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Wholesale Client Definition

In summary, an entity is a wholesale client if:

  • The price for the provision of the financial product, or the value of the financial product to which the financial service relates, equals or exceeds $500,000; or
  • The financial product, or financial service, is provided for use in connection with a business that is not a “small business”1; or
  • The financial product or financial service is not provided for use in connection with a business and the person acquiring the financial product or financial service provides a certificate from a qualified accountant, obtained within the prior 2 years2, that he or she:
    • Has net assets of at least $2.5 million3; or
    • Has a gross income for each of the past 2 financial years of at least $250,000; or
  • The investor is a “professional investor” or a “sophisticated investor”4.
  • Companies or trusts if they are controlled by persons who are wholesale clients5.

An investor will be a “professional investor” if that person falls into one of the following categories:

  • Australian financial services licensees (not limited to claims handling and settling services);
  • Bodies that are regulated by APRA (other than a trustee of certain superannuation funds and schemes);
  • Bodies registered under the Financial Sector (Collection of Data) Act 2001 (Cth);
  • Trustees of certain superannuation trusts or schemes within the meaning of the Superannuation Industry (Supervision) Act 1993 that have net assets of at least $10 million;
  • Persons who have or control gross assets of at least $10 million (including any assets held by an associate or under a trust that the person manages)6;
  • A listed entity, or a related body corporate of a listed entity;
  • An exempt public authority;
  • An investment company, being a body corporate or unincorporated body, which carries on the business of investing in financial products, interests in land or other investments, and which invest funds received directly or indirectly following offers or invitations to the public, the terms of which provided for the funds subscribed to invested accordingly; or
  • A foreign entity that, if established or incorporated in Australia, would be covered by one of the above paragraphs7.

Footnotes

  1. A “small business” is a business which has less than 20, or, if it is a manufacturing business, has less than 100, employees.
  2. Section 761G (7) (c) of the Corporations Act, as amended by regulation 7.6.02AF of the Corporations Regulations 2001 (the Regulations).
  3. The net assets or gross income of a company or trust controlled by such a person may be included – section 761G (7) (c) (i) of the Corporations Act, as amended by regulation 7.6.02AC of the Regulations.
  4. Sections 761G (7) and 761GA of the Corporations Act.
  5. Section 761G (7) (ca) of the Corporations Act, inserted by regulation 7.6.02AB of the Regulations.
  6. Paragraph (e) of the definition of professional investor in section 9 of the Corporations Act, as modified by regulation 7.6.02AE of the Regulations.
  7. Section 9 of the Corporations Act.

Sophisticated Investor Definition

“Sophisticated Investor” means:

  1. An institutional investor of the following types:

1.1 A Joint Investment Trust Fund (mutual fund) as defined in the Joint Investment Trust Law, 5754-1994, or a company managing such fund.

1.2 A Provident Fund or a Managing Company (of such funds) as defined in the Regulation of Financial Services (Provident Funds) Law 5765-2005.

1.3 An Insurer as defined in the Regulation of Financial Services (Insurance) Law, 5741-1981.

1.4 A Banking Corporation or Auxiliary Corporation as such terms are defined in the Israeli Banking (Licencing) Law 5741-1981, other than a “joint services company”, purchasing Securities (as such term is defined in the Securities Law “Securities”) for its own account or for the account of customers who are investors listed in section 15A(b) of the Securities Law (“Exempt Investors”). Exempt Investor means: (a) An investor of the type listed in the First Schedule to the Securities Law; (b) An investor incorporated outside of Israel and which, in the opinion of the ISA, is capable of obtaining the information which it requires in order to make a decision to invest in the securities and which would have been included in a prospectus if one had been published; or (c) A Controlling shareholder, a general manager or a director of the corporation whose Securities are being offered, or a corporation under the Control of the aforesaid corporation (the terms “Control” and “Securities” in this definition shall have the meaning ascribed to them in the Securities Law).

