SEBI’s New Accredited Investor Rules: Securities-Based Criteria
By Market Desk
SEBI proposes new accredited investor rules, allowing qualification based on Rs 5 crore+ in securities-market assets, expanding access to AIFs.
The Securities and Exchange Board of India (SEBI) has put forth significant amendments to its accredited investor framework, introducing an alternative eligibility pathway tied to holdings in the securities market.
This strategic move is designed to expand the pool of investors who can access alternative investment products, aiming to foster wider engagement in Alternative Investment Funds (AIFs) and other investment avenues.
Revised Eligibility Thresholds
Under the new proposals, individuals possessing securities-market assets valued at a minimum threshold would be recognized as accredited investors, irrespective of their current income or net-worth.
- Individuals: A minimum of Rs 5 crore in securities-market assets.
- Corporate entities and trusts (excluding family trusts): A minimum of Rs 20 crore in securities-market assets.
SEBI’s objective behind these changes is to foster wider engagement in Alternative Investment Funds (AIFs) and other investment avenues available to accredited investors.
Projected Market Expansion
An internal analysis by the regulator projects a substantial increase in eligible investors through this new route, indicating a potential for deeper participation in private market investments.
- Projected new eligible investors by April 30, 2026: Around 3.7 lakh.
- Existing AIF investor base: Approximately 96,000.
The regulator emphasized that these proposed thresholds are intended to ensure qualifying investors possess sufficient financial capacity and a demonstrated willingness to undertake investment risks.
Current Accreditation Framework
Currently, individuals, Hindu Undivided Families (HUFs), family trusts, and sole proprietorships can achieve accredited investor status by fulfilling specific income or net-worth conditions.
- Annual income: At least Rs 2 crore.
- Net worth: At least Rs 7.5 crore with a minimum of Rs 3.75 crore in financial assets.
- Combined: Annual income Rs 1 crore and net worth Rs 5 crore, provided at least Rs 2.5 crore is held in financial assets.
Streamlining for Overseas Investors
Furthermore, SEBI has proposed granting deemed accredited investor status to all Persons Resident Outside India as defined by the Foreign Exchange Management Act (FEMA), which includes all Foreign Portfolio Investors (FPIs).
This measure is expected to simplify the process for overseas investors to access Indian investment products and broaden the range of investors eligible for more flexible investment opportunities.
Qualifying Securities-Market Assets
The types of securities-market assets considered for accreditation under the proposal are broad, encompassing various investment instruments.
- Listed equities, debt securities, mutual funds.
- Real Estate Investment Trusts (REITs), Infrastructure Investment Trusts (InvITs), AIF units.
- Unlisted securities, overseas investments, and futures positions.
These revisions aim to deepen participation in India’s alternative investment landscape by creating more accessible pathways for a diverse group of investors.