Capital markets regulator Securities and Exchange Board of India (SEBI) has tightened norms for management teams operating alternative investment funds (AIFs), it said in a circular on Monday.
According to the notification by SEBI, it is now mandatory to have at least one key personnel in an investment team managing an AIF scheme, with a relevant certification from the National Institute of Securities Market (NISM).
This will be an eligibility criterion for the certification of registration of an AIF, the circular added. It said that all active schemes and those with pending scheme applications must comply with the new norm by 9 May, 2025.
“At least one key personnel, amongst the associated persons functioning in the key investment team of the manager of an alternative investment fund, shall obtain certification from the National Institute of Securities Market by passing the NISM Series-XIX-C,” the circular noted.
The purpose of this examination is to create a common minimum knowledge benchmark for AIF managers and investment teams, according to the NISM. It focuses on enabling a deeper understanding of AIF product features, their investment valuation norms, fund governance processes, fund performance measurements, and taxation aspects.
It offers understanding about the investment landscape and various types of investments via concepts of informational efficiency, modern portfolio theory and capital market theory.
Investment managers who complete the module will specialise in aspects such as the role of AIF managers their management team, fund and fee structures as well as performance measurement techniques, the various investment strategies involved, investment due diligence processes and governance structure in AIFs followed by investors.
It will also help identify the regulatory environment in which the AIFs operate in India such as SEBI (AIF) Regulations, FEMA, PMLA, SEBI (PIT) Regulations, SEBI (PFUTP) Regulations etc, according to the details on the NISM website.
The NISM is a public trust established in 2006 by SEBI. The institute offers full-time residential long-term programmes for postgraduate students, short-term training programmes, and faculty development programmes for market participants.
Last month, the regulator permitted submission of changes in the private placement memorandum of AIFs directly to the regulator instead of via a merchant banker, to facilitate the ease of doing business and rationalising the cost of compliance for AIFs.
