Sebi asks cos to adopt ESOP norms by June
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Market regulator Sebi on Thursday asked listed companies to comply with new norms that bar employee welfare schemes and trusts from purchasing the shares of their own firms from the secondary market, by June 30. The move is aimed at preventing possible manipulation in trading of shares by companies.
In August, Sebi had barred employee welfare schemes and trusts of listed entities from purchasing their own shares from the secondary market. In a circular, Sebi has directed all listed entities to comply with the requisite norms on employee benefit schemes (stock options as well as stock purchases) by June 30.
Listed companies are required to furnish details about the schemes to the stock exchanges within one month from January 17. Further, the details have to be put up on their websites.
Sebi's ESOS (Employee Stock Option Scheme) and ESPS (Employee Stock Purchase Scheme) guidelines allow listed companies to reward their employees through these.
"... any employee benefit schemes involving dealing in the securities of the company, which are not in accordance with Sebi guidelines, it has been decided that such companies shall align any existing employee benefit schemes with Sebi guidelines on or before June 30, 2013," Sebi said.