The Securities and Exchange Board of India (SEBI) and the National Institute of Securities Markets (NISM) have formalised a new certification examination for distributors of mutual funds and specialised investment funds (SIFs), addressing a key bottleneck that had emerged in expanding the distribution network for the new investment product. NISM, in consultation with SEBI, has specified the NISM-Series-V-D: Mutual Fund – Specialized Investment Fund Distributors Certification Examination as the requisite standard for associated persons involved in the sale and distribution of mutual fund and SIF products. The examination will be available from July 22, 2026, replacing the previous system where distributors had to clear two separate examinations — Series V-A for MFs and Series XIII for SIFs. The new examination is expected to be comparatively easier as MF-related questions will have a 45 per cent weightage, while equity and interest rate derivatives will have weightages of 35 per cent and 20 per cent, respectively. The examination pattern includes 150 questions, 1 mark each, total 150 marks; 3 hours (180 minutes) with passing criteria of 60% (90 marks out of 150).
Industry leaders have welcomed the simplified certification process as a significant step toward expanding SIF distribution. Deepak Jain, president and head of sales at Edelweiss Mutual Fund, stated that the new examination achieves two objectives: improving efficiency by combining certification requirements into a single examination and reducing difficulty by removing currency derivatives from the syllabus. As reported by The Hindu BusinessLine, Venkat Chalasani, chief executive of the Association of Mutual Funds in India (Amfi), emphasized that the new curriculum provides distributors with a more holistic understanding of the investment landscape while simplifying the certification process. Aditya Agarwal, Co-founder of Wealthy.in, noted that the simplified certification lowers entry barriers, reduces compliance complexity and encourages more individuals to join the industry, particularly as mutual fund penetration continues to expand across India.
Despite steady growth over the past year, the number of SIF distributors remains significantly smaller than MF distributors. According to reports from The Hindu BusinessLine, as of June-end, there were 8,371 SIF distributors against an MF distributor base of 340,000. However, the industry added 717 SIF distributors in June alone, taking the total count to nearly 7,000 distributors. Several fund houses have delayed their entry into the SIF space owing to the lack of distribution strength, highlighting the need for improved certification accessibility. The complexity of SIF strategies and the certification requirement had emerged as a challenge for the expansion of the distributor base, with distributors earlier raising concerns about the difficulty and breadth of the NISM Series XIII examination.
The SIF market has demonstrated remarkable growth momentum with industry AUM increasing 29 per cent month-on-month to ₹17,858 crore in June, while monthly inflow rose 171 per cent to ₹3,782 crore. As reported by The Hindu BusinessLine, hybrid investment strategies accounted for nearly 72 per cent of total SIF assets. This growth trajectory underscores the expanding demand for alternative investment products and the need for a more accessible certification pathway for distributors. The certification requirement will cover distributors, agents, brokers, authorised persons and other associated persons engaged in or being employed for the sale and distribution of mutual fund and SIF products.
While the simplified process is welcomed by many, some industry experts have raised concerns about the depth of understanding required. Suranjana Borthakur, head of distribution and strategic alliances at Mirae Asset Mutual Fund, noted that while the simplification is operationally simpler, it risks diluting the purpose of understanding derivatives, a genuinely nuanced subject. As reported by The Hindu BusinessLine, she emphasized that SIFs use long-short and derivative overlay strategies that are meaningfully different from plain-vanilla MFs, and distributors will need to understand those pay-offs to sell them responsibly. A MF distributor noted that while the simplified examination improves accessibility, it does not replace the need for strong domain knowledge and ethical, client-centric advisory practices. The pace of SIF growth will ultimately depend on investor awareness, product suitability, and fund houses' ability to demonstrate consistent outcomes rather than just certification accessibility.
