Page 4 – National Institute of Securities Markets (NISM)

Global Liquidity at Record Highs: What It Means for Markets and Economic Strategy

Posted on July 16, 2025August 7, 2025 by Auburn Solutions

In May 2025, the U.S. M2 money supply reached an unprecedented $21.9 trillion, while India’s M2 stood at ₹67.73 trillion (~$765bn). These figures reflect decades of monetary expansion driven by economic crises, policy interventions, and evolving financial systems. But what does this surge in liquidity mean for markets, interest rates, inflation, and long-term economic planning?

Money supply refers to the total amount of money circulating in an economy at a given point in time. It includes physical currency, demand deposits, and other liquid assets. Economists and central banks track money supply to understand liquidity conditions and guide monetary policy.

1. Understanding Liquidity and Money Supply

Liquidity refers to the ease with which assets can be converted into cash without affecting their price. A high money supply, especially M2, which includes cash, savings deposits, and money market instruments means more money is available in the economy.

Why Does Money Supply Matter?

More money = more spending: When households and businesses have more cash, consumption and investment rise.
Lower interest rates: Central banks often inject liquidity to reduce borrowing costs and stimulate growth.
Asset price inflation: Excess money often flows into stocks, real estate, and commodities, pushing prices up.

Example: After the 2008 financial crisis and the COVID-19 pandemic, central banks globally used quantitative easing (QE) to inject liquidity. This helped stabilize economies but also inflated asset prices.

2. Impact on Financial Markets and Interest Rates
a. Asset Valuations

Increased liquidity tends to boost demand for financial assets:

Equities: Investors chase returns in stock markets, driving up valuations.
Real Estate: Low interest rates make home loans cheaper, increasing property demand.
Gold and Crypto: Seen as hedges against inflation, these assets also attract liquidity-driven investments.

b. Interest Rates and Bond Yields

When money supply increases faster than output, inflation can rise. To counter this, central banks may raise interest rates, which can cool demand but also slow growth. Central banks must balance liquidity with inflation control:

US. Federal Reserve: Faces pressure to raise rates if inflation expectations rise.
Reserve Bank of India (RBI): Has taken a cautious approach, gradually normalizing rates while supporting credit growth.

3. Currency and Inflation Dynamics
a. Currency Strength

US. Dollar (USD): Despite high liquidity, the dollar is still strong due to global demand and its reserve currency status.
Indian Rupee (INR): Faces depreciation pressure due to trade deficits and capital outflows, though RBI interventions help stabilize it.

Example: In 2024-25, the rupee hovered around ₹83–85 per USD, influenced by oil prices, FPI flows, and global interest rate trends.

b. Inflation Outlook

Inflation occurs when too much money chases too few goods. Productivity improvements and efficient supply chains can help offset this. While inflation has moderated post-pandemic, excess liquidity is still a latent risk:

India: Food and fuel prices are key drivers. Supply-side reforms (e.g., logistics, Agri-tech) are essential to control inflation.
Global: Wage growth and energy prices are major factors. Central banks are closely monitoring inflation expectations.

4. Credit Growth and Economic Strategy
a. Banking Sector and Credit Expansion

Liquidity supports credit growth, which can fuel GDP if directed productively:

India: Robust growth in retail loans(housing, personal loans) and infrastructure financing. NBFCs and FinTech’s are playing a growing role.
Global: Credit growth is more cautious, especially in developed markets where debt levels are already high.

b. Strategic Implications

For Policymakers: Focus on channelling liquidity into productive sectors-manufacturing, green energy, digital infrastructure.
For Investors: Diversify portfolios, hedge against inflation, and monitor central bank signals.
For Learners: Understand how macroeconomic indicators like money supply, inflation, and interest rates interact to shape financial markets.

Conclusion: Navigating a Liquidity-Driven World

The surge in global and Indian money supply reflects both past economic interventions and future growth ambitions. While liquidity can support recovery and investment, it also brings risks-asset bubbles, inflation, and currency volatility.

For learners and market participants, understanding the basics of monetary economics is essential. Whether you’re analysing stock trends, evaluating bond yields, or planning long-term investments, keeping an eye on liquidity trends can provide valuable insights.

Author: Mr. Biharilal Deora, CFA, CIPM, FCA

How to Become a SEBI Registered Investment Advisor: Step-by-Step Guide

Posted on July 15, 2025August 7, 2025 by Auburn Solutions

India’s Growing Securities Market Needs More SEBI Registered Investment Advisers (RIAs): Investing wisely is crucial for financial growth and security. However, navigating the complex world of stocks, mutual funds, bonds, and other investment avenues can be challenging. Investment Advisors (IAs) help investors make informed decisions by providing expert financial advice tailored to individual goals and risk tolerance. This article will provide a comprehensive understanding of investment advisors, the services they offer, grievance redressal mechanisms, benefits of engaging an advisor, and regulations protecting investors.

Who is an Investment Advisor: An Investment Advisor (IA) is a SEBI-registered professional who provides personalized financial guidance to clients based on their financial goals, risk appetite, and market conditions. Unlike Mutual Fund Distributors (MFDs), who earn commissions from mutual fund sales, Investment Advisors charge fees directly from clients and provide unbiased recommendations.

Why India Needs More Investment Advisors (IAs): In recent years, the Indian securities market has experienced significant growth, leading to an increase in domestic investors. However, the number of investment advisors (IAs) has not kept pace with this growth. The ratio of investment advisors per million people in India is low compared to countries like the USA. This discrepancy has resulted in a rise in unregistered entities showcasing themselves as investment advisors. To address this issue and improve investor access to qualified advice, there is a need to significantly increase the number of registered investment advisors.

