SEBI Proposes Mandatory NISM AML and CFT Certification for Principal Officers

SEBI (Securities and Exchange Board of India) has released a consultation paper proposing mandatory NISM-Series-XXIV AML/CFT (Anti-Money Laundering and Combating the Financing of Terrorism) certification for Principal Officers within regulated entities. Under the proposed framework, designated individuals will be given a compliance timeline of six months from the date of notification to clear the examination and obtain the certification. Public comments and stakeholder feedback on this regulatory proposal are invited until 27 November 2026.

Regulatory bodies continuously tighten compliance requirements to align domestic financial markets with global anti-money laundering standards. Previously, while compliance functions were strictly monitored, specific certification mandates for Principal Officers varied across different intermediaries. The proposed NISM certification standardizes professional competency requirements, ensuring that every Principal Officer possesses verified technical knowledge to detect and prevent illicit financial flows within the securities market. Compliance departments at brokerages, mutual funds, and other SEBI-registered intermediaries should review the consultation paper and submit constructive feedback before the 27 November 2026 deadline.

Affected organizations must identify their Principal Officers, plan for the six-month compliance window, and arrange for necessary training materials once the final regulation is enacted. Bottom line: Regulated entities must prepare administrative pathways to ensure their compliance leadership meets upcoming certification timelines.