valid as on 06/12/2022

Regulation 23. Related party transactions.
Effective date 01.12.2015

Section 188 of The Companies Act, 2013

Related party transactions.

. (1)The listed entity shall formulate a policy on materiality of related party transactions and on dealing with related party transactions :

  a transaction with a related party shall be considered material, if the transaction(s) to be entered into individually or taken together with previous transactions during a financial year, exceeds rupees one thousand crore or ten per cent of the annual consolidated turnover of the listed entity as per the last audited financial statements of the listed entity, whichever is lower

Explanation.- A transaction with a related party shall be considered material if the transaction(s) to be entered into individually or taken together with previous transactions during a financial year, exceeds ten percent of the annual consolidated turnover of the listed entity as per the last audited financial statements of the listed entity.

Notwithstanding the above, a transaction involving payments made to a related party with respect to brand usage or royalty shall be considered material if the transaction(s) to be entered into individually or taken together with previous transactions during a financial year, exceed  two percent of the annual consolidated turnover of the listed entity as per the last audited financial statements of the listed entity

(2)All related party transactions shall require prior approval of the audit committee.

  only those members of the audit committee, who are independent directors, shall approve related party transactions.

(a) the audit committee of a listed entity shall define “material modifications” and disclose it as part of the policy on materiality of related party transactions and on dealing with related party transactions;

(b) a related party transaction to which the subsidiary of a listed entity is a party but the listed entity is not a party, shall require prior approval of the audit committee of the listed entity if the value of such transaction whether entered into individually or taken together with previous transactions during a financial year exceeds ten per cent of the annual consolidated turnover, as per the last audited financial statements of the listed entity;

(c) with effect from April 1, 2023, a related party transaction to which the subsidiary of a listed entity is a party but the listed entity is not a party, shall require prior approval of the audit committee of the listed entity if the value of such transaction whether entered into individually or taken together with previous transactions during a financial year, exceeds ten per cent of the annual standalone turnover, as per the last audited financial statements of the subsidiary;

(d) prior approval of the audit committee of the listed entity shall not be required for a related party transaction to which the listed subsidiary is a party but the listed entity is not a party, if regulation 23 and sub-regulation (2) of regulation 15 of these regulations are applicable to such listed subsidiary.

Explanation: For related party transactions of unlisted subsidiaries of a listed subsidiary as referred to in (d) above, the prior approval of the audit committee of the listed subsidiary shall suffice.

(3)Audit committee may grant omnibus approval for related party transactions proposed to be entered into by the listed entity subject to the following conditions, namely-

(a)the audit committee shall lay down the criteria for granting the omnibus approval in line with the policy on related party transactions of the listed entity and such approval shall be applicable in respect of transactions which are repetitive in nature;

(b)the audit committee shall satisfy itself regarding the need for such omnibus approval and that such approval is in the interest of the listed entity;

(c)the omnibus approval shall specify:

(i)the name(s) of the related party, nature of transaction, period of transaction, maximum amount of transactions that shall be entered into,

(ii)the indicative base price / current contracted price and the formula for variation in the price if any; and

(iii)such other conditions as the audit committee may deem fit:
Provided that where the need for related party transaction cannot be foreseen and aforesaid details are not available, audit committee may grant omnibus approval for such transactions subject to their value not exceeding rupees one crore per transaction.

(d)the audit committee shall review, atleast on a quarterly basis, the details of related party transactions entered into by the listed entity pursuant to each of the omnibus approvals given.

(e)Such omnibus approvals and shall require fresh approvals after the expiry of one year:

(4) All material related party transactions shall require approval of the through resolution and the related parties shall abstain from voting on such resolutions whether the entity is a related party to the particular transaction or not.

 prior approval of the shareholders of a listed entity shall not be required for a related party transaction to which the listed subsidiary is a party but the listed entity is not a party, if regulation 23 and sub-regulation (2) of regulation 15 of these regulations are applicable to such listed subsidiary.

