NSDL arm gets Sebi approval to set up an accreditation agency
Premium- The recognition of NDML as an accreditation agency will be valid for a period of three years with effect from 10 May 2022
NSDL Database Management Ltd (NDML), a wholly-owned subsidiary of National Securities Depository Limited (NSDL), has been granted recognition as an accreditation agency by the Securities and Exchange Board of India (Sebi).
The recognition of NDML as an accreditation agency will be valid for a period of three years with effect from 10 May 2022. According to the regulator, the renewal of the recognition would be subject to satisfactory performance by NDML.
Sebi in August 2021 had introduced the framework for “accredited investors" in the Indian securities market. An accreditation agency issues accreditation certificate to the investors seeking accreditation.
Under the framework covering Alternative Investment Funds (AIFs), Portfolio Managers Services (PMSes) and investment advisors, accredited investors may avail of flexibility in minimum investment amount (lower ticket size) or concessions from specific regulatory requirements applicable to investment products, subject to conditions applicable for specific products or services.
Earlier, wholly owned subsidiaries of BSE Ltd and Central Depository Services(India) Limited (CDSL) — BSE Administration and Supervision Ltd (BASL) and CDSL Ventures Limited (CVL) — had received market regulator’s approval to set up an accreditation agency.
The concept of a class of investors who have an understanding of various financial products and the risks and returns associated with them, and therefore, can make informed decisions regarding their investments, is recognized by many securities and financial market regulators around the globe. These investors are typically termed accredited investors, qualified investors or professional investors.
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The new flexible regulatory framework is expected to result in customized investment products, reduced compliance, better risk labelling (product classification) and increased transparency.