AIF industry needs to move to accredited investors regime: Sebi Official

Mumbai: The alternative investment fund (AIF) industry should move to the accredited investors regime, in line with global practices, a senior Sebi official said on Tuesday.

"Globally, if you want to join a hedge fund or invest in a private equity fund, you typically have to be an accredited investor. I am saying adopt this model in India where you only have accredited investors coming in," Ananth Narayan, whole time member,Sebi said.

"Then you can make a cogent argument for light touch regulation as far as investor protection is concerned. In the absence of that, it is a very weak market."


He said, one of the issues around not having enough accredited investors was higher costs.

"Once you have a reasonable number coming in, the cost will automatically come down," Narayan said while addressing a CII event here.

He added that the intermediaries should look at processing the accredited investors applications which can help bring down the costs.

"Of the ₹4.5 lakh crore of investments, out of the ₹5 lakh crore of actual drawdown, around ₹1 lakh crore of investment has been questionable in terms of the regulatory intent behind those investments. This is not a small number," he said.