SEBI Employees Share Based Employee Benefits and Sweat Equity Regulations 2021
SEBI notifies Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations 2021BackgroundOn November 20, 2020, SEBI had issued a consultation paper to review the SEBI (Delisting of Equity Shares) Regulations,2009 with an objective of streamlining and strengthening the delisting process.
SEBI has notified Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (‘ESOP and Sweat Equity Regulations 2021’ or ‘New Regulations’) which repeal and supersede the earlier regulations viz. Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 and Securities and Exchange Board of India (Issue of Sweat Equity) Regulations, 2002 (collectively referred to as ‘Erstwhile Regulations’).
The New Regulations consolidate the regulations with respect to share-based benefit schemes and sweat equity shares and are applicable to any company whose equity shares are listed on a recognised stock exchange in India. The share-based benefit schemes which are governed by SEBI Regulations (both new and old) are as under –
− Employee stock option scheme
− Employee stock purchase scheme
− Stock appreciation rights scheme
− General employee benefits scheme
− Retirement benefits scheme