Explanation: For related party transactions of unlisted subsidiaries of a listed subsidiary as referred above, the prior approval of the shareholders of the listed subsidiary shall suffice

that the requirements specified under this sub-regulation shall not apply in respect of a resolution plan approved under section 31 of the Insolvency Code, subject to the event being disclosed to the recognized stock exchanges within one day of the resolution plan being approved;

(5)   The provisions of sub-regulations (2), (3) and (4) shall not be applicable in the following cases:

(a) transactions entered into between two government companies;

(b) transactions entered into between a holding company and its wholly owned subsidiary whose accounts are consolidated with such holding company and placed before the shareholders at the general meeting for approval.

transactions entered into between two wholly-owned subsidiaries of the listed holding company, whose accounts are consolidated with such holding company and placed before the shareholders at the general meeting for approval

Explanation.-For the purpose of clause (a), “government company(ies)” means Government company as defined in sub-section (45) of section 2 of the Companies Act, 2013.

(6)  The provisions of this regulation shall be applicable to all prospective transactions.

  For the purpose of this regulation, all entities falling under the definition of related parties shall abstain from voting irrespective of whether the entity is a party to the particular transaction or not.

   All existing material related party contracts or arrangements entered into prior to the date of notification of these regulations and which may continue beyond such date shall be placed for approval of the shareholders in the first General Meeting subsequent to notification of these regulations.

The listed entity shall submit to the stock exchanges disclosures of related party transactions in the format as specified by the Board from time to time, and publish the same on its website:

Provided that a ‘high value debt listed entity’ shall submit such disclosures along with its standalone financial results for the half year:

Provided further that the listed entity shall make such disclosures every six months within fifteen days from the date of publication of its standalone and consolidated financial results: Provided further that the listed entity shall make such disclosures every six months on the date of publication of its standalone and consolidated financial results with effect from April 1, 2023.

The listed entity within 30 days from the date of publication of its standalone and consolidated financial results for the half year, on a consolidated basis, in the format specified in the relevant accounting standards for annual results to the stock exchanges and publish the same on its website.

  a ‘high value debt listed entity’ shall submit such disclosures along with its standalone financial results for the half year.

Refer SEBI – Clarification dated 30.03.2022 on applicability of regulation 23 of SEBI (LODR) Regulations, 2015 in relation to Related Party Transactions. To view the clarification Click Here
Inserted vide SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) (AMENDMENT) REGULATIONS, 2018 dated 9th May, 2018 effective from 1 April, 2019. To view the notification Click Here
Substituted by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Sixth Amendment) Regulations, 2021 dated 09.11.2021. To view the notification, Click Here
Inserted vide SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) (AMENDMENT) REGULATIONS, 2018 dated 9th May, 2018 effective from 1 April, 2019. To view the notification Click Here
Inserted vide the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2019 dated 29.03.2019. To view the Notification, Click Here.
Substituted vide Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Third Amendment) Regulations, 2019 dated 27th June,2019. To view the notification Click Here 
  1. Refer SEBI – Clarification dated 30.03.2022 on applicability of regulation 23 of SEBI (LODR) Regulations, 2015 in relation to Related Party Transactions. To view the clarification Click Here.
  2. Inserted by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Sixth Amendment) Regulations, 2021 dated 09.11.2021. To view the notification, Click Here
  3. The information as prescribed in SEBI Circular SEBI/HO/CFD/CMD1/CIR/P/2021/662 dated 22.11.2021 shall be placed before the Audit Committee for its approval. To view the notification, Click Here
Substituted by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Sixth Amendment) Regulations, 2021 dated 09.11.2021. To view the notification, Click Here

The information as prescribed in SEBI Circular SEBI/HO/CFD/CMD1/CIR/P/2021/662 dated 22.11.2021 shall be placed before the Audit Committee for its approval. To view the notification, Click Here

