PENSION FUND REGULATORY AND DEVELOPMENT AUTHORITY
NOTIFICATION
New Delhi, the 10th January, 2024
PENSION FUND REGULATORY AND DEVELOPMENT AUTHORITY
(POINT OF PRESENCE) (AMENDMENT) REGULATIONS, 2023
No. PFRDA/16/05/112/0018/2020-REG-POP—In exercise of the powers conferred by subsection (1) read with clauses (e), (l), (n), (o), (p) and (w) of sub-section (2) of section 52 of the Pension Fund Regulatory and Development Authority Act, 2013 (23 of 2013), the Pension Fund Regulatory and Development Authority hereby makes the following regulations to amend the Pension Fund Regulatory and Development Authority (Point of Presence) Regulations, 2018, namely:-
(1) These regulations may be called the Pension Fund Regulatory and Development Authority (Point of Presence) (Amendment) Regulations, 2023.
(2) These shall come into force on the date of their publication in the official gazette.
(3) In the Pension Fund Regulatory and Development Authority (Point of Presence) Regulations, 2018, as amended from time to time (hereinafter referred to as ‘the principal regulations’), the following amendments are made.
I. Sub-regulation (1) of regulation 1 of the principal regulations shall be substituted as follows:
“1. Short title and commencement.— (1) These regulations may be called the Pension Fund Regulatory and Development Authority (Point of Presence) Regulations, 2018. These regulations specify eligibility criteria, set governance standards to regulate the point of presence to serve and protect the interest of the subscribers.”
II. Sub-regulation (3) of regulation 1 of the principal regulations shall be substituted as follows:
“ (3) The Pension Fund Regulatory and Development Authority (Point of Presence) Regulations, 2015 and The Pension Fund Regulatory and Development Authority (Aggregator) Regulations, 2015 shall stand repealed. The repeal shall not affect the previous operation of the regulations or anything duly done or suffered thereunder, or any right, privilege, obligation or liability acquired, accrued or incurred thereunder or any penalty, confiscation or punishment incurred or liable to be incurred, in respect of any contravention under the regulation so repealed and any proceeding or remedy may be instituted, continued or enforced, and any penalty or punishment may be imposed or made as if the regulation had not been repealed.”
III. In sub-regulation (1) of regulation 2 of the principal regulations,
a. Clause(b) shall be substituted as follows:
“(b) “auditor” shall have the same meaning as defined under section 141 of Companies Act, 2013 and includes a system auditor;”
b. Clause (c) shall be deleted;
c. Clause (d) shall be deleted;
d. Clause (h) shall be deleted;
e. After clause (i), a new clause (j) shall be inserted as follows:
“(j) “pension agent” means any person engaged by point of presence for facilitating the distribution of pension schemes covered under the Act and shall comprise the following:
(i) banking correspondents permitted by the Reserve Bank of India;
(ii) insurance agents registered with the Insurance Regulatory and Development Authority of India;
(iii) mutual fund distributors registered with Association of Mutual Funds in India; or
(iv) any other person permitted by the Authority.”
IV. Sub-regulation (2) of regulation 2 of the principal regulations shall be deleted;
V. Regulation 3 of the principal regulations shall be substituted as follows:
“3. Categories of the Point of Presence.— (1) An applicant may seek registration as a point of presence in respect of any one or more of the following pension schemes:
a. National Pension System;
b. Atal Pension Yojana; or
c. any other scheme regulated or administered by Authority.
Provided that the entity(s) already registered for distribution and servicing only its own employees and other personnel, either through physical or online platforms, prior to these amendments, shall surrender its certificate of registration, and
a. seek registration or authorisation in such manner as may be directed by Authority; or
b. be associated with a point of presence, for its employees who are subscribers, within the time period so directed.
Provided further that the entity(s) already registered under NPS-Lite-Swavalamban scheme, prior to these amendments may continue to be a point of presence and shall be required to fulfil the eligibility conditions specified under these regulations, during the validity of such registration.
Explanation.— For the purposes of sub-clause (a) of clause (1) of regulation 3, modes of distribution shall be any one or more of the following:
a. physical;
b. online;
c. physical and online;
d. to its own employees and other personnel.”
VI. Regulation 4 of the principal regulations shall be substituted as follows:
“4. Application for grant of certificate of registration.—(1) An eligible applicant may apply for grant of a certificate of registration in such form as determined by the Authority along with a non-refundable application fee of Rupees ten thousand plus applicable taxes and levies thereon. The Authority shall acknowledge receipt of the application within seven days of receipt of such application.
Provided that an applicant proposing to conduct activities under Atal Pension Yojana, shall not be required to pay any application fee.
(2) Notwithstanding the repeal of the Pension Fund Regulatory and Development Authority (Point of Presence) Regulations, 2015 and Pension Fund Regulatory and Development Authority (Aggregator) Regulations, 2015, the point of Presence and Aggregator who were registered under the said regulations, would be issued a fresh registration certificate under these regulations and would be permitted to undertake other activities under regulation 3, subject to fulfilment of eligibility criteria.
(3) Any point of presence dealing with distribution of Atal Pension Yojana (APY) and servicing of subscribers under the said scheme, which was granted a permission to function as such by the Authority, prior to the notifications of these regulations may continue to act as such for a period of one hundred and eighty days or such extended period, from the notification of the regulations, or if it makes an application for grant of registration, within ninety days of notification of the regulation or such extended period, till the disposal of its application by the Authority.”
