AIF Regulations: New Certification Requirement Comes Into Effect

The Securities and Exchange Board of India (SEBI) has mandated that the key investment team of the manager of an Alternative Investment Fund (AIF) should have at least one key personnel with certification from the National Institute of Securities Market (NISM).

Regulation 4 of the SEBI (Alternative Investment Funds) Regulations, 2012, provides the eligibility criteria for obtaining certification of registration as an AIF. The said Regulations were amended last year.[1] Prior to the amendment, Regulation 4(g) specified that the key investment team of the manager of AIF had to have at least one key personnel with experience as prescribed under sub-clause (i), and at least one key personnel with professional qualification described under sub-clause (ii) of the said Regulation. These requirements of experience and professional qualification could be fulfilled by the same key personnel.

Through the 2023 amendment, the experience requirements were done away with, and replaced with certification requirements.  As per amended Regulation 4(g)(i), the key investment team has to have “at least one key personnel with relevant certification as may be specified by the Board from time to time”. On May 10, this particular provision was brought into force[2] and the relevant certification was specified as certification from the NISM by passing the NISM Series-XIX-C: Alternative Investment Fund Managers Certification Examination.[3] A similar amendment has been made to the SEBI (Certification of Associated Persons in the Securities Markets) Regulations, 2007.

This certificate is valid for a period of three years and has to be renewed before its expiry to ensure continuity in compliance with the certification requirement.

The circular dated May 13, 2024, states that the new certification requirement applies to all the applications for registration of AIFs and launch of schemes by AIFs filed after May 10, 2024. When it comes to existing schemes or schemes whose application for launch is pending, a year’s time has been given to ensure compliance. Further, it has to be ensured that compliance with the provisions of the circular is included in the Compliance Test Report (CTR) prepared by the manager at the end of the financial year.

[1] SEBI (Alternative Investment Funds) (Second Amendment) Regulations, 2023; available at: