Australia: Investor Types and criteria

Retail Investor

A Retail Investor is any investor that does not meet the criteria of a Wholesale Investor. 

 

Wholesale Investor

A Wholesale Investor (a person or an entity) is defined in the Corporations Act 2001. Please refer to sections 708 (8)(c)(i)(ii), 708 (9), 708 (10)(d) and 708 (11) of the Act for more detail. Under the Corporations Act clients can be defined as wholesale if they meet one of the following requirements:

 

Professional Investors

As defined under Section 9 of the Corporations Act, a professional investor may be:

  • An Australian Financial Services Licensee
  • A body regulated by APRA (other than a trustee of a super fund, approved deposit fund, pool superannuation trust, or a public sector superannuation fund)
  • A body registered under the Financial Corporations Act 1974
  • A trustee of a super fund, approved deposit fund, pool superannuation trust, or a public sector superannuation fund where the fund, trust or scheme has net assets of $10 million
  • A person that controls at least $10 million (including an amount held by an associate or under a trust that the person manages)
  • A listed entity or related body corporate of a listed entity
  • An exempt public authority
  • A body corporate or unincorporated body who invests in financial products, interests in land or other investments and invests fund received (directly or indirectly) following a public offering the terms of which provided for the funds to be invested for those purposes
  • A foreign entity that would be covered by one of the above.

Crowd88 must confirm with the member which professional investor category applies to them by having the member complete the Professional Investor Declaration and obtain evidence that demonstrates that they meet the requirement. The Professional Investor Declaration to be uploaded to the Crowd88 website for a Professional Investor can be found here.

 

Sophisticated Investor

A Sophisticated Investor is defined in Section 708 (8) of the Corporations Act

A Sophisticated Investor must provide;

  • A certificate given by a Qualified Accountant that they have net assets of $2.5 million and/or has gross income for the last 2 financial years of at least $250,000

The certificate to be completed by a Qualified Accountant and to be uploaded to the Crowd88 website for a Sophisticated Investor can be found here.

Crowd88 process

To qualify as a Professional or Sophisticated Investor you need to upload the relevant completed document to the Crowd88 website. 

A member of Crowd88 will then check the document and change your investor status to Wholesale Investor. Once changed you will be advised by email that you are now a Wholesale Investor.

 

$500,000 Investment

Members can also be treated as wholesale for offers of securities only under Chapter 6D Section 708, if they invest at least $500,000 in a financial product. 

If a person, an associate of the person or a body corporate controlled and wholly owned by the person invest at the same time in the same offering by the same issuer, it is possible to aggregate the investment amounts so they total at least $500,000 allowing them to all qualify as wholesale.

It is important to note that members relying on this rule will only be treated as wholesale for that transaction they are investing in. Members will revert back to retail once the transaction is completed. If the member wishes to maintain their wholesale status they will be required to meet one of the other wholesale qualifications.

To satisfy the $500,000 Investment rule, members must self-certify here to advise they are Investing at least $500,000 into the offer