{"id":7068922,"date":"2026-09-28T05:59:59","date_gmt":"2026-09-28T05:59:59","guid":{"rendered":"https:\/\/peraltafinancing.com\/uncategorized\/esop-trust-secondary-acquisition-sebi-rules-since-2013\/"},"modified":"2026-09-28T05:59:59","modified_gmt":"2026-09-28T05:59:59","slug":"esop-trust-secondary-acquisition-sebi-rules-since-2013","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=7068922","title":{"rendered":"ESOP Trust Secondary Acquisition: SEBI Rules Since 2013"},"content":{"rendered":" \r\n<br><div wp_automatic_readability=\"454.84045959691\">\n            <div class=\"td-post-featured-image\"><a href=\"https:\/\/blog.ipleaders.in\/wp-content\/uploads\/2026\/09\/ESOP-Trust-Secondary-Acquisition-SEBI-Rules-Since-2013.png\" data-caption=\"\" data-wpel-link=\"internal\" rel=\"noopener noreferrer\"><img loading=\"lazy\" decoding=\"async\" width=\"696\" height=\"464\" class=\"entry-thumb td-modal-image\" src=\"https:\/\/blog.ipleaders.in\/wp-content\/uploads\/2026\/09\/ESOP-Trust-Secondary-Acquisition-SEBI-Rules-Since-2013-696x464.png\" srcset=\"https:\/\/blog.ipleaders.in\/wp-content\/uploads\/2026\/09\/ESOP-Trust-Secondary-Acquisition-SEBI-Rules-Since-2013-696x464.png 696w, https:\/\/blog.ipleaders.in\/wp-content\/uploads\/2026\/09\/ESOP-Trust-Secondary-Acquisition-SEBI-Rules-Since-2013-300x200.png 300w, https:\/\/blog.ipleaders.in\/wp-content\/uploads\/2026\/09\/ESOP-Trust-Secondary-Acquisition-SEBI-Rules-Since-2013-1024x683.png 1024w, https:\/\/blog.ipleaders.in\/wp-content\/uploads\/2026\/09\/ESOP-Trust-Secondary-Acquisition-SEBI-Rules-Since-2013-768x512.png 768w, https:\/\/blog.ipleaders.in\/wp-content\/uploads\/2026\/09\/ESOP-Trust-Secondary-Acquisition-SEBI-Rules-Since-2013-630x420.png 630w, https:\/\/blog.ipleaders.in\/wp-content\/uploads\/2026\/09\/ESOP-Trust-Secondary-Acquisition-SEBI-Rules-Since-2013-1068x712.png 1068w, https:\/\/blog.ipleaders.in\/wp-content\/uploads\/2026\/09\/ESOP-Trust-Secondary-Acquisition-SEBI-Rules-Since-2013.png 1536w\" sizes=\"auto, (max-width: 696px) 100vw, 696px\" alt=\"A listed company's ESOP trust may buy existing shares only on the stock exchange, within 2% of paid-up equity a year and 5% overall, after a separate shareholder resolution, a rule SEBI brought in with its 2014 Regulations after the 2013 ban.\" title=\"ESOP Trust Secondary Acquisition SEBI Rules Since 2013\"\/><\/a><\/div>\n            \n\n<p>ESOP trust secondary acquisition lets a listed company\u2019s employee trust buy existing shares on the stock exchange for employee grants, so the company doesn\u2019t have to issue new ones. SEBI caps these purchases at 2% of paid-up equity a year and 5% overall, after a separate shareholder resolution.<\/p>\n\n<hr\/>\n\n<nav class=\"ls-toc\" aria-label=\"Table of contents\">\n<h2>Table of Contents<\/h2>\n<ol class=\"ls-toc-list\">\n<li><a href=\"#guidelines-1999\">ESOP trust secondary purchases under the 1999 Guidelines<\/a>\n<\/li>\n<li><a href=\"#ban-to-2014\">ESOP trust secondary acquisition from the 2013 ban to the 2014 Regulations<\/a>\n\n<\/li>\n<li><a href=\"#unlisted-since-2014\">Secondary purchases by an unlisted company\u2019s ESOP trust since 2014<\/a>\n\n<\/li>\n<li><a href=\"#regulations-2021\">ESOP trust secondary acquisition under the 2021 Regulations<\/a>\n\n<\/li>\n<li><a href=\"#frequently-asked-questions\">Frequently asked questions<\/a>\n<\/li>\n<li><a href=\"#references\">References<\/a>\n<\/li>\n<li><a href=\"#disclaimer\">Disclaimer<\/a>\n<\/li>\n<\/ol>\n<\/nav>\n\n<hr\/>\n\n<p>My advice to any founder is to settle where your trust\u2019s shares will come from before the shareholder meeting, not after it. A listed company needs a separate shareholder resolution that states the maximum percentage the trust may buy, and the explanatory statement has to say whether the trust\u2019s shares will be new shares, existing shares or both. My listed company runs an ESOP and PSOP service for startups and smaller businesses, covering advisory, drafting and implementation. Our annual report for 2024-25 records SEBI\u2019s employee benefit regulations as not applicable to us, and we had no ESOP trust of our own.<\/p>\n<p>You\u2019d think buying existing shares means buying them from anyone who\u2019s willing to sell, but SEBI\u2019s definition is much narrower than that. Regulation 2(1)(nn) of the <a href=\"https:\/\/www.sebi.gov.in\/sebi_data\/attachdocs\/aug-2026\/1785911420093.pdf\" target=\"_blank\" rel=\"noopener follow external noreferrer\" data-wpel-link=\"external\">SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021<\/a> defines secondary acquisition as a trust acquiring existing shares of the company \u201con the platform of a recognised stock exchange for cash consideration\u201d. A private deal for a founder\u2019s block doesn\u2019t meet that definition. Where the company\u2019s money pays for such a deal, Rule 16(1)(b) of the Companies (Share Capital and Debentures) Rules, 2014 requires listed shares to be bought \u201conly through a recognized stock exchange\u201d and \u201cnot by way of private offers or arrangements\u201d.<\/p>\n<p>SEBI lets a trust buy on the market at all because market purchases let a company reward employees without diluting its capital. In its <a href=\"https:\/\/www.sebi.gov.in\/sebi_data\/attachdocs\/1384944786125.pdf\" target=\"_blank\" rel=\"noopener follow external noreferrer\" data-wpel-link=\"external\">November 2013 discussion paper<\/a>, SEBI called market purchases by trusts \u201can internationally accepted practice\u201d that allows companies \u201cto grant options to employees without having to dilute their existing share capital\u201d. It tied that freedom to \u201cnecessary safeguards to prevent misuse\u201d, and those safeguards include the caps, the separate resolution and the six-month holding period. An unlisted company\u2019s trust sits outside SEBI\u2019s definition, and where the company funds its purchases, Section 67 of the Companies Act, 2013 and Rule 16 apply instead.