VII. Regulation 5 of the principal regulations shall be substituted as follows:
“5. Eligibility criteria.—(1) An applicant is required to fulfil the following eligibility criteria:
(a) be registered with and regulated by any financial sector regulator(s) including the Reserve Bank of India, the Securities and Exchange Board of India, the Insurance Regulatory and Development Authority of India, the Pension Fund Regulatory and Development Authority, or the National Housing Bank;
(b) for registration under National Pension System, it shall be:
(i) a company incorporated in India under the Companies Act, 2013, or any previous company law;
(ii) a bank; or
(iii) a non-banking finance company (with necessary certification from the Reserve Bank of India)
(c) for registration under Atal Pension Yojana, it shall either be:
(i) a bank; or
(ii) any other entity(s) registered under the relevant laws, if in the opinion of the Authority, such entity(s) can facilitate provision of old age income security;
Explanation.— For this purpose, “Bank” shall mean any entity:
(i) established under Banking Regulation Act, 1949 or Regional Rural Banks Act, 1976 or under any other relevant Act; and
(ii) registered with and regulated by RBI;
(d) have at least one branch or office in India, possessing information technology infrastructure capable of electronic connectivity with the central recordkeeping agency(s) to receive and transmit the subscribers’ funds, instructions, and pay out of funds as per the service standards or relevant guidelines issued by the Authority;
(e) minimum net worth of Rupees two crore which shall include minimum paid up equity capital of Rupees fifty lakh, as on the last day of the immediately preceding quarter, duly certified by the statutory auditor;
Explanation.— “net worth” shall be as defined under section 2(57) of the Companies Act, 2013. Provided that this requirement shall not be applicable for:
(i) entity(s) seeking registration under Atal Pension Yojana; and
(ii) departments / boards of the Central or the State Governments;
(f) it and its key managerial personnel shall fulfil the “fit and proper person criteria” as provided under Schedule-V;
Explanation.— “key managerial personnel” shall have the same meaning as defined under section 2(51) of the Companies Act, 2013;
(g) possess a two-year track record of profitability (profit after tax) as on the last day of the immediately preceding financial year;
Provided that this condition shall not apply to:
(i) online marketing companies distributing financial products, payment banks and small finance banks for a period of five years from the date of their registration with the concerned regulator, for such activities;
(ii) banks proposing to conduct its activities under the Atal Pension Yojana; and
(iii) departments / boards of Central and State governments;
Provided further that any entity that does not fulfil this criterion, may seek exemption, for just cause to be shown. The Authority may grant such exemption for reasons to be recorded in writing and may impose such conditions, as it may deem fit;
(h) any other criteria as may be determined by the Authority through guidelines, circulars, directions and instructions.”
VIII. Regulation 6 of the principal regulations shall be substituted as follows:
“6. Disclosure of Information.- The applicant shall intimate change in any information in the application submitted to the Authority immediately, but not later than three working days of occurrence of such change.”
IX. Regulation 7 of the principal regulations shall be substituted as follows:
“7. Furnishing of information and clarification.— The Authority may for reasons to be recorded in writing, require an applicant to furnish any further information or clarification, or to remove any defects or deficiency, within the time granted. The applicant through its key managerial personnel shall, if so required, by the Authority, appear in person while considering its application.”
X. Regulation 8 of the principal regulations shall be substituted as follows:
“8. Verification of information.—(1) While processing the application, the Authority may:
(a) verify the documents, inspect the office space, and resources including technological capabilities which the applicant is required to fulfil; and
(b) seek report(s) from any agency which may have a bearing on the application.
(2) For the purpose of verification of information, the Authority may appoint any person, including any of its officers or an external agency.”
XI. Regulation 9 of the principal regulations shall be substituted as follows:
“9. Consideration of application.—(1) For considering the eligibility of the applicant and grant of registration to such applicant, the Authority shall take into account all such matters, which it deems relevant to the pension sector, including but not limited to the following:
(a) whether the applicant has in the past five years been refused certificate of registration by any of the financial sector regulator(s) including Reserve Bank of India, the Securities and Exchange Board of India, the Insurance Regulatory and Development Authority of India, the Pension Fund Regulatory and Development Authority, or the National Housing Bank and the reasons thereof;
(b) whether the applicant satisfies the eligibility criteria, including fit and proper person requirements, as specified under these regulations; and
(c) whether the grant of a certificate to the applicant is in the interest of the subscribers and for ensuring the orderly growth of pension schemes covered under the Act.
(2) An application for grant of certificate of registration-
(a) which is not complete in all respects and does not conform to the requirements specified in these regulations;
(b) which does not contain such additional information as is required by the Authority;
(c) which is incorrect, false or misleading in nature or has omitted to disclose material facts;
(d) where the applicant is not in compliance with the eligibility criteria, including fit and proper person requirements, as specified under these regulations; or
(e) which in the opinion of the Authority is not in the interest of subscribers and for ensuring the orderly growth of pension schemes covered under the Act;
shall be rejected by the Authority for reasons to be recorded in writing.
(3) Before rejecting an application, the Authority shall give a notice to the applicant to remove the defects or deficiencies, if any, in its application within fifteen days of receipt of such notice from the Authority.
Provided that where the Authority is of the prima facie opinion that the registration ought not be granted, it shall communicate the reasons for forming such an opinion and give the applicant an opportunity to explain why its application should be accepted, within fifteen days of the receipt of the communication from the Authority, to enable the Authority to form a final opinion.
Provided further that where an application has been rejected on the grounds of being incorrect, false or misleading in nature or has omitted to disclose material facts, no fresh applications for grant of certificate of registration shall be considered for a period of one year from the date of such rejection.
(4) An application for grant of certificate of registration, under regulation 4, shall be disposed of by the Authority, within thirty days of:
(a) receipt of complete information, if any from the applicant;
(b) expiry of the time granted for submission of further information under sub-regulation (3); or
(c) the explanation, if any, received under sub-regulation (3) from the applicant or upon expiry of the time granted for giving explanation.”
