SEBI Overhauls Accredited Investor Framework: Market Asset Criterion and Global Inclusivity Set to Spark AIF Boom
SEBI Launches Comprehensive Review of Accredited Investor Framework
The Securities and Exchange Board of India (SEBI) has released a significant Consultation Paper aiming at the comprehensive review of the existing Accredited Investor (AI) framework. This move comes after gathering suggestions from various stakeholders, guided by recommendations from SEBI's Alternative Investment Policy Advisory Committee (AIPAC).The proposed changes signal a major effort to modernize and expand access within India’s growing Alternatives investment ecosystem. The initiative seeks robust public feedback before implementing these wide-ranging reforms.
Introducing Securities Market Assets as New Eligibility Criterion
One of the most pivotal proposals introduced by SEBI is the addition of securities market assets as an eligibility criterion for accreditation. This criteria will run parallel to the existing income and net-worth based requirements.To meet this new standard, individuals must demonstrate a threshold of INR 5 crore in securities market assets. For body corporates, the required threshold has been set at INR 20 crore. This single proposal is projected to dramatically expand the pool of eligible Accredited Investors. SEBI estimates that this expansion could boost the potential AI investor base from approximately 1 lakh to around 4 lakh.
Streamlining Accreditation and Enhancing Global Reach
Beyond defining new asset criteria, the Consultation Paper addresses process simplification and international inclusion. A key proposal involves streamlining the onboarding procedure through manager-led accreditation. This method would operate at a group level and complements the existing Accreditation Agency route.SEBI also proposes streamlining the validity of accreditation to three years, contingent upon submission of updated documents. Crucially, SEBI is broadening global inclusivity by expanding the scope of deemed Accredited Investors.
The framework now plans to cover all Persons Resident Outside India (PROI), as defined under the Foreign Exchange Management Act, 1999. This significant addition will enable all NRIs and OCIs, along with other persons resident outside India, to invest in AIFs seamlessly, irrespective of minimum thresholds.
Accreditation's Growing Role Across Financial Markets
Accreditation has assumed increasing significance within the broader Alternative Investment Funds (AIF) ecosystem. Its benefits are now widely recognized across several financial products. This includes Accredited Investors participating in AIFs, Specialised Investment Funds (SIFs) offered by Mutual Funds, Portfolio Management Services (PMS), and Angel Funds.The market waits as SEBI seeks widespread industry input on these transformative proposals. The entire Consultation Paper is available on the official SEBI website for review. Interested parties are urged to submit their comments before the deadline of September 03, 2026.
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