Hi
QQ, Interactive Brokers asked me to confirm my investor status.
“The answers you provided in your account application indicate that you are qualified as an Accredited Investor (as defined in Rule 501(a) of Regulation D of the Securities Act of 1933)”
what would be the consequences of this? Any impact on Swiss investor status?
Regulatory status has nothing to do with tax status.
They’re making sure you can afford the risk and don’t need to be protected against yourself/other financial actors.
(Threshold is usually based on qualifications or wealth)
Honestly if you don’t need it, I wouldn’t ask for it. You can always change it later.
Thanks! They kind of asked me, the task is pending in my inbox and I cannot see how to cancel it. But of course I can just ignore it.
Do you know if there are any “advantages” coming with such a status?
It removes some safe guards on US products you can trade (respectively cannot trade as regular retail investor), incl. OTC stuff or private equity. If I remember correctly, it’s not about risk per se, but whether the product is SEC regulated. You’d have to online search which instruments exactly.
A few years ago some people reported here that they couldn’t trade US ETF anymore due to brokers applying PRIIPS regulation. That would be an equivalent for most European markets for such a status.
From Certificate of Smart Investor by Matt Levine
Crudely speaking the rules in the US are:
1.Ordinary retail investors are only allowed to invest in “public” investments — stocks, mutual funds, exchange-traded funds, etc. — that are subject to strict disclosure requirements, so that the investors know what they’re getting into.
2.“Accredited” investors — ones who are sophisticated and able to bear risk — are allowed to invest in whatever they want, without any mandatory disclosure; the accredited investors are assumed to be able to negotiate disclosure and governance terms for themselves, to make their own decisions about how much information they need, and to bear the risk of losing money.
3.The main way you get accredited is by making more than $200,000 per year ($300,000 for married couples), or having a net worth of more than $1 million.