An accredited investor, a qualified client, and a qualified purchaser are all terms used in the context of securities regulation in the United States. These classifications govern which investors can access certain investment opportunities.
INVESTOR CLASSIFICATIONS • INVESTMENTS • 3(C)1 & 3(C)7 FUNDS
Why do investor classifications matter?
Individuals who meet the requirements of these classifications can participate in offerings that aren’t registered with the SEC. The reason for this is that the SEC believes the risks of these opportunities may be greater than what is allowed in public markets which are regulated by the SEC. Participation in these opportunities can provide significant diversification to investor portfolios as well as enhanced returns.
Accredited investors have access to 3(c)1 funds while qualified clients and qualified purchasers can typically invest in both 3(c)1 and 3(c)7 funds.
Accredited Investor
An accredited investor is a person or entity that meets certain financial criteria that allows them to participate in certain types of private securities offerings. Specifically, an accredited investor is someone who:
If an investor wants to invest through a trust, the trust must meet all of the following requirements.
Qualified Client
A qualified client is a type of investor that meets certain financial criteria, which allows them to invest in certain private funds that have the ability to charge a performance fee. To be considered a qualified client you must meet one of the following criteria:
Qualified Purchaser
A qualified purchaser is a type of investor that meets certain financial criteria, which allows them to invest in certain types of investment funds that are exempt from registration under the Investment Company Act of 1940. Specifically, a qualified purchaser is someone who:
Summary
In summary, while there are some similarities between the terms “accredited investor,” “qualified client,” and “qualified purchaser,” each term has a specific meaning and is used in a different regulatory context. An accredited investor is able to participate in certain private securities offerings, while a qualified client is eligible to receive certain types of investment advice as well as participate in investments that charge a performance fee, and a qualified purchaser is able to invest in certain types of investment funds that are exempt from registration under the Investment Company Act of 1940.
Learn how Citizen Mint reviews investment opportunities by downloading our Investment Philosophy and Process white paper.
Sign up to download Citizen Mint’s Investment Process & Philosophy white paper.
Join our impact investor community and be notified of the latest industry news!
*Financial projections or returns displayed on the website are estimated predictions of performance only, are hypothetical, are not based on actual investment results and are not guarantees of future results.
Disclosures: No communication by Citizen Mint Inc. or any of its affiliates (collectively, “Citizen Mint”), through this website or any other medium, should be construed or is intended to be a recommendation to purchase, sell or hold any security or otherwise to be investment, tax, financial, accounting, legal, regulatory or compliance advice. Nothing on this website is intended as an offer to extend credit, an offer to purchase or sell securities or a solicitation of any securities transaction.
Any financial projections or returns shown on the website are estimated predictions of performance only, are hypothetical, are not based on actual investment results and are not guarantees of future results. Estimated projections do not represent or guarantee the actual results of any transaction, and no representation is made that any transaction will, or is likely to, achieve results or profits similar to those shown. In addition, other financial metrics and calculations shown on the website (including amounts of principal and interest repaid) have not been independently verified or audited and may differ from the actual financial metrics and calculations for any investment, which are contained in the investors’ portfolios. Any investment information contained herein has been secured from sources that Citizen Mint believes are reliable, but we make no representations or warranties as to the accuracy of such information and accept no liability therefor.
Private placement investments are NOT bank deposits (and thus NOT insured by the FDIC or by any other federal governmental agency), are NOT guaranteed by Citizen Mint or any other party, and MAY lose value. Neither the Securities and Exchange Commission nor any federal or state securities commission or regulatory authority has recommended or approved any investment or the accuracy or completeness of any of the information or materials provided by or through the website. Investors must be able to afford the loss of their entire investment.
Sign up now to learn the benefits of private market impact investing for financial advisors
Sign up now to access private market investments on Citizen Mint’s platform.
