SEBI Accredited Investors: Manager-Led Accreditation and the New INR 5 Crore Exposure Test (Circular of 5 November 2026)
SEBI’s circular of 5 November 2026, in force immediately, lets fund and portfolio managers decide for themselves whether an investor is “accredited”, as an optional route beside accreditation agencies. It adds a securities market exposure test (INR 5 crore or INR 20 crore), three-year validity and deemed status for non-residents.
Meera, an invented individual, asks Alpha Fund Managers (invented), which runs an alternative investment fund, on 10 November 2026 to treat her as an accredited investor. Can Alpha decide this itself, and what would it count?
| Her holding (invented) | Value | Evidence (paragraph) |
|---|---|---|
| Securities in demat form | INR 3.90 crore | eCAS value (5.3) |
| Unlisted shares in demat form, not valued in the eCAS | INR 0.70 crore | Chartered Accountant certificate (5.4) |
| Overseas securities, not valued in the eCAS | INR 0.60 crore | Chartered Accountant certificate (5.4) |
| Total exposure | INR 5.20 crore | 3.90 + 0.70 + 0.60, against INR 5 crore for an individual (5.1) |
She qualifies. Without the two certificates she would fall short at INR 3.90 crore. Alpha confirms the decision to her in writing with the date and validity (3.4). Validity is three years, so to 10 November 2029 (our counting). Alpha keeps the file for at least five years, or until five years after she stops being an investor in any of its schemes, whichever is later (6.2).
What is an accredited investor, and what was the rule before?
An accredited investor (AI) is a person SEBI treats as sophisticated and wealthy enough to take more risk. An “Accredited Investors only fund” under the SEBI (Alternative Investment Funds) Regulations, 2012 (“AIF Regulations”) takes only AIs, apart from the manager, sponsor and their staff.
The definition sits in Regulation 2(1)(ab). Until now the status came from a certificate issued by an accreditation agency, a subsidiary of a stock exchange or depository. Under the AIF Master Circular (7 May 2024, repeated in the 3 June 2026 edition), a certificate was valid for two years if the applicant met the test in the preceding financial year, or three years if it met it in each of the preceding two. Individuals, Hindu Undivided Families (HUFs), family trusts and sole proprietorships qualified on income or net worth. Body corporates and other trusts needed net worth of INR 50 crore.
The circular’s aim is to ease and expedite accreditation. SEBI’s Board press release of 24 September 2026 adds that the manager-led route removes duplicate verification.
What is new, side by side?
| Point | Before | Now |
|---|---|---|
| Who accredits | An accreditation agency | A Manager too, as an optional route. Agencies continue (3.5) |
| Validity | Two or three years | Three years, on both routes (4.1, 4.3) |
| Tests | Income or net worth | Securities market exposure added (5.1) |
| Non-residents | Mostly assessed by type; Category I foreign portfolio investors and sovereign wealth funds already deemed | Deemed accredited (9.1) |
Who is affected, and from when?
The circular goes to AIFs, accreditation agencies, portfolio managers, investment advisers, research analysts and mutual funds. A “Manager” is the manager of an AIF, the asset management company of a Specialized Investment Fund (SIF), or a portfolio manager (3.1). An investment adviser or research analyst may only rely on a valid decision by a Manager in its Group (3.3).
Immediate effect (10.1), so from 5 November 2026. Earlier agency certificates stay valid for their unexpired period (4.5).
Which route applies to a given investor?
1. Is the investor resident outside India under the Foreign Exchange Management Act, 1999?
2. Does the investor hold a valid agency certificate?
3. Did a Manager in the same Group decide within the last three years?
4. The Manager decides. It checks income, net worth or securities market exposure against the documents below, records the status and confirms it in writing (3.1, 3.4).
What does an investor have to show?
