SEBI Overhauls Accredited Investor Rules in India
By Market Desk
SEBI proposes a major overhaul of India’s Accredited Investor framework, simplifying criteria and aiming to expand the investor pool significantly.
The Securities and Exchange Board of India (SEBI) has launched a comprehensive review of its Accredited Investor (AI) framework. This initiative aims to simplify the accreditation process and substantially increase the number of eligible investors within the Indian securities market.
New Eligibility Criteria and Expected Growth
A central proposal in SEBI’s new consultation paper introduces securities market assets as an additional eligibility criterion for accreditation. This new measure will supplement the existing requirements tied to income and net-worth for potential investors.
- For individuals, the proposed threshold for securities market assets is Rs 5 crore.
- Body corporates would need to meet a threshold of Rs 20 crore in securities market assets.
SEBI projects that these changes could significantly expand the pool of eligible Accredited Investors. The regulator anticipates the number could grow to approximately 4 lakh, a notable increase from the current Alternative Investment Fund (AIF) investor base of around 1 lakh.
Streamlining the Accreditation Process
Further simplifications are also under consideration to make the accreditation route more accessible. SEBI plans to introduce a manager-led accreditation process, which would function alongside the existing Accreditation Agency route.
- Accreditation would be valid at the group level, enhancing flexibility.
- A standardized three-year validity period is proposed for accreditation, based on the most recently submitted investor documents.
Expanding Investor Definitions
The consultation paper also seeks to broaden the definition of deemed Accredited Investors. This expansion aims to include all Persons Resident Outside India (PROI), as defined by the Foreign Exchange Management Act, 1999.
- This would encompass Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs).
- Other non-resident individuals would also gain the ability to invest in Alternative Investment Funds (AIFs) without any minimum investment threshold.
SEBI underscored the increasing importance of accreditation within the AIF ecosystem, noting its advantages extend to various investment vehicles, including Specialised Investment Funds (SIFs) of mutual funds, Portfolio Management Services (PMS), and Angel Funds. The public is invited to submit comments on this consultation paper until September 3, 2026.