Some of the safeguards as outlined by the market regulator include, requirement of shareholders’ approval through special resolution for undertaking secondary market acquisitions; restrictions on sale of shares by trusts; at least six month holding period for shares acquired from secondary market.

Among other safeguards include, stricter disclosure and other regulatory obligations; a limit of 10 per cent of the assets held by general employee benefit schemes other than ESOS type of schemes and certain limits on secondary market acquisitions.

To ensure a smooth transition for complying with the new regulatory framework, the existing employee benefit schemes have been provided with a time period of one year from the date of notification.

Further a longer transition period of five years has been provided for re-classifying shareholding of existing employee benefit schemes separately from ‘promoter’ and ‘public’ category.

Bringing down the level of shares acquired from secondary market within the permissible limits and reducing own share component to 10 per cent of the total assets of general employee benefit schemes.