Latest news with #EmployeeStockOptions
India Today
a day ago
- Business
- India Today
ED bars summons to advocates, exceptions need director's approval under law
The Enforcement Directorate (ED) on Friday issued a circular instructing its field formations not to issue summons to any advocate in violation of Section 132 of the Bhartiya Sakshya Adhiniyam, 2023. This section states that no advocate, at any point of time, should disclose any communication made to him without the client's circular mandates that any summons under the exceptions to this provision require prior approval from the Director of the Enforcement comes amid the probe agency's investigation into a money laundering case involving Care Health Insurance Ltd (CHIL) concerning the issuance of Employee Stock Options (ESOPs) at significantly undervalued prices. The case centres around the Employee Stock Ownership Plans (ESOPs) issued on May 1, 2022, which were reportedly priced much lower than market value. This issuance allegedly took place despite a formal rejection of the ESOP proposal by the Insurance Regulatory and Development Authority of India (IRDAI).As part of the ongoing probe, the ED summoned Pratap Venugopal, an independent director of CHIL, to ascertain the circumstances surrounding the issuance of the ESOPs and the board's discussions following IRDAI's rejection. However, given that Venugopal is a senior advocate practicing in the Supreme Court, the summons issued to him has now been ED said that any documents required from him in his capacity as an independent director will be requested via July 23 last year, the IRDAI directed CHIL to revoke or cancel any ESOPs that remain unallotted. In addition, the regulator imposed a penalty of Rs 1 crore on CHIL for non-compliance with its Watch
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Business Standard
3 days ago
- Business
- Business Standard
Reverse-flipping and startup IPOs get boost as Sebi relaxes norms
The Securities and Exchange Board of India (Sebi) on Wednesday announced a slew of measures to ease the compliance burden in the stock markets ecosystem, encourage more companies to list on the bourses after reverse flipping to India, and facilitate greater foreign fund flows into government bonds. The market watchdog also decided to drop the norm that makes start-up founders and promoters ineligible to hold Employee Stock Options (ESOPs) and other share-based benefits at the time of filing their draft red herring prospectus (DRHP) for a public issue of shares. Sebi has allowed promoters to hold on to their ESOPs granted a year prior to the filing of their DRHP, while disallowing fresh ESOP issuances in the run up to the filing. At its meeting steered by chairman Tuhin Kanta Pandey, the Board also scrapped a rule that requires investors in fully paid up Compulsorily Convertible Securities (CCS) to hold shares arising from conversion of such securities for a minimum of one year. 'This has resulted in certain investors not being able to participate in the Offer for Sale in public issue,' the Board noted. These changes in regulations will assist companies contemplating reverse flipping — a term used for changing a firm's domicile from a foreign nation to India to facilitate domestic listing. Further, Sebi also allowed shares held by foreign ventures, alternative investment funds (AIFs) and public financial institutions to be factored into the minimum promoter contribution requirement for a public issue. Though clearing corporations were not officially on the board's agenda, Sebi chairman Pandey said the regulator has formed a working group to look into unbundling of charges by clearing corporations. Sebi chairman said that such charges cannot be a 'black-box' and need to be disclosed to the investors. He added that the ownership structure of clearing corporations will not change — a deviation from the past stance whereby the regulator had contemplated hiving them off from parent exchanges. Sebi has also eased the rules for delisting of public sector undertakings (PSUs) where government shareholding is over 90 per cent. Pandey said the relaxation will not be applicable to banks, NBFCs and insurance companies, and will benefit about five listed PSUs. The market regulator also announced a separate category for foreign portfolio investors (FPIs) for investing in government securities (gsecs). Such investors will have relaxed regulations on KYC, similar to that by RBI. These FPIs will also secure relief from making granular disclosures and get a longer timeline to disclose material changes. Further, Sebi also allowed Category-I and -II AIFs to form co-investment vehicles, approved changes in norms governing angel funds, and has initiated discussions on easing accreditation. The board also pulled back from its December 2024 decision, requiring regulated entities like merchant bankers to hive off non-core or non-regulated business into separate entities. Merchant bankers will be able to continue activities which are under other financial regulators. However, merchant bankers will have to disclose to the clients if the said activity, such as in an unlisted market, is unregulated. The Sebi board has also cleared a settlement scheme for brokers charged under the scam involving the National Spot Exchange (NSEL). Additionally, a settlement scheme for venture capital funds has also been introduced. Further, the market regulator has mandated dematerialisation of shares of certain key shareholders such as senior management before the filing of the DRHP.
