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THE PENSION FUND REGULATORY AND DEVELOPMENT AUTHORITY ACT, 2013
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ARRANGEMENT OF SECTIONS
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CHAPTER I
PRELIMININARY
SECTIONS
CHAPTER II
PENSION FUND REGULATORY AND DEVELOMENT AUTHORITY
CHAPTER III
EXTENT AND APPLICATION
CHAPTER IV
TRANSEFER OF ASSETS, LIABILITIES, ETC., OF INTERIM PENSION FUND REGULATORYAND DEVELOPMENT AUTHORITY
CHAPTER V
DUTIES, POWERS AND FUNCTIONS OF AUTHORITY
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SECTIONS
CHAPTER VI
NATIONAL PENSION SYSTEM
CHAPTER VII
REGISTRATION OF INTERMEDIARIES
CHAPTER VIII
PENALTIES AND ADJUDICATION
CHAPTER IX
FINANCE, ACCOUNT AND AUDIT
2
CHAPTER X
MISCELLANEOUS
SECTIONS
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THE PENSION FUND REGULATORY AND DEVELOPMENT
AUTHORITY ACT, 2013
ACT NO. 23 OF 2013
[18th September, 2013.]
An Act to provide for the establishment of an Authority to promote old age income security by establishing, developing and regulating pension funds, to protect the interests of subscribers to schemes of pension funds and for matters connected therewith or incidental thereto.
BE it enacted by Parliament in the Sixty-fourth Year of the Republic of India as follows:—
CHAPTER I
PRELIMINARY
(2) It extends to the whole of India.
(3) It shall come into force on such date1 as the Central Government may, by notification in the
Official Gazette, appoint:
Provided that different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision.
(a) ?Authority? means the Pension Fund Regulatory and Development Authority established under sub-section (1) of section 3;
(b) ?central recordkeeping agency? means an agency registered under section 27 to perform the functions of recordkeeping, accounting, administration and customer service for subscribers to schemes;
(c) ?Chairperson? means the Chairperson of the Authority;
(d) ?document? shall include any matter written, expressed or described upon any substance by means of letters, figures or marks, or by more than one of those means, in printed or in electronic version, which is intended to be used, or which may be used, by the Interim Pension Fund Regulatory and Development Authority, or Authority or an intermediary or any other entity connected with the National Pension System, for the purpose of recording that matter;
(e) ?individual pension account? means an account of a subscriber, executed by a contract setting out the terms and conditions under the National Pension System;
(f) ?Interim Pension Fund Regulatory and Development Authority? means the Interim Pension Fund Regulatory and Development Authority set up by the Central Government through Resolutions No. F. No. 5/7/2003-ECB&PR, dated the 10th October, 2003 and F. No. 1(6)/2007-PR, dated the 14th November, 2008;
(g) ?intermediary? includes pension fund, central recordkeeping agency, National Pension System Trust, pension fund adviser, retirement adviser, point of presence and such other person or entity connected with collection, management, recordkeeping and distribution of accumulations;
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(h) ?member? means a member of the Authority and includes its Chairperson;
(i) ?National Pension System? means the contributory pension system referred to in section 20 whereby contributions from a subscriber are collected and accumulated in an individual pension account using a system of points of presence, a central recordkeeping agency and pension funds as may be specified by regulations;
(j) ?National Pension System Trust? means the Board of Trustees who hold the assets of subscribers for their benefit;
(k) ?notification? means a notification published in the Official Gazette;
(l) ?pension fund? means an intermediary which has been granted a certificate of registration under sub-section (3) of section 27 by the Authority as a pension fund for receiving contributions, accumulating them and making payments to the subscriber in the manner as may be specified by regulations;
(m) ?Pension Regulatory and Development Fund? means the fund constituted under sub-section (1) of section 40;
(n) ?point of presence? means an intermediary registered with the Authority under sub-section (3) of section 27 as a point of presence and capable of electronic connectivity with the central recordkeeping agency for the purposes of receiving and transmitting funds and instructions and pay out of funds;
(o) ?prescribed? means prescribed by rules made under this Act;
(p) ?regulated assets? means the assets and properties, both tangible and intangible, owned, leased or developed by and other rights belonging to, the central recordkeeping agency;
(q) ?regulations? means the regulations made by the Authority under this Act;
(r) ?scheme? means a scheme of pension fund approved by the Authority under this Act;
(s) ?Securities Appellate Tribunal? means a Securities Appellate Tribunal established under sub-section (1) of section 15K of the Securities and Exchange Board of India Act, 1992 (15 of 1992);
(t) ?subscriber? includes a person who subscribes to a scheme of a pension fund;
(u) ?Subscriber Education and Protection Fund? means the fund constituted under sub-section (1) of section 41;
(v) ?Trustee Bank" means a banking company as defined in the Banking Regulation Act, 1949 (10 of 1949).
