Securities and Exchange Board of India (SEBI) has released a circular encapsulating the framework for offer for sale (OFS) of shares to employees through stock exchanges such as BSE and NSE.

Banking & Finance

Securities and Exchange Board of India (SEBI) has released a circular encapsulating the framework for offer for sale (OFS) of shares to employees through stock exchanges such as BSE and NSE. The promoters of eligible companies will be permitted to sell shares within two weeks from the offer for sale (OFS) transaction to the employees of such companies. The promoters are meant to make necessary disclosures in the OFS notice to the stock exchange including number of shares offered to employees and discount offered. Key provisions of this circular include the following: 1. Bidding will be allowed during trading hours on T+1 day only. 2. Employees will place bids only at cut-off price of T+1 day. 3. The maximum bid amount will be ₹5 lakh. 4. Each employee is eligible for allotment of equity shares up to ₹2 lakh. 5. In case there is under-subscription in the employee portion, the unsubscribed portion may be allotted to such employees whose bid amount is over ₹2 lakh on a proportionate basis for a value in excess of ₹2 lakh subject to the total allotment to an employee not exceeding ₹5 lakh. 6. The employees are supposed to pay upfront the margin to the extent of 100 percent of the order value in cash or cash equivalents.


      The regulator also issued instructions stating that stock exchanges and clearing corporations are meant to take necessary steps and put in place necessary systems for implementation of these provisions.

     

     

 

     


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