Market regulator Securities and Exchange Board of India (SEBI) has extended the deadline for existing angel funds to comply with the mandatory accredited investor requirement by nearly seven months, giving them additional time to transition to the revised regulatory framework.
In a circular issued on 7 September 2026, SEBI extended the deadline for Angel Funds registered on or before 10 September 2025 from 8 September 2026 to 31 March 2027. The extension follows representations from the alternative investment fund (AIF) industry seeking additional time to comply with the accredited investor mandate.
Under the extended timeline, these angel funds can continue to operate under the transitional arrangement until 31 March 2027. However, they cannot offer investment opportunities to more than 200 non-accredited investors during this period.
From 1 April 2027, such angel funds will no longer be permitted to accept contributions from non-accredited investors for investment in an investee company.
The deadline extension relates to the revised regulatory framework introduced for angel funds last year. The AIF Regulations, 2012, were amended and notified on 9 September 2025 to introduce the revised framework.
SEBI subsequently issued a circular on 10 September 2025 prescribing the conditions and modalities for implementing the new framework.
These provisions have since been incorporated into Chapter 8 of the SEBI master circular for AIFs dated 3 June 2026.
Under the revised framework, angel funds registered with SEBI after 10 September 2025 are required to on-board and offer investment opportunities only to accredited investors. For angel funds registered on or before 10 September 2025, SEBI had provided a transitional period to comply with the new requirement.
Initially, these existing angel funds were required to implement the accredited investor mandate by 8 September 2026. During the transition period, they were not permitted to offer investment opportunities to more than 200 non-accredited investors. They were also barred from accepting contributions from non-accredited investors for investment in an investee company after 8 September 2026.
The latest circular effectively gives these funds an additional period of nearly seven months to complete the transition. Accordingly, angel funds registered on or before 10 September 2025 can continue to offer investment opportunities to non-accredited investors, subject to the ceiling of 200 investors, until 31 March 2027.
The extension, however, does not affect investments that have already been made by existing investors in these angel funds. SEBI has clarified that such investors can continue to hold their existing investments in accordance with the terms of the private placement memorandum (PPM) and/or other fund documents.
SEBI has also clarified that all other provisions contained in Chapter 8 of the AIF master circular will remain unchanged.
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