Regulation 4 of the Securities Exchange Board of India (Alternative Investment Funds) Regulations, 2012 (AIF Regulations) prescribes the eligibility criteria for obtaining certificate of registration for Alternative Investment Funds (AIFs). Earlier, AIF manager’s investment team was required to have at least 1 (one) key personnel with (i) an experience of at least 5 (five) years’ in advising or managing pools of capital or fund or asset or wealth or portfolio management or in the business of buying, selling and dealing of securities or other financial assets; and (ii) professional qualification inter-alia in the subjects of finance/accountancy/business management/commerce/economics from a university or an institution recognized by the Central Government or any State Government or a foreign university, or a chartered financial analyst (CFA) charter from the CFA institute.
However, amendments by the Securities and Exchange Board of India (SEBI) require key personnel of the investment team of AIF managers to obtain necessary certification from the National Institute of Securities Market (NISM) with effect from May 10, 2024. SEBI has made it mandatory for at least one key personnel amongst the associated persons functioning within the investment team of an AIF manager to obtain a certification from NISM by passing the ‘NISM Series-XIX-C: Alternative Investment Fund Managers Certification Examination’.
Conclusion
SEBI’s move of mandating certification requirement for investment team of AIF managers is intended to achieve increased professionalism and competency in management of AIF investments.