• Other excluded communications – any person to whom promotion would be exempt under the Ucis order (for example, investment professionals).
Some of the categories above are the same as the old Cobs 4.12 but there are gaps. In order to achieve the FCA’s aim that Ucis may only be marketed to high net-worth and sophisticated individuals current category 2 has been removed and it will no longer be possible for firms to market to customers solely based their being a client of the firm for whom the firm has taken reasonable steps to ensure the scheme is suitable. Marketing can only take place if the individual customer is in another category – that is, high net-worth or sophisticated.
For financial advisers providing advice or dealing services to retail the key exemptions will be those based on the net-worth of their customers. This means putting in place robust and appropriate procedures to ensure that the exemptions are applied properly, as well as undertaking a preliminary assessment of suitability for the customer where that is required.
• A high net-worth investor is a person with an annual income of £100,000 or more or net investable assets of £250,000 or more. However, the FCA has made it clear that it intends to review these thresholds (which have been copied across from the Ucis order) to ensure that they are appropriate. It is likely that any review would be upwards to reflect increases in salary rates over the years since the Ucis order came into force.
• A certified sophisticated investor is a person who has a certificate in the required form confirming that they have been assessed by a firm as being sufficiently knowledgeable to understand the risk of NMPIs and who has signed a prescribed statement including accepting that these investments may result in significant risk of loss of the investment.
• A self-certified investor is an individual who has signed a statement in the required terms to the effect that they can receive promotions of NMPIs and that they understand the risks. A person can only self-certify if they have been in a business angels’ network, have made more than one unlisted company investment in the last two years, work in private equity or corporate finance or are currently a director of a company with an annual turnover of at least £1m.
