The Australian financial services regime recognises two different types of clients - wholesale and retail.


A person may fall within the definition of a wholesale client if, among other things, they are:


(a) a person purchasing a financial product or products (e.g. a regulated emissions unit, or a number of regulated emissions units), and the value of the product(s) is above the prescribed threshold (currently set by the Corporations Regulations at Australian dollars 500,000);


Note 1: For financial products deemed to be ‘investment products’ (including regulated emissions units and derivatives), the value of the product is worked out from either its market value or, if this is not relevant, the amount of money that stands in the client’s credit for that product.

Note 2: Where financial product advice is provided for more than one product at a time, the cumulative value of the products in question is taken into account in assessing whether a client is a retail client. A similar approach applies when a person is arranging for a dealing to take place.


(b) a person who is provided with another type of financial service related to a financial product such as regulated emissions units, where the value of the product is above the prescribed threshold (currently set by the Corporations Regulations at Australian dollars  500,000);


(c) a person with certified net assets of at least Australian dollars 2.5 million or a person who had a gross income for each of the past two financial years of at least Australian dollars  250,000; or


(d) a ‘professional investor’—this category includes Australian Financial Services (AFS) licensees, listed entities, banks and friendly societies, and other specified entities that may be presumed to have the expertise or access to professional advice to justify their being treated as wholesale client.


Some requirements in relation to the financial services regime apply only to ‘retail clients’ because it is recognised that ‘wholesale clients’ are in a better position to look after their own interests. For example, AFS licensees that provide financial services to retail clients must have in place dispute resolution and compensation arrangements.


Source: Australian Securities & Investments Commission Regulatory Guide 236 ‘Do I need an AFS licence to participate in carbon markets?’ May 2012 ($file/rg236-published-9-March-2012.pdf)



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