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Market regulator Securities and Exchange Board of India (SEBI) has asked listed entities to share more information for approval of related party transactions (RPTs).
Related party transactions or RPTs are business dealings between a company and parties that have pre-existing relationship, like subsidiaries, key management personnel, or major shareholders.
SEBI issued a circular on Thursday and directed listed entities to follow the standards prescribed by Industry Standards Forum (ISF), on minimum information to be provided to the audit committee and shareholders for approval of related party transactions.
This circular is expected to bring more transparency with respect to related party transactions. The minimum information format has been prescribed by ISF comprising representatives from industry chambers like ASSOCHAM, FICCI, CII in collaboration with SEBI and stock exchanges.
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