Govt cuts red tape for employee share schemes

Commerce Minister Craig Foss has announced an exemption to cut compliance costs for employee share schemes as part of the Financial Markets Conduct Act implementation.

“New exemption rules will open up possibilities for employers to offer share purchase schemes, enabling employees to take an ownership stake in the business they work for. This creates a practical way for businesses, especially start-ups to attract and retain talent,” says Mr Foss.

Current rules can make it costly and burdensome for employers, especially start-ups, to offer their employees a stake in their company.

Under the new purchase exemption employers will need to provide employees with:
• a warning statement about the nature of employee share purchase schemes and the implications of the exemption
• basic information about the scheme, such as its terms and conditions
• access to the employer’s most recent annual report and financial statements.
“Employee share schemes can help employers attract and retain staff. Offering employees a stake in a business can also help with helping to facilitate ownership succession and provides additional equity capital.

“Creating robust financial markets and restoring investor confidence are key pillars of the Government’s Business Growth Agenda,” says Mr Foss.

For more information on the Financial Markets Conduct Act implementation, visitwww.fma.govt.nz/keep-updated/the-future-of-financial-markets

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