XII. Regulation 10 of the principal regulations shall be substituted as follows:
“10. Procedure for grant of certificate of registration.—(1) The Authority upon being satisfied that the applicant fulfils the eligibility conditions as specified under these regulations shall inform the applicant to submit registration fee of Rupees twenty five thousand plus applicable taxes and levies thereon within fifteen days. Upon receipt of registration fee, the Authority shall grant a certificate of registration, in the form specified in Schedule-I and send an intimation to the applicant.
Provided that an applicant proposing to conduct activities under Atal Pension Yojana shall not be required to pay any registration fee.
Provided further that where any proceeding (pertaining to eligibility criteria) is pending against the applicant or its key managerial person, before the Authority or any other regulator or court or tribunal, the Authority may grant a conditional registration, as it deems fit.
(2) An applicant (other than applicant under Atal Pension Yojana, departments / boards of the Central or the State Governments) who has been given a certificate of registration, shall be required to submit a security deposit in the form of bank guarantee or bank fixed deposit, with proper lien marking, in favour of the Authority within thirty days or prior to commencement of activities as point of presence, whichever is earlier. Such deposit shall be equivalent to one per cent. of its net worth or Rupees five lakh, whichever is higher. Provided that the maximum security deposit shall not exceed Rupees twenty lakh.
(3) The security deposit shall not be released to the applicant unless the prior permission of the Authority is obtained.
(4) If the Authority is prima facie of the opinion, that any point of presence or pension agent engaged by it has contravened any provisions of the Act, rules, regulations, guidelines, circulars, directions or instructions or any terms and conditions of registration, or it is necessary in subscribers interest to do, the Authority may forfeit and recover the amounts in the security deposit (either fully or partly) and apply the same in the interest of the subscribers, pending any action initiated or contemplated against a point of presence.”
XIII. Regulation 11 of the principal regulations shall be substituted as follows:
“11. Conditions of certificate of registration.—(1) The certificate of registration granted by the Authority to point of presence shall be subject to the following conditions, namely:—
(a) where there is any change in status or constitution, the same shall be intimated to the Authority within seven days;
Explanation.— “Change in status or constitution” shall include the following:
(i) amalgamation, demerger, consolidation or any other kind of corporate restructuring falling within the provisions of the Companies Act, 2013 (13 of 2013) or the corresponding provision of any other law for the time being in force or any agreement or arrangement which would have the effect of such corporate restructuring;
(ii) any change in control; or
Explanation.— “control” shall mean as defined under Section 2(27) of the Companies Act, 2013
(iii) any change in its legal status;
(b) payment of the renewal fees along with taxes and levies in accordance with these regulations or instructions;
(c) adherence to the provisions of the Act, rules, regulations, guidelines, circulars, directions and instructions issued by the Authority;
(d) fulfilment of the eligibility criteria at all times including fit and proper person criteria. For this purpose, it shall submit an annual certificate that:-
(i) it meets the eligibility criteria; and
(ii) it complies with all the applicable laws;
Provided that any existing point of presence not satisfying eligibility criteria pertaining to profitability, may seek exemption under sub regulation (1) of regulation 14; and
(e) Submission of security deposit instrument as required under regulation 10(2).
(2) Notwithstanding the above, the Authority may impose such other conditions, as it may deem fit in the interest of subscribers and for the orderly growth of pension schemes covered under the Act.”
XIV. Regulation 12 of the principal regulations shall be deleted;
XV. Regulation 13 of the principal regulations shall be substituted as follows:
“13. Period of validity of certificate of registration.— (1) Subject to compliance with the provisions of the Act, rules, regulations, guidelines, circulars, directions and instructions issued by the Authority, the certificate of registration granted to a point of presence shall remain valid, unless suspended or cancelled by the Authority.
(2) Where a certificate of registration has been granted subject to conditions, the validity of such registration shall be construed as being subject to such conditions unless removed.
(3) A point of presence may, within ninety days before the expiry of every five years from the date of registration, make an application in the form determined by the Authority along with the renewal fee payable.
Provided that if the application along with renewal fee reaches the Authority, not later than one year from the date due for payment of renewal fee, late fee of Rupees five thousand per month along with applicable taxes and levies thereon for such period of delay shall be payable by the applicant to the Authority.
(4) The renewal fee shall be half-per cent. (0.5%) of the charges earned out of activities under National Pension System or other pension schemes put together, in the preceding financial year, subject to a minimum of Rupees fifteen thousand and a maximum of Rupees one lakh.
Provided that in respect of departments / boards of Central and State governments or point of presence registered under Atal Pension Yojana, this condition shall not be applicable.”
XVI. Regulation 14 of the principal regulations shall be substituted as follows:
“14. Exemptions in certain cases from eligibility criteria.—(1) If any point of presence does not fulfil the eligibility criteria specified under sub-clause (g) of sub regulation (1) of regulation 5, relating to profitability, it may seek exemption from fulfilment of such eligibility criteria, for just cause to be shown. The Authority may grant such exemption for reasons to be recorded in writing and may impose such conditions, as it may deem fit.
(2) An existing point of presence as on the date of notification of this amendment, shall meet the eligibility criteria of net worth within the time permitted by the Authority for the purpose.”
