SEBI, India's securities regulator, has made a significant move to raise the bar for professionalism in Alternative Investment Funds (AIFs). Effective immediately, at least one key member of AIFs' investment teams must obtain certification from the National Institute of Securities Market (NISM).

This new rule, outlined in a circular dated May 13, 2024, requires designated individuals in AIF management to pass the NISM Series-XIX-C: Alternative Investment Fund Managers Certification Examination. The aim is to ensure that these key staff members have the necessary skills to navigate investment complexities effectively. AIFs have become a big force, with total investments made standing at Rs 4 lakh crore.

Under Regulation 4(g)(i) of the SEBI (Alternative Investment Funds) Regulations, 2012, this mandate underscores SEBI's commitment to raising industry standards by emphasizing professional certification as a key criterion for AIF registration.

The certification requirement will apply to all new AIF registration applications and scheme launches submitted after May 10, 2024. Existing AIF schemes and pending launch applications must comply by May 9, 2025.

Responsibility for ensuring compliance falls on the trustees or sponsors of AIFs, as per SEBI's Master Circular dated May 7, 2024. This move reflects SEBI's mandate to protect investor interests and promote a well-regulated securities market.

SEBI's decision aims to strengthen the integrity and professionalism of India's investment landscape, bolstering investor confidence and promoting best practices in alternative investments.

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