India urgently needs more qualified SEBI Registered IAs who can guide retail investors with ethical, personalized, and well-informed financial advice. This presents a tremendous opportunity for finance professionals to build a rewarding career while contributing to the growth of India’s capital markets. However, despite this surge in participation, there are currently only 932 SEBI-registered IAs serving more than 18 crore demat account holders. This indicates a significant gap between the demand for investment advice and the availability of qualified professionals.

1. Who is a SEBI Registered Investment Adviser (RIA)?
A SEBI Registered Investment Adviser is an individual or entity authorized by the Securities and Exchange Board of India to provide fee-based investment advice to clients while complying with SEBI regulations and investor protection guidelines.

2. Educational Qualifications Required
As per SEBI regulations, the applicant must possess any of the following degrees:

A professional qualification or graduate degree or postgraduate degree or post-graduate diploma (minimum two years in duration) in finance, accountancy, business management, commerce, economics, capital market, banking, insurance or actuarial science
OR a professional qualification by completing a Post Graduate Program in the Securities Market (Investment Advisory) from NISM of a duration not less than one year
OR a professional qualification by obtaining a CFA Charter from the CFA Institute

3. Experience and Certifications
Experience: No experience required.
Mandatory Certifications:

NISM Series-X-A: Investment Adviser (Level 1)
NISM Series-X-B: Investment Adviser (Level 2)

NISM Study Material

4. Documents and Fees Required

Proof of identity (PAN/Aadhaar)
Proof of address
Educational qualification certificates (including NISM certifications)
CIBIL Score
Various other declarations and undertaking
Non-refundable Application Fee of Rs. 2,000 for individual and partnership firms; and Rs. 10,000 for Companies including LLPs
Registration Fee of Rs. 13,000 for individual and partnership firms (For a period of 5 years); and Rs. 5,15,000 for Companies including LLPs (For a period of 5 years)

5. How to Apply for RIA Registration
Step-by-step Guide:

Visit the BSE India website which facilitates IA registration.
Register as a new member.
Verify your mobile number and email ID to receive login credentials.
Log in using the credentials.
Fill out all required details across 12 tabs, including:
- Applicant details
- Address details
- Other details
- Personal details
- Associate companies Registration details
- Other
- Infrastructure details
- Other information
- Change in control
- Questions
- Bank details
- Declaration

Watch the Webinar on Registration Process for Investment Advisers by SEBI and BSE: Registration process guidance

Important Links
• NISM Login Portal
• NISM Study Material
• IA application Documents Checklist
• BSE IA Registration Page

NISM Certification Helpdesk
• Phone: +91-8080806476
• Timing: Monday to Friday, 9:30 AM – 5:30 PM (Closed on public holidays)
• Email: certification@nism.ac.in
• For registration process important contact from SEBI & BSE – Refer BSE India website

For more information, please refer to the following:
• FAQs on SEBI website for IA Registration
• BSE SOP for Registration

Author: N.U. RAJU, DGM, SEBI

Hybrid Funds vis-à-vis Equity Funds: long term and correction phase

Posted on July 10, 2025August 7, 2025 by Auburn Solutions

The market correction of last six months shows the utility of Hybrids

Context
When we talk of volatility in the market and the impact on funds, we talk in terms of statistical measures like standard deviation, Sharpe ratio, Treynor ratio, etc. These measures are good for analysis purposes. However, what matters to the end-user i.e. the investor is the returns over the holding period. Today we will talk about the performance of certain Mutual Fund categories, in a de-jargonized manner which would be easy for the investor to understand.

Fund categories

We have taken three hybrid fund categories that have equity exposure. We will look at their performance in the current phase of market correction. Nifty 50 index peaked on 26 September 2024; we have taken that as the starting point to look at their performance in the correction phase. To compare the performance of these three categories, we have taken two pure-play equity funds – the comparison will give us the perspective.

The three hybrid fund categories we have taken are:

Balanced Advantage Fund: BAF funds have long exposure to equity, usually more than 65 percent of the portfolio for equity taxation. Balance part of the portfolio is in debt instruments. However, a part of the equity portfolio is hedged by taking a short position in the equity futures segment. This reduces the net effective equity exposure in the fund. The implication is, when the equity market is rallying, these funds gain less than pure-play equity funds and when the market is tanking, these funds lose less.
Aggressive Hybrid Fund: these funds have exposure to equity in the range of 65 to 80 percent of portfolio, the balance is in debt instruments. The extent of equity exposure in the portfolio gives an idea of correlation with the equity market vis-à-vis BAF funds.
Equity Savings Fund: these funds have exposure to usual equity, hedged equity and debt instruments. Combination of usual equity and hedged equity is 65 percent or more, which makes its taxation as equity.

The two equity fund categories we have taken for comparison purposes are Large Cap and Small Cap.

Performance

To gauge the performance in the correction phase, we have taken data for the period 26 September 2024 to 28 March 2025. BAF funds, as category average, has given negative 6.17 percent, regular plan, non-annualized. Aggressive Hybrid Funds, with a relatively higher exposure to equity than BAF, have yielded negative 8.58 percent in this period. Equity Savings Funds, with a relatively higher component of equity hedging / debt exposure, have done relatively better, giving negative 1.24 percent in the correction phase. Equity Large Cap Funds have yielded negative 11.33 percent in this period and for Small Cap Funds the number is negative 16.06 percent.

