The Securities and Exchange Board of India (SEBI) has released a consultation paper seeking public comments on the proposed amendments to the SEBI (Certification of Associated Persons in the Securities Markets) Regulations, 2007 — commonly known as the CAPSM Regulations. These regulations play a key role in ensuring that individuals associated with the securities market are appropriately certified and competent to perform their professional roles. The consultation paper, issued in November 2025, aims to modernize and streamline the CAPSM framework to align it with the evolving landscape of the Indian securities market. SEBI has invited feedback from market participants, intermediaries, and the general public on several important proposals
Objective of the Consultation
The primary objective of the proposed amendments is to review and strengthen the existing CAPSM Regulations. Over the years, the Indian securities market has undergone significant technological and structural changes, and SEBI recognizes the need to make the certification framework more inclusive, flexible, and relevant.
The proposed changes focus on four major areas:
- Review/Expansion of the definition of “Associated Persons.”
- Revised manner of obtaining certificates.
- Inclusion of electronic mode of participation for Continuing Professional Education (CPE) programs.
- Review of exception criteria for obtaining certification.
Background: Why the Review is Needed
Under the existing CAPSM Regulations, SEBI mandates that “Associated Persons” working with regulated intermediaries must obtain certification from the National Institute of Securities Markets (NISM). This certification, valid for three years, can be renewed through Continuing Professional Education (CPE) programs.
When the CAPSM Regulations were first introduced in 2007, SEBI provided several exemptions. These included:
• “Principal” officers,
• Individuals aged 50 years or more at the time of notification, and
• Persons with over 10 years of experience in the securities market as on the date of notification.
However, in light of the dynamic changes in the securities ecosystem — especially the rise of digital platforms, new financial products, and regulatory innovations — SEBI believes that a comprehensive review is now essential.
- Key Proposals in the Consultation Paper
(a) Expansion of the Definition of “Associated Persons”
Currently, Regulation 2(1)(c) defines an “Associated Person” as a principal, employee, agent, or distributor engaged in securities business. The proposed amendment seeks to broaden this scope by including:
• Employees of regulated entities (not just intermediaries),
• Persons intending to be engaged in the securities market, and
• Individuals involved directly or indirectly in securities activities.
The definition will also include employees of foreign portfolio investors (FPIs) and foreign venture capital investors (FVCIs) working in India.
Rationale:
This change will make the definition more inclusive and reflective of the wider range of participants who now play roles in India’s growing capital market ecosystem. It ensures that all individuals, even those indirectly involved, maintain a standard level of knowledge and competence.
(b) Modernization of Certification and Renewal Process
SEBI proposes to review the manner of obtaining certification, emphasizing flexibility, efficiency, and the use of technology. The inclusion of electronic modes for CPE programs will make it easier for professionals across geographies to renew their certifications without logistical hurdles.
(c) Review of Exception Criteria
The paper also suggests revisiting the exemptions granted under the 2007 framework. SEBI aims to ensure that exceptions are justified and in tune with the current professional standards of the securities market.
Conclusion
SEBI’s consultation paper on the amendments to the CAPSM Regulations, 2007 represents a forward-looking step toward a more competent, digitally enabled, and inclusive securities market. By expanding definitions, embracing technology, and refining regulatory exceptions, SEBI seeks to ensure that every associated person—whether in India or abroad—meets the highest standards of professionalism and regulatory compliance.
Stakeholders are encouraged to share their views and suggestions, helping SEBI craft a framework that supports both market integrity and ease of doing business in India’s rapidly evolving financial ecosystem.