SEBI Updates NISM Certification Requirements for AIF Managers
SEBI/LAD-NRO/GN/2025/249
Background
The Securities and Exchange Board of India (SEBI) has mandated certifications for Alternative Investment Fund (AIF) managers to enhance professionalism and investor confidence. Administered by the National Institute of Securities Markets (NISM), this requirement replaces subjective experience-based criteria with standardized certifications, aligning India’s AIF sector with global standards and fostering transparency in the alternative investment landscape.
Key Details
Notification Reference: SEBI/LAD-NRO/GN/2025/249
Gazette ID: CG-MH-E-25062025-264142
Date of Issuance: June 25, 2025
Subject: Notification under Securities and Exchange Board of India (Certification of Associated Persons in the Securities Markets) Regulations, 2007.
Applicability
Applies to existing AIF schemes as of June 25, 2025.
Covers pending AIF launch applications as of June 25, 2025.
Includes all new AIF registrations after June 25, 2025.
Compliance must be documented in the annual Compliance Test Report (CTR).
Key Update: Revised Certification Framework
The June 25, 2025, notification supersedes the May 10, 2024, notification (SEBI/LAD-NRO/GN/2024/176), replacing the singular NISM Series-XIX-C requirement with flexible certification options. Existing AIFs must comply by July 31, 2025. Actions taken under the prior notification remain valid. Additionally, the May 13, 2025, circular (SEBI/HO/AFD/AFD-PoD-1/P/CIR/2025/066) extended the original May 9, 2025, deadline to July 31, 2025, addressing industry concerns about operational challenges.
Regulatory Framework and Certification Requirements
Under the June 25, 2025, notification, pursuant to Regulation 3 of the SEBI (Certification of Associated Persons in the Securities Markets) Regulations, 2007, and Regulation 4(g)(i) of the SEBI (Alternative Investment Funds) Regulations, 2012, at least one key personnel per AIF management team must hold an NISM certification: Series-XIX-C (launched January 17, 2024) or Series-XIX-D (launched May 1, 2025) for Category I and II AIFs; Series-XIX-C or Series-XIX-E (launched May 1, 2025) for Category III AIFs. Certifications, valid for three years, require renewal.
Evolution of the Certification Requirement
The NISM Series-XIX-C certification was introduced on January 17, 2024, followed by Series-XIX-D and Series-XIX-E on May 1, 2025. The May 13, 2025, circular extended the compliance deadline, and the June 25, 2025, notification introduced flexibility by allowing multiple certification options, rescinding the May 10, 2024, mandate while preserving prior actions.
Purpose and Industry Implications
The updated mandate promotes transparency, continuous professional development, and investor trust. It levels the playing field for new entrants, enhances market integrity, and aligns the AIF sector with global standards, fostering innovation and operational efficiency.
SEBI’s Statement
SEBI’s June 25, 2025, notification provides flexibility in certification options, while the May 13, 2025, extension was granted “based on representation received from the AIF industry” to ease compliance, balancing regulatory oversight with practicality.
Conclusion
SEBI’s June 25, 2025, notification (SEBI/LAD-NRO/GN/2025/249), replacing the May 10, 2024, mandate, introduces flexible NISM certifications (Series-XIX-C, XIX-D, XIX-E) for AIF managers, with compliance required by July 31, 2025, as extended by the May 13, 2025, circular. Applicable to existing and new schemes, it ensures expertise, fosters investor trust, and aligns with global standards. Managers must certify personnel and update CTRs to maintain compliance.
A much needed relief.