SEBI Circular - Key Details
Circular Title: Certification requirement for Compliance Officers of Managers of AIFs
Circular No.: HO/19/(8)2025-AFD-POD1/I/1266/2025
Date: December 30, 2025
Issued By: SEBI – Alternative Investment Fund and Foreign Portfolio Investors Department (AFD)
Category: Compliance / Certification / AIF Governance / Investor Protection
Applicable To: All Alternative Investment Funds (AIFs)
When is NISM Series III-C mandatory and what must be reported?
NISM Series III-C becomes mandatory from 1 January 2027 for appointment or continuation of Compliance Officers of AIF Managers. To prove compliance, AIF managers must explicitly report adherence to this requirement in the Compliance Test Report (CTR) prepared under the SEBI AIF Master Circular framework and ensure governance oversight by the trustee/sponsor/manager, as applicable.
Who exactly is covered (new vs existing Compliance Officers)?
The requirement applies to both categories. New appointments made on or after 1 January 2027 must hold the certification, and existing Compliance Officers must also be certified to continue in the role beyond that date. There is no grandfathering exemption after the enforcement date.
Where does this requirement sit legally?
The mandate is grounded in Regulation 20(18) of the AIF Regulations, which empowers the regulator to prescribe eligibility criteria for Compliance Officers. The circular is issued under Section 11(1) of the SEBI Act, 1992, and operationalized through the SEBI (Certification of Associated Persons in the Securities Markets) Regulations, with the specific exam being NISM Series III-C (Fund), as directed by SEBI.
Exam tip: Remember the triad - Date (1 Jan 2027) + Coverage (new & existing) + Proof (CTR inclusion).
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RegDEEP™ Decoding SEBI Circular Dec 2025: Compact 2-in-1 RegDEEP™ guide Exam decoding + Industry notes for the latest SEBI update. Designed for NISM aspirants and Compliance Officers on Certification requirement for Compliance Officers of Managers of AIFs
1. Snapshot Summary
- SEBI has mandated a certification for the Compliance Officer of the Manager of an AIF.
- The required qualification is NISM Series-III-C: Securities Intermediaries Compliance (Fund) exam (NISM).
- From January 1, 2027, only certified individuals can be appointed as, or continue as, Compliance Officers of AIF Managers.
- The AIF’s Compliance Test Report (CTR) must explicitly include compliance with this circular.
- Circular is stated to be in force immediately, but the eligibility enforcement date for the role is Jan 1, 2027.
- Issued under SEBI’s powers (SEBI Act + AIF Regs + SEBI Certification Regulations) to protect investors and regulate markets.
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2. Clause-by-Clause Decoding
Clause 1 - “Why SEBI can mandate eligibility criteria”
What SEBI said: The Manager must appoint a Compliance Officer; SEBI can specify eligibility criteria from time to time.
What it means in practice: SEBI can convert “good-to-have compliance competence” into a formal minimum qualification.
Clause 2.1 - “Which exact certification is required”
What SEBI said: Compliance Officer must obtain certification by passing NISM Series-III-C: Securities Intermediaries Compliance (Fund).
What it means in practice: This is not optional or “any compliance certification.” It’s a specific NISM series referenced via NISM communique.
Exam angle: Confusing Series-III-A (Non-Fund) with Series-III-C (Fund). (For AIF managers, SEBI explicitly says III-C.)
Clause 2.2 - “From when it becomes mandatory for appointment/continuation”
What SEBI said: With effect from January 1, 2027, only certified persons can be appointed/continue as Compliance Officer of AIF Managers.
What it means in practice: You have a transition runway: build capability, certify existing COs, update HR/JD/fitment, succession plans.
Exam angle: Date-based are very likely: “Effective from which date…”.
Clause 3 - “Where you must report compliance”
What SEBI said: Trustee/sponsor/manager must ensure the Compliance Test Report (CTR) includes compliance with this circular (CTR under para 15.2 of SEBI AIF Master Circular dated May 7, 2024).
What it means in practice: Compliance is not just internal - SEBI expects documented evidence via the CTR workflow and governance oversight.
Exam angle: “During annual compliance test report preparation, what additional check is now required?”
Clause 4 - “Immediate effect”
What SEBI said: Circular comes into force immediately.
Practical interpretation: Reporting/controls should start now (policy updates, CTR inclusion), while role eligibility enforcement becomes binding from Jan 1, 2027.
