Sebi eases investor accreditation norms, lets fund managers certify status

Sebi has allowed AIF, SIF and portfolio managers to certify investor accreditation, simplifying the process while retaining verification and record-keeping requirements.

Capital markets regulator Sebi on Thursday eased the framework for accredited investors, allowing fund and portfolio managers to determine an investor's accreditation status, in addition to the existing route through recognised accreditation agencies.

 The move aims to simplify and speed up the accreditation process for investors in Alternative Investment Funds (AIFs), Specialised Investment Funds (SIFs) and portfolio management services.

 Under the new framework, managers of AIFs, asset management companies of SIFs and portfolio managers can verify an investor's eligibility and grant accredited status at the time of onboarding or during the tenure of a scheme.

 Such accreditation will be valid for three years and will be recognised across managers belonging to the same corporate group.

 Managers will be required to maintain supporting documents and verification records for at least five years from the date of accreditation or until five years after the investor ceases to be associated with any scheme managed by them, whichever is later.

 "A manager may determine and record an investor's accredited status at onboarding or during the tenure of a scheme, after verifying that the investor meets eligibility criteria under the AIF Regulations," Sebi said in its circular.

 Further, limited liability partnerships (LLPs) will qualify as accredited investors if each partner independently meets the prescribed eligibility criteria.

 In addition, Sebi said that persons resident outside India, will be treated as deemed accredited investors and will not need to obtain a separate accreditation certificate.

 However, this exemption will not dilute the obligations of AIFs and their managers to comply with anti-money laundering and client due diligence requirements.

 The circular came into immediate effect.