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Acredit investor
U.S. criteria
Canadian criteria
European Union
Qualified investor (UK)

Hedge fund 
Acquisition process
Asset vs. Share purchase
CBD
BOOT – BOT – TOT – DOT

 

Acredited investor:

A term used by the Securities and Exchange Commission (SEC) under Regulation D to refer to investors
who are 
financially sophisticated and have a reduced need for the protection provided by certain government filings. 
Accredited investors include individuals, banks, insurance companies, employee benefit plans, and trusts.
´Accredited Investor' 
In order for an individual to qualify as an accredited investor, he or she must accomplish at least one of the following:  
1) earn an individual income of more than $200,000 per year, or a joint income of $300,000, in each of the last two years
     and expect to reasonably maintain the same level of income. 
 
2) have a net worth exceeding $1 million, either individually or jointly with his or her spouse.  
3) be a general partner, executive officer, director or a related combination thereof for the issuer of a security being offered.  

These investors are considered to be fully functional without all the restrictions of the SEC.  
An employee benefit plan or a trust can be qualified as accredit investors is total assets are in excess of $5 million. 

Accredited investor is a term defined by various countries' securities laws that delineates investors permitted to invest
in certain types of higher risk investments including seed money, limited partnerships, hedge funds, private placements,
and angel investor networks. The term generally includes wealthy individuals and organizations such as banks,
insurance companies, significant charities, some corporations, endowments, and retirement plans.
 

In the United States, for an individual to be considered an accredited investor, he or she must have a net worth of at least
one million US dollars, not including the value of one's primary residence or have made at least $200,000 each year for the
last two years (or $300,000 together with his or her spouse if married) and have the expectation to make the same amount
this year." This rule came into effect in 1933 by way of the Securities Act of 1933.
  
In Canada, the same prerequisites apply,
however one's net worth must be a minimum of one million dollars not including 
the value of the principal residence. 

"The federal securities laws define the term accredited investor in Rule 501 of Regulation D and as amended by the 

Dodd-Frank Wall Street Reform and Consumer Protection Act as: 

a bank, insurance company, registered investment company, business development company, or small business
investment company;
 
an employee benefit plan, within the meaning of the Employee Retirement Income Security Act,
if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has
total assets in excess of $5 million;
 a charitable organization, corporation, or partnership with assets exceeding $5 million; 

a director, executive officer, or general partner of the company selling the securities; a business in which all the equity owners
are accredited investors;
 a natural person who has individual net worth, or joint net worth with the person's spouse, that exceeds
$1 million at the time of the purchase, excluding the value of their primary residence;
 a natural person with income exceeding
$200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and
a reasonable expectation of the same income level in the current year; or
 a trust with assets in excess of $5 million, not formed
to acquire the securities offered, whose purchases a sophisticated person makes."
 

Proposed new accredited investor class for hedge funds The U.S. Securities and Exchange Commission (SEC) has considered
a change to the definition of "accredited investor" to create a new class of potential investors: "accredited natural persons".
The proposed changes would stipulate that an "accredited natural person" must be both "accredited investors" under the existing
standards and also own not less than $2.5 million in investments (as currently defined in the Investment Company Act for
purposes of the Section 3(c)(7) exemption) on the date an investment is made. The $2.5 million test will be periodically
adjusted for inflation.
 

Canadian Criteria

An "Accredited Investor" (as defined in NI 45 106) is: 

a person registered under the securities legislation of a jurisdiction of Canada, as an adviser or dealer, other than a person
registered solely as a limited market dealer under one or both of the Securities Act (Ontario) or the Securities Act (Newfoundland
and Labrador); or
 
