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
- Access the employer's most recent annual report and financial
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
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