|
The Departmentally Related Parliamentary Standing Committee on Finance, has, inter-alia, recommended that the initial or broad contours of the regulations governing the implementation of the New Pension System under the infrastructure of PFRDA should be framed and put in the public domain prior to the enactment of the PFRDA Bill. Accordingly, a preliminary draft of the broad contours of Regulations on registration of intermediaries has been prepared. The following are the major highlights of these Regulations:
I. The legal form of the entities to be registered as Central Recordkeeping Agency (CRA), Pension Funds (PFs) and Points of Presence (POPs) will be firmed up only after suggestions are received on this issue.
II. PFRDA will consider registering an entity as a Fund Manager on the basis of the following parameters: satisfying minimum capital requirement criteria; past track record including ability to provide guaranteed returns; costs’ and fees’ structure; customer base; information technology capabilities; human resources, and other related matters. Suggestions from public and stakeholders are invited on the quantification of these parameters.
III. For an entity to be licensed as a POP, it should be a registered entity under RBI/IRDA/SEBI regulatory jurisdiction. For pension business, it will be regulated by PFRDA.
IV. A minimum capital requirement will be an essential criterion for registration as an intermediary. However, the exact quantification of this number has not been indicated. Suggestions are invited on the quantification of capital requirement for entities to be registered as CRA, PFs, and POPs.
V. The draft Regulations has proposed restricting the cross holding of ownership among intermediaries in order to address the issue of conflict of interest.
VI. The drafts Regulations also indicate standard service agreement between CRA and (i) the subscriber (ii) PFs and (iii) POPs.
VII. The charges and fees to be levied by the intermediaries are provided for in the draft Regulations. However, the exact quantification of such fees and charges have not been indicated. Suggestions are, therefore, invited on quantification of these charges and fees.
VIII. The draft Regulation has not indicated the period of license/registration. However, the Authority has been given right of rejecting any application which do not conform to stipulated conditions. Further, power of suspension and cancellation of the license has also been provided for in the draft Regulations.
IX. Initially, it is proposed to offer four (4) Schemes to the subscribers. The investment pattern of these Schemes will vary from a 100% Government debt to a growth plan in which up to 50% will be invested in equity based index. Suggestions are also invited on this issue.
X. The draft Regulations provide that the net asset value (NAV) of schemes shall be provided on a daily basis by the PFs .
XI. The draft Regulations provide for rejection of the application for registration of intermediaries. Further, provision has also been made for suspension and cancellation of the certificate of registration for not conforming to provisions of the Regulations.
The draft regulations regarding registration of intermediaries (Central Recordkeeping Agency, Pension Funds and Points of Presence) have now been put on the web site of Ministry of Finance viz. www.finmin.nic.in seeking comments from stakeholders/public by October 3, 2005. The draft Regulations will be finalized and notified only after the PFRDA Bill is passed by the Parliament.
Comments/views on the draft Regulations could be sent either through post (Office of PFRDA, Jeevan Bharti Building, Ground Floor, Tower-I, 124, Connaught Circus, New Delhi- 110001) or e-mail to: gyanbhushan@nic.in.
BY/GN-328/05
|
