Sebi introduces threshold-based framework to assess materiality of related party transactions

Under the new norms, for firms with turnover up to Rs 20K crore, an RPT will be considered material if it exceeds 10% of annual consolidated turnover

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Markets regulator Sebi has introduced a new threshold-based system to determine the materiality of related party transactions (RPT), linking limits to a listed company’s annual consolidated turnover.

The revised framework also eases audit committee approval norms for RPTs undertaken by subsidiaries and simplifies disclosure requirements for smaller transactions.

‘The changes aim to resolve practical challenges, reduce ambiguity and balance investor protection with ease of doing business under the Listing Obligations and Disclosure Requirements (LODR) norms.