SEBI Relaxes Certification Norms For Investment Advice Sales Staff, Introduces New NISM Exam

The Securities and Exchange Board of India (SEBI) on Wednesday relaxed certification requirements for Persons Associated with Investment Advice (PAIA) who perform only sales and other non-core services, allowing them to obtain a separate certification instead of clearing the two examinations prescribed for investment advisers.

Under the existing framework, PAIA were required to obtain certification from the National Institute of Securities Markets (NISM) by passing the NISM Series X-A (Investment Adviser Level 1) and NISM Series X-B (Investment Adviser Level 2) examinations.

In a circular issued on June 24, SEBI noted that sales staff, relationship managers and other personnel engaged only in sales and non-core services may have contact with clients but are not directly associated with or involved in investment advice-related activities.

The regulator stated that, based on feedback received from market participants and as part of its ease of doing business measures, it had decided to prescribe a lighter NISM certification module for such personnel.

Accordingly, PAIA who perform only sales and other non-core services will now be required to obtain certification by passing the NISM Series XXV-B: Persons Associated with Investment Advice (Sales and Other Non-Core Services) Certification Examination.

The circular clarified that the relaxation applies only to personnel engaged exclusively in sales and non-core functions. PAIA involved in investment advisory activities, or those performing functions beyond sales and other non-core services, must continue to obtain certification through the NISM Series X-A and NISM Series X-B examinations.

SEBI has also provided a transition arrangement for personnel covered by the new framework who have already obtained the Level 1 and Level 2 adviser certifications.

Such individuals will not be required to undertake the NISM Series XXV-B certification immediately. Instead, they will be required to obtain the certification only before the validity of their existing NISM Series X-A and X-B certifications expires.

The Investment Adviser Administration and Supervisory Body has been advised to make necessary amendments to its relevant bye-laws and rules for implementation of the circular and to disseminate the changes among registered investment advisers.

The circular came into force with immediate effect.