SEBI Revises Disclosure Norms for Related Party Transactions
Why in the news
After consulting Assocham, FICCI and CII, SEBI updated disclosure rules for related party transactions (RPTs).
About RPTs
- Deals between a company and related parties such as directors, key managers or their families; conflicts of interest make disclosure vital.
Key revisions
| Area | Change |
|---|---|
| Certifier | MD, Whole-Time Director or Manager may certify RPT is in the company’s best interest |
| Certificate | Mandatory contents specified |
| Audit committee data | Current-year transactions, previous-year defaults, past dealings, ownership; royalty details |
| Oversight | Can seek valuation reports; must minute reasons for approval or rejection |
Objective
- Transparency, curbing promoter abuse, investor protection.
Exam angle
- Regulator: SEBI; term: RPT.