Sebi proposes manager-led accreditation, wider eligibility for investors

Sebi has proposed allowing investment managers to determine accredited status during onboarding and adding securities market assets as an eligibility criterion for investors

The Securities and Exchange Board of India (Sebi) has proposed changes to the accredited investor framework, including allowing investment managers to determine and record an investor’s accredited status as part of the onboarding process.

 

The framework identifies investors who have the financial capacity and ability to bear the risks associated with complex investment strategies. Such investors are given flexibility on the regulatory front.

 

Sebi also proposed recognising securities market assets as an additional eligibility criterion and extending deemed accredited investor status to all persons resident outside India, including foreign portfolio investors.

 

Under the proposed manager-led route, accreditation for products launched by different managers will be undertaken each time an investor is onboarded.

 

 

For products launched by the same manager, accreditation could remain valid for three years from the eligibility assessment.

 

The proposed changes will operate as an additional route alongside the existing accreditation agency-based framework.

 

The regulator has also proposed safeguards, including accreditation policies, record maintenance, independent oversight, and an accountability framework. The manager-led route will not permit investors to self-certify their accredited status.

 

Sebi has proposed adding securities market assets as an eligibility criterion. Individuals with at least Rs 5 crore of such assets could qualify, while the proposed threshold for bodies corporate is Rs 20 crore.

 

Eligible assets will include demat equity and debt instruments, REITs/InvITs, alternate investment funds, mutual fund holdings, futures open interest, unlisted securities in demat form, and overseas securities market investments.

 

The regulator estimates that about 370,000 investors could qualify under the proposed securities-market-asset criterion, compared with around 96,000 existing accredited investors now.