Sebi directs cos to comply with ESOP norms by June

The move is aimed at preventing possible manipulation in trading of shares by companies.

In August Sebi had barred employee welfare schemes and trusts of listed entities from purchasing their own shares from the secondary market.

In a circular today, the capital market regulator has directed all listed entities to comply with the requisite norms on employee benefit schemes (Stock Options as well as Stock Purchases) by June 30.

Listed companies are required to furnish details about the schemes to the stock exchanges within one month from today. Further, the details have to be put up on their websites.

Sebi's ESOS (Employee Stock Option Scheme) and ESPS (Employee Stock Purchase Scheme) guidelines allow listed companies to reward their employees through these.

"... any employee benefit schemes involving dealing in the securities of the company, which are not in accordance with Sebi (ESOS and ESPS) Guidelines, it has been decided that such companies shall align any existing employee benefit schemes with Sebi guidelines on or before June 30, 2013," Sebi said.

Sebi's crackdown on unregulated staff welfare schemes and trusts last year came amid concerns that some companies may be funding these schemes to deal in their own securities with an aim to manipulate the share price by engaging into fraudulent and unfair trade practices.

The regulations had prohibited the companies from buying their own shares,

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