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TMI BlogSimplification of requirements for grant of accreditation to investorsX X X X Extracts X X X X X X X X Extracts X X X X ..... ed from various stakeholders, to provide flexibility and facilitate ease of accreditation of investors, it has been decided to simplify the requirements for grant of accreditation to investors as under: 1.1. Accreditation Agencies, which are also KYC Registration Agencies (KRAs), may access Know Your Customer (KYC) documents of applicants available with them in capacity of KRA and may also access the same from the database of other KRAs, for the purpose of accreditation. 1.2. The Accreditation agencies shall grant accreditation solely based on the KYC and the financial information of the applicants. 1.3. To this effect, the accreditation certificate issued by accreditation agencies shall include the following disclaimer: "the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Annexure 2 of this circular respectively. 3. Further, Stock Exchanges and Depositories are directed to bring the provisions of this circular to the notice of their subsidiaries who are recognized by SEBI as Accreditation Agencies. 4. The provisions of this circular shall come into force with immediate effect. 5. This circular is issued with the approval of the competent authority. 6. This circular is issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market. 7. The circular is available on SEBI website at www.sebi.gov.in under the categories "Legal fram ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. In case of investments held jointly by more than one individual, the following conditions shall apply for eligibility as AI: (i) Where the joint holders are parent(s) & child(ren), at least one person should independently fulfil the eligibility criteria for AI. (ii) Where the joint holders are spouses, their combined income/ net worth should meet the eligibility criteria for AI. 1.5. For the purpose of reckoning eligibility criteria, net worth of Body Corporates shall be calculated as under: Net worth = (Capital + free reserves) - (Accumulated losses + deferred expenditure not written off) 1.6. For the purpose of reckoning eligibility criteria, net worth of Trusts shall be calculated as under: Net worth = (Book value of all as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icant meets the eligibility criteria for preceding one financial year, the accreditation certificate issued shall be valid for a period of two years from the date of issuance. 3.2. If the applicant meets the eligibility criteria in each of the preceding two financial years, the accreditation certificate issued shall be valid for a period of three years from the date of issuance. 3.3. If the applicant is a newly incorporated entity, which does not have financial information for the preceding financial year but meets the applicable net-worth criteria as on the date of application, the accreditation certificate issued shall be valid for a period of two years from the date of issuance. 4. Procedure to avail benefits linked to accreditation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tween the investor and the investment service provider, and the conditions for availing the same, and (ii) consequences, if any, in the event of the investor becoming ineligible to be an AI during the tenure of the said agreement. 5. Flexibility to investors to withdraw 'Consent' 5.1. Accredited Investors shall have the flexibility to withdraw their 'Consent' and discontinue availing benefits of accreditation, subject to the following: (i) An investor who withdraws 'Consent' after availing the benefit of lower ticket size shall be required to increase the investment to the minimum amount that is stipulated under the applicable regulatory framework for the particular investment product, within the timeframe specified in the client agr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Letter from authorized signatory to apply for accreditation. Proof of financial information In case of Individual / HUF/Sole Proprietorship/ Body Corporates/Trusts (Number of years for which financial information is provided shall determine the validity of the accreditation) a) Copies of Income Tax Return(s) or ITR Acknowledgement (Only in case of individuals/HUF/Family Trust/Sole Proprietorship), or; b) Copies of audited Financial Statements, or; c) Copies of Audited Financial Statements prepared by the statutory auditor for the current financial Year (Only in case the entity is incorporated in the same financial Year), or; d) Net worth Certificate from practicing chartered accountant. The latest net-worth certificate shall no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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