Related Party Transaction Documentation Templates — A Practical How-To

Knowing that a related party transaction needs disclosure and investor consent is one thing. Having a documentation trail that actually satisfies SEBI on inspection is another. This is the practitioner's toolkit version.

Starting From What Actually Counts as a Related Party Transaction

Before building a template, the Manager needs a working definition it applies consistently — not a case-by-case judgment call each time a transaction comes up. For AIFs, this should capture: transactions with the Sponsor or Manager entity or their associates; co-investment arrangements where the Manager or its affiliates also participate alongside the fund; transactions with a portfolio company in which the Manager, Sponsor, or their key personnel hold a separate interest; and cross-fund transactions where two schemes managed by the same Manager transact with each other. SEBI's evolving proposals (including the June 2026 consultation on broadening the "related party" definition for AIFs to align with Section 2(76) of the Companies Act, 2013) point toward this definition getting wider, not narrower — so a template built on today's narrow reading will likely need revisiting.

The Core Documentation Set for Every RPT

A defensible RPT file, built at the time of the transaction rather than reconstructed later, should contain:

• Transaction rationale memo — why this transaction, why this counterparty, and why on these terms, written by the Investment Committee or deal team at the time of approval, not after the fact.
• Arm's-length pricing support — an independent valuation, comparable transaction benchmarking, or a documented pricing methodology showing the terms are no less favourable to the fund than an unrelated-party deal would have been.
• Conflict disclosure to the Investment Committee — a signed record that the conflicted member(s) disclosed their interest and recused themselves from the approval vote, with the abstention noted in the minutes.
• Investor consent trail — the specific PPM clause or fund document provision under which investor approval is required, the notice sent to investors, and the record of approval (or deemed approval under the fund's consent mechanism) actually obtained.

Building a Standing Investment Committee Minute Template

Rather than drafting bespoke minutes for every RPT, a standing template with mandatory fields (nature of the conflict, recusal confirmation, pricing basis, approving quorum excluding conflicted members) turns governance discipline into a repeatable process rather than something that depends on whoever happens to be drafting minutes that quarter. This is also the single easiest control to strengthen ahead of SEBI's proposed broadening of the RPT definition — a template that already captures pricing rationale and recusal will absorb a wider definition far more easily than one built loosely.

The LP Disclosure Layer — Separate From Internal Governance

Internal Investment Committee documentation proves the Manager followed its own process; it doesn't automatically satisfy investor-facing disclosure obligations, which typically run through periodic reports or specific PPM-mandated notices. A complete RPT template set should include a standard LP disclosure format — summarising the transaction, the conflict, the pricing basis, and the approval obtained — that can be dropped into quarterly reporting without a fresh drafting exercise each time.

Retention and Audit-Readiness

RPT files should be retained for the fund's full life plus the statutory look-back period SEBI or an inspection team could reasonably apply, organised so that a specific transaction can be pulled and its full approval chain reconstructed within minutes, not days — inspection responsiveness is itself a governance signal SEBI reads into how seriously a Manager takes its conflict framework.

Turning This Into an Actual Working System

A template is only useful if the deal team and Compliance Officer actually use it consistently under time pressure — which is where most RPT documentation quietly breaks down in practice. We help AIF Managers build these templates directly into their approval workflow, so the paper trail is a natural byproduct of the deal process rather than a separate compliance exercise done after the fact.

This article is for general informational purposes and does not constitute legal or regulatory advice specific to any fund's transactions.

CA Anuj Desai