PFRDA Invites Feedback on Proposed Amendments to Point of Presence Regulations

These regulations aim at encouraging an independent, strong and effective distribution channel for National Pension System and other schemes regulated and administered under the provisions of the Pension Fund Regulatory and Development Authority Act, 2013 (23 of 2013) and to ensure that market practices of the points of presence towards provision of old age income security are fair, efficient and transparent for the promotion and protection of interest of the subscribers.

i. National Pension System (NPS) –
Distribution and servicing for public at large through physical as well as online platforms

ii. National Pension System (NPS) –
Distribution and servicing for citizens at large through online platforms only

iii. National Pension System (NPS) – Distribution and servicing only for own employees and other personnel either through physical or online platforms.

Provided that only such entities shall be permitted to function which has covered its employees for social security benefits under the provisions of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 or the Employees State Insurance Act, 1948 or under the Goods and Services Act, 2017 and is registered with authorities under the said enactments, for not less than a period of two years, from the date of the application.

iv. NPS-Lite-Swavalamban scheme.

v. Atal Pension Yojana.

vi. Any other scheme regulated or administered by Authority.

i. National Pension System (NPS) – Performance of functions through physical and online platforms known as Point of Presence -NPS-Offline and Online

ii. National Pension System (NPS) – Performance of functions through online platforms only known as Point of Presence – NPS – Online;

iii. National Pension System (NPS) – Performance of functions for own employees and other personnel either through physical or online platform known as Point of Presence – NPS – Own employees;

Provided that only such entities shall be eligible to undertake this activity which has covered its employees for social security benefits by having registered, either under the provisions of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 or the Employees State Insurance Act, 1948 or any other Act providing any social security benefit and under the Goods and Services Act, 2017 for not less than a prior period of two years, from the date of making the application.

iv. NPS-Lite-Swavalamban scheme known as Point of Presence – NPS Lite

v. Atal Pension Yojana known as Point of Presence – Atal Pension Yojana

vi. Any other scheme regulated or administered by Authority.

Provided that this requirement shall not be applicable to entities covered under sub-clause (ii), (iii) and (v) of regulation 3.

Provided that the requirement of having minimum number of branches shall not be applicable in respect of entities covered under sub-clause (ii), (iii) and (v) of sub-regulation (1) of regulation 3.

Explanation: Net worth as defined under Section 2(57) of Companies Act 2013 for the purpose of this clause.

Provided that where an application is rejected for the reason, that it contains false or
misleading information, no such opportunity may be given and the applicant shall not make any application for grant of certificate of registration under these regulations or any other regulations for a period of one year from the date of such rejection.

Provided that where an application is rejected on the ground, that it contains false or misleading information or has omitted to disclose material facts, no fresh applications for grant of Certificate of Registration under these Regulations or any other Regulations shall be considered for a period of three years, from the date of such rejection, made either by the applicant or by any entity comprising key managerial personnel of such applicant.

(I) Duties in relation to initial customer /subscriber interaction for pension schemes:

(a) addressing queries of potential subscribers regarding pension schemes

(b) providing and displaying information, in accordance with the provisions of the scheme, as approved by the Authority, including information relating to application forms, offer documents or any other publicity material pertaining to pension schemes;

(II) Duties in relation to subscriber registration:

(a) receive the duly filled application form along with the Know Your Customer documentation, as may be applicable from time to time and/or any other mode as directed/ specified by the authority and conduct customer due diligence procedures as required under the Prevention of Money Laundering Act, 2002 (17 of 2003) including the amendments thereof or any other law through effective use of Know Your Customer verification processes, laid down by the Authority for all subscribers;

(b) the point of presence shall carry out checks, as specified in the service standards prescribed or as per the guidelines laid down by the Authority for the purpose;

(c) the point of presence shall ensure maintenance and reporting of all transactions by subscribers in accordance with the provisions of Prevention of Money Laundering Act, 2002 (17 of 2003) including amendments thereof and the rules framed thereunder from time to time, as may be applicable;

