PFRDA has directed pension fund managers to maintain their mutual funds holdings in de-mat form.
The pension fund regulator has found that many pension fund managers have kept mutual funds units in physical form. In addition, these pension fund managers are not keeping some of the securities particularly mutual fund units with the appointed custodian.
Currently, the Stock Holding Corporation of India (SCHIL) is the custodian for NPS and APY.
“It is advisable that all pension funds shall maintain the holdings in mutual funds with appointed custodian. Pension funds are further advised to convert the existing holdings of mutual fund units in de-mat form in coordination with SHCIL under confirmation to the NPS Trust and the Authority.”
Earlier in September 2015, PFRDA had allowed pension fund managers (PFMs) to invest NPS corpus in mutual funds. The pension fund regulator had allowed PFMs to invest in mutual funds having at least 65% exposure to large cap stocks. The pension fund regulator had also allowed PFMs to take equity exposure through low cost index ETFs and CPSE ETFs. In addition, PFMs are allowed to invest in income funds, gilt funds and liquid funds to take exposure to debt instruments.
