Sebi Simplifies Accreditation Process for Investors Under AIF Framework

New Framework Eases Entry for Accredited Investors​

Markets regulator Securities and Exchange Board of India has simplified the process for granting accreditation to investors under the Alternative Investment Fund framework. The move is aimed at streamlining onboarding while maintaining safeguards around formal accreditation.

Managers Allowed to Proceed Based on Eligibility Assessment​

Under the revised approach, investment managers can execute contribution agreements and complete related formalities based on their own assessment of an investor’s eligibility. This is permitted even if the investor has not yet received the formal accreditation certificate.

However, the investor’s commitment will not be counted towards the scheme’s corpus until the accreditation certificate is issued. The AIF can accept funds only after the investor becomes formally accredited.

Net Worth Certification Norms Relaxed​

For accreditation based on net worth criteria, the requirement to submit a detailed break up of net worth has been removed. A chartered accountant is no longer required to state the exact net worth figure, as long as the certificate confirms that the prescribed threshold has been met.

Compliance Reporting Made Mandatory​

Trustees, sponsors, and managers of AIFs are required to ensure that these changes are appropriately captured in the Compliance Test Report, reinforcing accountability under the updated framework.

Changes Take Effect Immediately​

The revised norms are applicable with immediate effect, providing quick relief to market participants and accredited investors seeking faster access to alternative investment opportunities.

Background on Accredited Investor Only AIFs​

Earlier, Sebi had indicated its intent to introduce an accredited investors only AIF regime with fewer compliance requirements. The objective is to enable sophisticated investors to support higher risk ventures in a more efficient and flexible manner.