1.5 A Portfolio Manager as defined in Section 8(b) of the Regulation of Investment Advice, Investment Marketing and Portfolio Management Law, 1995 (the “Investment Advice Law”), who is purchasing Securities for his own account or for the account of customers which qualify as Exempt Investors.

1.6 An Investment Adviser or an Investment Marketer, as such terms are defined in section 7(c) of the Investment Advice Law, who is purchasing Securities for its own account.

1.7 A Stock Exchange Member (as such term is defined in the Securities Law referring to a member of a stock exchange that holds a license issued pursuant to the Securities Law) purchasing Securities for its own account or for clients who qualify as Exempt Investors.

1.8 An Underwriter (as such term is defined in the Securities Law), qualified in accordance with Section 56(c) of the Securities Law who is purchasing Securities for its own account.

1.9 A Venture Capital Fund, which means a corporation primarily engaged in investments in other corporations which are engaged, at the time of the investment, in research and development or in the production of innovative or high technology products or processes, and where the risk of such investment is typically higher than the risk involved in other investment.

  1. A corporation that is owned exclusively by Sophisticated Investors.

  2. A corporation, except for a corporation that was incorporated for the purpose of purchasing Securities in a specific offer, whose equity exceeds fifty (50) million NIS. [For this purpose “equity” shall mean – the equity of the corporation within its meaning under generally accepted accounting standards that apply to the corporation, provided that if in accordance with such standards it includes Non-Controlling Interests (within the meaning of such term under the standards and interpretations accepted by the International Accounting Standard Board), the Non-Controlling Interest will be deducted.]

  3. An individual who fulfils one of these criteria:

4.1 The aggregate value of the liquid assets (“liquid assets” – cash, deposits, financial assets, as defined in the Investment Advice Law, and traded securities) owned by him exceeds NIS 8,364,177;

4.2 His individual income during each of the last two years exceeds NIS 1,254,627, or the income of the family unit (“family unit” – an individual and his family living with him, or when one’s livelihood is dependent on the other) of which he is a member exceeds NIS 1,881,940;

4.3 The aggregate value of the liquid assets owned by the individual exceeds NIS 5,227,610, and his income during each of the last two years exceeds NIS 627,313 or the income of the family unit of which he is a member exceeds NIS 940,969.

Professional Investor Definition

Professional investor as defined under Cayman Islands Law is:

  • a “sophisticated person” (being a person (a) regulated by the Cayman Islands Monetary Authority or a recognized overseas regulatory authority, (b) whose securities are listed on a recognized securities exchange, or (c) who by virtue of knowledge and experience in financial and business matters is reasonably to be regarded as capable of evaluating the merits of a proposed transaction and participates in a transaction with a value or in amounts of at least US$100,000 (or its equivalent in any other currency) in each single transaction);
  • a “high net worth person” (being (a) an individual whose net worth is at least US$1 million (or its equivalent in any other currency), or (b) any individual that has any assets of not less than US$5 million (or its equivalent in any other currency));
  • a person specified in paragraph 2 of the Fourth Schedule to the Securities Investment Business Act (As Revised) of the Cayman Islands (being a person carrying on securities investment business exclusively for one or more of the following classes of person: (a) a “sophisticated person”; (b) a “high net worth person”; or (c) a company, partnership or trust of which the shareholders, unit holders or limited partners are one or more persons falling within (a) or (b), and who has a registered office or a place of business in the Cayman Islands for which services are provided by a person licensed to provide such services);
  • an exempted or ordinary non-resident company registered under the Companies Act (As Revised) of the Cayman Islands, or a foreign company registered under Part IX of the Companies Act (As Revised) of the Cayman Islands, a foreign limited partnership registered under section 42 of the Exempted Limited Partnership Act (As Revised) of the Cayman Islands or any such company acting as general partner of a partnership registered under section 9(1) of the Exempted Limited Partnership Act (As Revised) of the Cayman Islands, or any director or officer of the same acting in such capacity;
  • a limited liability partnership registered under the Limited Liability Partnership Act (As Revised) of the Cayman Islands,
  • a limited liability company registered under the Limited Liability Companies Act (As Revised) of the Cayman Islands; and
  • the trustee of any trust registered or capable of registration under Section 74 of the Trusts Act (As Revised) of the Cayman Islands acting in such capacity.

