SEBI's amendment to the Listing Obligations and Disclosure Requirements (LODR) Regulations 2015, effective from 1 April 2025, substantially raises the disclosure bar for all companies listed on NSE, BSE, and other recognised stock exchanges. The amendment was issued following SEBI's review of related party transaction governance and its assessment that event-based disclosures were being made with material delays that disadvantaged retail investors. Companies whose compliance teams have not yet fully absorbed the April 2025 changes face ongoing default exposure.
Revised RPT Disclosure Requirements
Regulation 23 of the LODR Regulations has been comprehensively amended. The definition of "related party" for LODR purposes now aligns with a broader interpretation than under the Companies Act 2013, capturing entities in which directors, promoters, or key managerial personnel hold a 20% or greater stake — reduced from 25%. This expanded definition brings a larger set of commercial counterparties into the RPT compliance perimeter.
All material RPTs must be disclosed to stock exchanges within 24 hours of board approval or audit committee omnibus approval, whichever applies first. Previously, RPT disclosures were bundled into quarterly compliance reports. The shift to real-time disclosure requires listed companies to establish an internal workflow that connects board secretariat functions directly to the company secretary's disclosure team, with no manual bottlenecks.
Disclosures must now include: the name of the related party and the nature of the relationship, the type of transaction, the value approved and the value transacted in the reporting period, the rationale provided by the audit committee for approving the transaction, and a certification from the managing director or chief financial officer that the transaction is in the interest of the company. Boilerplate certifications without substantive rationale are flagged in SEBI's informal guidance as non-compliant.
Event-Based Disclosure Timelines
The amendment rewrites Regulation 30, which governs event-based disclosures. SEBI has introduced a tiered timeline: Tier 1 events — including board decisions on dividends, mergers, acquisitions, changes in promoter shareholding, and material litigations — must be disclosed within 30 minutes of the conclusion of the board meeting. Tier 2 events — including analyst meetings, investor presentations, and credit rating changes — must be disclosed within 24 hours. Previously, the standard was 24 hours for most disclosures, with no differentiation for market-sensitive items.
The 30-minute timeline for Tier 1 disclosures requires listed companies to have draft disclosures prepared before board meetings conclude, cleared by the company secretary, and ready to upload to the exchange portal immediately upon board sign-off. Companies that have historically relied on post-meeting drafting will need to revise their board meeting protocols fundamentally.
New Requirements for the Audit Committee
The amendment requires the audit committee to meet at least quarterly specifically to review RPTs, in addition to its existing meeting obligations. Each quarterly RPT review must be reflected in a board-level disclosure within 21 days of the quarter's end. The audit committee must now also consider, and disclose its view on, whether each material RPT was conducted at arm's length and whether it required competitive market testing. Where market testing was not conducted, the committee must explain why.
Independent Director Obligations
Independent directors now carry direct accountability for LODR compliance in a manner not previously codified. The amendment requires the chairperson of the audit committee — who must be an independent director — to certify each quarterly RPT disclosure personally. If the chairperson dissents from an RPT approval, that dissent must be separately disclosed. This creates a direct regulatory exposure for audit committee chairs who do not engage substantively with RPT review.
Penalties for Non-Compliance
SEBI has communicated, through its enforcement orders issued in the 12 months preceding this amendment, that delay-based violations will attract penalties under Regulation 98 of the LODR Regulations and Section 23E of the Securities Contracts (Regulation) Act 1956. Penalties for disclosure delays have ranged from Rs 1 lakh to Rs 10 crore depending on the gravity of the omission and whether investor harm resulted. SEBI has also indicated it will consider repeat violations as grounds for referral to its Enforcement department for market access restrictions.
Action Items for Listed Companies in Delhi NCR
- Map all related parties under the revised 20% threshold definition and update the RPT register accordingly.
- Establish a 30-minute disclosure workflow for Tier 1 board decisions, with pre-drafted templates cleared by the company secretary before board meetings.
- Reconstitute the audit committee meeting calendar to include a dedicated quarterly RPT review session.
- Amend audit committee omnibus approval resolutions to include the rationale and arm's-length certification requirements.
- Audit the last four quarters of RPT disclosures against the new timeline standards and assess historical exposure.
- Train the managing director and CFO on the personal certification obligations for RPT disclosures.