an individual registered or formerly registered under the securities legislation of a jurisdiction of Canada as
a representative of a person referred to in paragraph (a); or
 an individual who, either alone or with a spouse, beneficially owns
financial assets having an aggregate realizable value that before taxes, but net of any related liabilities, exceeds $1,000,000;
or
 an individual whose net income before taxes exceeded $200,000 in each of the two most recent calendar years or whose
net income before taxes combined with that of a spouse exceeded $300,000 in each of the two most recent calendar years
and who, in either case, reasonably expects to exceed that net income level in the current calendar year; or
 an individual who,
either alone or with a spouse, has net assets of at least $5,000,000; or
 a person, other than an individual or investment fund,
that has net assets of at least $5,000,000 as shown on its most recently prepared financial statements; or
 a trust company
or trust corporation registered or authorized to carry on business under the Trust and Loan Companies Act (Canada) or under
comparable legislation in a jurisdiction of Canada or a foreign jurisdiction, acting on behalf of a fully managed account
managed by the trust company or trust corporation, as the case may be; or
 an investment fund that distributes or has
distributed its securities only to (i) a person that is or was an accredited investor at the time of the distribution, (ii) a person
that acquires or acquired securities in the circumstances referred to in sections 2.10 of NI 45 106 [Minimum amount investment]
or 2.19 of NI 45 106 [Additional investment in investment funds], or (iii) a person described in paragraph (i) or (ii) that acquires
or acquired securities under section 2.18 of NI 45 106 [Investment fund reinvestment];
  a person acting on behalf of a fully
managed account managed by that person, if that person is registered or authorized to carry on business as an adviser
or the equivalent under the securities legislation of a jurisdiction of Canada or a foreign jurisdiction; or
 a person in respect
of which all of the owners of interests, direct, indirect or beneficial, except the voting securities required by law to be owned
by directors, are persons that are accredited investors (as defined in NI 45 106); or
 an investment fund that is advised by
a person registered as an adviser or a person that is exempt from registration as an adviser.
 

 

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:
  
the client has carried out transactions, in significant size (at least EUR 50,000), on the relevant market at an
average frequency of 10 per quarter over the previous four quarters;
 the size of the client's financial instrument portfolio,
defined as including cash deposits and financial instruments, exceeds EUR 500,000;
 the client works or has worked in
the financial sector for at least one year in a professional position which requires knowledge of the transactions or services
envisaged.
 

 

 

The Qualified Investor Register (QIR) 

 

Under the Prospectus Directive (PD) issuers/offerors are exempt from the obligation to produce a prospectus where offers
of securities are made only to Qualified Investors (QIs).
 

QIs are legal entities authorised to operate in the financial markets (e.g. investment firms and insurance companies),
governments, supranational institutions, as well as natural persons and Small and Medium sized Enterprises (SMEs)
that certify that they meet the required criteria.
 
The PD allows the FSA to maintain a register of QIs which must then be available to all issuers and offerors. The information
held on the Qualified Investor Register (QIR) is solely to facilitate the issuance of securities without the requirement to
publish a prospectus under the PD.
 

 

Natural Persons and SMEs can only be recognised as QIs if they meet the criteria specified below and are registered on the QIR. 

 QIs will be removed from the QIR annually (30 June) and so QIs must specifically request that their details appear on the 

new register every year. Amendments can be carried out at any time by contacting our Register Team. 

 

The following will help you register as a QI or obtain a copy of the QIR. 

 Natural persons seeking inclusion on the Qualified Investor Register 

 We rely on investors to self-certify. However, you must meet at least two
of the following three criteria to qualify for inclusion on the QIR:
 

 

You must have carried out transactions of a significant size (at least EUR 1,000) on securities markets at an average
frequency of, at least, ten per quarter for the last four quarters.
 

Your security portfolio exceeds EUR 0.5 Mn. 

You work – or have worked for at least one year – in the financial sector in a professional position which requires knowledge
of securities investment.
  
If you are unsure whether you meet the criteria we recommend that you seek advice before proceeding
with this application.
 

 

To apply to go on the register, use Application Form B below. This consists of both the application form and the self-certification form. 

Please note that the QIR is only available to issuers/offerors or their agents and exclusively for the purpose of making an offer of
securities to you as a QI. 
 

