Calcutta, June 5: Agents selling mutual funds may have to appear for an examination to get a certificate to do their business.

The Securities and Exchange Board of India (Sebi) has proposed regulations for a compulsory certification programme for certain categories of agents who sell mutual funds, stocks, corporate deposit schemes, government securities or any other instrument under the Securities Contracts (Regulation) Act, 1956.

The regulator has prepared the draft, called the Sebi (Certification of Associated Persons in the Securities Market) Regulations 2007, and posted it on its website for feedback.

Sebi has been contemplating measures to clamp down on the growing number of financial intermediaries and advisers. The regulator said there was gross “mis-selling” of investment products to investors.

The Insurance Regulatory and Development Authority has made it mandatory for agents and advisers to take a 100-hour training programme.

Taking the cue from its insurance counterpart, Sebi has proposed the certification programme and a continuing professional education course for agents, distributors and employees of financial boutiques dealing with assets or funds of investors.

The National Institute of Securities Market (NISM), set up by the market regulator, will implement the certification process.

Sebi, in consultation with the NISM, will also notify the categories of “associated persons” who require the certificate. The regulator will consider whether the “associated person” deals or interacts directly with investors, issuers or clients of the financial intermediary; deals with the assets or funds of investors or clients; or is responsible to redress consumer grievances or internal control and risk management of the intermediary.

After the notification, no financial intermediary will be allowed to employ or engage “associated persons” who do not possess the certificate.

The certificate, to be awarded by the NISM, will be valid for three years and on expiry, the agent can renew it for another three years on successful completion of the continuing professional course.

However, anyone having 10 years of experience or who has attained the age of 50 will not be required to appear for the examination. Such a person will be awarded the certificate on completion of the continuing professional course.

To conduct the certification programme and the professional course, the NISM may accredit other educational institutions and organisations such as the Association of Mutual Funds of India.

Persons keen to undertake the certification programme or the professional course will have to pay a fee.

The market regulator has also decided that compliance with these regulations will be a pre-condition for granting and renewing registrations to financial intermediaries.