SEBI mandates NISM certification for AIF compliance officers from 2027

SEBI

• SEBI requires NISM Series III-C certification for AIF compliance officers by 2027
• Managers must confirm compliance in annual Compliance Test Reports
• AIF industry size has grown to Rs 15 lakh crore, highlighting need for oversight

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In a circular issued today, SEBI said that compliance officers of AIF managers will be required to obtain certification from the National Institute of Securities Markets (NISM) by clearing the NISM Series III-C: Securities Intermediaries Compliance (Fund) Certification Examination.

The circular stated, "The Compliance Officer of Manager of an AIF shall obtain certification from the National Institute of Securities Market by passing the NISM Series-III-C: Securities Intermediaries Compliance (Fund) Certification Examination as mentioned in the communique No. NISM/Certification/Series-III-C: Securities Intermediaries Compliance (Fund) Certification Examination /2025/01/November 20, 2025 issued by the National Institute of Securities Market".

The circular further stated, "Managers of AIFs shall ensure that, with effect from January 01, 2027, only those persons who have obtained the aforesaid certification shall be appointed as or shall continue to act as compliance officer of managers of AIFs".

AIF Regulation mandates AIF managers to appoint a compliance officer and empowers the regulator to prescribe eligibility criteria for the role.

According to the circular, from January 1, 2027, only individuals who hold the specified NISM certification will be eligible to be appointed as compliance officers of AIF managers or to continue in the role. This effectively gives the industry a one-year transition period to ensure existing compliance officers meet the new requirement.

SEBI has also directed trustees, sponsors and managers of AIFs to explicitly confirm compliance with this certification requirement in the Compliance Test Report, which is submitted annually.

SEBI’s intent is to raise professional standards and accountability within the fast-growing AIF sector. The move is seen as strengthening regulatory oversight and ensuring that compliance officers possess uniform and up-to-date knowledge of securities laws applicable to fund structures.

India’s AIF industry, which is growing rapidly across private equity and venture capital, needs enhanced compliance and plug governance gaps if any, as part of the evolving ecosystem. Size of AIF industry has grown rapidly and crossed Rs 15 lakh crore in comparison to around Rs 28000 crore 10 year ago, registering a CAGR of 49 percent.