SEBI's Revised Accredited Investor Framework: Manager-Led Accreditation, a Rs 5 Crore Market Exposure Route and What It Means for You

SEBI has made it easier to become an Accredited Investor (AI). A fund or portfolio manager can now verify and record an investor’s status directly; a new securities market exposure route sits alongside income and net worth, and non-residents are deemed accredited. The changes came by SEBI Circular HO/19/34/11(6)2026-AFD-POD1/I/25244/2026 dated 5 November 2026, which takes effect immediately.

At a glance

Reports place the sequence as a consultation paper on 13 August 2026, Board approval on 24 September 2026, the amendment on 15 October and this circular on 5 November.

1. Manager-led accreditation (an optional extra route)

A “Manager” can now determine and record an investor’s accredited status at onboarding or during a scheme’s tenure, after verifying the criteria. “Manager” means:

• the manager of an AIF
• the asset management company of a Specialized Investment Fund (SIF)
• a portfolio manager

Key points:

• Group recognition: a Manager’s determination is recognised across Managers of the same group for AIFs, SIFs and portfolio management services, using the “corporate group” meaning in Regulation 19F(1) of the AIF Regulations.
• Investment advisers and research analysts cannot determine status independently, but may rely on a valid determination by a Manager in their group.
• In writing: the Manager records the status and confirms it to the investor in writing, with the accreditation date and validity period.
• The agency route continues. If an investor produces a valid certificate from a recognised Accreditation Agency, the Manager must rely on it and cannot run a fresh check during its validity.

2. Validity

3. Securities market exposure: the new eligibility route

The minimum qualifying exposure is ₹5 crore for an individual, HUF, family trust or sole proprietorship, and ₹20 crore for a body corporate or a trust other than a family trust.

What counts:

• Securities held in demat form
• Mutual fund investments held through folios
• Unlisted securities held in demat form
• Investments in the overseas securities market
• Investments under the National Pension System

How it is valued: use the value in the eCAS statement as of the statement date. For unlisted securities and overseas holdings not valued in the eCAS, the applicant must furnish a practising Chartered Accountant’s certificate that states the nature of the securities, the valuation date and the value.

4. Documents to verify

The income and net worth thresholds themselves remain in Regulation 2(1)(ab). As commonly summarised, an individual qualifies with income of ₹2 crore or more, or net worth of ₹7.5 crore (including ₹3.75 crore in financial assets), or income of ₹1 crore plus net worth of ₹5 crore. Confirm the exact figures in the Regulation.

5. Safeguards on Managers

A Manager that accredits is responsible for compliance with the criteria and the circular, and must:

• Keep records and verification evidence for at least five years from the accreditation, or five years after the investor ceases to be an investor in any scheme the Manager manages, whichever is later, and make them available for inspection.
• Audit: include periodic review of the accreditation process in an existing audit.
• Adopt an accreditation policy covering conflict controls (including separation of accreditation from business development and distribution), an escalation and grievance process, and record retention that protects privacy and cybersecurity.
• Document each decision, the criterion relied on and the verification, so that it can be independently reviewed.

6. LLPs

An LLP is recognised as an AI where each partner independently satisfies the eligibility criteria applicable to that partner as on the date of determination. Where a partner is itself a body corporate, another LLP, a firm or a trust, that partner must independently meet the criteria for its category.

Commentary on the Third Amendment Regulations also reports that an LLP can qualify on net worth of ₹50 crore or securities market exposure of ₹20 crore. Check Regulation 2(1)(ab) for the current text.

7. Persons resident outside India

A Person Resident Outside India, as defined under FEMA, is deemed an AI. No certificate or Manager-led accreditation is needed. Two conditions:

• The Manager must record the basis on which the investor was identified as resident outside India.
• Deemed status does not dilute the AIF’s and Manager’s PMLA obligations on client due diligence, beneficial owner identification and source of funds.

What it means for each stakeholder

• Managers: build the accreditation policy, separate accreditation from sales, set up document intake and record retention, and bring accreditation into the internal audit scope before relying on the new route.
• Investors: the new route can save the time and fee of an agency, but only works with the Manager (and its group). An agency certificate stays portable across managers.
• Chartered Accountants: the circular relies on practising CA certificates for income, net worth, unlisted holdings, overseas holdings and exposure. Expect demand, and expect the certificate content (nature, date, value) to be scrutinised.
• Investment advisers and research analysts: you can rely on a group Manager’s determination, but not make your own.
• LLPs and family offices: work through each partner’s eligibility early, because one partner who falls short can block the route.

What the circular leaves open (my reading)

• Moving between managers. Because accreditation is determined afresh for each non-group Manager, an investor moving between fund houses may need to repeat it unless they hold an agency certificate.
• Lapse versus scheme life. Validity is three years, while an AI stays an AI for the life of the scheme. The circular does not spell out how this applies to follow-on commitments or switching schemes.
• What is not on the list. The qualifying exposure list is specific. Assets such as bank deposits, real estate or gold are not mentioned, so treat them as outside the criterion.
• AIF and PMS holdings. The circular does not say how units or portfolios not shown in an eCAS are valued.

Action checklist

1. Managers: adopt the accreditation policy, separate the accreditation function from distribution, set up records and audit.
2. Investors: choose between the agency route and the Manager route, and prepare the documents (ITR, audited accounts or net worth certificate, eCAS).
3. CAs: prepare certificate templates covering the nature of securities, valuation date and value.
4. LLPs: map each partner against Regulation 2(1)(ab) before applying.
5. Non-residents: keep records of the basis for resident-outside-India status, and expect full PMLA due diligence.
6. Everyone: read the updated AIF Master Circular of 3 June 2026 together with this circular.

Bottom line: SEBI has widened the doorway to accredited status while moving the responsibility onto the managers who use it. Faster accreditation comes with a record-keeping and conflict-of-interest burden that the Manager now carries.