NISM Certification: All You Need To Know

What is NISM?

NISM stands for National Institute of Securities Markets. It’s a public trust established in 2006 by SEBI (Securities and Exchange Board of India), the main regulatory body for the Indian stock market.

Think of NISM as the educational backbone of SEBI, dedicated to:

    1. Promoting professionalism and standardization in the Indian securities market.
    2. Equipping individuals with the knowledge and skills needed to navigate the complexities of this dynamic field.
    3. Offering a wide range of courses and certifications across various financial domains, from equity markets and derivatives to mutual funds and wealth management.

NISM has six schools of excellence:

    1. Capital Markets
    2. Risk Management
    3. Investment Banking
    4. Derivatives Markets
    5. Investor Education
    6. Securities Operations and Technology

These schools collaborate to develop high-quality educational programs and research initiatives, ultimately aiming to enhance the overall quality and efficiency of the Indian securities market.

The key takeaway: NISM is more than just a certification provider; it’s a vital institution responsible for upskilling and empowering individuals to participate in the Indian financial ecosystem responsibly and effectively.

Here are some additional points you might find interesting:

    1. NISM certifications are recognized and valued by employers in the Indian financial sector, giving certified professionals a competitive edge in the job market.
    2. NISM courses are open to anyone, regardless of educational background or prior experience, making financial education accessible to a wider audience.
    3. NISM actively collaborates with international organizations to share best practices and promote global financial standards.

  1. What is NISM Certification?

    Imagine this: You’re navigating the bustling streets of the Indian stock market, confident in your knowledge and equipped with the expertise to make informed decisions. This vision can become reality with NISM certifications, your passport to a successful and rewarding career in finance.

    But what exactly is NISM certification?

    Think of NISM as the educational arm of SEBI (Securities and Exchange Board of India), established in 2006 to bring professionalism and standardization to the Indian securities market. Just like a prestigious university, NISM offers a wide range of comprehensive courses and certifications across various financial domains, empowering individuals with the knowledge and skills to navigate the complexities of the market.

    Here’s how NISM certification benefits you:

    1. Credibility and Expertise: Earning a NISM certification validates your knowledge and skills, setting you apart from non-certified professionals in the job market. It’s like wearing a badge of honor, showcasing your commitment to professionalism and continuous learning.
    2. Enhanced Knowledge: Dive deep into financial concepts, regulations, and best practices relevant to your chosen domain. Whether it’s equity markets, debt markets, mutual funds, or derivatives, NISM courses equip you with the necessary knowledge to make informed investment decisions.
    3. Career Boost: NISM certifications open doors to exciting career opportunities. Employers actively seek certified professionals for various roles, such as investment advisors, research analysts, portfolio managers, and many more. With a NISM certification under your belt, you’ll be well-positioned to climb the career ladder and land your dream job in the financial sector.
    4. Competitive Edge: In a competitive job market, NISM certifications give you a significant edge over non-certified individuals. It demonstrates your dedication to excellence and positions you as a valuable asset to potential employers.

    The best part? NISM certifications are open to everyone, regardless of your educational background or current profession. Whether you’re a fresh graduate, a seasoned professional seeking upskilling, or a career changer looking for a new direction, NISM provides a pathway to your financial aspirations.

    Stay tuned for the next section, where we’ll explore the diverse range of NISM certifications available to cater to your specific career goals!

How to Register for NISM Certification Exam? 

Ready to embark on your NISM certification journey? Here’s a step-by-step guide to navigate the registration process like a pro:

01. Create Your NISM Account:
    1. Visit the official NISM website: https://certifications.nism.ac.in/
    2. Click on “Register” if you’re a new user.
    3. Fill in the required details, including your name, email address, PAN card information, and create a password.
    4. Choose a security question and answer for account protection.
    5. Submit the registration form.

02. Verify Your Email and Activate Your Account:
    1. Check your email for an activation link from NISM.
    2. Click the link to activate your account.
    3. Choose a strong password and login to the NISM portal.