XVII. Regulation 15 of the principal regulations shall be substituted as follows:
“15. Duties and responsibilities of point of presence.—(1) The point of presence shall discharge duties and responsibilities in respect of the following functions in accordance with the provisions of the Act, rules, regulations, guidelines, circulars, directions and instructions issued by the Authority-
(a) interacting with potential subscribers:
(i) address queries regarding pension schemes covered under the Act; and
(ii) provide and display information in accordance with the provisions of the pension schemes, including information relating to application forms or any other promotion material pertaining to pension schemes;
(b) registration of subscribers:
(i) receive subscriber registration request along with Know Your Customer (KYC) records;
(ii) conduct customer due diligence procedure; and
(iii) process the request in central recordkeeping agency system or in the mode and manner directed by the Authority;
(c) processing of contribution:
(i) open and maintain a 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 account shall be a non-withdrawable account with an option to transfer the funds to account of National Pension System Trust 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 permitted by the Authority;
(i) receive contribution from subscriber or their employer;
(ii) upload contribution details and generate subscriber contribution file from central recordkeeping agency; and
(iii) remit contribution to the National Pension System Trust account maintained with the Trustee Bank;
(d) servicing of subscriber requests:
(i) receive, process and approve requests or instructions as specified under clause (e) of sub-regulation (1) of regulation 17 in central recordkeeping agency system or in the mode and manner determined by the Authority;
(e) redressal of subscriber grievance:
(i) receive and redress grievances in accordance with the Pension Fund Regulatory and Development Authority (Redressal of Subscriber Grievance) Regulations, 2015, and any guidelines, circulars, directions and instructions issued by the Authority, for this purpose;
(f) processing of exits and withdrawals requests:
(i) receive the request for withdrawal and exit from pension schemes along with stipulated documents and KYC records;
(ii) conduct subscriber or nominee(s) or legal heir due diligence procedure;
(iii) process and approve the said request in central recordkeeping agency system, as required under the Pension Fund Regulatory and Development Authority (Exits and Withdrawals under National Pension System) Regulations, 2015 with amendments thereof and any guidelines, circulars, directions and instructions issued by the Authority, for this purpose;
(g) Maintenance and transfer of documents to Central Recordkeeping Agency:
(i) maintain and transfer forms along with stipulated documents and KYC records to the central recordkeeping agency, in the mode and manner determined by the Authority;
(h) submission of compliance reports and certificates:
(i) submit compliance reports and certificates as laid down under circulars, guidelines, directions and instructions issued by the Authority.
(2) In discharging the functions, duties and responsibilities under sub-regulation (1), the point of presence shall-
(a) comply with service standards along with timeline and other requirements as determined by the Authority through circulars, guidelines, directions and instructions;
(b) comply with circulars, guidelines, instructions issued by the Authority on KYC, Anti Money Laundering (AML) and Countering Financing of Terrorism (CFT);
(c) ensure that customer due diligence procedure is conducted through effective use of KYC verification processes 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 and instructions issued by the Authority in this regard;
(d) take all measures necessary for prevention of all forms of fraud and develop and follow a fraud prevention and mitigation policy, in accordance with guidelines issued by Authority;
(e) lay down internal controls to be followed and ensure that such controls are adequate and operating effectively; and
(f) make provision for indemnifying the subscriber for any loss on account of fraud or negligence on the part of the point of presence or its pension agents, which has been established.
Explanation.— For the purposes of this regulation, the term internal controls means the policies and procedures adopted by the point of presence 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 compliance reports.
(3) Engagement of services of Retirement Advisers-
(a) the point of presence registered for provision of services under National Pension System may engage the services of Retirement Advisers registered with the Authority under the Pension Fund Regulatory and Development Authority (Retirement Advisers) Regulations, 2016.”
XVIII. Regulation 16 of the principal regulations shall be substituted as follows:
“16. Charges to be collected from subscribers.—The charges that may be collected by the point of presence from the subscriber shall be subject to the limit, mode and manner of collection, as permitted by the Authority.”
XIX. Regulation 17 of the principal regulations shall be substituted as follows:
“17. Maintenance of records, audit of accounts and inspection.— (1) The following records shall be maintained by the point of presence in respect of its activities for a period as laid down in the guidelines issued by the Authority for this purpose:
(a) details of application(s) received from subscribers and submitted to the central recordkeeping agency for registration and Permanent Retirement Account Number data generated for all such applicant(s);
(b) details of money received from the subscribers – in cash, by cheque, or any authorized form of remittance;
(c) details of cash held on a daily basis;
(d) details of subscriber-wise contribution remitted to the Trustee Bank;
(e) details of subscriber-wise instructions such as change of point of presence, change of central recordkeeping agency, change of pension fund, change of scheme, change of nomination details, change of personal details, change of contact details, change of address, error rectification requests or any other requests permitted by the Authority, to be received, processed and sent to central recordkeeping agency; and
(f) details of subscriber-wise exit or withdrawal or partial withdrawal requests received, processed and sent to central recordkeeping agency.
(2) A point of presence shall:
(a) get its processes, operations and accounts in respect of pension schemes including functions assigned to pension agents, audited annually; and
(b) submit to the Authority, an audit report as per the requirements of the Authority.”
XX. Sub-regulation (2) of regulation 19 of the principal regulations shall be substituted as follows:
“(2) Each point of presence shall be liable for the acts of commissions or omissions by its employees or pension agents or other persons, whose services it has obtained and indemnify the subscriber for any loss caused on account of any act of fraud or negligence, established on its part.”
XXI. Regulation 20 of the principal regulations shall be deleted;
XXII. Regulation 21 of the principal regulations shall be substituted as follows:
“21. Appointment of Compliance officer, Designated Director and Principal Officer:
(1) The point of presence shall appoint a compliance officer who shall be responsible for monitoring compliance of the provisions of Act, rules, regulations, guidelines, circulars, directions and instructions issued by the Authority including redressal of subscriber grievances.
(2) The compliance officer shall immediately and independently report any deviation or noncompliance observed by such officer, to the Authority.
(3) The point of presence shall appoint Designated Director and Principal Officer in compliance of Prevention of Money Laundering Act, 2002 (17 of 2003) and the rules made thereunder.
(4) Any change in respect of officers appointed under sub-regulation (1) and (3) shall be informed to the Authority immediately, but not later than three working days.”
XXIII. Regulation 22 of the principal regulations shall be substituted as follows:
“22. Code of Conduct— Point of presence shall adhere to the code of conduct as specified in Schedule-II at all times and ensure that pension agents also comply with the same.”
