SEBI has extended the timeline for certain existing Angel Funds to transition to the mandatory Accredited Investor framework.
Under the revised regulatory framework for Angel Funds, SEBI had introduced an Accredited Investor mandate for Angel Funds. Angel Funds registered after September 10, 2025 are required to onboard and offer investment opportunities exclusively to Accredited Investors.
For Angel Funds registered with SEBI on or before September 10, 2025, a transitional period had originally been provided until September 8, 2026.
What has changed?
Based on representations received from the AIF industry, SEBI has now extended the transition timeline until March 31, 2027.
Accordingly, Angel Funds registered on or before September 10, 2025 must comply with the following:
1. Implementation of Accredited Investor mandate
Such Angel Funds must implement the Accredited Investor mandate on or before March 31, 2027.
During the transition period, they must not offer investment opportunities to more than 200 non-Accredited Investors.
2. Contributions from non-Accredited Investors
From April 1, 2027, such Angel Funds will not be permitted to accept contributions for investment in an investee company from non-Accredited Investors.
3. Existing investments remain unaffected
Existing investors may continue to hold investments already made in the Angel Fund in accordance with the terms of the Fund’s PPM and/or other fund documents.
Effective Date
The circular has come into effect immediately. All other provisions of Chapter 8 of the SEBI Master Circular for AIFs remain unchanged.
What does this mean for Angel Fund Managers?
The extension provides existing Angel Funds with additional time to:
Transition their investor onboarding processes.
Put in place systems for Accredited Investor verification.
Review existing investor and contribution structures.
Update internal compliance and operational processes.
Prepare for a complete transition to the Accredited Investor framework by March 31, 2027.
Key takeaway: Existing Angel Funds registered on or before September 10, 2025 now have an additional transition period until March 31, 2027 to comply with the Accredited Investor mandate.