Relaxation from the requirement of minimum vesting period in case of death of employee(s) under SEBI (Share Based EmployeeBenefit) Regulations, 2014

Last updated: 16 June 2021

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The Securities and Exchange Board of India (SEBI) has introduced a relaxation regarding the minimum vesting period for employee benefits. In the event of an employee's death, the one-year minimum vesting period for stock options and stock appreciation rights will no longer apply. This means all benefits granted to the employee will vest immediately with their legal heirs or nominees on the date of death. This change is effective for employees who passed away on or after April 1, 2020, and aims to provide relief to families during the COVID-19 pandemic.

CIRCULAR SEBI/HO/CFD/DCR2/CIR/P/2021/576 June 15, 2021 To All Listed Companies All Recognized Stock Exchanges All Registered Merchant Bankers Dear Sir/Madam, Sub: Relaxation from the requirement of minimum vesting period in case of death of employee(s) under SEBI (Share Based EmployeeBenefit) Regulations, 2014 1. Presently, regulation 18(1) and 24(1) of the SEBI (Share Based Employee Benefit) Regulations, 2014 (SBEB Regulations) provides that there shall be a minimum vesti

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FAQ :

The circular relaxes the requirement of a minimum one-year vesting period for employee stock options and stock appreciation rights in cases where an employee passes away.

If an employee dies, all granted options, SARs, or other benefits will vest with their legal heirs or nominees on the date of the employee's death.

This relaxation is available to employees who have deceased on or after April 1, 2020.

The circular provides relaxation from regulations 18(1) and 24(1) of the SEBI (Share Based Employee Benefit) Regulations, 2014.

The benefits will vest with the legal heirs or nominees of the deceased employee.