XXIV. Regulation 23 of the principal regulations shall be substituted as follows:
“23. Inspection and audit.- (1) The Authority shall inspect point of presence at regular intervals as it deems fit.
Notwithstanding the above, it may at any time, as it deems fit, undertake, directly or appoint an auditor or through its authorized representative conduct an inspection or audit of the books, accounts, records including the call records and electronic records and documents of a point of presence for the purposes specified under this regulation.
(2) The purposes referred to in sub-regulation (1) may include:
(a) ensuring that the books of account, records including electronic records and documents are being maintained in the manner required under these regulations;
(b) ascertaining whether adequate internal control systems, procedures and safeguards have been established and are being followed by the point of presence;
(c) ascertaining whether the provisions of the Act, rules, regulations, guidelines, circulars, instructions and directions issued by the Authority are being complied with;
(d) inquiring into the complaints received from subscribers, nodal offices, intermediaries, corporates or any other person on any matter having a bearing on the activities of the point of presence; and
(e) inquiring suo motu into such matters as may be deemed fit in the interest of subscribers.”
XXV. Sub-regulation (2) of regulation 25 of the principal regulations shall be substituted as under:
“(2) The point of presence shall allow the Authority or its authorized representative or auditor to have a reasonable access to the premises occupied by it or by any other person on its behalf and also extend reasonable facility for examining any books, records, documents and computer data in the possession of the point of presence or pension agents or such other person and also provide copies of documents or other materials which in the opinion of the Authority or its authorized representative or auditor, are relevant for the purpose of the inspection or audit.”
XXVI. In regulation 26 of the principal regulations after sub-regulation (2), a new sub-regulation (3) shall be inserted:
“(3) The report submitted by the authorized person or any documents or information so collected by such person, during the course of inspection or audit, would be admissible in any investigation or inquiry or any other proceedings before the Authority.”
XXVII. Regulation 29 of the principal regulations shall be substituted as under:
“29. Cancellation or suspension of certificate of registration.—(1) Where a point of presence:
(a) fails to comply with any conditions of the certificate of registration;
(b) contravenes the provisions of the Act, the rules, regulations, guidelines, circulars, instructions and directions issued thereunder;
(c) indulges in unfair trade practices or fraudulent practices or conducts its business in a manner prejudicial to the orderly growth of pension schemes covered under the Act, or that of the subscribers;
(d) fails to furnish any information as required by the Authority relating to its point of presence activity;
(e) does not submit periodical returns as required by the Authority;
(f) does not co-operate in any inquiry conducted by the Authority;
(g) fails in the periodic review of its performance in terms of number of new subscriber registrations done by the point of presence in relation to the business plan submitted at the time of registration or against any other uniform criteria applicable to all the point of presence;
(h) commits any acts of defaults as mentioned under section 28 of the Act;
(i) goes into liquidation or is adjudged as insolvent;
(j) has its business transferred to or amalgamated with another point of presence without the prior approval of the Authority;
(k) fails to pay the fee payable along with applicable taxes and levies thereon;
(l) ceases to carry on activity or voluntarily applies to surrender the certificate of registration granted by the Authority;
(m) fails to observe or perform any representation, warranty or undertaking given by it or fails to correct any breach or failure within the time provided by the Authority to do so;
(n) submits to the Authority a false statement or information which has a material effect on the rights, obligations or interests of the Authority or the subscribers or any intermediary;
(o) undergoes a change in the ownership, management or key managerial personnel which in the opinion of the Authority adversely affects the interest of the subscribers;
(p) fails to submit valid security deposit; or
(q) fails to comply with any directions issued by the Authority in the interest of the subscribers or the orderly growth of pension schemes covered under the Act;
the Authority may, by order, without prejudice to any other action, suspend or cancel the certificate of registration, or pass any order or direction, as may be deemed appropriate.”
XXVIII. Regulation 30 of the principal regulations shall be substituted as under:
“30. Surrender of certificate of registration.— (1) A point of presence may surrender its certificate of registration by making a request to the Authority.
(2) For consideration of such request, the Authority may require the point of presence to satisfy the following—
(a) arrangements made by it for transfer of records, funds or securities of the subscribers, at its own cost and expense and ensure continuity of service to subscribers;
(b) redressal of subscriber grievances;
(c) rectifying the defaults and pending actions, if any; and
(d) any other measures to be taken in the interest of the subscribers.
(3) While considering the request for surrender, the Authority may impose such conditions upon the point of presence as it deems fit for the protection of interest of the subscribers.
(4) No surrender shall be permitted unless the Authority is satisfied that the point of presence has complied with or has taken steps to comply with the requirements under sub-regulation (2) and other conditions, if any, under sub-regulation (3).
(5) No request for surrender shall be entertained from a point of presence in respect of which any action for default has been initiated or is contemplated by the Authority.
(6) Where the Authority has accepted the request for surrender, it shall cancel the certificate of registration granted to the point of presence and inform the entity within seven working days and place such information on its website and also direct the entity to place the information on its website and disseminate the information, in such manner, as may be required.”
