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September 28, 1998

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Software industry asked to comment on ESOP regulation

Email this story to a friend. The Securities and Exchange Board of India has forwarded the J R Verma Committee's report on stock options to the National Association of Software and Service Companies.

T O D A Y
Last mile jostling
'Portable' numbers
ESOP regulation
Is 'training' 'services'?
The regulator has asked the association to gather inputs from the software industry on the committee's recommendations.

NASSCOM has, in turn, forwarded a copy of the Verma Committee report to all its members asking for comments and suggestions.

The objective of the exercise is to gather inputs of the different sections of the industry on the recommendations.

NASSCOM is also expected to submit a report to the Securities and Exchange Board of India based on the reactions from its member companies.

SEBI is likely to take a final decision on stock options regulations after considering the NASSCOM report that it expects to be submitted next month.

The industry, in general, has been happy with the recommendations of the J R Verma Committee on the pricing of employee stock option plans.

"We only hope that the government will decide to implement most of the committee's recommendations," the sources added.

Though the committee has recommended complete freedom to software companies in pricing their stock options, it has suggested the enforcement of strict accounting policies when issuing stock options.

Industry sources said the policies recommended for the pricing of stock options would ensure that companies do not price them unreasonably low.

Besides making shareholder-approval for the issue of stock options mandatory, the committee has also laid down a list of disclosures to be made in the director's report of the company's annual report.

These include information regarding the pricing formula, options granted, vested, exercised and forfeited and money raised by the options exercise.

- Compiled from the Indian media

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