- SEBI proposes extending Accredited Investor status to all Persons Resident Outside India including FPIs
- Individuals with Rs 5 crore in securities assets could qualify without income or net-worth criteria
- Accredited investors gain relaxed investment minimums and access to alternative investment funds
SEBI has proposed a significant overhaul of its accredited investor framework, including extending deemed Accredited Investor status to all Persons Resident Outside India, including all FPIs, under the FEMA definition. The proposal could ease foreign capital access to Indian investment products while significantly widening the pool of investors eligible for greater flexibility in alternative and private-market investments.
The regulator has also proposed a new route that could expand the accredited investor universe to around 3.7 lakh investors. Individuals with at least Rs. 5 crore in securities-market assets could qualify without having to meet the existing income and net-worth combinations. The proposed route would cover equities, debt, mutual funds, REITs, InvITs, AIF units, unlisted securities, overseas investments and futures positions.
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This would represent a major expansion from the current base. The number of accredited investors has already risen sharply from 649 to 3,820 in a year, but remains small relative to the potential addressable universe. Yet these investors already held around Rs. 1.91 lakh crore of AIF units, nearly 30% of total AIF investments as of December 2025.
The FPI proposal is also significant because Category I FPIs are already deemed Accredited Investors under the existing framework. SEBI is now proposing to extend deemed Accredited Investor criteria to all Persons Resident Outside India, including all FPIs, potentially removing the need for separate accreditation for a much wider pool of foreign investors.
SEBI said the move could facilitate foreign capital access to investment products and deepen the pool of risk capital available to Indian markets.
The significance of accredited status lies in what it unlocks. Accredited investors are exempt from the usual Rs. 1 crore minimum commitment for AIFs, while minimum investment thresholds are relaxed for SIFs and PMS. The minimum ticket for Special Situation Funds falls from Rs. 10 crore to Rs. 5 crore, while accredited investors can access Angel Funds and co-investment vehicles.
SEBI also proposes manager-led accreditation, allowing investment managers to determine and record an investor's accredited status during onboarding. Accreditation could be valid for three years for products of the same manager or group, while the existing accreditation-agency route would continue.
The regulator has identified potential conflict-of-interest concerns because managers have a commercial incentive to onboard investors.
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The proposed Rs. 5 crore route would also make accreditation more digital. Eligibility could be verified through depository-generated e-CAS or broker statements, reducing reliance on manual certification and potentially lowering the cost and time involved in accreditation.
The proposals reflect SEBI's broader shift from using minimum investment commitments as a proxy for sophistication towards accreditation status as the primary measure of an investor's ability to understand and absorb investment risk.
The consultation comes as SEBI responds to industry concerns over accreditation costs, limited accreditation agencies, duplication between accreditation agencies and fund managers, limited validity and process inefficiencies. Public comments on the proposals have been invited until Sept. 3, 2026.
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