SEBI proposes new rules to widen accredited investor pool to 4 lakh
Mumbai, August 13
The Securities and Exchange Board of India has proposed widening the Accredited Investor framework by introducing securities market assets as an additional eligibility criterion, a move that could expand the pool of eligible accredited investors to around 4 lakhs.
Under the proposal, individuals with securities market assets of at least Rs 5 crore and body corporates with assets of at least Rs 20 crore could qualify for accreditation, alongside the existing income and net-worth based criteria.
"This one proposal itself, has the potential to expand the pool of eligible Accredited Investors to around 4 lakh, compared to the existing AIF investor base of around 1 lakh," SEBI said in a press release issued on Thursday.
The proposal forms part of a consultation paper issued by the market regulator for a comprehensive review of the existing Accredited Investor framework. SEBI said the review is based on suggestions received from stakeholders and recommendations of its Alternative Investment Policy Advisory Committee.
Accredited Investors are investors who meet prescribed financial and other eligibility criteria and are given greater flexibility to participate in certain investment products. SEBI said the importance of accreditation has increased as its benefits now extend across Alternative Investment Funds (AIFs), Specialised Investment Funds (SIFs) of mutual funds, Portfolio Management Services (PMS) and Angel Funds.
The regulator has also proposed simplifying the accreditation process by introducing manager-led accreditation, in addition to the existing Accreditation Agency route.
"Other proposals include simplifying the onboarding process through manager led accreditation (which will be valid at a group level), in addition to the existing Accreditation Agency route," SEBI said.
It has also proposed streamlining the validity of accreditation to three years based on the latest documents.
In another significant proposal, SEBI plans to expand the category of deemed Accredited Investors to cover all Persons Resident Outside India (PROI), as defined under the Foreign Exchange Management Act, 1999.
"This will enable all NRIs, OCIs and all other persons resident outside India to invest in AIFs more seamlessly without minimum threshold," the regulator said.
The proposals are currently at the consultation stage and have not yet been made final. SEBI has invited public comments on the consultation paper until September 3, 2026.
— ANI
Reader Comments
As a woman investor actively looking at PMS and AIF options, this is welcome news! The earlier criteria of ₹5 crore net worth alone was limiting. Many of us have significant mutual fund and stock holdings but don't meet the traditional yardstick. However, I do worry about retail investors being lured into complex products without adequate understanding. SEBI must ensure proper risk disclosures. 🙏
This is a sensible reform. Expanding the accredited investor pool from 1 lakh to 4 lakh is significant for India's capital markets. The manager-led accreditation and extension to NRIs will also boost foreign participation, which is vital for the growth of AIFs and PMS sectors. Kudos to SEBI for trying to streamline the system.
Wait, the comment period is open until September 3, 2026? That's over two years away! These consultations take forever in India. By the time this is finalised, the market dynamics will change. SEBI should expedite this process. Otherwise, the proposal looks good on paper, but implementation matters more. Also, I hope they consider the cost burden for individual investors to get accredited repeatedly every three years.
I'm happy to see the inclusion of NRIs and OCIs in the deemed accredited investor category. Many of my relatives in the US want to invest in Indian startups and AIFs but find the current KYC and accreditation process cumbersome. This will make it much easier for them to participate in India's growth story. 🇮🇳 Proud of this progressive step!
While I appreciate the intent, I have a concern. The ₹5 crore securities market assets
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.