SEBI Eases NISM Certification for Sales Staff of Investment Advisers — New Lighter Exam for PAIA (June 24, 2026)
On June 24, 2026, the Securities and Exchange Board of India issued Circular No. HO/38/12/11(5)2026-MIRSD-POD/I/14660/2026, granting a significant ease-of-doing-business relaxation to the certification requirements applicable to Persons Associated with Investment Advice (PAIA). The circular introduces a lighter, more proportionate NISM certification module specifically for PAIA who handle only sales and other non-core functions — such as sales staff and relationship managers — who interact with clients but are not directly involved in giving investment advice.
This is a welcome, practical fix to a compliance requirement that had, until now, treated every category of client-facing staff at an Investment Adviser firm identically — regardless of whether they actually formulated investment advice or simply handled onboarding, sales, and relationship management. This article explains the full background, what exactly has changed, who benefits, and what Investment Advisers and their staff need to do now.
📋 Quick Summary — SEBI Circular Dated June 24, 2026
Key Numbers at a Glance
Background — Why Did SEBI Need to Act?
Under Regulation 7 of the SEBI (Investment Advisers) Regulations, 2013, every Investment Adviser is required to ensure that all its "Persons Associated with Investment Advice" — commonly referred to as PAIA — obtain the relevant NISM certification. PAIA is a broad category that covers any individual employed by, or associated with, an Investment Adviser who deals with clients in relation to investment advisory services.
On January 2, 2025, SEBI had notified, via Gazette Notification under the SEBI (Certification of Associated Persons in the Securities Markets) Regulations, 2007, that all PAIA must obtain certification by passing two specific exams:
- NISM Series-X-A: Investment Adviser (Level 1) Certification Examination
- NISM Series-X-B: Investment Adviser (Level 2) Certification Examination
These two examinations are comprehensive and were designed to test deep technical knowledge of investment advisory principles — covering financial planning, asset allocation, product knowledge, regulatory framework, ethics, and risk profiling. This level of rigour makes complete sense for someone who is actually formulating and delivering investment advice to a client.
⚠ The Problem Industry Flagged to SEBI
The difficulty is that "PAIA" as originally defined captures every staff member who has client contact at an Investment Adviser firm — including sales staff, relationship managers, client servicing executives, and other support personnel who never actually give investment advice themselves. These staff may onboard clients, explain processes, handle documentation, or manage relationships — but the substantive investment advice is given by separately qualified advisory personnel. Requiring this category of staff to clear the same rigorous X-A and X-B exams as actual investment advisers was seen as disproportionate — adding compliance cost and friction without a corresponding increase in investor protection, since these staff are not the ones formulating advice in the first place.
Based on this feedback from market participants, and consistent with SEBI's continuing ease of doing business agenda, SEBI has now created a more calibrated, risk-proportionate certification framework — introducing a lighter-touch exam specifically for this sales and non-core category, while preserving the full rigour of X-A/X-B for anyone genuinely involved in giving investment advice.
The New Two-Track Certification Framework for PAIA
The June 24, 2026 circular splits PAIA into two distinct categories, each with its own certification pathway:
Track 1 — Core Investment Advice PAIA
Any PAIA who is directly associated with or involved in giving investment advice to clients — i.e., the substantive advisory function itself. This includes advisers who analyse client risk profiles, recommend products, and formulate financial plans.
NISM Series-X-A + Series-X-BTrack 2 — Sales & Non-Core Services PAIA
PAIA who perform only sales and other non-core functions — such as sales staff and relationship managers — who have contact with clients but are not directly associated with or involved in the actual investment advice process.
NISM Series-XXV-B (New, Lighter Module)💡 NISM Series-XXV-B Certification
SEBI has specified NISM Series-XXV-B: Persons Associated with Investment Advice (Sales and Other Non-Core Services) Certification Examination for PAIA who perform only sales and other non-core services.
The examination is referred to in the NISM Communique dated May 18, 2026. Readers should consult the official NISM communique for the examination syllabus, structure, fees and certification validity.
Which Certification Applies to You? — Decision Flow
Are you a PAIA (Person Associated with Investment Advice)?
i.e., do you have client contact on behalf of a SEBI-registered Investment Adviser?
Do you only perform sales / relationship management / other non-core services — with NO direct involvement in formulating or delivering investment advice?
NISM Series-XXV-B
The new lighter certification module applies to you — Sales and Other Non-Core Services Certification Examination
NISM Series-X-A + X-B
You are directly involved in investment advice — full Level 1 and Level 2 Investment Adviser Certification continues to apply
Before vs After — What Exactly Changed
Grandfathering Provision — Relief for Existing Certificate Holders
One of the most practically important aspects of this circular is the grandfathering relief built into Paragraph 5. SEBI has been careful to ensure that this new framework does not create fresh, unnecessary compliance burden for staff who are already certified under the existing (more rigorous) standard.
