SEBI Accredited Investor Rules: Fund Managers Can Certify, ₹5 Crore Securities Route Added

SEBI's revised accredited investor rules let fund managers certify investors themselves. By a circular dated 5 November 2026, HO/19/34/11(6)2026-AFD-POD1/I/25244/2026, SEBI allowed managers of alternative investment funds (AIFs), asset management companies running specialised investment funds (SIFs) and registered portfolio managers to determine whether an investor is accredited, without sending the investor to an accreditation agency first. The circular also adds a new way to qualify: a securities market portfolio of ₹5 crore for individuals, HUFs, family trusts and sole proprietorships, and ₹20 crore for body corporates and trusts other than family trusts.

The circular operates with immediate effect. It implements the amendments to the SEBI (Alternative Investment Funds) Regulations, 2012 notified on 15 October 2026, and SEBI has updated its Master Circular for AIFs dated 3 June 2026 to match. The package was cleared at the SEBI board meeting of 24 September 2026, recorded as item 12 of SEBI press release PR No. 59/2026 on key board decisions, with the stated aim of simplifying accreditation and expanding the pool of eligible investors.

For chartered accountants the change is practical. The new evidence rules lean heavily on certificates from practising CAs, with fixed six-month freshness windows, and every manager who opts into the new route now has to run, document and audit an accreditation process of its own.

Why SEBI changed the accredited investor framework

Accredited status is what lets an investor enter accredited-investor-only AIF schemes and the other products SEBI reserves for this class. Until now there was one route: an investor applied to an accreditation agency, obtained a certificate and then went through onboarding again with the fund manager. Only two agencies hold that role, CDSL Ventures Limited and NSDL Database Management Limited.

The board memorandum proposing the review of the accredited investor framework lists the problems SEBI was responding to: duplicate touchpoints and documents for the agency and the manager, limited certificate validity, a small number of agencies, high cost and heavy reliance on digital financial records. The same memorandum shows how fast the category has grown. Accredited investors rose from 649 on 29 May 2025 to 4,492 on 28 August 2026, and their holdings stood at about ₹2.31 lakh crore at par value on 31 July 2026, roughly a third of all AIF investments.

Who can certify an accredited investor now

The circular defines a Manager for this purpose as the manager of an AIF, the AMC of a SIF, or a portfolio manager. A Manager may record an investor's accredited status at onboarding or at any point during a scheme's tenure, after verifying eligibility. This manager-led route is optional. The agency route stays open, and a Manager presented with a valid agency certificate must accept it and cannot insist on its own fresh determination while that certificate is valid.

A Manager's determination is recognised by other Managers in the same group across AIF, SIF and portfolio management products during its validity. Group carries the meaning of corporate group in Explanation I to Regulation 19F(1) of the AIF Regulations. Investment advisers and research analysts cannot accredit anyone themselves, but they may rely on a valid determination made by a Manager within their group. When a Manager outside the group onboards the investor, accreditation has to be done afresh.

Once accredited, the investor must receive written confirmation from the Manager stating the date of accreditation and the validity period.

Accredited investor validity: three years under both routes

Manager-led accreditation and agency certificates are now both valid for three years. Two transition rules matter for existing portfolios. An investor who was accredited when onboarded into a scheme remains accredited for the remaining life of that scheme. Certificates issued before the new provisions became applicable remain valid for their unexpired period, so nobody needs to re-apply merely because the framework has changed.

The new ₹5 crore and ₹20 crore securities market exposure test

Securities market exposure is a third route to accreditation, alongside the existing income and net worth tests in Regulation 2(1)(ab). The holdings that count are dematerialised securities, mutual fund folio holdings, unlisted securities held in demat form, investments in overseas securities markets and National Pension System investments.

Valuation follows the evidence. For dematerialised holdings, the value shown in the depository-generated consolidated account statement (eCAS) as of the statement date is used. Unlisted and overseas investments that the eCAS does not value need a certificate from a practising chartered accountant stating the nature of the securities, the valuation date and the value.

The table below sets the existing criteria, as listed in the board memorandum, beside the new exposure route and the look-through rules.

Documents and CA certificates for accreditation

The circular prescribes the evidence that both Managers and accreditation agencies must use for each criterion:

• Income: the latest income tax return, or a certificate from a practising CA confirming that the income threshold is met.
• Net worth: the latest audited financial statements, or a CA net worth certificate not older than six months.
• Securities market exposure: an eCAS summary not older than six months, or a CA certificate confirming that the threshold was met within the last six months.

The six-month window is the detail most likely to trip up a file. A net worth certificate dated in April 2026 cannot support an accreditation in November 2026, even if the client's position has not changed, and an eCAS older than six months has to be replaced with a current one.

Worked example: who qualifies under the exposure route

Illustration only. An individual earns ₹80 lakh a year and has a net worth of ₹6 crore, of which ₹2.2 crore is in financial assets. She fails all three existing tests: income is below ₹2 crore and below ₹1 crore, and net worth is below ₹7.5 crore. Her eCAS dated 30 September 2026 shows listed shares worth ₹3.4 crore and mutual fund folios worth ₹1.1 crore, and she holds NPS investments of ₹0.7 crore. Securities market exposure is ₹3.4 crore + ₹1.1 crore + ₹0.7 crore = ₹5.2 crore, which clears the ₹5 crore threshold. A portfolio manager onboarding her in November 2026 can accredit her using that eCAS, which is within six months, and the accreditation will be valid for three years and usable by the group's AIF and SIF managers.

Now take a family-owned company with net worth of ₹32 crore, short of the ₹50 crore body corporate test. If its demat holdings and mutual fund units total ₹22 crore on a current eCAS, it qualifies through the ₹20 crore exposure route. If part of that figure is unlisted shares that the eCAS does not value, the Manager needs a practising CA's certificate for that part, stating the nature of the securities, the valuation date and the value.

LLPs and non-resident investors

An LLP is now accredited if each partner independently meets the eligibility criteria as of the date of determination. Where a partner is itself a body corporate, an LLP, a firm or a trust, that partner must independently meet the criteria applicable to its own category.

A person resident outside India, as defined under the Foreign Exchange Management Act, 1999, is deemed accredited and needs neither an agency certificate nor a manager-led determination. The Manager must record the basis on which it identified the investor as a person resident outside India. The deemed status does not dilute obligations under the Prevention of Money Laundering Act, including client due diligence, beneficial ownership identification and source-of-funds checks.

What managers must put in place before using manager-led accreditation

A Manager that chooses to accredit investors takes responsibility for compliance with the eligibility criteria and the circular. It must adopt an accreditation policy that separates the accreditation function from business development, provides an escalation and grievance process, and covers record-retention infrastructure with data privacy and cybersecurity controls. Each decision has to be documented, including the criterion relied on and the verification done, so that it can be independently reviewed.

Records must be kept for at least five years from the date of accreditation, or five years after the investor ceases to be an investor in any of the Manager's schemes, whichever is later, and must be available for inspection. The accreditation process also has to be covered by periodic internal audit and compliance review as part of the Manager's existing audits. The circular does not prescribe how often that review must happen, does not require the policy to be approved by any particular body, and sets no reporting of manager-led accreditations to SEBI or to the agencies, so these points will rest with each Manager's own policy unless SEBI adds to them.

For practising CAs, the likely immediate effect is more requests for income, net worth and portfolio certificates in the specific forms the circular describes, each tied to a stated threshold and, for exposure certificates, a valuation date within the last six months. Managers that want to start accrediting investors right away will first need the policy, the documentation trail and the audit coverage in place, since the circular took effect on 5 November 2026.

Official source: View the official source document