SEBI Mandates New Certification Norms for AIF Managers

The Securities and Exchange Board of India (SEBI) has officially unveiled revised certification requirements for key investment personnel of Alternative Investment Fund (AIF) managers. This crucial update, detailed in SEBI circular F. No. SEBI/LAD-NRO/GN/2025/249 dated June 25, 2025, aims to enhance professional standards and ensure a higher level of expertise within the burgeoning AIF industry.

The new regulations introduce a category-wise mandatory certification framework through the National Institute of Securities Markets (NISM). This move clarifies the certification pathway for AIF professionals and replaces SEBI’s earlier notification dated May 10, 2024.

Category-Wise Certification Now Mandatory:

The updated norms specify different NISM certification requirements based on the AIF category:

• Category I & II AIFs: Key personnel associated with the management of Category I and Category II AIFs are now required to pass either the NISM Series-XIX-C: Alternative Investment Fund Managers Certification Examination or the newly introduced NISM Series-XIX-D: Category I and II Alternative Investment Fund Managers Certification Examination. This ensures that professionals managing these AIFs possess a common minimum knowledge benchmark covering regulatory, operational, and fiduciary aspects.
• Category III AIFs: For key personnel of Category III AIFs, the mandate requires passing either the NISM Series-XIX-C: Alternative Investment Fund Managers Certification Examination or the newly introduced NISM Series-XIX-E: Category III Alternative Investment Fund Managers Certification Examination. This specific certification for Category III AIFs caters to the distinct complexities and strategies often associated with these funds, which may involve higher leverage and more complex investment approaches.

Deadline and Industry Impact:

All existing AIFs are required to comply with these updated certification requirements on or before July 31, 2025. With this approaching deadline, AIF managers are actively preparing their teams to meet the new standards.

This regulatory change is poised to have a significant impact on the AIF landscape. Beyond enhancing professionalism and accountability, it raises questions about potential shifts in hiring strategies for funds. Managers might prioritize candidates who already hold the required certifications or invest heavily in training existing personnel. The emphasis on standardized knowledge is expected to foster greater investor confidence and promote best practices across the alternative investment sector in India.

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Dhairya Chaniyara

Senior Associate | Tax & Regulatory | dhairya.c@server5.the-treelife.com

Focuses on direct tax and regulatory services with a specialization in GIFT IFSC. Brings experience from various industries, including manufacturing, FMCG, IT-ITES, and healthcare, to deliver impactful tax solutions.