SEBI Accredited Investor Framework 2026: What Managers Must Do Before They Accredit

TRANSIQUE INSIGHT · AIF STRUCTURING & REGISTRATION

SEBI introduced the Accredited Investor framework in 2021. Until the 2026 changes, accreditation was generally evidenced through a certificate issued by a recognised Accreditation Agency. On 15 October 2026, the Securities and Exchange Board of India (Alternative Investment Funds) (Third Amendment) Regulations, 2026 amended the definition of “Accredited Investor” in Regulation 2(1)(ab), including by recognising accreditation by specified SEBI-registered or regulated entities and adding securities market exposure as an eligibility route. SEBI’s circular dated 5 November 2026, Review of the framework for Accredited Investors, sets out the operational modalities for the revised framework. The circular took effect on 5 November 2026.

The circular changes who may accredit, how long accreditation lasts and what an investor may rely on to qualify. This article sets out each change, the safeguards a Manager must have in place before it accredits anyone, and the points the circular leaves for Managers to settle in their own accreditation policy.

What has SEBI changed in the Accredited Investor framework?

SEBI has introduced a manager-led route to accreditation, prescribed three-year validity for accreditation under either route, and added securities market exposure as an eligibility test. The revised Regulations also provide entity-specific criteria for LLPs, body corporates and specified trusts, retain a partner-wise test for firms, and deem Persons Resident Outside India to be Accredited Investors. The circular also sets out the documentation, governance and reliance requirements for the new framework.

Table 1: The Accredited Investor framework before and after the circular.

The changes follow a SEBI consultation paper of 13 August 2026 and approval by the SEBI Board on 24 September 2026.

Who can now determine accredited investor status?

The manager of an AIF, the asset management company of a SIF or a portfolio manager may determine and record an investor’s accredited status, at onboarding or during the tenure of a scheme. Investment Advisers and Research Analysts may not determine status themselves, but may rely on a valid determination by a Manager in their Group.

The manager-led route runs on six rules (paras 3 and 4.2 of the circular):

1. 1
   Verification first: The Manager verifies that the investor meets the eligibility criteria under the AIF Regulations and the circular before it records accredited status.
2. 2
   Written confirmation: The Manager records the status and confirms it to the investor in writing, stating the date of accreditation and the validity period.
3. 3
   Group recognition: Other Managers of the same Group must recognise the determination for AIFs, SIFs and portfolio management services while it is valid. “Group” means a corporate group as defined in Explanation I to Regulation 19F(1) of the AIF Regulations.
4. 4
   Fresh determination outside the Group: A Manager that is not of the same Group must determine accreditation afresh each time it onboards the investor.
5. 5
   Agency certificates prevail: Where an investor furnishes a valid certificate from a recognised Accreditation Agency, the Manager must rely on it and may not conduct a fresh determination during its validity.
6. 6
   Advisers and analysts rely, not decide: An Investment Adviser or Research Analyst may rely on a valid determination by a Manager in its Group, but may not determine accredited status independently.

The choice of route matters most to investors who deal with more than one fund house. An agency certificate is accepted by every Manager for three years. A manager-led determination is recognised only inside one Group, so an investor who plans to commit to schemes of unrelated Managers will go through accreditation again with each of them.

How long is accreditation valid?

Three years from the date of accreditation, whether a Manager or a recognised Accreditation Agency accredits the investor. An investor who is accredited when onboarded into a scheme remains an Accredited Investor for the remaining life of that scheme, and certificates issued before 5 November 2026 stay valid for their unexpired period.

Continuity attaches to the scheme, not to the Manager. If an investor’s accreditation lapses in year four of a seven-year scheme, the investor remains an Accredited Investor in that scheme. A commitment to a new scheme after the lapse needs fresh accreditation. In practice, this creates three compliance implications for the Manager:

1. 1
   Track expiry by investor: Keep an accreditation register that records, for each investor, the route used, the date of accreditation, the expiry date and the schemes entered while accredited. Onboarding into a new scheme should be blocked once the expiry date has passed.
2. 2
   Rely on Group determinations only on evidence: Before relying on a determination made by another Manager, obtain its written confirmation to the investor and confirm that the two Managers are in the same corporate group under Explanation I to Regulation 19F(1).
3. 3
   Accept agency certificates as they stand: Check that the certificate was issued by a recognised Accreditation Agency and is within its validity, and do not re-verify the investor’s income or net worth during that period.

What is the securities market exposure test?

