On May 13, 2024, IND SEBI issued circular regarding certification requirements for key investment team of AIFs, mandating at least one key personnel to obtain certification, in accordance with reg 4 of SEBI (alternative investment funds) regulations, 2012.
Amendments to the SEBI (certification of associated persons in the securities markets) regulations, 2007, require key personnel in AIF manager’s investment team to pass NISM series-XIX-C: alternative investment fund managers certification examination.
Applies to all AIF registration applications, scheme launches filed after May 10, 2024.
Trustees/sponsors must ensure compliance and include it in compliance test report.
Circular effective from May 10, 2024; existing schemes must comply by May 9, 2025.
On Feb. 3, IND SEBI proposed review of eligibility criteria of manager.
IND SEBI issued Consultation paper on review of eligibility criteria for the key investment team and prescribing qualification for compliance officer of manager of an alternative investment fund, seeking comments from stakeholders/public on proposals.
Background
Reg. 4, SEBI (AIF regulations) 2012 covers eligibility conditions for AIF registration.
Reg. 4(g) provides that the key investment team of manager of an AIF is required to have adequate experience, at least 1 key personnel having at least 5 years experience.
Such experience could be in managing fund, asset, wealth or portfolio management or the experience could be in the business of buying, selling and dealing of securities.
Further, must have at least one key personnel with professional qualification in finance, accountancy, business management, commerce, economics, capital market or banking.
Proposal
IND SEBI said requirement of having experience may act as a barrier for new age/first generation managers who may not have experience to satisfy regulatory requirement, but have competence/expertise in fund management, generating returns for investors.
Hence, IND SEBI has recommended a review of the eligibility criteria for the key investment team of the manager of an AIF and prescribed qualifications for them.
It has proposed to replace the experience criteria with the requirement of obtaining a relevant certification from an institution notified by IND SEBI, and has suggested that the compliance officer may also be required to obtain relevant certification.
Effectiveness
The comment period for this consultation closes on Feb. 18, 2023.
May 2024 Certification Requirement
On May 13, 2024, IND SEBI issued circular regarding certification requirements for key investment team of AIFs, mandating at least one key personnel to obtain certification, in accordance with reg 4 of SEBI (alternative investment funds) regulations, 2012.
Amendments to the SEBI (certification of associated persons in the securities markets) regulations, 2007, require key personnel in AIF manager’s investment team to pass NISM series-XIX-C: alternative investment fund managers certification examination.
Applies to all AIF registration applications, scheme launches filed after May 10, 2024.
Trustees/sponsors must ensure compliance and include it in compliance test report.
Circular effective from May 10, 2024; existing schemes must comply by May 9, 2025.