Inserted vide Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Third Amendment) Regulations, 2021 dated 03.08.2021. To view the notification, Click Here
SEBI has extended the applicability of the amendments made to LODR Regulations dated 03/08/2021 to 01/01/2022 vide corrigendum notification dated 06/08/2021. To view the notification, Click Here
Inserted by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Sixth Amendment) Regulations, 2021 dated 09.11.2021. To view the notification, Click Here
As per by SEBI’s clarification dated 08.04.2022, the shareholders’ approval of omnibus RPTs approved in an AGM shall be valid upto the date of the next AGM for a period not exceeding fifteen months. Further, in case of omnibus approvals for material RPTs, obtained from shareholders in general meetings other than AGMs, the validity of such omnibus approvals shall not exceed one year. To view the clarification, Click Here
  1. Inserted by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Sixth Amendment) Regulations, 2021 dated 09.11.2021. To view the notification, Click Here
  2. The information as prescribed in SEBI Circular SEBI/HO/CFD/CMD1/CIR/P/2021/662 dated 22.11.2021 shall be placed before the Shareholders for their approval. To view the notification, Click Here.
  3. SEBI Circular SEBI/HO/CFD/CMD1/CIR/P/2021/662 dated 22.11.2021 shall be applicable to debt listed entities as prescribed in SEBI Circular dated 07.01.2022 regarding disclosure obligations of listed entities in relation to Related Party Transactions. To view the circular, Click Here

 

  1. Inserted by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Sixth Amendment) Regulations, 2021 dated 09.11.2021. To view the notification, Click Here
  2. The information as prescribed in SEBI Circular SEBI/HO/CFD/CMD1/CIR/P/2021/662 dated 22.11.2021 shall be placed before the Shareholders for their approval. To view the notification, Click Here
  3. SEBI Circular SEBI/HO/CFD/CMD1/CIR/P/2021/662 dated 22.11.2021 shall be applicable to debt listed entities as prescribed in SEBI Circular dated 07.01.2022 regarding disclosure obligations of listed entities in relation to Related Party Transactions. To view the circular, Click Here
As per by SEBI’s clarification dated 08.04.2022, the shareholders’ approval of omnibus RPTs approved in an AGM shall be valid upto the date of the next AGM for a period not exceeding fifteen months. Further, in case of omnibus approvals for material RPTs, obtained from shareholders in general meetings other than AGMs, the validity of such omnibus approvals shall not exceed one year. To view the clarification, Click Here
Substituted vide SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) (AMENDMENT) REGULATIONS, 2018 dated 9th May, 2018 effective from 1 April, 2019. To view the notification Click Here
Inserted by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Sixth Amendment) Regulations, 2021 dated 09.11.2021. To view the notification, Click Here
Inserted vide the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Third Amendment) Regulations, 2018 dated 1.06.2018. To view the Notification, Click Here
Inserted by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Sixth Amendment) Regulations, 2021 dated 09.11.2021. To view the notification, Click Here
Inserted by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Sixth Amendment) Regulations, 2021 dated 09.11.2021. To view the notification, Click Here
Omitted by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Sixth Amendment) Regulations, 2021 dated 09.11.2021. To view the notification, Click Here
Substituted vide SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) (AMENDMENT) REGULATIONS, 2018 dated 9th May, 2018 effective from 1 April, 2019. To view the notification Click Here
Refer SEBI – Clarification dated 30.03.2022 on applicability of regulation 23 of SEBI (LODR) Regulations, 2015 in relation to Related Party Transactions. To view the clarification Click Here
  1. Refer Updated SEBI Operational Circular as on 01.12.2022. To view the circular, Click Here
  2. Refer SEBI Operational Circular dated 29.07.2022 for listing obligations and disclosure requirements for Non-convertible Securities, Securitized Debt Instruments and /or Commercial Paper. To view the circular, Click Here
  3. Substituted by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Sixth Amendment) Regulations, 2021 dated 09.11.2021. To view the notification, Click Here

