SEBI Mandates NISM Certification for Alternative Investment Fund Managers As of May 13, 2024, the Securities and Exchange Board of India (SEBI) has implemented a new requirement for Alternative Investment Funds (AIFs). According to the updated Certification of Associated Persons in the Securities Markets Regulations, 2007, at least one key personnel in the investment team of an AIF manager must hold a National Institute of Securities Market (NISM) Series-XIX-C certification. This rule, effective from May 10, 2024, is now a prerequisite for AIF registration.
Details of the Certification Requirement
- Purpose: The introduction of this certification requirement aims to elevate the proficiency and expertise in managing AIFs, ensuring that fund managers are well-equipped to handle complex investment activities.
- Compliance Timeline: Existing AIF schemes have until May 9, 2025, to comply with this requirement. The rule also applies immediately to any new AIF schemes or those whose applications for launching a scheme were pending with SEBI as of May 10, 2024.
- Regulatory Context: This move is part of SEBI’s broader efforts under the SEBI Act, 1992, to protect investor interests and foster the development of the securities market.
Additional Regulatory Updates In April 2024, SEBI also simplified the process for AIFs by allowing direct submissions of changes to the private placement memorandum, eliminating the previous requirement for involvement of a merchant banker. This change is intended to streamline administrative procedures and facilitate easier business operations for AIFs.
Through these regulatory updates, SEBI continues to strengthen the governance and operational standards of the investment fund sector, enhancing transparency and investor protection.
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