Sebi Proposes ₹5 Crore Securities-Assets Route For Accredited Investor Status

The Securities and Exchange Board of India (Sebi) has proposed a new securities-market-assets criterion for accredited investor status. Under this proposal, individuals with at least ₹5 crore in securities-market assets could qualify for accredited investor status, regardless of their income or net worth.

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.

According to Sebi's analysis, around 3.7 lakh investors could qualify under the proposed securities-market-assets criterion as of April 30, 2026. This is nearly four times the current AIF investor base of around 96,000, indicating the potential for a significant expansion in the pool of eligible investors.

Currently, individuals, Hindu Undivided Families, family trusts, and sole proprietorships qualify as accredited investors if they meet certain income or net-worth criteria. These include an annual income of at least ₹2 crore or a net worth of at least ₹7.5 crore, with at least ₹3.75 crore in financial assets.

The proposed framework would allow securities-market assets, such as equity and debt instruments, REITs, and InvITs, to be counted towards the threshold. Mutual fund investments, futures open-interest positions, and overseas securities-market investments would also qualify.

Sebi has also proposed allowing investment managers to determine and record an investor's accredited status while onboarding them into an investment product. Verification of accredited status would require investors to furnish the latest income-tax return, a certificate from a practising chartered accountant, or an eCAS summary statement generated by depositories.

The proposal is expected to increase participation in AIFs and provide more investment opportunities for eligible investors. Sebi's consultation paper aims to gather feedback from stakeholders before implementing the new criterion.

The proposed threshold is designed to ensure that eligible investors have sufficient financial wherewithal and a willingness to take risk. Sebi's analysis of securities-market holdings and the percentage of option traders indicates that a substantial population of investors has the willingness to take risk.

Overall, the proposal has the potential to significantly expand the pool of eligible investors and increase participation in AIFs. It is expected to provide more investment opportunities for eligible investors and promote the growth of the alternative investment fund industry.

The proposal is a significant development in the Indian securities market, and its implementation is expected to have a positive impact on the industry. It is likely to attract more investors to the market and provide them with more investment opportunities.

In conclusion, Sebi's proposal to add a securities-market-assets criterion for accredited investor status is a welcome move. It is expected to widen the pool of eligible investors, increase participation in AIFs, and promote the growth of the alternative investment fund industry.

This move is significant for the Indian securities market, and its impact will be closely watched by investors and industry stakeholders. The proposal is expected to provide more investment opportunities for eligible investors and contribute to the growth of the industry.

The Securities and Exchange Board of India (Sebi) is the primary regulator of the Indian securities market. Its proposals and regulations have a significant impact on the industry, and this proposal is no exception. The implementation of the proposed criterion is expected to be a major development in the Indian securities market.

The proposal is also expected to increase transparency and accountability in the industry. It will provide more clarity on the eligibility criteria for accredited investors and ensure that only eligible investors participate in AIFs.

In summary, Sebi's proposal to add a securities-market-assets criterion for accredited investor status is a significant development in the Indian securities market. It is expected to widen the pool of eligible investors, increase participation in AIFs, and promote the growth of the alternative investment fund industry.