The Securities and Exchange Board of India (SEBI) has proposed a revamp of its Accredited Investor (AI) framework to make accreditation simpler and widen the pool of investors eligible for regulatory relaxations in products such as alternative investment funds (AIFs), portfolio management services (PMS) and specialised investment funds (SIFs).The regulator aims to reduce paperwork and costs while making “accreditation status” rather than minimum investment commitments the key measure of an investor’s sophistication. SEBI said the review is part of its focus on “ease of doing business and deepening the pool of risk capital.”New frameworkUnder the new framework, investment managers would be allowed to determine and record an investor’s accredited status during onboarding, instead of investors having to first approach a separate accreditation agency. The existing accreditation agency route would continue, giving investors a choice.For products run by the same manager or group, the accreditation could be valid for three years. For products offered by different managers, accreditation would be undertaken when the investor is onboarded by each manager. Investors would not be allowed to self-certify.SEBI, however, has raised concerns about this being a departure from its position in 2021, which entrusted independent agencies with accreditation. Shifting this responsibility to the Manager, who is an interested party that stands to gain from the investor’s commitment and the associated fees, may be seen as a dilution of that independence and could give rise to a potential conflict of interest, it said.“Allied concerns include the risk of inconsistent standards across Managers in the absence of a single accrediting authority, and the need for a robust framework for record-keeping, consent management and audit, with clearly-fixed consequences for erroneous or fraudulent accreditation,” SEBI said in its draft paper inviting public comments by September 3.Accordingly, it has proposed safeguards, including accreditation policies, record-keeping, independent oversight, audits and accountability for incorrect accreditation.The regulator has also proposed a new eligibility route based solely on securities market assets. Individuals with at least ₹5 crore in such assets and corporates and trusts with at least ₹20 crore could qualify. Eligible assets would include equity, debt, REITs/InvITs, AIF units, mutual funds, futures open interest, unlisted securities and overseas securities investments.SEBI estimates the ₹5 crore threshold could make about 3.7 lakh investors eligible, roughly four times the existing AIF investor base, potentially encouraging more risk capital.Another key suggestion is to deem all Persons Resident Outside India, including all FPIs, as accredited investors, removing the need for separate accreditation. SEBI said the move would help facilitate foreign capital inflows and deepen risk capital in Indian markets.SEBI has also proposed allowing an LLP to qualify where all its partners are accredited investors, and on recognising a wholly owned subsidiary as accredited if its parent meets the prescribed net-worth requirement.Published on August 13, 2026