Refer BSE Circular-XBRL based filing of Related Party Transactions for Listed Companies at BSE dated 19.10.2021. To view the circular, Click Here

Refer Guidance note on SEBI (Listing Obligations and Disclosure Requirements) Regulation 23(9) regarding disclosure of related party transactions Content dated 30.09.2021. To view the guidance note, Click Here

Refer Guidance Note on disclosure of related party transactions dated 01.04.2021. To view the circular, Click Here

Inserted vide SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) (AMENDMENT) REGULATIONS, 2018 dated 9th May, 2018 effective from 1 April, 2019. To view the notification Click Here.

  1. Extension vide SEBI Circular dated 26.03.2020 provided for implementation of circular on non-compliance with certain provisions of the SEBI LODR and the Standard Operating Procedure for suspension and revocation of trading of specified securities dated 22.01.2020. The revised implementation date is for compliance periods ending on or after June 30, 2020 from earlier date of March 31, 2020. To view the circular, Click Here.
  2. Refer SEBI Circular on non-compliance with certain provisions of the SEBI LODR and the Standard Operating Procedure for suspension and revocation of trading of specified securities dated 22.01.2020 to be implemented for compliance periods ending on or after March 31, 2020. To view the circular Click Here
Refer Circular-Filing of Related Party Transactions in XBRL mode dated 06.09.2021. To view the notification, Click Here
Inserted vide SEBI (Listing Obligations and Disclosure Requirements) (Fifth Amendment) Regulations, 2021 dated 07.09.2021. To view the notification, Click Here

Guidance note on SEBI (Listing Obligations and Disclosure Requirements) Regulation 23(9) regarding disclosure of related party transactions Content dated 30.09.2021


SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018 dated 09.05.2018


SEBI (Listing Obligations and Disclosure Requirements) (Fifth Amendment) Regulations, 2021 dated 07.09.2021


SEBI Corrigendum dated 06.08.2021


Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Third Amendment) Regulations, 2019, dated 27 June,2019


Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Third Amendment) Regulations, 2021 dated 03.08.2021


The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2019 dated 29.03.2019


The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Third Amendment) Regulations, 2018 dated 1.06.2018


BSE Circular-XBRL based filing of Related Party Transactions for Listed Companies at BSE dated 19.10.2021


Circular-Filing of Related Party Transactions in XBRL mode dated 06.09.2021


Clarification on applicability of Regulation 23(4) read with Regulation 23(3)(e) of the SEBI (LODR) Regulations, 2015 in relation to Related Party Transactions dated 08.04.2022


Disclosure obligations of listed entities in relation to Related Party Transactions


Guidance note as per Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 23(9) on disclosure of related party transactions dated 01.04.2021


NSE Circular dated 25.04.2022 regarding Frequently Asked Questions (FAQs) – Disclosure of Related Party Transactions under regulation 23 of SEBI (LODR) Regulations, 2015


Operational Circular dated 29.07.2022 for listing obligations and disclosure requirements for Non-convertible Securities, Securitized Debt Instruments and/or Commercial Paper.


SEBI – Clarification dated 30.03.2022 on applicability of regulation 23 of SEBI (LODR) Regulations, 2015 in relation to Related Party Transactions


SEBI Circular dated 07.01.2022 regarding disclosure obligations of high value debt listed entities in relation to Related Party Transactions


SEBI Circular on Further relaxations from compliance with certain provisions of LODR and the SEBI circular dated January 22, 2020 relating to SOP due to the CoVID -19 virus pandemic dated 26.03.2020


SEBI Circular on non-compliance with certain provisions of the SEBI LODR and the Standard Operating Procedure for suspension and revocation of trading of specified securities dated 22.01.2020


Updated SEBI Operational Circular dated 01.12.2022


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