Some investments on Odin are only open to professional investors. This is a legal requirement under UK rules (the FCA's Conduct of Business rules, COBS 3) and EU rules (MiFID II). It is not an Odin policy.
The law treats investors as either retail or professional. Retail investors get the most protection. Professional investors are expected to understand the risks and make their own decisions, so they get less protection. In return, they can access a wider range of investments.
You can be a professional investor in one of two ways:
1. Per se professional: you qualify automatically because of what your organisation is.
2. Elective professional: you ask to be treated as a professional, and you meet a set of qualifying criteria.
Per se professional investors
Only organisations can be per se professionals. Individuals cannot. Your organisation qualifies if it is one of the following:
- A bank, building society or other credit institution
- An investment firm
- Any other financial institution that is authorised or regulated
- An insurance company
- A collective investment scheme (a fund), or the company that manages it
- A pension fund, or the company that manages it
- A commodity or commodity derivatives dealer
- A "local": a member of a futures or options exchange that trades on its own account
- Another institutional investor whose main business is investing in financial instruments, including companies set up to securitise assets
- A national or regional government, a public body that manages public debt, a central bank, or an international organisation such as the World Bank, IMF, ECB or EIB
- A large undertaking that meets at least two of these three tests:
- Total balance sheet of €20,000,000 or more - Net turnover of €40,000,000 or more - Own funds (i.e. net assets) of €2,000,000 or more
If your organisation is on this list, you just confirm you are a per se professional investor. There are no further criteria.
Elective professional investors
If you are an individual, or an organisation that isn't on the list above, you can ask to be treated as a professional investor. To qualify, you must pass two tests.
Test 1: Knowledge and experience
We need to be reasonably sure that you can make your own investment decisions and that you understand the risks. You'll show this by completing our investor appropriateness assessment.
Test 2: At least two of these three conditions
- Trading frequency: over the last four quarters, you made an average of at least 10 transactions of significant size per quarter on the relevant markets.
- Portfolio size: your portfolio of financial instruments, including cash deposits, is worth more than €500,000.
- Work experience: you work, or have worked, in the financial sector for at least one year, in a professional role that needed knowledge of the kind of investments you plan to make.
If you're applying to invest via an organisation (eg. a trust or holding company you control), we look at the person who makes investment decisions for it.
What you need to do
On Odin, you handle the three actions below in a short online form.
1. Tell us in writing that you want to be treated as a professional investor 2. Read our warning about the protections you will lose 3. Confirm in writing, separately from your request, that you understand what you are giving up
What protections do you lose?
As a professional investor:
- We are not required to warn you about the specific risks of each investment
- We do not have to check whether an investment is suitable for you
- You will not receive some of the risk warnings and information that non-professional investors get
- Some rules about how deals are carried out ("best execution") may apply differently
What if things change?
Your declaration stays valid until your situation changes. If anything changes that could affect it (for example, your portfolio falls below €500,000), you must tell us. This is your responsibility.
What if I don't qualify?
You won't be able to invest in deals that are only open to professional investors. You can still use Odin and invest in other opportunities you qualify for.
Rules may change
The FCA has proposed replacing the elective tests for UK investors with a single test of £10 million in investable assets. These changes are not yet in force. We'll update this page if they come in.