(2) Words and expressions used and not defined in this Act, but defined in—
(i) the Insurance Act, 1938 (4 of 1938);
(ii) the Companies Act, 1956 (1 of 1956);
(iii) the Securities Contracts (Regulation) Act, 1956 (42 of 1956); and
(iv) the Securities and Exchange Board of India Act, 1992 (15 of 1992), shall have the meanings respectively assigned to them under those Acts.
CHAPTER II
PENSION FUND REGULATORY AND DEVELOPMENT AUTHORITY
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(2) The Authority shall be a body corporate by the name aforesaid, having perpetual succession and a common seal with power, subject to the provisions of this Act, to acquire, hold and dispose of property, both movable and immovable, and to contract and shall, by the said name, sue or be sued.
(3) The head office of the Authority shall be in the National Capital Region referred to in clause (f) of section 2 of the National Capital Region Planning Board Act, 1985 (2 of 1985).
(4)The Authority may establish offices at other places in India.
(b) three whole-time members; and
(c) three part-time members,
to be appointed by the Central Government from amongst persons of ability, integrity and standing and having knowledge and experience in economics or finance or law with at least one person from each discipline.
Provided that no person shall hold office as a Chairperson after he has attained the age of sixty-five years:
Provided further that no person shall hold office as a whole-time member after he has attained the age of sixty-two years.
(2) A part-time member shall hold office as such for a term not exceeding five years from the date on which he enters upon his office.
(3)The salary and allowances payable to, and other terms and conditions of service of, the members other than part-time members shall be such as may be prescribed.
(4)The part-time members shall receive such allowances as may be prescribed.
(5)The salary, allowances and other conditions of service of a member shall not be varied to his disadvantage after his appointment.
(6) Notwithstanding anything contained in sub-section (1) or sub-section (2), a member may—
(a) relinquish his office, by giving in writing to the Central Government, a notice of not less than thirty days; or
(b) be removed from his office in accordance with the provisions of section 6.
(a) is, or at any time has been, adjudged as insolvent; or
(b) has become physically or mentally incapable of acting as a member; or
(c) has been convicted of an offence which, in the opinion of the Central Government, involves moral turpitude; or
(d) has acquired such financial or other interest as is likely to affect prejudicially his functions as a member; or
(e) has, in the opinion of the Central Government, so abused his position as to render his continuance in office detrimental to the public interest.
(2) No such Chairperson or other member shall be removed under clause (d) or clause (e) of sub-section (1) unless he has been given a reasonable opportunity of being heard in the matter.
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(a) any employment either under the Central Government or under any State Government; or
(b) any appointment in any regulated entity in the pension sector.
(2) The Chairperson and the whole-time members of the Interim Pension Fund Regulatory and Development Authority holding the office as such before the commencement of this Act, shall not, on and after such commencement, accept any appointment in any regulated entity in the pension sector for a period of two years from the date on which they cease to hold office as such, except with the previous approval of the Central Government.
(2) The Chairperson or, if for any reason, he is unable to attend a meeting of the Authority, any other member chosen by the members present from amongst themselves at the meeting, shall preside at the meeting.
