Classification

In order to invest on our platform, you need to complete a short questionnaire (whereby you will be classified as a “restricted investor”), or you may choose to self certify as a “high net worth” or a “sophisticated investor”. This shows us that you have the judgement and understanding to appreciate the risks involved in investing on our platform.

All clients must be classified as either a high net worth, sophisticated, self-certified sophisticated or restricted investor and, until you have done so, nothing on our website is intended as an offer capable of acceptance by you or us.

Classification occurs when you create a London House Exchange account. You can check your classification by navigating to 'Settings'. On the Personal Details tab, you’ll find your current investor classification in the ‘About you’ section.

 In order to classify, investors must complete the relevant certification relating to their classification selection. 

High Net Worth

Certified high net worth investors qualify as such because at least one of the following applies to them.

The investor:

(a) Has, throughout the financial year immediately preceding the date of classification, an annual income to the value of £100,000 or more (does not include any one-off pension withdrawals);

(i) If yes, the investor must specify their income (as defined above) to the nearest £10,000 in the last financial year.

(b) Held, throughout the financial year immediately preceding the date of classification, net assets to the value of £250,000 or more. Net assets for these purposes do not include:

- The property which is their primary residence or any money raised through a loan secured on that property;

- Any rights of theirs under a qualifying contract of insurance; or

- Any benefits (in the form of pensions or otherwise) which are payable on the termination of their service or on their death or retirement and to which they are (or their dependants are), or may be, entitled.

(i) If yes, the investor must specify their net assets (as defined above) to the nearest £100,000 in the last financial year.

The investor accepts that the investments to which any promotions will relate may expose them to a significant risk of losing all of the money or other property invested. They must be aware that it is open to them to seek advice from an authorised person who specialises in advising on non-mainstream pooled investments / speculative illiquid securities (as applicable).

Sophisticated Investor

A classification as a sophisticated investor means:

(i) They can receive promotional communications made by a person who is authorised by the Financial Conduct Authority which relate to investment activity in non-mainstream pooled investments and speculative illiquid securities;

(ii) the investments to which the promotions will relate may expose them to a significant risk of losing all of the property invested.

An investor can qualify as a sophisticated investor on the basis that in the last three years they have received a certificate from an authorised firm confirming that they understand the risks involved with the relevant type of investment.

Self-certified Sophisticated Investor

By self-certifying as a sophisticated investor the investor must understand that this means:

(i) They can receive promotional communications made by a person who is authorised by the Financial Conduct Authority which relate to investment activity in non-mainstream pooled investments and speculative illiquid securities;

(ii) the investments to which the promotions will relate may expose them to a significant risk of losing all of the property invested.

An investor is a self-certified sophisticated investor because at least one of the following applies:

(a) They are a member of a network or syndicate of business angels and have been so for at least the last six months prior to the date of classification;

(b) They have made two or more investments in an unlisted company in the two years prior to the date of classification;

(c) They are working, or have worked in the two years prior to the date of classification, in a professional capacity in the private equity sector, or in the provision of finance for small and medium enterprises; and

(d) They are currently, or have been in the two years prior to the date of classification, a director of a company with an annual turnover of at least £1 million.

The investor accepts that the investments to which the promotions will relate may expose them to a significant risk of losing all of the money or other property invested. They must be aware that it is open to them to seek advice from someone who specialises in advising on non-mainstream pooled investments / speculative illiquid securities (as applicable).

Restricted Investor

Restricted investors are those investors which do not classify as high net worth or sophisticated, but can proceed to invest on our platform by successfully completing a short questionnaire which shows to us that they have understood our product and the associated risks of investing with London House Exchange.

Investors qualify as restricted investors on the basis that:

(a) In the past twelve months, they have invested less than 10% of their net assets in high-risk investments 

(i) If yes, the investor must specify roughly what percentage of their net assets are invested in high-risk investments

.(b) In the next twelve months, they intend to limit their investment in high-risk investments to less than 10% of their net assets

(i) If yes, the investor must specify roughly what percentage of their net assets they intend to invest in high-risk investments

24-hour cool down period 

As of 1st February 2023, FCA regulation requires that all new clients that sign up to use the platform will be required to wait 24 hours from the point of sign-up to proceed to make an investment. Investors can fund their account during this period and learn more about our exchange.

What if my circumstances have changed?

All our investors are promoted to re-classify on an annual basis. This prompt occurs when an investor next logs in following their reclassification anniversary.

If your circumstances have changed since you last classified click here to review and amend via 'Settings' in your London House Exchange account.