Sebi proposes enhanced pay disclosure for mutual fund executives

Key facts

• Sebi has proposed new disclosure norms for executive remuneration at mutual fund asset management companies (AMCs).
• The proposed rules require consolidated disclosure of executive pay and the total number of such employees.
• Investors may be granted limited access to scheme-level fund manager remuneration details.
• Current disclosure frameworks typically cover only 2% to 10% of an AMC's total employee base.
• AMCs will need to disclose remuneration for their CEO, CIO, and COO, as well as top-paid employees and those earning above Rs 1.02 crore annually.
• The regulator is seeking public comments on the draft regulations by June 30, 2026.

The Securities and Exchange Board of India (Sebi) has proposed new regulations aimed at enhancing transparency in executive compensation at mutual fund asset management companies (AMCs). The proposed norms would require AMCs to disclose consolidated remuneration details for their executive-level employees and the total number of such staff. This move is intended to provide investors with a clearer view of senior management compensation and ensure alignment with performance and investor interests.

Currently, the disclosure framework for executive remuneration in AMCs is limited, with only a small percentage of employees typically covered. Sebi noted that in 36 out of 51 AMCs, the covered employees represent between 2% and 10% of the total workforce. The regulator plans to mandate the disclosure of remuneration for the Chief Executive Officer (CEO), Chief Investment Officer (CIO), and Chief Operations Officer (COO), along with the top ten highest-paid employees and any employee earning over Rs 1.02 crore annually. Additionally, AMCs will need to report the ratio of the CEO's remuneration to the median employee pay and the company's total Assets Under Management (AUM).

Sebi also suggested that investors could be granted limited access to scheme-level consolidated remuneration details for fund managers upon specific request. This addresses the current lack of separate disclosure for fund manager pay, which is only incidentally captured. The regulator acknowledged that listed AMCs already adhere to detailed disclosure requirements under SEBI's LODR regulations and the Companies Act, but noted that unlisted AMCs operate under different frameworks.

The market regulator has invited comments and suggestions on the draft mutual fund regulations, with a deadline of June 30, 2026.