The Securities and Exchange Board of India (SEBI) on Wednesday drafted guidelines for investors willing to invest in startups that would be listed on the Innovators Growth Platform (IGP).
The IGP was earlier known as Institutional Trading Platform. It has been created to facilitate the listing of startups across various sectors.
SEBI, in a circular, released the framework, eligibility criteria, and procedure to apply for the accreditation. It also mentioned the validity of the accreditation once granted.
Any individual with an annual gross income of Rs 50 lakh and liquid net worth of Rs 5 crore is eligible to be an accredited investor, while corporates are eligible only if their net worth is Rs 25 crore.
The aspiring startups’ investors must have their demat account with a depository and they must submit an application either to an exchange or depository in the prescribed format for the accreditation.
Exchanges and depositories are entrusted with the responsibility of verifying and maintaining the database of accredited investors.
Accreditation is valid for three years from the date of issue. If an accredited investor’s financial status changes and falls below the prescribed level, then he or she must inform the exchange or depository.
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