The Securities and Exchange Board of India vide its notification dated 28th April 2021 has aligned the interest of key employees of asset management companies with unitholders of mutual fund schemes.
It has been decided that a part of compensation of the Key Employees of the AMCs shall be paid in the form of units of the scheme(s), as under:
- Minimum 20% of salary to be paid in MF units in which key employees have a role
- Employees managing ETFs, Index Funds, Overnight Funds & existing closed-ended schemes to be excluded.
- locked-in for a minimum period of 3 years or tenure of the scheme whichever is less.
- Details for the contribution of key employees in close-ended funds to be provided in due course.
- No redemption allowed during the lock-in period
- Units allotted to the Key Employees shall be subject to clawback in the event of violation of Code of Conduct, fraud, gross negligence by them, as determined by SEBI.
The compliance of the provisions of this circular shall be ensured by the AMCs and monitored by the Trustees. Any non-compliance in this regard, shall be reported in the quarterly CTR and half yearly trustee report.
Further these provisions shall be applicable with effect from July 01, 2021.
