Articles

EMPLOYEE SHARE SCHEME EXEMPTION ANNOUNCED

There will be new exemption rules for employee share schemes as part of the Financial Markets Conduct Act implementation.


Current rules set out in the Securities Act 1978 make it fairly costly and onerous for employers, especially small employers, to reward employees with a shareholding interest in the company.


Under the proposed new rules employers will have a greater opportunity to set up share purchase schemes and invite participation in such schemes from employees without having to provide employees with weighty disclosure documents.

Some disclosure will still be required. Specifically, under the new rules employers will need to provide employees with:


- A warning statement about the nature of the employee share purchase scheme and the implication of the exemption;
- Basic information about the scheme, i.e its terms and conditions;
- Access the employer's most recent annual report and financial statements.

Certain other conditions will also need to be satisfied, particularly for companies listed on the stock exchange. Further detail about these conditions is expected to be released shortly in Regulations.


In a business environment where companies compete for talent, these new rules offer employers a practical option for attracting and retaining talent by enabling employers to offer staff a stake in the business.


The new exemption rules are expected to be in force from 1 April 2014.

Written by Kylie van Heerden at 09:00

0 Comments :

Comment

Tags

Latest Comments

Archive