The Securities and Exchange Board of India (SEBI) has said that a minimum 20% of the compensation of mutual fund managers and other key personnel in an asset management company (AMC) should be in the form of units of the mutual fund schemes they manage.
About:
Key personnel here refers to the likes of chief executive officer, chief investment officer, research head and their direct reportees.
The compensation of fund managers — at least the variable pay component — is linked to performance. What SEBI has done here is crystallise the rules and extend it beyond fund managers to so-called key employees. Moreover, SEBI has specified the rules of allocation of this 20% by saying that is should be proportional to the assets under management of the schemes in which an employee has a role or oversight.
The regulator has also specified that these units offered by way of compensation are locked-in for three years.
Dear Student,
You have still not entered your mailing address. Please enter the address where all the study materials will be sent to you. (If applicable).
