Portfolio Management Services
Accredited Investor Framework
Framework for Accredited Investors under the SEBI (Portfolio Managers) Regulations, 2020 and SEBI circular SEBI/HO/IMD/IMD-I/DF9/P/CIR/2021/620 dated August 26, 2021.
About Accredited Investors
"Accredited Investor (AI)" means any person who fulfils the applicable eligibility criteria and is granted a certificate of accreditation by an Accreditation Agency. The Central and State Governments, developmental agencies and funds set up by them, qualified institutional buyers (as defined under the SEBI (ICDR) Regulations, 2018), Category I foreign portfolio investors, sovereign wealth funds, multilateral agencies and any other entity as may be specified by SEBI shall be deemed to be accredited investors and may not be required to obtain a certificate of accreditation.
"Large Value Accredited Investor" means an Accredited Investor who has entered into an agreement with the Portfolio Manager for a minimum investment of INR 10 crores.
Accreditation Agencies
"Accreditation Agency" means a subsidiary of a recognised stock exchange or a subsidiary of a depository, or any other entity as may be specified by SEBI. The following entities are currently notified as Accreditation Agencies by SEBI:
- BSE Administration and Supervision Limited (BASL)
- CDSL Ventures Limited (CVL)
Investors may obtain a certificate of accreditation from any of the above agencies.
Eligibility Criteria for Accredited Investors
| Category | Criteria |
|---|---|
| Individual, HUF, Family Trust, Sole Proprietorship | Annual Income ≥ INR 2 Crore; OR Net Worth ≥ INR 7.5 Crore, out of which at least INR 3.75 Crore is in the form of financial assets; OR Annual Income ≥ INR 1 Crore and Net Worth ≥ INR 5 Crore, out of which at least INR 2.5 Crore is in the form of financial assets. |
| Body Corporate | Net worth ≥ INR 50 Crore. |
| Trust (other than family trust) | Net worth ≥ INR 50 Crore. |
| Partnership firm set up under the Indian Partnership Act, 1932 | Each partner independently meets the eligibility criteria for accreditation. |
Net worth calculation
- Individual / Karta of HUF / Sole Proprietor: the value of the primary residence shall not be considered for calculation of net worth.
- Body Corporate: Net worth = (Capital + free reserves) − (Accumulated losses + deferred expenditure not written off).
- Trustee: Net worth = (Book value of all assets, other than intangible assets) − (Book value of total liabilities).
Regulatory concessions
| Particulars | Applicability |
|---|---|
| The contents of the agreement specified under Schedule IV of the SEBI (Portfolio Managers) Regulations, 2020 shall not apply to the agreement between the Portfolio Manager and the investor. | Large Value Accredited Investor |
| The requirement of a minimum investment of INR 50 lakhs per client shall not apply. | Accredited Investor |
| The Portfolio Manager may offer discretionary, non-discretionary or advisory services for investment up to 100% of the assets under management in unlisted securities, subject to the terms agreed between the client and the Portfolio Manager. | Large Value Accredited Investor |
| The quantum and manner of exit load applicable to the client under the PMS regulations shall not apply and shall be governed through bilaterally negotiated contractual terms. | Large Value Accredited Investor |