Companies to now report overseas staff exercising stock options
stock options, including share appreciation rights (SARs), cashless plans, as well those schemes where securities are held by trusts on behalf of non-residents.
This was communicated to banks on Monday by the Reserve Bank of India as part of the amended guidance on foreign investment reporting and management system, two persons told ET.
Companies will have to report the details of overseas persons exercising employee stock options plans to the banks, which in turn will inform the regulator.
«The intent of the clarification seems twofold: one, to streamline issues for ESOP and its variables related reporting, downstream investment and also to be able to ascertain and track ownership of shareholders under these routes, especially for sensitive sectors and investments from sensitive regions,» said Moin Ladha, partner at law firm Khaitan & Co.
The updated instructions also lay down the reporting mechanism connected with foreign portfolio investors (FPIs) transiting to FDI, valuation of unlisted shares in FDI transactions, and change of ownership in downstream FDI investments — where a company incorporated in India but owned and controlled by offshore investors transfers shares.
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