(d) the point of presence is responsible for collecting and transmitting, the initial contribution at the time of opening of an individual pension account and subsequent contributions of subscribers made by them to the Trustee Bank;

(e) the point of presence shall be responsible for delivering the subscriber registration form and supporting documents to the central recordkeeping agency or its representative approved by the Authority or shall share subscriber information as received from him, in any other mode or manner as approved by the Authority;

(f) the point of presence shall transfer the contributions received from the subscriber or their employer or deducted from salary of the employees [in case of entities registered under sub regulation (iii) of regulation 3] to the National Pension System Trust account maintained with the Trustee Bank and upload the subscriber contribution files with the central recordkeeping agency within the time frame laid down under the service standards or as per the guidelines issued by the Authority for the purpose;

(III) The following fund collection function shall be performed by the point of presence:

(a) the point of presence shall ensure that credible collection infrastructure is available to its underlying subscribers;

(b) Every point of presence will open or have a collection account in the name of “Name of the PoP or its abbreviation – Collection Account – Name of pension scheme or its abbreviation – National Pension System Trust or its abbreviation” and such an account shall be a non-withdrawable account with an option to transfer the funds to NPS Trust account or only in exceptional cases such as wrong entries, unidentified entries or amount not pertaining to subscriber contribution, for reasons to be recorded in writing, it may be credited to any other account as may be specified by the authority through guidelines/circulars. The

authority to transfer the collection amount will reside with the point of presence:

Provided that those Point of Presence who are already registered and having bank accounts with different nomenclature and usage shall within a period of ninety days from notification of this regulation, comply with this condition.

(2) Servicing of subscriber requests such as the following:-

(a) the point of presence shall be responsible for receiving and processing switching requests from subscribers among schemes and among pension fund;

(b) the point of presence shall upload all requests from subscribers into the central recordkeeping agency system within the timelines laid down under any service standards or in accordance with the guidelines issued by the Authority for the purpose;

(c) In respect of the subscriber withdrawal requests, the point of presence shall be responsible for receiving and processing, from subscribers, for withdrawal or exiting from pension schemes within the timelines laid down under the service level standards or any guidelines issued by the Authority under the Pension Fund Regulatory and Development Authority (Exit and Withdrawal under National

Pension System) Regulations, 2015, as amended. The point of presence shall not collect from subscribers any extra charge for provision of such service, unless permitted by the Authority;

(d) The Point of Presence shall be responsible for attending to subscriber’s request for shift from one point of presence to another point of presence or to another point of presence service provider branch;

(e) the point of presence shall be responsible for receiving and processing all subscriber requests;

(f) the point of presence shall be responsible for receiving, uploading into centralized grievance management system and resolving the grievances pertaining to it;

Explanation: For the purposes of this Regulation, the term internal controls means the policies and procedures adopted by the PoP for ensuring the orderly and efficient conduct of its functions, including prevention and detection of frauds and errors, the accuracy and completeness of the records, and the timely preparation and submission of reliable compliance reports.

(I) Duties in relation to onboarding of subscribers

(a) in respect of interaction with potential subscriber for pension schemes:

(i) addressing queries regarding pension schemes;

(ii) providing and displaying information physically and digitally, in accordance with the provisions of the scheme, as approved by the Authority, including information relating to application forms, offer documents or any other promotion material pertaining to pension schemes;

(b) in respect of subscriber registration:

(i) receive the duly filled application form along with the Know Your Customer documentation and conduct customer due diligence procedures through effective use of Know Your Customer verification processes for all subscribers as required under the Prevention of Money Laundering Act, 2002 (17 of 2003) and the rules notified thereunder or any other law, besides relevant regulations, guidelines, circulars, directions issued by the Authority in that behalf;

(ii) ensure uploading of the subscriber registration form and supporting documents (including KYC documents) digitally signed by PoP onto the system of central recordkeeping agency or in any other mode or manner as specified by the Authority [by the point of presence registered under 3(1)(i) or 3(1)(ii) or 3(1)(iii)] and retain and preserve physical documents in accordance with the provisions of Prevention of Money Laundering Act, 2002 (17 of 2003) and the rules framed thereunder or any other relevant law; (II) Duties in relation to receipt and transmission of contribution