(3) All questions which come up before any meeting of the Authority shall be decided by a majority of votes by the members present and voting, and in the event of an equality of votes, the Chairperson or in his absence, the person presiding shall have a second or casting vote.
(4) If any member, who is a director of a company and who as such director, has any direct or indirect pecuniary interest in any matter coming up for consideration at a meeting of the Authority, he shall, as soon as possible after relevant circumstances have come to his knowledge, disclose the nature of his interest at such meeting and such disclosure shall be recorded in the proceedings of the Authority, and the member shall not take part in any deliberation or decision of the Authority with respect to that matter.
(a) any vacancy in, or any defect in the constitution of, the Authority; or
(b) any defect in the appointment of a person acting as a member of the Authority; or
(c) any irregularity in the procedure of the Authority not affecting the merits of the case.
(2) The terms and other conditions of service of officers and other employees of the Authority appointed under sub-section (1) shall be such as may be determined by regulations.
CHAPTER III
EXTENT AND APPLICATION
(b) any other pension scheme not regulated by any other enactment.
(2) Every pension scheme referred to in clause (b) shall conform to the regulations made by the Authority within such time as may be specified in the regulations.
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(3) Notwithstanding anything contained in sub-section (1), the provisions of this Act shall not apply
to–
(a) the schemes or funds under–
(i) the Coal Mines Provident Fund and Miscellaneous Provisions Act, 1948 (46 of 1948);
(ii) the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952); (iii) the Seamen’s Provident Fund Act, 1966 (4 of 1966);
(iv) the Assam Tea Plantations Provident Fund and Pension Fund Scheme Act, 1955 (Assam Act X of 1955); and
(v) the Jammu and Kashmir Employees’ Provident Funds Act, 1961 (Jammu and Kashmir Act XV of 1961);
(b) contracts referred to in sub-section (11) of section 2 of the Insurance Act, 1938 (4 of 1938);
(c) any other pension scheme, which the Central Government may, by notification, exempt from the application of this Act;
(d) persons appointed before the 1st day of January, 2004 to public services in connection with the affairs of the Union, or to All-India Services constituted under section 2A of the All-India Services Act, 1951 (61 of 1951);
(e) persons appointed to public services in connection with the affairs of any State, or such Union territories as may be specified by notification by the Central Government.
(4) Notwithstanding anything contained in sub-section (3), any State Government or administrator of a Union territory may, by notification, extend the National Pension System to its employees.
(5) Notwithstanding anything contained in clause (c) of sub-section (3), the Central Government may, by notification, extend the application of this Act to any other pension scheme including any other pension scheme exempted and notified under clause (c) of sub-section (3).
(6) Any person governed under any of the schemes or funds referred to in sub-section (3) may, at his option, also join the National Pension System.
CHAPTER IV
TRANSFER OF ASSETS, LIABILITIES, ETC., OF INTERIM PENSION FUND REGULATORY AND DEVELOPMENT AUTHORITY
(a) all the assets and liabilities of the Interim Pension Fund Regulatory and Development Authority shall stand transferred to, and vested in, the Authority.
Explanation.—The assets of the Interim Pension Fund Regulatory and Development Authority shall be deemed to include all rights and powers, all properties, whether movable or immovable, including, in particular, cash balances, deposits and all other interests and rights in, or arising out of, such properties as may be in the possession of the Interim Pension Fund Regulatory and Development Authority and all books of account and other documents relating to the same; and liabilities shall be deemed to include all debts, liabilities and obligations of whatever kind;
(b) without prejudice to the provisions of clause (a), all debts, obligations and liabilities incurred, all contracts entered into and all matters and things engaged to be done by, with or for the Interim Pension Fund Regulatory and Development Authority immediately before that day, for or in connection with the purpose of the said Regulatory Authority, shall be deemed to have been incurred, entered into or engaged to be done by, with or for, the Authority;
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(c) all sums of money due to the Interim Pension Fund Regulatory and Development Authority immediately before that day shall be deemed to be due to the Authority; and
(d) all suits and other legal proceedings instituted or which could have been instituted by or against the Interim Pension Fund Regulatory and Development Authority immediately before that day may be continued or may be instituted by or against the Authority.
