SEBI has made it clear that all AIFs in India have to go through a clearly established certification process for at least one key personnel in their investment teams
The certification mandate follows two years of concerns raised by limited partners, including government-run SIDBI, around due diligence lapses and other systemic issues in the VC ecosystem
Fund managers that we spoke to are of the belief that SEBI-mandated certification is long overdue, though some have pointed out glaring gaps even with these changes
Fund managers and key personnel managing venture capital funds could soon be taking notes from YouTube tutorials and mugging up rules and regulations related to operating alternative investment funds (AIFs) as SEBI’s May 2025 deadline for certification draws near.“The test is not easy as far as we have been told. Even though it is a multiple choice question (MCQ) format, there is negative marking (-25%) for wrong answers, and the passing score for the examination is 60 marks,” the Bengaluru-based partner added.“SEBI’s certification mandate does not completely eliminate the problem of only skilled and approved people running funds. The regulator needs to mandate that at least one partner, ideally the one with the highest equity in the partnership, needs to be certified by NISM,” the partner mentioned above added.
In May this year, the regulator said it would need existing funds, new funds and schemes to get certification for at least one key personnel in the investments team. The certification criterion is applicable for registration of alternative investment funds, and launch of schemes by existing AIFs after May 10, 2024.