Market regulator Securities and Exchange Board of India (SEBI) on Thursday introduced a manager-led mechanism for determining accredited investor status, allowing managers of Alternative Investment Funds (AIFs), asset management companies of Specialised Investment Funds (SIFs) and portfolio managers to certify eligible investors without requiring them to approach a recognised accreditation agency.
Under the new mechanism, a manager can determine an investor's accredited status at the time of onboarding or during the tenure of a scheme, after verifying that the investor meets the prescribed eligibility criteria. The determination will be recognised across managers belonging to the same corporate group for AIFs, SIFs and portfolio management services.
Investment Advisers and Research Analysts can rely on a valid accreditation granted by a manager belonging to their group, but cannot independently determine an investor's accredited status. Managers will have to confirm the accreditation in writing, specifying its date and validity.
Manager-led accreditation is an additional and optional route. The existing accreditation agency mechanism will continue. Managers will have to accept a valid certificate issued by a recognised agency without undertaking fresh verification during its validity.
Both manager-led accreditation and certificates issued by recognised agencies will be valid for three years. However, investors onboarding with a manager from a different corporate group will have to undergo fresh accreditation. Investors accredited at the time of joining a scheme will retain that status for the remaining life of the scheme. Existing certificates will remain valid until their expiry.