SEBI made it easier for wealthy investors to get accredited status under its November 5 circular. Managers can now verify investors directly, cutting down documentation delays. This status lets people access funds with smaller investments of ₹10 lakh. It helps those meeting specific income, net-worth, or market exposure criteria.
Wealthy investors can gain access to certain investment products with smaller investment amounts and greater flexibility by qualifying as accredited investors. For instance, some portfolio management services (PMS) and Alternative Investment Funds (AIFs) allow accredited investors to invest as little as ₹10 lakh, against the usual minimum investment requirements of ₹50 lakh and ₹1 crore, respectively.
Market regulator Securities and Exchange Board of India (SEBI) has now made it easier for eligible investors to obtain accredited status. Under its November 5 circular (https://tinyurl.com/sebiaccinv2026), AIF managers, asset management companies (AMCs) offering Specialised Investment Funds (SIFs) and portfolio managers can independently verify and accredit investors without requiring them to approach a separate accreditation agency.
The move is expected to reduce onboarding delays and documentation for wealthy investors seeking access to these products. But who qualifies as an accredited investor, and what does the status offer?
Who can qualify
Accredited Investors are individuals or entities that qualify for special regulatory treatment under SEBI’s framework by meeting prescribed income, net-worth or securities market exposure criteria. The framework distinguishes investors with the financial capacity to access products carrying higher risks or offering greater investment flexibility.
According to PMS Bazaar’s report, some PMS managers have lowered the entry threshold to ₹10 lakh, while select AIFs accept investments from ₹10 lakh. These concessions, however, are available only where permitted under the relevant regulations and offered by the investment manager.
For individuals, Hindu Undivided Families (HUFs), family trusts and sole proprietorships, there are four principal routes to accreditation.
An applicant can qualify with an annual income of at least ₹2 crore, or a net worth of at least ₹7.5 crore, including ₹3.75 crore in financial assets. Alternatively, an annual income of ₹1 crore combined with a net worth of ₹5 crore, including ₹2.5 crore in financial assets, is sufficient.
The fourth route, clarified under the latest framework, is securities market exposure of at least ₹5 crore. This means investors need not necessarily satisfy the income or net-worth thresholds if they meet the prescribed securities exposure requirement.
For body corporates and trusts other than family trusts, the securities market exposure threshold is ₹20 crore. Separate net-worth criteria also apply to these entities.
SEBI has clarified which investments can be counted towards securities market exposure. The eligible investment basket includes securities held in dematerialised form, mutual fund investments held through mutual fund folios, unlisted securities held in dematerialised form, overseas securities market investments and investments under the National Pension System (NPS).
The inclusion of mutual funds, overseas investments and NPS is particularly relevant as it recognises that an investor’s exposure to financial markets need not be limited to direct equity investments or other securities held in a demat account.
What has changed
Until now, obtaining accredited status involved a separate verification process through a recognised Accreditation Agency. Investors had to submit income, net-worth or investment-related documents and secure a certificate before claiming this status.
SEBI has introduced an additional, optional route called manager-led accreditation. An AIF manager, an SIF’s AMC or a portfolio manager can independently verify whether an investor meets the prescribed eligibility criteria and certify the investor as accredited. This can be done either at onboarding or during the tenure of a scheme.
Once eligibility is established, the manager can record the investor’s accredited status and issue written confirmation specifying the accreditation date and validity period.
Investors will therefore no longer necessarily have to approach a separate accreditation agency. They can complete the process directly with the fund manager or AMC with which they intend to invest.
The change can address duplication of verification, associated costs and procedural delays. However, allowing managers to accredit prospective clients also raises potential conflicts of interest, particularly when business acquisition and eligibility verification are handled by the same organisation.
SEBI has mandated safeguards, including separation of the accreditation function from business development and distribution, periodic internal audits and compliance reviews. Managers must also retain supporting documents and verification evidence for the prescribed period.
Investment Advisers and Research Analysts cannot independently certify investors, although they may rely on valid accreditation granted by a manager belonging to the same corporate group.
Validity, investor benefits
Accreditation granted by a manager or a recognised Accreditation Agency will now be valid for three years. Existing certificates will remain valid for their unexpired period.
An important operational relaxation is that accreditation granted by one manager will be recognised by other managers belonging to the same corporate group for their AIFs, SIFs and portfolio management services during the validity period.
For instance, if an investor is accredited by an AMC belonging to a financial group, the same accreditation can be recognised by the group’s AIF manager or portfolio management business. This eliminates repeated verification across different businesses within the same group. However, an investor approaching a manager belonging to another corporate group will have to undergo fresh accreditation.
Importantly, an investor accredited at the time of onboarding into a scheme will continue to be treated as accredited for the remaining life of that scheme, even if the original accreditation period expires.
The framework also simplifies the process for overseas investors. Persons resident outside India under FEMA will be deemed Accredited Investors, without requiring certification by an Accreditation Agency or fund manager. Applicable anti-money-laundering and due diligence requirements will continue.
For eligible investors, accreditation can offer greater choice in accessing specialised investment strategies and products on more flexible terms. However, accreditation does not guarantee access to every product or remove the risks associated with complex investment strategies. Investors must still assess product suitability, liquidity and their capacity to absorb losses.