Sophisticated Investor Status - Aussie Stock Forums

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  1. #1

    Default Sophisticated Investor Status

    Does anyone know what exactly defines a Sophisticated investor within Australia?

  2. #2
    white swans need love too Timmy's Avatar
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    Sep 2007
    Between the lines

    Default Re: Sophisticated Investor Status

    Shorts with long socks.
    The contents of this post were tested, ruthlessly, on small, cute, furry animals. Most of them were fatally harmed. Hence, if this post causes irritation, please discontinue reading immediately.

  3. #3

    Default Re: Sophisticated Investor Status

    For certain purposes, net worth and income restrictions must be met before a person can be classified a Sophisticated Investor. The distinction makes an investor eligible to buy into certain investment opportunities, such as pre-IPO securities, that are considered "non-disclosure" or "non-prospectus" issues. Typically, a Sophisticated Investor in the Commonwealth of Australia where Sophisticated Investors must typically have either a net worth of $2.5 million or have earned more than $250,000 in the past two years to qualify .

    An accountant to certify the following:

    I am a qualified accountant within the meaning of section 9 of the Corporation Law1.

    This certificate is given at the request of the investor described in Section 1 of this certificate ("Investor") in relation to potential offers by First of offers to subscribe for or acquire securities.
    This certificate is given to First for the purpose of section 708(8)(c) of the Corporations Law; and
    The Investor has:
    (i) Net assets of at least $2,500,000; or
    (ii) A gross income for each of the last 2 financial years of at least $250,000 a year.

    If a "Qualified Accountant" signs off on one of these then you are truly a ... "Sophisticated Investor"

    Certain assumptions are made about sophisticated investors: that they can hold their investments indefinitely (the funds do not need to be liquidated for cash needs), and they can assume a total loss of investment principal without causing severe damage to their overall net worth.

  4. #4

    Default Re: Sophisticated Investor Status

    Gross income or net asset level
    The Corporations Regulations prescribe the asset and income criteria which must be met before you can issue a certificate. A person is only eligible to be the subject of a certificate if they have:
    a gross income of $250,000 or more per annum in each of the previous two years or
    net assets of at least $2.5 million (reg 6D.2.03 and reg 7.1.28).
    The rationale is that people meeting one of these criteria are more likely to be able to evaluate offers of securities and some financial products (such as interests in managed investment schemes) without needing the protections of a regulated disclosure document.

    Sorry guys, found it courtesy of ASIC

  5. #5

    Default Re: Sophisticated Investor Status

    Kyle Sandilands is technically a sophisticated investor. Food for thought.
    Whether you think you can, or think you can't; you are right.

  6. #6

    Default Re: Sophisticated Investor Status

    he is also fundamentally a d-bag!

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