Compliance

Defining Professional Investors: Focus On Dubai, Singapore And Hong Kong

Chris Hamblin, Compliance Matters, Editor, 6 November 2013

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TOO MUCH TROUBLE?

In Eastern UK-influenced jurisdictions and elsewhere, one of the
common features of the regulatory rules that surround ‘market professionals’
who are also high-net-worth investors is their complexity.
It is absolutely vital for the bank in question to get the classification
process right and private banks and asset management firms often
get it wrong. It is also important to note that good regulatory compliance
is no bar to the bank in question being sued for negligence
for giving the high-net-worth client sub-standard advice. Yet another
complicating factor is the fact that rich individuals the world over are
notoriously reluctant to receive waivers through the post and send
replies back in the right manner and in the right time-frame. The
same goes for the various reports they have to handle. Private banks
and fund firms might conclude that the classification of a customer
as a ‘professional client/investor’ or an ‘expert investor,’ however
prestigious it may sound, is more trouble than it is worth.

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