NISM - The most important requirement for Research analyst and Investment advisor

Regulation 7 of SEBI RA Regulations, 2014 and SEBI IA Regulations 2013 stipulates the mandatory requirement of holding valid NISM certificate.

NISM certification is the most important certification for SEBI registered Research analysts as well as SEBI registered Investment advisors. Research analysts have to pass NISM XV exam before they apply for SEBI Research analyst certificate and Investment advisors have to pass NISM X-A and X-B which are level 1 and level 2 exam for Investment advisors. Investment advisors have to pass both NISM X-A & X-B exams before they apply for Investment advisor certificate with SEBI.

Why NISM is important ?

Holding a valid NISM certification is an essential condition to Research analyst as well as Investment advisor certification. So it is duty and responsibility of research analyst (RA) as well as Investment advisors (IA) to renew the same before the expiry of respective NISM certificate. Even a miss of one day is a serious compliance violation. Holding a valid NISM certificate all the time is a must.

Who all are required to have valid NISM certification?

As per regulation 7 of SEBI RA Regulations as well as SEBI IA Regulations following are required to hold a valid NISM certification

1. Individual RA or Individual IA

2. Principal officer in case of non individual RA or Non Individual IA

3. Partner or partners who is/are involved or related with research services, directly or indirectly, in case of partnership OR Partner/s who is/are engaged in providing Investment advice

4. Person associated with research services- Means the people who are involved in research services, directly or indirectly. This include persons who are dealing with public or client. Also sales staff,service relationship managers, client relationship managers are required to hold NISM certification

5. Person associated with Investment advice- means persons who are engaged in providing investment advice to client, directly/ indirectly, irrespective of association with Investment advisor. It includes client-facing persons such as sales staff, service relationship managers, client relationship managers, etc., by whatever name called

   
   

   You can now appreciate the fact that NISM is a very important certification and an essential condition of Research analyst & Investment advisor certification. Thus timely renewal before expiry of NISM certificate is key responsibility of RA as well as IA.

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