|SEBIâ€™s Re-assess the Role of Employee Welfare Trusts|
With the intent to align the working of Employee Welfare Trusts in Listed Companies with the internationally accepted practice on one hand and to ensure transparency in the operations of the said Trusts on the other, SEBI has reconsidered the proposal of allowing secondary market acquisitions by Trusts.
In January 2013, the Capital Market Regulator, SEBI had debarred the Employee Welfare Trusts to purchase and sell the shares in the Secondary market under the cloak of the ESOP Schemeas these Trusts were being used as portfolio managers for the Promoters with the sole objective to inflate, depress, maintain or fluctuate the price of their own shares by engaging in fraudulent and unfair trade practices
However, the market regulator has finally been swayed with the representations received from corporate houses, trustee firms etc. and accordingly, drifted a discussion paper for public comments with the primary objective of framing a comprehensive set of regulations not only governing the working of employee welfare trusts dealing in secondary market acquisitions but also bringing all types of Employee Welfare Trusts under the ambit of said regulations.
Main highlights of the discussion paper are outlined as follows:
Considering the importance and impact of Employee Welfare Schemes on the public at large, SEBI has invited inputs and suggestions from the Public in the prescribed format.
Accordingly, you can mail your valuable suggestions on or before 5th December, 2013 at email@example.com
In our view, SEBIs initiative is surely considered as a welcoming step that aims at streamlining the regulatory framework with the dynamic business environment thereby ensuring transparency in the operations of the Employee Welfare Trusts on one hand and bringing all Welfare Schemes involving Shares of the Listed Entities under the dictatorial roof.