Sebi launches new certification programme for intermediaries

Sebi launches new certification programme for intermediaries
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First Published: Thu, Dec 20 2007. 12 08 AM IST
Updated: Thu, Dec 20 2007. 12 08 AM IST
Mumbai: The stock market regulator, Securities and Exchange Board of India (Sebi), has initiated a certification programme for all market intermediaries.
Under this programme, people associated with stock markets in any way, will have to obtain a qualifying certificate from the regulator.
The National Institute of Securities Market (NISM), a trust formed by Sebi, is tasked with the certification programme. The process and scope of the certification has been spelt out in the new set of regulations, termed as Certification of Associated Persons in the Securities Markets Regulations 2007.
The power and functions of NISM have also been laid down.
“It’s one more signal to potential investors that the people whom they deal with have appropriate knowledge, certain minimum level of education and behavioural standards to do the job,” said Sebi chairman M. Damodaran.
The certification programme hopes to cover stock broking firms, stock dealers, foreign institutional investors, mutual fund managers, portfolio managers, and those who are involved with the distribution or marketing of equity-related products. As of now, only stock dealers and brokers undergo a certification programme, designed by the exchanges—the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).
NSE’s certification in financial markets (NCFM) conducts 15 certification programmes, which covers various stock market functions, such as derivatives, commodities, corporate governance and compliance. The Association of Mutual Funds in India (AMFI), a representative body of the mutual fund industry, conducts several certification programmes for mutual fund agents. However, the fund managers are not required to undergo any such certification as of now.
All such certification programmes may gradually be brought under the umbrella of new regulations. If any of these certificates is recognized by Sebi, then an individual who earns the certificate will be exempt from obtaining a fresh certificate under the new guidelines.
All existing employees in any stock market-related employment will have to get the certificate within two years of a prescribed date. The new employees will have to get certified within one year. To get the required certificate, which would be valid for three years, each person will have to write an examination conducted by any organization as specified by NISM from time to time.
The certification is renewable and a person wishing to get the certification extended will need to undergo training programmes or seminars as laid out by NISM.
“Besides conducting examinations, NISM will also act as a central registry and a database of certified persons working in the stock market,” said Deena Mehta, Asit C Mehta Investment Intermediates Ltd, a domestic brokerage.
The registrars and transfer agents will be the first category of intermediaries who would be required to complete the certification programme.
rachna.m@livemint.com
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First Published: Thu, Dec 20 2007. 12 08 AM IST