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Khyati Simran Nandrajog/AI-generated image
Summary: For 10 years, anyone could look up exactly what their fund house paid its CEO — the real number, his name beside it, two minutes on a website. A new SEBI proposal would replace those names with totals.
For 10 years, you could look up what the CEO of your fund house earns. The exact number, with his name next to it. Same for the CIO, the COO, the top 10 earners and anyone making over Rs 1.02 crore. Two minutes on the AMC's website.
SEBI wants to end this.
The consultation paper came out on June 10. The idea is to replace the names with totals. One combined number for the CEO, CIO and COO. One for the top 10. One for everyone above the threshold, plus the number of people that are covered. So you'll know a fund house paid Rs 120 crore to 40 people. You won't know whether the CEO took home Rs 5 crore or Rs 25 crore. You won't notice when a fund manager's pay doubles in a year if his fund went nowhere.
Now, most investors have never opened that salary page, and the industry knows it. Its submission to SEBI says exactly this: investors look at performance and costs, not pay.
Except that the pay is the cost. Every rupee of that Rs 120 crore comes out of the expense ratio you bear. This is your money they're discussing.
And nobody ever claimed disclosure works because lots of people read it. It works because anyone can. A CEO whose salary sits on a public webpage behaves a little differently from one whose pay is hidden inside a lump sum. If you doubt that, ask yourself why the industry has fought this rule for 10 years.
It has fought continuously. When the rule came in 2016, some fund houses just blew past the deadline. Others put the numbers behind web forms asking for your folio number, PAN, registered mobile and date of birth before they'd show you a salary. SEBI had to tell them to drop these filters, calling them unnecessary and unhelpful. After that, the fight moved to AMFI, which continued to send representations. AMFI asked for three things and got all three, nearly word-for-word.
The arguments are the old ones. You're a unitholder, not a shareholder. Privacy. PMS and AIF firms don't have to disclose, so they poach talent. Some of it is even true. But all of it was just as true in 2016, when SEBI heard it and decided investors came first. Nothing has changed since except the regulator's mind.
And remember, only seven of India's 53 AMCs are listed. Yes, every AMC must put its annual report on its website, but that gives you company-level financials. The name-wise pay of the top brass appears in the board's report only for listed companies. For the other 46, this webpage was the only place you could see who earned what.
The paper has one sweetener. Fund manager pay, disclosed scheme-by-scheme for the first time ever. The fund manager runs your money, so this is actually the most useful number in the whole thing. But look at the conditions. It won't be on any website; you have to ask. You get one combined figure for all the scheme's managers. And you can only ask about schemes you already hold. The only time this number could change your decision is before you put your money in. That's exactly when you can't get it.
Comments close on June 30. The form is on sebi.gov.in, takes 10 minutes and lets you agree or disagree with each proposal separately. The fund houses will certainly send in their views. Don't let them be the only ones.
Also watch: SEBI's New Rules: What They Mean For You
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