India’s markets regulator proposed on Wednesday that bondholders should have the right to object to related party transactions proposed by companies that have listed high-value debt securities.

The regulator has sought comments by February 22.

SEBI said the proposal would apply where more than 90% of the company is owned by an entity defined as a related party. If more than 75% of bondholders oppose a deal, the board will have to withdraw the deal.

According to SEBI, the norm will only apply to listed non-convertible debt securities.

Currently, SEBI applies governance norms if the outstanding debt through bond issuance exceeds Rs 500 crore. The regulator proposes adjusting governance norms for three consecutive financial years even if the debt falls below that limit.

SEBI’s proposal comes as companies circumvent related party transaction rules by obtaining approval for loans to group companies.