<\/p><div class=\"td-a-rec td-a-rec-id-content_inline  tdi_2 td_block_template_1\">\n<a href=\"https:\/\/growthx.skillarbitra.ge\/f\/google-accounting-b-com-grads-11july\" ?p_source=\"iPleaders_InArticle_Top&quot;\" target=\"_blank\" data-wpel-link=\"external\" rel=\"follow external noopener noreferrer\"><img decoding=\"async\" src=\"https:\/\/blog.ipleaders.in\/wp-content\/uploads\/2026\/07\/Inline_700x350.png\" alt=\"Download Now\"\/><\/a><\/div>\n<p>Listed trusts still buy within those safeguards. In 2026, Persistent Systems told the stock exchanges that its ESOP trust had bought 107,874 of the company\u2019s shares on the market and would buy up to 40,000 more, in tranches, <a href=\"https:\/\/nsearchives.nseindia.com\/corporate\/PERSISTENTUSER1_15062026153410_PSLIntimationofscheduledpurchasefromthesecondarymarketJune152026Signed.pdf\" target=\"_blank\" rel=\"noopener follow external noreferrer\" data-wpel-link=\"external\">except while its trading window was closed<\/a>. The trust passes those shares to employees off-market when they exercise their options. The pause during the trading window is the company\u2019s own practice, and SEBI\u2019s rule in regulation 3(16) requires the trust to meet the insider-trading requirements that apply to insiders or promoters.<\/p>\n\n<p>Which shares a listed company\u2019s trust may take, and from whom, is clearest in one proposed deal. Take a listed company whose co-founder wants to sell shares equal to about 1% of its paid-up equity. The board would like the ESOP trust to take those shares for next year\u2019s grants instead of issuing new ones, and the company will lend the trust the money.<\/p>\n<p>Two difficulties then appear. A private purchase from the co-founder isn\u2019t secondary acquisition, and because the company\u2019s loan pays for it, Rule 16(1)(b) forbids buying listed shares through a private arrangement. Even on the exchange, the trust needs a separate shareholder resolution stating the percentage it may buy, and it can\u2019t buy more than 2% of the paid-up equity in that financial year.<\/p>\n<p>The answer is that the trust can buy through the stock exchange once the resolution is passed, within the 2% annual cap and the 5% overall cap, and it has to hold whatever it buys for at least six months unless a general exit such as a buy-back or an open offer comes first. It can\u2019t buy the co-founder\u2019s block in a private deal. The company\u2019s loan has to meet Rule 16 as well, including a special resolution of its members and the 5% ceiling on paid-up capital and free reserves. The trust generally has to hold shares acquired through secondary acquisition for at least six months, subject to the permitted transfers under Regulation 3(14), including off-market transfer to employees pursuant to the scheme. Those caps and the separate resolution exist because SEBI stopped these purchases altogether in 2013 and allowed them back in 2014 with safeguards.<\/p>\n\n<h2 id=\"guidelines-1999\">ESOP trust secondary purchases under the 1999 Guidelines<\/h2>\n<p>ESOP trust secondary purchases had no rules of their own under the <a href=\"https:\/\/www.sebi.gov.in\/sebi_data\/attachdocs\/1289549364138.pdf\" target=\"_blank\" rel=\"noopener follow external noreferrer\" data-wpel-link=\"external\">SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999<\/a>, which never mentioned a trust buying shares on the market. The Guidelines came into force on 19 June 1999. A clause on schemes run \u201cthrough Trust Route\u201d was added on 30 June 2003, and a circular of 22 July 2004 rewrote it to require the company\u2019s accounts to be prepared \u201cas if the company itself is administering\u201d the scheme. SEBI later described the Guidelines as having been \u201csilent regarding acquisition of shares from secondary market\u201d.<\/p>\n<p>That silence came up when Mukta Arts Ltd asked SEBI, in 2004, for informal guidance on a trust that would buy its shares on the market. SEBI replied on 12 May 2005 that the <a href=\"https:\/\/www.sebi.gov.in\/enforcement\/informal-guidance\/may-2005\/request-of-informal-guidance-by-mukta-arts-ltd-on-esop-guidelines-sast-regulations-and-insider-trading-regulations_8496.html\" target=\"_blank\" rel=\"noopener follow external noreferrer\" data-wpel-link=\"external\">Guidelines applied<\/a> whether the trust got its shares by a new issue or by market purchases financed by the company. It added that trustees who were insiders couldn\u2019t deal for the trust while holding unpublished price sensitive information. The trust and its promoter-trustees, SEBI said, may also be persons acting in concert under the takeover rules.<\/p>\n<p>SEBI acted against these trusts in 2012. Its Board decided on <a href=\"https:\/\/www.sebi.gov.in\/media\/press-releases\/aug-2012\/sebi-board-meeting_23255.html\" target=\"_blank\" rel=\"noopener follow external noreferrer\" data-wpel-link=\"external\">16 August 2012<\/a> that listed companies must frame employee benefit schemes only under the Guidelines, and that schemes outside them \u201cwill be restrained from acquiring their shares from the secondary market\u201d. The circular that followed in January 2013 gave SEBI\u2019s reasons. Some listed companies had set up trusts \u201cto deal in their own securities in the secondary market\u201d, and SEBI feared that such schemes could be used to inflate, depress, maintain or cause fluctuation in the company\u2019s share price.<\/p>\n\n\n<figure class=\"ls-infographic-wrap\" style=\"margin:2rem 0;\">\n<div style=\"max-width:880px;margin:32px auto;font-family:-apple-system,BlinkMacSystemFont,'Segoe UI',Roboto,Helvetica,Arial,sans-serif;border:1px solid #d6eef7;border-radius:14px;overflow:hidden;box-shadow:0 6px 20px rgba(10,126,168,.12);background:#ffffff;\" wp_automatic_readability=\"12.5\">\n  <div style=\"background:linear-gradient(135deg,#0a7ea8 0%,#33ccff 100%);color:#ffffff;padding:20px 24px;\" wp_automatic_readability=\"13\">\n    <p>ESOP trust secondary acquisition, 1999 to 2026<\/p>\n    <p>How a listed company\u2019s trust went from market buying the Guidelines never mentioned, to a ban, to capped purchases.<\/p>\n  <\/div>\n\n  <div style=\"padding:14px 24px 6px;\" wp_automatic_readability=\"27\">\n\n    <div style=\"display:flex;gap:14px;padding:10px 0;border-bottom:1px solid #f0f8fc;align-items:flex-start;\" wp_automatic_readability=\"8\">\n      <p>19 Jun 1999<\/p>\n      \n      <p>SEBI\u2019s ESOS and ESPS Guidelines come into force. They say nothing about a trust buying shares on the market. A trust route clause (22A) is added on 30 June 2003.