The government has published their response to the consultation which proposed reforms to the Financial Promotion Order exemptions for high net worth individuals and sophisticated investors. The consultation ran from 15 December 2021 to 9 March 2022.
The government intends to update the exemptions by:
- Increasing the financial thresholds to be eligible for the high net worth individual exemption to:
- Income of at least £170,000 in the last financial year; or
- Net assets of at least £430,000 throughout the last financial year.
- Amending the criteria to be eligible for the self-certified sophisticated investor exemption by:
- Removing the criterion of having made more than one investment in an unlisted company in the previous two years; and
- Increasing the company turnover required to satisfy the ‘company director’ criterion to £1.6m (i.e. directors of companies with at least £1.6m 18 turnover will remain eligible for the self-certified sophisticated investor exemption).
- Requiring businesses to provide details of themselves in any communications made using the exemptions;
- Updating the title of the certified high net worth individual exemption by removing ‘certified’;
- Updating the high net worth individual and self-certified sophisticated investor statements;
- Applying these changes to the equivalent exemptions for promotion of collective investment schemes.
New financial promotions made under the Financial Promotions Order from 31 January 2024, even if made to individuals already promoted to under the current exemptions, will need to be made in accordance with the updated exemptions.
The full publication can be read here.