On October 13, 2025, the Securities and Exchange Board of India (SEBI) issued a significant circular—SEBI/HO/CFD/CFD-PoD-2/P/CIR/2025/135—that brings welcome relief to listed entities dealing with Related Party Transactions (RPTs). This circular, which modifies earlier compliance requirements, reflects SEBI’s continued focus on balancing corporate governance with the ease of doing business in India.
Background: Tightening RPT Disclosures
SEBI had, through its Master Circular dated November 11, 2024, and another circular issued in June 2025, mandated that listed entities follow detailed disclosure norms for RPTs as laid out in the Industry Standards on Minimum Information. These norms were developed by the Industry Standards Forum (ISF) and required detailed information to be furnished to Audit Committees and Shareholders before approving any RPTs.
However, several industry bodies—including ASSOCHAM, FICCI, and CII—raised concerns about the compliance burden. The ISF formally represented these concerns to SEBI, requesting a relaxation of the disclosure norms for transactions of smaller financial value.
The Relaxation: Key Changes Approved by SEBI
After discussions with SEBI’s Advisory Committee on Listing Obligations and Disclosures (ACLOD) and a public consultation in August 2025, SEBI has now amended the disclosure norms. The revisions were approved during SEBI’s 211th board meeting on September 12, 2025.
Here are the key highlights:
1. Reduced Disclosures for Small-Value RPTs
If the RPT value—either individually or together with other RPTs in a financial year—does not exceed 1% of the annual consolidated turnover (based on the latest audited financials) or ₹10 crore, whichever is lower, the listed entity only needs to provide “minimum information” as outlined in Annexure-13A of the circular.
2. Complete Exemption for Very Small Transactions
RPTs whose cumulative value does not exceed ₹1 crore in a financial year are now entirely exempt from the disclosure norms under the Industry Standards. This helps entities avoid excessive compliance for de minimis transactions.
3. Alignment with Companies Act
The new circular ensures that while complying with SEBI’s norms, entities must still meet the disclosure requirements under the Companies Act, 2013. However, SEBI’s revised norms now streamline the process by tiering disclosure based on transaction size.
Implications for Listed Companies
This move is a clear attempt by SEBI to reduce compliance fatigue for companies, especially in routine or low-value related party dealings. It also signals SEBI’s willingness to respond to industry feedback while maintaining transparency and investor protection.
Audit Committees and Boards of listed companies must now revise their RPT review frameworks to reflect the new thresholds and ensure Annexure-13A is used correctly for eligible transactions.
Final Thoughts
SEBI’s October 2025 circular marks a pragmatic shift in regulatory oversight of related party dealings. By introducing materiality thresholds and simplifying disclosures, SEBI is aiming to make corporate compliance more efficient, without compromising on the spirit of transparency. For investors and market participants, it’s a sign that governance and ease of doing business can, indeed, go hand in hand.