CHAPTER V
DUTIES, POWERS AND FUNCTIONS OF AUTHORITY
(2) Without prejudice to the generality of the provisions contained in sub-section (1), the powers and functions of the Authority shall include—
(a) regulating the National Pension System and the pension schemes to which this Act applies;
(b) approving the schemes, the terms and conditions thereof and laying down norms for the management of the corpus of the pension funds, including investment guidelines under such schemes;
(c) registering and regulating intermediaries;
(d) issuing to an intermediary, on application, a certificate of registration and renewing, modifying, withdrawing, suspending or cancelling such registration;
(e) protecting the interests of subscribers by—
(i) ensuring safety of the contribution of subscribers to various schemes of pension funds to which this Act applies;
(ii) ensuring that the intermediation and other operational costs under the National Pension System are economical and reasonable;
(f) establishing mechanism for redressal of grievances of subscribers to be determined by regulations;
(g) promoting professional or organisations connected with the pension system;
(h) adjudication of disputes between intermediaries and between intermediaries and subscribers;
(i) collecting data and requiring the intermediaries to collect such data and undertaking and commissioning studies, research and projects;
(j) undertaking steps for educating subscribers and the general public on issues relating to pension, retirement savings and related issues and training of intermediaries;
(k) standardising dissemination of information about performance of pension funds and performance benchmarks;
(l) regulating the regulated assets;
(m) levying fees or other charges for carrying out the purposes of this Act;
(n) specifying by regulations the form and manner in which books of account shall be maintained and statement of accounts shall be rendered by intermediaries;
(o) calling for information from, undertaking inspection of, conducting inquiries and investigations including audit of, intermediaries and other entities or organisations connected with pension funds;
(p) exercising such other powers and functions as may be prescribed.
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(3) Notwithstanding anything contained in any other law for the time being in force, while exercising the powers under clause (o) of sub-section (2), the Authority shall have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908) while trying a suit, in respect of the following matters, namely:—
(i) the discovery and production of books of account and other documents, at such place and at such time as may be specified by the Authority;
(ii) summoning and enforcing the attendance of persons and examining them on oath;
(iii) inspection of any book, register and other document of any person or intermediary referred to in section 26, at any place;
(iv) issuing commissions for the examination of witnesses or documents; (v) any other matter which may be prescribed.
(4) Without prejudice to the provisions contained in sub-sections (1), (2) and (3) and section 16, the Authority may, by order, for reasons to be recorded in writing, in the interest of subscribers, take any of the following measures, pending investigation or inquiry, namely:—
(i) restrain persons from participating in any scheme;
(ii) restrain any office bearer of an intermediary from acting as such;
(iii) impound and retain the proceeds under the scheme in respect of any activity which is under investigation;
(iv) attach, after passing an order, on an application made for approval, by the Judicial Magistrate of first class having jurisdiction, for a period not exceeding one month, one or more bank account or accounts of any intermediary or any person associated with the scheme in any manner involved in violation of any of the provisions of this Act or the rules or the regulations made thereunder:
Provided that only the bank account or accounts or any transaction entered therein, relating to the proceeds actually involved in the violation of any of the provisions of this Act or the rules or the regulations made thereunder shall be allowed to be attached;
(v) direct any intermediary or any person associated with the scheme in any manner not to dispose of or alienate an asset forming part of any activity which is under investigation:
Provided that the Authority shall, either before or after, passing such orders, under this section, give to such intermediaries or persons concerned an opportunity of being heard.
(i) in the interests of subscribers or orderly development of National Pension System or a pension scheme to which this Act applies; or
(ii) to prevent the affairs of any intermediary or other persons or entities referred to in section 27 being conducted in a manner detrimental to the interests of subscribers; or
(iii) to secure the proper management of any such intermediary or person or entity,
it may issue such directions to such intermediaries or entities or to any person or class of persons referred to in section 27, or associated with the pension fund, as it may deem fit:
Provided that the Authority shall, either before or after passing such orders, give an opportunity of being heard to such intermediaries, entities or persons concerned.
