UK and EU equivalent to Accredited Investors
In the United Kingdom and greater Europe, the term “Experienced Investors” is nearly synonymous with the United States term “Accredited Investor”. While the two terms differ in relation to the actual rules they come from the same source, i.e. protecting investors from risky investors.
In order to be eligible to make an investment – and in many cases to even view a company’s documents, the company or fund will state that the investor must fall within the definition of “Experienced Investor”, which is contained in the Financial Services (Experienced Investor Funds) Regulations, 2012. An Experienced Investor is a person or body who, at the time of the investment, falls into one of the following categories:
(a) a person or partnership whose ordinary business or professional activity includes, or it is reasonable to expect that it includes, acquiring, underwriting, managing,
holding or disposing of investments, whether as principal or agent, or the giving of advice concerning investments; or
(b) a body corporate which has net assets in excess of €1,000,000 or which is part of a group which has net assets in excess of €1,000,000; or
(c) an unincorporated association which has net assets in excess of €1,000,000; or
(d) the trustee of a trust where the aggregate value of the cash and investments which form part of the trust’s assets in excess of €1,000,000; or
(e) an individual whose net worth, or joint net worth with that person’s spouse, is greater than €1,000,000, excluding that person’s principal place of residence; or
(f) a participant who has a current aggregate of €100,000 invested in one or moreexperienced investor funds; or
(g) a participant who invests a minimum of €50,000 in an experienced investor fund and who has been advised by a professional adviser to invest in the fund and the
fund’s administrator has received confirmation of such advice; or
(h) a participant who is a professional client, as defined under the Financial Services (Markets in Financial Instruments) Act 2006; or
(i) a participant in a fund that has re-domiciled to Gibraltar where the Authority has permitted the inclusion of such participant either in respect of a specific fund or generally in respect of funds or a category of funds from a certain jurisdiction.
The minimum investment for an Experienced Investor who does not fall within subparagraphs (a) to (i) above is €100,000 or its foreign currency equivalent.
Normally a prospectus or a memorandum will state that “this prospectus or memorandum does not constitute a general offer or invitation to the public to subscribe for the Securities (such as “Participation Shares” or “Bonds” or Note”) in the Company other than Experienced Investors as so defined.
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