After seeking to overhaul its Pension Fund Regulations, the pension regulator PFRDA has now set its sight on bringing about changes to its Points-of-Presence (POP) regulations, originally issued in 2018.
This is part of its aim to further the ease of doing business and bring down compliance costs leading to increased returns for National Pension System (NPS) subscribers.
Put simply, POPs is the first point of contact for NPS account holders in the NPS architecture. POP facilitates registration, contribution and other transactions for NPS account holders. POPs are entities that provide the services under NPS through their network of branches called POP Service Providers (POP-SP).
Under the proposed changes to POP regulations, PFRDA wants to simplify the eligibility criteria for POP registration and reduce the time taken by it for processing of application for registration from current 60 days to 30 days. Also proposed are reduction in the requirement of minimum number of branches from 15 to 10 for the purpose of seeking registration.
PFRDA also proposes to stipulate that POPs need to fulfil the requirement of minimum net worth criteria as on date of application, instead of last day of immediately preceding financial year.
The latest PFRDA proposal to amend its POP regulations comes in the wake of Finance Minister Nirmala Sitharaman’s announcement in her budget speech this year that financial sector regulators would be requested to undertake comprehensive review of Regulations to simplify, ease and reduce cost of compliance.
Mandatory annual external audit
The proposed changes also require POPs’ Audit committee/Board to appoint external auditor to carry out Operational/Process and Financial audit of POPs and submit the audit report to their Board and the PFRDA. It will also be required to submit its Board’s observation to the PFRDA.
Public and stakeholder comments have now been invited by PFRDA on the draft proposals by August 5.
It maybe recalled that PFRDA had set up two committees for the comprehensive review of its regulations in the wake of the Finance Minister’s announcement in her budget speech this year.
While one committee was an internal one, the other one was an external Panel headed by former IBBI Chairman MS Sahoo.
Deepak Mohanty, Chairman, PFRDA had earlier said that comprehensive review of regulations is a priority for the pension regulator. He had indicated that the entire comprehensive review exercise would be done this year itself.
The two panels will look at compliance issues, reduce compliance burden and give recommendations to rationalise regulations, Mohanty had said after assuming charge at the helm of PFRDA.
Pension assets (NPS and APY) are growing at frenetic pace in India with the total assets under management at ₹9.8 lakh crore as of July 7 and set to cross milestone of ₹ 10 lakh crore in next couple of months.