Facilitating ease of doing business relating to the framework on “Alignment of interest of the Designated Employees of the Asset Management Company (AMC) with the interest of the unitholders”

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....s of the Asset Management Company (AMC) with the interest of the unitholders" 1. With an objective to facilitate ease of doing business for Mutual Funds, amendments to SEBI (Mutual Funds) Regulations, 1996 ('MF Regulations') were carried out to relax the regulatory framework relating to 'Alignment of interest of the Designated Employees of the AMCs with the interest of the unitholders' (hereinafter referred to as 'skin in the game requirements'). The amendments have been notified vide notification dated February 14, 2025 (link to the Gazette notification) and March 04, 2025 (link to the Gazette notification). The said amendments shall be applicable from April 01, 2025. 2. Accordingly, in terms of Regulation 25 (16B) of MF Regulations,....

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.... 17.5% of gross annual CTC net of income tax, any statutory contributions and ESOPs. Slab 3 (Gross CTC above 1 crore)   18% gross annual CTC net of income tax and any statutory contributions  22.5% of gross annual CTC net of income tax, any statutory contributions and ESOPs. AMC shall have the option to adopt Option A or Option B for its Designated Employees. Designated Employee with no ESOP component as part of their CTC shall be covered under Option A.  b) The slabs applicable to a Designated Employee at point (a) above shall also be decided based on the role of the Designated Employee in the AMC in the following manner: Category Employees   ....

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.... the CTC. For Designated Employees associated with other schemes in addition to liquid fund scheme, Slabs based on the CTC of the employee shall be applicable." B After Clause 6.10.1.5 of the Master Circular, Clause 6.10.1.5 (A) shall be inserted as: "Provided that for Designated Employees managing liquid fund schemes, up to 75 percent of the minimum investment amount required to be invested in liquid fund schemes may be invested in schemes, managed by the AMC, with higher risk as compared to liquid fund schemes. This shall be applicable for Designated Employees associated with only liquid fund scheme and also for Designated Employees associated with other schemes in addition to liquid fund scheme, only with respect to the qu....

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....mpliance officer when closure period is not applicable, in terms of Clause 6 of Schedule B1 of SEBI (Prohibition of Insider Trading) Regulations, 2015. For mandatory subscription/investment in the units of mutual funds under Clause 6.10 of the Master Circular, the requirements specified under Clause 6 of Schedule B1 of SEBI (Prohibition of Insider Trading) Regulations, 2015 shall not be applicable." F Clause 6.10.2.5. modified as: "Deleted" G After Clause 6.10.7.1. of the Master Circular, Clause 6.10.7.2 shall be inserted as: "In the event of violation of Code of Conduct under the MF Regulations, fraud, gross negligence by Designated Employees, the Nomination and Remuneration Committee of AMC shall und....