The Securities and Exchange Board of India (SEBI) has updated its master circular for alternative investment funds (AIFs) to incorporate revised investor accreditation rules, including optional accreditation by managers and broader eligibility. AIF managers, asset management companies offering specialized investment funds and portfolio managers may determine accredited status, with recognition across managers in the same corporate group. Both manager determinations and accreditation agency certificates are valid for three years. Investors accredited when entering a scheme retain that status for its remaining life. The eligibility framework includes securities market exposure of at least INR 5 crore for individuals, Hindu undivided families, family trusts and sole proprietorships. The corresponding threshold for companies, limited liability partnerships and other trusts is INR 20 crore. Persons resident outside India are deemed accredited, but AIFs and their managers must still conduct client due diligence, identify beneficial owners and meet applicable source of funds requirements. Managers undertaking accreditation must document eligibility decisions, separate accreditation from business development and distribution, and conduct internal audit and compliance reviews. The accreditation agency route remains available, and managers must accept valid agency certificates without a fresh determination. The consolidated framework also retains the previously extended March 31, 2027 deadline for angel funds registered on or before Sept. 10, 2025, to implement the accredited investor mandate. These funds may offer investment opportunities to no more than 200 non-accredited investors during the transition and cannot accept contributions from them for investments after the deadline. Trustees, sponsors or managers, as applicable, must ensure the manager’s Compliance Test Report covers every chapter of the master circular.

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