SEBI proposes mandatory AML certification for intermediaries’ principal officers

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SEBI has proposed that existing principal officers obtain the certification within six months of the issuance of the requirement

By BL Mumbai Bureau

Updated - November 06, 2026 at 08:49 PM.

SEBI said the existing framework requires intermediaries to appoint a principal officer at the management level but does not prescribe any specific AML/CFT certification | Photo Credit: HEMANSHI KAMANI

The Securities and Exchange Board of India (SEBI) has proposed making an anti-money laundering (AML) and countering the financing of terrorism (CFT) certification mandatory for principal officers of all SEBI-registered intermediaries.

Under the proposal, principal officers will have to clear the NISM-Series-XXIV: Anti-Money Laundering and Combating the Financing of Terrorism Provisions in Securities Markets Certification Examination, conducted by the National Institute of Securities Markets (NISM).

SEBI has proposed that existing principal officers complete the certification within six months of the issuance of the requirement. Newly appointed officers will get six months from the date of their appointment. They will also have to maintain a valid certification throughout their tenure.

Principal officers are responsible for overseeing AML/CFT compliance at intermediaries. Their duties include identifying and assessing suspicious transactions, reporting them to the Financial Intelligence Unit-India (FIU-IND), maintaining records and facilitating regulatory reporting.

Certification deadline

The certification covers provisions of the Prevention of Money Laundering Act (PMLA), SEBI’s AML/CFT framework, customer due diligence, beneficial ownership, risk-based client classification, enhanced due diligence and suspicious transaction reporting. It also covers targeted financial sanctions, high-risk jurisdictions identified by the Financial Action Task Force (FATF), transaction monitoring and emerging money laundering risks arising from new products and technologies.

SEBI said the existing framework requires intermediaries to appoint a principal officer at the management level but does not prescribe any specific AML/CFT certification. As a result, the level of knowledge and expertise among these officers may vary across intermediaries.

The regulator said the proposed certification is intended to create a common minimum knowledge benchmark and strengthen the ability of principal officers to discharge their responsibilities. Public comments are open until November 27, 2026.

The consultation paper also proposes that other employees handling AML/CFT-related activities be encouraged to take the examination.

Published on November 6, 2026

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