Should you have any questions regarding the QI certification process please email our Register Team. 

The application form should be returned to the Register Team, 25 The North Colonnade, Canary Wharf, London, E14 5HS. 

Application Form B 

Small and Medium Size Enterprises (SME) seeking inclusion on the Qualified Investor Register 

We rely on SMEs to self-certify. However, at least two of the following three criteria must be fulfilled to qualify for inclusion on the QIR: 

 

Average number of employees is less than 250. 

Total balance sheet does not exceed EUR 43,000,000. 

Annual net turnover does not exceed EUR 50,000,000. 

If you are unsure whether you meet the criteria we recommend that you seek advice before proceeding with this application. 

 

To apply to be placed on the QIR use Application Form B below.
This consists of both the application form and the self-certification form.
 

 

Please note that the QIR is only available to issuers/offerors or their agents and exclusively for the purpose of making
an offer of securities to you as a QI. 
 

Should you have any questions regarding the QI certification process please email our Register Team. 

The application form should be returned to the Register Team, 25 The North Colonnade, Canary Wharf, London, E14 5HS. 

 

Application Form B 

Issuers/Offerors seeking access to the Qualified Investor Register 

The information held on the QIR is to be used solely for issuing securities without publication of a prospectus 

(see the terms of consent in the application form for inclusion in the QIR and the terms of access in the application
form for access to the register).
 

The following information is included on the QIR for individuals: 

QI's name; 

QI unique reference number; 

a contact address (this can be the address of their representative/legal, financial or other adviser or a P.O. Box address)
or broker name and identification number with that broker.
 

The following information is included on the QIR for SMEs: 

 company name; 

contact name and position; and 

registered office address. 

To obtain a copy of the register please use Application Form C below. The QIR is provided on a spreadsheet and sent
out by email (no alternative available) and an administration charge applies (
£25 or £150 plus VAT, see application form
for details). If a QI removes themselves from the register within 31 days of us sending you a copy we will send you the
amended QIR.
 

 

Please note that using the information held on the QIR for any other purpose than to facilitate issuance of securities without
publication of a prospectus under the PD contravenes the Prospectus Rules under Part VI of FSMA and section 348 of FSMA
and may result in a fine or imprisonment or both.
 

 If you have any queries relating to the registration process or the use of the QIR please email our Register Team. 

The application form should be returned to the Register Team, 25 The North Colonnade, Canary Wharf, London, E14 5HS. 

 Application Form C 

 

 

A hedge fund is an investment fund that can undertake a wider range of investment and trading activities than other funds,
but which is only open for investment from particular types of investors specified by regulators. These investors are typically
institutions, such as pension funds, university endowments and foundations, or high net worth individuals. As a class, hedge
funds invest in a diverse range of assets, but they most commonly trade liquid securities on public markets. They also employ
a wide variety of investment strategies, and make use of techniques such as short selling and leverage.
 

Hedge funds are typically open-ended, meaning that investors can invest and withdraw money at regular, specified intervals.
The value of an investment in a hedge fund is calculated as a share of the fund's net asset value, meaning that increases
and decreases in the value of the fund's assets (and fund expenses) are directly reflected in the amount an investor can
later withdraw.
 

 

  

Asset vs. Share purchase

CBD

CBD is a common abbreviation for central business district. This part of a city is also commonly known as
downtown, or the city center. Central business districts are characterized by high-density development of office
buildings, often including government centers and transportation hubs. The "CBD office market" is the term for
demand for office real estate in a central business district. In most cities, the central business district represents
an important part of the local commercial real estate market.
 

 

BOOT – BOT – TOT – DOT 

BOOT (Build, Own, Operate, Transfer) includes a range of different models such as 
BOT    (Build, Operate, Transfer)
TOT    (Transfer, Operate, Transfer)
BOO   (Build, Own, Operate)
DOT    (Design, Operate, Transfer) etc.

 

 

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