₹5 crore in shares and funds is becoming a route to accredited investor status. What it opens and what it waives

SEBI's board approved changes to the accredited investor framework at its meeting on 24 September 2026. The largest change for families is a fourth way to qualify: ₹5 crore of securities market exposure for individuals, HUFs, family trusts and sole proprietorships, and ₹20 crore for companies and other trusts.

The board approved the policy. The rule itself is an amendment to the SEBI (Alternative Investment Funds) Regulations, 2012, and the board papers say it "shall be notified after following the due process". On 20 October 2026, SEBI's list of regulations still shows the AIF Regulations as last amended on 14 July 2026, and no circular with the details has been issued.

The four ways to qualify

Today an individual qualifies under Regulation 2(1)(ab) of the AIF Regulations through one of three tests. The new route sits alongside them.

SEBI's board memorandum lists what is proposed to count towards the ₹5 crore: equity, debt, REIT and InvIT units and AIF units held in demat; mutual fund folios; unlisted securities in demat; overseas securities market investments; futures positions at notional value from the broker statement; and NPS, which SEBI said "may be considered" after commenters pointed out it had been left out. The final list will be set in the circular. Bank deposits do not count, and SEBI said cash waiting with a portfolio manager to be invested will not count either.

Loans are not deducted

The ₹5 crore is a gross figure. Commenters asked SEBI to exclude pledged or margin-funded holdings and to net off borrowings. SEBI declined, on the ground that the point of the route is that a depository or broker statement proves it without anyone examining the investor's debts.

As an illustration: an investor holds ₹3.2 crore in mutual funds and ₹2.1 crore of listed shares, has borrowed ₹1.5 crore against those shares, earns ₹80 lakh a year and owns nothing else of size. Net worth is ₹3.8 crore, so none of the three existing tests is met. Holdings are ₹5.3 crore, so the new test is.

The test applies to each investor separately. The board papers do not say how folios or demat accounts held jointly will be counted.

What accreditation opens

The board memorandum lists the flexibilities an accredited investor gets:

Accredited status is also the entry ticket to angel funds, which may take only accredited investors, to co-investment alongside an AIF, to large value funds for accredited investors and to "AI only" schemes, which allow more contractual flexibility. Under a non-discretionary PMS, the usual cap of 25% of assets in unlisted securities rises to 100% for a large value accredited investor.

What it waives

SEBI's memorandum describes the products open to accredited investors as carrying "more flexibility and lesser regulatory oversight than those meant for retail investors", and says accreditation is the basis for "departures from protections otherwise available to investors". The framework asks every accredited investor to declare that they understand and accept the consequences of being treated as one.

Two details affect how long the status lasts:

• Accreditation from either route will be valid for three years. Today an investor buys a two-year or three-year certificate from an accreditation agency.
• An investor accredited into a scheme stays tagged as accredited for the life of that scheme, even if their holdings later fall below ₹5 crore.

Managers can accredit their own clients

Until now only two accreditation agencies, CDSL Ventures and NSDL Database Management, could issue a certificate, and no money could be drawn down until it arrived. Under the new optional route, the manager of an AIF, an AMC offering SIFs, or a portfolio manager can check the documents and record the status itself. That accreditation is valid for three years across the AIF, SIF and PMS products of the same corporate group. A different, unrelated manager has to accredit the investor again, or the investor can use the agency route, which gives a certificate any manager can accept.

SEBI recorded the objection that a manager earns more when more of its clients qualify. The safeguards it set out are a written accreditation policy that separates accreditation from sales, records kept for inspection, internal audit and an independent check whose form the circular will set. Investment advisers and research analysts cannot accredit, but they can accept an accreditation done by a manager in their group.

Non-residents and LLPs

Every person resident outside India under FEMA, including NRIs and all foreign portfolio investors, will be deemed accredited with no income or asset test. A limited liability partnership will qualify when each partner is accredited, as partnership firms already do.

The numbers behind the threshold

SEBI chose ₹5 crore from depository and exchange data as on 30 April 2026:

Counting companies and trusts, about 3.7 lakh investors would meet the new test. India had 4,492 accredited investors on 28 August 2026, up from 649 on 29 May 2025, and about 96,000 AIF investors. Accredited investors held AIF units with a par value of about ₹2.31 lakh crore on 31 July 2026, nearly 33% of all AIF investments.

Still to be decided

• The date the amendment is notified, and the circular with the final list of qualifying holdings.
• How unlisted demat shares, overseas holdings and futures are valued for the test. SEBI left unlisted valuation to a CA certificate and to standards from the AIF industry's Standard Setting Forum.
• The form of the independent audit of manager-led accreditation.
• The meaning of "group", which SEBI said will follow the AIF Regulations' definition of a corporate group.

Questions

What is the new ₹5 crore accredited investor rule?

SEBI's board approved on 24 September 2026 that individuals, HUFs, family trusts and sole proprietorships with at least ₹5 crore of securities market exposure can be accredited, alongside the existing income and net worth tests. The amendment to the AIF Regulations is still to be notified.

Do loans against shares reduce the ₹5 crore?

No. SEBI declined to deduct borrowings or exclude pledged holdings, because the route is meant to be proved from a depository or broker statement alone.

Do fixed deposits count towards the ₹5 crore?

No. The proposed list covers securities: demat holdings, mutual fund folios, unlisted demat shares, overseas securities, futures at notional value and possibly NPS. Bank deposits are not on it.

What does an accredited investor get?

No minimum investment in AIFs (usually ₹1 crore), PMS (₹50 lakh) or SIFs (₹10 lakh), a ₹5 crore minimum in special situation funds instead of ₹10 crore, and access to angel funds, co-investment and accredited-only schemes, in exchange for some investor protections.

How long does accreditation last?

Three years under both the agency route and the new manager-led route, and for the life of any scheme the investor joined while accredited.

Are NRIs accredited investors?

Under the approved change, every person resident outside India under FEMA, including NRIs, will be deemed accredited without a test.

Sources

1. SEBI, Key decisions taken in the SEBI Board Meeting, PR No. 59/2026 (24 Sep 2026)
2. SEBI, Board memorandum, Proposals to review the Accredited Investor framework, with public comments and SEBI's views (Sep 2026)
3. SEBI, Consultation paper on review of Accredited Investor framework (13 Aug 2026)
4. SEBI, SEBI (Alternative Investment Funds) Regulations, 2012, last amended on 14 July 2026 (checked 20 Oct 2026)

Compound is analysis, not investment advice. Reva Money is not a SEBI-registered investment adviser.