Description

Clarifications on the applicability and implementation of Industry Standards for minimum information disclosure requirements in Related Party Transactions.

Summary

BSE has issued comprehensive FAQs addressing the applicability and implementation of RPT Industry Standards for Related Party Transaction disclosures. The standards replace previous RPT disclosure formats and specify minimum information requirements for Audit Committee and shareholder approval of RPTs, effective from September 1, 2025.

Key Points

  • RPT Industry Standards replace all previous RPT disclosure formats under Section III-B of Master Circular dated November 11, 2024
  • Standards specify minimum information requirements - management may provide additional information beyond prescribed minimums
  • Audit Committee can seek additional information as deemed necessary to evaluate proposed RPTs
  • Applicable to transactions between foreign subsidiaries of Indian listed companies requiring holding company approval
  • Applicable to subsidiary transactions where listed entity approval is required under LODR Regulations
  • Holding companies can provide certified summary of financial information for fellow subsidiaries
  • Part A applies to all RPTs unless specifically exempt under Para 1(3)

Regulatory Changes

  • Complete substitution of disclosure requirements from Section III-B of Master Circular
  • New minimum information standards for RPT approvals
  • Enhanced disclosure framework for cross-border and inter-subsidiary transactions
  • Streamlined reporting process for holding company consolidated information

Compliance Requirements

  • Listed entities must adopt new RPT Industry Standards format for all applicable transactions
  • Provide minimum prescribed information to Audit Committee and/or shareholders
  • Ensure compliance for foreign subsidiary transactions requiring parent company approval
  • Maintain certified financial summaries for fellow subsidiary transactions
  • Apply standards to all RPTs unless specifically exempted

Important Dates

  • September 1, 2025: Effective date for RPT Industry Standards applicability (as per SEBI Circular No. SEBI/HO/CFD/CFD-PoD-2/P/CIR/2025/93 dated June 26, 2025)

Impact Assessment

High Impact: All listed entities with related party transactions must implement new disclosure standards, affecting reporting processes, Audit Committee procedures, and shareholder approval mechanisms. The comprehensive nature of these standards requires significant compliance framework updates across corporate governance structures.

Impact Justification

Provides critical clarifications on mandatory RPT disclosure standards affecting all listed entities with related party transactions