India proposes broader access for accredited investors

India’s securities regulator has proposed widening access to capital markets for accredited investors, aiming to broaden participation among high-net-worth individuals and institutional entities.

The proposal, outlined by the Securities and Exchange Board of India (SEBI), seeks to revise the definition of accredited investors to include a wider range of entities and individuals who meet specified financial thresholds. Under current rules, accredited investors enjoy relaxed regulatory requirements for certain market activities, including derivatives trading and alternative investment funds.

SEBI’s consultation paper suggests lowering the net worth requirement for individuals from the current ₹2 crore (approximately $240,000) to ₹1 crore, while adjusting criteria for institutional investors. The move is part of a broader effort to deepen India’s capital markets and attract more high-value participants.

The regulator is also considering expanding the list of eligible entities, such as family offices and proprietary investment firms, to qualify as accredited investors. This expansion could facilitate greater inflows into private markets and structured products, which often have higher entry barriers.

Industry stakeholders have welcomed the proposal, noting that a more inclusive definition could enhance liquidity and innovation in India’s financial ecosystem. However, concerns remain about potential risks, including investor protection and market stability, given the relaxed oversight for accredited investors.

SEBI has invited public feedback on the draft proposals by a specified deadline, with final rules expected to be notified in the coming months.