Sebi rejigs RPT norms, adopts size-based compliance model

New Delhi: Markets regulator Sebi has introduced a threshold-based framework to determine the materiality of related party transactions (RPTs), based on the annual consolidated turnover of the listed entity. Also, the regulator has revised thresholds for approval by audit committees for RPTs undertaken by subsidiaries and simplified disclosure requirements for smaller related party transactions. These new norms are aimed at addressing practical challenges, removing ambiguities, and striking a balance between investor protection and ease of doing business under the Listing Obligations and Disclosure Requirements (LODR) norms.