(a) the activities of the pension fund are being conducted in a manner detrimental to the interest of the subscriber; or
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(b) any intermediary or any person associated with the schemes of the pension fund has violated any of the provisions of this Act or the rules or the regulations made or directions issued by the Authority thereunder,
it may, at any time, by order in writing, direct any person (hereafter in this section referred to as the Investigating Authority) specified in the order to investigate the affairs of such intermediary or persons associated with the pension fund and to report thereon to the Authority.
(2) Without prejudice to the provisions contained in sections 235 to 241 of the Companies Act, 1956 (1 of 1956), it shall be the duty of every manager, managing director, officer and other employee of the company, in case of a company and every intermediary or persons or entity referred to in section 27 or every person associated with the pension fund to preserve and to produce to the Investigating Authority or any person authorised by him in this behalf, all the books, registers, other documents and record of, or relating to, the company or, as the case may be, of or relating to, the intermediary or such person, which are in their custody or power.
(3) The Investigating Authority may require any intermediary or any person or entity associated with the pension fund in any manner to furnish such information to, or produce such books, or other documents, or record before him or any person authorised by him in this behalf as he may consider necessary if the furnishing of such information or the production of such books, or register, or other documents, or record is relevant or necessary for the purposes of its investigation.
(4) The Investigating Authority may keep in its custody any books, registers, other documents and record produced under sub-section (2) or sub-section (3) for six months and thereafter shall return the same to any intermediary or any person associated or entity with the pension fund by whom or on whose behalf the books, registers, other documents and record are produced:
Provided that the Investigating Authority may call for any book, register, other documents and record if they are required again:
Provided further that if the person on whose behalf the books, registers, other documents and record are produced requires certified copies of the books, registers, other documents or record produced before the Investigating Authority, it shall give certified copies of such books, registers, other documents or, as the case may be, record to such person or on whose behalf the books, registers, other documents and record were produced.
(5) Any person, directed to make an investigation under sub-section (1), may examine on oath any intermediary or any person associated with the pension fund in any manner, in relation to the affairs of his business and may administer an oath accordingly and for that purpose may require any of those persons to appear before him personally.
(6) Notes of any examination under sub-section (5) shall be taken down in writing and shall be read over to, or by, and signed by, the person examined, and may thereafter be used in evidence against him.
(7) If any person fails without reasonable cause or refuses—
(a) to produce to an Investigating Authority or any person authorised by him in this behalf any book, register, other document or record which it is his duty under sub-section (2) or sub-section (3) to furnish; or
(b) to furnish any information which it is his duty under sub-section (3) to furnish; or
(c) to appear before the Investigating Authority personally when sub-section (5) or to answer any question which is put to him by the pursuance of that sub-section; or
required to do so under Investigating Authority in
(d) to sign the notes of any examination referred to in sub-section (6),
he shall be punishable with imprisonment for a term which may extend to one year, or with fine, which may extend to twenty-five crore rupees, or with both, and also with a further fine which may extend to ten lakh rupees for every day after the first day during which the failure or refusal continues.
