SEBI has come up with some important changes in the pay structure for mutual fund employees by issuing a circular. The provisions of this circular shall be applicable with effect from July 01, 2021. Market regulator Securities and Exchange Board of India (SEBI) via a circular published on Wednesday said that minimum of 20% of the salary of the Key employees of asset management companies known as AMCs must be in Mutual Fund units.
Key employees for this purpose include:CEO, CIO, COO, fund managers and others. Key employees of the AMCs shall include:Chief Executive Officer (CEO), Chief Investment Officer (CIO), Chief Risk Officer (CRO), Chief Information Security Officer (CISO), Chief Operation Officer (COO), Fund Manager(s), Compliance Officer, Sales Head, Investor Relation Officer(s) (IRO), heads of other departments, Dealer(s) of the AMCDirect reportees to the CEO (excluding Personal Assistant/Secretary)Fund Management Team and Research team
Other employees as identified & included by AMCs and Trustees. It has been decided that a part of compensation of the Key Employees of the AMCs shall be paid in the form of units of the scheme(s), for the purpose of aligning the interest of the Key Employees of the AMCs with the unitholders of the mutual fund schemes. The circular says that minimum of 20% of the salary/perks/ bonus/ non-cash compensation-gross annual CTC, net of income tax and any statutory contributions like PF and NPS of the Key Employees of the AMCs shall be paid in the form of units of Mutual Fund schemes in which they have a role/ oversight. Exchange Traded Funds (ETFs), Index Funds, Overnight Funds and existing close ended schemes have been excluded from the order. SEBI added that the compensation paid as mutual fund units will be locked-in for a minimum period of three years or tenure of the scheme, whichever is less.
Bhoi Smrutirekha Dharanidhar