Alerts & Updates 16th Jan 2026
The Securities and Exchange Board of India (“SEBI”) has issued a circular bearing reference no. HO/19/34/11(9)2025-AFD-POD1/I/2286/2026 dated January 09, 2026 (“Circular”), simplifying procedural requirements for the onboarding of accredited investors by Alternative Investment Funds (“AIFs”). The accredited investor framework was introduced pursuant to amendments to the SEBI (Alternative Investment Funds) Regulations, 2012 (“AIF Regulations”) in August 2021. The Circular introduces relaxations aimed at easing operational challenges faced by AIF managers and investors during the onboarding process.
Under the existing framework, accredited investors are required to obtain an accreditation certificate from a SEBI-recognised accreditation agency before they can execute a contribution agreement for investing in an AIF. The Circular now permits an AIF manager, based on its own assessment of the investor’s eligibility, to finalise and execute the contribution agreement and initiate related operational procedures even prior to the receipt of the accreditation certificate. However, any commitment made by such an investor cannot be included in the computation of the scheme’s corpus until the accreditation certificate is issued. Further, AIF schemes are prohibited from accepting capital contributions from such investors until accreditation is formally obtained from a recognised accreditation agency. SEBI has clarified that this restriction is intended to preserve the sanctity of prudential norms under the AIF Regulations that are linked to corpus thresholds.
The Circular also provides that, henceforth, the net worth certificate need not mandatorily attach a detailed break-up of net worth. Further, it is optional for the certifying chartered accountant to specify the actual net worth in the net worth certificate. It would be sufficient if the certificate merely states that the investor’s net worth meets the specified threshold.
| ELP Comments |
|
The Circular can be found here.
We trust you will find this an interesting read. For any queries or clarifications please write to us at insights@elp-in.com or write to our authors:
Vinod Joseph, Partner – Email – vinodjoseph@elp-in.com
Zaynali Badami, Associate – Email – zayanlibadami@elp-in.com
As per the rules of the Bar Council of India, lawyers and law firms are not permitted to solicit work or advertise. By clicking on the "I Agree" button, you acknowledge and confirm that you are seeking information relating to Economic Laws Practice (ELP) of your own accord and there has been no advertisement, personal communication, solicitation, invitation or any other inducement of any sort whatsoever by or on behalf of ELP or any of its members to solicit any work through this website.
