SEBI has proposed a consolidated disclosure model that would move away from publishing remuneration details of individual employees to a more consolidated framework, marking a significant shift from the current granular approach. As per the consultation paper issued on Wednesday, the regulator is considering publishing the ratio of CEO's remuneration to median remuneration of AMC employees alongside the consolidated disclosure. The proposal also includes mandating scheme-level consolidated disclosures of total remuneration to fund managers, expanding beyond the current top 10 employee or threshold-based disclosures. SEBI noted that considering investment decision-making for each scheme rests primarily with the respective Fund Manager(s), there may be merit in providing visibility into their remuneration, though such disclosures may only be made upon specific requests from scheme investors due to sensitivity considerations. The regulator emphasized that investment decisions are typically driven by scheme performance, risk management, asset allocation, investment strategy, and expense ratios, stating that individual-level remuneration disclosures may not materially influence such decisions or improve investor outcomes.
The proposal follows representations from the Association of Mutual Funds in India (AMFI), which has urged SEBI to revisit existing disclosure requirements. AMFI had questioned the scope, granularity, and relevance of the existing framework, with industry participants arguing that mutual funds operate differently from listed companies. Unlike shareholders, mutual fund investors are unitholders and do not exercise ownership rights over the AMC. The industry has argued that investment decisions are generally driven by scheme performance, risk management, investment strategy and costs rather than compensation paid to individual employees. SEBI's analysis shows that remuneration disclosures typically cover just 2-10% of employees in 36 of 51 AMCs, with higher coverage mainly in firms with smaller workforces due to mandatory disclosure of the top 10 earners. 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. SEBI noted that public disclosure of named individual remuneration may expose employees to risks related to the misuse of personal information, creating an asymmetry that may place AMCs at a competitive disadvantage.
Under the existing rules, asset management companies (AMCs) must disclose the names, designations and remuneration of their chief executive officer (CEO), chief investment officer (CIO) and chief operating officer (COO), along with details of the top 10 highest-paid employees and all employees whose remuneration exceeds specified thresholds. 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 ₹1.02 crore annually or ₹8.5 lakh per month if employed for part of the year. SEBI's analysis reveals that current data from AMFI indicates that SEBI's analysis shows current disclosure norms cover a relatively small portion of AMC employees, with the proportion of employees included in remuneration disclosures ranging between around 2% and 10% of total staff across 36 out of 51 AMCs. The regulator noted that the mutual fund regulatory framework already incorporates several safeguards, including caps on recurring expenses that can be charged to each scheme, oversight by trustees, independent directors, Nomination and Remuneration Committee of AMC, internal and external auditors and alignment of interest requirements such as mandatory investments by key employees. In practice, fund houses have restricted visibility by requiring investors to enter their folio numbers before accessing these details.
Under the proposed framework, AMCs would report the total remuneration paid to CEOs, CIOs and COOs, aggregate compensation of the top 10 employees, and consolidated remuneration of all employees crossing the prescribed threshold. 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 stated that 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 move represents relief for senior executives at asset management companies (AMCs), who have been concerned about the potential misuse of personal information through individual disclosures. SEBI had first directed mutual funds to disclose salaries of top management in 2015-16, but industry officials have been uncomfortable disclosing such information on their websites for public access. The regulator noted 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. SEBI has sought public comments on the proposals till June 30, 2026, providing stakeholders with adequate opportunity to provide feedback on the proposed framework and its potential impact on asset management industry practices.
SEBI has also proposed a framework for disclosure of fund managers' remuneration, addressing a gap in current regulations. The regulator noted that 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". This approach balances transparency with privacy considerations while ensuring unitholders can access information about fund manager compensation when it directly affects their investments. The disclosure would include the number of fund managers overseeing a scheme and the aggregate remuneration paid to them, providing investors with greater visibility into the compensation structure of those directly involved in investment decision-making.
Legal experts have welcomed the proposed changes while raising important questions about governance standards. Abhishek Paliwal, Partner at King Stubb & Kasiva, Advocates and Attorneys, noted that the proposed changes represent a notable shift in the regulatory approach to transparency and governance in the MF sector. However, he emphasized that the proposal raises important questions regarding the extent to which investors can effectively evaluate management accountability without visibility into the remuneration of key decision-makers who directly influence investment outcomes and operational strategy. For retail investors, transparency remains a cornerstone of trust in the mutual fund ecosystem. As per The Economic Times, any revised framework should ensure that the reduction in individual-level disclosures does not inadvertently weaken governance standards or diminish investor confidence. The regulatory changes come as SEBI Chairman Tuhin Kanta Pandey announced a comprehensive review of market regulations aimed at making India's capital markets more efficient, transparent, and investor-friendly. Paliwal noted that individual remuneration disclosures have historically served as an important accountability mechanism, enabling investors and stakeholders to assess whether compensation structures are aligned with fund performance, risk management objectives, and long-term investor interests. However, he added that the move towards aggregated disclosures reflects a growing recognition of employee privacy and data protection considerations, while acknowledging that consolidated disclosures may limit the ability of stakeholders to independently assess whether executive incentives are appropriately structured and aligned with fiduciary responsibilities owed to unit holders.
