Policies

Crowdbase client categorisation policy

Introduction

The purpose of this Client Categorisation Policy is to provide users with a clear understanding of how Crowdbase classifies and treats its clients in accordance with Regulation (EU) 2020/1503 on European Crowdfunding Service Providers (ECSPR). This policy outlines the different categories of investors and the corresponding levels of protection and obligations for each category.

Client Categories

Under ECSPR, Crowdbase classifies clients into two categories:

  1. Sophisticated Investors
  2. Non-Sophisticated Investors

These categories determine the level of investor protection measures that apply, in accordance with Article 21 of ECSPR.

Non-Sophisticated Investors

Non-sophisticated investors are retail investors who do not meet the criteria to be classified as sophisticated. By default, all investors are considered non-sophisticated unless they declare and qualify for sophisticated investor status.

Protections for Non-Sophisticated Investors

Non-sophisticated investors benefit from enhanced regulatory safeguards, including:

  • Entry Knowledge Test – Investors must complete a suitability assessment to determine their understanding of crowdfunding risks.
  • Simulation of Ability to Bear Loss – Investors may be asked to declare their financial situation to assess their ability to bear potential investment losses.
  • Additional Risk Warnings – Crowdbase provides enhanced risk disclosures, particularly if an investment surpasses 5% of an investor’s net wealth or if there are other campaign-specific risks.
  • Reflection Period – Non-sophisticated investors have a four-day reflection period during which they can withdraw their investment commitment without penalty.

💡 Note: Crowdbase does not impose investment limits. However, additional risk warnings may be triggered based on individual investor circumstances or campaign-specific factors.

Sophisticated Investors

Sophisticated investors are individuals or entities that meet specific criteria demonstrating their ability to understand investment risks and make informed decisions without additional regulatory safeguards.

To be classified as a sophisticated investor, an investor must meet at least two of the following criteria, as defined in Annex II of ECSPR:

  1. The investor has carried out significant transactions in capital markets (at least 10 transactions per quarter over the last four quarters).
  2. The investor has a financial instrument portfolio (including cash deposits and securities) exceeding €100,000.
  3. The investor works or has worked in the financial sector for at least one year in a professional position requiring knowledge of crowdfunding investments.

How to Request Sophisticated Investor Status

  • By default, all newly registered and verified investors are considered non-sophisticated.
  • