Good News for Mutual Fund Distributors Aged 50 and Above!

 

No NISM Examination Required to Distribute PMS! New Rules Recognise Age and Professional Experience

 

Rajesh is 51 years old and has been working in the mutual fund distribution business for the past 20 years. Over the years, he has introduced investment products to hundreds of investors and guided them in choosing investments based on their financial goals.

 

Recently, he wanted to expand his business by introducing Portfolio Management Services (PMS) to his clients. However, he was hesitant because he would have to clear the relevant NISM certification examination.

 

Now, there is good news for professionals like Rajesh. Individuals aged 50 and above can obtain the required certification by attending the prescribed Continuing Professional Education (CPE) programme, without having to appear for the examination.

Recognition for Age and Professional Experience

 

PMS is an important investment segment that offers mutual fund distributors an opportunity to expand their business and provide clients with additional investment options.

 

Earlier, distributors intending to distribute PMS products were required to clear the relevant NISM certification examination to obtain the necessary qualification.

However, following SEBI's guidelines, the National Institute of Securities Markets (NISM) has introduced changes to its certification requirements.

Under the revised framework, individuals aged 50 and above are eligible for an examination exemption. Instead of appearing for the relevant examination, they can complete the prescribed Continuing Professional Education (CPE) programme to fulfil the certification requirements.

 

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Which Examinations Are Covered?

 

Under the new framework, individuals aged 50 and above can obtain exemption from the following two important examinations:

1.  NISM Series V-A: Mutual Fund Distributors Certification Examination.

2.  NISM Series XXI-A: Portfolio Management Services (PMS) Distributors Certification Examination.

 

Instead of clearing these examinations, eligible candidates can attend the respective CPE programmes. This enables them to fulfil the applicable certification requirements under AMFI (Association of Mutual Funds in India) and APMI (Association of Portfolio Managers in India).

 

One important condition is that candidates must have completed 50 years of age on the date of registering for the CPE programme with NISM.

 

10 Years of Experience Also Qualifies for Exemption!

 

Age 50 is not the only eligibility criterion for availing of this benefit. Professionals with at least 10 years of relevant industry experience can also qualify for the examination exemption.

Individuals who have collectively worked for 10 years or more with one or multiple SEBI-registered PMS providers are eligible to avail themselves of this benefit.

A similar experience-based exemption is also applicable to the mutual fund distribution segment.

However, candidates must submit relevant experience certificates issued by the concerned organisations to establish their professional experience.

Other NISM Examinations Covered Under the Exemption

 

The age- and experience-based examination exemption has also been extended to certain other NISM certification examinations.

NISM Certification	Area Covered
Series I	Currency Derivatives
Series II-B	Registrars to an Issue and Share Transfer Agents – Mutual Funds
Series III-A	Securities Intermediaries Compliance (Non-Fund)
Series VI	Depository Operations
Series VII	Securities Operations and Risk Management
Series VIII	Equity Derivatives
Series XVI	Commodity Derivatives

 

Eligible candidates can complete the respective CPE programmes instead of appearing for these examinations, subject to the applicable conditions.

 

No Exemption for SIF Distribution

There is an important exception to the new framework.

The examination exemption does not apply to the certification requirement for distributing Specialised Investment Funds (SIFs).

Therefore, individuals intending to distribute SIF products must mandatorily clear the NISM Series V-D examination.

 

How Will This Benefit Distributors?

The revised framework is expected to benefit mutual fund distributors who want to expand their professional activities.

 

Experienced distributors will no longer have to undergo the additional burden of preparing for and appearing in examinations covered by the exemption. It also creates an opportunity for individuals aged 50 and above to enter or expand their activities in the distribution business.

 

However, PMS is significantly different from conventional mutual fund investments. Investment requirements, risk levels, investment strategies and fee structures may vary.

Therefore, obtaining the necessary certification alone is not sufficient. Distributors must also develop a thorough understanding of PMS products, their investment strategies and associated risks before recommending them to clients.

 

Overall, this is a welcome move that recognises the value of age and professional experience in the financial distribution industry.

 

However, exemption from an examination should not be mistaken for exemption from professional qualification requirements. Eligible distributors must complete the prescribed CPE programmes and comply with all applicable regulatory and certification requirements to obtain the necessary certification.