Sebi Proposes Clarifications to Enhance Equity Holding Transparency

Markets regulator Sebi has proposed amendments to clear ambiguities in rules governing equity shares in Offer for Sale (OFS) and Employee Stock Options (ESOPs) related to promoters. The changes aim to align eligibility requirements and harmonize the treatment of shares obtained through various mechanisms.

In a bid to streamline market processes, the Securities and Exchange Board of India (Sebi) has proposed amendments for enhanced clarity on equity share holding periods and employee stock options (ESOPs) involving promoters.

The proposed adjustments target discrepancies in the Issue of Capital Disclosure Requirements (ICDR) and the Share Based Employee Benefits and Sweat Equity norms. These changes aim to ensure consistency in Offer for Sale (OFS) and Minimum Promoter Contribution (MPC) standards.

Sebi is seeking public input until April 10 on these proposals, which intend to provide clearer guidelines on share treatment obtained via compulsory conversions or approved schemes, and maintain restrictions on new issuances under the Share Based Employee Benefit Scheme for promoters.

(With inputs from agencies.)