The Securities and Exchange Board of India (SEBI) has issued a new rule that requires asset management companies (AMCs) to pay at least 20 percent of gross salaries of key employees in the form of units of schemes managed by them. Key employees include heads of functions and employees involved in the fund management process, including the Chief Executive Officer, Chief Investment Officer, Research Heads, and those reporting directly below them. Compensation paid in the form of units must be proportionate to the assets under management (AUM). These units are locked in for three years. Under the regulation, investments must be made where the key employee has a role or oversight on a pro-rata basis depending upon the AUM of the schemes. The rule will come into effect from 01 June, 2021.