Accredited investor

An accredited or sophisticated investor is an investor with a special status under financial regulation laws. The definition of an accredited investor (if any), and the consequences of being classified as such, vary between countries. Generally, accredited investors include high-net-worth individuals, banks, financial institutions, and other large corporations, who have access to complex and higher-risk investments such as venture capital, hedge funds, and angel investments.
Laws may require that some types of financial offerings may only be made to accredited investors.
Criteria for accreditation.
Australia.
s 708(8) of the Corporations Act 2001 is found in Chapter 6D (Fundraising). It defines "sophisticated investor" so as to exclude them from certain disclosure requirements.
That section provides for an accountant to issue a certificate stating that an individual meets the criteria prescribed in the "Corporations Regulations 2001", namely net assets of at least $2.5 million, or a gross income for each of the last two financial years of at least $250,000.
There is a second definition of "sophisticated investor" in s 761GA of the Corporations Act 2001 in Chapter 7 (Financial services and markets). It defines sophisticated investors so that they can be treated as wholesale (rather than retail) clients.
According to ASIC, a person with a sophisticated investor certificate is a sophisticated investor for the purpose of Chapter 6D, and a wholesale client for the purpose of Chapter 7.
Brazil.
On December 17, 2014, CVM issued the Instructions No. 554 and No. 555, which became effective from July 1, 2015 according to Mondaq.
The definition of accredited investors under the United States SEC’s Regulation D are analogous in Brazil to the combination of two categories of investors, classified by the "Comissão de Valores Mobiliários" (CVM) as ""investidor profissional" (professional investor) and "investidor qualificado"" (qualified investor) under Instruction 539, articles 9-A and 9-B.
Canada.
An "Accredited Investor" (as defined in NI 45 106) is:
Note that as of 2016, many provinces in Canada now allow non-accredited investors to invest in private markets – under specified limits.
European Union.
Retail clients requesting treatment as 'elective' professional clients (as defined by Markets in Financial Instruments Directive (MiFID)) must satisfy at least two of the following "quantitative" criteria in assessing the client's expertise, experience and knowledge:
New Zealand.
s 5 of the Securities Act (1978) defines a sophisticated investor in New Zealand for the purposes of subsection (2CC)(a), a person is wealthy if an independent chartered accountant certifies, no more than 12 months before the offer is made, that the chartered accountant is satisfied on reasonable grounds that the person
(a) has net assets of at least $2,000,000; or
(b) had an annual gross income of at least $200,000 for each of the last two financial years.
There is a further section that follows stating that an eligible investor (experienced or sophisticated) is one who has satisfied a financial investor that they meet certain criteria.
Singapore.
In Singapore, Accredited Investor is defined in Section 4A(1)(a) of the Securities and Futures Act (SFA), Chapter 289.
United States.
In the United States, to be considered an accredited investor, one must have a net worth of at least $1,000,000, excluding the value of one's primary residence, or have income at least $200,000 each year for the last two years (or $300,000 combined income if married) and have the expectation to make the same amount this year.
The term "accredited investor" is defined in Rule 501 of Regulation D of the U.S. Securities and Exchange Commission (SEC) as: