SEBI relaxes requirement of minimum vesting period in case of death of employee(s) under SEBI (Share Based Employee Benefit) Regulations, 2014

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Presently, regulation 18(1) and 24(1) of the SEBI (Share Based Employee Benefit)

Regulations,  2014  (“SBEB  Regulations”)  provides  that  there  shall  be  a  minimum vesting period of one year in case of employee stock options (“options”) and stock appreciation rights (“SAR”). Further, regulation 9(4) of the SBEB Regulations states that in the event of death of  the  employee  while  in  employment,  all  the  options,  stock appreciation rights  or  any  other  benefit granted  to  him/her under  a  scheme  till  such  date  shall  vest  in  the  legal  heirs  or nominees of the deceased employee.

In view of the COVID 19 pandemic situation, to provide relief to the families of the deceased employees of listed companies ,it has been decided as under:

  1. The  provisions under  the  SBEB  Regulations relating  to  minimum  vesting period  of  one  year  shall  not  apply  in  case  of  death (for  any  reason)  of  an employee and  in  such  instances all the  options,  stock appreciation rights  or  any  other  benefit granted to such employee(s) shall vest with his/her legal heir or nominee on the date of death of the employee; and
  2. This relaxation shall be available to all such employees who have deceased on or after April 01, 2020.

 A  copy  of  this  circular  is  available on  SEBI  website at  http://www.sebi.gov.in  under  the categories “Legal Framework/Circulars.”

 

 

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