Making mutual funds accountable, SEBI style

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Editor's note: After years of trying to make mutual fund house executives accountable for the performance of their funds, the Securities and Exchange Board of India finally bit the bullet last week by putting out a circular, which despite being muddled, set the cat among the pigeons.  The 28 April circular from SEBI states, among other things, that 20% of the salaries of key mutual fund house executives should be invested in units of the schemes over which they have oversight or are managed by them. As with almost any reform, the industry is unhappy. But if they’re looking for someone to blame, it should be Franklin Templeton India. Clearly the measure is a fallout of the crisis triggered by the asset management company shutting down its suite of six debt mutual fund schemes in April last year, effectively dragging the entire industry into SEBI’s crosshairs. We have tracked the sordid saga in a series of stories on how key officials put their own interest ahead of investors when the schemes were shuttered and how the fund managers doled out preferential treatment …