03. Select Your Desired Certification:
    1. Explore the wide range of NISM certifications available.
    2. Identify the one that aligns with your career goals and interests.
    3. Refer to the NISM website for detailed information on each certification.
    4. Choose the certification you wish to enroll in.

04. Schedule Your Exam:
    1. Choose a convenient exam date and time from the available slots.
    2. Select a preferred exam center location.
    3. Review the exam fee and make the payment online through a secure payment gateway.

05. Download Admit Card:
    1. Once your registration is confirmed, download your admit card.
    2. This card contains essential details like your exam date, time, center address, and guidelines.
    3. Print the admit card and carry it with you on the exam day.

06. Prepare for Success:
    1. Download the study material provided by NISM for your chosen certification.
    2. Develop a thorough understanding of the syllabus and exam pattern.
    3. Utilize online resources, practice tests, and mock exams to enhance your preparation.

07. Attend the Exam:
    1. Arrive at the exam center on time with your admit card and valid ID proof.
    2. Adhere to the exam rules and regulations.
    3. Give your best and confidently demonstrate your knowledge!

Additional Tips:

    1. Review the eligibility criteria for each certification carefully.
    2. Familiarize yourself with the exam format and duration.
    3. Manage your time effectively during the exam.
    4. Refer to the NISM website for any updates or changes in the registration process.

Remember, the NISM portal is user-friendly and guides you through each step smoothly. If you encounter any difficulties, don’t hesitate to reach out to NISM’s customer support for assistance.!

NISM CERTIFICATION EXAMINATIONS (ALL 29 EXAMS DETAIL)

Capital Markets: 8 NISM Certifications

Certification Duration (Hrs) Fees (INR) Max Marks Questions Pass (%) Negative (%) Validity (Years) Focus
Series I: Currency Derivatives 2 1500 100 100 60 25 3 Equips you with knowledge of currency derivatives, their products, risks, and strategies.
Series III: Equity Derivatives 2 1500 100 100 60 25 3 Master the complexities of equity derivatives, exploring their types, valuation, and risk management.
Series VI: Depository Operations 2 1500 100 100 60 25 3 Provides in-depth knowledge of depository operations, settlement procedures, and risk management.
Series VII: Securities Operations & Risk Management 2 1500 100 100 50 25 3 Equips you to manage risks and ensure efficient securities operations, covering trade settlement, clearing, and risk management.
Series VIII: Equity Markets: Dealer Module 2 1500 100 100 60 25 3 Gain in-depth knowledge of equity market operations, focusing on trading mechanisms, regulations, and best practices.
Series IX: Equity Markets: Investment Advisers Module 2 1500 100 100 60 25 3 Develop expertise in equity market analysis and portfolio management, catering to investment advisors.
Series XIV: Currency Derivatives Dealers Module 2 1500 100 100 60 25 3 Hone your skills in currency derivatives trading, risk management, and compliance.
Series XIX: Merchant Banking Module 2 1500 100 100 60 25 3 Understand the nuances of merchant banking activities, encompassing project financing, underwriting, and mergers & acquisitions.

Risk Management: 5 NISM Certifications

Certification Duration (Hrs) Fees (INR) Max Marks Questions Pass (%) Negative (%) Validity (Years) Focus
Series X: Investment Adviser (Level 1) 3 3000 150 135 60 25 3 Build a strong foundation for investment advising, covering portfolio management, investment analysis, and ethics.
Series X B: Investment Adviser (Level 2) 3 3000 150 135 60 25 3 Deepen your knowledge of investment advisory services, focusing on advanced asset allocation strategies and portfolio management techniques.
Series XI: Research Analyst 2 1500 100 100 60 25 3 Equip yourself with the tools for effective financial research, understanding methodologies, valuation techniques, and ethical considerations.
Series XVII: Portfolio Management 2 1500 100 100 60 25 3 Master the art of portfolio management, covering asset allocation, risk management, and performance evaluation.
Series XXII: Wealth Management 2 1500 100 100 60 25 3 Navigate the world of wealth management, catering to high-net-worth individuals and their financial needs.