An investor may now qualify on securities market exposure alone. The threshold is ₹5 crore for an individual, HUF, family trust or sole proprietorship, and ₹20 crore for an LLP, a body corporate other than an LLP, or a trust other than a family trust. The ₹20 crore threshold is an alternative to the applicable ₹50 crore net-worth criterion for those entity categories. Exposure is limited to the asset classes specified in paragraph 5.2 of the circular.

Two valuation rules apply:

• Demat securities: the value shown in the eCAS statement as of the statement date.
• Unlisted and overseas holdings not valued in the eCAS: a certificate from a practising Chartered Accountant that identifies the nature of the securities, the valuation date and the value.

Table 2: Exposure test for an individual. Mr A qualifies at ₹5.20 crore against the ₹5 crore threshold. His fixed deposits do not count towards it.

Assets such as bank deposits, real estate, gold and insurance policies are not included in the specified list of qualifying securities market exposure and therefore cannot be counted towards this particular eligibility threshold. This does not mean that such assets are necessarily excluded when net worth is calculated under the applicable test. AIF units and securities held in a PMS client’s account in dematerialised form may be considered only to the extent they fall within the specified eligible categories and are evidenced in the prescribed manner.

What documents must a Manager obtain?

The documents depend on the eligibility criterion and investor category. For income, the prescribed evidence includes the latest Income Tax Return/acknowledgement or a practising Chartered Accountant’s certificate. For net worth, the applicant must provide the latest audited financial statements or a practising CA certificate not older than six months. For securities market exposure, the evidence is an eCAS summary statement not older than six months or a practising CA certificate establishing the threshold within the preceding six months. Additional identity, address, constitution/incorporation, authorisation and declaration documents may also be required under Annexure 11 to the updated AIF Master Circular.

In addition to financial eligibility evidence, the applicant should furnish the applicable identity, address, PAN, incorporation/constitution, trust deed, authorisation and declaration documents prescribed under Annexure 11. The Manager or Accreditation Agency may seek further information where necessary to verify the genuineness of information submitted.

Table 3: Eligibility criteria and the documents that prove them.

For individuals, the existing income and net-worth tests continue to apply alongside the new securities market exposure test. The individual tests include annual income of at least ₹2 crore; or net worth of at least ₹7.5 crore, of which at least half is in financial assets; or annual income of at least ₹1 crore together with net worth of at least ₹5 crore, of which at least half is in financial assets. The revised entity-level tests are different: an LLP may qualify with net worth of at least ₹50 crore or securities market exposure of at least ₹20 crore; a body corporate other than an LLP may qualify on either of those same thresholds; and a trust other than a family trust may qualify on either of those same thresholds. These are alternative tests, not cumulative requirements.

For the relevant net-worth tests, the computation must follow the applicable method specified in the AIF Master Circular. The primary residence exclusion and the rules for joint investments should also be applied where relevant; Managers should not assume that every asset or joint holding is treated identically across investor categories.

How are LLPs and non-resident investors treated?

An LLP may qualify as an Accredited Investor under any one of three alternative tests: (i) net worth of at least ₹50 crore; (ii) securities market exposure of at least ₹20 crore; or (iii) each partner independently meets the eligibility criteria for accreditation under the AIF Regulations. A partnership firm (other than an LLP) qualifies where each partner independently meets the applicable eligibility criteria. A Person Resident Outside India, as defined under FEMA, is deemed to be an Accredited Investor under the amended definition and does not need to obtain an accreditation certificate or undergo manager-led accreditation.

Where an LLP relies on the partner-wise route, each partner must independently satisfy the criteria applicable to its category. Where a partner is itself a body corporate, another LLP, a firm or a trust, that partner must meet the relevant criteria applicable to that category. The partner-wise test also applies to a partnership firm. It is therefore incorrect to assume that one partner’s failure necessarily disqualifies an LLP in every case: the LLP may still qualify independently under its ₹50 crore net-worth or ₹20 crore securities market exposure test.

For a Person Resident Outside India, the Manager should record the basis on which the investor has been identified as resident outside India, using the applicable KYC and FEMA residency evidence. Deemed accreditation does not displace the AIF’s or Manager’s obligations under PMLA and the applicable rules, including client due diligence, beneficial ownership identification and source-of-funds checks.

Does accreditation automatically entitle an investor to regulatory concessions?

