Sebi proposes new norms for employee stock options

The Securities and Exchange Board of India on Wednesday proposed a new set of regulations wherein trusts of companies will be allowed to purchase their shares or that of a subsidiary from the secondary market for employee share benefit schemes such as Employee Stock Ownership Plan (ESOP) and Employee Stock Purchase Scheme (ESPS).

Coming out with a discussion paper on guidelines related to stock-based employee benefit schemes,Sebi also proposed to cover all employee benefit schemes other than ESOP and ESPS,as they were unregulated and were outside the purview of ESOS (Employee Stock Option Scheme) norms.

The proposed regulations should cover all the schemes for the benefit of employees which are set up,managed or financed by the company directly or indirectly through the mechanism of a trust and which deal in actual securities of the company whether by way of purchase from/sale in the secondary market or grant of shares made by the company, said the discussion paper released by Sebi on Wednesday.

Sebi has invited public comments on the recommendations made by the Primary Market Advisory Committee till December 5,following which it will come out with the final guidelines.