SEBI, through a notification dated 27 January, 2014 has recognized Certified Financial Planner certification from the Financial Planning and Standards Board India, as being an eligible certification for registration under SEBI (Investment Advisers) Regulations, 2013. However the proviso to paragraph 3 of the Notification exempts only those associated persons, who have already obtained CFP certification or who would obtain it within 30 days from the date of the Notification from obtaining certification by passing the NISM certification examinations.
The IA Regulations prescribes minimum qualification and certification requirements for a registered investment adviser for protecting investors by ensuring that only a duly competent and suitably licensed person provides investment advice. The 30-days period is unreasonable and does not have any connection with this objective. It would adversely affect an additional route of certification and reduce the number of certified advisers. It effectively implies that a person who gets CFP certification from FPSB India post 30 days from the date of the Notification is less proficient than one who gets the same certification within 30 days from that date. Further, persons who are currently registered with FPSB India for obtaining their certification will still need to obtain certification from NISM by passing the NISM examinations. Under Article 14 of the Constitution of India, classification is permissible if: (i) it is based on intelligible differentia, and (ii) the differentia has a rational nexus to the object sought to be achieved by the rule in question. Persons obtaining certification by passing CFP certification from FPSB India form one class, irrespective of the date on which they attain the certification. Therefore they should be treated equally, and the impugned proviso may be held violative of Article 14.