Big equity boost coming for retail investors, employees

THE GOVERNMENT IS considering a host of steps to boost participation of retail investors in equity markets and enhance the use of employee stock options (ESOPs).

- MANU KAUSHIK

According to official sources, the Corporate Laws (Amendments) Bill, to be tabled in Parliament in the Winter Session, will seek to amend the Companies Act to give legal sanction to transfer, issuance and holding of "fractional shares." Also on the cards is automatic recognition to non-monetary employee benefit schemes like restricted stock units (RSUs) and stock appreciation rights (SARS).

Fractional shares are shares split into smaller units. They can make high-value stocks accessible to small investors, without leaving any uninvested cash.

Such shares are also often an offshoot of stock splits, issuance of bonus shares and mergers and acquisitions (M&As).