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Informist, Thursday, Aug. 13, 2026

--SEBI releases consultation paper on accredited investor framework

MUMBAI – The Securities and Exchange Board of India issued a consultation paper Thursday, laying out its proposals on changes in the accredited investor framework. The market regulator has proposed that asset management companies and investment managers be permitted to undertake the accreditation of an interested investor and record it at the time of onboarding of investors in their products.

Current rules require the accreditation seeking investor to first approach an accreditation agency which independently verifies the applicant's income and net worth and issues an accreditation certificate. After getting accreditation, the investor can use it in his investments in products of asset or investment management companies such as mutual funds, alternative investment funds, and portfolio management service entities,  

A subsidiary of a stock exchange or a depository can seek SEBI authorisation to act as accreditation agencies currently.

At present, subsidiaries of the BSE, Central Depository Services (India) Ltd, and National Securities Depository Ltd. are the SEBI-recognised accreditation agencies. Accredited investors attract lower regulatory oversight under SEBI's framework. But the scheme has not taken off as not many high net worth investors have sought accreditation. SEBI had introduced the framework in 2021.

On the proposal to allow fund houses to do the accreditation process, SEBI acknowledged in the consultation paper there were regulatory concerns. The proposal was a departure from the framework's underlying position that independent validation of financial capacity lent credibility. Entrusting the process to a fund house would give rise to potential conflict of interest since the funds were interested parties gaining the investor's commitment and associated fees.  End

Edited by Avishek Dutta

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