SEBI Expands Accredited Investor Criteria in India
By Business Desk
SEBI proposes to significantly expand India’s Accredited Investor pool by introducing securities market assets as a key eligibility criterion, potentially tripling the number of eligible investors.
The Securities and Exchange Board of India (SEBI) has unveiled new proposals designed to substantially broaden the Accredited Investor framework. A primary change involves establishing securities market assets as an additional criterion for eligibility, a move that could increase the pool of accredited investors from the current 1 lakh to approximately 4 lakh individuals and entities.
Expanding the Investor Pool
Under the proposed regulations, individuals must hold at least Rs 5 crore in securities market assets to qualify for accredited investor status. Similarly, body corporates would need to possess a minimum of Rs 20 crore in such assets to meet the new criteria.
- The current pool of eligible accredited investors stands at 1 lakh.
- SEBI’s proposals could expand this pool to approximately 4 lakh individuals and entities.
Streamlining the Accreditation Process
These proposals stem from stakeholder feedback and recommendations provided by the Alternative Investment Policy Advisory Committee. SEBI aims to simplify the accreditation process significantly, making it more accessible and efficient for potential investors.
- A new manager-led accreditation route will be introduced, valid at a group level, complementing the existing Accreditation Agency method.
- The validity of accreditation will be streamlined to three years, based on the submission of the latest financial documents.
Inclusivity for Non-Resident Investors
A significant aspect of SEBI’s plan is the expansion of the category of deemed Accredited Investors to include all Persons Resident Outside India (PROI). This classification is defined under the Foreign Exchange Management Act, 1999, and aims to foster greater foreign participation in Indian markets.
This expansion means non-resident individuals, including Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs), will be permitted to invest in Alternative Investment Funds (AIFs) without adhering to a minimum investment threshold. The public is invited to provide comments on these proposals until September 3, 2026, marking a crucial step towards modernizing India’s investment landscape.