On June 25, 2025, SEBI issued a notification that immediately changed the staffing math for every AIF manager in India. The amendment to the SEBI (Certification of Associated Persons in the Securities Markets) Regulations, 2007 [1] mandated that at least one member of the key investment team of every AIF manager must hold a valid NISM certification, specifically Series-XIX-C (Alternative Investment Fund Managers Certification) or the newer Series-XIX-D [1][2]. This was not a consultation paper or a proposal. It took effect the day it was notified.
For managers who were already registered, SEBI gave a compliance window until July 31, 2025 [1][2]. That was barely five weeks. For anyone launching a new AIF, the requirement applies from day one. I have worked with several emerging managers who had to rethink their team structure and hiring timeline because of this single change. This is what you need to know.
What the requirement actually says
The notification, SEBI/LAD-NRO/GN/2025/249 [1], amends the certification regulations to include AIF key investment personnel in the list of "associated persons" who must hold valid NISM certification. The specific requirement is:
- At least one member of the fund manager's key investment team must hold a valid NISM Series-XIX-C or Series-XIX-D certification [1][2].
- The certification must be in force at the time of SEBI registration and must remain valid throughout the fund's operation.
- The certification is valid for three years from the date of passing and must be renewed before expiry [2].
"Key investment team" is defined by SEBI to include personnel who are directly involved in making investment decisions on behalf of the AIF. This typically means the CIO, fund manager, or lead investment professional, not back-office or operations staff. But the exact scope can vary depending on how your fund's investment committee and decision-making structure is documented in the PPM.
Series-XIX-C versus Series-XIX-D
There are two certification paths, and choosing the right one depends on which AIF category you manage.
Series-XIX-C is the broader AIF Managers Certification. It covers the full spectrum of alternative investments (Category I, II, and III AIFs) and tests knowledge across fund structuring, SEBI regulations, valuation, risk management, and investor protection. This is the default choice for most managers [1][2].
Series-XIX-D was introduced specifically for Category I and Category II AIF managers [1]. It is narrower in scope, focusing on the regulatory and operational aspects most relevant to VC, PE, and credit funds. If you are running a Category I VCF or a Category II PE fund and do not plan to manage Category III strategies, XIX-D may be a more efficient path, as the syllabus is lighter and the exam is more targeted.
Both certifications satisfy the SEBI requirement. You do not need both. But at least one person on your key investment team needs one of them.
The exam itself
NISM administers the certification exams through designated test centres across India. The format is computer-based, with multiple-choice questions. What to expect:
- Duration: 2 hours for XIX-C, slightly shorter for XIX-D.
- Passing score: Typically 60% (NISM sets this and can adjust it).
- Syllabus coverage: SEBI AIF Regulations, fund structuring, investment mandates, valuation methods, compliance and reporting obligations, taxation of AIFs, investor protection norms, and recent regulatory amendments.
- Preparation time: Most professionals with fund management experience need 2-4 weeks of focused study. If you are coming from a non-financial background, allow more time.
- Re-attempts: You can retake the exam if you fail, but there is a mandatory waiting period between attempts.
The exam is not trivially easy, but it is not designed to be a barrier either. It tests practical knowledge of the regulatory framework. If you have been working in the AIF space for a year or more, the material should be familiar. If you are a first-time manager coming from an operating or entrepreneurial background, take the preparation seriously.
Why SEBI introduced this now
The certification requirement fits into SEBI's broader push to professionalise the AIF industry. The Indian AIF market has grown fast: total AIF commitments have crossed INR 12 lakh crore, with hundreds of new fund managers registering each year. SEBI's worry, not an unreasonable one, is that some managers lack adequate understanding of the regulatory and operational obligations they are taking on.
The NISM requirement creates a minimum competence bar. It does not guarantee good fund management, but it ensures that at least one person making investment decisions has demonstrated baseline knowledge of the rules they are operating under. I think this is a reasonable requirement, even though the timeline was aggressive.
Practical implications for emerging managers
If you are forming a new AIF, this requirement has a few practical consequences:
Hiring and team composition. If neither you nor your co-founder holds NISM certification, one of you needs to get it before you can register with SEBI. Factor this into your timeline. The exam is available frequently, but scheduling, preparation, and the possibility of needing a retake means you should start early, ideally 6-8 weeks before your planned registration submission.
Key person risk. If only one person on your team holds the certification and that person leaves, you have a compliance problem. SEBI expects the certification requirement to be met at all times, not just at registration. Some managers address this by having two team members certified, which also helps with business continuity planning.
PPM disclosure. Your Private Placement Memorandum must now include the certification status of your key investment personnel [1]. SEBI reviewers check this during the registration process. If you list someone as a key investment team member but they are not NISM-certified, expect a clarification request that delays your registration.
Ongoing renewal. The three-year validity means you need a calendar reminder to renew before expiry. Letting the certification lapse is a compliance breach. SEBI verifies certification status through quarterly and annual reporting [1].
For second-time managers: the transition period is over
If you are a manager who was already registered before June 25, 2025, the compliance window closed on July 31, 2025 [1][2]. By now, you should have at least one certified team member. If you do not, you are technically non-compliant, and this will surface in your next Compliance Test Report filing. SEBI has not yet taken public enforcement action specifically for NISM non-compliance, but the risk is real and growing as the CTR framework tightens [3].
My advice: do not treat this as a box-ticking exercise. Get the certification, keep it current, and make sure your compliance records reflect it accurately. It is a small investment of time relative to the regulatory risk of ignoring it.
How this fits into the bigger regulatory picture
NISM is one piece of a wider regulatory tightening that SEBI has been driving since late 2024. The December 2024 pro-rata rights circular [4], the enhanced CTR requirements effective February 2026 [3], and the updated reporting frameworks [5] all point the same way: SEBI is raising the bar for operational and professional standards across the AIF industry.
For emerging managers, the cost and complexity of running a fund in India are higher than they were two years ago. But managers who take compliance seriously will stand out to institutional investors and allocators who care about regulatory hygiene. On balance, professionalisation is good news for well-run emerging managers.
How Allocator One Bharat supports this
At Allocator One Bharat, we guide emerging managers through the full registration process, including the NISM certification requirement. We help you figure out who on your team should get certified, how to prepare, and how to document certification status in your PPM and ongoing compliance filings.
Our fund administration services include compliance tracking that monitors certification validity and flags renewal deadlines well in advance. We have seen too many managers let small compliance items slip and then scramble to fix them before an audit or CTR filing. Our system prevents that. If you are forming an AIF and need to plan around the NISM requirement, get in touch.
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