Markets regulator Sebi has proposed adding a securities-market-assets criterion for accredited investor status, under which individuals with such assets of at least ₹5 crore could qualify irrespective of existing income or net-worth criteria. According to Sebi's consultation paper, this move aims to widen the pool of investors eligible for accredited investor status and encourage greater participation in alternative investment funds (AIFs). For body corporates and trusts other than family trusts, Sebi has proposed a threshold of ₹20 crore in securities-market assets, alongside their existing ₹50 crore net-worth criterion. The eligible assets would include demat equity and debt instruments, REITs/InvITs, AIF units, mutual fund holdings, futures open interest, unlisted securities in demat form and overseas securities market investments. Currently, investors are required to have a minimum net worth of ₹7.5 crore with at least ₹3.75 crore in financial assets, including security market assets, bank fixed deposits, and certificates of deposit. Sebi's analysis indicates that as of April 30, 2026, approximately 3.7 lakh investors could qualify under the proposed securities-market-assets criterion, representing nearly four times the current AIF investor base of around 96,000. The proposed threshold would ensure that eligible investors have sufficient financial wherewithal and that a substantial population of them has the willingness to take risk, as indicated by an analysis of securities-market holdings and the percentage of option traders.
Under the proposed manager-led route, Sebi has allowed investment managers to determine and record an investor's accredited status as part of the onboarding process, instead of investors having to first approach a separate accreditation agency. For products launched by different managers, accreditation would be undertaken each time an investor is onboarded. However, for products launched by the same manager, accreditation could remain valid for three years from the eligibility assessment. The new proposed changes would operate as an additional route alongside the existing accreditation agency-based framework. Sebi has proposed that such accreditation could be recognised at the group-entity level across investment vehicles including AIFs, specialised investment funds (SIFs) and portfolio management services (PMS). For verification, investors would be required to furnish the latest income-tax return for income-based eligibility, net worth could be established through a certificate from a practising chartered accountant not older than six months, and for securities-market assets, investors could submit an eCAS summary statement generated by depositories or a broker statement not older than six months, or a certificate from a practising chartered accountant. Sebi has raised concerns about this being a departure from its position in 2021, which entrusted independent agencies with accreditation. The regulator stated that shifting this responsibility to managers may be seen as a dilution of independence and could give rise to potential conflict of interest. Accordingly, Sebi has proposed safeguards including accreditation policies, record-keeping, independent oversight, audits and accountability for incorrect accreditation. Investors identified as AIs will retain their status for the remaining life of a particular scheme, regardless of whether they fulfil the criteria evaluated during onboarding.
As reported by Sebi, as of April 30, 2026, approximately 3.7 lakh investors could qualify under the proposed securities-market-assets criterion, representing nearly four times the current AIF investor base of around 96,000. The number of accredited investors has already risen sharply from 649 to 3,820 in a year, but remains small relative to the potential addressable universe. These investors already held around ₹1.91 lakh crore of AIF units, nearly 30% of total AIF investments as of December 2025. The significance of accredited status lies in what it unlocks - accredited investors are exempt from the usual ₹1 crore minimum commitment for AIFs, while minimum investment thresholds are relaxed for SIFs and PMS. The minimum ticket for Special Situation Funds falls from ₹10 crore to ₹5 crore, while accredited investors can access Angel Funds and co-investment vehicles. Sebi aims to reduce paperwork and costs while making "accreditation status" rather than minimum investment commitments the key measure of an investor's sophistication.
Sebi has also proposed that all Persons Resident Outside India (PROIs), including foreign portfolio investors, may be treated as deemed accredited investors under the framework. The proposals are part of Sebi's review of the accredited investor framework, with comments sought until September 3 on the suggestions. According to The Economic Times, Sebi has proposed expanding the scope of deemed Accredited Investors to cover all Persons Resident Outside India (PROI), which would enable all NRIs, OCIs and other persons resident outside India to invest in AIFs more seamlessly without a minimum threshold. The FPI proposal is significant because Category I FPIs are already deemed Accredited Investors under the existing framework. Sebi is now proposing to extend deemed Accredited Investor criteria to all Persons Resident Outside India, including all FPIs, potentially removing the need for separate accreditation for a much wider pool of foreign investors. The regulator stated that this could facilitate foreign capital inflows and deepen the pool of risk capital available to Indian markets.
Under the existing framework, individuals, Hindu Undivided Families, family trusts and sole proprietorships qualify as accredited investors if they meet prescribed income or net-worth criteria. These include annual income of at least ₹2 crore; net worth of at least ₹7.5 crore, of which at least ₹3.75 crore is in financial assets; or annual income of at least ₹1 crore and net worth of at least ₹5 crore, with at least ₹2.5 crore in financial assets. The current AI framework already includes central and state governments, developmental agencies and funds set up by them, Qualified Institutional Buyers (QIBs), Cat I FPIs, sovereign wealth funds and multilateral agencies. Sebi has also proposed extending the AI framework to limited liability partnerships (LLPs) where each partner is an AI, and to wholly owned subsidiaries if the parent company holds the minimum net-worth. The consultation comes as Sebi responds to industry concerns over accreditation costs, limited accreditation agencies, duplication between accreditation agencies and fund managers, limited validity and process inefficiencies. Since its introduction, accreditation has assumed increasing significance within the AIF ecosystem, with its benefits now extending across AIFs, Specialised Investment Funds (SIFs) of Mutual Funds, Portfolio Management Services (PMS) and Angel Funds.
