GUIDANCE – NISM XXIA
To: All SEBI Registered Portfolio Managers
From: Association of Portfolio Managers in India
This has reference to SEBI(Portfolio Managers) Regulations, 2020,SEBI (Certification of Associated Persons in the Securities Markets) Regulations, 2007
and various circulars for 13th February 2020 Circular for 7th September 2021 XXIA circular, to 7th September 2021 XXIB circular) requiring the associated persons (including distributors), principal officers and certain other employees of the portfolio manager to obtain relevant NISM certifications as specified by SEBI. NISM has also notified NISM Series-XXI-A: Portfolio Management Services (PMS)
Distributors Certification Examination vide NISM communiqué NISM/Certification/Series-XXI-A: PMS/2021/01 dated February 16,202. Over this time, APMI has been receiving various queries and clarification with requests for extension of the applicable date of NISM XXIA. These feedbacks & requests were presented to SEBI & the below is what APMI is guiding the industry regarding applicability of NISM XXIA:
- Any Associated Person who was employed or engaged as a Distributor of Portfolio Management Services (PMS) as on 7 September?21 shall comply with the certification of NISM XXIA within 2 years by 7 September’23.
- Any Associated Person who was employed or engaged as a Distributor of Portfolio Management Services (PMS) after 7th September’21 shall comply with the certification of NISM XXIA within 1 year from their date of employment or engagement.
- An Associated person who being a distributor of the Portfolio Management Services (PMS) and had obtained a valid NISM VA exam certification as on 7th September’21 shall be exempt from the requirement of obtaining NISM XXIA till the validity of the said NISM VA certification.
It has to be noted that this examination seeks to create a common minimum knowledge benchmark for distributors and relevant employees of PMS providers. The certification aims to enhance the quality of distribution and related support services in the PMS industry.
APPLICABILITY & IMPORTANT DATES FOR NISM XXI A & B
APMI conducted its first event on Wednesday 22nd June’22 with Mr. Manoj Kumar Executive Director, SEBI as the Chief Guest. This event was also attended by the CGM SEBI, Ms. Ruchi Chojer & GM SEBI, Ms. Mansawani Mahapatra with the presence of Board of Directors of APMI and over 75 participants from the PMS Industry.
During this event, participants contributed their views on various topics relevant for PMS Industry including the applicability and important dates related to the NISM XXI-A & XXI-B certifications required to be taken by associated persons, including principal officers and distributors of the Portfolio Managers. We are taking this opportunity to release a brief note on this important topic. APMI is working to create an Industry wide environment to facilitate these certifications for our members and
SEBI(Portfolio Managers) Regulations, 2020, SEBI (Certification of Associated Persons in the Securities Markets) Regulations,2007 and various circulars require the Principal Officers and other associated persons (including distributors) of the portfolio manager to obtain relevant NISM certifications as specified by SEBI.
Mandatory Certifications and Continuing Professional Education
1. For Distributors, In house Sales/Product staff of Portfolio Managers – NISM-Series XXI-A: PMS
Distributors Certification Examination is a mandatory examination. The examination seeks to create a common minimum knowledge benchmark for distributors of PMS. The certification aims to enhance the quality distribution and related support services in the PMS.NISM has notified NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors Certification Examination vide NISM communiqué NISM/Certification/Series-XXI-A: PMS/2021/01 dated February16,2021
2. For Principal Officers and other relevant employees- NISM-Series-XXI- B: Portfolio Managers Certification Examination to create a common minimum knowledge benchmark for principal officers and other employees of the Portfolio Management Services (PMS) firms. The exam aims to enhance the quality of Portfolio Management Services.
B: CPE & eCPE:
Once the certifications are obtained, the Regulations also require the certificate holders to complete the continuing professional education requirements to keep the certifications valid. Following links will help you understand the relevant CPE requirements:
1. Eligibility criteria for PMS- Distributors CPE/ eCPE Programme:
2. Eligibility criteria for PMS- Managers CPE / eCPE Programme:
3. FAQs on CPE Programme: https://www.nism.ac.in/frequently-asked-questions-portfoliomanagement-services-pms-distributors-cpe-program/
4. The E-CPE criteria (including Grandfathering provisions) can be availed by employees, local distributors as well as overseas distributors also.
C: Important Dates:
1. Associated persons engaged in distribution of PMS products, engaged by Portfolio Managers before 7th Sept’21- have 2 years from the date of 2021 Circular i.e. by 7th September 2023) to obtain the certification by passing NISM XXI- A- This includes Sales/product employees hired before 7th Sept’21 and also local/overseas distributors. However, if their AMFI Registration Number and/or NISM V-A Certification are expiring before 7th September 2023, they need to obtain the NISM XXI-A certification on or before that date.
2. Portfolio Managers who engage or employ any such associated person after 7th Sept’21 have 1 year to obtain the certification by passing NISM XXI- A- This includes Sales/product employees hired after 7 Sept 21 and also local/overseas distributors. During this period though, the associated person needs to hold a valid- ARN and/or NISM V-A Certification.
3. The associated persons who are acting as the principal officer or employee(s) of the Portfolio Manager having decision making authority related to fund management, shall obtain the NISM Series-XXI-B: Portfolio Managers Certification Examination before 7th September 2023.
4. Principal officers or employees having decision making authority for fund management, who have joined the portfolio manager after 7th September 2021, can clear the NISMSeries-XXI-B: Portfolio Managers Certification Examination within 1 year from the date of joining.
D: Important Definitions as per Regulations:
1. “agent” means any person who is engaged in the activity of sale or distribution of securities on behalf of an issuer or a distributor for a commission or any other consideration;
2. “associated person” means a principal or employee of an intermediary or an agent or distributor or other natural person engaged in the securities business and includes an employee of a foreign institutional investor or a foreign venture capital investor working in
3. “distributor” means any person engaged by an intermediary or an issuer for the purpose of sale or distribution of securities;
4. “principal” means persons who are actively engaged in the management of the intermediary’s securities business including supervision, solicitation, conduct of business, and includes Sole Proprietors, Managing Partners & Whole Time Directors.