Does your fund manager have skin in the game?

On April 28, 2021, SEBI introduced a new rule. They mandated key employees of asset management companies i.e. mutual fund companies to invest about 20% of their salary in the schemes they run or oversee. They’ll have to tie it up for 3 years or for the duration of the scheme, whichever is shorter. Basically, it’s a diktat forcing fund managers and other key personnel to have their skin in the game. But what is skin in the game?