SEBI Introduces Standardised Related Party Transaction (RPT) Framework – Effective 13 October 2025

In a move aimed at strengthening transparency and governance in listed entities, SEBI has introduced a Standardised Related Party Transaction (RPT) Framework, effective 13 October 2025. The framework brings enhanced uniformity in approval processes, materiality thresholds, and disclosure requirements across all listed companies.

Applicability

The framework is applicable to all listed entities, ensuring consistent compliance and monitoring standards across the market.

Approval Mechanism

• Audit Committee:
  Prior approval of the Audit Committee is mandatory for all Related Party Transactions (RPTs), irrespective of their monetary value. This reinforces the committee’s oversight role in ensuring that transactions are conducted at arm’s length and in the best interests of shareholders.

• Shareholders:
  Approval from shareholders will be required only when transactions cross the defined materiality thresholds, promoting efficiency while maintaining adequate checks for significant transactions.

Disclosure Levels

To balance transparency with practicality, SEBI has prescribed a tiered disclosure structure based on transaction value:

Key Impact

The standardisation of RPT procedures is expected to:

• Improve comparability of disclosures across listed entities

• Reduce ambiguity in approval and reporting requirements

• Strengthen investor confidence through enhanced governance practices

In essence, the revised RPT framework marks another step by SEBI towards aligning governance practices with global standards, ensuring that related party transactions are fair, transparent, and well-documented.