The Securities Exchange Board of India (SEBI), on September 18, 2015, issued SEBI (Share Based Employee Benefits) (Amendment) Regulations, 2015, thereby amending the definition of 'employee'.
As per SEBI (Share Based Employee Benefits) Regulations, 2014, only an employee shall be eligible to participate in the employee benefit schemes of the company. 'Employee' as defined under SEBI (Share Based Employee Benefits) Regulations, 2014, meant, —
i. a permanent employee of the company who has been working in India or outside India; or
ii. a director of the company, whether a whole time director or not but excluding an independent director; or
iii. an employee as defined in clauses (i) or (ii) of a subsidiary, in India or outside India, or of a holding company of the company or of an associate company but does not include—
a) an employee who is a promoter or a person belonging to the promoter group; or
b) a director who either himself or through his relative or through any body corporate, directly or indirectly, holds more than ten percent of the outstanding equity shares of the company;
SEBI (Share Based Employee Benefits) (Amendment) Regulations, 2015, via amendment, has removed 'associate company' from the definition. Meaning thereby, an employee of an associate company shall now not be eligible for such schemes.
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