NISM's Risk Management certifications offer a comprehensive understanding of investment advising, research analysis, portfolio management, and wealth management, providing practitioners with the skills necessary for navigating the intricate landscape of financial risk.

Investment Banking: 4 NISM Certifications

Certification Duration (Hrs) Fees (INR) Max Marks Questions Pass (%) Negative (%) Validity (Years) Focus
Series XII: Securities Markets Foundation 2 1500 100 100 [Percentage Not Provided] [Percentage Not Provided] [Validity Not Provided] [Focus Not Provided]
Series XVIII: Investment Banking Module 2 1500 100 100 60 25 3 Gain insights into investment banking activities, including corporate finance, valuation, and deal structuring.
Series XXIII: IPO Grade I Merchant Banker Module 2 1500 100 100 60 25 3 Become an expert in the IPO process, covering due diligence, regulatory requirements, and deal execution.
Series XXIII: IPO Grade II Investment Banker Module 2 1500 100 100 60 25 3 Deepen your expertise in IPO structuring, valuation, and investor relations.

NISM's Investment Banking certifications equip individuals with a solid foundation in securities markets and delve deeper into the intricacies of investment banking, IPO processes, and deal structuring, offering specialized knowledge essential for excelling in the realm of investment banking.

Derivatives: 4 NISM Certifications

Certification Duration (Hrs) Fees (INR) Max Marks Questions Pass (%) Negative (%) Validity (Years) Focus
Series XV: Interest Rate Derivatives Module 2 1500 100 100 60 25 3 Master the intricacies of interest rate derivatives, exploring their uses, valuation, and risk management.
Series XVI: Commodity Derivatives Module 2 1500 100 100 60 25 3 Gain expertise in commodity derivatives markets, understanding their products, trading mechanisms, and regulations.
Series XXIII: Credit Derivatives Module 2 1500 100 100 60 25 3 Equip yourself with knowledge of credit derivatives, their applications, and risk management techniques.
Series XXIV: Options Strategies Module 2 1500 100 100 60 25 3 Develop advanced options trading strategies, understanding various techniques and risk management practices.

NISM's Derivatives Markets certifications provide a comprehensive understanding of interest rate derivatives, commodity derivatives, credit derivatives, and advanced options trading strategies, offering specialized knowledge to navigate the complexities of derivative markets.

Empowering Investors: 4 NISM Certifications in Investor Education

Certification Duration (Hrs) Fees (INR) Max Marks Questions Pass (%) Negative (%) Validity (Years) Focus
Series XII: Securities Markets Foundation 2 1500 100 100 60 25 3 Provide sound basic knowledge of Indian securities markets to investors.
Series XIII: Investor Awareness (Financial Planning) Module 2 1500 100 100 60 25 3 Guide investors in making informed financial plans, covering budgeting, investments, and retirement planning.
Series XIV: Investor Awareness (Mutual Funds) Module 2 1500 100 100 60 25 3 Equip investors with understanding of mutual funds, their types, risks, and selection criteria.
Series XV: Investor Awareness (Capital Markets) Module 2 1500 100 100 60 25 3 Empower investors to navigate the capital markets confidently, understanding various investment options and market dynamics.

NISM's Investor Education certifications aim to empower individuals with foundational knowledge in securities markets, guide them in financial planning, provide insights into mutual funds, and enhance their understanding of capital markets, fostering informed and confident investment decisions.

Securities Operations & Technology: 4 NISM Certifications

Certification Duration (Hrs) Fees (INR) Max Marks Questions Pass (%) Negative (%) Validity (Years) Focus
Series VII: Securities Operations & Risk Management 2 1500 100 100 50 25 3 Gain expertise in efficient securities operations and risk management, including trade settlement, clearing, and risk assessment.
Series XX: Trade Surveillance & Monitoring Module 2 1500 100 100 60 25 3 Develop skills for effective trade surveillance and monitoring, identifying potential market manipulation and insider trading.
Series XXI: Information Technology for Securities Market Module 2 1500 100 100 60 25 3 Understand the critical role of IT in securities markets, focusing on infrastructure, cyber security, and technology implementation.
Series XXIV: Cyber Security & Information Security Module 2 1500 100 100 60 25 3 Equip yourself with knowledge of cybersecurity threats and mitigation strategies in the securities market.

