A S BANKA ADVISORS

If your next round includes money from an angel fund, the question of who counts as an “accredited investor” decides who can come in. On 24 September 2026, at its 215th meeting, the SEBI Board approved four changes to the Accredited Investor framework (SEBI Press Release No. 59/2026, item 12). Founders have started asking whether their NRI uncle, their friend’s LLP or a high-value investor with a large demat portfolio now qualifies. The short answer: plan your round on the regulation as it reads today, and treat the Board decision as approved policy.

What the Board approved

1. Manager-led accreditation. As an additional and optional route, managers of Alternative Investment Funds, AMCs offering Specialized Investment Funds and SEBI-registered portfolio managers will be permitted to accredit investors. The route through Accreditation Agencies continues.
2. A securities market exposure test. Investors will be permitted to qualify on securities market exposure of at least Rs 5 crore (individuals, HUFs, family trusts and sole proprietorships) or Rs 20 crore (body corporates and other trusts), in addition to the income and net worth tests.
3. Deemed accreditation for non-residents. Persons resident outside India, as defined under the Foreign Exchange Management Act, 1999, including Foreign Portfolio Investors, will be deemed to be accredited investors.
4. LLPs. An LLP will be eligible for accreditation where each partner is an accredited investor, in line with the framework for partnership firms.

Per the release, accreditation under both routes will be valid for three years, and manager-led accreditation will be portable across AIF, SIF and PMS products within the same group, subject to appropriate safeguards.

What the regulation says today

The definition sits in regulation 2(1)(ab) of the SEBI (Alternative Investment Funds) Regulations, 2012. The text on SEBI’s website is amended up to 14 July 2026. Under it, an accredited investor is a person granted a certificate of accreditation by an accreditation agency who meets these tests:

The proviso deems certain investors accredited without a certificate: the Central and State Governments and their developmental agencies and funds, qualified institutional buyers under the SEBI ICDR Regulations, Category I foreign portfolio investors, sovereign wealth funds, multilateral agencies, and any other entity as may be specified by SEBI.

What this means for your round

The investor list is a legal question, not a courtesy. Under regulation 19D(1), an angel fund shall raise funds only from accredited investors by way of issue of units; key management personnel of the fund or its manager may also invest. If your round is being pooled through an angel fund, every other investor in that fund has to clear one of the tests above.

NRI investors still need a certificate today. A family member or former colleague living abroad is not deemed accredited under the regulation as it reads today unless they fall in a listed category, such as a Category I FPI. Do not build your closing timeline on the Board’s non-resident decision.

A large portfolio alone does not qualify an investor today. The Rs 5 crore securities market exposure test is part of the Board decision. Today the investor must meet the income or net worth tests.

LLPs are not named in regulation 2(1)(ab) today. The each-partner test applies only to partnership firms under the 1932 Act, so do not treat an LLP as accredited on the strength of its partners.

Older angel funds have a fixed date. Under SEBI’s circular dated 7 September 2026, an angel fund registered on or before 10 September 2025 must implement the accredited investor mandate on or before 31 March 2027, and may not offer investment opportunity to more than 200 non-accredited investors during this period. We covered that circular in our note on the 31 March 2027 deadline.

Your checklist

1. Ask the angel fund for its registration date and whether the 31 March 2027 transition applies to it.
2. Map each investor joining through the fund against the tests in regulation 2(1)(ab) today.
3. Give non-resident and LLP investors time to obtain a certificate of accreditation from an accreditation agency, or bring them in another way that fits FEMA and your cap table.
4. Watch SEBI’s regulations and circulars pages for any change to regulation 2(1)(ab), and read the text before relying on a new route.

Download the full carousel PDF

Source: Securities and Exchange Board of India, Press Release No. 59/2026, Key decisions taken in the SEBI Board Meeting dated 24 September 2026, item 12, sebi.gov.in
Source: Securities and Exchange Board of India, SEBI (Alternative Investment Funds) Regulations, 2012 (amended up to 14 July 2026), regulations 2(1)(aa), 2(1)(ab) and 19D(1), sebi.gov.in
Source: Securities and Exchange Board of India, Circular HO/19/34/11(7)2025-AFD-POD1/I/20626/2026 dated 7 September 2026, Relaxation in timeline with respect to Accredited Investor mandate for Angel Funds, sebi.gov.in

Raising from an angel fund? Book a quick call: https://calendly.com/asbanka-info/30min

A S Banka Advisors Private Limited. This article is for general information and is not legal advice.