Professional Investor Definition

“Professional Investor” under the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong) (the “SFO”) and its subsidiary legislation) means:

(a) any recognised exchange company, recognised clearing house, recognised exchange controller or recognised investor compensation company, or any person authorised to provide automated trading services under section 95(2) of the SFO;

(b) any intermediary, or any other person carrying on the business of the provision of investment services and regulated under the law of any place outside Hong Kong;

(c) any authorized financial institution, or any bank which is not an authorised financial institution but is regulated under the law of any place outside Hong Kong;

(d) any insurer authorized under the Insurance Ordinance (Cap. 41 of the Laws of Hong Kong), or any other person carrying on insurance business and regulated under the law of any place outside Hong Kong;

(e) any scheme which-

(i) is a collective investment scheme authorised under section 104 of the SFO; or

(ii) is similarly constituted under the law of any place outside Hong Kong and, if it is regulated under the law of such place, is permitted to be operated under the law of such place,

or any person by whom any such scheme is operated;

(f) any registered scheme as defined in section 2(1) of the Mandatory Provident Fund Schemes Ordinance (Cap. 485 of the Laws of Hong Kong), or its constituent fund as defined in section 2 of the Mandatory Provident Fund Schemes (General) Regulation (Cap. 485A of the Laws of Hong Kong), or any person who, in relation to any such registered scheme, is an approved trustee or service provider as defined in section 2(1) of that Ordinance or who is an investment manager of any such registered scheme or constituent fund;

(g) any scheme which-

(i) is a registered scheme as defined in section 2(1) of the Occupational Retirement Schemes Ordinance (Cap. 426 of the Laws of Hong Kong); or

(ii) is an offshore scheme as defined in section 2(1) of that Ordinance and, if it is regulated under the law of the place in which it is domiciled, is permitted to be operated under the law of such place,

or any person who, in relation to any such scheme, is an administrator as defined in section 2(1) of that Ordinance;

(h) any government (other than a municipal government authority), any institution which performs the functions of a central bank, or any multilateral agency;

(i) except for the purposes of Schedule 5 to the SFO, any corporation which is-

(i) a wholly owned subsidiary of-

(A) an intermediary, or any other person carrying on the business of the provision of investment services and regulated under the law of any place outside Hong Kong; or

(B) an authorized financial institution, or any bank which is not an authorised financial institution but is regulated under the law of any place outside Hong Kong;

(ii) a holding company which holds all the issued share capital of-

(A) an intermediary, or any other person carrying on the business of the provision of investment services and regulated under the law of any place outside Hong Kong; or

(B) an authorized financial institution, or any bank which is not an authorised financial institution but is regulated under the law of any place outside Hong Kong; or

(iii) any other wholly owned subsidiary of a holding company referred to in subparagraph (ii); or

(j) any person of a class which is prescribed by rules made under section 397 of the SFO for the purposes of this paragraph as within the meaning of this definition for the purposes of the provisions of the SFO, or to the extent that it is prescribed by rules so made as within the meaning of this definition for the purposes of any provision of the SFO.