NISM's Securities Operations & Technology certifications provide a comprehensive understanding of efficient securities operations, risk management, trade surveillance, information technology, and cybersecurity in the dynamic landscape of the securities market.

Research Analyst – How to Become a SEBI Registered Research Analyst?

Introduction:

Investing in the stock market is a common avenue for many investors, whether directly in individual stocks or through mutual funds. However, navigating the vast sea of information related to companies, stocks, and commodities can be challenging. Often, this information is raw and requires thorough analysis using various financial tools to make informed investment decisions. This is where the role of a ‘Research Analyst’ becomes crucial.

In essence, a research analyst is responsible for evaluating securities, such as stocks, mutual funds, or derivatives, and providing recommendations to buy, sell, or hold. Despite their significance, it’s important to note that the perspectives or recommendations of research analysts may not always be impartial, leading to potential conflicts of interest.

To address this concern and ensure the independence of research analysts, the Securities and Exchange Board of India (SEBI) introduced the SEBI (Research Analyst) Regulations in 2014. These regulations aim to oversee individuals or entities engaged in the issuance and publication of research reports or research analysis on securities.

This guide aims to delve into various aspects of the SEBI (Research Analyst) Regulations, 2014, and provide a comprehensive overview of the steps involved in obtaining registration as a Research Analyst.

What is a Research Analyst?

A Research Analyst plays a pivotal role in the financial landscape, primarily tasked with preparing research reports and offering recommendations such as ‘buy/sell/hold’ or providing price targets for securities listed or to be listed on stock exchanges. It’s worth noting that individuals in this role may or may not carry the official designation of ‘research analyst.’

The definition of a Research Analyst extends to include entities like companies or Limited Liability Partnerships (LLPs) that issue research reports or conduct research analyses on listed securities, such as stocks and mutual funds. Additionally, it encompasses anyone reporting directly or indirectly to a research analyst, aiding in the preparation or publication of research reports. For example, individuals assisting a research analyst in gathering information about specific stocks or mutual funds fall under this category.

Furthermore, it’s essential to understand the concept of a proxy adviser:

A Proxy Adviser is an individual who provides advice to institutional investors or shareholders of a company regarding the exercise of their rights within the company. This advice may include recommendations on public offers or voting suggestions on agenda items during meetings.

What is a Research Report?

A Research Report, in the context of a Research Analyst’s responsibilities, refers to any written or electronic communication containing research analysis, research recommendations, or opinions concerning securities or public offers. These reports serve as a basis for making informed investment decisions, covering a spectrum of financial instruments such as stocks, mutual funds, bonds, debentures, derivatives, and other securities.

In summary, a Research Analyst is a professional central to the financial sector, focusing on the preparation of research reports and providing recommendations on various securities, contributing to the informed decision-making process for investors.

Do Research Analyst Regulations Apply to You?

It’s not uncommon for individuals to be uncertain about whether their research activities fall under the purview of SEBI Research Analyst (RA) Regulations. Let’s simplify this for you. Keep reading!

Consider the RA Regulations if:

1. You provide buy/sell/hold recommendations on various securities like stocks, mutual funds, bonds, debentures, derivatives, and government securities.
2. You have the primary responsibility for generating research reports.
3. You are involved in the preparation and publication of the content of research reports.
4. You offer price targets on stocks.
5. You express views on Initial Public Offerings (IPO) or New Fund Offers (NFO).
6. You are a merchant banker, investment banker, or a broker who also issues research reports.
7. You directly or indirectly report to a research analyst or assist in writing research reports or providing price targets.

