The Securities and Exchange Board of India (SEBI) has unveiled a new proposal to expand the eligibility criteria for Accredited Investors (AIs). The regulator suggests introducing a securities-market asset test, which, if implemented, could dramatically increase the number of individuals and corporate bodies qualifying for AI status.
New Asset-Based Eligibility
Under the new framework, individuals could qualify as Accredited Investors by holding ₹5 crore in securities market assets. For body corporates, the proposed threshold stands at ₹20 crore. This new criterion would complement the existing income and net-worth based tests, providing an additional pathway to accreditation.
SEBI's estimates suggest that this asset-based route could boost the pool of eligible Accredited Investors to approximately 4 lakh, a significant rise from the current AIF investor base of about 1 lakh. This change aims to make participation in alternative investment products more accessible to a wider range of investors who might not meet the current income or net-worth requirements.
Simplified Accreditation and Global Access
Beyond the asset test, SEBI has put forward several other proposals to streamline the accreditation process. These include:
- Manager-led Accreditation: Introducing a new mechanism where accreditation could be managed at a group level, potentially reducing repetitive processes for associated investors.
- Streamlined Validity: Standardizing the validity of accreditation to three years, based on the most recent documentation.
- Easier NRI/OCI Access: Expanding the scope of deemed Accredited Investors to encompass all Persons Resident Outside India (PROI) as defined under FEMA, 1999. This would allow NRIs, OCIs, and other non-resident persons to invest in Alternative Investment Funds (AIFs) more seamlessly, without minimum threshold requirements.
Broadening Benefits of AI Status
Accredited Investor status has become increasingly pivotal within India's alternative investment landscape. SEBI highlights that the benefits of accreditation now extend beyond AIFs to include Specialised Investment Funds (SIFs) of mutual funds, Portfolio Management Services (PMS), and Angel Funds.
The regulator has invited public comments on the comprehensive review of the existing Accredited Investor framework. Stakeholders and the public have until September 3, 2026, to submit their feedback on these proposals, which are currently in the consultation phase and do not yet represent final regulatory changes.