Sebi's New Proposal to Revise 'Skin in the Game' Rule for Mutual Fund Employees

Sebi has proposed amending the 'skin in the game' rule for mutual fund employees to ease compliance. The proposal includes adjusting mandatory investments based on salary brackets and excluding non-cash perks. The aim is to benefit employees with lower salaries and non-investment roles by reducing the financial burden.

Sebi has taken a significant step to address the ongoing concerns surrounding the 'skin in the game' rule for employees of mutual funds. By introducing a new proposal, the regulatory body aims to ease the compliance burden on various employees within the industry.

The proposed amendments suggest a reduction in the mandatory investment percentage based on employees' CTC, while also excluding non-cash components like ESOPs from the mandatory calculations. This shift primarily targets benefiting employees in lower salary brackets and those involved in operational roles.

Sebi's consultation paper outlines different investment requirements, with suggestions like lifting lock-in periods upon resignation and stress testing preparation for public disclosure. The regulator has invited comments from the public on these proposals, with the deadline set for November 21.

(With inputs from agencies.)