Exemptions from RA regulations include:

1. Providing buy/sell/hold recommendations on unlisted securities.
2. Being a marketing personnel or a back-office assistant involved in the publication or formatting of research reports.
3. Offering general views on the market, industry, or sector.
4. Presenting statistical summaries of the financial data of a company.
5. Presenting publicly available financial data of a company in an easy-to-understand manner.
6. Providing technical analysis related to demand and supply in a sector or index.
7. Recommending spot commodities.

Additionally, the following activities are not covered under Research Analyst Regulations for companies:

1. Providing periodic reports or other communications prepared by mutual funds, alternative investment funds, portfolio managers, or investment advisers for their clients.
2. Circulating documents like offer documents or prospectuses required by regulations.
3. Sending internal communications to employees or group companies that are not shared with current or prospective clients.

Entities exempted from registration under the Research Analyst Regulations include:

1. Investment Advisers.
2. Credit Rating Agencies.
3. Asset Management Companies or fund managers issuing research reports or circulating/distributing them to the public, or their directors or employees making public appearances.

However, note that these exempt entities still need to comply with Chapter III of the Research Analyst regulations.

What are the Eligibility Criteria for Research Analyst Application?

Once you’ve identified your research activities and decide to register as a Research Analyst, it’s crucial to assess your eligibility for application with SEBI. The main criteria to consider are qualification and certification requirements, as well as capital adequacy requirements.

Qualification and Certification Requirements:

Qualification:

1. Professional Qualification or Post Graduate Degree/Diploma:
– A degree in finance, business management, commerce, economics, capital markets, financial services from a recognized university or institution by the central or state government, or a recognized foreign university, institution, or association.

OR

– A professional qualification or post-graduate degree/diploma accredited by All Indian Council for Technical Education, National Assessment and Accreditation Council, National Board of Accreditation, or any other council/board/body set up under an Act of Parliament in India.

OR

– A graduate in any discipline with a minimum of five years of working experience in activities related to financial products, securities, fund, or asset/portfolio management.

2. Certification:
– Possession of NISM certification for research analysts as specified by the Board or any other certification recognized by the Board.

– Specific certifications include:
– Chartered Accountant (ICAI)
– Company Secretary (ICSI)
– Cost Accountant (ICWA)
– MBA in Finance (from a recognized institute/university/association)
– M.Com
– Chartered Financial Analyst (CFA)
– Masters Degree in Economics
– Post-graduation in Banking and Finance
– Other qualifications like Chartered Market Technician (CMT) or Certified Financial Technician (CFTe) from recognized international bodies.

– Relevant experience may be considered in lieu of specific qualifications.

Additional Notes:

– Engineering degrees without relevant experience do not fulfill qualification requirements.
– Graduates with at least 5 years of relevant experience may meet the qualification criteria.
– Personal investment or family portfolio management does not count as relevant experience.
– SEBI may consider contributions like blogs or articles related to financial product research or personal finance as relevant experience.

Courses:

– If current qualifications do not meet the criteria, individuals can enroll in courses offering postgraduate degrees or diplomas from recognized institutions.

For Non-Individuals:

– In the case of companies or LLPs, research analysts and partners involved in research and analysis must meet the eligibility criteria.

Capital Adequacy Requirement:

Individuals (including proprietorship) and Partnerships:

– Net tangible assets should be not less than INR 1 Lakh.
– “Net tangible assets” include total assets (laptop, house, vehicle, bank balance, FDs, shares, mutual funds, and other investments) minus intangible assets minus liabilities (home loan, car loan, education loan, etc.).

Companies and LLPs:

– Net worth should be not less than INR 25 Lakhs.
– “Net worth” includes the aggregate value of paid-up share capital plus free reserves (excluding reserves created out of revaluation) minus the aggregate value of accumulated losses.

Net Worth Certification:

– A net worth certificate must be provided by a Chartered Accountant, stating their membership number, seal, and signature.

Application:

– Apply for registration as a Research Analyst only after fulfilling the above two criteria.

Before submitting an application to SEBI, ensure that you, your partnership firm, or your company fulfill the qualification and net worth criteria outlined above.

How to Get Registered as a Research Analyst with SEBI?

