Existing players also have to renew their certificates of registrations after complying with the new guidelines, which mandate a company to have a minimum net worth of R25 crore, a three-year profit record and managing assets of at least Rs 8,000 crore, a PFRDA official told FE.
The PFRDA will announce the names of the new fund managers on Nov 1, the official said.
There is good response from new players eager to enter the pension sector, the official said but declined to name the companies who have applied.
In 2007, PFRDA allowed state-owned LIC, SBI and UTI AMC to set up pension fund companies and manage the long-term savings of government staff. After two years, PFRDA allowed four private players - IDFC Pension Fund Management Co Ltd, ICICI Prudential Pension Funds Management Co Ltd, Kotak Mahindra Pension Fund Ltd and Reliance Capital Pension Fund Ltd.
These seven PFMs now manage assets worth over R20,000 crore of 3.75 million subscribers in government, private and unorganised sectors.
Many more banks, mutual funds and insurance companies were eager to enter the fast growing pension sector but were unable to do so because of restrictions on the number of players and a selection criteria based on lowest bid for fund management charges.
In July 2012, the PFRDA abolished the bidding process and announced a list of eligibility criteria to allow new players.
While the regulators eligibility criteria allows foreign participation directly or indirectly up to 26% as it is applicable for insurance companies, PFRDA sources said the joint ventures directly with foreign partners may not be allowed unless the parliament passes the PFRDA Bill.
The PFMs can be allowed to forge the joint venture with foreign funds once the bill is passed, an official said.
However, Indian mutual funds and insurers with minority foreign holding can be allowed as it has been the case for Employees Provident Fund Organisation, sources said. The EPFO recently approved Reliance Capital Asset Management to continue as a fund manager after it sold a 26% stake to Japanese insurer Nippon Life.
Earlier this month, the Cabinet approved certain changes in the Pension Fund Regulatory and Development Authority Bill, which was introduced in parliament in 2005 and it has been approved by the standing committee headed by BJP leader Yashwant Sinha. The bill to empower PFRDA as a statutory regulator of the New Pension System (NPS), allow 26% FDI among other reforms, will be taken up for parliament approval in the winter session.