Trust-based implementation of employee share schemes limits secondary acquisitions and prescribes trustee eligibility and disclosure obligations. Regulation 3 governs implementation of employee share-based schemes through irrevocable trusts, mandating that schemes involving secondary acquisition or gifts be trust-implemented and that the decision to use a trust be taken at shareholder approval. A single trust can operate multiple schemes with separate accounts; SEBI-prescribed trust-deed provisions must be filed. Trustees are disqualified if they are company insiders or significant holders; trust shares are classified as non-promoter non-public and trustees must not vote them. Secondary acquisition is subject to annual and aggregate ceilings, holding periods, restricted transfers, prohibition on derivatives, and insider trading compliance.