SEBI (Share Based Employee Benefit) Regulations, 2014 (SBEB Regulations)

The Securities Exchange Board of India, on October 28, 2014, repelled the erstwhile SEBI ESOP Guidelines and promulgated a new set of Regulations namely SEBI (Share Based Employee Benefit) Regulations, 2014 (SBEB Regulations).

 The new Regulations brought within their purview not just the Equity-based Plans i.e. ESOS & ESPS, but also the Equity-linked Plans such as Phantoms & SARs. They have further widened Arena of the Regulations by covering even General Employee Benefit Schemes and Retirement Benefit Schemes.

The Regulations also talked about various disclosure requirements and certain processes with regard to respective regulations. However the same was not defined/ stated by the Board at the time of promulgation of these Regulations.

Now, after a gap of six months, the Board has given the much awaited information vide its circular no. CIR/CFD/POLICY CELL/2/2015, dated June 16, 2015, detailing the guidelines and annexure with regard to the disclosures and references of the respective Regulations.

The SEBI has given the following disclosures in this respect:-

1. The minimum provisions to be included in the Trust Deed under Regulation 3(3);
2. The terms & conditions of the schemes to be formulated by the compensation committee under Regulation 5(3);
3. The contents of explanatory statement to the notice and resolution for shareholders meeting under Regulation 6(2) have been revised and certain new points have been added;
4. In-principal Approval of Stock Exchange-
   • The information required to be given in the statement to be filed with the Stock Exchange pursuant to Regulation 10(b) for obtaining in-principal approval;
   • List of documents to be filed with registration statement to be filed with the Stock Exchange for obtaining in-principal approval along with the undertakings to be given by the Company to the Stock Exchange;
5. Format of notification for issue of shares under Regulation 10(c) for getting the shares listed on the Stock Exchange;
6. Disclosures by the Board of Directors under Regulation 14 to be given in the Director’s Report;
7. Disclosure requirements and documents under Regulation 16(2) & 23(3), to be disclosed in the Scheme