SEBI introduces new mechanism allowing employees to bid for shares through Stock Exchange

In a recent development, the Securities and Exchange Board of India (SEBI) has given the green light for employees to participate in the offer for sale (OFS) of shares using the stock market mechanism. The circular issued by SEBI outlines the framework for this initiative, specifying that a certain portion of shares must be reserved for employees, with a maximum bid amount set at Rs 5 lakh.

The circular emphasizes the aim to enhance efficiency, ease compliance, and reduce costs. According to SEBI, this decision is the result of discussions with stock exchanges, clearing corporations, and the Secondary Market Advisory Committee. The circular states, “To streamline processes, promoters are now permitted to offer shares to employees in OFS through the Stock Exchange Mechanism, introducing an additional avenue alongside the existing method.”

This move is expected to provide employees with greater accessibility to participate in share offerings, fostering a more inclusive and dynamic market environment.