<\/p>\n    <\/div>\n\n    <div style=\"display:flex;gap:14px;padding:10px 0;border-bottom:1px solid #f0f8fc;align-items:flex-start;\" wp_automatic_readability=\"8\">\n      <p>12 May 2005<\/p>\n      \n      <p>SEBI\u2019s informal guidance to Mukta Arts Ltd: the Guidelines apply to a trust that buys on the market with company finance.<\/p>\n    <\/div>\n\n    <div style=\"display:flex;gap:14px;padding:10px 0;border-bottom:1px solid #f0f8fc;align-items:flex-start;\" wp_automatic_readability=\"8\">\n      <p>16 Aug 2012<\/p>\n      \n      <p>SEBI\u2019s Board decides that schemes outside the Guidelines will be restrained from buying shares on the market.<\/p>\n    <\/div>\n\n    <div style=\"display:flex;gap:14px;padding:10px 0;border-bottom:1px solid #f0f8fc;align-items:flex-start;background:#fff8f7;\" wp_automatic_readability=\"8\">\n      <p>17 Jan 2013<\/p>\n      \n      <p><b style=\"color:#ef6f6c;\">The ban.<\/b> Circular CIR\/CFD\/DIL\/3\/2013 inserts clause 22B: no scheme may involve acquiring securities from the secondary market.<\/p>\n    <\/div>\n\n    <div style=\"display:flex;gap:14px;padding:10px 0;border-bottom:1px solid #f0f8fc;align-items:flex-start;\" wp_automatic_readability=\"11\">\n      <p>May 2013 to Jun 2014<\/p>\n      \n      <p>Three extensions of the deadline to align schemes: 31 December 2013, then 30 June 2014, then until new regulations are notified. Trusts may keep shares bought before the ban if their schemes are aligned.<\/p>\n    <\/div>\n\n    <div style=\"display:flex;gap:14px;padding:10px 0;border-bottom:1px solid #f0f8fc;align-items:flex-start;\" wp_automatic_readability=\"9\">\n      <p>20 Nov 2013<\/p>\n      \n      <p>SEBI\u2019s discussion paper proposes letting trusts buy on the market again, because it lets companies grant options without diluting their capital.<\/p>\n    <\/div>\n\n    <div style=\"display:flex;gap:14px;padding:10px 0;border-bottom:1px solid #f0f8fc;align-items:flex-start;background:#f4fbf6;\" wp_automatic_readability=\"16\">\n      <p>28 Oct 2014<\/p>\n      \n      <p><b style=\"color:#2e9e5b;\">Back, with caps.<\/b> The SBEB Regulations, 2014: stock exchange only, through a trust, <b style=\"color:#0a7ea8;\">2% of paid-up equity a year and 5% overall<\/b>, a separate shareholder resolution, a six-month hold, and no voting by trustees.<\/p>\n    <\/div>\n\n    <div style=\"display:flex;gap:14px;padding:10px 0;border-bottom:1px solid #f0f8fc;align-items:flex-start;\" wp_automatic_readability=\"11\">\n      <p>13 Aug 2021<\/p>\n      \n      <p>The SBEB and Sweat Equity Regulations, 2021 keep the caps, adjust them when a buy-back reduces capital, and let the trust sell shares to cover an employee\u2019s tax on exercise.<\/p>\n    <\/div>\n\n    <div style=\"display:flex;gap:14px;padding:10px 0;align-items:flex-start;\" wp_automatic_readability=\"10\">\n      <p>2026<\/p>\n      \n      <p>The Income-tax Act, 2025 applies from 1 April 2026. Open-market buy-backs through the stock exchange return from 1 August 2026, and a buy-back can leave a trust above its cap.<\/p>\n    <\/div>\n\n  <\/div>\n\n  <div style=\"background:#eaf9ff;border-top:4px solid #33ccff;padding:14px 24px;display:flex;flex-wrap:wrap;align-items:center;justify-content:space-between;gap:12px;\" wp_automatic_readability=\"12\">\n    <p>An unlisted company\u2019s trust follows a separate track: Section 67(3)(b) of the Companies Act, 2013 and Rule 16, from 1 April 2014, with the shares bought and the company\u2019s money together <b style=\"color:#0a7ea8;\">within 5% of paid-up capital and free reserves<\/b>.<\/p>\n    <img decoding=\"async\" src=\"https:\/\/blog.ipleaders.in\/wp-content\/uploads\/2022\/10\/ipleaders1.png\" alt=\"iPleaders\" style=\"height:26px;width:auto;\"\/>\n  <\/div>\n<\/div>\n<\/figure>\n\n<h2 id=\"ban-to-2014\">ESOP trust secondary acquisition from the 2013 ban to the 2014 Regulations<\/h2>\n<p>ESOP trust secondary acquisition was banned for listed companies on 17 January 2013. It was allowed again from 28 October 2014, for schemes framed under or aligned with the new regulations SEBI notified that day, and the caps in those regulations still apply. In between, SEBI extended the deadline for companies to align their schemes three times.<\/p>\n<h3 id=\"ban-2013\">SEBI\u2019s 2013 ban on ESOP trust purchases from the market<\/h3>\n<p>SEBI\u2019s 2013 ban came through <a href=\"https:\/\/www.sebi.gov.in\/legal\/circulars\/jan-2013\/amendments-to-sebi-employee-stock-option-scheme-and-employee-stock-purchase-scheme-guidelines-1999-and-equity-listing-agreement_24173.html\" target=\"_blank\" rel=\"noopener follow external noreferrer\" data-wpel-link=\"external\">circular CIR\/CFD\/DIL\/3\/2013<\/a> of 17 January 2013, which prohibited listed companies from framing any employee benefit scheme \u201cinvolving acquisition of own securities from the secondary market\u201d. It inserted clause 22B into the Guidelines: \u201cNo ESOS\/ESPS shall involve acquisition of securities from the secondary market.\u201d Companies already running schemes outside the Guidelines had 30 days to report them to the stock exchanges, on a form that asked for the trust\u2019s market purchases and sales since 1 April 2012. They had until 30 June 2013 to bring those schemes into line.<\/p>\n<p>The ban was on buying in the market, not on trusts, and the trust route in clause 22A stayed in place. A clarification of 13 May 2013 applied the January circular to every scheme \u201cset up, managed or financed by the company directly or indirectly\u201d. It moved the deadline to 31 December 2013. It also let trusts keep shares they\u2019d bought before 17 January 2013, provided their schemes were aligned with the Guidelines and the shares were used only under those schemes.<\/p>\n<p>Two more extensions followed. On 29 November 2013 SEBI moved the deadline to 30 June 2014, and on 27 June 2014 it extended it \u201ctill the new regulations are notified\u201d, adding that the ban on market purchases \u201cshall continue\u201d until existing schemes were aligned with them. By then SEBI had already published its change of course, in the discussion paper of 20 November 2013. That paper proposed letting trusts buy on the market again, at up to 2% of paid-up equity a year and 5% in all, with a six-month holding period that wouldn\u2019t apply to shares transferred to employees on exercise.