An Accredited Investor (AI) is someone who is deemed by the law to be financially savvy and monetarily equipped to take on riskier investments.
If such an individual opts in to be treated as an Accredited Investor by a financial institution, he or she will usually have access to a wider range of investment products that are generally unavailable to non-Accredited Investors.
To be an Accredited Investor in Singapore, you have to fulfill the criteria set out in the Securities and Futures Act (SFA):
1. You have net personal assets that exceed $2 million in value (or its equivalent in a foreign currency). But If you include your primary residence in the calculation, your primary residence can only contribute up to $1 million; or
2. You have financial assets (net of any related liabilities) that exceed $1 million in value (or its equivalent in a foreign currency); or
3. Your income in the preceding 12 months is not less than $300,000 (or its equivalent in a foreign currency).
– John stays in a fully-paid bungalow valued at $5m (but it is to be counted as $1m), and has $1m worth of shares in his CDP account. He qualifies as an AI according to (1).
– Mary has a total of $1m in multiple bank savings accounts. She also qualifies as an AI, according to (2).
– Leslie earned a total $300k in the past 12 months. From (3), she can opt in to be an AI.