What we observe is, when the equity market has tanked, pure-play equity funds have given commensurate returns, as per the segment of exposure i.e. Large Cap or Small Cap. Hybrid funds, with various combinations of equity / hedged equity / debt instruments, have done relatively better. Over the longer term, pure-play equity funds have fared better. Equity funds, transient volatility aside, have delivered returns, provided you have an adequate holding period. Last one-year results are mixed, as it is after the correction of last six months.

1 April 2024 to 28 March 2025, Large Cap Funds have delivered 5.84 percent, regular plan, and Small Cap Funds have given 7.76 percent. Over this period, BAF category has yielded 5.75 percent, Aggressive Hybrid 8.14 percent and Equity Savings have given 7.4 percent. When we look at 10-year returns till 28 March 2025, Large Cap Funds have delivered 11.1 percent annualized. Small cap Funds have done even better, 16.05 percent annualized. Aggressive Hybrid Funds, with relatively lower allocation to equity than pure-play, follows with 10.7 percent annualized. Then comes BAF, which can fine-tune the effective equity exposure as per their reading of the market, having delivered 9.02 percent. The more defensive of these five fund categories, Equity Savings Funds, have delivered relatively modest 7.54 percent.

Conclusion

The simple message from the above analysis is that the purpose of pure-play equity funds is to deliver relatively superior returns, subject to volatility. Hybrid funds reduce the impact during market volatility, but end up yielding little less over the long term. There are eleven equity fund categories, apart from passive funds i.e. Index Funds / ETFs, and six hybrid fund categories. You can pick and choose the appropriate ones as per you risk appetite. You will have to allocate to multiple categories, in a ratio that suits you.

Author:

Joydeep Sen, Corporate Trainer (Financial Markets)

Originally publish in Mint on 23^rd April 2025
https://www.livemint.com/money/personal-finance/hybrid-funds-equity-funds-balanced-advantage-funds-equity-savings-funds-aggressive-hybrid-funds-market-volatility-11745395348091.html

Why Students of Commerce, CA, CS, and CMA Should Consider NISM’s Forensic Investigation Courses

Posted on July 10, 2025August 7, 2025 by Auburn Solutions

In today’s rapidly evolving financial ecosystem, the demand for professionals with investigative acumen and a strong understanding of financial frauds is rising sharply. With increasing incidents of corporate scams, money laundering, and cyber-enabled financial crimes, companies and regulatory bodies are strengthening their forensic audit and compliance frameworks.

Against this backdrop, NISM’s Forensic Investigation Level 1 and Level 2 e-learning courses, developed in collaboration with EY, offer a unique opportunity for students of Commerce, Chartered Accountancy (CA), Company Secretaryship (CS), and Cost & Management Accounting (CMA) to gain a competitive edge.

1. Real-World Relevance in Every Subject Area

Students pursuing commerce or professional qualifications like CA, CS, and CMA are already equipped with strong foundations in accounting, auditing, corporate law, and finance. These areas align perfectly with forensic investigation, which applies these concepts to detect irregularities, trace fraudulent transactions, and ensure compliance with regulatory norms.

NISM’s forensic courses provide learners with practical exposure to how real-world frauds are detected, investigated, and mitigated. This complements academic learning with actionable skills that are increasingly in demand across audit firms, banks, regulatory bodies, and large corporates.

2. Enhancing Career Versatility and Employability

In addition to their traditional career routes, students can use this certification to pivot into high-growth roles such as:

Forensic Auditor
Risk & Compliance Analyst
AML/KYC Specialist
Internal Investigator
Corporate Governance Advisor

Many top consulting firms and financial institutions prefer candidates who can demonstrate both core domain knowledge and applied forensic skills. These courses, designed with EY’s expertise, ensure industry-relevant insights that help learners stand out in job interviews and career transitions.

3. Gaining an Edge in Audit, Risk, and Governance Domains

For CA students, forensic investigation deepens the understanding of internal controls, red flags in financial reporting, and audit trails. For CS aspirants, it enhances capabilities around corporate governance, legal compliance, and fraud prevention. For CMA students, it provides tools to assess operational and financial frauds impacting cost systems and managerial decisions. Commerce graduates can broaden their horizons by positioning themselves as forensic-ready professionals.

This layered learning approach—starting from fundamentals in Level 1 to case-based applications in Level 2—makes it suitable even for beginners while remaining highly valuable for those with prior knowledge in finance or audit.

4. Flexible Learning for Busy Schedules

The courses are 100% online, self-paced, and designed to accommodate the busy schedules of students preparing for professional exams or pursuing internships. Learners can access high-quality content, interactive case studies, and expert-curated modules anytime, anywhere.

5. Certification That Speaks for Itself

The certification from NISM (an institution under SEBI), with EY as the knowledge partner—a global leader in assurance and advisory services—adds significant value and credibility to the job market. It signals credibility, preparedness, and a commitment to continuous professional development.

Conclusion

Whether you’re aiming to work in the Big 4, join a regulatory authority, or enhance your skills for a career in audit or compliance, NISM’s Forensic Investigation courses can unlock valuable opportunities. For students of Commerce, CA, CS, and CMA, it’s not just a certification—it’s a strategic investment in a future-proof career.

Explore the courses here:
Level 1 | Level 2

Why SIPs should be continued when markets are down

Posted on July 7, 2025 by Auburn Solutions

Context
You must have seen the awareness campaign of Mutual Funds Sahi Hai and SIPs Sahi Hai. It is not just a campaign, but there is a rationale behind it. It is beneficial for you. The logic is, you are inculcating discipline. The money that otherwise may have been spent, is being invested for your future benefit. The other advantage is cost averaging. When markets are down and prices are low, we psychologically tend to move away. However, arguably, we should invest more when prices are down. When we continue our purchases in a disciplined manner, say every month, we are buying cheap, which leads to overall average cost of acquisition being relatively lower. This is called dollar cost averaging or rupee cost averaging.