<\/p>\n<h3 id=\"conditions-2014\">Conditions on ESOP trust secondary acquisition in the 2014 Regulations<\/h3>\n<p>The conditions on ESOP trust secondary acquisition in the <a href=\"https:\/\/www.sebi.gov.in\/sebi_data\/attachdocs\/1414568485252.pdf\" target=\"_blank\" rel=\"noopener follow external noreferrer\" data-wpel-link=\"external\">SEBI (Share Based Employee Benefits) Regulations, 2014<\/a>, notified on 28 October 2014, allowed a trust to buy only on a stock exchange, only for a scheme run through a trust, and only within fixed caps. Regulation 2(1)(zc) defined secondary acquisition as the trust acquiring existing shares \u201con the platform of a recognised stock exchange for cash consideration\u201d. A company whose scheme involved secondary acquisition had to run it through a trust, and it had to decide on the trust route \u201cupfront at the time of taking approval of the shareholders\u201d. The same Regulations repealed the 1999 Guidelines.<\/p>\n<p>Shareholders approve the scheme itself by special resolution under regulation 6(1). Secondary acquisition needs a further \u201cseparate resolution\u201d, and that resolution has to state the percentage of secondary acquisition the trust may undertake. SEBI\u2019s press release of 19 June 2014 described this approval as a special resolution, but regulation 6(3)(a) says only \u201cseparate resolution\u201d, in the 2014 text and again in 2021.<\/p>\n<p>In any financial year, the trust can\u2019t buy more than 2% of the paid-up equity capital as it stood at the end of the previous financial year. Its total holding from market purchases can\u2019t go above 5% for option, purchase and appreciation-rights schemes, or 2% for general employee benefit and retirement benefit schemes, with 5% for all schemes together. That overall cap is measured against paid-up equity at the end of the financial year before the shareholders approved the purchases, and not against the capital on the day the trust buys. Shares the trust gets through a new issue or a gift don\u2019t count towards the caps.<\/p>\n<p>The 2014 Regulations also restricted what the trust could do once it had bought. It could make only delivery-based purchases, it couldn\u2019t deal in derivatives, and its trustees couldn\u2019t vote the shares it held. The trust\u2019s holding is shown to the stock exchanges as \u201cnon-promoter and non-public\u201d, and it doesn\u2019t count towards the 25% <a href=\"https:\/\/blog.ipleaders.in\/compliance-with-minimum-public-shareholding-norms\/\" target=\"_blank\" rel=\"noopener noreferrer\" data-wpel-link=\"internal\">minimum public shareholding<\/a>. Regulation 3(15) adds that the trust \u201cshall not become a mechanism for trading in shares\u201d.<\/p>\n<p>The six-month holding period is where the final rule parted from SEBI\u2019s own proposal. Regulation 3(13) made the trust hold market-bought shares for at least six months, with one exception for transfers in an open offer, a buy-back, a delisting or another exit offered to shareholders generally. The 2013 proposal\u2019s exception for transfers to employees on exercise wasn\u2019t carried into the text, and none of SEBI\u2019s FAQs adds it back. An amendment of 18 September 2015 added the words \u201cwhether off-market or on the platform of stock exchange\u201d to regulation 3(13).<\/p>\n<h2 id=\"unlisted-since-2014\">Secondary purchases by an unlisted company\u2019s ESOP trust since 2014<\/h2>\n<p>Secondary purchases by an <a href=\"https:\/\/blog.ipleaders.in\/esop-scheme-works-listed-unlisted-companies\/\" target=\"_blank\" rel=\"noopener noreferrer\" data-wpel-link=\"internal\">unlisted company\u2019s ESOP trust<\/a> fall under the Companies Act, 2013, because SEBI\u2019s 2021 Regulations apply only to companies whose shares are listed on a recognised stock exchange in India. Section 67(2) of the Act bars a public company from giving financial assistance for the purchase of its own shares. Section 67(3)(b) exempts money that a company provides, under a scheme approved by special resolution and \u201cin accordance with such requirements as may be prescribed\u201d, for fully paid-up shares held by trustees for the benefit of employees.<\/p>\n<p>The prescribed requirements sit in Rule 16 of the <a href=\"https:\/\/www.sebi.gov.in\/sebi_data\/attachdocs\/apr-2017\/1492085873402.pdf\" target=\"_blank\" rel=\"noopener follow external noreferrer\" data-wpel-link=\"external\">Companies (Share Capital and Debentures) Rules, 2014<\/a>, in force from 1 April 2014. A company can\u2019t provide the money unless its members have approved the scheme by special resolution in a general meeting. Listed shares have to be bought only through a recognised stock exchange, and unlisted shares have to be bought at a valuation made by a registered valuer. The value of the shares bought, together with the money the company provides, can\u2019t exceed 5% of the company\u2019s paid-up capital and free reserves.<\/p>\n<p>That 5% isn\u2019t the same limit as SEBI\u2019s 5%, because Rule 16 measures the purchases and the company\u2019s money against paid-up capital plus free reserves, while SEBI caps the trust\u2019s holding against paid-up equity capital. Rule 16 also bars a director, key managerial personnel or promoter of the company or its holding, subsidiary or associate company, or their relatives, from being a trustee, and it bars anyone who holds 10% or more of the paid-up share capital. Breaking Section 67 carries a fine of \u20b91 lakh to \u20b925 lakh for the company, and imprisonment of up to three years with the same fine for every officer in default. A private company is outside Section 67 altogether under G.S.R. 464(E) of 5 June 2015 if no other body corporate has invested in its share capital, its borrowings from banks, financial institutions or bodies corporate are less than twice its paid-up share capital or \u20b950 crore, whichever is lower, and it isn\u2019t in default on those borrowings.