On 9 November 2021, the Securities and Exchange Board of India (SEBI) notified certain amendments to the SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015 (Listing Regulations) with regard to provisions pertaining to Related Party Transactions (RPTs) (amendments). Subsequently, on 22 November 2021, SEBI specified some additional disclosure requirements to be provided by listed entities with regard to RPTs. The amendments in notifications dated 9 November 2021 and 22 November 2021 mainly relate to the following areas:

  • Widening the definition of related parties and Related Party Transactions (RPT)
  • Amendments have been made to the audit committee’s approval mechanism
  • Amendments have been made to the materiality threshold, thus broadening the number of RPTs requiring shareholders’ approval
  • Enhanced disclosures are required to be made to the stock exchange, the audit committee and to shareholders.

The amendments are applicable in a phased manner, with certain amendments coming into effect from 1 April 2023 and remaining amendments are applicable from 1 April 2022.

New development

Based on representations received from listed entities and industry bodies, SEBI, on 30 March 2022 and 8 April 2022 issued certain clarifications and guidance in relation to the amendments.

These circulars are applicable from 1 April 2022.

In this issue of first notes, we aim to provide an overview of the clarifications issued by SEBI.

  •  To access the text of the SEBI circular dated 30 March 2022, please click here.
  •  To access the text of the SEBI circular dated 8 April 2022, please click here