SEBI Proposes Centralized Control over Securities Market Professional Certification
SDG 16: Peace, Justice and Strong Institutions | SDG 8: Decent Work and Economic Growth | SDG 9: Industry, Innovation and Infrastructure
Institutions: Securities and Exchange Board of India (SEBI) | Ministry of Finance
The Securities and Exchange Board of India (SEBI) released a Consultation Paper proposing amendments to the SEBI (Certification of Associated Persons in the Securities Markets) Regulations, 2007 (CAPSM Regulations). These amendments aim to update, clarify, and reinforce the professional standards required for individuals operating within the Indian securities market.
The core change is the centralization and simplification of SEBI’s regulatory power over certification.
Centralized Authority: SEBI has taken broader authority to directly specify which categories of “associated persons” must obtain certifications, the types of intermediaries they engage with, and the exact timeframe for compliance.
Streamlining: The regulations have been streamlined by omitting redundant sub-regulations and refining language across related sections.
Mandatory Compliance: The amendment reinforces that associated persons engaged in critical activities—such as those dealing with investor funds, internal control, risk management, or compliance—must possess a valid certificate (administered by the National Institute of Securities Markets (NISM)) to continue their engagement.
The amendments lay the groundwork for the following regulatory actions:
Finalize Certification Scope: SEBI will use its new authority to specify the categories of associated persons that require certification, the types of intermediaries they are associated with, and the compliance timeframe.
Ensure Certificate Validity: Associated persons engaged in critical functions must possess a valid certificate to continue their engagement.
Ensure Compliance Continuity: The regulator must establish clear monitoring and enforcement mechanisms to ensure that the industry adheres to the mandatory professional standards.
This regulatory move is highly relevant as it grants SEBI the necessary flexibility to enhance investor protection and regulatory agility across the market. By centralizing and reinforcing certification, SEBI strengthens the mandatory skill floor for market functionaries, directly protecting investors from misconduct and malpractice. The broader authority allows the regulator to quickly adapt certification mandates to new products and technologies (e.g., FinTech platforms) without lengthy legislative processes.
What are ‘Associated Persons’ under SEBI Regulations?→ “Associated Persons” refers to individuals working in the securities markets who are employed by or engaged with intermediaries (like brokers, investment advisers, or asset management companies). Their roles typically involve activities such as interacting with investors, managing client assets, handling investor grievances, or overseeing risk and compliance.
Follow the full update here: Consultation Paper proposing amendments to the SEBI 2007 CAPSM Regulations