SEBI Proposes Major Overhaul of Securities Professional Certification Framework

The Securities and Exchange Board of India (SEBI) has put forth a proposal to significantly restructure the certification framework for individuals working in the securities market. This initiative is designed to widen the scope of participation and elevate skill levels to meet the dynamic demands of the market.

A central aspect of the proposal is the broadening of the definition for "Associated Persons." This expansion aims to include not only current employees of intermediaries and regulated entities but also individuals who intend to engage with the securities market. SEBI believes this inclusivity will help attract younger talent and boost employability among students and aspiring professionals.

To bolster capacity building, SEBI suggested that the National Institute of Securities Markets (NISM) develop long-term certification courses lasting three months or more. These courses will be available in physical, online, or hybrid formats, serving as an alternative or supplement to the current examination-based system and contributing towards NISM and Continuing Professional Education (CPE) credits.

Furthermore, SEBI proposes to discontinue certain existing exemption categories for certifications, such as those for "principals" or individuals above 50 years old with over 10 years of experience. A new, consolidated exemption would cater to individuals aged 50 or older with at least 10 years of relevant experience, allowing them to qualify through classroom credits or approved long-term courses instead of mandatory exams.

The regulator also suggested allowing CPE programs to be conducted electronically or in hybrid formats, moving away from the current requirement of physical attendance. This change is expected to enhance accessibility for professionals across India, particularly those located outside major financial hubs.

These proposed changes stem from the increased number of regulated entities and professionals in the securities market, driven by the introduction of new products and services, necessitating an update to certification requirements.

Public feedback on these proposals is invited until November 27.

Impact: These reforms are expected to professionalize the securities market further by ensuring a better-skilled workforce. They will enhance accessibility to training and certification, potentially attracting more talent and improving overall compliance and investor protection standards. Rating: 7/10.

Difficult Terms: Securities Market Professionals: Individuals working in the financial sector involved in the trading and management of financial instruments like stocks and bonds. Intermediaries: Entities such as brokers, investment advisors, and fund managers that facilitate transactions in the securities market. Regulated Entities: Companies or organizations that are subject to oversight and rules by regulatory bodies like SEBI. Associated Persons: Individuals connected with or employed by a regulated entity in the securities market. NISM (National Institute of Securities Markets): An institution established by SEBI for providing education and certification in the securities market. CPE (Continuing Professional Education) credits: Points earned by professionals through ongoing training to maintain and update their knowledge and skills. Consultation Paper: A document released by a regulator to gather opinions and feedback from the public on proposed policy or rule changes. Exemption Categories: Specific groups of people who are excused from fulfilling certain standard requirements, such as passing an exam for certification. Principals: Senior individuals or owners of firms operating within the securities market.