NISM to certify market players

The Securities and Exchange Board of India (Sebi)-promoted National Institute of Securities Markets (NISM) is all set to become a central registry of all intermediaries in Indian capital markets.

"In the long term, NISM will be the central registry of every person working in the financial markets and it will serve as a pool of information to know the advisor's history for employers and investors alike," said one of the panelists at a workshop organised by Sebi and chaired by its chief M Damodaran.

The NISM has been made responsible to co-ordinate the task of certification in Indian securities markets that would also include maintenance of a complete database of all market participants who have been certified by it.

The initiative is expected to result in the creation of a pool of qualified workforce in the Indian securities industry and spur a set of new educational programmes catering to market professionals over a period of time.

In a move to have a clean and safe market, the regulator has made it mandatory for all persons associated with the securities market to get a certificate from the NISM.

According to the Sebi notification, 'Associated person' means an employee of an intermediary/agent/distributor. It also means an employee of a foreign institutional investor or a foreign venture capital investor working in India.

The certificate, once obtained, is valid for three years and will have to be re-validated once in every three years on successful completion of continuing professional education (CPE).

There will be various ways of obtaining the certificate, which involves either passing an examination with NISM, participating in specified programmes or delivering some sessions in specified programmes of CPE.

The norms would make the entry of new players more stringent, but the existing ones might be given some time to graduate to the new criteria.

Industry estimates put the number of people who might have to take the exam every year at 30,000-40,000.

"At present, we have prepared an exam for the registrar and trasfer agents since the number of RTAs is small. We are now in talks to prepare an exam for investment bankers. For larger groups, we may even engage agencies that have the competency to administer these tests," said Dr G Sethu, director, NISM.

The course fee would be similar to the ones charged by the exchanges currently, he added.