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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 ..... rs by Accreditation Agencies. Based on the feedback received 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /CIR/2021/620 dated August 26, 2021 have been revised and are given at Annexure 1 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of the individual, Karta of HUF and the Sole Proprietor respectively, shall not be considered for calculation of net worth. 1.4. 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) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence required to be carried out of the accredited investors at the time of on-boarding them as their clients. 3. Validity of Accreditation 3.1. If the applicant 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 applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AI framework. 4.4. The client agreement between the investment service provider and AI shall, inter-alia , provide the following: (i) details of regulatory concessions agreed upon between 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) Copy of PAN Card (b) Copy of any Officially Valid Document In case of Body Corporates (a) Copy of PAN card (b) Document of Incorporation In case of Trusts (a) Copy of PAN Card. (b) Copy of registered trust deed Authorization to seek accreditation In case of body corporates/trusts 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 deter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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