AMENDMENTS TO SEBI (EMPLOYEE STOCK OPTION SCHEME
AND EMPLOYEE STOCK PURCHASE SCHEME) GUIDELINES, 1999 AND EQUITY LISTING
AGREEMENT
CIRCULAR NO.: CFD/DIL/3/2013,
DATED
17-1-2013
1. SEBI (Employee Stock Option Scheme and Employee
Stock Purchase Scheme) Guidelines, 1999 ("SEBI (ESOS & ESPS)
Guidelines") were issued to enable listed entities to reward their
employees through stock option schemes and stock purchase schemes and to ensure
that such schemes introduced by the companies are within the regulated framework.
2. It has come to the notice of SEBI that some listed
entities have been framing their own employees benefit schemes wherein Trusts
have been set up to deal in their own securities in the secondary market, which
was not envisaged within the purview of SEBI (ESOS and ESPS) Guidelines 1999.
3. It is apprehended that some entities may frame such
schemes with the purpose of dealing in its own securities with the object of
inflating, depressing, maintaining or causing fluctuation in the price of the
securities by engaging in fraudulent and unfair trade practices. Such dealing
in the company's shares by the Trusts may also raise regulatory concerns
regarding compliance with SEBI (Prohibition of Fraudulent and Unfair Trade
Practices relating to the Securities Market) Regulations, 2003 and SEBI
(Prohibition of Insider Trading) Regulations, 1992.
4. In order to address the concerns over acquisition
of shares by employee welfare Trusts from the secondary market, it has been
decided to prohibit the listed entities from framing any employee benefit
schemes involving acquisition of own securities from the secondary market.
5. In order to implement the above decision, certain
listing conditions are hereby specified by way of inserting Clause 35C in the
Equity Listing Agreement as given in Annexure I.
6. In respect of those companies, which have already
framed and implemented before the date of this circular any employee benefit
schemes involving dealing in the securities of the company, which are not in accordance
with SEBI (ESOS and ESPS) Guidelines, it has been decided that:-
(i)
Such companies will be required to inform the
details of their schemes to the Stock Exchanges within 30 days from date of
this circular, in the format provided in Annexure II to this
circular and to disseminate the said information on their website.
(ii)
Such companies shall align any existing
employee benefit schemes with SEBI (ESOS and ESPS) Guidelines on or before June
30, 2013.
7. In view of the above, it has also been decided to
amend the SEBI (ESOS and ESPS) Guidelines 1999 as provided in Annexure
III. The amendments made vide this circular shall come into force with
immediate effect.
8. All stock exchanges are advised to ensure
compliance with this circular, and carry out the necessary amendments in their
Listing Agreement accordingly.
Annexure – I
Amendments to Equity Listing Agreement
1. After Clause 35B, a new clause
35C shall be inserted to read as under:
"35C. (i) the issuer agrees that
all the employee benefit schemes involving the securities of the company shall
be in compliance with SEBI (Employee Stock Option Schemes and Employee Stock
Purchase Schemes) Guidelines, 1999 and any other guidelines, regulations etc.
framed by SEBI in this regard.
(ii) The issuer further agrees that
all the employee benefit schemes already framed and implemented by the company
involving dealing in the securities of the company, before the insertion of
this clause shall be aligned with and made to conform to SEBI (Employee Stock
Option Schemes and Employee Stock Purchase Schemes) Guidelines, 1999 by June
30, 2013."
2. In Clause 35B of the Listing
Agreement, all references to "Companies (Passing of the Resolution by
Postal Ballot) Rules 2001" shall be replaced with "Companies (Passing
of the Resolution by Postal Ballot) Rules 2011".
Annexure – II
Format for furnishing the details of employee benefit
schemes involving dealings in secondary market, not covered under SEBI (ESOS
and ESPS) Guidelines 1999
1. Name of the Issuer:
2. Name of the Scheme:
3. Date of implementation:
4. Mode of Implementation
(Trust/Direct):
5. Brief particulars about the
Scheme (modus operandi):
Details of Trust, Trustees, and their
relationship with Promoters or Directors of the company
6. Whether promoters/persons
belonging to the promoter group/directors, are also beneficiaries in the
scheme. If so, the details thereof and their entitlements:
7. No. of shares held by
Trust/any other agency managing the scheme as on the date of the circular
8. How the Trust/agency is
proposing to deal with the existing holding (whether to be transferred to the
employees, or to be sold in the market for transferring the benefits to the
employees, if so, details regarding proposed date of such transfer or sale
shall be given) Such date shall not be later than June 30, 2013 :
9. Details of persons who are
entitled to shares or benefits accruing out of the shares, which form part of
more than 1 per cent of the paid up share capital, as on the date of the
circular in the following format:
Name
of the employee
|
Whether
falling under Promoter/promoter group/directors
|
No.
of entitled shares
|
% of
such entitlement over the paid-up share capital
|
No.
of shares transferred/allotted to them/benefits of which is passed on to them
out of (3)
|
|
|
(1)
|
(2)
|
(3)
|
(4)
|
(5)
|
10. Details of secondary market
purchases/sales by the company/Trust/ any other agency managing the scheme if
any, since April 01, 2012 in the following format:
Sl.
|
Date/time
|
Type
of Transaction (Purchase/Sale)
|
No.
of Securities
|
Price
at which Purchased/sold
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annexure – III
Amendments to SEBI (Employee Stock Option Scheme and
Employee Stock Purchase Scheme) Guidelines, 1999
After clause 22A, the
following new clause shall be inserted namely:
"22B. Prohibition on acquisition of
securities from secondary market
No ESOS/ESPS shall involve acquisition of
securities from the secondary market."
Regards
CA.
Mona Singhal
Partner
Arpit
Gupta & Associates
Chartered
Accountants
701,
Nirmal Tower,
26,
Barakhamba Road,
Connaught
Place, Delhi-110001
Mobile:-
+91-9873082769
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