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Pension fund regulator proposes restrictions on fund investmentsnews
03 September 2005

New Delhi: In its draft regulation on registration of intermediaries released on Friday, the interim Pension Fund Regulatory and Development Authority (PFRDA) has proposed restrictions on investments of pension accumulations handled by pension fund managers (PFMs). The PFRDA has said that PFMs would be allowed to invest only in a handful of instruments, all of them domestic.

These include equities of companies listed in India and regulated by SEBI, publicly traded securities issued by the central government, traded Indian corporate debt instruments that have been rated as investment grade by at least two rating agencies and loans of Indian micro-finance institutions guaranteed by the RBI.

The permitted equities would have to be part of an index approved by the PFRDA.

The draft regulations has been issued to conform to the wishes of the parliamentary standing committee on finance that had suggested that the broad contours of the regulations governing the implementation of the 'new pension system' should be first put in the public domain prior to the enactment of the PFRDA Bill.

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Pension fund regulator proposes restrictions on fund investments