The first of such classes of additional “professional investor”, under the Securities and Futures (Professional Investor) Rules (Cap. 571D of the Laws of Hong Kong), are:

(k) any trust corporation (registered under Part VIII of the Trustee Ordinance (Cap. 29 of the Laws of Hong Kong) or the equivalent overseas) having been entrusted under the trust or trusts of which it acts as a trustee with total assets of not less than HK$40 million or its equivalent in any foreign currency at the relevant date (see below) or-

(i) as stated in the most recent audited financial statement prepared-

(A) in respect of the trust corporation; and

(B) within 16 months before the relevant date;

(ii) as ascertained by referring to one or more audited financial statements, each being the most recent audited financial statement, prepared-

(A) in respect of the trust or any of the trust; and

(B) within 16 months before the relevant date; or

(iii) as ascertained by referring to one or more custodian (see below) statements issued to the trust corporation-

(A) in respect of the trust or any of the trusts; and

(B) within 12 months before the relevant date;

(l) any individual, either alone or with any of his associates (the spouse or any child) on a joint account, having a portfolio (see below) of not less than HK$8 million or its equivalent in any foreign currency at the relevant date or-

(i) as stated in a certificate issued by an auditor or a certified public accountant of the individual within 12 months before the relevant date; or

(ii)  as ascertained by referring to one or more custodian statements issued to the individual (either alone or with the associate) within 12 months before the relevant date;

(m) any corporation or partnership having-

(i) a portfolio of not less than HK$8 million or its equivalent in any foreign currency; or

(ii) total assets of not less than HK$40 million or its equivalent in any foreign currency, at the relevant date, or as ascertained by referring to-

(iii) the most recent audited financial statement prepared-

(A) in respect of the corporation or partnership (as the case may be); and

(B) within 16 months before the relevant date; or

(iv) one or more custodian statements issued to the corporation or partnership (as the case may be) within 12 months before the relevant date; and

(n) any corporation the sole business of which is to hold investments and which at the relevant date is wholly owned by any one or more of the following persons-

(i) a trust corporation that falls within the description in paragraph (k);

(ii) an individual who, either alone or with any of his or her associates on a joint account, falls within the description in paragraph (k);

(iii) a corporation that falls within the description in paragraph (m);

(iv) a partnership that falls within the description in paragraph (m).

For the purposes of paragraphs (k) to (n) above:

  • “relevant date” means the date on which the advertisement, invitation or document (made in respect of securities or structured products or interests in any collective investment scheme, which is intended to be disposed of only to professional investors), is issued, or possessed for the purposes of issue;
  • “custodian” means (i) a corporation whose principal business is to act as a securities custodian, or (ii) an authorised financial institution under the Banking Ordinance (Cap. 155 of the Laws of Hong Kong); an overseas bank; a corporation licensed under the SFO; or an overseas financial intermediary, whose business includes acting as a custodian; and
  • “portfolio” means a portfolio comprising any of the following (i) securities; (ii) certificates of deposit issued by an authorised financial institution under the Banking Ordinance (Cap, 155 of the Laws of Hong Kong) or an overseas bank; and (iii) except for trust corporations, cash held by a custodian.

Institutional Investor / Accredited Investor Definition

An institutional investor as defined in Section 4A of the SFA and Securities and Futures (Classes of Investors) Regulations 2018 is:

(a) the Singapore Government;

(b) a statutory board as may be prescribed by regulations made under section 341 of the SFA, as prescribed in the Second Schedule of the Securities and Futures (Classes of Investors) Regulations 2018;

(c) an entity that is wholly and beneficially owned, whether directly or indirectly, by a central government of a country and whose principal activity is —

(i) to manage its own funds;

(ii) to manage the funds of the central government of that country (which may include the reserves of that central government and any pension or provident fund of that country); or

(iii) to manage the funds (which may include the reserves of that central government and any pension or provident fund of that country) of another entity that is wholly and beneficially owned, whether directly or indirectly, by the central government of that country;

(d) any entity —

(i) that is wholly and beneficially owned, whether directly or indirectly, by the central government of a country; and

(ii) whose funds are managed by an entity mentioned in sub‑paragraph (c);

(e) a bank that is licensed under the Banking Act 1970;

(f) a merchant bank that is licensed under the Banking Act 1970;

(g) a finance company that is licensed under the Finance Companies Act 1967;

(h) a company or co‑operative society that is licensed under the Insurance Act 1966 to carry on insurance business in Singapore;

