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The Securities and Exchange Board of India (Sebi) has told mutual fund (MF) houses there will be no extension of its earlier order to them for disclosing the remuneration of their top executives.
The deadline for disclosure was Sunday but several fund houses had not complied, saying there was lack of clarity on the issue. There would be no extension, members were told on Sebi’s behalf by the Association of Mutual Funds in India (Amfi) on Monday. Anyone who’d not complied by Sunday would have till end-Monday to do so. Further, the regulator asked fund houses not to put unnecessary and unhelpful filters while providing the information to investors.
For instance, some fund houses were asking for several details from investors such as folio number, registered phone number, PAN card number, registered e-mail IDs, bank account number and date of birth, among others, for accessing the information of remuneration.
Sebi also allowed fund houses to indicate employee stock options for different years separately. This would help fund houses to come up with a more realistic annual salary and not a bloated one for key managerial people. India's top fund houses - ICICI Prudential Mutual Fund, HDFC MF and Reliance MF — adhered to the regulator's diktat and allowed their investors a sneek-peak into the pay packages of their top officials for 2015-16. However, other leading asset management companies -- including Birla Sun Life, UTI MF, SBI MF, Franklin Templeton MF, IDFC MF and Kotak MF — opted not to upload the remuneration figures on their websites.
The deadline for disclosure was Sunday but several fund houses had not complied, saying there was lack of clarity on the issue. There would be no extension, members were told on Sebi’s behalf by the Association of Mutual Funds in India (Amfi) on Monday. Anyone who’d not complied by Sunday would have till end-Monday to do so. Further, the regulator asked fund houses not to put unnecessary and unhelpful filters while providing the information to investors.
For instance, some fund houses were asking for several details from investors such as folio number, registered phone number, PAN card number, registered e-mail IDs, bank account number and date of birth, among others, for accessing the information of remuneration.
Sebi also allowed fund houses to indicate employee stock options for different years separately. This would help fund houses to come up with a more realistic annual salary and not a bloated one for key managerial people. India's top fund houses - ICICI Prudential Mutual Fund, HDFC MF and Reliance MF — adhered to the regulator's diktat and allowed their investors a sneek-peak into the pay packages of their top officials for 2015-16. However, other leading asset management companies -- including Birla Sun Life, UTI MF, SBI MF, Franklin Templeton MF, IDFC MF and Kotak MF — opted not to upload the remuneration figures on their websites.
The industry body Association of Mutual Funds in India (Amfi) had been trying to get some relaxation on the issue as its members considered salary disclosures a sensitive matter. Meanwhile, Sebi provided some relief to the fund industry by deferring the scheme related disclosures — raising hopes that similar relief may be expected on the remuneration front. However, till now since the issue of circular Sebi did not provide any relief to industry.
Interestingly, on April 30, the last day of the deadline, Leo Puri, chairman of Amfi, issued a letter to all fund houses saying that there has been some uncertainty on how to proceed with uploading compensation data on the websites... following the cancellation of a meeting with Sebi's chairman UK Sinha.
The letter further adds, "We are now scheduled to meet Sebi chairman on May 2 evening, which is post the deadline mentioned in the circular for uploading data."
The Amfi's letter advised fund houses that those AMCs who wish to wait until final guidance, to be issued on the manner of disclosure on Monday, may do so. However, it adds that it should not be taken to represent a change of heart on substance of the circular, (but) merely an accommodation of my request that it would help our members properly align themselves and ensure compliance in standardised and orderly manner.
The letter, however, made it amply clear, that those AMCs who have disclosed or wish to disclose may also do so as the circular was in force.
The Amfi's meeting with Sebi is scheduled on Monday at 4 pm (earlier it was on Friday last week, which got cancelled).
Puri, in the letter, added, "We will issue guidance to all members after our meeting on Monday. Until then it is appropriate to be prepared for disclosure, but if you have not done so there will be forbearance shown until further guidance is received on Monday."
Puri is also the managing director of UTI Mutual Fund. A Balasubramanian, chief executive officer (CEO) of Birla Sun Life Mutual Fund is vice chairman on Amfi's board.
Email queries sent to Birla Sun Life MF, UTI MF and SBI MF did not elicit any responses. Some fund houses may be uploading the data by today. Franklin Templeton follows October-September as financial accounting year, so the fund house' disclosures is expected only in October this year.
