Qualified investor: definition and eligibility

There are various investment opportunities available to the general public, such as investing in publicly traded stocks with a brokerage account and meeting specific criteria to purchase investment properties.

Some investment options are not accessible to most individuals, such as investing in a foreign Investment Fund (FIEX), even with sufficient disposable income.

The CVM (Securities Commission) permits only qualified investors who meet specific criteria, such as a minimum investment amount and knowledge of the financial market, to participate in certain types of investments.

This article will explain the concept of a qualified investor and the eligibility criteria for becoming one. Happy learning!

What does a qualified investor refer to?

A qualified investor is someone with a level of financial expertise who can assess investment opportunities consistently. To be classified as a qualified investor, specific criteria must be met. Learn more about this below.

How can one become a certified investor?

To qualify as an investor, one must meet the criteria set by CVM Instruction No. 539, which specifies that a qualified investor is an individual or entity with financial investments ranging from R$1 million to R$10 million, and must also provide written confirmation of their qualified investor status.

They are recognized as eligible investors under CVM Instruction No. 539 dated November 13, 2013, Article 9-B.

I am a professional investor.

Natural or legal individuals with financial investments exceeding R$ 1,000,000 and who confirm their status as a qualified investor in writing according to Annex 9-B.

Individuals who have passed technical qualification exams or hold CVM-approved certifications necessary for registering as autonomous investment agents, portfolio administrators, analysts, and securities consultants with their own funds.

Investment clubs are allowed to have their portfolios managed by qualified investors.

An investor can qualify without investing R$1 million as long as they pass an approved certification exam recognized by the CVM.

What does the Securities Commission refer to?

The primary goal of the Securities Committee is to regulate, oversee, and enhance the Brazilian securities market to provide investors with safety and predictability.

What do qualified investors target with their investments?

Only qualified investors are permitted to access certain investments, such as CRAs (Agribusiness Receipt Certificates) as per CVM regulations.

Real Estate Investment Funds (FIIs) and debentures are also limited to qualified investors.

Some of the primary financial products are only available to individuals who meet the qualifications set by the CVM.

• Debentures, Certificates of Real Estate Receivers (CRI), and Agribusiness (CRA) are securities.
• Investment funds with overseas investments (FIEX).
• Investment Fund focused on Creditor Rights (FIDC);
• Multimarket funds.
• Participation Investment Funds (FIP)
• Real estate investment funds – FIIs specifically tailored for this type of investor.

Several of these investment categories also offer bonds for individual investors.

Becoming a certified investor – what are the steps?

To be considered a qualified investor without having R$1 million, you must pass technical qualification exams from international institutions or ANBIMA.

Discover what certifications are needed to become an accredited investor.

• ANBIMA’s CEA certification is for investment specialists.
• ANBIMA’s CGA certification in management.
• CFP stands for Certified Financial Planner, which is a professional specializing in financial planning.
• CNPI – Certified Investment Professional.
• CFA III stands for Chartered Financial Analyst.
• Autonomous Investment Agent (AAI) is affiliated with the National Association of Brokers and Distributors of Securities and Securities, Exchange and Goods (Ancord).

To reach a successful outcome and qualify as an investor, thorough preparation and extensive knowledge of the financial market are crucial. This is essential in order to attain the desired level of success.

Discover the top books here to excel in the financial market.

Benefits of being a certified investor

Being a qualified investor provides exclusive access to specialized financial products.

The qualified investor can benefit from restricted financial products related to overseas assets and lower operating fees.

The qualified investor needs to be mindful of the increased risks and volatility associated with restricted and highly profitable financial products compared to typical financial products.

The introduction of qualified investors categories aims to relax suitability standards and prevent investors with limited market knowledge from taking on risks that are unsuitable for their financial situation, according to A. Barreto Menezes Cordeiro, author of “Directorate of Securities and Capital Markets.”

Is it necessary to be a certified investor in order to receive favorable returns?

High-net-worth individuals have numerous investment options available to them, but being a certified investor is not necessary to achieve a favorable return on investment.

Having a mix of fixed and variable income investments can assist investors in generating the necessary returns to fund their retirement and future financial needs.

Keep an eye on investment opportunities to invest wisely and achieve good returns, regardless of your financial situation.

Reflect on where to diversify your investment portfolio by asking the following questions and reviewing your investor profile.

• Do you conduct proper research to understand the liquidity of your investment?
• Should you spend the money indulgently or hold out for a potential improvement in your financial situation?
• Are you ready to deal with the challenges posed by political, economic, and social circumstances during times of crisis and recession?
• Does your investor profile permit you to engage in high-risk or low-risk investment opportunities?

Get to know your investor profile by reading this article to understand which investments are best suited for you.

Summary

This article explains the position of a qualified investor and highlights the key benefit of accessing various financial products, some of which are exclusive.

It offers greater profit potential than typical investments and allows for diversification of portfolios, but it also involves investment risks.

If you are not yet ready to become a qualified investor but seek successful investment outcomes, it is beneficial to be aware of the leading crowdfunding investment platform in Brazil.