SEBI Introduces Manager‑Led Accreditation to Streamline Accredited Investor Status

The Securities and Exchange Board of India (SEBI) issued a circular on 5 November 2026 amending the Alternative Investment Funds (AIF) Regulations, 2012 to introduce a manager‑led accreditation route for accredited investors and to clarify eligibility thresholds and record‑keeping requirements [1].

New Manager‑Led Accreditation Route

SEBI’s amendment, notified on 15 October 2026, permits an AIF manager, a Specialized Investment Fund (SIF) manager or a portfolio manager to determine and record an investor’s accredited status at onboarding or during the life of a scheme, provided the investor meets the eligibility criteria set out in the AIF Regulations and the circular [1].

The manager’s determination is recognised across all managers within the same corporate group for AIFs, SIFs and portfolio‑management services for the validity period specified in the circular. An investment adviser or research analyst may rely on a manager’s determination but cannot independently certify accreditation [1].

Validity and Renewal

Accreditation granted by a manager remains valid for three years from the date of accreditation. If an investor joins a scheme managed by a different group, a fresh determination is required. Certificates issued by recognised accreditation agencies also carry a three‑year validity, and any pre‑existing certificates continue to be valid for their unexpired period [1].

Minimum Securities Market Exposure

The circular defines the minimum securities market exposure required for accreditation: INR 5 crore for individuals, Hindu Undivided Families, family trusts or sole proprietorships, and INR 20 crore for body corporates or non‑family trusts. Qualifying exposure includes dematerialised securities, mutual‑fund holdings, unlisted securities, overseas securities, and National Pension System investments. Valuation is based on the eCAS statement, or a chartered‑accountant‑certified valuation where eCAS data is unavailable [1].

Documentation and Eligibility

Eligibility can be demonstrated through income, net‑worth or securities‑market‑exposure criteria. Required documents include the latest income tax return or a chartered‑accountant certificate for income, audited financial statements or a net‑worth certificate for net‑worth, and an eCAS summary or chartered‑accountant certificate for securities exposure. All records must be retained for at least five years after accreditation or five years after the investor ceases to be an investor, whichever is later [1].

Safeguards and Governance

Managers undertaking accreditation must adopt a written accreditation policy covering conflict‑of‑interest controls, grievance redressal, and data‑privacy and cybersecurity measures. Periodic internal audits of the accreditation process are mandatory, and the manager must retain documentation that enables independent review of each accreditation decision [1].

Special Provisions

Limited Liability Partnerships (LLPs) are recognised as accredited investors only if each partner individually satisfies the eligibility criteria. Partners that are themselves corporate entities must meet the criteria applicable to them. Persons resident outside India are deemed accredited investors and are exempt from obtaining a certificate, though managers must record the basis for this classification [1].

Immediate Effect

The circular came into force with immediate effect and updates the Master Circular for AIFs dated 3 June 2026. SEBI made the circular available on its website under the “Legal → Circulars” and “Info for → Alternative Investment Funds” sections [1].

Accredited investors are high‑net‑worth individuals or entities that can invest in alternative investment funds (AIFs) without the protection mechanisms applicable to retail investors. Prior to this amendment, accreditation relied primarily on certificates issued by recognised accreditation agencies, a process that could be time‑consuming and costly for both investors and fund managers [1].

The manager‑led accreditation framework aims to streamline the onboarding of sophisticated investors, reduce duplication of verification work, and potentially lower costs for AIFs. For Indian high‑net‑worth investors, the change could speed up access to private market opportunities, while regulators expect enhanced consistency and oversight through mandatory record‑keeping and audit controls.

If managers adopt the new accreditation policy, onboarding timelines for AIFs could shorten, potentially increasing fund inflows. The three‑year validity may reduce the frequency of re‑verification, lowering compliance costs. However, reliance on internal manager assessments places greater responsibility on fund houses to maintain robust verification and audit mechanisms, which could drive investment in compliance infrastructure.

The effectiveness of manager‑led accreditation depends on the rigor of internal controls; weak governance could lead to mis‑classification of investors. The transition period may create confusion for investors accustomed to agency certificates, and the requirement to retain records for five years could impose additional administrative burdens on smaller managers.