NPS new rule: Check out PFRDA norms on trail commission

“The trail commission on contributions made through D-Remit will be similar to eNPS (another mode of online contribution) by those subscribers who were on-boarded by the respective PoPs,” the government authority added.

The D-Remit feature was introduced by the PFRDA as a way for subscribers to deposit money directly from their bank accounts. The feature would also result in optimised investment returns as it would offer same-day net asset value (NAV) prices if the trustee bank received the contributions before 9.30 am. Before D-Remit, subscribers would need to deposit their contributions with the POPs, from where it would enter the money chain towards the trustee bank, and ultimately the fund manager. This process could take 2-3 days.

POPs are the first point of contact between subscribers when they choose to enrol in the NPS and include organizations like banks, non-banking financial companies and other players. A trailing commission helps compensate these points of contact for their lost fees in servicing clients.