Australian Securities & Investments Commission consults on consolidating and remaking employee incentive scheme relief for five years

The Australian Securities & Investments Commission (ASIC) has opened a consultation on remaking and consolidating two employee incentive scheme (EIS) class orders that are due to sunset on 1 April 2025, proposing to replace them with a single legislative instrument and continue the existing exemptions for a further five years. Although entities have been unable to make new offers under the EIS class orders since 1 March 2023 and employee share schemes now operate under Division 1A of Part 7.12 of the Corporations Act 2001, ASIC noted that issuers may still need relief to complete product issuances under legacy schemes, such as when options are exercised or incentive rights vest. The existing framework includes exemptions supporting continued issuance and related activities, including secondary sales, advertising, licensing and contribution plans (as amended by ASIC Corporations (Amendment) Instrument 2022/1022); the proposed remake would largely retain current settings but limit some exemptions to ‘underlying eligible products’ (for example shares) rather than ‘overlying eligible products’ (for example options or incentive rights). Feedback on Consultation Paper CS 14 is due by 5pm AEDT on 22 February 2025.