XXIX. Regulation 31 of the principal regulations shall be substituted as under:
“31. Effect of suspension, cancellation or surrender of certificate.—(1) On and from the date of suspension of the certificate of registration, the point of presence shall, where directed-
(a) not undertake any additional assignment or collect any new contributions or information from the subscriber or prospective subscriber. During the period of such suspension, it shall cease to carry on any activity in respect of which the certificate of registration has been granted, to the extent directed by the Authority;
(b) cease to transact fresh business under the National Pension System or other pension schemes, as the case may be;
(c) make provisions as regards liabilities incurred or assumed by it;
(d) take such action in respect of the assets, records, documents or information that may be in the custody or control of the point of presence, within the time limit and in the manner as may be required under the relevant regulations or as may be directed by the Authority;
(e) transfer at its own cost the assets, records, documents or information that are in its custody or control to another point of presence in the form and manner as may be directed by the Authority;
(f) at its cost and expense, provide all necessary support to ensure smooth transfer of all records of subscribers, and make such public announcement or disclosure as may be conducive to subscriber’s interest, regarding such transfer of assets. It shall also ensure that the transfer of all the relevant documents, record or information is made in accordance with the directions issued by the Authority;
(g) the transfer of assets shall be undertaken in accordance with the guidelines or instructions that may be issued by the Authority; and
(h) the point of presence shall be subject to the directions of the Authority, until all such transfers or actions are completed or until, the certificate of registration remains suspended.
(2) On and from the date of cancellation of the certificate of registration, the concerned point of presence shall-
(a) cease to carry on and wind up its affairs qua the activities in respect of which registration has been granted;
(b) return the certificate of registration so cancelled to the Authority and inform the same to such other stakeholders, as may be directed by the Authority, disseminate the information on its website and in such other manner as may be directed;
(c) carry out any other directions within the time limits given by the Authority, and report compliance of the same;
(d) make provisions as regards liability incurred or assumed by it; and
(e) take such other action including the action relating to any records or documents and assets of the subscribers that may be in the custody or control of such point of presence, within the time limit and in the manner, as may be required.”
XXX. Regulation 41 of the principal regulations shall be substituted as under:
“41. Compensation payable to Subscribers.— In the event of the point of presence failing to adhere to the service level standards or any guidelines issued by the Authority, including timelines for provision of services to subscribers and any loss or inconvenience caused to the subscriber thereby, such point of presence shall be liable to compensate the subscriber, in accordance with guidelines issued by the Authority, in this regard.
Provided that there shall be no requirement of any loss or inconvenience to be proved on the part of the subscriber.”
Regulation 42 of the principal regulations shall be substituted as under:
“42. Reports and disclosures.— The point of presence shall submit periodic reports of its activities including the business transacted by it, matters relating to KYC and compliances as are required under other laws including Prevention of Money Laundering Act, 2002, in accordance with the instructions of the Authority.”
XXXII. Regulation 43 of the principal regulations shall be substituted as under:
“43. Confidentiality.— The point of presence and pension agent shall maintain absolute confidentiality with respect to all records, data and information received by it under any pension scheme, including the National Pension System as laid down in Schedule-III. The point of presence and pension agent shall not, without the prior permission of Authority, produce or share such data or information as evidence, or for any other purpose, except as required by the due process of law.”
XXXIII. Regulation 44 of the principal regulations shall be substituted as under:
“44. Engagement of services of pension agents.—(1) A point of presence shall not transfer or assign any of its functions.
Notwithstanding the above, a point of presence may engage pension agents for a limited function of distribution of pension schemes as specified in these regulations and perform its activities in accordance with Schedule-IV.
(2) A point of presence shall be liable for any acts of omission or commission, by the pension agents in discharge of its functions, arising out of such engagement, including compliance with KYC and AML norms prescribed under Prevention of Money Laundering Act, 2002, monitoring and supervising their activities, imparting training on pension schemes to them.
(3) The charges payable to pension agent by the point of presence would be as per the contractual agreement between them for engagement of activities and subject to the condition that the subscriber should not be charged beyond the limit permitted by Authority, for the particular service.
(4) The general activities of pension agents shall include the following –
(a) provide subscriber registration form(s) to the potential subscriber for registration in pension schemes;
(b) receive subscriber registration form, subsequent service requests (excluding exit and withdrawal request) in such form as determined by the Authority, duly filled and signed by the subscriber along with the necessary documentation and ensure they are complete in all respects;
(c) ensure that prescribed KYC records for various services are collected in accordance with the provisions of Prevention of Money Laundering Act, 2002 and the rules framed thereunder. Notwithstanding the same, ensuring compliance with KYC, AML and CFT norms shall continue to be the entire responsibility of point of presence;
(d) ensure that contribution is collected only by means of Cheque or Demand Draft or through electronic mode in favour of the point of presence to which they are associated as per the laid down nomenclature of collection account of the said point of presence;
(e) ensure that service standards laid down for point of presence for various operational activities are adhered to; and
(f) adherence, in coordination with the point of presence, to the provisions of the Act, rules and regulations including provisions of regulation 22, regulation 43 and this regulation, in discharge of its functions, besides any guidelines, circulars, instructions and directions issued by the Authority.”
XXXIV. Regulation 45 of the principal regulations shall be substituted as under:
“45. Power of Authority to issue clarifications.- In order to remove any difficulties in the application of the provisions of these regulations or interpretation of these regulations, the Authority shall have the power to issue any directions or clarifications in the form of any circulars or guidelines, which shall be binding on the point of presence or any person connected with it.”
XXXV. Regulation 46 shall be substituted as under:
“46. Power of Authority to issue directions.—(1) Without prejudice to any order under Chapter V of these regulations, the Authority may, in the interest of the subscribers or for the purpose of securing the proper management of point of presence, issue necessary directions:
(a) directing the point of presence to refund any contributions or money collected from the subscribers under National Pension System or other pension scheme covered under the Act with or without interest;
(b) any other direction which the Authority may deem fit and proper in the circumstances of the case including suspension of its operations:
Provided that before issuing any directions, the Authority shall give to the persons concerned, a reasonable opportunity of being heard:
Provided further that if the circumstances warrant that any interim direction is required to be passed immediately, the Authority may give to the person(s) concerned, a reasonable opportunity of being heard after passing the direction, without any undue delay.”
XXXVI. Schedule-I of the principal regulations shall be substituted as follows:
“SCHEDULE-I
Pension Fund Regulatory and Development Authority (Point of Presence) Regulations, 2018
(See regulations 10, 11, 13)
CERTIFICATE OF REGISTRATION
REGISTRATION No…………..