<\/p>\n<h3 id=\"founders-investors\">ESOP trust purchases from founders and investors in an unlisted company<\/h3>\n<p>ESOP trust purchases from founders and investors in an unlisted company can be made off the exchange, because Rule 16(1)(b)\u2019s exchange-only condition applies only \u201cin case the shares of the company are listed\u201d. Where the company\u2019s money funds the purchase, Rule 16(1)(c) requires a registered valuer to fix the price. The rule doesn\u2019t say this in so many words, and the position follows from the listed-only wording. Where the sellers are founders, the explanatory statement for the special resolution matters too, because Rule 16(2) makes it give the trustees\u2019 relationship with the promoters, directors or key managerial personnel, and say who will exercise the voting rights on the shares bought.<\/p>\n<p>The price also matters to the seller\u2019s tax. If unquoted shares are sold for less than their fair market value, Section 79(1) of the Income-tax Act, 2025 treats that fair market value as the sale price, unless the seller falls in a class that the rules exempt under Section 79(2). Section 92(2)(m) separately taxes a person who receives shares for more than \u20b950,000 below their fair market value. None of the exceptions written into that section names an ESOP trust, though the section lets the government exempt receipts from further classes of persons by rules.<\/p>\n<h2 id=\"regulations-2021\">ESOP trust secondary acquisition under the 2021 Regulations<\/h2>\n<p>ESOP trust secondary acquisition under the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 keeps the 2014 definition, the 2% and 5% caps, the trust requirement and the bar on trustees voting. SEBI notified those Regulations on 13 August 2021. A company can now switch between running its scheme directly and running it through a trust, by a fresh special resolution passed before the change, as long as the change isn\u2019t prejudicial to employees. Even so, the third proviso to regulation 3(1) still makes a trust mandatory wherever a scheme involves secondary acquisition.<\/p>\n<p>The caps now adjust when the company\u2019s capital falls, and not only when it rises. Explanation 1 to regulation 3(11) counts \u201cexpanded or reduced capital\u201d, including a reduction from a buy-back or a scheme of arrangement, where the 2014 text covered only an expansion, such as one from a bonus issue, a split or a rights issue. SEBI\u2019s FAQs say that a trust pushed over its limit by a buy-back may keep its shares, but \u201cshall not be permitted to acquire any further shares\u201d.<\/p>\n<p>Three further changes affect how the trust runs day to day. Shares the trust has bought but not yet matched to grants have to be appropriated by the end of the following financial year, or the one after that if the compensation committee approves. The trust may now sell shares to fund an employee\u2019s exercise price and \u201cthe amount necessary to meet his\/her tax obligations\u201d, where the 2014 text spoke only of cashless exercise. The trustee bar also reaches directors, key managerial personnel and promoters of group companies, and anyone holding 10% or more of the voting rights.<\/p>\n<p>The trust has insider-trading and takeover obligations as well. Regulation 3(16) requires it to make the disclosures and meet the other requirements that apply to insiders or promoters under the SEBI (Prohibition of Insider Trading) Regulations, 2015. <a href=\"https:\/\/www.sebi.gov.in\/sebi_data\/faqfiles\/nov-2021\/1637066501879.pdf\" target=\"_blank\" rel=\"noopener follow external noreferrer\" data-wpel-link=\"external\">SEBI\u2019s FAQs<\/a> also state that shares held by the trust count towards voting rights under the Takeover Regulations, which reverses an informal guidance SEBI gave in December 2016.<\/p>\n<p>SEBI amended the 2021 Regulations twice in 2025, and neither amendment touched regulation 3. Persistent Systems\u2019 2026 filing records two schemes whose shares can come from a fresh issue and from secondary acquisition, with the trust buying on the exchange in tranches. From 1 August 2026, SEBI\u2019s <a href=\"https:\/\/blog.ipleaders.in\/sebi-buy-back-of-securities-amendment-regulations-2026\/\" target=\"_blank\" rel=\"noopener noreferrer\" data-wpel-link=\"internal\">Buy-back (Amendment) Regulations, 2026<\/a> allow open-market buy-backs through the stock exchange again. A buy-back reduces the company\u2019s capital, and under Explanation 1 and SEBI\u2019s FAQ that can leave a trust above its cap and unable to buy more.<\/p>\n<p>Four questions settle a company\u2019s position before its trust places a market order:<\/p>\n<ol>\n<li>Are the company\u2019s shares listed, which brings SEBI\u2019s Regulations in on top of the Companies Act?<\/li>\n<li>Have your shareholders passed the separate resolution that states the percentage the trust may buy?<\/li>\n<li>How much room is left under the 2% cap for this financial year, and under the 5% overall cap after any buy-back?<\/li>\n<li>Will you need these shares for employees within six months of buying them?<\/li>\n<\/ol>\n<h3 id=\"tax-accounting\">Tax and accounting on shares an ESOP trust buys in the market<\/h3>\n<p>Tax on shares an ESOP trust buys in the market arises for the employee when the trust transfers them on exercise, and from 1 April 2026 it\u2019s governed by the <a href=\"https:\/\/egazette.gov.in\/WriteReadData\/2025\/265620.pdf\" target=\"_blank\" rel=\"noopener follow external noreferrer\" data-wpel-link=\"external\">Income-tax Act, 2025<\/a>. Section 17(1)(d) taxes as a perquisite any specified security \u201callotted or transferred, directly or indirectly\u201d by the employer free of cost or at a concessional rate, which covers shares transferred through the employer\u2019s trust. Under Section 17(4)(h), the value is the fair market value on the date you exercise, less what you paid. When you sell later, that same fair market value is your cost under Section 73, which replaced Section 49(2AA) of the Income-tax Act, 1961, just as Section 17(1)(d) replaced Section 17(2)(vi) for the <a href=\"https:\/\/blog.ipleaders.in\/taxation-of-stock-options-and-employee-compensation\/\" target=\"_blank\" rel=\"noopener noreferrer\" data-wpel-link=\"internal\">tax on stock options<\/a>.