Capital market regulator Sebi today said that 'unappropriated shares' held with Trusts, which is not backed by grants but has been acquired through secondary acquisition, need to be offloaded on the stock exchanges in the next four years.
Unappropriated inventory of shares held by existing Trusts to be appropriated by way of grants within one year.
In case the Trusts failed to do so, it has to be sold off in the secondary markets within next four years, as per latest Frequently Asked Questions (FAQs) note from Sebi.
As per the norms, Trusts have to sell the shares within five years from October 28, 2014, the day when Sebi notified regulations governing various employee benefit schemes.
The Share Based Employee Benefits Regulations, 2014 had replaced the earlier (ESOP & ESPS) Guidelines, 1999.
"Appropriation towards ESPS, ESOP (Employee Stock Ownership Plan, SAR (Stock appreciation rights) General Employee Benefits Scheme, Retirement Benefit Schemes by October 27, 2015 would be considered as compliance," the regulator said.
"The company may appropriate towards individual employees or sell in the market during next four years so that no unappropriated inventory remains thereafter," it added.
As per the norms, unappropriated shares need to be appropriated by Trust by the end of subsequent financial year. Further, they are required to hold shares acquired from secondary market for minimum period of six months.
