Following is a summary of the main categories of what constitutes a “Wholesale Investor”.
- Invest at least $500,000 at one time (excluding superannuation monies).
- Invest at least $500,000 together with an associate at one time (excluding superannuation monies). Reasons the investor and someone else can be associated include:
a. The other person is a trustee of a trust in relation to which the investor benefits or is capable of benefiting.
b. The other person is a person with whom the investor is acting in concert, or proposes to act in concert, in respect of the investment.
c. The other person is a person with whom the investor is, or is proposing to become associated, whether formally or informally, in any other way in respect of the investment.
- The investor and a body corporate which the investor wholly owns and controls together invest at least $500,000 in aggregate. See below for the meaning of ‘control’.
- The investor has an accountant’s certificate that shows that they have net assets of at least $2.5 million or gross income for each of the last two financial years of at least $250,000. The certificate must not be more than 2 years old. And in calculating the $2.5 million or $250,000 the investor can include the net assets or gross income (as relevant) of any company or trust it controls. See below for meaning of ‘control’.
- The investor is a company or trust controlled by someone who has an accountant’s certificate as mentioned in number 4. ‘Control’ means you have the capacity to determine the outcome of decisions about the company or trust’s financial and operating policies. The practical influence you can exert (rather than the rights you can enforce) is the issue to be considered and any practice or pattern of behaviour affecting the company or trust’s financial or operating policies is to be taken into account (even if it involves a breach of an agreement or a breach of trust).
- The investor is a business which is not a small business. A small business is one that employees less than 100 employees if that business is or includes the manufacture of goods, or otherwise is a business which employs less than 20 people.
- The investor is a subsidiary or holding company of another body corporate which is a wholesale investor.
- The investor has a financial services license.
- Investor is the trustee of a superannuation fund with net assets of at least $10 million.
- The investor controls at least $10 million. Including any amount held by an associate or under a trust that the investor manages.
- The AFSL holder considers the investor to be a sophisticated investor. The AFSL holder considers the investor to be a sophisticated investor.
a. The Trustee or another AFSL holder must be satisfied on reasonable grounds, that the client has previous experience in using financial services and investing in financial products that allows the client to assess:
i. the merits of the Trust;
ii. the value of the units in the Trust;
iii. the risks associated with holding units in the Trust;
iv. the client’s own information needs; and
v. the adequacy of the information given by the Trustee;
b. The Trustee or the other AFSL holder must give the client before or at the time when the units are issued, a written statement of the Trustee’s or AFSL holder’s reasons for being satisfied as stated above.
c. The client must sign a written statement, before or at the time when the product or service is provided, acknowledging that the Trustee or other AFSL holder:
i. has not provided the client a Product Disclosure Statement or any other document that would normally be required to be given to a retail client; and
ii. has no other obligations towards the client that would apply if the client were retail.