<\/p>\n<p>The accounting follows the ICAI\u2019s <a href=\"https:\/\/resource.cdn.icai.org\/61670research50201gn-sbp.pdf\" target=\"_blank\" rel=\"noopener follow external noreferrer\" data-wpel-link=\"external\">Guidance Note on Accounting for Share-based Payments<\/a> of September 2020 for companies that don\u2019t apply Ind AS. Where the company finances the trust to buy shares from the market, the Guidance Note says the company\u2019s standalone financial statements should portray the picture \u201cas if the enterprise itself is administering the ESOP Scheme\u201d, so a \u201cLoans to ESOP Trust\u201d line doesn\u2019t appear. The shares the trust holds are deducted from share capital and securities premium, and they aren\u2019t treated as outstanding for basic earnings per share until employees <a href=\"https:\/\/blog.ipleaders.in\/how-are-esops-exercised\/\" target=\"_blank\" rel=\"noopener noreferrer\" data-wpel-link=\"internal\">exercise their options<\/a>.<\/p>\n<h2 id=\"frequently-asked-questions\">Frequently asked questions<\/h2>\n<p><strong>What is the limit on secondary acquisition by an ESOP trust?<\/strong>\nThe limit on secondary acquisition by an ESOP trust is 2% of the company\u2019s paid-up equity capital in any financial year, measured at the end of the previous financial year. The trust\u2019s total holding from market purchases can\u2019t exceed 5% for option, purchase and appreciation-rights schemes, 2% for general employee benefit and retirement benefit schemes, and 5% for all schemes together. That overall cap is measured against paid-up equity at the end of the financial year before shareholders approved the purchases, adjusted for corporate actions such as bonus issues, splits, rights issues, buy-backs and schemes of arrangement.<\/p>\n<p><strong>Can an ESOP trust transfer shares bought on the market to employees within six months?<\/strong>\nAn ESOP trust is generally required to hold shares acquired through secondary acquisition for at least six months under Regulation 3(13) of the 2021 Regulations. However, Regulation 3(14)(a) permits off-market transfer of such shares to employees pursuant to the scheme. Regulation 3(14)(b) separately permits transfers in connection with an open offer, buy-back, delisting or another exit offered generally to shareholders.<\/p>\n<p><strong>Do shares held by an ESOP trust count towards open offer thresholds?<\/strong>\nShares held by an ESOP trust count towards voting rights under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, according to SEBI\u2019s FAQs on the 2021 Regulations. That answer reverses SEBI\u2019s informal guidance of December 2016, which had said the trust\u2019s shares wouldn\u2019t be counted. SEBI states in the FAQs that they aren\u2019t binding.<\/p>\n<p><strong>Can a company lend money to its ESOP trust to buy shares from the market?<\/strong>\nA listed company may lend money to its ESOP trust to acquire shares through secondary acquisition, subject to the requirements of the Companies Act, 2013 and the Companies (Share Capital and Debentures) Rules, 2014, as provided under regulation 3(8) of the 2021 Regulations. The explanatory statement to the shareholders\u2019 resolution has to give the loan\u2019s amount, tenure, use and repayment terms. Where a company relies on Section 67(3)(b) of the Companies Act, 2013, Rule 16 caps the value of the shares bought, together with the money provided, at 5% of paid-up capital and free reserves.<\/p>\n<h2 id=\"references\">References<\/h2>\n<p>SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, as updated to 3 September 2009 (clauses cited: 22A, 23.1)<\/p>\n<p>SEBI, informal guidance to Mukta Arts Ltd under the ESOS and ESPS Guidelines, the Takeover Regulations and the Insider Trading Regulations (12 May 2005)<\/p>\n<p>SEBI, Board meeting press release (16 August 2012)<\/p>\n<p>SEBI circular CIR\/CFD\/DIL\/3\/2013 (17 January 2013)<\/p>\n<p>SEBI circular CIR\/CFD\/DIL\/7\/2013 (13 May 2013)<\/p>\n<p>SEBI circular CIR\/CFD\/POLICYCELL\/14\/2013 (29 November 2013)<\/p>\n<p>SEBI circular CIR\/CFD\/POLICYCELL\/3\/2014 (27 June 2014)<\/p>\n<p>SEBI, Discussion Paper on the review of guidelines governing stock related employee benefit schemes (20 November 2013)<\/p>\n<p>SEBI, Press Release No. 63\/2014 (19 June 2014)<\/p>\n<p>SEBI (Share Based Employee Benefits) Regulations, 2014 (Gazette, 28 October 2014), and as amended up to 18 September 2015 (regulations cited: 2(1)(zc), 3, 6, 31)<\/p>\n<p>SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, as amended up to 4 December 2025 (regulations cited: 1(4), 2(1)(nn), 3, 6 and Schedule I)<\/p>\n<p>SEBI, Frequently Asked Questions on the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (November 2021)<\/p>\n<p>SEBI (Prohibition of Insider Trading) Regulations, 2015<\/p>\n<p>SEBI (Buy-back of Securities) (Amendment) Regulations, 2026 (in force 1 August 2026)<\/p>\n<p>Companies Act, 2013 (section cited: 67)<\/p>\n<p>Companies (Share Capital and Debentures) Rules, 2014 (rule cited: 16)<\/p>\n<p>G.S.R. 464(E), Ministry of Corporate Affairs (5 June 2015)<\/p>\n<p>Income-tax Act, 2025 (sections cited: 17, 73, 79 and 92)<\/p>\n<p>Institute of Chartered Accountants of India, Guidance Note on Accounting for Share-based Payments (September 2020), paragraphs 75 to 77<\/p>\n<p>Persistent Systems Ltd, intimation to NSE and BSE of scheduled purchase from the secondary market (15 June 2026)<\/p>\n<h2 id=\"disclaimer\">Disclaimer<\/h2>\n<p>This article is for informational purposes only and doesn\u2019t constitute legal, tax or accounting advice. How a particular ESOP trust may buy shares depends on its scheme, its trust deed, the shareholder resolutions passed and whether the company is listed, and parts of the position under the Income-tax Act, 2025 haven\u2019t yet been tested before the courts.<\/p>\n\n\n\n\n\n\n        <\/div>\r\n<br>\r\n<!