✅ If You Already Hold NISM Series-X-A and Series-X-B
PAIA falling into the sales/non-core category who have already obtained NISM Series-X-A and Series-X-B certifications as on the date of this circular (June 24, 2026) are not required to immediately undertake the new NISM Series-XXV-B examination. They may continue relying on their existing X-A/X-B certifications. The requirement to obtain Series-XXV-B for such persons only arises before the expiry of the validity of their existing certifications — i.e., at the time of their next renewal cycle.
Original Requirement Notified
SEBI's Gazette Notification mandates NISM Series-X-A and Series-X-B for all PAIA without distinction between advisory and sales/support roles.
NISM Notifies the New Lighter Exam
NISM issues a communique specifying NISM Series-XXV-B as the dedicated certification for PAIA performing only sales and other non-core services.
SEBI Formalises the Two-Track Framework
SEBI's circular operationalises the distinction — sales/non-core PAIA may use Series-XXV-B going forward; core advisory PAIA continue with X-A/X-B; existing X-A/X-B holders are grandfathered until their next renewal.
Renewal Cycle — Transition to XXV-B for Eligible Staff
As existing X-A/X-B certifications held by sales/non-core staff approach expiry, such staff must obtain NISM Series-XXV-B before the expiry date to remain compliant — rather than renewing X-A/X-B again.
Why This Matters — Practical Significance for the IA Industry
💼 Impact on Investment Advisory Firms
- Lower compliance cost: Sales and relationship management staff no longer need to invest time and money clearing the full, comprehensive X-A and X-B examinations meant for substantive investment advisers
- Faster onboarding of sales talent: Investment Adviser firms can bring in sales and client-relationship staff more quickly, since the certification bar for this category is now proportionate to their actual function
- Clearer role segregation: The two-track framework reinforces a clean distinction between staff who give advice and staff who only sell/service — useful for internal governance, role definition, and supervision structures
- No disruption for existing staff: The grandfathering clause ensures no immediate re-certification scramble for staff who are already X-A/X-B certified
🎯 Why SEBI Frames This as "Ease of Doing Business"
This circular is explicitly titled an "Ease of Doing Business" measure — consistent with SEBI's broader regulatory philosophy of calibrating compliance burden to the actual risk a function poses to investors. A sales executive who only explains the firm's services and onboards a client poses a fundamentally different risk profile than an adviser who is directly recommending where a client should invest their money. By right-sizing the certification requirement to match this risk differential, SEBI reduces unnecessary friction for Investment Adviser firms without compromising on protecting investors from unqualified advice — since anyone actually giving advice still must clear the full X-A/X-B standard.
What Investment Advisers Must Do Now
📋 Action Checklist for Registered Investment Advisers
- Map your staff: Classify every existing PAIA into one of the two categories — core advisory vs. sales/non-core — based on their actual job function and client interaction
- Identify new hires' track: For any new PAIA being onboarded, determine upfront whether their role qualifies for the lighter NISM Series-XXV-B track or requires the full X-A/X-B certification
- Check existing certifications: For sales/non-core staff who already hold X-A and X-B, note their certification expiry dates — plan for them to obtain Series-XXV-B before that expiry rather than renewing X-A/X-B
- Update internal compliance policy: Revise internal HR and compliance documentation to reflect the two-track certification framework and ensure role definitions clearly state which category each position falls under
- Coordinate with IAASB: The Investment Adviser Administration and Supervisory Body (IAASB) has been directed to amend its bye-laws and rules to implement this circular — Investment Advisers should watch for IAASB's updated guidance and operational procedures
- Avoid misclassification risk: Be cautious about classifying genuinely advisory staff as "sales/non-core" simply to use the lighter certification — SEBI's distinction is based on actual function, not job title, and misclassification could expose the firm to regulatory risk
Role of the Investment Adviser Administration and Supervisory Body (IAASB)
The circular places two specific obligations on the Investment Adviser Administration and Supervisory Body (IAASB) — the SEBI-recognised supervisory body for the IA industry:
- Amend bye-laws and rules: IAASB must make the necessary amendments to its relevant bye-laws and operational rules to give effect to this circular's two-track certification framework
- Disseminate to registered Investment Advisers: IAASB is required to bring the provisions of this circular to the notice of all registered Investment Advisers and publish it on its own website, ensuring industry-wide awareness
Legal Basis and Regulatory Authority
Frequently Asked Questions
Conclusion
SEBI's June 24, 2026 circular is a well-targeted, proportionate reform that addresses a genuine compliance friction point in the Investment Adviser industry. By creating a dedicated, lighter NISM Series-XXV-B certification pathway for sales staff and relationship managers — while preserving the full rigour of NISM Series-X-A and Series-X-B for anyone genuinely involved in giving investment advice — SEBI has improved the proportionality of its certification framework without diluting investor protection where it matters most.
For Investment Advisers, the immediate task is to correctly classify every PAIA into the appropriate track, plan certification timelines around the grandfathering relief for existing X-A/X-B holders, and update internal compliance documentation accordingly. For sales and relationship management staff specifically, this is good news — a more relevant, less burdensome certification path that better matches what they actually do for clients every day.
