No vesting period requirement under stock option scheme: In a major development, Securities and Exchange Board of India (Sebi) on Tuesday issued a circular on 'Relaxation from the requirement of minimum vesting period in case of death of employee (s) under SEBI (Share Based Employee Benefit) Regulations, 2014'.

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The Securities and Exchange Board of India (Sebi) has relaxed the vesting period requirement under its Share Based Employee Benefit (SBEB) Regulations, 2014, if an employee dies.

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No vesting period requirement under stock option scheme

The Sebi has issued a circular where it has mentioned that in the event of death of the employee while in employment,  all the options, Stock Appreciation Rights (SAR),  or any other benefit granted to an employee under a scheme till such date shall vest in the legal heirs or nominees of the deceased employee.

The move is aimed at providing relief to families of the deceased staff amid the coronavirus pandemic.

"In view of the COVID-19 pandemic situation, to provide relief to the families of the deceased employees of listed companies, it has been decided the provisions under the SBEB Regulations relating to a minimum vesting period of one year shall not apply in case of death (for any reason) of an employee," the Sebi said in the circular.

The relaxation will be available to all such employees, who died on or after April 1, 2020, the Sebi said in the circular.

Currently, the Sebi's Share Based Employee Benefit Regulations,  2014  provides that there shall be a minimum vesting period of one year in case of employee stock options and stock appreciation rights.

The circular is issued in exercise of powers conferred by Section 11(1) of the Securities and Exchange Board of India Act, 1992.