Current situation
Markets have corrected. Nifty50 index, from its peak in September 2024 till 13 March 2025, has lost 14.6 percent. Nifty 500 index has lost 17.6 percent over the period. Nifty Midcap 150 has lost more, 20.4 percent. Nifty Smallcap 250 has lost the lost the most from September 2024 peak, 24.3 percent. However, SIP cancellations are moving up as well. In 2020, 1.25 crore SIP accounts were opened. By next year, 35 percent of those were closed. In 2021, 2.43 crore SIP accounts were opened, but by next year, 41 percent of those were closed. That is, number of accounts opened went up, but closure rate went up as well. In 2022, number of accounts opened were 2.57 crore and closures by next year were 42 percent. Year after, in 2023, number of accounts opened went up to 3.48 crore and closure rate by next year was up at 48 percent. To put it simply, half the SIP accounts opened in 2023 were closed by 2024.

This typically is a sign of lack of maturity from investors who have not seen market cycles over a long period of time. It is the nature of equity market to move in cycles, but over a long period of time, it delivers decent returns. One of the reasons for SIP closure could be consolidation – instead of multiple SIP accounts, the investor may want to operate fewer accounts. That apart, it shows a short investment horizon; much shorter than what is optimally required for investment in the equity market.

Cost averaging
Let us look at the illustration of rupee cost averaging in three different market situations, with hypothetical data.

You have a SIP of Rs 10,000 per month, from July 2024 to December 2024. The market level varies; accordingly, the NAV of your fund varies as well. The number of units purchased is a function of the unit price or NAV: it is the amount i.e. Rs 10,000 divided by Rs 20 in July 2024. In July 2024, you acquire 500 units of your fund, at a price of Rs 20.

In a flat market condition, the NAV fluctuates, but only so much. You acquire units every month at the given unit price. At the end of six months, you acquire 3,039.76 units, which is the total of the units acquired over six months. Since you have invested Rs 60,000 and at the end of six months you have 3039.76 units, the average cost of acquisition is Rs 19.74. The crux of the matter is, this is lower than if you would have invested lump sum Rs 60,000 in July 2024, when the price was Rs 20.

In a bull market, the NAVs are higher since stock prices are moving up. Your average cost of acquisition is Rs 60,000 divided by 2,622.66 units i.e. Rs 22.88. Though the cost of acquisition is higher, investors do not mind. In a bull market, there is a feel-good factor around and investors are in a positive frame of mind. In the bear market illustration, the NAV is coming down and you acquire a greater number of units. Your average cost of acquisition is Rs 60,000 divided by 3,334.1 units i.e. Rs 18. To be noted, in a bear market, you acquire more units, but your value at the end is relatively lower. In December 2024, your value is 3334.1 units multiplied by Rs 16.5 = Rs 55,013. In a bull market, you acquire lesser number of units but your value at the end is relatively higher. In the bull phase illustration, your terminal value is 2,622.66 units multiplied by Rs 25 = Rs 65,567.

Conclusion
The purpose of SIP is disciplined investments, not trying to time the market. If you discontinue the SIP, you are defeating the very purpose of doing it. In the illustration above, the higher number of units you acquire in the bear phase, will contribute to higher portfolio value in the next bull phase. Given that there is no structural issue about the growth of the Indian economy, market is correcting due to certain cyclical issues – you can take the right decision.

Author:

By Joydeep Sen, Corporate Trainer (Financial Markets)

“The article was earlier published in The Hindu on 31 March 2025.”

Passively Managed Funds and Portfolio Allocation

Posted on July 7, 2025 by Auburn Solutions

The crux of your investment portfolio is allocation to various investment assets like equity, bonds, gold, etc. Within these are sub-assets e.g. large cap/small cap stocks, long maturity/short maturity bonds, etc.

There is another approach to portfolio allocation. There would be a core part of the portfolio, and a satellite component. The core component is not to be disturbed unless there is a drastic change in the market or in the fund.

The satellite component is for taking tactical calls based on prevailing market situation. The satellite component is meant for taking advantage of market situations, hence the investment tenure can be short term. The more defensive the portfolio, higher should be the core component as satellite is for taking higher risks.

Passive funds: The concept of passive funds is the fund manager does not take any decision on the portfolio. S/he does not take any decision on what to buy or when to sell. The fund manager’s job is to follow the underlying index. As an example, if the underlying index is Nifty50 or Sensex, then the fund manager will mimic that. S/he will buy the same stocks as in Nifty / Sensex, and maintain the same ratio in portfolio allocation. The returns, which simply follow the underlying index, will be similar as of the index. The returns will be marginally lower as there would be some recurring expenses in the fund and tracking error.

Passive funds are available for various asset classes viz. equity, debt (bonds) and commodities. One passive idea or strategy can be followed by multiple Asset Management Companies (AMCs). Example, Nifty50- or Sensex-based passive funds.

Two formats: Passive funds are offered in two formats. One is Exchange Traded Funds (ETFs) where fund units are listed on the exchange i.e. NSE / BSE. Investors can buy/sell ETF units during trading hours. There is no purchase or redemption with the AMC for ETF units. The other format is Index Fund format, where you can buy or redeem with the AMC, like any other open-ended fund.

The advantage of Index Fund format is liquidity; when you want money, just make the redemption request. In ETFs, the advantage is you can do multiple buy/sell trades a day. In Index Funds, you can buy/redeem only once a day, at end-of-day NAV.

Active vs. passive: There is a debate between active and passive funds, which one is better? In active funds, expenses are higher. The expectation is, these funds would generate returns higher than relevant benchmark, which is referred to as alpha.

