SEBI amends ESOS norms

Our Markets Bureau
24 July 2004

The report, prepared by the SEBI Committee on ESOP and chaired by J.R. Varma, was put up for public comments in April.

The SEBI board has now amended the guideline after incorporating the committee's recommendations and reviewing the public comments, stated a SEBI circular.

After the modification, the guideline specifies, that market price means the latest available closing price, prior to the date of the company's board meeting in which options are granted or shares are issued on stock exchanges.

If the shares are listed on more than one stock exchange, then the exchange where there is highest trading volume on the said date should be considered.

Shares arising after the initial public offer (IPO), from options granted under any ESOS framed prior to its IPO, should be listed immediately on stock exchanges where the equity shares of the company are listed.

The accounting value of shares, issued under ESPS, should be equal to the aggregate of price discount over all shares issued under the scheme during any accounting period.