NISM certification is a mandatory requirement for key personnel in portfolio management services. This article explains which exams you actually need and how to obtain them.
The Regulatory Framework
Legal Basis
Under the SEBI (Portfolio Managers) Regulations, 2020, the Principal Officer and other key personnel must hold relevant NISM certification. The certification requirements are specified under the SEBI (Certification of Associated Persons in the Securities Markets) Regulations, 2007.
Purpose
NISM certification ensures that personnel in the securities market have the necessary knowledge and competence to perform their roles effectively and in compliance with regulatory requirements.
Required NISM Exams
NISM-Series-XXI-B: Portfolio Managers Certification Examination
Who Needs It: Principal Officer and employees having decision making authority related to fund management
Examination Details:
- Cost: ₹3,000
- Validity: 3 years
- Passing Score: 60% (90 marks out of 150)
- Negative Marking: 10% of marks assigned to a question
- Duration: 2 hours
- Availability: More than 150 cities across India
Timeline for Certification:
- Existing Principal Officers: Must obtain within two years from September 7, 2021
- New Principal Officers: Must obtain within one year from date of employment
NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors Certification Examination
Who Needs It: Associated persons engaged as distributors of Portfolio Management Services
Examination Details:
- Duration: 2 hours
- Passing Score: 60%
- Negative Marking: 10% of marks assigned to a question
Exemptions:
- Those with valid AMFI Registration Number (ARN) are exempted
- Those with NISM Series-V-A exam certification are exempted
Certification Requirements for Different Roles
| Role | Required Exam | Timeline |
|---|---|---|
| Principal Officer | NISM-Series-XXI-B | Within 2 years (existing) / 1 year (new) |
| Fund Management Personnel | NISM-Series-XXI-B | Within 2 years (existing) / 1 year (new) |
| Compliance Officer | NISM-Series-III-A (Securities Intermediaries Compliance) | As per SEBI guidelines |
| PMS Distributors | NISM-Series-XXI-A | Within 2 years (existing) / 1 year (new) |
How to Obtain Certification
Step 1: Register for the Exam
Register for the NISM examination through the NISM website. Examinations are available in more than 150 cities across India.
Step 2: Prepare for the Exam
Study the NISM curriculum and practice mock tests. The NISM-Series-XXI-B: Portfolio Managers Certification is a more advanced exam.
Step 3: Take the Exam
Take the exam at the designated NISM test centre. The exam duration is 2 hours.
Step 4: Obtain Certification
Upon passing the exam, obtain the certification certificate. The certification is valid for three years.
Step 5: Renew Certification
Ensure timely renewal of certification before expiry. Fresh certification shall be obtained before expiry of the existing certification.
Consequences of Non-Compliance
Regulatory Action
Failure to obtain required NISM certification can result in enforcement action by SEBI.
Operational Impact
Uncertified personnel may not be permitted to perform regulated activities.
Expert Legal Guidance
Anuj Desai & Associates provides expert legal advisory services on NISM certification compliance for portfolio managers. Our securities law experts help firms understand certification requirements, ensure timely compliance, and maintain regulatory compliance. Contact us for guidance on NISM certification and other regulatory matters.