India markets regulator proposes easier access to riskier investment products for overseas investors
MUMBAI: India’s markets regulator on Thursday proposed revamping its framework for “accredited investors” to allow more overseas investors access to higher risk investment products and strategies. Accredited investors are individuals or companies that are financially sophisticated based primarily on their annual income or net worth. SEBI proposed widening the framework beyond alternative…
MUMBAI: India’s financial regulatory body, SEBI, has proposed a significant overhaul to its framework for accredited investors, aiming to expand access for overseas investors to riskier investment products and strategies. Accredited investors are generally individuals or corporations displaying high financial sophistication, typically determined by annual income or net worth.
SEBI’s proposal seeks to broaden this framework, no longer limiting it to Alternative Investment Funds (AIFs) but extending it to include portfolio managers and specialized investment funds. Fund managers will now play a pivotal role in determining an investor’s accredited status during the onboarding process, eliminating the need for investors to undergo certification by independent accreditation agencies.
The proposed changes also introduce a new criterion for qualifying as an accredited investor - based on an individual’s securities holdings. A person will be considered accredited if they own more than 50 million rupees ($523,889.35) in securities. For corporations, the threshold is set at 200 million rupees.
Most notably, SEBI has suggested extending the accredited investor status to overseas residents, removing the necessity for a separate accreditation requirement when investing in private markets and specialized funds.
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