Accredited investors (AI) are classified according to net worth and income.

As defined in Section 4A of the Securities and Futures Act (Chapter 289), an accredited investor means

(i) an individual —

• (A) whose net personal assets exceed in value S$2 million (or its equivalent in a foreign currency) or such other amount as the Authority may prescribe in place of the first amount; or
• (B) whose income in the preceding 12 months is not less than $300,000 (or its equivalent in a foreign currency) or such other amount as the Authority may prescribe in place of the first amount;

(ii) a corporation with net assets exceeding $10 million in value (or its equivalent in a foreign currency) or such other amount as the Authority may prescribe, in place of the first amount, as determined by —

• (A) the most recent audited balance-sheet of the corporation; or
• (B) where the corporation is not required to prepare audited accounts regularly, a balance-sheet of the corporation certified by the corporation as giving a true and fair view of the state of affairs of the corporation as of the date of the balance-sheet, which date shall be within the preceding 12 months;

(iii) the trustee of such trust as the Authority may prescribe, when acting in that capacity; or

(iv) such other person as the Authority may prescribe.

Because of their accredited status, these high net worth individuals enjoy access to certain financial products that are not sold to retail investors.

This is because some products from financial institutions, such as unit trusts and structured products, are made available only to these accredited or sophisticated investors. The ‘accredited’ status implies that the investor can withstand a higher level of monetary risk than the non-accredited investor.

Typically, the minimum investment amount for these products may start from at least $200,000.