Sebi notifies certification requirements for distributors, staff of portfolio management services

Capital markets regulator Securities and Exchange Board of India (Sebi) has put in place certification requirements for associated persons engaged by portfolio managers as distributors or employees having decision-making authority related to fund management.

These persons need to obtain certification from the National Institute of Securities Markets (NISM), the regulator said in two separate notifications dated September 7.

The associated persons, engaged by a portfolio manager as a distributor of the PMS, and associated persons functioning as principal officers of a portfolio manager or an employee having decision-making authority related to fund management, will have to obtain certification from the NISM by passing the certification examination.

The portfolio managers will have to ensure that that all associated persons who are distributors of the portfolio management services (PMS) and who are principal officers having decision-making authority related to fund management, as of September 7, 2021, obtain the certification within two years, Sebi said.

It further said a portfolio manager, who engage or employ such associated person after September 7, 2021, will have to ensure that such person obtains certification within one year from the date of their employment.

However, an associated person, who being a distributor of the PMS has obtained a valid AMFI Registration Number (ARN) or NISM certification, will be exempted from the requirement of obtaining such certification.

Earlier in March, the Securities and Exchange Board of India (Sebi) notified new regulations for portfolio managers about their qualifications.

The move was expected to help recognise “the postgraduate programme in the securities market of not less than one year offered by NISM” as an eligible qualification for portfolio managers.

With regard to qualification for the portfolio manager, Sebi had said a portfolio manager needs to have a professional qualification in finance, law, accountancy or business management from a university or an institution recognised by a recognised university or a professional qualification by completing a postgraduate programme in the securities market (portfolio management) from NISM.

The postgraduate programme from NISM should not be less than a one-year duration.