The Securities and Exchange Board of India (Sebi) on Wednesday proposed two key regulatory reforms aimed at expanding the investor accreditation framework and accelerating onboarding processes for Alternative Investment Funds (AIFs). The regulator has invited public feedback on these proposals by July 8.Under the suggested changes, all KYC Registration Agencies (KRAs) would become eligible to function as accreditation agencies, reversing the current restriction that limits the role to subsidiaries of stock exchanges and depositories, PTI reported.Sebi noted that only two accreditation agencies—CDSL Ventures Ltd and NSDL Data Management Ltd—are currently operational, both of which are KRAs. Expanding eligibility “would not disrupt the existing accreditation ecosystem” and could bring in more players, boosting competition and reducing costs, the market watchdog said in its consultation paper.The regulator pointed out that five KRAs are already registered, and broadening their role would inject efficiency and choice into the accreditation process.The proposal also empowers AIF managers to provisionally onboard investors as accredited clients, based on first-level due diligence, subject to issuance of a formal accreditation certificate.To ensure compliance, Sebi stipulated that investment funds cannot be accepted from these provisionally onboarded investors until a valid accreditation certificate is obtained. Additionally, any capital commitment made before certification will not count towards the scheme corpus.For close-ended AIF schemes, the paper mandates that if accreditation is not secured before the final close, AIFs must void the contribution agreement and not accept any funds from the investor.Currently, the onboarding process requires investors to obtain a certificate before being recognised as accredited, and their capital commitment is only included post-accreditation.