Professional Investor
Professional Investor is defined in section 9 of the Corporations Act 2001 (Cth). It captures entities that are treated as capable of protecting their own interests by virtue of what they are, rather than by certification. Unlike the sophisticated investor test, no qualified accountant certificate is required.
Why It Matters
This category is frequently overlooked because attention defaults to the certificate route. Where an investor is a professional investor, the certificate machinery is simply not needed, which removes a step and a two year expiry to monitor. Correctly identifying the category also matters for record keeping, since the evidence required is entirely different.
How It Works
- Holders of an Australian Financial Services Licence.
- Bodies regulated by APRA, other than a superannuation trustee in certain circumstances, and other regulated financial institutions.
- Trustees of superannuation funds, approved deposit funds, pooled superannuation trusts or public sector superannuation schemes with net assets of at least $10 million.
- Persons who control at least $10 million, including anything held by an associate or under a trust the person manages.
- Listed entities and their related bodies corporate, exempt public authorities, and certain foreign equivalents also fall within the definition.
Common Use Cases
- Institutional investors subscribing into a wholesale credit fund
- Large SMSFs and family offices meeting the $10 million control threshold
- Licensee to licensee dealings where no certificate is needed
Related Switchboard Resources
- Sophisticated Investor
- Wholesale Client
- Wholesale Investor
- Qualified Accountant
- Managed Investment Scheme
Is a professional investor the same as a sophisticated investor?
No. They are separate categories. A sophisticated investor qualifies on wealth or income evidenced by an accountant certificate. A professional investor qualifies by status, such as holding an AFS licence or controlling at least $10 million, and needs no certificate.
Does the $10 million include assets held through a trust?
The control test extends to amounts held by an associate or under a trust the person manages, so it is broader than assets held personally in the person's own name.
Can an SMSF be a professional investor?
A superannuation trustee can fall within the definition where the relevant net asset threshold of at least $10 million is met. Below that, an SMSF would usually need to rely on the certificate route or another wholesale pathway instead.
General information only. This page explains a term used in Australian financial services law. It is general information, not legal or financial product advice, and does not take account of your objectives, financial situation or needs. Definitions and thresholds change. Confirm the current position on the Federal Register of Legislation or with a qualified professional before relying on it.