Certification of Registration as point of presence for_______ (NPS and/or APY and/or other pension schemes)
a. In exercise of the powers conferred by sub-section 3 of Section 27 of the Pension Fund Regulatory and Development Authority Act, 2013, the Authority hereby grants this Certificate of Registration to …………………………… to act as a point of presence to transact in……………….. (Name of the pension scheme(s)) as per the Pension Fund Regulatory and Development Authority (Point of Presence) Regulations, 2018:
b. The registration code of the point of presence (PoP) is………………..
The Certificate of Registration granted shall remain valid unless suspended or cancelled by the Authority and subject to adherence to the terms and conditions provided under the Pension Fund Regulatory and Development Authority Act, 2013 (23 of 2013) and Pension Fund Regulatory and Development Authority (Point of presence) Regulations, 2018, and any amendments thereof.
Date:
Place: New Delhi
By Order
On Behalf of
Pension Fund Regulatory and Development Authority”
XXXVII. Schedule-II of the principal regulations shall be substituted as under:
“SCHEDULE-II
Pension Fund Regulatory and Development Authority (Point of Presence) Regulations, 2018
(See regulation 22)
CODE OF CONDUCT
(1) Point of presence and pension agents shall avoid conflict of interest in managing National Pension System or any other pension scheme covered under the Act and keep the interest of subscribers’ paramount in all matters. In case of any conflict between the interests of a subscriber and that of the point of presence or its representative, precedence shall be given to the subscribers’ interests.
(2) Subscribers shall be provided with updated information on pension schemes through fair disclosure mechanism as may be instructed by the Authority to enable informed decision making by the subscriber:
(a) sufficiently before a subscriber opens an account, allow such subscriber reasonable time to understand the information;
(b) dissemination on a continuing basis through its website, and within a reasonable time-period from the occurrence of any material change or at reasonable periodic intervals, as applicable; and
(c) in writing and in a manner that is likely to be understood by the subscriber.
(3) The point of presence and pension agents shall ensure that they have not given any undue or unfair advantage to any associates or dealt with any of the associates in any manner detrimental to interest of the subscribers.
(4) The point of presence and pension agents, shall maintain high standards of integrity and fairness in all their dealings and in the conduct of its activities. They shall render at all times high standards of service, exercise due diligence which implies a standard of skill and care that is commensurate with honest market practice, good faith, profile of subscriber, the extent of dependence of the subscriber on the point of presence and exercise independent professional judgment.
(5) The point of presence and pension agents, shall not make any exaggerated statement, whether oral or written, either about its qualifications or capability to render services or its achievements.
(6) The point of presence and pension agents are prohibited from indulging in unfair conduct, i.e., an act or omission that significantly impairs, or is likely to significantly impair, the ability of a subscriber to make an informed transactional decision and includes conduct that is misleading or abusive, while dealing with subscribers.
(7) The point of presence and pension agents, shall not collect any charge other than as determined by the Authority from time to time.
(8) The point of presence and pension agents, shall establish adequate procedures and facilities to ensure that its records are protected against loss or destruction and due arrangements have been made for maintaining back up facilities.”
XXXVIII. Schedule-III of the principal regulations shall be substituted as under:
“SCHEDULE-III
Pension Fund Regulatory and Development Authority (Point of Presence) Regulations, 2018
(See regulation 43)
Protection of personal information by point of presence
(1) Personal information is any information that relates to a subscriber or allows a subscriber’s identity to be inferred, directly or indirectly, and includes:
(a) Name and contact information;
(b) biometric information, in case of individuals;
(c) information relating to transactions in or holdings of financial products;
(d) information relating to the use of financial services; or
(f) such other information as may be specified by regulations.
(2) A point of presence either by itself or through its agent, shall –
(a) not collect personal information relating to a subscriber in excess of what is required for the provision of pension schemes;
(b) maintain the confidentiality of personal information relating to subscribers and not disclose it to a third party, except where required under law;
(c) make best efforts to ensure that any personal information relating to a subscriber that it holds is accurate, up to date and complete;
(d) ensure that subscribers can obtain reasonable access to their personal information, subject to any exceptions that the Authority may provide; and
(e) allow subscribers an effective opportunity to seek modifications to their personal information to ensure that the personal information held by the point of presence is accurate, up to date and complete.
(3) A point of presence may disclose personal information relating to a subscriber to a third party if –
(a) it has obtained prior written consent of the subscriber for the disclosure, after giving the subscriber an effective opportunity to refuse consent;
(b) the subscriber has allowed the disclosure to be made;
(c) the Authority has approved or ordered the disclosure, and unless prohibited by the relevant law or rules or regulations, the subscriber is given an opportunity to represent under such law or rules or regulations against such disclosure; or
(d) the disclosure is made to protect against or prevent actual or potential fraud, unauthorised transactions or claims, if the point of presence arranges with the third party to maintain the confidentiality of the personal information in the manner required under this regulation.”
