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Sonali Maity | Aug 27, 2021 | Views 1429666

SEBI comes out with modalities for accredited investors framework

CIRCULAR

CIRCULARSEBI/HO/IMD/IMD-I/DF9/P/CIR/2021/620

August 26, 2021

To,

Recognized Stock Exchanges,
Depositories,
AlternativeInvestment Funds,
Portfolio Managers,
Investment Advisers

Dear Sir/ Madam,

Sub: Modalities for implementation of the framework for Accredited Investors

A. General

1.Pursuant topublic consultationand approval of the SEBI Board, the framework for “Accredited Investors” (AIs) has been introduced in the securities market. In this regard, the SEBI (Alternative Investment Funds) Regulations, 2012 link, SEBI (Portfolio Managers) Regulations, 2020 link and SEBI (Investment Advisers) Regulations, 2013 link have been amended and notified on August 03, 2021.

2.Under the aforesaid framework, AIsmay avail flexibility in minimum investment amount(“Lower ticket size”) orconcessions from specific regulatory requirements applicable to investment products, subject to conditions applicable for specific products/ services under the aforesaid Regulations. The modalities ofaccreditation areprovided in Annexure A.

3.The framework for AIs may be made availableon the respective websites.

B. Accreditation Agency

4.Personsdesirous of being reckoned as AIs shall approach an Accreditation Agency for accreditation. Accreditation Agencies shall be responsible for:

(a)verification of documents submitted by applicants for accreditation,

(b)timely processing of applications for accreditation and issuance of accreditation certificate,

(c)maintaining data of accredited investors,

(d)verification of accreditation status,

(e)maintaining confidentiality of investor information atall times, and

(f)any other responsibilities as may be specifiedby SEBIfrom time to time.

5.Accreditation Agencies shall have the requisite infrastructureincluding systemsand manpower to fulfill their responsibilitiesas specified underPara 4.

6.The following entities areeligible to carry out the accreditation process:

(i)Subsidiaries of recognized Stock Exchanges, provided the Stock Exchangemeetsthe following criteria:

(a)minimum 20 years presence in Indian securities market,

(b)minimum networth of INR200 crores,

(c)presence of nation-wide terminals,

(d)having Investor grievance redressal mechanisms in place, including arbitration,

(e)presence of Investor Service Centers (ISCs) in at least 20 cities, and

(f)any other criteria as specified by SEBIfrom time to time.

(ii)Subsidiaries of Depositories

7.Eligible subsidiariesshall make an application toSEBIthrough the concernedStock Exchange or Depository,for recognition as an Accreditation Agencyin terms of Regulation 2(1)(aa) of the SEBI (Alternative Investment Funds) Regulations, 2012, within 3 weeks from the date of the Circular.

8.This Circular is issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992, to protect the interest of investors in securities market and to promote the development of, and to regulate the securitiesmarket.

9.This Circular is available on SEBI website at www.sebi.gov.in under the categories“Legal Framework-Circulars”, “Info for -Alternative Investment Funds”, “Info for –Portfolio Managers” and “Info for-Investment Advisers”.

Yours faithfully,

Deepti Agrawal
General Manager
Tel no.: +91-22-26449616

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