Deadline for norms on related-party payments to companies deferred

Our Bureau Mumbai | Updated on March 27, 2019 Published on March 27, 2019

SEBI postpones the move by three months to June 30

SEBI on Wednesday differed implementation of a provision that required companies to seek shareholder approval for material payments made to related parties for brand usage or royalty, by three months to June 30. The decision was taken at SEBI’s board meeting held on Wednesday.


Such payments are considered material if they exceed 2 per cent of the annual consolidated turnover of the listed company in the financial year, SEBI said. The provision was scheduled to come into effect from April 1. SEBI said it had deferred the implementation of this provision, in view of the representations received.

The regulator also approved the proposal for undertaking a public consultation process to amend the SEBI (Self Regulatory Organisations) Regulations, 2004. Such amendments are with the objective of defining the SRO, rationalising the process of recognition and strengthening the role of such organisations in the securities market, SEBI said.

Stock broker associations have made representation to SEBI for being appointed as SRO. In an event held this year, former SEBI chairman M Damodaran had said that SROs’ initiatives have not succeeded in the past and building blocks need to be put in place before it is approved.

The SEBI budget for financial year 2019-20 was approved by the board on Wednesday.

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Published on March 27, 2019
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