Accredited investors: UPSC Daily Important Topic | 16 January 2022

Accredited investors

• Accredited investors, also called qualified investors or professional investors, are those who have an understanding of various financial products and the risks and returns associated with them.

• They are able to make informed decisions regarding their investments and are recognised by many securities and financial market regulators globally.

• Generally, they are allowed to trade securities that may not be registered with financial authorities.

• They are entitled to this privileged access by satisfying requirements regarding their income, net worth, asset size, governance status or professional experience.

Significance of accredited investors

• The accredited investor concept may offer benefits to investors and financial product/service providers such as:

• Flexibility in minimum investment amount.

• Flexibility and relaxation in regulatory requirements.

• Access to products/ services offered exclusively to accredited investors.