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(a) any person who has been required under sub-section (3) of section 16 to produce, or cause to be produced, any books, accounts or other documents in his custody or power has omitted or failed to produce, or cause to be produced, such books, accounts or other documents; or
(b) any person to whom a requisition to produce any books, accounts or other documents as aforesaid has been or might be issued will not, or would not, produce or cause to be produced, any books, accounts or other documents which will be useful for, or relevant to, an investigation under sub-section (1) of section 16; or
(c) a contravention of any provision of this Act has been committed or is likely to be committed by an intermediary; or
(d) any claim which is due to be settled by the intermediary, has been or is likely to be rejected or settled at a figure higher than a reasonable amount; or
(e) any claim which is due to be settled by an intermediary, has been or is likely to be rejected or settled at a figure lower than a reasonable amount; or
(f) any illegal fees and charges have been transacted or are likely to be transacted by an intermediary; or
(g) any books, accounts, papers, receipts, vouchers, survey reports or other documents, belonging to an intermediary are likely to be tampered with, falsified or manufactured,
it may authorise any officer of the Authority, not below the rank equivalent to that of a Gazetted Officer of the Government (hereafter referred to as the authorised officer), to–
(i) enter and search any building or place where he has reason to suspect that such books, accounts or other documents, or any books or papers relating to any claim, rebate or commission or any receipts, vouchers, reports or other documents are kept;
(ii) break open the lock of any box, locker, safe, almirah or other receptacle for exercising the powers conferred by clause (i) where the keys thereof are not available;
(iii) seize all or any such books, accounts or other documents, found as a result of such search;
(iv) place marks of identification on such books, accounts or other documents or make or cause to be made extracts or copies there from.
(2) The authorised officer may requisition the services of any police officer or of any officer of the Central Government, or of both, to assist him for all or any of the purposes specified in sub-section (1) and it shall be the duty of every such police officer or officer to comply with such requisition.
(3) The authorised officer may, where it is not practicable to seize any such book, account or other document, specified in sub-section (1), serve an order on the person who is in immediate possession or control thereof that he shall not remove, part with or otherwise deal with it except with the previous permission of such officer and such officer may take such steps as may be necessary for ensuring compliance with this sub-section.
(4) The authorised officer may, during the course of the search or seizure, examine on oath any person who is found to be in possession or control of any books, accounts or other documents, and any statement made by such person during such examination may thereafter be used in evidence in any proceeding under this Act.
(5) The books, accounts, papers, receipts, vouchers, reports, or other documents seized under sub-section (1) shall not be retained by the authorised officer for a period exceeding one hundred and eighty days from the date of the seizure unless the reasons for retaining the same are recorded by him in writing and the approval of the Authority for such retention is obtained:
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Provided that the Authority shall not authorise the retention of the books, accounts, papers, receipts, vouchers, reports, or other documents for a period exceeding thirty days after all the proceedings under this Act, for which the books, accounts, papers, receipts, vouchers, reports, or other documents are relevant, are completed.
(6) The person from whose custody the books, accounts, papers, receipts, vouchers, reports, or other documents are seized under sub-section (1) may make copies thereof, or take extracts there from, in the presence of the authorised officer or any other person empowered by him in this behalf at such place and time as the authorised officer may appoint in this behalf.
(7) If a person legally entitled to the books, accounts, papers, receipts, vouchers, reports or other documents seized under sub-section (1) objects for any reason to the approval given by the Authority under sub-section (5), he may make an application to the Central Government stating therein the reason for such objection and requesting for the return of the books, accounts, papers, receipts, vouchers, report or other documents.
(8) On receipt of the application under sub-section (7), the Central Government may, after giving the applicant an opportunity of being heard, pass such order as it thinks fit.
(9) The provisions of the Code of Criminal Procedure, 1973 (2 of 1974) relating to searches and seizures shall apply, so far as may be, to every search and seizure made under sub-section (1).
(10) The Central Government may, by notification, make rules in relation to any search or seizure under this section and in particular, and without prejudice to the generality of the foregoing power, such rules may provide for the procedure to be followed by the authorised officer,–
(i) for obtaining ingress into such building or place to be searched where free ingress thereto is not available;
(ii) for ensuring safe custody of any books, accounts, papers, receipts, vouchers, reports, or other documents seized under this section.
18.Power of Authority to ensure compliance.—If the Authority finds, after causing an inquiry to be made, that any person has violated, or is likely to violate, any provisions of this Act, or any rule or regulation made thereunder, the Authority may pass an order requiring such person to cease and desist from committing or causing such violation.
