NISM certificate must for investment adviser practice: Sebi

NDTV Profit Desk

28 Jan 2014, 11:13 PM IST

Capital market regulator Securities and Exchange Board of India (Sebi) has said investment advisers and their 'associated persons' can get certification from the National Institute of Securities Markets (NISM) or any institution accredited by it to offer investment advice in capital markets.

As per the market regulator's norms, investment advisers and their associated persons, including their partners and representatives, have to obtain requisite certification from NISM after passing relevant examinations, for operating in the markets.

In a notification dated January 27, Sebi said, "Notwithstanding anything contained in this notification, such associated person, may, in alternative, also obtain certification from organisations and institutions accredited by NISM...."

The regulator has asked the concerned entities to obtain certification from NISM "by passing the NISM-Series-X-B: Investment Adviser (Level 2) Certification Examination".

In June 2013, the market regulator had notified norms for investments advisers asking them to obtain NISM certification after passing "NISM-Series-X-A: Investment Adviser (Level 1) Certification Examination". It had at the time said that norms pertaining to clearing Level 2 exam will be notified later.

In its latest notification, Sebi has also said that such associated persons would not be required to obtain NISM certificate if they have acquired certification by passing "Certified Financial Planner" from the Financial Planning Standards Board India.

Besides, such persons would also not require the NISM certificate if they are able to obtain "Certified Financial Planner" certificate within thirty days.

The term "associated person" refers to a permanent or temporary employee of an entity operating in the Indian securities space.

Last year, Sebi had brought in norms that made it compulsory for investment advisers to register with the capital market regulator and also require them to disclose all issues that could result in conflict of interests.