If the active fund is not beating the benchmark, then why should the investor bear higher expenses? The investor would rather settle for a passive fund. The passive fund would never beat the benchmark, but give similar returns i.e. not underperform grossly.

You should allocate to both as per your objectives, suitability and performance of the funds.

Should passives be part of core portfolio or satellite? There is a tendency to have passives in the satellite component as the core portfolio is expected to accumulate wealth over a long period of time via compounding effect. Since the fund manager needs a long time to outperform the benchmark, it should not be disturbed.

In the satellite portion, since you are taking relatively higher risk, you minimise the possibility of the fund underperforming the benchmark. Having said that, there is a shift, with a good reason, to have passives in the core component of your portfolio.

The portfolio allocation compounding and accumulating wealth over a long period of time should be defensive. That is, the risk of your exposures underperforming the benchmark should be low, as you do not want to go wrong on that part. The satellite portion is meant to bear the risk. If your call / the fund manager’s call goes right, you earn superior returns.

Conclusion: Data shows over 50% of active funds not beating the benchmark. The outcome varies on whether it considers direct plan (relatively lower expense ratio) or regular plan (relatively higher expense ratio). Hence, go for active funds where there is scope for the fund manager to outperform e.g. small cap or thematic funds. In large cap funds, the scope is limited as the universe is only 100 stocks. Where you want to settle for market or near-to-index returns, passives are better which can be core. Where you want higher returns, beating the index, you can allocate in the satellite component.

Author:

By Joydeep Sen, Corporate Trainer (Financial Markets)

Prerequisites for becoming a SEBI Registered Research Analyst

Posted on July 1, 2025 by Auburn Solutions

I. Who is/are Securities and Exchange Board of India (SEBI) Registered Research Analyst?

A SEBI Registered Research Analyst can be a person or entity registered under the SEBI Research Analysts (RA) Regulations, 2014. As per these regulations:

1. A Research Analyst means a person who, for consideration, is engaged in:
a) the business of providing research services and
b) includes a part-time research analysis.

2. A Research Entity means an intermediary registered with SEBI who is also engaged in:
a) merchant banking; or
b) investment banking; or
c) brokerage services; or
d) underwriting services; and
e) issue research report or research analysis in its own name through the individuals employed by it as research analyst and includes any other intermediary engaged in issuance of research report or research analysis.

3. No person shall act as a research analyst or research entity or hold itself out as a research analyst unless he has obtained a Certificate of Registration from SEBI. This provision is subject to various conditions, therefore, readers are advised to refer to Chapter II Regulation 3 of the SEBI Research Analyst Certification Examination.

II. What are the eligibility criteria to become a SEBI Registered Research Analyst?

The eligibility criteria for the grant of Certificate of Registration to be fulfilled by an applicant is as follows:

1. Qualification & Other Requirements for a Research Analyst
a) Minimum Qualification Requirements for Research Analysts
The following individuals must meet certain qualification requirements at all times:
- Individual research analysts,
- Principal officers of non-individual research analysts,
- individuals employed and partners of a research analyst engaged in research services
They must have:
1. 1. A graduate, postgraduate degree or diploma, or professional qualification in fields like:
2. i. Finance, Accountancy, Business Management, Commerce, Economics, Capital Markets, Banking, Insurance, Actuarial Science, or other financial services from a university or institution recognised by Central government or any State Government or a recoganised foreign university or institution or association; or
3. 2. A professional qualification by either:
4. i. completing a one-year Post Graduate Program in Securities Market (Research Analysis) from NISM, or
5. ii. obtaining a CFA Charter from the CFA Institute.
1. b) Additionally:
- Persons associated with research services must have at least a graduate degree from a university or institution recognized by the Central Government or any State Government or a recognized foreign university or institution.
- All such individuals must hold a valid NISM certification as specified by SEBI.
- A fresh relevant NISM Certification as specified by SEBI from time to time shall be obtained before expiry of the validity of the existing certification to ensure continuity in compliance with certification requirements.

2. Type of Applicant

For the purpose of grant of Certificate of Registration, the applicants are required to be certified and qualified as per the Regulation 7 of the SEBI RA Regulations, 2014. They are:

3. Other Criteria

Deposit Requirement: The applicant must meet the deposit requirements specified in Regulation 8 of SEBI RA Regulations, 2014.
Fit and Proper Criteria: The applicant, must be “fit and proper” as per the criteria listed in Schedule II of the SEBI (Intermediaries) Regulations, 2008.
Adequate Infrastructure: The applicant must have suitable infrastructure to effectively carry out research analyst activities.
Past Refusal of Registration: If the applicant or any connected person has previously been refused registration by SEBI, the reasons for such refusal will be considered.
Disciplinary History:Any past disciplinary action by SEBI or other regulatory authorities against the applicant or connected persons will also be examined.
Enlistment with a Recognised Body: The applicant must be enlisted with a body or body corporate recognised by SEBI under Regulation 14 of SEBI RA Regulations, 2014.

III Which exam should I take to become a SEBI Registered Research Analyst?

For becoming a SEBI registered research analyst:

i. You must pass the NISM Series-XV: Research Analyst Certification Examination(Exam is held at Test Centre).
ii. The certificate awarded upon successful completion is valid for three years.
iii. To continue practising as a research analyst, it is mandatory to renew the certificate before its expiry. You can do so either by passing the NISM Series-XV: Research Analyst Certification Examination again or by clearing the NISM Series XV-B: Research Analyst Certification (Renewal) Examination(Exam is remotely proctored).

