Review of Offer for Sale (OFS) of Shares through Stock Exchange Mechanism
Summary
This circular modifies existing guidelines on Offer for Sale (OFS) to encourage employee participation by allowing promoters to sell shares post-OFS. It permits promoters to offer these shares to employees at the discovered price or a discount, subject to specific disclosure requirements. Stock Exchanges are directed to implement necessary systems and amend bye-laws to facilitate this change.
Text
Promoters of eligible companies shall be permitted to sell shares within a period of 2 (two) weeks from the OFS transaction to the employees of such companies. The offer to employee shall be considered as a part of the said OFS transaction
The promoters may at their discretion offer these shares to employees at the price discovered in the said OFS transaction or at a discount to the price discovered in the said OFS transaction.
Promoters shall make necessary disclosures in the OFS notice to the exchange including number of shares offered to employees and discount offered if any.
take necessary steps and put in place necessary systems for implementation of above.
make necessary amendments to the relevant bye-laws, rules and regulations for the implementation of the above.
bring the provisions of this circular to the notice of the member brokers of the stock exchange and also to disseminate the same on their website.
This circular is being issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.
Source: SecMarx — Review of Offer for Sale (OFS) of Shares through Stock Exchange Mechanism. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.