Figures are from Regulation 2(1)(ab) as amended to 15 October 2026.
| Investor type | Qualifies on any one of |
|---|---|
| Individual, HUF, family trust, sole proprietorship | Annual income of INR 2 crore; or net worth of INR 7.5 crore (INR 3.75 crore in financial assets); or annual income of INR 1 crore with net worth of INR 5 crore (INR 2.5 crore in financial assets); or exposure of INR 5 crore |
| Body corporate, trust other than family trust | Net worth of INR 50 crore; or exposure of INR 20 crore |
| LLP | Net worth of INR 50 crore or exposure of INR 20 crore; or each partner qualifies independently (regulation; 8.1, 8.2) |
Exposure counts demat securities, mutual fund folios, unlisted demat securities, overseas securities and National Pension System investments (5.2). Demat holdings use the eCAS value on the statement date (5.3). The eCAS is the statement a depository generates (7.1).
| Test | Document (7.1) |
|---|---|
| Income | Latest Income Tax Return, or Chartered Accountant certificate |
| Net worth | Latest audited financial statements, or Chartered Accountant certificate not older than six months |
| Exposure | An eCAS summary not older than six months, or a Chartered Accountant certificate that the threshold was met within the last six months |
What must a Manager put in place?
The Manager is responsible for compliance with the criteria and the circular (6.1).
RECORDS, FILE, AUDIT
- Keep evidence for at least five years from accreditation, or five years after the investor leaves, if later (6.2)
- Document the decision so it can be independently reviewed (6.5)
- Periodic internal audit, within an existing audit (6.3)
ACCREDITATION POLICY (6.4)
- Conflict controls, separating accreditation from business development and distribution
- Escalation and grievance process
- Record retention covering privacy and cybersecurity
ANTI-MONEY-LAUNDERING
- Deemed status leaves client due diligence and source-of-funds duties under the Prevention of Money-laundering Act, 2002 intact (9.3)
What should managers do now?
- Choose whether to offer the Manager route, and adopt the accreditation policy with a decision-maker outside sales.
- Build an evidence checklist with a six-month date check, and record accreditation date, end date and Group per client.
Legal basis
- Parent regulation
- SEBI (Alternative Investment Funds) Regulations, 2012, Regulation 2(1)(ab), as amended with effect from 15 October 2026
- Power used
- Section 11(1), SEBI Act, 1992, read with Regulations 2(1)(ab) and 36 of the AIF Regulations (10.2)
- Earlier framework
- Master Circular for AIFs, 3 June 2026, Chapter 10 (7 May 2024: Chapter 12, Annexure 8)
Key facts
| Authority | Securities and Exchange Board of India (SEBI) |
|---|---|
| Instrument | Circular, Review of the framework for Accredited Investors |
| Reference | HO/19/34/11(6)2026-AFD-POD1/I/25244/2026 |
| Issue date | 5 November 2026 |
| Effective date | Immediate effect (paragraph 10.1) |
| Exposure thresholds | INR 5 crore (individuals, HUFs, family trusts, sole proprietorships); INR 20 crore (others) |
| Last verified | 6 November 2026 |
Frequently asked questions
Can an AIF manager accredit an investor without an accreditation agency?
Yes. It is an additional, optional route (3.1, 3.5). The agency route continues.
How long does accreditation last?
Three years from the date of accreditation (4.1, 4.3). An investor accredited when onboarded into a scheme stays accredited for that scheme’s remaining life (4.4).
Are non-resident investors treated as accredited?
Yes. A person resident outside India under the Foreign Exchange Management Act is deemed accredited, though anti-money-laundering checks still apply (9.1 to 9.3).
Can an investment adviser or research analyst accredit a client?
Not on its own. It may rely on a valid Manager decision in its Group (3.3).
Sources (official)
- SEBI circular, Review of the framework for Accredited Investors, 5 November 2026 (page) https://www.sebi.gov.in/legal/circulars/nov-2026/review-of-the-framework-for-accredited-investors_105618.html
- Same circular (PDF) https://www.sebi.gov.in/sebi_data/attachdocs/nov-2026/1793874966416.pdf
- SEBI (AIF) Regulations, 2012, last amended 15 October 2026 (page) https://www.sebi.gov.in/legal/regulations/oct-2026/securities-and-exchange-board-of-india-alternative-investment-funds-regulations-2012-last-amended-on-october-15-2026-_105374.html
- SEBI Master Circular for AIFs, 7 May 2024 (PDF) https://www.sebi.gov.in/sebi_data/attachdocs/may-2024/1715088215946.pdf
- SEBI press release PR No. 59/2026, Board meeting of 24 September 2026 (PDF) https://www.sebi.gov.in/sebi_data/attachdocs/sep-2026/1790259036651.pdf
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