Accredited Investor is a status certified by a SEBI-recognised accreditation agency to individuals or entities that meet prescribed income, net-worth, or institutional criteria, allowing them to participate in investment products — most notably Angel Funds — that are otherwise restricted to protect less financially sophisticated investors. Under Indian securities law, the requirement that Angel Funds onboard only Accredited Investors is set out in the SEBI (Alternative Investment Funds) Regulations, 2012, as amended with effect from 9 September 2025.
Legal definition
Angel Funds are a sub-category of Category I Alternative Investment Funds under the SEBI (Alternative Investment Funds) Regulations, 2012, built to channel early-stage capital into start-ups from a pool of individual investors. Historically, Angel Funds could draw contributions from any investor meeting the fund's minimum-ticket-size requirements, without a separate wealth or income screen.
That changed with SEBI's amendment to the AIF Regulations notified on 9 September 2025, which confined Angel Fund investors to those holding SEBI-recognised Accredited Investor status, and with SEBI's circular of 10 September 2025 specifying the conditions and modalities for the transition — later consolidated into Chapter 8 of the SEBI Master Circular for Alternative Investment Funds. Angel Funds seeking fresh registration after 10 September 2025 must onboard only Accredited Investors from the outset; funds already registered on or before that date were given a transition period, most recently extended by SEBI's circular of 7 September 2026 to 31 March 2027.
Accreditation criteria: Individual investors generally qualify as Accredited on the basis of an annual income exceeding a prescribed threshold, or a net worth exceeding a prescribed threshold with a minimum portion held in financial assets. This article states these criteria as they are consistently and independently reported across multiple secondary compliance sources describing SEBI's framework; the precise regulatory text setting the exact figures has not been independently retrieved and verified against the primary regulation for this entry, and no specific figure is asserted here without that qualification. Confirm current thresholds directly with a SEBI-recognised accreditation agency or your investment adviser before relying on them.
Why this matters
The Accredited Investor framework is SEBI's mechanism for deciding, product by product, which investors are financially sophisticated enough to be exposed to higher-risk, less-liquid investments — like early-stage start-up equity through an Angel Fund — without the fuller protections that apply to retail investors generally. For fund managers, accreditation status is now a gating condition for onboarding new Angel Fund investors, not merely a marketing label.
For existing Angel Funds, the practical significance in 2026 is transitional: SEBI has twice relaxed the compliance timeline for funds registered before the Accredited Investor mandate took effect — first extending disclosure obligations, and then, by the 7 September 2026 circular, extending the deadline for the accreditation mandate itself to 31 March 2027, while capping the number of non-Accredited Investors such funds may carry during the extended window at 200 and barring fresh non-Accredited contributions after the new deadline. Fund managers, investors, and advisers should treat these as hard boundaries rather than assume further relief will follow automatically.
For individual investors, Accredited status is not automatic or self-declared — it requires certification by a SEBI-recognised accreditation agency, which means turnaround time for certification is itself a practical constraint when an investor wants to participate in an Angel Fund ahead of a compliance deadline.
Related terms
Regulatory context:
Frequently asked questions
Who certifies a person as an Accredited Investor?
Accreditation is not a self-declaration. An investor is certified as Accredited only by a SEBI-recognised accreditation agency, based on documented income, net worth, or (for institutional investors) other prescribed financial criteria.
Does every Alternative Investment Fund require investors to be Accredited?
No. The Accredited Investor requirement in its current, mandatory form applies specifically to Angel Funds, a sub-category of Category I Alternative Investment Funds under the SEBI (Alternative Investment Funds) Regulations, 2012. Other AIF categories have their own, separate eligibility and minimum-investment norms.
What is the current deadline for existing Angel Funds to onboard only Accredited Investors?
SEBI's circular of 7 September 2026 extended the transition deadline for Angel Funds registered with SEBI on or before 10 September 2025 from 8 September 2026 to 31 March 2027, subject to a cap of 200 non-Accredited Investors during the extended window and a bar on fresh non-Accredited contributions after 31 March 2027.
This entry is part of the Veritect Indian Legal Glossary, a comprehensive reference of Indian legal terminology grounded in statutory text and judicial interpretation.
Last updated: 2026-09-23. Veritect provides this content for informational purposes and does not constitute legal or investment advice.