Changes to the high net worth individual and self-certified sophisticated investor exemptions - What does this mean for you?

Summary

Implementation Date: 31 January 2024

Treasury Consultation Response: Financial promotion exemptions for high net worth individuals and sophisticated investors - Consultation response - November 2023

Who is affected?

• Authorised and unauthorised persons communicating financial promotions who rely on the high net worth individual or self-certified sophisticated investor exemptions.
• Investors who currently meet the requirements for and rely on the high net worth individual or self-certified sophisticated investor exemptions.

What has changed?

Changes to the financial thresholds for high net worth individuals

Requirements before 31 January 2024 In order to qualify as a high net worth individual an individual must have:

• a net income of at least £100,000 in the last financial year; or
• net assets of at least £250,000 throughout the last financial year.

Requirements after 31 January 2024 In order to qualify as a high net worth individual an individual must have:

• a net income of at least £170,000 in the last financial year; or
• net assets of at least £430,000 throughout the last financial year.

The method for calculating income and assets remains unchanged after the implementation date.

Changes to the requirements for self-certified sophisticated investors Requirements before 31 January 2024 In order to qualify as a self-certified sophisticated investor an individual must have:

• made more than one investment in an unlisted company in the previous two years;
• worked in a professional capacity in the private equity sector, or in the provision of finance for small and medium enterprises, in the last two years;
• been the director of a company with an annual turnover of at least £1million in the last two years; or
• been a member of a network or syndicate of business angels for more than six months and are still a member

Requirements after 31 January 2024 In order to qualify as a self-certified sophisticated investor an individual must have:

• worked in a professional capacity in the private equity sector, or in the provision of finance for small and medium enterprises, in the last two years;
• been the director of a company with an annual turnover of at least £1.6million in the last two years; or
• been a member of a network or syndicate of business angels for more than six months and are still a member

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If you have any queries in relation to this article or compliance with the financial promotion regime, do not hesitate to contact our Financial Services Regulation team to discuss what support we can provide.