The Securities and Exchange Board of India (SEBI) has revised the framework governing Accredited Investors to simplify and speed up the accreditation process. Through its circular dated November 5, 2026, SEBI has introduced a manager-led accreditation mechanism, clarified the validity of accreditation, specified qualifying securities market exposure and streamlined the documents required for verification.
The changes follow amendments to the SEBI (Alternative Investment Funds) Regulations, 2012, which were notified on October 15, 2026. The revised framework is aimed at making the accreditation process more convenient while retaining appropriate safeguards and compliance requirements.
The circular applies to Alternative Investment Funds (AIFs), recognised Accreditation Agencies, Portfolio Managers, Investment Advisers, Research Analysts and Mutual Funds. The provisions have come into force with immediate effect.
1. Manager-Led Accreditation Introduced
One of the key changes is the introduction of manager-led accreditation as an additional route for determining an investor's accredited status.
Under the revised framework, a Manager can determine and record an investor's accredited status either at the time of onboarding or during the tenure of a scheme, after verifying that the investor fulfils the prescribed eligibility criteria.
For this purpose, the term Manager includes:
- The manager of an Alternative Investment Fund (AIF).
- The asset management company of a Specialized Investment Fund (SIF).
- A portfolio manager.
An accreditation decision made by a Manager will also be recognised by other Managers belonging to the same Group during the applicable validity period.
However, Investment Advisers (IAs) and Research Analysts (RAs) cannot independently determine an investor's accredited status. They may rely on a valid accreditation determination made by a Manager belonging to their Group.
The Manager must record the investor's accreditation status and communicate the decision in writing, including the accreditation date and validity period.
Importantly, manager-led accreditation is optional. Investors can continue to obtain accreditation through recognised Accreditation Agencies.
Where an investor submits a valid certificate issued by a recognised Accreditation Agency, the Manager must rely on that certificate and cannot undertake a fresh determination during its validity.
2. Accredited Investor Status Valid for Three Years
SEBI has prescribed a three-year validity period for accreditation under both routes.
The following conditions will apply:
- Accreditation determined by a Manager will remain valid for three years from the date of accreditation.
- A certificate issued by a recognised Accreditation Agency will also remain valid for three years from its date of accreditation.
- If an investor is onboarded by a Manager belonging to a different Group, the accreditation must be determined afresh.
- An investor who qualifies as an Accredited Investor at the time of onboarding into a scheme will continue to be treated as an Accredited Investor for the remaining life of that scheme.
- Certificates issued before the applicability of the circular will remain valid for their unexpired validity period.
This clarification provides greater certainty for investors and fund managers regarding the continuation of accredited status.
3. Minimum Securities Market Exposure Criteria Specified
SEBI has clarified the minimum qualifying securities market exposure required for different categories of applicants.
The prescribed thresholds are:
| Category of Applicant | Minimum Securities Market Exposure |
|---|---|
| Individual, HUF, Family Trust or Sole Proprietorship | ₹5 Crore |
| Body Corporate or Trust other than a Family Trust | ₹20 Crore |
The circular also specifies the investments that can be considered while calculating securities market exposure.
These include:
- Securities held in dematerialised form.
- Mutual fund investments held through mutual fund folios.
- Unlisted securities held in dematerialised form.
- Investments in overseas securities markets.
- Investments under the National Pension System (NPS).
For securities held in dematerialised form, the value reflected in the electronic Consolidated Account Statement (eCAS) as of the statement date will be considered.
In cases involving unlisted securities and overseas securities market investments that are not valued in the eCAS statement, applicants must furnish a certificate from a practising Chartered Accountant. The certificate must specify the nature of securities, valuation date and corresponding value.
4. Safeguards for Manager-Led Accreditation
While allowing Managers to undertake accreditation, SEBI has also prescribed safeguards to ensure accountability, transparency and proper documentation.
Accountability: The Manager undertaking accreditation will be responsible for ensuring that the investor satisfies the prescribed eligibility criteria and that the requirements of the circular are followed.
Maintenance of records: Managers must preserve all records, supporting documents and verification evidence relied upon for determining accredited status.
These records must be retained for at least five years from the date of accreditation or until five years after the investor ceases to be an investor in any scheme managed by the Manager, whichever is later. The records must be made available for inspection whenever required.
Internal audit: Periodic internal audits and compliance reviews of the accreditation process must be conducted as part of the existing audit undertaken by the Manager.
Accreditation policy: Every Manager undertaking accreditation must adopt a formal policy covering:
- Conflict-of-interest controls, including separation of accreditation functions from business development and distribution activities.
- An escalation mechanism and grievance redressal process for investor concerns.
- Record-retention infrastructure, including data privacy and cybersecurity measures to protect investor information.
Additionally, Managers must document the accreditation decision, the eligibility criterion relied upon and the supporting verification in a manner that allows independent review.
5. Documents Required for Accredited Investor Verification
SEBI has specified the documents that a Manager or recognised Accreditation Agency, as applicable, must verify to establish whether an applicant meets the eligibility criteria under Regulation 2(1)(ab) of the AIF Regulations.
The prescribed documentation includes:
| Eligibility Criterion | Documents Required |
|---|---|
| Income | Latest Income Tax Return or a certificate from a practising Chartered Accountant confirming that the prescribed income threshold is met |
| Net Worth | Latest audited financial statements or a net worth certificate issued by a practising Chartered Accountant, not older than six months |
| Securities Market Exposure | eCAS summary statement generated by a depository, not older than six months, or a CA certificate confirming that the prescribed exposure threshold was met within the last six months |
These requirements provide a clearer documentation framework for verifying an applicant's eligibility.
6. Special Recognition for Limited Liability Partnerships
The circular also addresses the accreditation of Limited Liability Partnerships (LLPs).
An LLP incorporated under the Limited Liability Partnership Act, 2008, will be recognised as an Accredited Investor where every partner independently satisfies the applicable eligibility criteria 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 eligibility criteria applicable to its respective category.
Accordingly, the accreditation of an LLP will depend on the individual eligibility of all its partners.
7. Persons Resident Outside India Deemed as Accredited Investors
Another significant clarification concerns Persons Resident Outside India (PROIs), as defined under the Foreign Exchange Management Act, 1999.
Under the revised framework, a Person Resident Outside India will be deemed to be an Accredited Investor without having to obtain an accreditation certificate or undergo manager-led accreditation.
However, the Manager must record the basis on which the investor has been identified as a Person Resident Outside India.
SEBI has also clarified that deemed accredited status does not exempt an AIF or its Manager from their obligations under the Prevention of Money-laundering Act, 2002.
AIFs and their Managers must continue to undertake client due diligence, identify beneficial owners and comply with applicable requirements relating to the source of funds.
8. Effective Date of the Revised Framework
SEBI has clarified that the circular dated November 5, 2026, comes into force with immediate effect.
The regulator has also updated the Master Circular for Alternative Investment Funds dated June 3, 2026, to incorporate the provisions of the latest circular.
The updated Master Circular is available on the SEBI website under the Legal – Master Circulars section and the Alternative Investment Funds section.
Conclusion
SEBI's revised Accredited Investor framework introduces greater flexibility by allowing Managers to determine accredited status directly, while continuing to retain the Accreditation Agency route.
The three-year validity period, recognition across Managers within the same Group, clarified securities market exposure requirements and simplified verification documentation are important changes for investors and market intermediaries.
At the same time, the requirements relating to record retention, internal audits, conflict-of-interest controls and investor due diligence ensure that the simplified process continues to operate within a structured compliance framework.
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