INTHEBLACK June 2025 - Magazine - Page 19
Current thresholds for
sophisticated and wholesale
investors, set in 2001, may
soon qualify a larger portion
of Australians, raising
concerns about investor
protection.
Words Gary Anders
The Parliamentary Joint
Committee on Corporations
and Financial Services
recommends periodic reviews
and objective criteria for
sophisticated investor tests,
but no immediate changes
are expected.
THE AUSTRALIAN PARLIAMENTARY
Joint Committee on Corporations and
Financial Services recently made two
recommendations following an almost
year-long inquiry into whether the current
rules that determine who can be classed
as “sophisticated” and “wholesale” investors
remain relevant.
Yet, after extensive hearings and
receiving almost 130 submissions, the list
of recommendations contained in
the committee’s final report relating to the
existing wholesale investor and wholesale
client tests effectively add up to no changes
for the foreseeable future.
CPA Australia’s joint
submission with other
industry bodies advocates
for higher thresholds
and more consumer
protections, citing inflation
and potential risks.
Recommendation one is “That the
government consider establishing
a mechanism for periodic review of
the operation of the wholesale investor
and client tests; and that any such
mechanism include mandatory requirements
for engagement and consultation with
Australia’s investment industry.”
Recommendation two is “That, subject
to a period of stakeholder consultation,
the government amend the Corporations
Act 2001 to remove the subjective elements
of the sophisticated investor test (SIT)
and introduce objective criteria relating to
the knowledge and experience of the investor.”
intheblack.cpaaustralia.com.au 19
