The Securities and Exchange Board of India (Sebi) is considering measures to make it easier for financially stronger overseas investors to access certain higher-risk investment products in India, according to a Reuters report.
The market regulator has proposed changes to its accredited investor framework, which is designed for individuals and entities with sufficient financial capacity and investment knowledge to handle more complex products.
WHAT SEBI HAS PROPOSED
Under the proposed changes, the accredited investor framework could be extended beyond Alternative Investment Funds (AIFs) to cover portfolio managers and specialised investment funds as well.
Sebi has also suggested simplifying the accreditation procedure. Rather than requiring investors to obtain certification from independent accreditation agencies, fund managers could assess and establish an investor’s accredited status while completing the onboarding process.
The regulator has proposed another eligibility route for individuals. Those holding securities worth more than Rs 5 crore could qualify as accredited investors. For companies, the proposed threshold would be Rs 20 crore.
OVERSEAS INVESTORS COULD BENEFIT
A major proposed change is to allow individuals residing outside India to obtain accredited investor status.
Currently, overseas investors may have to meet additional accreditation requirements to gain access to private-market investments and specialised funds. Sebi’s proposal could eliminate this additional barrier for eligible investors, potentially making participation in these products easier.
The proposed reforms are intended to broaden access to sophisticated investment products while ensuring that participation remains focused on investors with the financial capacity and understanding required to handle the associated risks.
