Alternative Investment Fund Investors may be classified as Retail Investors, Well Informed Investors or Professional Investors
MiFID II Classification Framework
Based on the revised Markets in Financial Instruments Directive II and related implementing measures (together “MIFID II”), as incorporated in 144(I)/2007 Law which provides for the Provisions of Investment Services, the Exercise of Investment Activities, the Operation of Regulated Markets and other related matters an Alternative Investment Fund should classify its investors into one of the following three classifications:
- Retail Investors, which are afforded the highest level of protection;
- Well Informed Investors, which benefit from an intermediate level of protection;
- Professional Investors, which benefit from an intermediate level of protection;
These respective investor classes reflect the fact that investors have different levels of knowledge and experience, and therefore, the level of regulatory protection differs. Such differences in the regulatory protection under MiFID II cover a broad range of topics including, among others, investor disclosure requirements, rules for executing investor orders, and assumptions which can be made regarding investors by an Alternative Fund.
