Wholesale, Sophisticated and
Professional Investors Definition
Wholesale and Sophisticated Investors:
Our investment opportunities are available for wholesale or sophisticated investors as defined in the Corporations Act (Cth) 2001, Chapter 6D and 7.9.
Chapter 6D – Sophisticated investor
The Corporations Act requires that an offer of securities or debentures needs prospectus disclosure to investors unless excluded in section 708. Along with exclusions for small offerings, subsections 708(8) to 708(20) of the Corporations Act identify certain persons and circumstances as not requiring disclosure, including the following persons:
a ‘sophisticated investor;’ which is defined where:
- the minimum amount payable for securities is at least $500,000; or
- the collective amount invested in the same class of securities adds up to $500,000; or
- a qualified accountant certifies the net asset worth of $2.5 million or gross income for each of the last two financial years of at least $250,000 per annum.
- the offer is made to a person through a financial services licensee where the licensee is satisfied that the person has relevant previous experience in investing in securities; and
- a ‘professional investor,’ as defined in section 9 of the Corporations Act.
Part 7.9 – Wholesale client
The FSR Act also draws a distinction (for financial products other than securities and debentures) between ‘retail’ and ‘wholesale’ clients. Wholesale clients in Part 7.9 do not receive the same level of protection, as these clients are better informed and better able to assess the risks involved.
Wholesale clients are defined in the negative, that is, as persons who are not retail clients. With the exception of general insurance products, superannuation and RSA products, a financial product and the related disclosure requirements is provided to what is defined as a retail client unless the provisions of section 761G(7) apply:
- the price or value for the provision of the financial product is at least $500,000; or
- the financial product or service is provided for use in connection with a business that is not a small business; or
- when not provided for use in connection with a business, a qualified accountant certifies the net asset worth of $2.5 million or gross income for each of the last two financial years of at least $250,000 per annum; or
- the person is a ‘professional investor,’ as defined in section 9 of the Corporations Act.