SEBI’s Big Move: ESOPs & Sweat Equity Regulations Amended [Read Notification]

The Securities and Exchange Board of India (SEBI) has recently shared a notification dated September 8, 2025 in powers given by sections 11, 11A and 30 of the Securities and Exchange Board of India Act, 1992 (15), read with sections 54 and 62 of the Companies Act, 2013 (18) and rules 8 and 12 of the Companies Rules 2015 to make changes in regulations of the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021.

Following are the amendments:

• These regulations will be known as the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) (Amendment) Regulations, 2025.
• This notification will come into effect from the date of their publication in the official Gazette.
• In the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 after the existing regulation 9, the following new regulation will be placed:

“9A. Employee identified as a promoter or part of the promoter group in the draft offer document.

An employee who is identified as a “promoter” or part of the “promoter group” in the draft offer document filed by a company with the Board in relation to an initial public offering, and who was granted options, SAR or any other benefit under any scheme at least one year prior to filing of the draft offer document, will be eligible to continue to hold and/or exercise such options, SAR or any other benefit, in accordance with its terms and subject to compliance with these regulations and other applicable laws.”

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