CSOP—corporate events and rollover

What is a rollover?

The CSOP legislation provides for the ability for replacement options to be granted to existing option holders following a takeover of the scheme company (whose shares were under option) in a manner which allows the beneficial tax status of the original CSOP options to be rolled over into the replacement options. The replacement CSOP options must be 'equivalent' to the old options that they are replacing, and must be over shares in the acquiring company (or in another company which has control of the scheme company). Although the term 'rollover' of options is in common use, the legislation refers to a 'release' of old options in consideration of the grant of new options. Scheme rules should refer to 'releases' in the same way.

Unlike for enterprise management incentives schemes, the