5.1 Client Categorisation.
The FCA divides customers into three distinct categories: retail client, professional client, or eligible counterparty.
ShareIn have elected to classify all our clients as retail clients, which affords the highest level of investor protection. Owing to the nature of the investments available on our platforms, the FCA have defined only a limited subsection of retail clients who are eligible to invest in non-readily realisable securities such as those available on investment crowdfunding platforms.
Following the FCA’s Temporary Intervention Rules from 1st January 2020, and the rules becoming permanent as per 18th June 2020 announcement, Restricted investors are to be excluded from investment opportunities that are considered to be Speculative Illiquid Securities. However, ShareIn has taken a risk-based approach and does not allow these types of investments to be hosted on any of our Appointed Representatives sites.
Detailed information on client categories can be found in the ShareIn Client Categorisation Policy.
5.2 Appropriateness Testing.
In view of the nature of the investments made available via the AR platforms, it is necessary for prospective investors to demonstrate before they are able to invest that they understand the risks of investing. This is achieved by requiring investors to complete an appropriateness test. This has been put in place on each platform and this contains a number of multiple choice questions covering the key aspects of this type of investment.
The ShareIn technology includes an appropriateness test as a mandatory standard feature on all platforms. Answers provided to the appropriateness test – including a record of any failed tests – are maintained on the client record. Should a user on the platform fail their appropriateness test more than two times, they will be locked out the system. The user will only be allowed to re-sit this test when a member of the ShareIn Compliance team unblocks them to allow a re-sit