-- \/wp:post-content -->","protected":false},"excerpt":{"rendered":"<p>ESOP trust secondary acquisition lets a listed company\u2019s employee trust buy existing shares on the stock exchange for employee grants, so the company doesn\u2019t have to issue new ones. SEBI caps these purchases at 2% of paid-up equity a year and 5% overall, after a separate shareholder resolution. Table of Contents ESOP trust secondary purchases [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":7068923,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[101294,229998,229999,230000,230001,230002],"tags":[11310,230008,230003,230004,230005,11149,84017,230006,29960,230007,1313],"dealstore":[],"offerexpiration":[],"class_list":["post-7068922","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-corporate-law","category-esop-trust","category-income-tax-act-2025-esop-perquisite","category-rule-16-companies-share-capital-and-debentures-rules","category-sebi-sbeb-regulations-2021","category-secondary-acquisition","tag-acquisition","tag-esop","tag-esop-trust","tag-income-tax-act-2025-esop-perquisite","tag-rule-16-companies-share-capital-and-debentures-rules","tag-rules","tag-sebi","tag-sebi-sbeb-regulations-2021","tag-secondary","tag-secondary-acquisition","tag-trust"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>ESOP Trust Secondary Acquisition: SEBI Rules Since 2013 - Som2ny Network<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fivemor.com\/?p=7068922\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"ESOP Trust Secondary Acquisition: SEBI Rules Since 2013 - Som2ny Network\" \/>\n<meta property=\"og:description\" content=\"ESOP trust secondary acquisition lets a listed company\u2019s employee trust buy existing shares on the stock exchange for employee grants, so the company doesn\u2019t have to issue new ones. SEBI caps these purchases at 2% of paid-up equity a year and 5% overall, after a separate shareholder resolution. Table of Contents ESOP trust secondary purchases [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/fivemor.com\/?p=7068922\" \/>\n<meta property=\"og:site_name\" content=\"Som2ny Network\" \/>\n<meta property=\"article:published_time\" content=\"2026-09-28T05:59:59+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/fivemor.com\/wp-content\/uploads\/2026\/09\/ESOP-Trust-Secondary-Acquisition-SEBI-Rules-Since-2013.png\" \/>\n\t<meta property=\"og:image:width\" content=\"1536\" \/>\n\t<meta property=\"og:image:height\" content=\"1024\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"20 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/fivemor.com\/?p=7068922#article\",\"isPartOf\":{\"@id\":\"https:\/\/fivemor.com\/?p=7068922\"},\"author\":{\"name\":\"admin\",\"@id\":\"https:\/\/fivemor.com\/#\/schema\/person\/b85e3c3dc0e1daea076524dc8810c371\"},\"headline\":\"ESOP Trust Secondary Acquisition: SEBI Rules Since 2013\",\"datePublished\":\"2026-09-28T05:59:59+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/fivemor.com\/?p=7068922\"},\"wordCount\":4055,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/fivemor.com\/#organization\"},\"image\":{\"@id\":\"https:\/\/fivemor.com\/?p=7068922#primaryimage\"},\"thumbnailUrl\":\"https:\/\/fivemor.com\/wp-content\/uploads\/2026\/09\/ESOP-Trust-Secondary-Acquisition-SEBI-Rules-Since-2013.png\",\"keywords\":[\"Acquisition\",\"ESOP\",\"ESOP trust\",\"Income-tax Act 2025 ESOP perquisite\",\"Rule 16 Companies (Share Capital and Debentures) Rules\",\"Rules\",\"SEBI\",\"SEBI SBEB Regulations 2021\",\"Secondary\",\"secondary acquisition\",\"Trust\"],\"articleSection\":[\"Corporate law\",\"ESOP trust\",\"Income-tax Act 2025 ESOP perquisite\",\"Rule 16 Companies (Share Capital and Debentures) Rules\",\"SEBI SBEB Regulations 2021\",\"secondary acquisition\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/fivemor.com\/?p=7068922#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/fivemor.com\/?p=7068922\",\"url\":\"https:\/\/fivemor.com\/?p=7068922\",\"name\":\"ESOP Trust Secondary Acquisition: SEBI Rules Since 2013 - Som2ny Network\",\"isPartOf\":{\"@id\":\"https:\/\/fivemor.com\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/fivemor.com\/?p=7068922#primaryimage\"},\"image\":{\"@id\":\"https:\/\/fivemor.com\/?p=7068922#primaryimage\"},\"thumbnailUrl\":\"https:\/\/fivemor.com\/wp-content\/uploads\/2026\/09\/ESOP-Trust-Secondary-Acquisition-SEBI-Rules-Since-2013.png\",\"datePublished\":\"2026-09-28T05:59:59+00:00\",\"breadcrumb\":{\"@id\":\"https:\/\/fivemor.com\/?p=7068922#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/fivemor.com\/?p=7068922\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/fivemor.com\/?p=7068922#primaryimage\",\"url\":\"https:\/\/fivemor.com\/wp-content\/uploads\/2026\/09\/ESOP-Trust-Secondary-Acquisition-SEBI-Rules-Since-2013.png\",\"contentUrl\":\"https:\/\/fivemor.com\/wp-content\/uploads\/2026\/09\/ESOP-Trust-Secondary-Acquisition-SEBI-Rules-Since-2013.png\",\"width\":1536,\"height\":1024},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/fivemor.com\/?p=7068922#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/fivemor.com\/?bp_activities=1\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"ESOP Trust Secondary Acquisition: SEBI Rules Since 2013\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/fivemor.com\/#website\",\"url\":\"https:\/\/fivemor.com\/\",\"name\":\"Som2ny Network\",\"description\":\"Daily Deals\",\"publisher\":{\"@id\":\"https:\/\/fivemor.com\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/fivemor.com\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/fivemor.com\/#organization\",\"name\":\"Som2ny Network\",\"url\":\"https:\/\/fivemor.com\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/fivemor.com\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/fivemor.com\/wp-content\/uploads\/2026\/07\/4a0953c4-logo-300x86-1.png\",\"contentUrl\":\"https:\/\/fivemor.com\/wp-content\/uploads\/2026\/07\/4a0953c4-logo-300x86-1.png\",\"width\":300,\"height\":86,\"caption\":\"Som2ny Network\"},\"image\":{\"@id\":\"https:\/\/fivemor.com\/#\/schema\/logo\/image\/\"}},{\"@type\":\"Person\",\"@id\":\"https:\/\/fivemor.com\/#\/schema\/person\/b85e3c3dc0e1daea076524dc8810c371\",\"name\":\"admin\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/fivemor.