SEBI Defers Implementation Of Amended Norms For Royalty Payment
Indian two thousand rupee banknotes are arranged for a photograph in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

SEBI Defers Implementation Of Amended Norms For Royalty Payment


The Securities and Exchange Board of India deferred implementation of revised norms for royalty payment by listed companies to related parties by three months.

Following the decision taken at the regulator’s board meeting, the implementation of a provision of the amended norms has been deferred till June 30. They were to be implemented from April 1 this year.

Shareholders’ approval would be needed for making royalty or brand payments to related parties exceeding 2 percent of the particular listed entity's consolidated turnover.

In a release, SEBI said the decision had been taken in view of representations received on the matter.

As per the revised norms, payments made to related parties towards brand usage or royalty are to be considered material if the transaction is more than two percent of the listed entity’s annual consolidated turnover during a financial year.

This required approval of the shareholders with no related party having a vote to approve such resolutions.

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The amendments were made to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 - payment relating to royalty and brand usage.

Besides, the SEBI board decided to come out with a consultation paper on Self Regulatory Organisations in securities market.

A public consultation process would be undertaken towards amend SRO regulations. The objective is to define an SRO, rationalise the process of recognition as well as strengthen the role of such entities in the securities market, the release said.

At the meeting, the board also approved SEBI’s budget for the 2019-20 fiscal.

Also read: Jubilant FoodWorks’ Parent Backtracks On Royalty Issue Within Hours

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