Stock Market News: Announcement of new rules related to shares given to employees!

The Securities and Exchange Board of India (SEBI) has proposed changes in the rules of the Employee Stock Option Plan (ESOP), so that the founders of companies preparing for IPO can get the benefit of their ESOPs. Let us tell you what is ESOP (Employee Stock Option Plan) - ESOP (Employee Stock Option Plan) is a scheme in which companies give their employees the right to buy shares of the company, so that they can become shareholders of the company. This scheme is usually given by companies to encourage talented employees, keep them connected to the company and increase their productivity.

What changes can be made- As per the current rules of SEBI, no promoter or member of the promoter group can receive ESOP. However, many founders get listed as promoters before the IPO, which creates doubts over their ESOPs. SEBI has proposed that if a person has received ESOP before becoming a promoter, he should be allowed to hold and exercise those ESOPs. The condition will be that ESOPs or other benefits should be given at least one year before the company declares its IPO. What

will happen with SEBI's new proposal: - Founders will get clear rights in the IPO process.
- Founders of companies will not have to worry about losing their ESOP benefits.
- '1 year cooling-off period' to prevent misuse of ESOPs
- Possibility of granting ESOPs just before IPO will be banned
 

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