SEBI Eases Certification Rules For Sales, Non-Core Staff In Research Services

India’s market regulator, the Securities and Exchange Board of India (SEBI), has decided to relax certain certification requirements tied to research services.

The announcement was made on Wednesday, 11 March. The idea is to reduce compliance pressure for employees who interact with clients on research products but are not involved in producing the research itself.

The revised framework applies to Persons Associated with Research Services (PARS). These individuals were earlier required to clear the NISM Series-XV: Research Analyst Certification Examination.

Regulatory officials indicated that the step is part of broader efforts to simplify compliance while ensuring that investor protection standards remain intact. But what exactly has changed in the certification process?

Who Are Persons Associated With Research Services (PARS)?

The regulatory framework governing research analysts was introduced in 2014 to bring greater transparency to how investment research is created and distributed.

Under the regulations, anyone connected with research services must obtain certification from the National Institute of Securities Markets (NISM) before performing such roles.

The regulations also define a category known as Persons Associated with Research Services (PARS).

These roles typically include people who communicate research to investors rather than prepare it. Examples include sales staff, relationship managers (RMs), and support teams that coordinate client communication around research services.

What Modifications Has SEBI Made To The Certification Framework?

To simplify compliance for such roles, SEBI has introduced a new certification exam titled “NISM Series-XXV-A: Persons Associated with Research Services (Sales and Other Non-Core Services) Certification Examination".

Under the revised system:

1. PARS involved in sales or non-core functions can qualify through the Series-XXV-A certification instead of the full research analyst exam.

2. Professionals who are already certified in Series-XV will not have to take the new certification exam right away.

3. These individuals will move to the new certification only after their current Series-XV certification expires.

4. Professionals directly involved in research activities will continue to require the Series-XV Research Analyst certification.

The difference between the two modules is largely in the scope of the syllabus.

While the Series-XV exam focuses on technical subjects such as:

• Financial modelling

• Valuation frameworks

• In-depth company analysis

• Regulatory requirements for research reports

The newer module (Series-XXV-A) is expected to concentrate more on:

• Communication with clients

• Relationship management practices

• Ethical interaction with investors

• Compliance basics, including Most Important Terms and Conditions (MITC)

Also read: US Initiates ‘Unfair Trade’ Probe Targeting India And 15 Other Countries

Why Is SEBI Introducing A Lighter Certification Route?

The change fits into SEBI’s broader effort to simplify compliance where the regulatory risk is relatively lower.

Until now, many of these employees were required to pass the Series-XV Research Analyst exam, which covers detailed subjects such as financial statement analysis, valuation techniques, and fundamental or technical analysis.

Employees whose work mainly involved interacting with clients, rather than preparing research reports, earlier had to clear certifications that were broader than what their roles actually required.

Instead of a one-size-fits-all exam, the requirements are now meant to better reflect what these client-facing roles actually involve.

For brokerage firms and research houses, the change could simplify the process of certifying larger client-facing teams. A shorter and more role-specific certification may also reduce the time needed to bring new employees on board when their work relates to distributing research services rather than creating them.

Sources:

SEBI

TOI