Stock options entail multi-stage disclosure to stock exchanges
Requirement under SEBI Listing Regulations and SBEB Regulations
– Aisha Begum Ansari | corplaw@vinodkothari.com
Employee share benefit schemes in the form of ESOP, ESPS, etc. (‘stock options’) facilitate the employees to participate in the growth of the companies. Since, the issue of shares pursuant to exercise of stock options leads to dilution of the share capital of the company, the same may be relevant or material event or information for the investors. Therefore, right from the board meeting in which the decision relating to ESOP scheme is undertaken till the time of allotment of shares, disclosure is required to be made at different stages either in terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations’) or SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (‘SBEB Regulations’). This article deals with the requirements and the stages when the disclosure is required to be made by a company.
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