Economic Times
3 days ago
- Business
- Economic Times
Sebi board meeting: Regulator eases IPO rules for start-up founders, mandates dematerialisation of securities
Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Market regulator Securities and Exchange Board of India ( Sebi ) on Wednesday relaxed the rules around Employee Stock Options (ESOPs) for start-up founders . Founders classified as promoters who received share-based benefits at least one year before filing the Draft Red Herring Prospectus (DRHP) will now be allowed to retain or exercise these benefits post-listing, a shift from the earlier requirement to liquidate them before an the existing regulations, promoters are ineligible to hold or be granted share based benefits, including ESOPs and if they held such share based benefits at the time of filing of DRHP they are required to liquidate such benefits prior to the provision has been found to be impacting founders classified as promoters at the time of filing of DRHP, the Sebi board meeting document other measures, with a view to enhance market transparency, Sebi has mandated dematerialization of securities for a wider range of stakeholders—including promoter groups, employees, directors, and institutional investors—prior to filing the DRHP. This expansion of the demat mandate is expected to reduce fraud, prevent loss or damage of physical shares, and improve regulatory Read: Sebi board meeting: Regulator approves PSU delisting, IPO reforms, dematerialisation of Securities. 10 key takeaways In a bid to streamline the public issue process and encourage ease of doing business, SEBI has also approved key amendments to the Sebi (Issue of Capital and Disclosure Requirements) Regulations, 2018, and SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021. The move aims to simplify rules for companies planning to go public, especially those shifting their base back to India—a process known as "reverse flipping."One of the major changes addresses a long-standing issue related to equity shares arising from the conversion of fully paid-up Compulsorily Convertible Securities (CCS). Earlier, only equity shares acquired under approved schemes were exempted from a one-year holding period before being offered for sale in an IPO. Now, this exemption has been extended to shares arising from CCS conversions, enabling greater investor participation in public Board has also allowed certain 'relevant persons'—such as alternative investment funds, foreign venture capital investors, and public financial institutions—to contribute equity shares from CCS conversion towards the minimum promoter contribution (MPC), a flexibility previously granted only to measures were finalized after public consultations in March and April 2025 and reviewed by SEBI's Primary Markets Advisory Committee, reflecting SEBI's ongoing commitment to modernise India's capital markets.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
Time of India
3 days ago
- Business
- Time of India
Sebi board meeting: Regulator eases IPO rules for start-up founders, mandates dematerialisation of securities
Market regulator Securities and Exchange Board of India ( Sebi ) on Wednesday relaxed the rules around Employee Stock Options (ESOPs) for start-up founders . Founders classified as promoters who received share-based benefits at least one year before filing the Draft Red Herring Prospectus (DRHP) will now be allowed to retain or exercise these benefits post-listing, a shift from the earlier requirement to liquidate them before an IPO. Under the existing regulations, promoters are ineligible to hold or be granted share based benefits, including ESOPs and if they held such share based benefits at the time of filing of DRHP they are required to liquidate such benefits prior to the IPO. This provision has been found to be impacting founders classified as promoters at the time of filing of DRHP, the Sebi board meeting document said. Among other measures, with a view to enhance market transparency, Sebi has mandated dematerialization of securities for a wider range of stakeholders—including promoter groups, employees, directors, and institutional investors—prior to filing the DRHP. This expansion of the demat mandate is expected to reduce fraud, prevent loss or damage of physical shares, and improve regulatory oversight. Also Read: Sebi board meeting: Regulator approves PSU delisting, IPO reforms, dematerialisation of Securities. 10 key takeaways In a bid to streamline the public issue process and encourage ease of doing business, SEBI has also approved key amendments to the Sebi (Issue of Capital and Disclosure Requirements) Regulations, 2018, and SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021. The move aims to simplify rules for companies planning to go public, especially those shifting their base back to India—a process known as "reverse flipping." One of the major changes addresses a long-standing issue related to equity shares arising from the conversion of fully paid-up Compulsorily Convertible Securities (CCS). Earlier, only equity shares acquired under approved schemes were exempted from a one-year holding period before being offered for sale in an IPO. Now, this exemption has been extended to shares arising from CCS conversions, enabling greater investor participation in public issues. The Board has also allowed certain 'relevant persons'—such as alternative investment funds, foreign venture capital investors, and public financial institutions—to contribute equity shares from CCS conversion towards the minimum promoter contribution (MPC), a flexibility previously granted only to promoters. These measures were finalized after public consultations in March and April 2025 and reviewed by SEBI's Primary Markets Advisory Committee, reflecting SEBI's ongoing commitment to modernise India's capital markets.
Time of India
3 days ago
- Business
- Time of India
Sebi board meeting today. 5 key proposals on the agenda
Here's what to expect: 1) ESOP clarification: Live Events 2) Cooling-off period for IPOs: 3) PSU delisting: 4) Compliance for FPIs investing in IGBs: 5) QIP disclosure norms: (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel The Securities and Exchange Board of India (Sebi) will hold its board meeting today, where it may discuss whether startup founders should be allowed to retain employee stock options even after their companies go public. The agenda could also include permitting voluntary delisting of public sector companies, among other current regulations, startup founders must be classified as promoters at the time of filing IPO documents. Once labeled promoters, they are no longer eligible to receive Employee Stock Options (ESOPs).However, Sebi believes the existing rules do not clearly specify whether founders—who received ESOPs before being classified as promoters—can exercise their vested and unvested options after the of many new-age tech startups often receive ESOPs instead of salaries in the early stages to align their interests with shareholders. But as these companies raise capital from external investors, founders' stakes tend to get March 20, 2025, Sebi released a consultation paper seeking public feedback on the need to clarify whether ESOPs granted before filing the Draft Red Herring Prospectus (DRHP) can be exercised if the founder is later classified as a is also considering introducing a one-year cooling-off period between the grant of ESOPs and the filing of IPO papers, according to an ET report. The regulator believes issuing share-based benefits shortly before an IPO could be open to board, chaired by Tuhin Kanta Pandey, may also discuss creating a separate framework to allow public sector undertakings (PSUs) to voluntarily delist from stock exchanges—if the government holds more than 90% proposal stems from Sebi's view that some PSUs suffer from thin public float, weak financials, or limited future prospects due to outdated products or strategic asset May, Sebi floated a discussion paper proposing such a carve-out mechanism for PSU delisting where the government or promoter group owns at least 90% of may consider simplifying compliance requirements for Foreign Portfolio Investors (FPIs) investing solely in Indian Government Bonds (IGBs) via the Voluntary Retention Route (VRR) and the Fully Accessible Route (FAR). The move aims to attract more long-term bond investors to the Indian debt market, sources board could also take up a proposal to rationalise the disclosure requirements for Qualified Institutions Placement (QIP) documents. The plan would limit disclosure to only information relevant to the issue, people familiar with the matter said. Currently, issuers must adhere to detailed disclosure norms under the Issue of Capital and Disclosure Requirements (ICDR) regulations.: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
