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PFRDA Updates Retirement Adviser Regulations to Simplify Compliance

Overview

The Pension Fund Regulatory and Development Authority (PFRDA) has revised the PFRDA (Retirement Adviser) Regulations, 2016, effective from February 20, 2024. These changes, referred to as the Pension Fund Regulatory and Development Authority (Retirement Adviser/RA) (Amendment) Regulations, 2023, aim to reduce compliance costs and improve the Ease of Doing Business in line with the Union Budget 2023-24 directives.

Key Amendments to the Regulations

  1. Expanded Eligibility:
    • Broader Access: Non-Individual entities regulated by other financial authorities such as the RBI, SEBI, and IRDAI can now qualify as Retirement Advisers (RAs).
  2. Security Deposit Requirement Removed:
    • Lower Barriers: The amendment eliminates the need for submitting a security deposit, facilitating easier entry for new RAs into the market.
  3. Streamlined Registration Process:
    • Efficiency Gains: Applications for the grant of a certificate of registration must now be disposed of within 30 days by the PFRDA, ensuring a quicker start for aspiring RAs.
    • Transparent Rejection Procedures: The regulations now include detailed procedures that the PFRDA must follow when rejecting an application, enhancing clarity and fairness in the registration process.
  4. First Schedule Modifications:
    • Regulatory Updates: Changes were also made to the First Schedule of the PFRDA Act to align with the current amendments, supporting the overall goal of streamlined regulatory processes.

Institutional Context

  • Regulatory Body: Pension Fund Regulatory and Development Authority (PFRDA)
  • Chairman: Deepak Mohanty
  • Headquarters: New Delhi, Delhi
  • Establishment: 2003

Conclusion

These regulatory updates by the PFRDA significantly lower the operational hurdles for Retirement Advisers, particularly benefiting entities already regulated under other financial authorities. By removing the security deposit requirement and expediting the registration process, the PFRDA is making it easier and more attractive for professionals to offer retirement advisory services, thereby potentially increasing the quality and availability of financial advice for retirees.

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