India’s mutual fund industry may soon see a change in how senior employees’ salaries are disclosed. The Securities and Exchange Board of India (Sebi) has proposed allowing asset management companies (AMCs) to report executive and high-earner compensation in a consolidated format instead of naming individuals and disclosing their pay separately.
The proposal is aimed at balancing transparency for investors with privacy concerns for employees.
In a consultation paper released on Wednesday, Sebi suggested that AMCs should be allowed to disclose the combined remuneration paid to executive-level employees along with the total number of such employees.
According to the regulator, this approach would continue to provide investors with a broad picture of how much senior management is being paid, while reducing concerns around sharing personal salary details.
Sebi noted that under the current disclosure framework, only a small share of employees are covered. Based on its analysis of 51 AMCs, the proportion of employees whose remuneration is disclosed ranges from around 2% to 10% of the total workforce in 36 fund houses.
The market regulator said public disclosure of individual remuneration could expose employees to privacy risks and increase the possibility of misuse of personal information.
As a result, it believes a consolidated disclosure framework could offer a better balance between transparency and employee privacy.
Sebi has also proposed giving investors the option to seek scheme-level information on the total remuneration paid to fund managers managing the schemes in which they are invested.
The regulator said this would allow investors to access compensation-related information linked to the schemes they hold, while avoiding disclosure of individual pay details.
Sebi has invited comments from the public on the proposals. Stakeholders can submit their feedback until June 30.
The proposals will be considered after the consultation process is completed.