Sebi mulls easing executive remuneration disclosure norms for AMCs
Markets regulator Sebi on Wednesday proposed easing executive remuneration disclosure requirements for asset management companies (AMCs) by replacing individual name-wise disclosures with consolidated disclosures, citing industry concerns over privacy and competitive disadvantages.
“This would provide a holistic and structured view of senior management compensation, enabling unitholders to assess the overall quantum of remuneration at the senior management level, while aligning the level of disclosure with considerations of materiality and proportionality,” Sebi said in its consultation paper.
Currently, mutual fund AMCs are required to disclose on their websites the remuneration of chief executive officers (CEOs), chief investment officers (CIOs), chief operating officers (COOs), the top 10 highest-paid employees, and all employees earning at least Rs 1.02 crore annually or Rs 8.5 lakh per month if employed for part of the year.
Sebinoted that while listed AMCs are already subject to detailed remuneration disclosures under the Sebi(Listing Obligations and Disclosure Requirements) Regulations and the Companies Act, unlisted AMCs operate under a different regulatory framework and ownership structure.
“Disclosure requirements applicable to listed entities may not be directly comparable to those for unlisted AMCs,” the regulator said.
Under the proposed framework, AMCs would disclose consolidated remuneration figures along with the number of employees covered under various categories instead of publishing individual remuneration details.
The proposed format involves aggregate disclosures for CEOs, CIOs and COOs, the total remuneration paid to the top 10 employees, and the total remuneration paid to employees earning above the prescribed thresholds.
Sebi said such disclosures would provide a structured view of senior management compensation, while ensuring the disclosure level remains proportionate and aligned with materiality and privacy considerations.
The proposal follows feedback from the mutual fund industry, which argued that detailed employee-level remuneration disclosures are more relevant for listed companies with shareholders exercising ownership rights than for mutual funds, where investors are unitholders and do not have direct ownership of the AMC.
Industry participants also raised concerns over privacy and data protection, stating that public disclosure of individual remuneration could expose employees to misuse of personal information and place AMCs at a disadvantage in competing for talent with portfolio management services (PMS) and alternative investment funds (AIFs), where similar disclosure norms do not apply.
Separately, Sebi has proposed a framework for disclosure of fund managers’ remuneration.
The regulator said remuneration of fund managers is currently not disclosed separately, and is only captured indirectly through existing top-employee or threshold-based disclosures.
Since investment decision-making for each scheme rests primarily with the respective fund manager, Sebi said there may be merit in providing visibility into their remuneration.
However, instead of mandating public disclosure, the regulator has proposed “scheme level consolidated disclosure of total remuneration paid to fund manager(s) at scheme level may be made available upon specific request of unitholders and may be limited to the scheme(s) in which the investor requesting such details has invested as on the date of making such request”.
The Securities and Exchange Board of India (Sebi) has sought public comments on the proposals till June 30.
