SEBI released a consultation paper reviewing disclosure norms for executive remuneration by Asset Management Companies (AMCs). Current regulations under SEBI (Mutual Funds) Regulations 1996 mandate limited disclosure of top management compensation. The paper examines global best practices including SEC requirements in US markets. It proposes enhanced transparency measures for CEO, CIO, and key personnel compensation including fixed pay, variable pay, and performance linkages. Public comments invited until specified deadline. Aims to strengthen investor protection and corporate governance in mutual fund industry.

This consultation paper reflects SEBI's ongoing effort to enhance transparency and corporate governance in India's rapidly growing mutual fund industry. Currently, AMCs disclose minimal information about executive compensation, creating information asymmetry between fund managers and unit holders. The review comes amid concerns about high management fees and executive pay-performance misalignment in the industry. SEBI is examining international models, particularly SEC's comprehensive disclosure framework in the US, which requires detailed breakdowns of executive compensation including salary, bonuses, stock options, and performance metrics. The proposed changes could mandate disclosure of compensation philosophy, peer benchmarking, and risk-adjusted performance linkages. This initiative aligns with SEBI's broader regulatory agenda of strengthening investor protection while maintaining market competitiveness. Enhanced disclosure can help investors make informed decisions about fund selection and assess whether management fees are justified by performance. The consultation process demonstrates SEBI's collaborative approach to policy-making, inviting stakeholder feedback before finalizing regulations. This transparency initiative is particularly relevant given the mutual fund industry's assets under management crossing ₹50 lakh crore mark, making governance oversight crucial for retail investor confidence.