Market regulator SEBI introduces accredited investors concept in Indian market

Capital Markets regulator Securities and Exchange Board of India (SEBI) has introduced the concept of 'accredited investors' in the Indian securities market. The accreditation is expected to open up a new channel for raising funds. A person or entity will be identified as an accredited investor on the basis of net worth or income.

Individuals, Hindu-Undivided-Family (HUFs), family trusts, sole proprietorships, partnership firms, trusts and body corporates can get accreditation based on financial parameters specified by the regulator, according to a notification dated August 3.

Sebi said that subsidiaries of depositories and stock exchanges will issue an accreditation certificate to such investors. An individual, HUF, family trust or sole proprietorship, can be an accredited investor if their annual income is at least Rs 2 crore or net worth is at least Rs 7.50 crore, with at least half of it in financial assets, it added.

Such entities with a combination of at least rupees one crore yearly income and a net worth of Rs 5 crore, with at least half in financial assets can also become an accredited investors. For trusts other than family trusts, a net worth of at least Rs 50 crore would be required to qualify as accredited investors while for corporates, a net worth of Rs 50 crore will be mandatory, Sebi said.

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