(2) If the Central Government, after considering the report made under sub-section (1) is of the opinion, that it is necessary or proper to do so, it may appoint an Administrator to manage the affairs of the central recordkeeping agency or pension fund, as the case may be, under the direction and control of the Authority, in such manner as may be specified by notification.
CHAPTER VI
NATIONAL PENSION SYSTEM
(2) Notwithstanding anything contained in the said notification, the National Pension System shall, on the commencement of this Act, have the following basic features, namely:–
(a) every subscriber shall have an individual pension account under the National Pension System;
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(b) withdrawals, not exceeding twenty-five per cent. of the contribution made by the subscriber, may be permitted from the individual pension account subject to the conditions, such as purpose, frequency and limits, as may be specified by the regulations;
(c) the functions of recordkeeping, accounting and switching of options by the subscriber shall be effected by the central recordkeeping agency;
(d) there shall be a choice of multiple pension funds and multiple schemes:
Provided that—
(a) the subscriber shall have an option of investing up to hundred per cent. of his funds in Government Securities; and
(b) the subscriber, seeking minimum assured returns, shall have an option to invest his funds in such schemes providing minimum assured returns as may be notified by the Authority;
(e) there shall be portability of individual pension accounts in case of change of employment;
(f) collection and transmission of contributions and instructions shall be through points of presence to the central recordkeeping agency;
(g) there shall not be any implicit or explicit assurance of benefits except market based guarantee mechanism to be purchased by the subscriber;
(h) a subscriber shall not exit from the National Pension System except as may be specified by the regulations; and
(i) at exit, the subscriber shall purchase an annuity from a life insurance company in accordance with the regulations.
(3) In addition to the individual pension account mentioned in clause (a) of sub-section (2), a subscriber may also, at his option, have an additional account under the National Pension System having the features mentioned in clauses (c) to (g) of sub-section (2) and also having the additional feature that the subscriber shall be free to withdraw part or all of his money at any time from the additional account.
Provided that the Authority may, in public interest, appoint more than one central recordkeeping agency.
(2) The central recordkeeping agency shall be responsible for receiving instructions from subscribers through the points of presence, transmitting such instructions to pension funds, effecting switching instructions received from subscribers and discharging such other duties and functions, as may be assigned to it under the certificate of registration or as may be determined by regulations.
(3) All the assets and properties owned, leased or developed by the central recordkeeping agency, shall constitute regulated assets and upon expiry of certificate of registration or earlier revocation thereof, the Authority shall be entitled to appropriate and take over the regulated assets, either by itself or through an administrator or a person nominated by it in this behalf:
Provided that the central recordkeeping agency shall be entitled to be compensated the fair value, to be ascertained by the Authority, of such regulated assets as may be determined by regulations:
Provided further that where the earlier revocation of the certificate of registration is based on violation of the conditions in the certificate of registration or the provisions of this Act or regulations, unless otherwise determined by the Authority, the central recordkeeping agency shall not be entitled to claim any compensation in respect of such regulated assets.
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(2) A point of presence shall functions in accordance with the terms of its certificate of registration and the regulations made under this Act.
23.Pension funds.—(1) The Authority may, by granting a certificate of registration under sub-section (3) of section 27, permit one or more persons to act as a pension fund for the purpose of receiving contributions, accumulating them and making payments to the subscriber in such manner as may be specified by regulations.
(2) The number of pension funds shall be determined by regulations and the Authority may, in public interest, vary the number of pension funds:
Provided that at least one of the pension funds shall be a Government company.
Explanation.—For the purposes of this sub-section, the expression ?Government company? shall have the meaning assigned to it in section 617 of the Companies Act, 1956 (1 of 1956).
(3) The pension fund shall function in accordance with the terms of its certificate of registration and the regulations made under this Act.
(4) The pension fund shall manage the schemes in accordance with the regulations.
Explanation.—For the purposes of this section, the expression ?foreign company? shall have the meaning assigned to it in clause (23A) of section 2 of the Income-tax Act, 1961 (43 of 1961).
