ASIC has released a Consultation Paper 218 on employee incentive schemes for persons offering and receiving shares or other financial products under an employee incentive scheme.

It seeks feedback on ASIC’s proposals to extend relief currently in Class Order [CO 03/184] Employee share schemes and Regulatory Guide 49 Employee share schemes (RG 49). The paper attaches a draft updated version of RG 49.

ASIC’s proposed changes include who can make offers and who can receive offers, to make it easier for employers and issuers to develop an employee incentive scheme, subject to new conditions to support the interests of participants who are considering taking up such a scheme.

Certain offers will only be alowed to be made by listed bodies.

The proposals reflect changes to the Corporations Act as well as developments in market practice for structuring employee share schemes.

ASIC considers that it is appropriate to reduce the compliance burden for employers if the following policy objectives are satisfied:
(a) the objective of the offer is not fundraising, but rather to enable employees to participate in the financial success (including the benefits of ownership) of a body;
(b) the offer sufficiently supports the long-term interdependence between the employer and the employee; and
(c) there are adequate protections for employees and, in particular, a history of disclosure in a well-regulated financial market, which will help employees in determining a reliable alternative market price for the financial products they are being offered.