Pension Fund Regulatory and Development Authority (Pension Fund) (Second Amendment) Regulations, 2020

Feb 10, 2020 | by Avantis RegTech Legal Research Team

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Labour Compliance

The Pension Fund Regulatory and Development Authority (PFRDA) on February 04, 2020, notifies the Pension Fund Regulatory and Development Authority (Pension Fund) (Second Amendment) Regulations, 2020 to further amend the Pension Fund Regulatory and Development Authority (Pension Fund) Regulations, 2015.

Regulation 8 which specifies the eligibility criteria to be followed by the applicant to act as a sponsor of a pension fund, has been amended:

Under Sub-regulation (1), clause (c), (e), (f) and (i) has been substituted:

a.Clause (c): the sponsors, individually or jointly, shall have a positive tangible net worth of at least fifty crore rupees on the last day of each of the preceding five financial years out of which at least twenty-five crore rupees should be the capital

b.Clause (e): 

i.the sponsor of a pension fund shall incorporate a pension fund as a separate limited company under the Companies Act, 2013 and shall ensure that such pension fund has a minimum tangible net worth of fifty crore rupees or such other higher amount as may be specified by the Authority from time to time;

ii.the sponsor of a pension fund already registered with Authority, shall not be required to incorporate a new pension fund, but shall be required to furnish full details of the said pension fund to the Authority; Provided that the sponsor shall ensure that the existing pension fund achieves minimum tangible net worth of fifty crore rupees or such higher amount as stipulated by the Authority from time to time, within such time as may be decided by the Authority;

c.Clause (f): the aggregate holding of equity shares by a foreign company either by itself or through its subsidiary companies or its nominees or by an individual or by an association of persons whether registered or not under any law of a country outside India taken in aggregate in the pension fund shall not exceed forty nine per cent. of the paid-up capital of such fund or such percentage as may be approved for an Indian Insurance Company under the provisions of the Insurance Act, 1938, whichever is higher. The calculation of foreign investment shall be in accordance with the relevant rules notified by the Central Government or the regulations or guidelines issued by the Authority for the said purpose;

d.Clause (i): the sponsor of a pension fund or the pension fund itself shall not hold any direct equity stake in any other pension fund regulated by the Authority; Provided that a sponsor of a pension fund already holding equity stake in any other pension fund regulated by the Authority prior to the notification of the Act and/or these regulations, may continue to hold the same. However, the sponsor shall not increase its equity stake or holding in any other pension fund without the specific approval of the Authority.

Regulation 9 has been substituted: Procedure for grant of certificate of registration, registration fees and period of validity of certificate of registration.

Regulation 12(j) which specifies the terms and conditions of registration: 

(i)Any change in management, ownership, shareholding pattern or controlling interest of sponsor of the pension fund exceeding one per cent. but less than five per cent. of the paid up capital of the sponsor or pension fund in a financial year, shall be informed to the Authority within fifteen days of the occurrence of such change.

Provided that no change in excess of five per cent. or more of the paid up capital of the sponsor or the pension fund, in any financial year, shall be made without prior approval of the Authority.

(ii)Any change in the key personnel of the sponsor or the pension fund shall be intimated to the Authority within fifteen days of the occurrence of such change;

Regulation 13 which specifies the Annual fee has been substituted: Every pension fund shall deposit with the Authority before the 15th day of April of each year or within fifteen days of grant of certificate of registration, an annual fee as specified in Schedule III or as determined by the Authority from time to time.

In Schedule I, the format of Certificate of Registration as Pension Fund has been substituted.

These will come into force on the date of their publication in the official gazette (February 05, 2020).

[Notification No. PFRDA/12/RGL/139/9]


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