SEBI Proposes Major Overhaul of Market Participant Certification Rules

SEBI's Certification Framework Overhaul

The Securities and Exchange Board of India (SEBI), the country's capital market regulator, has initiated a major reform of its certification framework for individuals engaged in the securities market. This proposal, outlined in a consultation paper released recently, aims to update the SEBI (Certification of Associated Persons in the Securities Markets) Regulations, 2007.

Key proposed changes include: * Broadening the Scope of "Associated Person": SEBI intends to expand the definition of an "associated person" to encompass a wider range of individuals who interact with regulated entities, ensuring more market participants meet certification standards. * New Certification Modes: The regulator is looking to introduce alternative pathways for certification, such as completion of long-term relevant courses, offering flexibility beyond traditional exams. * Tightening Exemption Norms: SEBI plans to introduce stricter rules for exemptions from certification, addressing concerns that current norms have been exploited.

Impact These changes are expected to enhance regulatory compliance, professional standards, and investor protection within the Indian securities market. Professionals who currently fall outside the certification net may now need to comply, potentially increasing operational complexity or training costs for some firms. The move signals SEBI's commitment to a robust and well-qualified workforce in the financial sector. Rating: 7/10

Difficult Terms: * Associated Person: An individual who is associated with a regulated entity in the securities market, performing functions that require certification under SEBI rules. * Certification Framework: A system of rules and processes established by SEBI to ensure that individuals working in the securities market possess the necessary knowledge and qualifications. * Consultation Paper: A document issued by a regulatory body seeking public feedback on proposed policy changes or new regulations before they are finalized. * Regulated Entities: Companies or organizations that are subject to specific laws and regulations, such as stock exchanges, mutual funds, investment advisors, etc.