Regulation 8 - Issue of shares under Employees Stock Options Scheme to persons resident outside India - FOREIGN EXCHANGE MANAGEMENT (TRANSFER OR ISSUE OF SECURITY BY A PERSON RESIDENT OUTSIDE INDIA) REGULATIONS, 2000

These rules have been superseded vide New Regulations New Regulations of 2017 8. Issue of shares under Employees Stock Options Scheme to persons resident outside India :- 1 [(1) An Indian company may issue employees stock option and/or sweat equity shares to its employees/directors or employees/directors of its holding company or joint venture or wholly owned overseas subsidiary/subsidiaries who are resident outside India, provided that : a) The scheme has been drawn either in terms of regulations issued under the Securities Exchange Board of India Act, 1992 or the Companies (Share Capital and Debentures) Rules, 2014 notified by the Central Government under the Companies Act 2013 , as the case may be. b) The employee s stock option /sweat equity shares issued to non-resident employees/directors under the applicable rules/regulations are in compliance with the sectoral cap applicable to the said company. c) Issue of employee s stock option /sweat equity shares in a company where foreign investment is under the approval route shall require prior approval of the Foreign Investment Promotion Board (FIPB) of Government of India. d) Issue of employee s stock option /sweat equity shares under the applicable rules/regulations to an employee/director who is a citizen of Bangladesh/Pakistan shall require prior approval of the Foreign Investment Promotion Board (FIPB) of Government of India. (2) The Reserve Bank may require the company issuing employees stock option and/or sweat equity shares to submit such reports and at such frequency as it may consider necessary.] ----------------- Notes:- 1. Substituted vide Not. 344/2015-RB - Dated 11-6-2015 before it was read as, 8. Issue of shares under Employees Stock Options Scheme to persons resident outside India :- (1) An Indian company may issue shares under the Employees' Stock Options Scheme, by whatever name called, to its employees or employees of its joint venture or wholly owned subsidiary abroad who are resident outside India, directly or through a Trust:- Provided that (a) the scheme has been drawn in terms of regulations issued under the Securities Exchange Board of India Act, 1992; and (b) face value of the shares to be allotted under the scheme to the non-resident employees does not exceed 5% of the paid-up capital of the issuing company. (2) The Trust and the issuing company shall ensure that value of shares held by persons resident outside India under the scheme does not exceed the limit specified in clause (b) of sub-regulation (1). (3) The issuing company shall furnish to the Reserve Bank , within thirty days from the date of issue of shares under the scheme, a report giving the following particulars/documents, - (i) names of persons to whom shares are issued under the scheme and number of shares issued to each of them; (ii) a certificate from the Company Secretary of the issuing company that the value of shares issued under the scheme does not exceed 5% of the paid up capital of the issuing company and that the shares are issued in compliance with the regulations issued by the SEBI in this behalf