Who is a ‘Wholesale Client’?

This page provides a summary of the criteria for being classified as a ‘Wholesale Client’ for the purposes of receiving financial products and services in Australia, as defined in the Corporations Act 2001 (Cth) (“the Act”).

Finalto (Australia) Pty Ltd (‘Finalto’) is required by law to classify all clients as either ‘Retail’ or ‘Wholesale’. This classification determines the level of regulatory protection you receive. The default classification is ‘Retail Client’ unless you meet one of the specific tests to be classified as a ‘Wholesale Client’.

You may qualify as a Wholesale Client if you meet one or more of the following tests:

1. The Individual Wealth Test

This test applies if the financial service is not provided for use in connection with a business. You must provide a certificate from a qualified accountant, dated within the last two years, confirming you have:

• A gross income of $250,000 or more per annum for each of the last two financial years; OR
• Net assets of at least $2.5 million.

2. The ‘Sophisticated Investor’ Test

Finalto (Australia) Pty Ltd may classify you as a ‘sophisticated investor’ if we are satisfied on reasonable grounds that you have previous experience in using financial services and investing in financial products that allows you to assess:

• The merits of the product or service;
• The value of the product or service;
• The risks associated with holding the product;
• Your own information needs; and
• The adequacy of the information given by us.

This classification also requires you to sign a written acknowledgment of the warnings and loss of protections before any financial service is provided.

3. The Professional Investor Test

You are automatically considered a wholesale client if you are a ‘professional investor’ under the Act. This includes, among others:

• An Australian Financial Services (AFS) Licensee.
• A body regulated by APRA (e.g., a bank or general insurer), with limited exceptions.
• A trustee of a superannuation fund with net assets of at least $10 million.
• A person who controls gross assets of at least $10 million.
• A listed entity or a related body corporate of a listed entity.

4. The Business Use Test

The financial product or service is provided for use in connection with a business that is not a ‘small business’. A ‘small business’ is defined as a business that employs fewer than 20 people, or fewer than 100 people if the business includes the manufacturing of goods.

Important Notice Regarding Contracts for Difference (CFDs)

Please be aware that under Australian regulations, the test relating to the price or value of the financial product (i.e., an investment of $500,000 or more) cannot be used to classify a client as wholesale for the purpose of trading CFDs.

Disclaimer: This information is a summary of complex legal provisions and does not constitute legal advice. Your final classification is subject to providing satisfactory evidence to Finalto (Australia) Pty Ltd (‘Finalto’) and our internal verification processes. Finalto reserves the right to request further information to verify your status.