PFRDA, IRDAI and SEBI Compared

PFRDA was the last of India's three main non-banking financial regulators to receive statutory form. Its Act borrows heavily from the SEBI Act, 1992 and shares features with the law governing IRDAI. Comparing the three regulators shows what is distinctive about the PFRDA Act, where it follows established models, and where it is weaker or stronger than its counterparts.

1. Origins and Statutes

• SEBI: set up as a non-statutory body in 1988, given statutory status by the Securities and Exchange Board of India Act, 1992; regulates the securities markets.
• IRDAI: established under the Insurance Regulatory and Development Authority Act, 1999, constituted in 2000; regulates insurance under that Act and the Insurance Act, 1938.
• PFRDA: an Interim PFRDA by executive resolution from 2003; statutory under the PFRDA Act, 2013, from 1 February 2014; regulates the NPS and pension schemes to which the Act applies.

2. Mandate

• SEBI: to protect investors, and to promote the development of, and regulate, the securities market.
• IRDAI: to protect policyholders and to regulate, promote and ensure orderly growth of the insurance industry.
• PFRDA: to regulate, promote and ensure orderly growth of the NPS and pension schemes, and to protect subscribers.
• Common thread: all three combine regulation with development, a dual mandate that can create tension between growing the market and policing it.

3. Composition

• SEBI: a Chairman, two members from the Central Government ministries, one from the RBI, and five other members, of whom at least three are whole-time.
• IRDAI: a Chairperson, not more than five whole-time and not more than four part-time members.
• PFRDA: a Chairperson, three whole-time and three part-time members, with at least one expert each in economics, finance and law.
• Observation: SEBI's board includes Government and RBI nominees ex officio; PFRDA's does not, though the Government appoints all members and exercises control through directions and supersession.

4. Enforcement Powers

• Investigation and search: all three can investigate. SEBI's search power under Section 11C has required an order of a designated court since 2014; PFRDA's power under Section 17 requires only authorisation by the Authority.
• Interim measures: SEBI's Section 11(4) and PFRDA's Section 14(4) are closely similar, including attachment of bank accounts with a magistrate's approval.
• Cease and desist: SEBI's Section 11D is the model for PFRDA's Section 18.
• Penalties: SEBI's penalties can reach ₹25 crore or three times the gain for many defaults; IRDAI's general penalty under the Insurance Act was capped at ₹1 crore by the 2015 amendments, subject to later changes; PFRDA's typically reach ₹1 crore or five times the gain.
• Adjudication: under the SEBI Act, the adjudicating officer imposes the penalty; under the PFRDA Act, the officer recommends and a different member imposes it.
• Settlement: SEBI has a statutory settlement mechanism; the PFRDA Act has none.
• Criminal trial: SEBI offences go to Special Courts; PFRDA offences to a Court of Session.

5. Appeals and Accountability

• Appeals: orders of all three regulators are appealable to the Securities Appellate Tribunal, and then to the Supreme Court on questions of law.
• Government control: all three are bound by policy directions of the Central Government and can be superseded in defined circumstances.
• Audit: all three are audited by the CAG, with accounts laid before Parliament.
• Funds: each has a general fund for expenses and an investor, policyholder or subscriber protection fund.

6. Foreign Investment in the Regulated Sector

• Securities intermediaries: generally open to high foreign investment under the FDI policy.
• Insurance: raised from 26% to 49% (2015), 74% (2021) and 100% (2025).
• Pensions: linked to insurance by Section 24, but kept at 49% under the FDI policy; an increase was reported to be under consideration in 2026.
• Offshore investment: only the PFRDA Act contains an absolute bar on investing customers' money outside India (Section 25).

7. What Is Distinctive about PFRDA

• Statutory product features: the basic features of the NPS are written into the Act itself (Section 20). Neither the SEBI Act nor the insurance laws fix the features of products in this way.
• Regulator and system designer: PFRDA designed and operates the architecture of the NPS, including the NPS Trust, more directly than SEBI or IRDAI operate their markets.
• Administrator of Government schemes: PFRDA runs the APY and the Government sector NPS and UPS, giving it a quasi-administrative role.
• Social security purpose: pensions serve old-age security over very long horizons, which justifies tighter rules on exit and investment.

8. Related Topics and Provisions

• PFRDA and other financial regulators
• Duties, powers and functions of the Authority (Section 14)
• Investigation, search and seizure (Sections 16 and 17)
• Adjudication of penalties (Section 30)
• Annuities and the role of IRDAI