The Securities and Exchange Board of India, in a notification dated 27th June, 2019 released the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Third Amendment) Regulations, 2019 (“Amendment Regulations”) making amendments to Regulation 23(1A), which deals with materiality of related party transactions.
According to the Amendment Regulations, a transaction related to brand usage or royalty made to a related party will be considered material if it exceeds five percent of annual consolidated turnover of the listed entity as per financial statements of the listed entity, effective 27th June, 2019.
Previously, before this amendment, the requirement for considering such a related party transaction material was if it exceeded two percent of annual consolidated turnover of the listed entity.
Source: Securities and Exchange Board of India
