Fund managers can now accredit investors themselves; SEBI sets 3-year validity, exposure thresholds and LLP rules
TaxByKK · Compliance News · taxbykk.com5 Nov 2026
In short
SEBI has added a second route to becoming an Accredited Investor. A manager of an AIF, the asset management company of a Specialised Investment Fund, or a portfolio manager can now determine and record an investor's accredited status after verifying the criteria, instead of the investor going to an accreditation agency. The circular of 5 November 2026 applies with immediate effect, following amendments to the AIF Regulations notified on 15 October 2026.
- Authority
- SEBI, Alternative Investment Fund Department
- Circular
- HO/19/34/11(6)2026-AFD-POD1/I/25244/2026 dated 5 November 2026
- Type
- Circular
- Effective from
- Immediately (5 November 2026)
- Addressed to
- AIFs, recognised accreditation agencies, portfolio managers, investment advisers, research analysts and mutual funds
- Underlying change
- SEBI (Alternative Investment Funds) Regulations, 2012, amended and notified on 15 October 2026
What changed
| Item | Before | Now |
|---|---|---|
| Who can accredit | Accreditation agencies only | Agencies, or a Manager (AIF manager, SIF AMC, portfolio manager) as an additional, optional route |
| Validity of accreditation | — | 3 years from the date of accreditation, for both Manager and agency certificates |
| Same-group recognition | — | A Manager's determination is recognised across Managers of the same group for AIFs, SIFs and portfolio management; a fresh determination is needed on onboarding with a Manager outside the group |
| Securities market exposure threshold | — | INR 5 crore for an individual, HUF, family trust or sole proprietorship; INR 20 crore for a body corporate or non-family trust |
| Limited liability partnerships | — | Accredited where each partner independently meets the criteria; a corporate, LLP, firm or trust partner must meet the criteria applicable to it |
| Persons resident outside India | — | Deemed Accredited Investors, with no certificate or Manager determination needed; PMLA due diligence still applies |
An investment adviser or research analyst may not determine accredited status on its own but may rely on a valid determination by a Manager in its group. An investor who is accredited when onboarded into a scheme stays accredited for the life of that scheme, and certificates issued earlier stay valid for their unexpired period. The circular does not say how soon the fund-level systems must be ready.
Who it applies to
- AIF managers, SIF asset management companies and portfolio managers who want to accredit investors
- Investors seeking accredited status, including LLPs and non-residents
- Accreditation agencies
- Investment advisers and research analysts relying on a group Manager's determination
- CAs who issue income, net worth or exposure certificates
What to do
- Decide whether to adopt manager-led accreditation; if so, adopt a written accreditation policy covering conflict-of-interest controls (accreditation kept separate from business development and distribution), grievance escalation and record retention with data privacy and cybersecurity.
- Verify eligibility on documents: latest income tax return or CA certificate for income; latest audited financials or a CA net worth certificate not older than six months; an eCAS summary or CA certificate not older than six months for securities market exposure.
- For unlisted and overseas holdings not valued in the eCAS, obtain a practising CA certificate stating the nature of securities, valuation date and value.
- Confirm status in writing to the investor with the date of accreditation and the validity period.
- Keep all records and verification evidence for at least five years from accreditation, or five years after the investor ceases to invest in any scheme of the Manager, whichever is later; include the process in periodic internal audit.
Reference
SEBI circular HO/19/34/11(6)2026-AFD-POD1/I/25244/2026, 5 November 2026, Review of the framework for Accredited Investors; issued under section 11(1) of the SEBI Act, 1992 read with regulations 2(1)(ab) and 36 of the AIF Regulations. The Master Circular for AIFs of 3 June 2026 has been updated to include it.
Read the official PDF: SEBI circularWritten by TaxByKK from the official notification. Check the official text before you act on it.
Frequently asked questions
Who can now accredit an investor?
A Manager, meaning an AIF manager, the AMC of a Specialised Investment Fund or a portfolio manager, or a recognised accreditation agency. The Manager route is optional and additional.
How long does accreditation last?
Three years from the date of accreditation, whether given by a Manager or an accreditation agency.
Are non-resident investors accredited automatically?
Yes. A Person Resident Outside India under FEMA is deemed accredited, but the fund and manager must still do client due diligence under the PMLA.
Which documents prove eligibility?
Income tax return or CA certificate for income, audited financials or a CA net worth certificate for net worth, and an eCAS summary or CA certificate for securities market exposure, as set out in the circular.