No. Accreditation establishes eligibility to be considered for benefits under the Accredited Investor framework; it does not, by itself, mean that every regulatory concession applies automatically. The investor must separately consent to avail the relevant concessions and provide the prescribed undertaking. The investment service provider must verify the accreditation status, make the required disclosures before entering into the client agreement, and record the concessions being availed and the consequences of the investor subsequently becoming ineligible.

The applicable procedure and any restrictions on withdrawal of consent should be checked against paragraphs 10.7 and 10.8 of the updated AIF Master Circular and the specific product framework. In particular, the treatment of investors in pooled products launched exclusively for Accredited Investors should not be generalised to all accredited-investor products.

What safeguards must a Manager put in place before it accredits?

A Manager that undertakes accreditation is accountable for verifying eligibility and complying with the circular. It must adopt an accreditation policy, keep the accreditation function separate from business development and distribution, document each decision so that it can be independently reviewed, retain records for the prescribed period and include the process in periodic internal audit and compliance review.

The following are the key requirements:

1. 1
   Accountability: The Manager is responsible for compliance with the eligibility criteria and the circular.
2. 2
   Record retention: All records, supporting documents and verification evidence are kept 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, and produced for inspection when sought.
3. 3
   Audit: Periodic internal audit and compliance review of the accreditation process forms part of an existing audit of the Manager.
4. 4
   Conflict controls: The accreditation policy separates the accreditation function from the business development and distribution function.
5. 5
   Grievance redressal: The policy sets an escalation and grievance redressal process for investor concerns about the determination of accredited status.
6. 6
   Data protection: The policy covers record retention infrastructure, including data privacy and cybersecurity, so that information submitted by investors stays confidential.
7. 7
   Reviewable decisions: Each decision records the eligibility criterion relied on and the supporting verification in a way that allows independent review.

Table 4: Examples of accreditation practices.

In practice, the Manager should adopt the policy and test the decision note on a few files before it accredits its first investor on the new route.

What should the accreditation policy contain?

A comprehensive policy should also address the operational aspects, including:

• Routes and reliance: Define when the Manager independently grants accreditation, relies on an agency certificate or verifies a Group-level determination, including the supporting checks and records required.
• Approval authority: Specify the authorised person or committee responsible for accreditation and maintain independence from fundraising, investor onboarding and distribution functions.
• Document checklist: Prescribe criterion-wise supporting documents, including financial statements, net-worth certificates and investment records, and apply the relevant document-age requirements. The six-month requirements do not apply uniformly to every document or criterion.
• Expiry and continuity: Establish a mechanism to track certificate validity, manage renewals and determine the treatment of further commitments by existing investors.
• Grievances and data management: Define investor grievance escalation procedures and establish controls for access, confidentiality, retention and secure destruction of accreditation records.

How Transique supports AIF registration

Transique Corporate Advisors is a senior-led investment banking and advisory firm with offices in Gurugram and Mumbai. Its founders have over two decades of transaction experience, and its Legal & Regulatory practice works with Managers and Sponsors from scheme design to SEBI filing. Its AIF registration and advisory clients include Wealth Discovery, V-Cube and RiverRock.

For a Manager that plans to accredit investors in-house, or a scheme that raises money from Accredited Investors, our work covers:

• Structuring: whether to use the manager-led route, the agency route or both, and how the AIF, SIF and portfolio management entities of a Group rely on each other’s determinations.
• Documentation: the accreditation policy, decision notes, investor confirmation letters, and PPM and onboarding document changes for Large Value Funds and other accredited-investor schemes.
• Compliance: accreditation registers, expiry tracking, internal audit checklists and review of the Compliance Test Report.
• Valuation: independent valuation of unlisted holdings that investors rely on for the exposure test, through Transique Valuation Advisors, an IBBI-registered valuer entity.

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Frequently asked questions

What is an Accredited Investor under SEBI rules?

An Accredited Investor is a person or entity recognised under Regulation 2(1)(ab) of the SEBI (AIF) Regulations, 2012, as satisfying the eligibility criteria applicable to its category, or a person/entity treated as accredited under the proviso to that definition. Depending on the category, eligibility may be based on income, net worth or securities market exposure. The revised definition also recognises accreditation by specified SEBI-registered or regulated entities, in addition to certificates issued by recognised Accreditation Agencies.

Can an AIF manager or portfolio manager accredit an investor?

Yes. Since 5 November 2026, the manager of an AIF, the asset management company of a Specialised Investment Fund and a portfolio manager may determine and record an investor’s accredited status, after verifying eligibility with the documents in para 7.1 of the circular. The Manager must confirm the status to the investor in writing, with the date of accreditation and the validity period. The route is optional, and recognised Accreditation Agencies continue to issue certificates.