IV How can I register for the NISM Research Analyst exam?

You can register online via https://certifications.nism.ac.in. Refer this to know the step-by-step process of registrationfor NISM Exam.

V. What topics are covered in the NISM Research Analyst exam?

The NISM-Series-XV: Research Analyst Certification Examinationestablishes a minimum knowledge benchmark for individuals registered as Research Analysts under SEBI RA Regulations, 2014. The certification examination workbook covers essential topics such as:
- Basics of Indian securities markets and key financial terminologies
- Fundamental research approaches (top-down and bottom-up)
- Microeconomic and macroeconomic analysis
- Company analysis (qualitative and quantitative)
- Risk, return, and valuation principles
- Corporate actions and regulatory framework
- Guidelines for writing effective research reports

The NISM Series XV-B: Research Analyst Certification (Renewal) Examination Examination includes advanced topics like:

Accounting quality assessment and red flag identification
Valuation catalysts and market trend analysis
Technical analysis and value migration in equity markets
Overview of derivatives and commodities markets

VI. How do I apply to SEBI for research analyst registration?

After clearing the above-mentioned NISM exam, you need to:

i. Prepare necessary documents (application form, certificates, KYC, etc.)
ii. Submit an application on SEBI’s intermediary portal: https://siportal.sebi.gov.in/intermediary/index.html
iii. Pay the applicable registration fee, subject to 18% GST.
iv. Await SEBI’s verification and approval.
v. For Self-Registration, click here.

VII. What are the key responsibilities of a SEBI registered research analyst?

As per Regulation. 2(1) (wa) of SEBI RA Regulations, 2014, Research Analyst must perform Research Services such as:

Apart from the above, a research analyst must follow the Code of Conduct and Practices as specified by SEBI.

VIII. Is it mandatory to register with SEBI to work as a research analyst in India?

Yes As per SEBI RA Regulations, 2014, any Person and Entity offering research services in securities markets must be registered with SEBI.

IX. Where can I get more help and updates?

You can visit the official websites:

i. SEBI – www.sebi.gov.in
ii. NISM – https://www.nism.ac.in/certifications/

Author: Dr. Kiranjit Kaur Kalsi,
Sr. Assistant Manager – Centre for Content Creation

Why a Certificate in Financial Analytics is a Smart Investment

Posted on June 23, 2025 by Auburn Solutions

Unlocking the Future of Finance: Why a Certificate in Financial Analytics is a Smart Investment
In today’s data-driven economy, financial decisions are no longer guided by instincts alone. Whether you’re an aspiring analyst, a working finance professional, or someone looking to get into the financial domain, a certificate program in Financial Analytics offers a unique opportunity to harness the power of data and drive smarter financial strategies.

Financial analytics is the intersection of finance, data science, and technology. It involves collecting, processing, and analyzing financial data to support decisions related to investments, budgeting, forecasting, and risk management. From predicting market trends to evaluating the performance of financial instruments, financial analytics equips professionals with the tools to turn numbers into narratives and insights into impact.

What You’ll Learn
The Certificate Program in Financial Analytics is designed in collaboration with industry experts to ensure that the curriculum reflects the latest trends and tools in finance. Topics typically include:

Quantitative Methods in Finance
Financial Modeling and Portfolio Analysis
Risk Management and Derivatives
Credit Risk Analytics
Valuation and Risk Modeling

Career Opportunities
With companies across the globe looking for finance professionals who can interpret and analyze data, this certificate acts as a powerful credential. Roles you can pursue include:

Financial Analyst
Data-Driven Investment Advisor
Risk Analyst
Business Intelligence Analyst
FP&A Specialist

Flexible Learning Format
The programme could be offered in a hybrid/online format and is perfect for working professionals or students who want to learn without compromising their current commitments.

Who Should Enroll?

The participants of the program could be:

Graduates and Postgraduates in commerce, economics, statistics, or business
Working professionals in finance or accounting roles looking to upskill
Entrepreneurs and startup founders aiming to make data-backed financial decisions
Career switchers wanting to enter the high-demand world of fintech and analytics

Final Thoughts
Finance is evolving. Are you? The Certificate Program in Financial Analytics helps you stay ahead by combining financial acumen with analytical precision. It’s time to transform your career, make better decisions, and become future-ready.

Enroll now and take the first step toward becoming a financial analytics professional!

Author: Dr. Dhiraj Jain,

NISM’s CPFA:The Launchpad for High-Growth Roles in Finance and Analytics

Posted on June 20, 2025 by Auburn Solutions

As the financial industry undergoes a data-driven transformation, professionals who blend finance expertise with analytics acumen are becoming indispensable. Recognising this urgent need, National Institute of Securities Markets (NISM) offers the Certificate Programme in Financial Analytics (CPFA)—a rigorous and future-focused course designed to empower finance professionals with practical data handling, modeling, and interpretation skills that directly align with contemporary industry requirements.
Financial Analytics Professionals: Market Demand and Growth Trends

Metric / Segment	Insight
Fintech Sector Demand for Data Talent	87% of Indian fintech companies seek candidates with financial + analytics skills
Share of Analytics Jobs from India	17.4% of global analytics job postings; highest worldwide
Average Salary for Financial Analysts in India	₹4–6 LPA (entry-level); ₹12–25 LPA (mid-to-senior level with analytics skillset)

Sources:

NASSCOM. (2023, July 19). Fintech innovation in India: Demand for digital talent in the
financial sector.Retrieved from https://community.nasscom.in/communities/emerging-tech/fintech-innovation-india-demand-digital-talent-financial-sector
Times of India. (2024, February 10). India tops global demand for data analytics jobs. The Times of India. Retrieved from https://timesofindia.indiatimes.com/business/india-business/india-tops-global-demand-for-data-analytics-jobs/articleshow/113641351.cms
PayScale.(2024).Financial analyst salary in India.Retrieved from https://www.payscale.com/research/IN/Job=Financial_Analyst/Salary

Why CPFA is the Need of the Hour: Bridging Finance with Data-Driven Insight
NISM’s Certificate Programme in Financial Analytics (CPFA) is designed to meet the growing industry demand for finance professionals with strong analytical skills. Through 160 hours of live, expert-led sessions, the programme offers practical training in financial modeling, credit analysis, valuation, and risk assessment using real-world data and case studies.

