SEBI Proposes Overhaul of AMC Pay Disclosures

The Securities and Exchange Board of India (SEBI) has issued a consultation paper proposing changes to the disclosure framework for remuneration of mutual fund executives. The regulator is considering moving away from employee‑level salary disclosures towards a consolidated model, aiming to balance transparency with privacy and relevance for investors. Current Framework AMCs must disclose: Names, designations, and remuneration of CEO, CIO, COO. Top 10 highest‑paid employees. All employees earning above specified thresholds. Coverage: typically 2–10% of employees across 36 of 51 AMCs; higher in smaller firms due to top‑10 rule. Proposed Changes Consolidated disclosure model: aggregate pay data instead of individual salaries. CEO pay ratio: disclose CEO’s remuneration relative to median AMC employee pay. Scheme‑level disclosure: total remuneration of fund managers for each scheme. To be shared upon specific investor requests, given sensitivity concerns. Rationale & Industry Feedback AMFI representations: current framework overly granular, raises privacy concerns, limited investor value. Investor perspective: mutual fund unitholders differ from shareholders; they do not exercise ownership rights over AMCs. Decision drivers: scheme performance, risk management, investment strategy, and costs matter more than individual pay. Safeguards Already in Place Caps on recurring scheme expenses. Oversight by trustees, independent directors, and remuneration committees. Internal and external audits. Alignment of interest via mandatory employee investments in schemes. Conclusion SEBI’s proposed shift reflects a pragmatic balance between transparency and privacy. By focusing on consolidated disclosures and scheme‑level visibility, the regulator aims to provide investors with meaningful insights without unnecessary granularity. The consultation outcome could reshape how remuneration data is shared across India’s mutual fund industry.