CHAPTER VII
REGISTRATION OF INTERMEDIARIES
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Provided that any intermediary, including any point of presence, who had been associated with a pension scheme and appointed to act as such by the Interim Pension Fund Regulatory and Development Authority immediately before the establishment of the Authority under this Act for which no registration certificate was necessary prior to such establishment, and may continue to do so for a period of six months from such establishment or, if he has made an application for such registration within the said period of six months till the disposal of such application.
(2) Every application for grant of a certificate of registration under this Act shall be in such form and manner and shall be accompanied by such fees as may be determined by regulations.
(3) The Authority may, after considering the application and subject to such terms and conditions as it may specify, grant a certificate of registration as a central recordkeeping agency, point of presence, pension fund or such other intermediary, as the case may be.
(4) The Authority may, by order, suspend or cancel a certificate of registration granted under sub-section (3) in such manner as may be determined by regulations:
Provided that no order under this sub-section shall be made unless the person concerned has been given a reasonable opportunity of being heard.
CHAPTER VIII
PENALTIES AND ADJUDICATION
(a) to obtain a certificate of registration from the Authority for carrying on any activity under this Act, carries on such activities without obtaining such certificate of registration, he shall be liable to a penalty of one lakh rupees for each day during which the failure continues or one crore rupees, whichever is less;
(b) to comply with the terms and conditions of a certificate of registration fails to do so, he shall be liable to a penalty of one lakh rupees for each day during which the failure continues or one crore rupees, whichever is less;
(c) to furnish any information, document, books, returns or report to the Authority, fails to furnish the same within the time specified by the Authority, he shall be liable to a penalty which may extend to one crore rupees or five times the amount of profits made or losses avoided, whichever is higher;
(d) to maintain books of account or records, fails to maintain the same, he shall be liable to a penalty of one lakh rupees for each day during which the failure continues or five times the amount of profits made or losses avoided, whichever is higher.
(2) If any person, who is required under this Act or any rules or regulations made thereunder, to enter into an agreement with his client, fails to enter into such agreement, he shall be liable to a penalty of one lakh rupees for each day during which the failure continues or five times the amount of profits made or losses avoided, whichever is higher.
(3) If any intermediary registered with the Authority, after having been called upon by the Authority, in writing, to redress the grievances of subscribers, fails to redress such grievances within the time stipulated by the Authority, he shall be liable to a penalty of not more than one crore rupees or five times the amount of profits made or losses avoided, whichever is higher.
(4) If any person, who is registered under this Act as an intermediary, fails to segregate moneys of the client or clients or uses the moneys of a client or clients for self or for any other client, he shall be liable to a penalty not exceeding one crore rupees or five times the amount of profits made or losses avoided, whichever is higher.
(5) Whoever fails to comply with any provision of this Act, the rules or the regulations made or the directions issued by the Authority under the provisions of this Act for which no separate penalty has been
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provided, he shall be liable to a penalty which may extend to one crore rupees or five times the amount of profits made or losses avoided, whichever is higher.
(2) While holding an inquiry, the adjudicating officer shall have the power to summon and enforce the attendance of any person acquainted with the facts and circumstances of the case to give evidence or to produce any document which, in the opinion of the adjudicating officer, may be useful for or relevant to the subject matter of the inquiry and if, on such inquiry, he is satisfied that the person has failed to comply with the provisions of section 28, he may recommend such penalty as he thinks fit in accordance with the provisions of that section, to the member in charge of investigation and surveillance.
(3) The penalty shall be imposed by a member other than the member in charge of investigation and surveillance:
Provided that while adjudging the quantum of penalty under section 28, the member shall have due regard to the following factors, namely:—
(a) amount of disproportionate gain or unfair advantage, wherever quantifiable, made as a result of the default;
(b) amount of loss caused to a subscriber or group of subscribers; and (c) the repetitive nature of the default.
(a) the retention, preservation, interim custody or sale of any asset or property which is regulated by the provisions of this Act;
(b) securing any pension fund, moneys and other assets and properties owned by or under the control
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