Sophisticated Investor
/ˈsɒfɪstɪˌkeɪtɪd ɪnˈvɛstər/
Definitions
- (n.) An individual or entity recognized by securities law as having sufficient knowledge and financial expertise to engage in high-risk investment transactions without the need for regulatory protections.
The fund is only open to sophisticated investors who understand the risks involved.
- (n.) A person or institution that meets specific financial thresholds or experience criteria set by regulators to qualify for exemptions from certain disclosure requirements.
Under the Securities Act, sophisticated investors may receive private placement memoranda instead of full prospectuses.
Forms
- sophisticated investor
- sophisticated investors
Related terms
See also
Commentary
The term varies by jurisdiction but commonly underpins exemptions in securities regulation; precise qualification criteria should be checked in the applicable legal framework.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.