XXXIX. After Schedule-III in principal regulations, a new Schedule-IV shall be inserted as follows:
“SCHEDULE–IV
Pension Fund Regulatory and Development Authority (Point of Presence) Regulations, 2018
(See regulation 44)
Engaging services of Pension Agent(s)
(1) Point of presence performing activities under NPS or APY:
(a) may utilise the services of pension agent for distribution of pension schemes;
(b) the engagement shall be in the nature of principal – agent relationship. Pension agent shall be associated with only one point of presence at any point of time for distribution of each pension scheme;
(c) shall formulate an internal policy for engaging pension agent(s) with the prior approval of its Board. Due diligence shall be carried out by point of presence prior to the engagement. The due diligence exercise may, inter alia, cover aspects such as:
(i) integrity, honesty and ethical behaviour;
(ii) reputation/market standing;
(iii) financial soundness;
(iv) management and corporate governance;
(v) prior experience of selling financial products;
(vi) complete business plan of the agent;
(vii) risk management framework; and
(viii) ability to implement technology solutions in rendering financial services;
(d) shall closely coordinate and align its activities with the facilitation received from its pension agent, such that there is no deviation from activities under pension schemes and they are in compliance with the provisions of the Act, the rules, regulations guidelines, circulars and instructions issued by the Authority;
(e) shall periodically review the performance of pension agent(s) and may cancel its engagement with the pension agent based upon such a review in terms of number of new pension accounts opened, services rendered to the subscribers or for any other reason;
(f) shall ensure that the flow of subscriber information and records from pension agents to central recordkeeping agency shall only be through the associated point of presence and it shall be the responsibility of Point of Presence to maintain all the documents and records of subscribers sourced through them;
(g) shall maintain details of pension agents containing name, contact number, unique identity number, address, scheme distributed etc. and also be placed on the website of the point of presence;
(h) shall make available the records or documents in respect of agreements, due-diligence, board approved policy and list of pension agents at the time of audit or inspection.
(2) Erstwhile point of presence sub-entity – From the date of notification of these amendments the sub-entity (PoP-SE) earlier registered with the Authority shall have the option to act as pension agents upon complying with the conditions specified under these regulations, within a period of ninety days. The point of presence shall initiate surrender of the Certificate of Registration of associated point of presence sub-entities to the Authority for cancellation of the registration.
(3) The point of presence sub-entity(s) may continue to be associated with a point of presence, as a pension agent by executing an agreement, as mentioned above and be compliant of the Act, rules and regulations, notified thereunder.
(4) Such point of presence sub-entity(s) who do not want to continue as pension agents shall forthwith cease their activity and surrender the registration certificate to the Authority through the associated point of presence. The point of presence with whom such point of presence sub-entity is associated will take all steps to protect the interest of subscribers and ensure continuity of services.
(5) Notwithstanding the above, upon expiry of ninety days from the notification of these amendments to the regulations, in respect of such point of presence sub-entity(s) whose certificate of registration has not been received in the Authority, shall be deemed to have been cancelled and be of no effect.
(6) Notwithstanding such cancellation of registration, the liability of the point of presence sub-entity and associated point of presence, shall continue in respect of activities performed by them during the term of its registration.
(7) The point of presence shall give a public notice regarding the surrender of the certificate of registration by point of presence sub-entities associated with it and whether it is working as a pension agent or not.
(8) With respect to point of presence providing NPS-Lite services, the services of banking correspondents for facilitating the distribution of NPS Lite as facilitators may be utilized.”
XL. After Schedule-IV in principal regulations, a new Schedule-V shall be inserted as follows:
“SCHEDULE-V
Pension Fund Regulatory and Development Authority (Point of Presence) Regulations, 2018
(See regulation 5(1)(f))
Fit and Proper Person Criteria
(1) For the purpose of determining as to whether any person is ‘fit and proper person’, the Authority may take into account any criteria as it deems fit, including but not limited to the following:
PART (A)
(a) financial integrity,
(b) absence of convictions or civil liabilities,
(c) competence,
(d) good reputation and character,
(e) efficiency and honesty,
(f) financial solvency and net worth
PART (B)
A person shall not be considered as a” fit and proper person” if any of the following disqualifications are incurred:
(i) criminal complaint or information under section 154 of the Code of Criminal Procedure, 1973 (2 of 1974) has been filed against such person by the Authority and which is pending;
(ii) charge sheet has been filed against such person by any enforcement agency in matters concerning economic offences and is pending;
(iii) an order of restraint, prohibition or debarment has been passed against such person by the Authority or any other regulatory authority or enforcement agency in any matter concerning securities laws or financial markets and such order is in force;
(iv) recovery proceedings have been initiated by the Authority against such person and are pending;
(v) an order of conviction has been passed against such person by a court for any offence involving moral turpitude or involving economic offences or fraud;
(vi) any winding up proceedings have been initiated or an order for winding up has been passed against such person;
(vii) such person has been declared insolvent and not discharged;
(viii) such person has been found to be of unsound mind by a court of competent jurisdiction and the finding is in force;
(ix) such person has been categorized as a wilful defaulter;
(x) such person has been declared a fugitive economic offender; or
(xi) any other disqualification as may be determined by the Authority.
(2) Where a person has been declared as not fit and proper by an order of the Authority, such a person shall not be eligible to apply for any registration during the period provided in the said order or for a
period of five years from the date of effect of the order, if no such period is provided in the order.
(3) In the opinion of the Authority, where the point of presence or any its key managerial personnel, at any point of time ceases to satisfy the criteria under PART – A of clause (1) or incurs any disqualification or disability under PART – B of clause (1), its certificate of registration is liable to be suspended or cancelled, in accordance with the provision of these regulations.
Provided that the point of presence shall remove its key managerial person, ceasing to satisfy the criteria, under clause (1) within thirty days, from such cessation and inform the Authority of the action taken.”
Dr. DEEPAK MOHANTY, Chairperson
[ADVT.-III/4/Exty./683/2023-24]
Note: The Pension Fund Regulatory and Development Authority (Point of Presence) Regulations, 2018 were published vide Notification No. PFRDA/12/RGL/139/3, on the 25th June, 2018, in the Gazette of India, Extraordinary, Part III, Section 4, No. 237, and were subsequently amended by the Pension Fund Regulatory and Development Authority (Point of Presence) (Amendment) Regulations, 2021 published vide Notification No. PFRDA/12/RGL/139/3, on the 14th June, 2021 in the Gazette of India, Extraordinary, Part III, Section 4, No. 238.
