Clarification on Revision of Investment Guidelines for NPS Scheme issued on 29.01.2014
CIRCULAR
PFRDA/2015/05/PFM/03
Date: 22nd Jan. 2015
Subject: Clarification on Revision of Investment Guidelines for NPS
Scheme issued on 29.01.2014
This is with reference to the Circular No. PFRDA/2014/02/PFM/1 for
Revision of Investment Guidelines for NPS Schemes issued by PFRDA on
29.01.2014.
2. Pursuant to above mentioned circular, the Pension Funds were expected to
realign their portfolios in accordance with the revised guidelines.
3. However in the interest of the subscribers the following was
stipulated in clause 5.
“Pension Funds to ensure that the interest of the subscribers is
safeguarded and that they should not incur any loss while exiting the existing
investments to comply with the revised guidelines. However, all future
investments should be made strictly in compliance with the above guidelines’
4. It is to clarify that the above clause was only intended to protect
the subscriber any loss on exiting any existing security merely to comply with
revised investment pattern
5. However this does not imply that Pension
Funds cannot exit from existing investments at a loss, if it is
so required as a measure of portfolio management by the Pension Funds within the parameters of their internal Investment Management/Risk
Management/ Stop loss policy and within the overall framework of guidelines
issued by PFRDA.
6. A case in the point is when there is downgrade of any security, it is
for the Pension Funds to determine the point of exit from it. The guidelines do not bar any
such exit even if there is a loss, if the exit is so determined by the policy
of Pension Funds within the overall framework of PFRDA guidelines.
sd/-
Sumeet Maur Kapoor
(General Manager)
Source-http://www.pfrda.org.in/MyAuth/Admin/showimg.cshtml?ID=575
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