Employees' stock options and sweat equity may be issued to non-resident employees subject to sectoral caps and approval requirements. The substituted Regulation 8 permits an Indian company to issue employees' stock options and/or sweat equity shares to non-resident directors or employees of the company, its holding company, joint venture or wholly owned overseas subsidiaries provided the scheme complies with applicable securities or companies rules, issuances to non-residents conform to the sectoral foreign investment cap, issuances in companies under the approval route require prior foreign investment approval, issuances to certain foreign nationals require prior approval, and the Reserve Bank may mandate reporting by the issuing company.