SEBI (Securities Exchange Board of India) in its Board meeting held on September 28, 2021, approved the amendments in RPT (Related Party Transactions) framework that were proposed by the Working Group1 (‘WG’) in January 2020 relating to the following areas:
- Definition of a Related Party.
- Definition of Related Party Transactions (‘RPTs’).
- Thresholds for classification of RPTs as material.
- Process to be followed for approval of RPTs.
The notification amending SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations’) has been issued on November 9, 2021. Certain amendments to come into force from April 1, 2022 and remaining from April 1, 2023.
In this article, we have summarized below amendments made under regulation and their implications on the companies covered by the regulation mentioned above.