Research analysts seeking registration with SEBI need to follow a step-by-step process through the SEBI portal for intermediaries. Here is a detailed guide:

Step 1: Make Payment of Application Fee

– Pay the non-refundable application fee through Demand Draft (DD), NEFT, or RTGS. The DD should be in favor of “The Securities and Exchange Board of India” payable at Mumbai.

Step 2: Fill in Applicant Details on the Portal

1. Go to SEBI’s online portal.
2. Click on “Self-Registration” and start filling the application details.
3. Choose “Research Analyst” under “Role required.”
4. For “Applicant Category,” select “Individual Research Firm” for a firm, or “Research Entity” for a company or LLP.
5. Provide accurate contact person details, including a valid email ID and mobile number.
6. Mention the correct designation, either “Director” or “Partner” based on the applicant type.
7. Specify the Registered Office Address for SEBI correspondence.

Step 3: Fill in Payment Details

– Prepare the DD in advance if opting for this payment method.
– Fill in the details of the DD or select NEFT/RTGS and provide the necessary bank account details.
– Click “Submit” after adding all payment details.

Step 4: Receipt of Email from SEBI on Successful Registration

– Receive an email with the subject “User Registration” containing the applicant’s name and Request ID for tracking the application status.

Step 5: Receipt of Email from SEBI for Activation Link and Login ID

– Once SEBI confirms payment, receive an email with an activation link and login ID on the registered email.
– Create a new password within 14 days using the activation link.

Step 6: Fill in Application Details for Registration as Research Analyst

– Gather all required information and documents as specified in Form A of the relevant regulations.
– After completing the application and uploading necessary documents, receive a confirmation email from SEBI.
– Attach the signed Form A (in .pdf format) and send it to SEBI’s head office or regional office.

Step 7: Communication from SEBI

– SEBI will communicate within a month, either requesting additional details or approving the application.

Step 8: Payment of Registration Fees

– Once approved, pay the registration fees online or through a demand draft.

Step 9: Grant of Registration and Receipt of Registration Certificate

– After confirming the fee receipt, SEBI will send the registration certificate to the specified address in the application.
– The entire process typically takes at least two months, depending on SEBI’s response time.

Note: Keep track of your application status using the Request ID provided in SEBI’s communication emails.

5 Reasons Why SEBI Can Put Your Research Analyst Application on Hold:

1. Non-Fulfillment of Education Qualification Requirements:
– SEBI may put your application on hold if it deems that your educational qualifications do not meet the criteria specified in Regulation 7 of the Research Analyst Regulations. Ensure in advance that your qualifications align with the requirements or consider acquiring additional relevant qualifications.

2. Non-Disclosure of Complete Information:
– Full disclosure is crucial when applying to SEBI. Provide comprehensive information about your proposed business, the products/services you intend to offer, and a concise business plan. If you are a director or partner in a firm, make clear disclosures. Incomplete information may lead SEBI to put your application on hold, causing unnecessary delays.

3. Incomplete Set of Documents:
– Submission of various documents, including the past three years’ Income Tax returns and a net-worth certificate, is mandatory. Declarations mentioned in the application form (Form A) should also be included. Failure to submit the complete set of required documents may result in SEBI putting your application on hold, prompting requests for additional documentation or clarifications.

4. Non-Applicability of Regulations:
– Before applying, confirm whether the Research Analyst regulations truly apply to your case. Thoroughly review the definitions and exemptions outlined in the regulations. If it is determined that you are not required to register with SEBI, your application may not be accepted. SEBI might seek more information or clarification in such cases.

5. SEBI’s Discretionary Decision:
– SEBI reserves the right to exercise its discretion in accepting or rejecting applications. Different interpretations of regulations may exist between SEBI’s head office and regional offices, leading to variations in how your application is assessed. Consequently, your application may be put on hold based on SEBI officials’ individual interpretations.

Note: It’s important to be aware of potential pitfalls and uncertainties in the application process. Regularly check for updates and clarifications from SEBI to stay informed about any changes or nuances in the regulatory landscape.