Participants gain hands-on experience with key tools like Python, R, Excel, and Power BI, preparing them for strategic, data-driven decision-making in today’s evolving financial landscape.

CPFA: Tailored to Industry Demands

Industry Requirement	CPFA Programme Inclusion
Cross-functional finance + analytics skillset	Integrated curriculum covering finance, statistics, Python/R, and visual analytics
Proficiency in analytical tools (Excel, Power BI, Python, R)	Practical tool-based training with assignments and guided labs
Data visualization & storytelling	Modules on interactive dashboards, business insights, and presentations
Risk and credit analytics	Hands-on training in modelling, credit scoring, and financial forecasting
Real-world financial data application	Exposure to real-time datasets and industry-simulated capstone projects
BFSI, Fintech, Consulting-ready profiles	Curriculum aligned with recruitment trends across financial and analytics domains

Learning Objectives & Takeaways of CPFA Programme

Learning Objectives	Key Learning Takeaways
Build strong fundamentals in financial markets, macroeconomics, and investment theory	In-depth understanding of capital markets and financial instruments
Equip learners with hands-on knowledge of financial analytics tools and techniques	Practical skills in Excel, Power BI, Python, R for modeling and data interpretation
Enable construction of financial models for valuation, forecasting, and portfolio analysis	Ability to assess investment opportunities and construct optimized portfolios
Develop data-driven decision-making skills using real-world financial data	Proficiency in credit risk analysis, predictive modeling, and scenario planning
Provide exposure to real-life financial datasets and cases	Confidence in applying knowledge to industry-based capstone projects and simulations
Align learning outcomes with current BFSI and fintech industry demands	Job-readiness for roles such as Financial Analyst, Risk Analyst, Business Intelligence Analyst

Career Pathways: Where CPFA Can Take You

Job Role	Key Skills from CPFA	Prospective Recruiter(s)
Financial Analyst	Forecasting, Valuation, Excel, Market Analysis	Investment Firms, NBFCs, AMCs
Risk Analyst	Credit Risk Models, Basel Norms, Scenario Analysis	Banks, Fintech, Rating Agencies
Investment Analyst	Portfolio Construction, Equity Research, Financial Modeling	PE/VC Firms, Asset Management
Financial Data Analyst	Python, R, Power BI, SQL	Fintech, Consulting, Analytics Startups
Business Intelligence Analyst	Dashboarding, Visualization, Storytelling with Data	Technology, BFSI, Corporate Strategy Teams
Quantitative Analyst	Statistics, Regression, Risk Modeling	Hedge Funds, Algorithmic Trading, Quants Roles

Author: Dr. Shubhangi Chaturvedi, A.M (Sr.)

IPO Flipping, Risky Trading, and Debt: The Dangerous Game Young Indian Investors Are Playing

Posted on June 18, 2025 by Auburn Solutions

A new wave of retail trading is sweeping India’s markets, driven by the allure of quick wealth. Social-media “finfluencers” and familiar cognitive biases have spurred many young investors into speculative derivatives trading and IPO flipping. Encouraged by herd mentality, fear of missing out (FOMO) and overconfidence, inexperienced traders chase short-term gains instead of doing fundamental analysis.

Behavioral Drivers of Speculation

Investor psychology plays a key role. Young traders are prone to behavioral biases that amplify risk:

● Herd Mentality: Imitating the crowd. Many follow popular trades or tips from peers and influencers, rather than independent research. In markets, this can fuel asset bubbles and panic sell-offs as everyone chases the same idea.

● Fear of Missing Out (FOMO): Jumping into hype. The fear of missing a booming rally can prompt impulsive entries at overheated prices. Traders may buy simply because others are doing so, hoping to “ride the wave” before it’s too late.

● Disposition Effect: Selling winners too soon and hanging on to losers. Behavioral finance studies define the disposition effect as the tendency to cash out profitable positions quickly while avoiding realization of losses. Many young investors thus lock in small gains from an IPO listing, yet hold onto or even double down on stocks that have fallen, hoping to “break even.”

● Overconfidence: Overestimating skill or information. Novice traders often believe they can time the market or pick high returns based on limited research. This leads to excessive trading and underestimating the difficulty of speculation.

These biases feed directly into two popular strategies: leveraged derivatives trading and IPO flipping. Derivatives allow large bets with borrowed funds, magnifying gains and losses. IPO flipping refers to subscribing to a new issue solely to sell it quickly at the initial pop, instead of investing for the company’s fundamentals. Both practices expose the uninformed to huge downside if markets reverse.

Market Data and Trading Outcomes

Empirical market data confirm this speculative frenzy among youth:

● Intraday Trading Spike: Between 2022 and 2024, the count of intraday traders in India rose by about 5 times, with nearly 48% of new entrants under 30. Despite the hype, 93% of the 1.13 crore intraday traders during this period incurred net losses. In aggregate these traders lost ~Rs 1.8 lakh crore. (Put differently, the typical young trader making ~Rs 5 lakh annually burned through ~Rs 2 lakh on average.)

