SEBI Seeks Public Comments on Accredited Investor Framework Review

The Securities and Exchange Board of India (SEBI) has proposed five changes to the Accredited Investor (AI) framework, including letting fund managers accredit investors themselves at onboarding and adding a new eligibility test based on securities market holdings. The Consultation Paper on review of Accredited Investor framework was issued on 13 August 2026, and comments were due by 3 September 2026 through SEBI's online public comments form.

The AI framework was introduced in 2021 through amendments to the SEBI (Alternative Investment Funds) Regulations, 2012. Accredited investors get regulatory flexibilities across products: AIFs can accept commitments below the usual Rs 1 crore minimum, portfolio managers can waive the Rs 50 lakh minimum, specialised investment funds can waive the Rs 10 lakh minimum ticket, and accredited investors can access angel funds and co-investment vehicles.

Current eligibility tests

Governments, qualified institutional buyers, Category I FPIs, sovereign wealth funds and multilateral agencies are deemed accredited. All others must obtain a certificate from an accreditation agency, which is a subsidiary of a stock exchange or depository.

The five proposals

1. Manager-led accreditation. As an optional alternative to accreditation agencies, AIF managers, portfolio managers and SIF managers could assess accreditation during onboarding. Status would be valid for three years across schemes of the same manager group, while a different manager would need to accredit afresh. Evidence would be the latest income tax return for income, a CA certificate not older than six months for net worth, and an eCAS or broker statement not older than six months (or a CA certificate) for securities holdings. Managers would need an accreditation policy covering conflicts of interest, grievance redressal and data security, keep records for inspection, obtain an annual independent auditor certification, and face consequences for negligent verification.
2. Securities market assets test. A new route based on holdings of at least Rs 5 crore for individuals and Rs 20 crore for body corporates and trusts. Qualifying assets would include demat securities (equity, debt, REIT and InvIT units, AIF units), mutual fund units, futures open interest, unlisted securities in demat form and overseas securities. SEBI estimates about 3.7 lakh investors could qualify, around four times the existing participation.
3. Deemed status for foreign investors. All persons resident outside India, as defined under FEMA, 1999, would be treated as deemed accredited investors.
4. Look-through for LLPs. An LLP could be accredited if each partner qualifies. SEBI has flagged that LLPs have perpetual succession and changing partners, which raises the question of when status must be re-assessed.
5. Wholly owned subsidiaries. A subsidiary could qualify based on its parent's net worth. SEBI notes the concern that a parent's liability is ordinarily limited to its investment in the subsidiary.

Why it matters for CAs and intermediaries

SEBI's stated aim is to cut the duplication of documents, cost, time and touchpoints that arise when investors must go separately to an accreditation agency and then to a manager. For chartered accountants, the proposals keep the CA net worth certificate at the centre of manager-led accreditation, with a six-month freshness rule, while the securities market test could let many investors qualify through an eCAS without a certificate. AIF, PMS and SIF managers would take on verification responsibility and an annual audit certification if the manager-led route is adopted. Until SEBI issues amended regulations or a circular, the existing accreditation agency route and criteria continue to apply.

Updated on 27 September 2026: Added the official SEBI consultation paper of 13 August 2026 with the existing eligibility criteria, the five proposals, their safeguards and the 3 September 2026 comment deadline; removed generic commentary.