CS 14 Proposed remake of relief for employee incentive schemes
Released 20 January 2025. Comments close 22 February 2025.
ASIC is seeking feedback on a proposal to remake two employee incentive scheme (EIS) class orders due to expire on 1 April 2025:
- Class Order [CO 14/1000] Employee incentive schemes: Listed bodies, and
- Class Order [CO 14/1001] Employee incentive schemes: Unlisted bodies
ASIC plans to combine the two class orders into one legislative instrument and proposes to remake the exemptions for a period of five years.
A consultation paper was not issued for this consultation.
Providing feedback
We invite feedback on our proposal. You should send your submission to rri.consultation@asic.gov.au by 5 pm AEDT on Friday 22 February 2025.
You may choose to remain anonymous or use an alias when providing feedback. However, if you do remain anonymous we will not be able to contact you to discuss your feedback should we need to.
We will not treat your feedback as confidential unless you specifically request that we treat the whole or part of it (such as any personal or financial information) as confidential.
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Background
Entities have not been able to make offers of financial products to employees and other eligible participants under the EIS class orders since 1 March 2023. Employee share schemes are now operated under Division 1A of Part 7.12 of the Corporations Act 2001.
However, entities may need to continue issuing financial products because of employee incentive schemes established under the EIS class orders. For example, this may occur when an eligible participant becomes entitled to shares when they exercise an option or an incentive right vests.
The class orders currently contain exemptions that support the continued issue of financial products, including relief for secondary sales, advertising, licensing and contribution plans: ASIC Corporations (Amendment) Instrument 2022/1022.
While the exemptions will largely remain on the same terms, ASIC proposes some exemptions should only be required for ‘underlying eligible products’, such as shares, because entities should not need to issue ‘overlying eligible products’, such as options or incentive rights.
Related links
ASIC invites feedback on proposed remake of employee incentive scheme instruments (news item)
Media Release (22-370MR) ASIC provides legislative relief to facilitate employee share schemes (20 December 2022)