Founders can now hold employee stock options post listing, says SEBI
The Hindu
SEBI approves proposals to ease business for market participants, including founders holding stock options post-listing and AIF regulations.
In a bid to increase ease of doing business for market participants, the Securities and Exchange Board of India (SEBI) has approved proposals to allow founders to hold employee stock options even after listing, relax regulations for alternative investment funds (AIF), and allow public sector undertakings (PSUs) with minimal public shareholding to delist, among other actions.
In its board meeting that concluded on Wednesday, the markets regulator said that founders or promoters can now continue to benefit from employee stock options even after listing, if they started receiving them at least one year prior to filing for IPOs.
Moreover, compulsory convertible securities (CCS) will be exempted from a minimum shareholding period of one year, akin to equity shares.
This will assist companies contemplating reverse flipping. Reverse flipping is when Indian start-ups, originally incorporated overseas, move their headquarters and ownership back to India. The regulation will now also include relevant persons other than just the founders.
Category I and II AIFs can now offer co-investment schemes (CIV) to “facilitate AIFs and investors to co invest” and “support capital formation in unlisted companies,” according to a statement from SEBI.
This initiative is in addition to the existing opinion for accredited investors to co-invest in unlisted entities through portfolio management system (PMS).
The board also approved proposals to ensure that only angel investors would need to be accredited investors (AI) now.
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