Simplified SEBI Certification Framework for Non-Advisory Personnel

The Securities and Exchange Board of India (SEBI) has made it easier for some employees associated with registered investment advisers (RIAs) to get certified through a simpler NISM exam.

The revised framework creates a distinct category for employees who interact with clients but are not involved in providing investment advice. The category includes sales executives, relationship managers and other staff handling non-core functions within investment advisory firms.

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New Certification Requirement

Under the updated norms, these employees will be required to clear the NISM Series-XXV-B: Persons Associated with Investment Advice (Sales and Other Non-Core Services) Certification Examination.

In a circular issued on June 25, SEBI said the decision was taken after receiving feedback from market participants and as part of its efforts to improve ease of doing business.

The regulator stated that the new examination is intended for personnel who maintain client contact but are not directly associated with advisory activities or investment recommendation processes.

Advisory Staff Must Continue Existing Compliance

SEBI clarified that the relaxation does not apply to employees engaged in investment advisory functions.

Personnel involved in providing investment advice will continue to be governed by the existing qualification framework. Such employees must clear both the NISM Series-X-A: Investment Adviser (Level 1) Certification Examination and the NISM Series-X-B: Investment Adviser (Level 2) Certification Examination. The regulator has not made any changes to these requirements.

Background to the Change

Under the current regulatory framework, Persons Associated with Investment Advice (PAIA) are required to hold prescribed NISM certifications.

According to the guidelines issued by SEBI in January 2025, the PAIA personnel were required to have both the Level 1 and Level 2 certifications for investment advisers. However, it was subsequently felt by industry players that there must be a clear demarcation between advisory professionals and individuals engaged in sales or service roles but not providing investment advice.

This particular circular seeks to make such an explicit distinction through the introduction of a different qualification route for such individuals.

Transitional Period for Already Qualified Individuals

In addition, SEBI has also provided a period of transition for those employees who have already undergone the higher level of certifications.

Individuals falling into this new category and who have already appeared and cleared the Series X-A and Series X-B exams will not have to immediately appear for the Series XXV-B certification exam.

On the other hand, they can continue with their existing certifications till the period of validity of the certification comes to an end. Prior to the expiry of this period, however, they would have to undergo the new Series XXV-B certification exam.