Sebi proposes wider certification framework for market professionals

Sebi proposes major revamp of its certification framework, widening eligibility, introducing long-term NISM courses, and tightening exemptions to curb misuse

The Securities and Exchange Board of India (Sebi) has proposed a major overhaul of its certification framework for market participants, seeking to broaden the scope of who qualifies as an “associated person”, introduce new modes of certification through long-term courses, and tighten exemption norms that have reportedly been misused.

 

In a consultation paper released on Thursday, the capital market regulator suggested amendments to the SEBI (Certification of Associated Persons in the Securities Markets) Regulations, 2007 — commonly known as the CAPSM Regulations — which govern certification requirements for individuals working with regulated entities in the securities market.

 

Sebi has proposed expanding the definition of “associated person” to include not only employees of intermediaries and distributors but also individuals “intending to be engaged” in the securities market, directly or indirectly. The revised definition would also cover employees of regulated entities, foreign portfolio investors, and foreign venture capital investors operating in India.

 

The move aims to make the certification framework more inclusive and align it with the market’s evolving structure, Sebi said. It is also intended to attract younger participants, including students aspiring to work in the financial sector.

 

In a key change, Sebi has proposed allowing candidates to obtain certification by completing long-term courses or programmes offered by the National Institute of Securities Markets (NISM), with a duration of three months or more. These courses could be conducted in physical, online, or hybrid formats.

 

The regulator said the move would provide participants with “in-depth knowledge and skill development”, expanding beyond the current system, which relies largely on passing specific certification exams.

 

To improve accessibility, Sebi has also proposed that Continuing Professional Education (CPE) programmes — required for certificate renewal — be conducted in electronic or hybrid modes, in addition to classroom formats. This, it said, would enhance convenience and participation across geographies.

 

One of the major changes proposed is the discontinuation of existing exemptions that allowed “principals”, individuals above 50 years of age, and those with over 10 years of market experience to bypass NISM exams.

 

Sebi noted that these exemptions have been misused, with some intermediaries issuing designations that do not reflect actual eligibility.

 

Under the revised framework, exemptions would apply only to individuals aged 50 or above and with at least 10 years of relevant experience, who may qualify through classroom credits or approved long-term courses.

 

The regulator has invited public comments on the proposals till November 27.