The Federal Treasury has released a consultation paper seeking stakeholder feedback on proposed amendments to Employee Share Scheme (ESS) regulations.

The proposed changes are targeted at small, unlisted companies.

The current regulatory framework is fragmented and complex. It is difficult for smaller companies to work through and can result in significant costs to implement an ESS.

The changes suggested in the consultation paper are to:

  1. consolidate the regulatory framework to incorporate current legislation and ASIC class orders;
  2. increase the value of shares that unlisted companies can offer employees from $5,000 to $10,000 per year; 
  3. allow companies offering shares under an ESS within the above financial limits, to collect contributions from employees for those shares; and
  4. allow disclosure documents lodged with ASIC to remain confidential. 

While consolidation of the regulatory framework is welcome, these changes are modest and unlikely to make ESS implementation easier other than for small, lower value schemes.

Following the closure of a public submission process on 30 April 2019, the Federal Treasury will then make recommendations and introduce legislative changes.  We’ll keep you updated on developments.