GAZETTE OF INDIA
EXTRAORDINARY
PART – III – SECTION 4
PUBLISHED BY AUTHORITY
NEW DELHI, OCTOBER 28, 2014
SECURITIES AND EXCHANGE BOARD OF INDIA
NOTIFICATION
Mumbai, Dated- 28th October, 2014

SECURITIES AND EXCHANGE BOARD OF INDIA (SHARE BASED EMPLOYEE BENEFITS) REGULATIONS, 2014

No. LAD-NRO/GN/2014-15/16/1729. – In exercise of the powers conferred by section 11, section 11A , section 30 of the Securities and Exchange Board of India Act, 1992 read with section 62 of Companies Act, 2013 and rule 12 of Companies (Share Capital and Debentures) Rules, 2014, the Securities and Exchange Board of India hereby makes the following regulations to provide for regulation of all schemes by companies for the benefit of their employees involving dealing in shares, directly or indirectly, with a view to facilitate smooth operation of such schemes while preventing any possible manipulation and matters connected therewith or incidental thereto.

CHAPTER I

PRELIMINARY

Short title, commencement and application.

1. (1) These regulations may be called the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014.

(2)   They shall come into force on the date of their publication in the Official Gazette.

(3)   The provisions of these regulations shall apply to following, –

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(i)       employee stock option schemes;

(ii)     employee stock purchase schemes;

(iii)stock appreciation rights schemes;

(iv)   general employee benefits schemes; and

(v)     retirement benefit schemes.

(4) The provisions of these regulations shall apply to any company whose shares are listed on a recognised stock exchange in India, and has a scheme:

(i) for direct or indirect benefit of employees; and

(ii) involving dealing in or subscribing to or purchasing securities of the company, directly or indirectly; and

(iii)satisfying, directly or indirectly, any one of the following conditions:

a. the scheme is set up by the company or any other company in its group;

b. the scheme is funded or guaranteed by the company or any other company in its group; c. the scheme is controlled or managed by the company or any other company in its group.

(5) Nothing in these regulations shall apply to shares issued to employees in compliance with the provisions pertaining to preferential allotment as specified in the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009.

(6)      The provisions pertaining to preferential allotment as specified in the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 shall not be applicable in case of a company issuing new shares in pursuance and compliance of these regulations.

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