Change in Guidelines on aggregate holding of equity shares by a foreign company in Pension Funds
PENSION FUND REGULATORY
AND DEVELOPMENT AUTHORITY
B-14/A, Chhatrapati Shivaji Bhawan
Qutab Institutional Area
Katwaria Sarai, New Delhi-110016.
Phone: 011-26517501, 26517503, 26133730 Fax: 011-26517507
Website- www.pfrda.org.in
PFRDA/2021/27/REG-PF/1 Date: 20th July, 2021
CIRCULAR
To
CEOs of All Pension Funds
Dear Sir/Madam,
Subject: Change in Guidelines on aggregate holding of equity shares by a foreign company in Pension Funds as provided under Section 24 of the PFRDA Act, 2013 – Manner of calculation of such aggregate holding of equity shares by a foreign company in a Pension Fund under National Pension System -reg.
Reference is invited to the Circular No. PFRDA/2020/34/REG-PF/4 dated 13th August, 2020 on Guidelines on aggregate holding of equity shares by a foreign company in Pension Funds as provided under Section 24 of the PFRDA Act, 2013 and Circular No. PFRDA/2020/52/REG-PF/8 dated 10th December, 2020 regarding change in the above mentioned guidelines, hereinafter called as ‘the said guidelines’.
2. In a partial modification to the said guidelines, it has been decided by the Authority to make the following changes:
| Ref. No. | Existing Guidelines | Revised Guidelines |
|---|---|---|
| Para 2 | Para 2 Insurance Laws (Amendment Act), 2015 raised the Foreign Holding limit in Indian Insurance Company to 49% by amending Section 2 (7A) of the Indian Insurance Act, 1938, accordingly, the Foreign Holding limit in the Pension Funds stands raised to 49% of the paid-up capital. | Insurance Laws (Amendment Act), 2021 raised the Foreign Holding limit in an Indian Insurance Company to 74% by amending Section 2 (7A) of the Indian Insurance Act, 1938, accordingly, the Foreign Holding limit in the Pension Funds stands raised to 74% of the paid-up capital. |
| Para 6 | Both direct and indirect foreign investment would be considered for calculating the total foreign investment in Pension Funds irrespective of whether the direct and the indirect investments in Pension Fund are both by the same foreign investors or otherwise so as to ensure that the total foreign holding, whether direct or indirect, remains capped at 49%. | Both direct and indirect foreign investment would be considered for calculating the total foreign investment in Pension Funds irrespective of whether the direct and the indirect investments in Pension Fund are both by the same foreign investors or otherwise so as to ensure that the total foreign holding, whether direct or indirect, remains capped at 74%. |
| Annexure I | Example 2- attached to the said guidelines. | Revised example 2 is as per sheet attached. |
3. Subject to the aforementioned revision, all other terms and conditions as contained in the said guidelines shall remain unchanged. All Pension funds are called upon to note these changes and ensure necessary compliance.
4. This circular is issued in exercise of powers of the Authority under Section 14 (1) of the PFRDA Act, 2013.
5. The revision shall be effective from the date of this circular.
Yours sincerely,
Sd/-
(A. G. Das)
Executive Director