Accredited investors in PMS
A certificate that waives the ₹50 lakh minimum, and at ₹10 crore, several more protections.
An accredited investor is a client certified as financially sophisticated by an accreditation agency, on the basis of income or net worth. In PMS that certificate unlocks one relaxation: the ₹50 lakh minimum need not apply. A large value accredited investor, one who signs up for at least ₹10 crore with the manager, gets several more.
SEBI added both categories in 2021. Many older notes on PMS predate them, which is why candidates find these questions unfamiliar.
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Who qualifies as an accredited investor
The criteria sit in Regulation 2(1)(ab) of the SEBI (AIF) Regulations, 2012, and PMS uses the same meaning.
| Investor | Meets any one of |
|---|---|
| Individual, HUF, family trust or sole proprietorship | Annual income of at least ₹2 crore; or net worth of at least ₹7.5 crore with at least ₹3.75 crore in financial assets; or annual income of at least ₹1 crore plus net worth of at least ₹5 crore with at least ₹2.5 crore in financial assets |
| Body corporate | Net worth of at least ₹50 crore |
| Trust other than a family trust | Net worth of at least ₹50 crore |
| Partnership firm | Each partner independently meets the criteria |
The terms
- Accreditation agency
- A subsidiary of a recognised stock exchange or of a depository, or another entity SEBI specifies. It checks the documents and issues the certificate.
- Deemed accredited investor
- Central and State Governments and their development agencies and funds, qualified institutional buyers, Category I FPIs, sovereign wealth funds and multilateral agencies. They need no certificate.
- Large value accredited investor (PMS)
- An accredited investor who has entered into an agreement with the portfolio manager for a minimum investment of ₹10 crore.
What each status relaxes in PMS
₹50 lakh minimum investment
Accredited investor
Need not apply, if the Disclosure Document provides for it and the agreement says so
Large value accredited investor
Not relevant (already ₹10 crore or more)
Agreement must contain the Schedule IV contents
Accredited investor
Still applies
Large value accredited investor
Does not apply
Unlisted securities: none for discretionary, up to 25% for non-discretionary and advisory
Accredited investor
Still applies
Large value accredited investor
Up to 100% unlisted under any of the three services, with disclosure
Exit load capped at 3%, 2%, 1%, then nil
Accredited investor
Still applies
Large value accredited investor
Negotiated bilaterally in the contract
| Rule for ordinary clients | Accredited investor | Large value accredited investor |
|---|---|---|
| ₹50 lakh minimum investment | Need not apply, if the Disclosure Document provides for it and the agreement says so | Not relevant (already ₹10 crore or more) |
| Agreement must contain the Schedule IV contents | Still applies | Does not apply |
| Unlisted securities: none for discretionary, up to 25% for non-discretionary and advisory | Still applies | Up to 100% unlisted under any of the three services, with disclosure |
| Exit load capped at 3%, 2%, 1%, then nil | Still applies | Negotiated bilaterally in the contract |
Free account, this exam preselected.
Two clients, worked through
Mr Shah, a Mumbai surgeon, earns ₹2.4 crore a year. He clears the ₹2 crore income test, gets an accreditation certificate, and the manager's Disclosure Document allows accredited investors below ₹50 lakh. He can start with ₹30 lakh. Nothing else changes for him: the usual agreement, unlisted limits and exit load caps still apply.
A family office signs a ₹12 crore agreement after getting accredited. It is a large value accredited investor, so it can negotiate its exit load and agreement terms directly, and can allocate up to 100% to unlisted securities if the Disclosure Document provides for it.
Fewer protections, not fewer duties
Every relaxation removes a protection SEBI built for ordinary investors. Being rich is not enough: the client needs a valid certificate, or must be a deemed accredited investor. And accreditation does not replace your suitability assessment, which still applies to every recommendation.
How XXI-A tests this
The favourite trap is the threshold mix-up. In PMS a large value accredited investor commits at least ₹10 crore. In AIFs, a 'large value fund for accredited investors' requires each investor to put in at least ₹25 crore (cut from ₹70 crore in November 2025). Other questions ask which relaxation applies to which status, or whether high income alone makes someone accredited (it does not without the certificate).
FAQs
Who is an accredited investor in PMS?expand_more
A person granted an accreditation certificate by an accreditation agency on meeting SEBI's income or net worth criteria, for example an individual with annual income of at least ₹2 crore.
Can an accredited investor invest less than ₹50 lakh in PMS?expand_more
Yes, if the portfolio manager's Disclosure Document provides for it and the agreement with the client says so. The manager is not obliged to offer it.
What is a large value accredited investor?expand_more
In PMS, an accredited investor who has signed an agreement with the portfolio manager for at least ₹10 crore.
Does the PMS exit load cap apply to large value accredited investors?expand_more
No. For them the exit load is set by bilaterally negotiated contract terms instead of SEBI's 3%, 2%, 1% schedule.