Wednesday 26 June 2019 by FIIG Securities Education (basics)

Are you a wholesale client, but don’t know it?

This article was originally published on 12 July 2016 and modified on 27 June 2019.

Asset values have been increasing over the last six to twelve months. You may now qualify as a wholesale client, which would allow access to a greater range of bonds, including FIIG originated deals at first issue and foreign currency bonds 


Wholesale clients can tap into a range of benefits that are not available to retail clients. This article explains the benefits and how you can achieve wholesale status.

There are three main benefits of becoming wholesale certified:

  1. We can show you credit ratings. This is an important distinction – one that is enforced by ASIC and which we must abide by.
  2. You can access the entire universe of bonds. Information memorandums that set out the terms and conditions of a particular bond often stipulate that the bond can only be made available to wholesale clients. While this doesn’t apply to all bonds, it does to many. In other instances, we may limit availability of bonds to retail clients for a range of reasons.
  3. Access at initial issue to FIIG originated high yield bonds. These bonds are only available to wholesale investors for the first year. 

The difference between retail and wholesale (including professional and sophisticated) clients is important from a disclosure perspective, as a result of ASIC’s Information Sheet 99.

ASIC’s Information Sheet 99

Information Sheet Number 99 states that a credit rating must not be disclosed in a manner that is intended to (or could reasonably be regarded as being intending to) influence a retail client in making a decision in relation to a particular financial product or class of financial products. This means that financial intermediaries (such as brokers, advisors and financial planners) are not able to disclose the credit rating of products or issuers to retail clients. But they can provide that information to wholesale clients. This anomaly has arisen because since 1 January 2010 ASIC requires credit rating agencies (such as Standard & Poor’s, Moody’s and Fitch) to hold an Australian Financial Services Licence and to date the ratings agencies have only obtained licences with a wholesale client authorisation.

FIIG as a fixed income broker must comply with Information Sheet 99. So, it’s important that you understand if you are a retail or wholesale client, as it will affect the credit rating information that we are allowed to disclose to you. To assist in this regard, we have provided definitions below.

Retail clients

Essentially, everyone is a retail client unless they satisfy one of the requirements to be classified as a wholesale client under section 708(8) or (11), section 761G(5), (6), (6A) or (7) or section 761GA of the Corporations Act 2001.

Wholesale clients

Wholesale clients comprise sophisticated investors and professional investors under the Corporations Act 2001.

1. Sophisticated investor

A sophisticated investor is one or more of the following:

  • A person or entity that has obtained an accountant’s certificate dated no more than two years ago that the client:
    • (a) Has net assets of at least $2.5 million, or
    • (b) a gross income for each of the last two financial years of at least $250,000; and
  • A person or entity that is controlled by a person or entity that meets the requirements of (a) or (b) above
  • A person or entity who invests where the purchase price of the product is at least $500,000

2. Professional investor

A professional investor is defined as one or more of the following:

  • A financial services licensee
  • A body regulated by APRA, other than a trustee of any of the following (within the meaning of the Superannuation Industry (Supervision) Act 1993):
    • A superannuation fund 
    • An approved deposit fund
    • A pooled superannuation fund
    • A public sector superannuation scheme
  • A body registered under the Financial Corporations Act 1974
  • The trustee of:
    • A superannuation fund
    • An approved deposit fund
    • A pooled superannuation trust, or
    • A public sector superannuation scheme within the meaning of the Superannuation Industry (Supervision) Act 1993 And the fund, trust or scheme has net assets of at least $10 million
  • A person or entity who controls gross assets of at least $10 million (including any amount held by an associate or under a trust that the person manages)
  • A listed entity or related body corporate of a listed entity
  • An exempt public authority
  • A body corporate or an unincorporated body that:
    • Carries on the business of investment in financial products, interests in land or other investments, and
    • For those purposes, invests funds received (directly or indirectly) following an offer or invitation to the public, within the meaning of section 82 of the Corporations Act 2001, the terms of which provided for the funds subscribed to be invested for those purposes
  • A foreign entity that, if established or incorporated in Australia, would be covered by one of the preceding paragraphs


On 8 August 2014, ASIC withdrew QFS 150 which means SMSFs can now be classified as wholesale if they meet the sophisticated investor test as set out above.

A copy of the ASIC release is available here.External link - opens in a new window


It’s important to ascertain if you are a wholesale client and, if so, to let us know so we can ensure you receive proper disclosure of credit ratings of products and issuers. If you’re unsure, please speak to your dealer.

A factsheet and application form on becoming a wholesale investor is available here.External link - opens in a new window

We have also provided information hereExternal link - opens in a new window for SMSFs wanting to qualify as a wholesale client/sophisticated investor.

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