Approval of the framework for accredited investors in the securities market

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(Commercial Representative) Mumbai: A number of important decisions were taken at a board meeting held today by the Securities and Exchange Board of India (SEBI), the regulatory body for capital markets. SEBI has approved a new framework for accredited investors in the Indian securities market. Independent directors have also approved related amendments.

SEBI has approved the appointment / re-appointment or removal of independent directors through a special resolution for all listed companies. So that companies can do this with the approval of shareholders through a special resolution under the new rules.

SEBI has also approved a proposal to introduce a framework for accredited investors in the Indian securities market. For such investors who are considered to be a class of investors who are well-informed or well-advised on investment products, SEBI today highlighted the benefits and key points of this framework at a board meeting.

The definition of accredited investors varies from country to country. Investors in this category are usually high networth individuals or entities. The new framework sets out eligibility criteria for accredited investors, which may include independent individuals, HUFs, family trusts, proprietorships, partnership units, trusts, corporate bodies.

There will be subsidiaries of qualified depositories and accreditation agencies accredited by certain stock exchanges and other specific institutions. These agencies will be given accreditation status and will be able to issue certificates to accredited investors.

According to the proposed framework, accredited investors will be allowed to participate in investment products with an investment of less than the minimum allowable amount in the Alternative Investment Funds (AIF) Regulations and Portfolio Managers (PMS) Regulations.

For accredited investors, each investor has a minimum investment of Rs 50 crore in AIF, which can be relieved from the conditions for submitting schemes and regulatory requirements such as portfolio diversification, extension of AIF. Accredited investors can get relief from the regulatory requirement regarding investment in unlisted securities with a minimum investment of Rs 10 crore with a registered PMS provider.


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