PFRDA Circular – Common Stewardship Code

PFRDA

PENSION FUND REGULATORY AND DEVELOPMENT AUTHORITY

B-14/A, Chhatrapati Shivaji Bhawan
Qutab Institutional Area,
Katwaria Sarai, New Delhi – 110 016.
Ph: 011-26517501, 26517503, 26133730
Fax:011-26517507
Website: www.pfrda.org.in

CIRCULAR

PFRDA/2018/01/PF/01

Date: 4th May, 2018

Subject: Common Stewardship Code

1.  National Pension System strives to provide old age income security to its subscribers of which NPS Trust is the legal owner of the funds and the Pension Funds undertaking investment of such monies as per the investment guidelines approved by the Authority. Pension Funds are expected to shoulder greater responsibility towards the subscribers/beneficiaries by enhancing monitoring and engagement with the investee companies. Such activities are commonly referred to as ‘Stewardship Responsibilities’ of the institutional investors and asset managers and are intended to protect the subscribers’ pension wealth. Such increased engagement is also seen as an important step towards improved corporate governance in the investee companies and gives a greater fillip to the protection of the interest of subscribers in such companies.

2. In view of the above, in consultation with Securities and Exchange Board of India (SEBI) and Insurance Regulatory and Development Authority of India (IRDAI), a proposal for introducing a Stewardship Code in India was examined by a sub¬committee of the Financial Stability and Development Council (FSDC) and approved.

3. All the Pension Funds under the NPS architecture shall follow the Stewardship Code as placed at Annex including the voting policy dated 20.04.2017, which is already recognized in such principles and is effective.

4. The principles (other than voting policy which is already in effect) enumerated in the Code shall be effective from the date of issuance.

5. This Circular is issued in exercise of the powers conferred under Sections 14 (1) read with 14 (2) (a) & (b) of the Pension Fund Regulatory and Development Authority Act, 2013.

6. This Circular is available at www.pfrda.org.inJ under the link “Regulatory Framework- Circulars”.

S/d,
(Venkateswarlu Peri)
Chief General Manager

To
Pension Funds registered with PFRDA