Clause 5 & 6 - “Legal basis”
What SEBI said: Issued under Section 11(1) of SEBI Act, 1992 read with Regulation 20(18) of AIF Regulations and Regulation 3(1) of SEBI (Certification of Associated Persons in the Securities Markets) Regulations.
Practical interpretation: This is not “guidance” - it is a regulatory direction tied to statutory powers.
3. Exam Relevance Mapping
Most relevant exams / modules:
- NISM Series III-C (Fund) - Directly relevant: This circular effectively increases the exam’s industry relevance and makes it a compliance role gatekeeper for AIF Managers.
- NISM Series XIX (AIF-focused modules) - Indirect but high probability: Exam setters may test governance + compliance architecture (CO role, CTR reporting, regulatory powers) even if the certification mandated is III-C.
4. Industry Impact & Real-World Application
Who must comply: Managers of AIFs (and governance chain: trustee/sponsor/manager as applicable).
Operational changes (what firms will do):
- Update HR policies: JD for Compliance Officer must list NISM III-C mandatory (for AIF manager CO role) for appointments from Jan 1, 2027
- Build a certification tracker for existing COs + back-up COs.
- Update CTR checklist to include this circular as a compliance line item (para 15.2 CTR framework).
Ecosystem effect: Raises baseline compliance competence; makes “compliance role” more standardized and exam-aligned (NISM’s stated benchmark intent).
5. Why This Matters for Learners
- This is a career gate circular: it links a role (Compliance Officer for AIF Managers) to a specific certification.
- For exam prep: it’s a classic “date + requirement + reporting” triad - very testable.
- Interview Intent Signal: you can speak to implementation (transition plan, CTR proof, governance oversight), not just the rule.
HCAM™ Anchor Memory aid: “AIF CO = III-C; 2027 se seat pakki.” (Meaning: AIF compliance officer seat needs III-C; from 2027 it’s compulsory.)
6. Key Takeaways (Quick Revision)
- NISM Series-III-C (Fund) is mandatory certification for Compliance Officers of Managers of AIFs.
- Mandatory for appointment/continuation from Jan 1, 2027.
- CTR (para 15.2 of AIF Master Circular) must include compliance with this circular.
- Circular is effective immediately (controls/reporting readiness starts now).
- Legal basis: SEBI Act s.11(1) + AIF Reg 20(18) + SEBI Certification Reg 3(1).
7. Updates, Amendments & Implementation Timeline
Supersedes earlier circular? Not stated as superseding; it adds eligibility requirement under Reg 20(18).
Timeline:
- Dec 30, 2025: circular issued.
- Immediate effect: operational compliance starts now (policy/CTR inclusion).
- Jan 1, 2027: hard enforcement - only III-C certified persons can be appointed/continue as CO for AIF Managers.
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8. FAQ (Learner Clarification Layer)
Q1. Which specific NISM certification is mandatory for AIF Compliance Officers, and are substitutes allowed
SEBI has specifically mandated the NISM Series III-C: Securities Intermediaries Compliance (Fund) examination. No other certification -such as Series III-A (Non-Fund) or Series V-A (Mutual Funds) -is accepted as a substitute. The Series III-C curriculum is uniquely structured to cover fund-specific regulations, AIF governance standards, and investor protection mechanisms that differ significantly from non-fund intermediaries.
Q2. Does immediate effect mean certification is mandatory right now?
Immediate effect applies to the circular being in force and to compliance processes (like CTR inclusion), but the appointment/continuation restriction is explicitly from Jan 1, 2027.
Q3. Who is impacted - only new hires or existing COs too?
Both. From Jan 1, 2027, only certified persons can be appointed or continue.
Q4. What proof will SEBI expect?
Practical proof pathway is via CTR including compliance with this circular, plus internal certification records.
Q5. Which specific NISM certification is mandatory for AIF Compliance Officers, and are substitutes allowed?
SEBI has specifically mandated the NISM Series III-C: Securities Intermediaries Compliance (Fund) examination. No other certification -such as Series III-A (Non-Fund) or Series V-A (Mutual Funds) -is accepted as a substitute. The Series III-C curriculum is uniquely structured to cover fund-specific regulations, AIF governance standards, and investor protection mechanisms that differ significantly from non-fund intermediaries.
Q6. Does GurukulOnRoad provide a mock test for this new NISM Series III-C mandatory certification?
