Several venture capital fund managers are heading back to the classroom, not to learn how to pick the next unicorn or finalise valuation, but to clear a 150-mark exam that some of them said is designed for hedge fund managers, not startup investors.
A few of them have failed to clear the test, while some have cleared it after multiple attempts. VC fund managers ET spoke with said the failure was not due to lack of expertise, but because the theory-heavy test wasn't tailored for them. The Securities and Exchange Board of India in a circular over a year ago said at least one key personnel on the investment team of an alternative investment fund (AIF), registered or domiciled in India, should have the National Institute of Securities Market (NISM-Series-XIX-C) certification, which requires clearing of this test. The deadline to comply with this requirement is May 9.
VC managers question the need for such an exam at this stage in their careers. It has now become a regular topic in boardroom conversations and daily meetings. A deep-tech fund manager, speaking on the condition of anonymity, said he cleared the exam on his second attempt, but some of his peers are still struggling.
Some funds are asking compliance teams or junior staffers to take the exam to meet the mandate. Some of them who cleared it said the content of NISM is overwhelmingly geared towards Category-III AIFs, which deal with public market trades and derivatives. Category-I and -II AIFs, like most venture capital and private equity funds, have vastly different mandates, they said.
Homegrown VC firm 3one4 Capital said it complied with the requirement shortly upon the launch of the test. Siddarth Pai, its founding partner, pointed out that an exam was not a determinant of a good VC.
A few of them have failed to clear the test, while some have cleared it after multiple attempts. VC fund managers ET spoke with said the failure was not due to lack of expertise, but because the theory-heavy test wasn't tailored for them. The Securities and Exchange Board of India in a circular over a year ago said at least one key personnel on the investment team of an alternative investment fund (AIF), registered or domiciled in India, should have the National Institute of Securities Market (NISM-Series-XIX-C) certification, which requires clearing of this test. The deadline to comply with this requirement is May 9.
VC managers question the need for such an exam at this stage in their careers. It has now become a regular topic in boardroom conversations and daily meetings. A deep-tech fund manager, speaking on the condition of anonymity, said he cleared the exam on his second attempt, but some of his peers are still struggling.
Some funds are asking compliance teams or junior staffers to take the exam to meet the mandate. Some of them who cleared it said the content of NISM is overwhelmingly geared towards Category-III AIFs, which deal with public market trades and derivatives. Category-I and -II AIFs, like most venture capital and private equity funds, have vastly different mandates, they said.
Homegrown VC firm 3one4 Capital said it complied with the requirement shortly upon the launch of the test. Siddarth Pai, its founding partner, pointed out that an exam was not a determinant of a good VC.
