Wholesale investors are defined in law and, broadly speaking, are people or organisations who have sufficient previous investing experience that means they don’t require disclosure.
You can either be a wholesale investor for all offers of financial products, or just for a particular offer.
Wholesale investors for all offers of financial products
An investor is a wholesale investor for all offers of financial products if:
- they are an investment business (for example, an entity whose main business is investing in financial products, a registered bank, or a financial adviser);
- they meet the investment activity criteria specified in law to essentially qualify as a habitual or experienced investor;
- they are ‘large’ (the investor has net assets or turnover exceeding $5 million for the last two completed financial years); or
- they are a Government Agency.
Wholesale investors for a particular offer of financial products
An investor is a wholesale investor in relation to a particular offer of financial products if:
- they are an eligible investor in relation to that offer (see below);
- the minimum investment amount payable by the investor is $750,000;
- the investment amount, plus any amounts previously invested by the investor for the same financial products from that provider add up to at least $750,000;
- it is proposed that the investor will acquire the financial products under a bona fide underwriting or sub-underwriting agreement (typically relevant to investment banks or other financial institutions and not individual investors); or
- in relation to an offer of a derivative, the notional value of the derivative is at least $5 million.
Eligible investors
You can self-certify yourself to be an ‘eligible investor’ (which is a type of wholesale investor) in relation to a particular transaction if you have sufficient experience in acquiring or disposing of financial products to be able to assess:
- the merits of the transaction
- your own information needs in relation to the transaction; and
- the adequacy of the information provided by any person involved in the transaction.
That certification requires a financial adviser, a qualified statutory accountant, or a lawyer to sign the certification stating they are satisfied you have been sufficiently advised of the consequences of self-certification and have no other reason to consider the self-certification is incorrect or that further information or investigation is required.