The Securities and Exchange Board of India vide its circular dated 7th January 2022 has issued disclosure obligations for listed entities which have listed their debt securities in connection to related party transactions (RPTs).
Regulation 15(1A) of the SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015 (‘LODR Regulations’) was introduced stipulating that Regulations 15 to 27 of Listing Regulations shall be applicable to high value debt listed entities on a ‘comply or explain’ basis. High-value debt-listed entities are those entities that have listed non-convertible debt securities and an outstanding value of such securities are Rs 500 crore and above.
Regulation 23 of the LODR Regulations on related party transactions was amended, inter-alia, mandating listed entities that have listed specified securities to submit to the stock exchanges disclosure of Related Party Transactions (RPTs) in the format specified by the Board from time to time.
SEBI has specified following disclosure obligations of listed entities in relation to Related Party Transactions with respect to specified securities:
- Information to be reviewed by the Audit Committee for approval of RPTs;
- Information to be provided to shareholders for consideration of RPTs and;
- Format for reporting of RPTs to the Stock Exchange.
Since the provisions of Regulation 23 of the LODR Regulations would be applicable to high value debt listed companies also, it has been decided to make the above provisions applicable to high value debt listed entities.