(a) receive and transmit contribution received at the time of opening of an individual pension account and subsequent contributions of subscriber, to the Trustee Bank;

(b) ensure that credible infrastructure is available to its underlying subscribers for remitting contributions and handling documents besides other functions that it is required to undertake;

(c) transfer the contributions directly received from the subscriber or their employer or deducted from salary of the employees to the National Pension System Trust account maintained with the Trustee Bank and upload the subscriber contribution files with the central recordkeeping agency within the timelines specified by the Authority through instructions in that behalf;

(d) open one collection account for each pension scheme in the name of “Name of the PoP or its abbreviation – Collection Account – Name of pension scheme or its abbreviation – National Pension System Trust or its abbreviation” and such an account shall be a non-withdrawable account with an option to transfer the funds to NPS Trust account only.

Notwithstanding the above in exceptional cases like wrong entries, unidentified entries or amount received is not intended towards contribution by subscriber, for reasons to be recorded in writing, it may be credited to any other account as may be specified by the authority through guidelines/circulars.

(e) ensure maintenance and reporting of all transactions by subscribers in accordance with the provisions of Prevention of Money Laundering Act, 2002 (17 of 2003) and the rules framed thereunder, or any other relevant law.

(III) Duties in relation to servicing of subscribers

(a) Receive, process and approve subscriber requests including:

(i) switching requests received from subscribers in relation to either change of scheme or change of pension fund;

(ii) shifting request from one point of presence to another point of presence or to another branch of the point of presence;

(iii) any other service requests

(b) enter subscriber request and upload related document(s) received from subscribers digitally signed by PoP onto the system of central recordkeeping agency [by the point of presence registered under 3(1)(i) or 3(1)(ii) or 3(1)(iii)];

(c) ensure periodic updation of subscriber’s details;

(IV) Duties in relation to redressal of subscriber grievance:

(a) receive grievances, uploading them into centralized grievance management system maintained by central recordkeeping agency and resolving the grievances pertaining to it;

(b) redress the grievances of subscribers in accordance with the provisions of the Pension Fund Regulatory and Development Authority (Redressal of Subscriber Grievance) Regulations, 2015 and any guidelines, circulars or instructions issued by the Authority, in that behalf. For this purpose, the point of presence shall ensure that an effective mechanism to receive and redress complaints from the subscribers, is established at its offices and displayed prominently on its website and the grievances are examined and redressed in a prompt and fair manner.

(c) inform a subscriber at the commencement of relationship and at such other time when the information is likely to be required by the subscriber of:

(i) the subscriber’s right to seek redress for any grievances, including under the Pension Fund Regulatory and Development Authority (Redressal of Subscriber Grievances) Regulations, 2015 or any guidelines circulars or instructions issued by the Authority;

(ii) the processes followed by the point of presence to receive and redress grievances from the subscribers.

V) Duties in relation to processing of exits and withdrawals:

a) receive, process and approve requests for withdrawal of accumulations of such subscriber or for exiting of subscriber from pension schemes, within the timelines specified by the Authority under the Pension Fund Regulatory and Development Authority (Exit and Withdrawal under National Pension System) Regulations, 2015

b) ensure uploading of the subscriber exit / withdrawal form and supporting documents including KYC documents) digitally signed by PoP onto the system of central recordkeeping agency or in any other mode or manner as specified by the Authority [by the point of presence registered under 3(1)(i) or 3(1)(ii) or 3(1)(iii)] and retain and preserve copy of physical documents in accordance with the provisions of Prevention of Money Laundering Act, 2002 (17 of 2003) and the rules framed thereunder or any other relevant law;

c) Point of Presence shall take all possible steps to prevent fraud or mismanagement of the withdrawals of the subscribers upon exit from the pension schemes.

Point of presence shall appoint auditor, as per the eligibility criteria prescribed by the Authority, with the approval of the Audit committee or the Board.

The audit report shall be placed before the Audit committee or the Board of the point of presence and their observations shall be submitted to the Authority.