● Retail IPO Activity: The post-pandemic period saw a flood of first-time investors into IPOs. Nearly half of all demat accounts active in 2021–23 IPO subscriptions were opened after the COVID lockdowns. Meanwhile, demand from Non-Institutional Investors (NIIs) which typically experienced high-net-worth participants sharply declined, with NII oversubscription ratios falling from ~38 times to ~17 times. This suggests retail bidders (many young and unsophisticated) crowded the IPO market even as veterans pulled back.

● IPO Listing Returns: Analysis of IPOs listed Dec 2024 to Mar 2025 (80 issues total) reveals a speculative tilt. Of these, 57 IPOs opened with hefty gains (average listing jump of more than 40%), 9 opened roughly flat (0% gain), and 14 opened at a loss (average -12.5%). Half of the IPO shares allotted to retail investors were sold within one week, underscoring the “flip” mentality. In effect, many young subscribers captured initial listing profits and immediately exited, rather than holding for long-term value.

These figures paint a clear picture: young retail investors are overwhelmingly chasing immediate gains, often neglecting basic due diligence on company fundamentals. The short-term focus inflates listing prices and lures novices into chasing bubbles, only to suffer losses when momentum fades.
Financing Speculation through NBFC Loans

A critical question is how modest-income investors fund such aggressive trading. Industry reports suggest a key role for non-bank personal loans. The Fintech Association for Consumer Empowerment (FACE) found that in FY2023 to FY2024 NBFCs sanctioned nearly 14 crore personal loans, totaling about Rs 9 lakh crore. This explosive growth reflects the appeal of instant, often uncollateralized credit in the digital age.

Notably, these loans come at very high interest. Banks typically offer personal loans at around 11% per annum, whereas NBFC and fintech lenders charge up to 45%. The gap is stark and those with weak credit scores or urgent funding needs may be shut out by banks’ stringent criteria, so they turn to NBFCs’ fast, frictionless apps. In other words, subprime borrowers and desperate traders accept exorbitant rates in exchange for quick approvals.

This cycle of high-cost borrowing exacerbates losses. Young traders may borrow to cover losing trades or to leverage up for new bets. When trades go south, they re-borrow to recoup losses, perpetuating a debt spiral. RBI’s latest Financial Stability Report (Sep 2024) sounds the alarm: India’s bank NPAs are at a 12-year low (3.12% as of Sept 2024) thanks to a lending boom, but NBFCs remain vulnerable. The report highlights that NBFCs continue to have comparatively higher NPA levels due to their exposure to unsecured personal loans, and that unsecured lending by NBFCs is growing in double digits. In short, risk is accumulating on NBFC balance sheets. Many young traders could find themselves burdened by unmanageable debt as losses mount, threatening both household finances and NBFC stability.

Policy Imperatives and Institutional Responses

Addressing this multifaceted crisis requires coordinated action on several fronts:

1. Regulatory Strengthening of NBFC Lending: Regulators should tighten underwriting norms for personal loans, especially those lacking collateral or directed toward market speculation. For example, imposing risk-based credit assessment and end-use verification (requiring lenders to monitor whether a loan is used for trading) would help curb predatory NBFC practices. Enhanced supervision and higher provisioning for risky loan portfolios can protect lenders and borrowers alike. Similarly, measures like margin requirements or cooling-off periods for IPO subscriptions and derivatives to limit excessive leverage and speculative “flipping.”

2. Investor Education and Behavioural Finance Training: Long-term change hinges on smarter investors. Thus, India’s securities markets education body should play a pivotal role by developing modules on behavioural biases, risk management, and fundamental analysis. For instance, training programs could highlight common traps (FOMO, overconfidence, disposition effect) and reinforce the importance of scrutinizing business models and financials before investing. Equipping young traders with robust financial literacy will promote discipline. Embedding behavioural finance in certification courses and college curricula would help inoculate new investors against herd-driven mania.

3. Data-Driven Market Surveillance: RBI should leverage data analytics to detect early signs of speculative bubbles and risky credit flows. Real-time data-sharing between stock exchanges, brokerages and credit registries could flag anomalous trading patterns or a surge in margin / loan usage tied to market investments. Advanced algorithms and machine learning can monitor retail trading volumes, concentration of holdings, and velocity of IPO exits. Such surveillance would enable regulators to pre-empt systemic stress and adjust policies dynamically.

Conclusion

The convergence of social-media hype, behavioural biases and easy-but-costly credit has created a perilous environment for young investors in India. The evidence is unmistakable: a majority of inexperienced traders are losing hard-earned money on short-term bets, often funded by unsustainable loans. Beyond the personal toll on households, this trend poses broader financial stability risks (e.g. rising NBFC NPAs).

Institutional responses must therefore be two-pronged: tighten the credit and trading loopholes that fuel reckless speculation, and elevate the investment acumen of retail participants. Regulatory measures can curb obvious excesses, but ultimately sustainable markets depend on an informed investor base that prioritizes long-term value. By instilling prudent decision-making habits and emphasizing fundamentals over frenzy, we can help steer investors away from the dangerous cycle of quick gains and crushing losses and towards disciplined wealth creation.

Authors:

● Abhishek Dadhwal, PGP Student, Indian Institute of Management Raipur
● Rasmeet Kohli, Sr. AGM, National Institute of Securities Markets (NISM) .
● Pradiptarathi Panda, Asst. Professor, Indian Institute of Management Raipur

Disclaimer: The views expressed above are those of the authors alone and do not represent the views of NISM or affiliated institutions.
The piece had originally appeared in Live Mint.