SEBI proposes a new accreditation framework allowing portfolio managers to certify sophisticated investors based on securities exposure. The move introduces ₹5 crore exposure threshold and three-year validity.
SEBI Proposes Manager-Led Accreditation and ₹5 Crore Exposure Criterion
SEBI has issued a consultation paper proposing amendments to investor accreditation norms under the Portfolio Managers Regulations. The new framework allows registered portfolio managers to accredit clients as sophisticated investors based on a minimum cumulative securities exposure of ₹5 crore over the past three years. Such accreditation will be valid for three years, subject to periodic review.
The proposal includes deemed recognition for overseas investors accredited under equivalent foreign regimes and mandates compliance with due diligence and record-keeping standards. The shift from self-declaration to manager-led certification is intended to enhance investor classification accuracy and prevent mis-selling in high-risk products.
Legal advisors to asset managers must now evaluate client onboarding protocols in light of the proposed framework. The reforms align with SEBI's EODB initiatives and may simplify access to derivatives, structured products, and private placements for qualified investors.
Citations
- SEBI (Portfolio Managers) Regulations, 1993 (proposed to be replaced in 2026)
