The listed entities are now required to make additional disclosures relating to ESOPs on its Website. Here’s a closer look at the significant insertions:
As per Regulation 46(2)(za) of the SEBI(LODR) [Third Amendment] Regulation, 2024:
- Listed entities shall disclose Employee Benefit Schemes documents in accordance with SEBI’s SBEB & SE Regulations, 2021, subject to the exclusion of commercial secrets and any other information that could adversely impact the competitive position of the entity. Any redactions in information must receive approval from Board of Directors.
- To comply with the disclosure requirements, the listed entity MAY provide the direct link to the relevant webpage of each recognized stock exchange where the information is already available.
In continuation with above insertion, SEBI issued Circular SEBI/HO/CFD/CFD-PoD-2/CIR/P/2024/185 dated 31 December, 2024 stating Listed Entity shall comply with the following requirements for disclosure-
- The scheme document shall be uploaded on the website of the listed entity after obtaining shareholder approval as required under SEBI (SBEB) Regulations, 2021.
- The documents uploaded on the website shall Mandatorily have minimum information to be disclosed to shareholders as per SEBI (SBEB) Regulations, 2021.
- Any redactions in information along with rationale for redacting information from the documents and the justification as to how such redacted information would affect competitive position or reveal commercial secrets of the listed entity shall be placed before the board of directors for consideration and approval.
The secretarial compliance report issued by a Peer Reviewed Company Secretary under regulation 24A(2) of the LODR Regulations shall include a confirmation on compliance with the aforesaid requirements by the listed entity.
The intent of insertion is to allow investors to evaluate how the Company has allocated equity to its Employees and enable stakeholders to analyze its potential impact on them.
Conclusion:
Listed entities are now expected to adopt stricter measures for document disclosure and redaction, ultimately promoting a fairer, more accountable business environment.
For listed entities, it is crucial to understand these insertions in detail and adjust their compliance mechanisms accordingly to avoid any non-compliance issues. The additions not only enhance investor trust but also reinforce SEBI’s commitment to strengthening the Indian securities market’s regulatory framework.
Note– The disclosures are required from immediate effect, so update your website accordingly.
If you need any assistance, feel free to reach out to us.
For detailed information, you can refer SEBI (LODR) (THIRD AMENDMENT) REGULATIONS, 2024 dated 12 December, 2024 through LINK .
