SEBI Proposes Changes to Executive Compensation Disclosure Norms for Mutual Funds

The Securities and Exchange Board of India (SEBI) has released a consultation paper proposing modifications to the disclosure requirements relating to compensation of senior executives and fund managers within Asset Management Companies (AMCs) operating mutual fund schemes.

Under the existing disclosure framework, mutual fund investors are provided details of remuneration paid to key managerial personnel, including the Chief Executive Officer (CEO), Chief Investment Officer (CIO), and Chief Operating Officer (COO). AMCs are also required to disclose compensation details of the ten highest-paid employees and employees receiving remuneration above the prescribed threshold of ₹1.02 crore.

SEBI has proposed replacing individual-level compensation disclosures with group-level disclosures for senior executives. If implemented, remuneration information would be presented in an aggregated format rather than identifying compensation paid to specific executives.

The consultation paper also proposes changes relating to fund manager remuneration disclosures. One of the options under consideration is to make such information available on a request basis rather than through routine public disclosure. SEBI has additionally invited comments on whether fund manager compensation details should remain publicly accessible through AMC websites or be restricted to unit holders seeking the information.

According to feedback received from the mutual fund industry, the existing detailed disclosure requirements provide limited additional value to investors. Industry participants have also indicated that mutual fund investors act as unit holders rather than shareholders of AMCs and therefore do not exercise direct ownership rights over the management companies. Concerns relating to employee privacy and data protection have also been cited in support of revisiting the current disclosure framework.

The consultation paper further seeks stakeholder views on whether additional safeguards should be introduced if access to remuneration-related information is provided upon request. Market participants, investors, AMCs, and other stakeholders may submit their comments and suggestions on the proposals until June 30, 2026.

The proposed changes form part of SEBI's ongoing review of disclosure requirements applicable to the mutual fund sector and could impact the manner in which compensation-related information is made available to investors in the future.