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NISM Series XIX-E (Cat III AIF) study materials
NISM Series XIX-E (Cat III AIF) study resources

NISM Series XIX-E (Cat III AIF): Category III AIF managers - eligibility, registration and compliance obligations

NISM Series XIX-E (Cat III AIF) · Work through your exam, one topic at a time.

All guide sections

Category III AIF managers - eligibility, registration and compliance obligations

What this domain tests

Registration mechanics - what SEBI registers, who may act as manager, and the continuing obligations that fall on a leveraged fund.

Eligibility and registration

  • The AIF is registered with SEBI, one registration per fund; individual schemes are launched under it.
  • The manager must be a company or LLP, be a fit and proper person, and have key personnel with relevant securities-market experience. A Category III manager additionally needs demonstrable risk-management capability, because schemes may take leverage.
  • Application in the prescribed form with fee; refusal on fit-and-proper or disclosure grounds is appealable to the Securities Appellate Tribunal.
  • Custodian: a Category III AIF must appoint a SEBI-registered custodian for safekeeping of securities - a frequent one-mark question.
  • PPM goes to SEBI at least 30 days before launch; material changes must be intimated to investors, who get an exit option.

Ongoing compliance

  • Periodic reporting to SEBI, annual audit of accounts, compliance certificates.
  • Code of conduct: fiduciary duty, fair treatment of investors, disclosure of conflicts, no assured returns.
  • Change in control of the manager or sponsor requires SEBI approval; surrender or cancellation follows the prescribed process.
  • Past-performance disclosure is generally permitted for Category III schemes subject to SEBI's conditions - it is not a licence to advertise projected returns.

Worked example

A manager plans to launch on 1 June, so the PPM must reach SEBI by 2 May. On 20 May the performance-fee hurdle changes from 8% to 12%. That is material: SEBI and affected investors must be informed and exit options offered. Launching on the original date without that step is a compliance breach, not a paperwork delay.

Traps

Describing the manager as "registered as a Category III AIF"; missing the custodian requirement; treating PPM changes as internal matters; assuming registration, once granted, needs periodic renewal.