No restriction on ESOPs given to independent directors: Sebi

Capital markets regulator Sebi today said independent directors can exercise their ESOP (employee stock ownership plan) granted to them earlier.

The restrictions on grant of ESOPs applies only on fresh ones issued after new Sebi's guidelines in this regard.

While independent directors were earlier entitled for employee stock options, Sebi's new listing norms have restricted these ESOPs.

As per latest Frequently Asked Questions (FAQs) note from Sebi, "the restriction on grant of ESOPs to independent directors applies only on fresh grants of ESOPs" after commencement of the new provisions.

"Any grant already made prior to commencement of these provisions shall remain valid i.E. An independent director can exercise such ESOPs, subject to fulfilment of terms and conditions of the ESOP schemes framed by the companies in terms of the relevant regulations," it added.

The Securities and Exchange Board of India (Sebi) in October 2014, notified regulations governing various employee benefit schemes. The Share Based Employee Benefits Regulations, 2014 had replaced the earlier (ESOP & ESPS) Guidelines, 1999.