Archive · 23 Nov 2025
SEBI Introduces Threshold-Based Framework for Related Party Transactions
SEBI, the market regulator, has made new rules for deciding when a business deal with a related company is important.
These rules use a company's annual sales to set the threshold.
The rules also make it easier to report smaller deals and allow longer approval periods for bigger deals.
SEBI introduces threshold-based framework for determining materiality of related party transactions (RPTs)
Thresholds based on annual consolidated turnover of listed entity
New norms aim to address practical challenges and balance investor protection with ease of doing business
Simplified disclosure requirements for smaller RPTs
Omnibus approvals for material RPTs valid until next AGM
- Who
- SEBI (Securities and Exchange Board of India)
- What
- Introduced threshold-based framework for determining materiality of related party transactions (RPTs)
- When
- November 18, 2025
- Where
- India
- Why
- To address practical challenges, remove ambiguities, and balance investor protection with ease of doing business
Investor Protection Advocates
Business Entities
Materiality Threshold
Investor Protection Advocates
Welcomes tiered approach based on turnover for better protection
Business Entities
Concerns about increased complexity and compliance burden
- Turnover up to ₹20,000 crore
- Transaction material if >10% of annual turnover
- Turnover ₹20,001 - ₹40,000 crore
- Threshold: ₹2,000 crore + 5% of turnover > ₹20,000 crore
- Turnover > ₹40,000 crore
- Threshold: ₹3,000 crore + 2.5% of turnover > ₹40,000 crore or ₹5,000 crore
- Absolute threshold for turnover > ₹40,000 crore
- ₹5,000 crore
- Simplified disclosure for RPTs
- Total value of RPTs < 1% of annual turnover or ₹10 crore