Response to Stakeholder / Public comments on the proposed amendments to PFRDA (Point of Presence) Regulations, 2018

Response to Stakeholder / Public comments on the proposed amendments to PFRDA (Point of Presence) Regulations, 2018 S. Subject Matter Stakeholder / Public comments Response to stakeholder / public comments No 1 Definition of ‘Key Personnel’ Definition can be aligned with PFRDA (Pension The definition of ‘Key Personnel’ in the PF Regulations Fund) Regulations, 2015. includes KMP as defined under the Companies Act, 2013 and other functionaries such as CIO, CISO, CRO, Operations Head and Fund Manager. Considering the differential functions of PoP vis-à-vis PF, key personnel definition as per PoP includes KMP as defined under the Companies Act, 2013. 2 Eligibility criteria – Number of branches: Clarification sought on applicability of minimum In a digital world, online onboarding has gained a significant 10 branches criteria to the existing PoPs as well momentum. Thus, physical branches and online presence have Minimum of ten branches in India, having the necessary and the rationale thereof. a complimentary role to play. Hence, requirement of number of Information Technology infrastructure and capacity to branches has been relaxed to simplify and for ease of doing have electronic interface with the central recordkeeping business. agency(s). As per the amendment, the PoPs shall seek registration under POP-NPS and /or PoP-APY and need to have at least one Demonstrated capability to electronically transmit the branch/office in India, with Information Technology subscriber’s contribution and information as per the infrastructure capable of electronic connectivity with the central service standards or relevant guidelines issued by the recordkeeping agency(s) to receive and transmit the subscriber’s Authority. funds and instructions and pay out of funds as per the service standards. This change shall be applicable uniformly to existing PoP as well as to the applicants. 3 Eligibility criteria – Networth: Clarification on networth has been The eligibility criteria in terms of minimum networth acknowledged. requirement has been strengthened further and it has been Applicant should have a minimum net worth of rupees increased to Rupees two crore which shall include minimum seventy-five lakhs as on date of application including a paid up equity capital of Rupees fifty lakh. minimum paid up equity capital of rupees fifty lakhs. This requirement shall be met as on the last day of the immediately preceding quarter to the date of application vis-à- Explanation: Net worth as defined under Section 2(57) vis last day of the immediately preceding financial year. of Companies Act 2013 for the purpose of this clause. 4 Eligibility criteria – Fit and proper person: (i) To include a threshold for violation of any law Schedule-V specifying ‘Fit and proper person’ criteria has been including banking law or insurance law or incorporated. The Applicant or its key managerial personnel should securities law. not have been convicted in the past five years, (ii) The phrase “a major penalty has been immediately preceding the date of its application, for imposed by any regulator upon it” should be commission of any economic offences or involving defined, by mentioning the quantum of the national security or moral turpitude, or be involved in penalty imposed. The addition of “involved in violation of any law, including banking law or insurance violation of any law, including securities law” law or securities law or have committed acts of fraud or should be changed. This should instead be for Page 1 of 3Response to Stakeholder / Public comments on the proposed amendments to PFRDA (Point of Presence) Regulations, 2018 S. Subject Matter Stakeholder / Public comments Response to stakeholder / public comments No a major penalty has been imposed by any regulator upon violation of law that exceeds a specific threshold it. of penalty or imprisonment, or only for certain types of violations such as fraud, moral turpitude, etc. 5 Public disclosure of information in the application: (i) Suggest to keep the original clause unchanged. The application has information of commercial and confidential The Authority having regard to the interest of the (ii) PoPs should not be required to make in nature. Thus, its disclosure on website may not be required. subscribers, may make disclosure to the public of the additional disclosures in relation to individual Thus, the regulation has been deleted. information on such application made by the applicant, applications to the public. Any information that is by placing such information on its website, except required for applicants and subscribers will information of a commercial and confidential nature. continue to be available on the PoP’s website. 6 Disclosure of any change in material information during (i) What constitutes “Material Change”. Also, the “Material change” has been replaced with “any change in application pending stage: word “business days” is required to make it information” and timeline to furnish the such information has Any material change having occurred in respect of the uniform in all the regulations been reduced to three working days. information furnished shall be submitted to the (ii) The timelines provided are not giving This regulation is applicable to applicants, but disclosure of any Authority within seven days of occurrence of such adequate time for reporting. change in material information requirement is applicable to change. (iii) Suggestion to maintain the original timelines existing PoPs as well. of fifteen days. The time to dispose-off the application has also been reduced. 7 Verification of application: “or such other facilities” may be defined in The amended regulation provides for verification of While considering the information furnished by the explicit terms. technological capabilities of the applicant to render the PoP applicant, the Authority may, if it so desires, verify the services. information by physical verification of documents, inspect the availability of office space, infrastructure, and technological capabilities or such other facilities which the applicant is required to fulfil. The Authority may also seek confidential report from any other regulatory body or organization on the information disclosed in the application or on any other matter concerning the applicant. 8 Past track record: Clarity on definition of Controlling entity. The amended regulation require these details only in respect of Whether the request of registration of the applicant or of Whether the control will be assessed immediate the applicants. any entity which controls the applicant has in the past one level up of PoP i.e., the PoP and its holding been refused by Reserve Bank of India, Securities and company (sponsor). Exchange Board of India, Insurance Regulatory and Development Authority of India or Pension Fund Regulatory and Development Authority or any other regulator in India or whether any registration certificate granted, has been cancelled during the said period and if so, the ground for such refusal or cancellation. Page 2 of 3Response to Stakeholder / Public comments on the proposed amendments to PFRDA (Point of Presence) Regulations, 2018 S. Subject Matter Stakeholder / Public comments Response to stakeholder / public comments No 9 Grounds of rejection of application: (i) Suggest to replace the word “omitted” with The omission in respect of “material facts” in the application is which is incorrect, false or misleading in nature or has “wilfully omitted” serious in nature. Hence, the suggestion is not accepted. omitted to disclose material facts; or 10 Grounds of rejection of application: (i) Suggest to replace the word “omitted” with The omission in respect of “material facts” in the application Before rejecting an application, the applicant shall be “wilfully omitted” is serious in nature. Hence, the suggestion is not accepted. given an opportunity in writing to remove such deficiencies, which can be removed, within the time (ii) Suggest to delete “made either by the given by the Authority, for this purpose. applicant or by any entity comprising key The restriction of one year to seek fresh registration is applicable Provided that where an application is rejected on the managerial personnel of such applicant.” to the applicant entity. 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. 11 Compliance certificate: Whether the compliance certificate shall be This is not an additional requirement. This is the annual similar to Annexure 2.1. of the Guidelines for certificate submitted by PoP certifying the fulfilment of It meets the eligibility criteria and other requirements Operational Activities – to be followed by Points eligibility criteria. specified in these regulations or any guidelines or of Presence performing the activities of the circulars issued, throughout the tenure of such certificate National Pension Scheme dated June 30, 2023. If of registration, so granted. A certificate evidencing not, please provide a compliance certificate compliance with the eligibility conditions shall have to template to be followed by PoPs. be furnished by the registered point of presence to the Authority on annual basis, as specified by the Authority. Page 3 of 3