(1) Any applicant satisfying the following minimum eligibility criteria may submit its application to act as a sponsor of a pension fund:-
(a) the sponsor of a pension fund shall have at least five years’ experience of fund management (equity as well as debt market);
(b) the sponsor of a pension fund shall be an entity engaged in financial business activity, and regulated by any of the financial sector regulators in the country including the Reserve Bank of India, the Securities and Exchange Board of India, Insurance Regulatory and Development Authority and the Authority;
(c) the sponsors, individually or jointly, shall have a positive tangible net worth of at least twenty-five crore rupees on the last day of each of the preceding five financial years;
(d) the sponsor shall have profits after tax in at least three of the preceding five financial years and further that there shall be no cash loss in the last preceding five years;
(e) the sponsor shall be required to incorporate the pension fund as a separate limited company under the Companies Act, 2013 and it shall have the capacity to induct capital so that that the pension fund shall have a minimum positive tangible net worth of twenty-five crore rupees or such other higher amount as stipulated by the Authority in the selection process.
(f) the aggregate holding of equity shares by a foreign company either by itself or through its subsidiary companies or its nominees or by an individual or by an association of persons whether registered or not under any law of a country outside India taken in aggregate in the pension fund shall not exceed twenty-six per cent of the paid-up capital of such fund or such percentage as may be approved for an Indian Insurance Company under the provisions of the Insurance Act, 1938 (4 of 1938 ),whichever is higher;
(g) the sponsor shall ensure that the pension fund shall have the ability to provide minimum assured return scheme through market based mechanism which may include guarantee to be purchased by the subscriber;
(h) the sponsor has contributed or contributes at least twenty per cent to the tangible net worth of the pension fund.
An entity, which contributes twenty per cent or more of the paid up capital of the pension fund, shall be required to fulfill eligibility criteria for a sponsor specified in these regulations;
(i) the sponsor of a pension fund or the pension fund itself shall not hold any equity stake in any other pension fund regulated by the Authority;
(j) the sponsor of a pension fund or the pension fund shall at no time either directly or indirectly hold more than twenty-six per cent of the equity stake in central recordkeeping agency or custodian or the Trustee Bank;
(2) Every applicant shall mandatorily meet the minimum eligibility criteria as specified in sub-regulation (1).
(3) For the purpose of the grant of a certificate of registration, the Authority shall take into account any or all matters which are relevant to the activities of sponsor or pension fund as also all matters which it deems relevant to the pension sector and the National Pension System or any other pension scheme regulated by the Authority, including but not limited to the following:-
(a) the sponsor shall be required to provide the pension fund with adequate and necessary infrastructure, dedicated manpower, systems and procedures, information technology and information security systems with capabilities to adapt to future changes or any other requirement as may be specified by the Authority;
(b) at least fifty percent of the directors of the pension fund shall have adequate professional experience in finance and financial services related field;
(c) the pension fund shall ensure that the key personnel viz. the Chief Executive Officer, Chief Investment Officer, Fund Manager, Operations Manager, compliance officer or other positions, as may be notified by the Authority, from time to time have the adequate professional experience in the requisite field;
(d) the board of directors of such pension fund has at least fifty per cent independent directors;
(e) the sponsor and pension fund is a ‘fit and proper person’ as specified in Schedule II;
(f) the principal officer of the pension fund or sponsors have not been found guilty of moral turpitude or convicted of economic offence or violation of securities laws or any adverse order has been passed by any of the other financial sector regulators or court of law or tribunal;
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(g) whether the sponsor or any of its associates have in the past been refused certificate of registration by any of the financial sector regulators in India including, the Reserve Bank of India, the Securities and Exchange Board of India, the Insurance Regulatory and Development Authority and the Pension Fund Regulatory and Development Authority and if so, the ground for such refusal;
(h) whether the sponsor or any of its principal officers have in the past five years been convicted or imposed with penalties by any of the financial regulators [referred to in clause (g)] or by a court of law or tribunal, on the matters concerning violation of regulations, directions, guidelines and circulars of the regulator;
(i) grant of certificate of registration is in the interest of the subscribers;
(j) any other criteria as may be specified by the Authority while inviting applications for registration.
(4) If any entity does not fulfill one or more of the criteria specified in sub-regulation (3), it may seek an exemption from the Authority, by making an application citing reasons therefor.
(5) Nothing in these regulations, shall, confer the applicant any right to be granted any exemption sought for.
(6) The Authority may in public interest and for reasons to be recorded in writing, grant such exemption. The Authority may in such circumstances impose such additional conditions as it may deem fit for grant of certificate of registration.
(7) The decision of the Authority, as to whether any applicant satisfies the eligibility criteria shall be final;
(8) Mere submission of the application or satisfaction of eligibility criteria shall not confer the applicant any vested right to seek a certificate of registration for the pension fund.