CS 14 Proposed remake of relief for employee incentive schemes

CS 14 Proposed remake of relief for employee incentive schemes

Released 20 January 2025. Comments close 22 February 2025.

We propose to provide continuing relief to entities that need to issue financial products to employees and other eligible participants pursuant to options and incentive rights that were originally granted under Class Order [闭听Employee incentive schemes: Listed bodies聽and Class Order [闭听Employee incentive schemes: Unlisted bodies听(EIS class orders).

The EIS class orders are due to expire on 1 April 2025. We intend to remake the relief in line with the draft legislative instrument linked below, which would have an effective period of 5 years.

We have assessed that the EIS class orders are operating effectively and efficiently, and continue to form a necessary and useful part of the legislative framework.

A consultation paper was not issued for this consultation.

Providing feedback

We invite feedback on our proposal. You should send your submission to [email protected] 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.

Please see for more information on how we handle personal information, your rights to seek access to and correct personal information, and your right to complain about breaches of privacy by ob体育.

Background

Division 1A of Part 7.12 of the聽Corporations Act 2001 (ESS provisions)聽contains broad exemptions from disclosure and licensing requirements for offers of financial products to employees and other employee share scheme participants. The ESS provisions commenced on 1 October 2022 and replaced similar relief in the EIS class orders.

Stakeholders requested a transition period so that they could adjust their employee share schemes to the ESS provisions. ob体育 therefore amended the EIS class orders so that new offers could be made until 1 March 2023 and remain open for acceptance until 1 April 2024: see聽聽and Report 759聽Response to submissions on CP 364 Modifications to the ESS regime听(REP 759) at paragraph 8.听We retained relief in the amended EIS class orders for secondary sales, advertising, licensing and contribution plans. This was due to feedback that schemes established under the EIS class orders may require entities to issue financial products for some years. For example, as a result of 鈥榦verlying eligible products鈥� such as options or incentive rights granted under the EIS class orders, eligible participants may be entitled to receive 鈥榰nderlying eligible products鈥� such as shares. 聽

The amended EIS class orders and related Class Order [闭听Employee incentive schemes: Personal offers聽are due to sunset on 1 April 2025 under section 50 of the聽Legislation Act 2003. Our proposed draft instrument combines the three class orders and provides continuing exemptions for secondary sales, licensing and contribution plans. Some of the exemptions only cover underlying eligible products, because entities should not need to issue further overlying eligible products. We are open to feedback on that matter.

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