Does accreditation automatically entitle an investor to regulatory concessions?

No. The investor must separately consent to avail the applicable concessions and provide the prescribed undertaking. The investment service provider must verify accreditation, make the required disclosures before entering into the client agreement, and record the concessions and consequences of subsequent ineligibility in the agreement. The applicable withdrawal-of-consent rules must also be considered.

How long is accredited investor status valid?

Three years from the date of accreditation, under both the manager-led route and the Accreditation Agency route. An investor who is accredited at onboarding into a scheme remains an Accredited Investor for the remaining life of that scheme, even if the three years run out during it (paras 4.1, 4.3 and 4.4 of the circular).

What is the minimum securities market exposure to qualify as an Accredited Investor?

The securities market exposure threshold is ₹5 crore for an individual, HUF, family trust or sole proprietorship, and ₹20 crore for an LLP, a body corporate other than an LLP, or a trust other than a family trust. For LLPs, body corporates and such trusts, the ₹20 crore exposure test is an alternative to the applicable ₹50 crore net-worth test. Qualifying exposure is limited to the asset classes specified in paragraphs 5.1 and 5.2 of the circular.

Does accreditation by one manager apply at other fund houses?

Only within the same corporate group. A Manager’s determination is recognised by other Managers of the same Group for AIFs, SIFs and portfolio management services during its validity. A Manager outside the Group must determine accreditation afresh. An investor who wants a single accreditation accepted by every Manager should obtain a certificate from a recognised Accreditation Agency.

Can an Investment Adviser or Research Analyst accredit a client?

No. An Investment Adviser or Research Analyst may not determine accredited status independently. It may rely on a valid determination made by a Manager in its own Group (para 3.3 of the circular).

Can an LLP be an Accredited Investor?

Yes. An LLP may qualify if it has a net worth of at least ₹50 crore, securities market exposure of at least ₹20 crore, or each partner independently meets the eligibility criteria for accreditation under the AIF Regulations. The partner-wise test is one alternative and is not the only route. A partnership firm (other than an LLP) may qualify where each partner independently meets the applicable eligibility criteria.

Do Persons Resident Outside India need accreditation to invest in an AIF?

No. A Person Resident Outside India, as defined under FEMA, is deemed to be an Accredited Investor and is not required to obtain an accreditation certificate or undergo manager-led accreditation. The Manager should record the basis on which the investor has been identified as a Person Resident Outside India. Deemed status does not dilute PMLA obligations, including client due diligence, beneficial ownership identification and source-of-funds verification.

Are accreditation certificates issued before 5 November 2026 still valid?

Yes. A certificate of accreditation issued before the circular took effect remains valid for its unexpired period, and a Manager must rely on it rather than conduct a fresh determination during that period (paras 3.5 and 4.5 of the circular).

Does Transique advise on accredited investor compliance?

Yes. Transique advises Managers and Sponsors on AIF structuring and SEBI registration, including accreditation policies, decision notes, investor confirmations, PPM changes for accredited-investor schemes and Compliance Test Report review. Contact info@transique.in.

Sources

• SEBI Circular No. HO/19/34/11(6)2026-AFD-POD1/I/25244/2026 dated 5 November 2026, Review of the framework for Accredited Investors, paras 3 to 10. www.sebi.gov.in/sebi_data/attachdocs/nov-2026/1793874966416.pdf
• SEBI (Alternative Investment Funds) (Third Amendment) Regulations, 2026, published in the Official Gazette on 15 October 2026 (Regulation 2(1)(ab) and Regulation 25). sebi.gov.in: AIF (Third Amendment) Regulations, 2026
• SEBI (Alternative Investment Funds) Regulations, 2012, consolidated to 15 October 2026, Regulations 2(1)(ab), 19F(1) (Explanation I) and 36. sebi.gov.in: AIF Regulations, 2012 (last amended 15 October 2026)
• SEBI Master Circular for Alternative Investment Funds No. HO/19/34/11(6)2025-AFD-POD1/I/12928/2026 dated 3 June 2026, as updated on 5 November 2026. sebi.gov.in: Master Circular for AIFs (last updated 5 November 2026)
• SEBI Consultation Paper on Review of the Accredited Investor Framework, 13 August 2026. sebi.gov.in: Consultation paper, 13 August 2026

Part of Industry Insight · Related: SEBI Portfolio Managers Regulations 2026: key changes · AIF Structuring & Registration · Regulatory Updates