SEBI proposes new rules to widen accredited investor pool to 4 lakh

Mumbai: The Securities and Exchange Board of India (SEBI) 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.