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/729ae85bf62b9917e93538db2f2688ca?s=96&r=g&default=https%3A%2F%2Ffivemor.com%2Fwp-content%2Fplugins%2Fbuddypress-first-letter-avatar%2Fimages%2Fdefault%2F96%2Flatin_a.png\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/729ae85bf62b9917e93538db2f2688ca?s=96&r=g&default=https%3A%2F%2Ffivemor.com%2Fwp-content%2Fplugins%2Fbuddypress-first-letter-avatar%2Fimages%2Fdefault%2F96%2Flatin_a.png\",\"caption\":\"admin\"},\"sameAs\":[\"https:\/\/fivemor.com\"],\"url\":\"https:\/\/fivemor.com\/?author=1\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"ESOP Trust Secondary Acquisition: SEBI Rules Since 2013 - Som2ny Network","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/fivemor.com\/?p=7068922","og_locale":"en_US","og_type":"article","og_title":"ESOP Trust Secondary Acquisition: SEBI Rules Since 2013 - Som2ny Network","og_description":"ESOP trust secondary acquisition lets a listed company\u2019s employee trust buy existing shares on the stock exchange for employee grants, so the company doesn\u2019t have to issue new ones. SEBI caps these purchases at 2% of paid-up equity a year and 5% overall, after a separate shareholder resolution. Table of Contents ESOP trust secondary purchases [&hellip;]","og_url":"https:\/\/fivemor.com\/?p=7068922","og_site_name":"Som2ny Network","article_published_time":"2026-09-28T05:59:59+00:00","og_image":[{"width":1536,"height":1024,"url":"https:\/\/fivemor.com\/wp-content\/uploads\/2026\/09\/ESOP-Trust-Secondary-Acquisition-SEBI-Rules-Since-2013.png","type":"image\/png"}],"author":"admin","twitter_card":"summary_large_image","twitter_misc":{"Written by":"admin","Est. reading time":"20 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/fivemor.com\/?p=7068922#article","isPartOf":{"@id":"https:\/\/fivemor.com\/?p=7068922"},"author":{"name":"admin","@id":"https:\/\/fivemor.com\/#\/schema\/person\/b85e3c3dc0e1daea076524dc8810c371"},"headline":"ESOP Trust Secondary Acquisition: SEBI Rules Since 2013","datePublished":"2026-09-28T05:59:59+00:00","mainEntityOfPage":{"@id":"https:\/\/fivemor.com\/?p=7068922"},"wordCount":4055,"commentCount":0,"publisher":{"@id":"https:\/\/fivemor.com\/#organization"},"image":{"@id":"https:\/\/fivemor.com\/?p=7068922#primaryimage"},"thumbnailUrl":"https:\/\/fivemor.com\/wp-content\/uploads\/2026\/09\/ESOP-Trust-Secondary-Acquisition-SEBI-Rules-Since-2013.png","keywords":["Acquisition","ESOP","ESOP trust","Income-tax Act 2025 ESOP perquisite","Rule 16 Companies (Share Capital and Debentures) Rules","Rules","SEBI","SEBI SBEB Regulations 2021","Secondary","secondary acquisition","Trust"],"articleSection":["Corporate law","ESOP trust","Income-tax Act 2025 ESOP perquisite","Rule 16 Companies (Share Capital and Debentures) Rules","SEBI SBEB Regulations 2021","secondary acquisition"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/fivemor.com\/?p=7068922#respond"]}]},{"@type":"WebPage","@id":"https:\/\/fivemor.com\/?p=7068922","url":"https:\/\/fivemor.com\/?p=7068922","name":"ESOP Trust Secondary Acquisition: SEBI Rules Since 2013 - Som2ny Network","isPartOf":{"@id":"https:\/\/fivemor.com\/#website"},"primaryImageOfPage":{"@id":"https:\/\/fivemor.com\/?p=7068922#primaryimage"},"image":{"@id":"https:\/\/fivemor.com\/?p=7068922#primaryimage"},"thumbnailUrl":"https:\/\/fivemor.com\/wp-content\/uploads\/2026\/09\/ESOP-Trust-Secondary-Acquisition-SEBI-Rules-Since-2013.png","datePublished":"2026-09-28T05:59:59+00:00","breadcrumb":{"@id":"https:\/\/fivemor.com\/?p=7068922#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/fivemor.com\/?p=7068922"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/fivemor.com\/?p=7068922#primaryimage","url":"https:\/\/fivemor.com\/wp-content\/uploads\/2026\/09\/ESOP-Trust-Secondary-Acquisition-SEBI-Rules-Since-2013.png","contentUrl":"https:\/\/fivemor.com\/wp-content\/uploads\/2026\/09\/ESOP-Trust-Secondary-Acquisition-SEBI-Rules-Since-2013.png","width":1536,"height":1024},{"@type":"BreadcrumbList","@id":"https:\/\/fivemor.com\/?p=7068922#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/fivemor.com\/?bp_activities=1"},{"@type":"ListItem","position":2,"name":"ESOP Trust Secondary Acquisition: SEBI Rules Since 2013"}]},{"@type":"WebSite","@id":"https:\/\/fivemor.com\/#website","url":"https:\/\/fivemor.com\/","name":"Som2ny Network","description":"Daily Deals","publisher":{"@id":"https:\/\/fivemor.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/fivemor.com\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/fivemor.com\/#organization","name":"Som2ny Network","url":"https:\/\/fivemor.com\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/fivemor.com\/#\/schema\/logo\/image\/","url":"https:\/\/fivemor.com\/wp-content\/uploads\/2026\/07\/4a0953c4-logo-300x86-1.png","contentUrl":"https:\/\/fivemor.com\/wp-content\/uploads\/2026\/07\/4a0953c4-logo-300x86-1.png","width":300,"height":86,"caption":"Som2ny Network"},"image":{"@id":"https:\/\/fivemor.com\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/fivemor.com\/#\/schema\/person\/b85e3c3dc0e1daea076524dc8810c371","name":"admin","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/fivemor.com\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/729ae85bf62b9917e93538db2f2688ca?s=96&r=g&default=https%3A%2F%2Ffivemor.com%2Fwp-content%2Fplugins%2Fbuddypress-first-letter-avatar%2Fimages%2Fdefault%2F96%2Flatin_a.png","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/729ae85bf62b9917e93538db2f2688ca?s=96&r=g&default=https%3A%2F%2Ffivemor.com%2Fwp-content%2Fplugins%2Fbuddypress-first-letter-avatar%2Fimages%2Fdefault%2F96%2Flatin_a.png","caption":"admin"},"sameAs":["https:\/\/fivemor.com"],"url":"https:\/\/fivemor.com\/?author=1"}]}},"_links":{"self":[{"href":"https:\/\/fivemor.com\/index.php?rest_route=\/wp\/v2\/posts\/7068922","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/fivemor.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/fivemor.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/fivemor.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/fivemor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=7068922"}],"version-history":[{"count":0,"href":"https:\/\/fivemor.com\/index.php?rest_route=\/wp\/v2\/posts\/7068922\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/fivemor.com\/index.php?rest_route=\/wp\/v2\/media\/7068923"}],"wp:attachment":[{"href":"https:\/\/fivemor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7068922"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fivemor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7068922"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fivemor.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7068922"},{"taxonomy":"dealstore","embeddable":true,"href":"https:\/\/fivemor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fdealstore&post=7068922"},{"taxonomy":"offerexpiration","embeddable":true,"href":"https:\/\/fivemor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fofferexpiration&post=7068922"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}