The Pension Fund Regulatory and Development Authority vide notification dated 22nd September, 2021 has issued the Pension Fund Regulatory and Development Authority (Custodian of Securities) (Amendment) Regulations, 2021. The amendment provides that when the sponsor of a Pension Fund, Trustee Bank or central record keeping agency or their associates, are holding 50 percent or more of the voting rights of the share capital of a custodian in the same group, it can apply to become Custodian with the Authority, subject to following conditions:
- The sponsor, associates or the holding company, as the case may be, should have net worth of at least Rs.50,000 crore at all points of time;
- 50 per cent or more of the directors of the custodian shall be those who do not represent the interests of the sponsor or its associates;
- Neither the custodian nor the pension fund company shall be a subsidiary of each other;
- No person shall be a director of both the custodian and the pension fund company; and (v) the custodian and the pension fund company shall sign an undertaking that they will act independently of each other in their dealings with the schemes.