There are two different routes to qualifying as a Sophisticated Investor; self-certification OR certification via a certificate from a professional firm. Both routes are detailed below:
A Certified Sophisticated Investor is an individual who has:
- A written certificate, signed within the last 36 months, by a firm confirming they have been assessed by that firm as sufficiently knowledgeable to understand the risks associated with engaging in investment activity in non-mainstream pooled investments;
- Signed, within the last 12 months, a statement in the following terms:
o I make this statement so that I can receive promotional communications which are exempt from the restriction on promotion of non-readily realisable securities. The exemption relates to certified sophisticated investors and I declare that I qualify as such.
o I accept that the investments to which the promotions will relate may expose me to a significant risk of losing all of the money or other property invested. I am aware that it is open to me to seek advice from an authorised person who specialises in advising on non-mainstream pooled investments.
When investing via Floww, if you select this as your categorisation, you may be required to provide a copy of your written certificate to our internal Compliance team as part of our standard due diligence checks.
A Self-Certified Sophisticated Investor is an individual to whom at least ONE of the following criteria applies:
- I am a member of a network or syndicate of business angels and have been so for at least the last 6 months;
- I have made more than 1 investment in an unlisted company in the previous 2 years;
- I am working, or have worked in the past 2 years, in a professional capacity* in the private equity sector, or in the provision of finance for small and medium enterprises;
- I am currently or have been in the previous 2 years, a director of a company with an annual turnover of at least £1M.
Additionally, you are willing to sign the below declaration that you are a self-certified sophisticated investor for the purposes of the restriction on promotion of non-readily realisable securities and understand that this means:
- I can receive promotional communications made by a person who is authorised by the Financial Conduct Authority which relate to investment activity in non-readily realisable securities and;
- the investments to which the promotions will relate may expose me to a significant risk of losing all of the property invested;
- I accept that the investments to which the promotions will relate may expose me to a significant risk of losing all of the money or other property invested. I am aware that it is open to me seek advice from someone who specialises in advising on non- readily realisable securities.
When investing via Floww, if you chose to categorise yourself as a Self-Certified Sophisticated Investor, you may be required to provide evidence on how you meet these requirements to our internal Compliance team as part of our standard due diligence checks.
To review the full guidance on acceptable Retail Investor types please refer to the COBS 4.12.6 section of the FCA handbook.
*Professional capacity can include for example:
Senior position in the Financial Sector;
Director, CEO, CFO;