The Securities and Exchange Board of India (Sebi) has issued steps to simplify the requirements for registering as an ‘Accredited Investor’ along with an extension to the validity of the certification.With respect to the information provided above, consider the following statements-

I.The accreditation agencies will be able to grant certification solely based on the Know-Your-Customer (KYC) and financial information of the applicants. As KYC registration agencies (KRAs) act as accreditation agencies, they will now be able to access KYC documents from the database for this certification.

II.For individuals, Hindi Undivided Families (HUFs) and trusts, Sebi also removed the requirement for certain documents like certificate from a chartered accountant stating net worth for two  financial years, proof of basis of valuation of assets like demat account statements, ‘ready reckoner rate’ applicable for real estate assets.

III.Individuals, HUFs, family trusts with income criteria like annual income above Rs 2 crore or net worth above Rs 7.5 crore or those with annual income Rs 1 crore along with a net worth above Rs 5 crore are eligible for the accreditation.

Which of the following statements is/are TRUE? 

Solution

The Securities and Exchange Board of India (Sebi) has issued steps to simplify the requirements for registering as an ‘Accredited Investor’ along with an extension to the validity of the certification.The accreditation agencies will be able to grant certification solely based on the Know-Your-Customer (KYC) and financial information of the applicants. As KYC registration agencies (KRAs) act as accreditation agencies, they will now be able to access KYC documents from the database for this certification. Accredited investors are considered to have the ability to bear the financial risks associated with certain investment products. They may not be subject to the same regulatory oversight as applicable to investment by other investors.   In schemes like Alternative Investment Funds (AIFs), these investors are allowed to go below the minimum threshold.For individuals, Hindi Undivided Families (HUFs) and trusts, Sebi also removed the requirement for certain documents like certificate from a chartered accountant stating net worth for three financial years, proof of basis of valuation of assets like demat account statements, ‘ready reckoner rate’ applicable for real estate assets. Instead, copies of Income Tax Return (ITR) and financial statements have been sought. The requirements have been eased for corporate bodies too. As per regulatory officials, there are only 200 accredited investors registered in the country. Individuals, HUFs, family trusts with income criteria like annual income above Rs 2 crore or net worth above Rs 7.5 crore or those with annual income Rs 1 crore along with a net worth above Rs 5 crore are eligible for the accreditation.