(i) a company licensed under the Trust Companies Act 2005;

(j) a holder of a capital markets services licence;

(k) an approved exchange;

(l) a recognised market operator;

(m) an approved clearing house;

(n) a recognised clearing house;

(o) a licensed trade repository;

(p) a licensed foreign trade repository;

(q) an approved holding company;

(r) a Depository as defined in section 81SF of the SFA;

(s) a pension fund, or collective investment scheme, whether constituted in Singapore or elsewhere;

(t) a person (other than an individual) who carries on the business of dealing in bonds with accredited investors or expert investors;

(u) a designated market‑maker as defined in paragraph 1 of the Second Schedule to the Securities and Futures (Licensing and Conduct of Business) Regulations;

(v) a headquarters company or Finance and Treasury Centre which carries on a class of business involving fund management, where such business has been approved as a qualifying service in relation to that headquarters company or Finance and Treasury Centre under section 43D(2)(a) or 43E(2)(a) of the Income Tax Act 1947;

(w) a person who undertakes fund management activity (whether in Singapore or elsewhere) on behalf of not more than 30 qualified investors;

(x) a Service Company (as defined in regulation 2 of the Insurance (Lloyd’s Asia Scheme) Regulations) which carries on business as an agent of a member of Lloyd’s;

(y) a corporation the entire share capital of which is owned by an institutional investor or by persons all of whom are institutional investors;

(z) a partnership (other than a limited liability partnership within the meaning of the Limited Liability Partnerships Act 2005) in which each partner is an institutional investor.

An accredited investor as defined in Section 4A of the SFA and Securities and Futures (Classes of Investors) Regulations 2018 is:

(i)  an individual —

(A) whose net personal assets exceed in value $2 million (or its equivalent in a foreign currency) or such other amount as the Authority may prescribe in place of the first amount;

(B) whose financial assets (net of any related liabilities) exceed in value $1 million (or its equivalent in a foreign currency) or such other amount as the Authority may prescribe in place of the first amount, where “financial asset” means —

(BA) a deposit as defined in section 4B of the Banking Act 1970;

(BB) an investment product as defined in section 2(1) of the Financial Advisers Act 2001; or

(BC) any other asset as may be prescribed by regulations made under section 341; or

(C) whose income in the preceding 12 months is not less than $300,000 (or its equivalent in a foreign currency) or such other amount as the Authority may prescribe in place of the first amount;

(ii)  a corporation with net assets exceeding $10 million in value (or its equivalent in a foreign currency) or such other amount as the Authority may prescribe, in place of the first amount, as determined by —

(A) the most recent audited balance sheet of the corporation; or

(B) where the corporation is not required to prepare audited accounts regularly, a balance sheet of the corporation certified by the corporation as giving a true and fair view of the state of affairs of the corporation as of the date of the balance sheet, which date must be within the preceding 12 months;

(iii) A trustee of a trust which all the beneficiaries are accredited investors; or

(iv) A trustee of a trust which the subject matter exceeds S$10 million; or

(v) An entity (other than a corporation) with net assets exceeding S$10 million (or its equivalent in a foreign currency) in value. “Entity” includes an unincorporated association, a partnership and the government of any state, but does not include a trust; or

(vi) A partnership (other than a limited liability partnership) in which every partner is an accredited investor; or

(vii) A corporation which the entire share capital is owned by one or more persons, all of whom are accredited investors.

Continuation solutions encompass a host of transaction types in which a GP secures interim liquidity and/or additional primary capital for their LPs in a strongly performing asset, or set of assets, that the GP will continue to own and control. Specifically, they include continuation funds, new funds created by GPs for the purpose of acquiring the asset(s) that continue to be managed by the same GP and capitalized by one or several secondary buyers, or equity recapitalizations involving a direct equity or structured equity investment into a portfolio company. These transactions can also include a parallel investment from the GP’s latest fund into that same pool of assets (a “cross-fund trade”).