2025

        NSE Circular Ref. No.: NSE/CML/2025/29 dated June 26, 2025

Relevant Act/ Rules/ Regulation:  SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015;  Part A and Part B of Section III-B of SEBI Master Circular dated November 11, 2024 

Relevant Regulation:  Regulation 23(2), (3) and (4)

Following are the key takeaways:

  1. Regulation 23(2), (3), and (4) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR Regulations”) mandate that related party transactions (“RPTs”) be approved by the audit committee, and by shareholders if the transactions are deemed material. Part A and Part B of Section III-B of the SEBI Master Circular dated November 11, 2024 (“Master Circular”) outline the information to be provided to the audit committee and shareholders, respectively, for the consideration of RPTs.
  2. To assist listed entities in adhering to these requirements and ensuring a consistent approach, the Industry Standards Forum (“ISF”), comprising representatives from three industry associations—ASSOCHAM, CII, and FICCI—has developed industry standards in collaboration with SEBI. These standards specify the minimum information to be presented to the audit committee and shareholders for the approval of RPTs. The ISF members (ASSOCHAM, FICCI, and CII) and the stock exchanges will publish these industry standards on their respective websites.
  3. SEBI vide Circular dated February 14, 2025 (“the Circular”) required listed entities to follow aforesaid Industry Standards with effect from April 01, 2025 (Please refer to 1-Comply Article). Pursuant to feedback and requests received from various stakeholders, SEBI vide Circular dated March 21, 2025 (Please refer to 1-Comply Article) extended the timeline for applicability of the Industry Standards to July 01, 2025 and referred the feedback received for simplification of the Industry Standards to ISF for consideration and review of existing Industry Standards. ISF considered the feedback and came out with  revised Industry Standards on “Minimum information to be provided to the Audit Committee and Shareholders for approval of Related Party Transactions (“RPT Industry Standards”)
  4. Section III-B of the Master Circular shall accordingly stand modified as given below: 

Paragraph 4 under Part A of Section III-B shall stand substituted by the following paragraph: 

“ “The listed entity shall provide the audit committee with the information as specified in the Industry Standards on “Minimum information to be provided to the Audit Committee and Shareholders for approval of Related Party Transactions”, while placing any proposal for review and approval of an RPT.”

Paragraph 6 under Part B of Section III-B shall stand substituted by the following paragraph: 

“The notice being sent to the shareholders seeking approval for any RPT shall, in addition to the requirements under the Companies Act, 2013, include the information as part of the explanatory statement as specified in the Industry Standards on “Minimum information to be provided to the Audit Committee and Shareholders for approval of Related Party Transactions.”

  1. The listed entities, from the effective date of this Circular, shall follow the aforesaid RPT Industry Standards to ensure compliance with Part A and Part B of Section III-B of the Master Circular read with Regulation 23(2), (3) and (4) of LODR Regulations.
  2. The circular shall come into effect from September 01, 2025.
  3. The instant Circular supersedes the Circular no. SEBI/HO/CFD/CFD-PoD 2/P/CIR/2025/18 dated February 14, 2025 and Circular no. SEBI/HO/CFD/CFD PoD-2/P/CIR/2025/37 dated March 21, 2025.
  4. Stock Exchanges are required to bring the contents of this circular to the notice of their listed entities and ensure its compliance. Accordingly the Notices/Circulars issued by BSE/NSE are attached in the Link Section below.

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