India's markets regulator, the Securities and Exchange Board of India (SEBI), has implemented a lighter certification framework for sales and non-core staff in investment advisory roles, effective immediately. According to the latest circular from CNBC TV18, Rediff Moneynews, The Economic Times, Mint, and Business Standard, the initiative streamlines requirements for employees managing client relations, thereby reducing the compliance burden on firms. The regulations apply to personnel engaged in sales, relationship management and other non-core functions at investment advisory firms who have client contacts but are not directly associated or involved in investment advice-related aspects. As per the latest circular, the decision was taken after considering feedback received from market participants and industry stakeholders seeking a more practical approach to certification requirements for support and client-facing staff.
Under the revised framework, employees involved in providing actual investment advice will continue to be subject to existing qualification and certification requirements. However, staff engaged in customer acquisition, servicing and other support functions can now obtain a newly introduced National Institute of Securities Markets (NISM) certification designed specifically for non-advisory roles. According to the latest circular, PAIA who perform only sales and other non-core services shall obtain certification from NISM by passing the 'NISM Series–XXV-B' examination. PAIA, other than those who perform sales and other non-core services, will continue to obtain certification from NISM by passing the 'NISM Series-X-A: Investment Adviser (Level 1) certification examination' and the 'NISM SeriesX-B: Investment Adviser (Level 2) certification examination'.
The move follows representations from industry participants who argued that employees with client contact but no advisory responsibilities were being subjected to the same certification standards as investment advisers, increasing compliance costs and creating hiring and onboarding challenges. According to the latest circular, SEBI stated that the relaxation forms part of its ease-of-doing-business initiative while maintaining investor-protection safeguards by preserving higher standards for professionals engaged in advisory activities. The regulator noted that based on feedback from market participants, it has been decided to specify a lighter NISM certification module for PAIA such as sales staff, relationship managers and other staff who only perform sales and other non-core services. Market participants have long argued that requiring non-advisory staff to undergo the same certification process as investment advisers created an unnecessary compliance burden, particularly for firms employing large client-service and relationship-management teams.
The relaxation applies specifically to Persons Associated with Investment Advice (PAIA) engaged in sales, relationship management and other non-core services. As per the latest circular from The Financial Express, PAIA who already have passed the NISM Series-X exams will not be required to take the NISM Series – XXV:B exam right away and pass it after the expiry of their existing certifications. The regulations will come into effect immediately, allowing eligible firms and employees to transition to the revised certification framework without delay. This approach ensures a smooth transition for existing staff while maintaining the regulatory framework's effectiveness in protecting investors.
