Which of the following statements is/are correct with reference to the recent changes announced by Securities and Exchange Board of India?

Which of the following statements is/are correct with reference to the recent changes announced by Securities and Exchange Board of India?

A. A minimum 20% of the compensation of mutual fund managers and other key personnel in an asset management company (AMC) should be in the form of units of the mutual fund schemes they manage.

B. The compensation of fund managers at least the variable pay component is linked to performance.

C. Both A & B

D. None of these

Explanation:

The Securities and Exchange Board of India (SEBI) has said that a minimum 20% of the compensation of mutual fund managers and other key personnel in an asset management company (AMC) should be in the form of units of the mutual fund schemes they manage. Key personnel here refers to the likes of chief executive officer, chief investment officer, research head and their direct reportees.  The compensation of fund managers — at least the variable pay component — is linked to performance. What SEBI has done here is crystallise the rules and extend it beyond fund managers to so-called key employees.