SEBI Simplifies Investor Accreditation Process For Enhanced Accessibility[1]

In a bid to streamline the accreditation process for investors, the Securities and Exchange Board of India (SEBI) has announced significant simplifications to the existing requirements. The decision, outlined in a circular dated December 18, 2023, revisits the framework set forth in SEBI Circular No. SEBI/HO/IMD/IMD-I/DF9/p/CIR/2021/620, released on August 26, 2021.

The key development lies in the empowerment of Accreditation Agencies, which are also designated as KYC Registration Agencies (KRAs). These agencies can now access the Know Your Customer (KYC) documents of applicants both from their own records as KRAs and from the databases of other KRAs. This expanded access facilitates a more thorough assessment for accreditation purposes.

Crucially, the accreditation decision will now be solely based on the KYC details and financial information provided by the applicants. This move is expected to expedite the accreditation process, making it more efficient and investor-friendly.

SEBI’s directive extends to stock exchanges and depositories, urging them to communicate the provisions of this circular to their subsidiaries recognized by SEBI as accreditation agencies. This ensures uniformity in the implementation of the revised modalities of accreditation.

To aid stakeholders, SEBI has released the revised Modalities of Accreditation and a comprehensive list of documents required for accreditation. These details are available in Annexure A and Annexure B of the circular, respectively.

The simplified accreditation process aligns with SEBI’s ongoing efforts to enhance the ease of doing business in the Indian securities market. By leveraging existing KYC infrastructure, the regulatory body aims to strike a balance between robust investor protection and a more accessible investment landscape. Investors and market participants are encouraged to familiarize themselves with the updated procedures outlined in the circular for a smoother accreditation experience.

[1] https://www.sebi.gov.in/legal/circulars/aug-2021/circular-on-modalities-for-implementation-of-the-framework-for-accredited-investors_52116.html