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SEBI’s 2025 overhaul of Related Party Transactions (RPTs) marks a shift toward a risk-based, transparent, and scalable compliance framework. The new regime under Regulation 23 of the SEBI (LODR) Regulations replaces the earlier uniform materiality limit with scale-based thresholds linked to company turnover, easing compliance for large entities while maintaining oversight on significant transactions. The Industry Standards Forum (comprising ASSOCHAM, FICCI, and CII) introduce uniform disclosure formats effective September 2025, standardizing information to Audit Committees and shareholders. The October 2025 circular simplifies disclosure for transactions below ₹10 crore and exempts those under ₹1 crore. Clarified validity for omnibus approvals and targeted exemptions further streamline governance. Auditors now play an enhanced role in validating RPT disclosures, supported by SA 550 and NFRA guidance. Overall, SEBI’s reforms strengthen transparency and minority protection while reducing compliance friction for listed companies.
INTRODUCTION
Related Party Transactions (RPTs) have always been a focus area of the regulators, considering the potential for conflicts of interest, financial misreporting, and disproportionate advantage. The regulatory bodies, such as the Securities and Exchange Board of India (SEBI), have identified RPTs as an important ar