Yes. GurukulOnRoad offers the most comprehensive 2026 Paid Online Mock Test specifically designed for the NISM Series III-C: Securities Intermediaries Compliance (Fund) examinationcom. This is not just a question bank; it is an exam-to-industry readiness system featuring 2000+ high-quality MCQs structured across three progressive layers: 1. Chapter-wise Practice Tests: 17 chapter-specific drills (1000+ MCQs) to build foundational concept clarity. 2. Full-Length Mock Tests: 5 full-syllabus simulations (500 MCQs) that mirror real exam difficulty and timing. and 3. RegDEEP™ Mastery Assessment Tests (MAT): 5 exclusive Mastery tests (500 MCQs) designed to train you on regulatory logic, grey-zone judgment, and examiner traps - skills essential for passing the exam and succeeding as a Compliance Officer. ENROL NOW
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9. Micro Glossary - Key Terms from SEBI NRI Re-KYC Geo-Tagging Circular
Alternative Investment Fund (AIF)
AIF ek privately pooled investment vehicle hota hai jisme investors ka paisa collect karke non-traditional assets (jaise private equity, hedge strategies, real assets, structured strategies, etc.) mein invest kiya jata hai. India mein AIFs SEBI (Alternative Investment Funds) Regulations, 2012 ke under regulate hote hain, aur inke operations, governance aur compliance ke liye AIF Manager aur Compliance Officer responsible hote hain.
👉 “AIF = Private pool + SEBI rules + strong compliance.”
Compliance Officer (AIF Manager)
Compliance Officer woh person hota hai jo AIF Manager ke andar yeh ensure karta hai ki SEBI Act, AIF Regulations, circulars aur directions ka proper follow ho raha hai. Simple words mein, yeh role regulatory rule-book ka guardian hota hai.
NISM Series III-C (Fund) Certification
NISM Series III-C ek mandatory compliance exam hai jo fund-based intermediaries (jaise AIFs) ke compliance professionals ke liye design kiya gaya hai. Is circular ke baad, yeh certification AIF Compliance Officer ke role ke liye compulsory ho gaya hai (from 1 Jan 2027).
Compliance Test Report (CTR)
CTR ek annual compliance report hoti hai jisme AIF Manager yeh declare karta hai ki sab SEBI rules aur circulars follow ho rahe hain. Is circular ke baad, CTR mein specifically yeh mention karna hoga ki Compliance Officer certification requirement complied hai.
Regulatory Authority (Legal Basis)
SEBI ne yeh rule apni legal powers ke under issue kiya hai - SEBI Act, AIF Regulations (Reg 20(18)) aur Certification Regulations ke through. Matlab yeh sirf guidance nahi, balki legally enforceable regulatory requirement hai.
10. Official Resources & References
- SEBI Circular (Dec 30, 2025): Certification requirement for Compliance Officers of Managers of AIFs
Gurukul Resources & Exam Support
- All NISM Mock Test Series XIX-C, V-A, X-A/B, VIII, III-A/B, XXI-A, XIX-A, XV
- Regulatory Circulars Decoded (Global + India): 2025–26 Exam Guide for NISM, CAIIB, JAIIB, III, FINRA, CII, CISI, IRDAI | Notes for BFSI, BPO, KPO & GCC
- NISM-Series-III-C: Securities Intermediaries Compliance (Fund) NISM Series 3C Online Mock Test 2026 | 2000+ MCQs
- All Regulatory Circulars Decoded (Global + India): 2025–26 Exam Guide for NISM, CAIIB, JAIIB, III, FINRA, CII, CISI, IRDAI | Notes for BFSI, BPO, KPO & GCC
Results & Exemptions Disclaimer
RegDEEP SEBI AIF Compliance Officer Certification Guide | RegDEEP Guide: SEBI AIF Compliance Officer NISM III-C Requirement | SEBI AIF Compliance Officer Update: RegDEEP Exam & Industry | SEBI AIF Compliance Officer Certification Mandate - RegDEEP Summary | RegDEEP SEBI AIF Compliance Officer Eligibility Guide | SEBI AIF Compliance Officer NISM Series III-C Update | SEBI AIF Compliance Officer Certification Note | AIF Manager Compliance Officer Rules SEBI | NISM Series III-C Mandatory for AIF Compliance Officer | SEBI AIF Compliance Officer Compliance Brief | AIF Compliance Test Report CTR Requirement | RegDEEP AIF Compliance Officer Certification
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