Home » Knowledge Hub » ISF Guidance on the applicability of Minimum information to be provided for review of the audit committee and shareholders for approval of Related Party Transactions’ [‘ISF RPT Standards’]
ISF Guidance on the applicability of Minimum information to be provided for review of the audit committee and shareholders for approval of Related Party Transactions’ [‘ISF RPT Standards’]
March 19, 2025
Industry Standards Forum (‘ISF’) has clarified on the applicability of Related Party Transactions’ [‘ISF RPT Standards’] for approval of related party transactions that have been taken or would be taken from audit committee or shareholders for transactions commencing or continuing beyond April 1, 2025. This clarification is notified by Bombay Stock Exchange and National Stock Exchange vide their circular dt: March 15, 2025.[1].
Applicability of ISF RPT Standards: SEBI has clarified that listed entities shall continue to adhere to the requirements stipulated under Section III-B of the SEBI Master Circular dated November 11, 2024, for the approval of Related Party Transactions (RPTs) till March 31, 2025. Post March 31, 2025 (w.e.f April 1, 2025) ISF RPT standards needs to be complied with for RPT approval process.
FAQs on applicability of ISF RPT Standards would benefit Related Party Transactions [RPTs’] that would be entered post March 15, 2025.
The issuance of FAQs on the applicability ISF RPT Standards will provide clarity and relief for RPTs approved by audit committee and/or shareholders between February 16, 2025, till March 15, 2025.
Omnibus approval of related party transactions
Audit committee approval
ISF RPT Standards
Omnibus approval granted before April 1, 2025, for RPTs for FY 25-26.
No need to seek fresh approval with ISF RPT Standards.
Material modification on or after April 1, 2025, for RPTs to whom omnibus approval is granted (before April 1, 2025)
ISF RPT Standards would be applicable
Approval of material related party transactions
Audit committee
Shareholders
ISF RPT Standards
Approval taken before April 1, 2025
Notices sent to members before April 1, 2025, or after April 1, 2025
Not applicable
Approval to be taken post April 1, 2025
Members approval to be taken post April 1, 2025,
Applicable
Ratification of RPTs
Ratification of RPTs
ISF RPT Standards
Before April 1, 2025.
Not applicable
Post April 1, 2025.
Applicable
Approval of RPTs specifically with a related party.
Specific approval of RPTs to be entered into on or April 1, 2025
ISF RPT Standards
If approval taken on or before April 1, 2025
Not applicable
If approval is being taken post April 1, 2025.
Applicable
Hence it is clear that material modification or fresh approvals or ratification of RPTs on or after April 1, 2025, approval of audit committee and shareholders must be taken in compliance with ISF RPT Standards.
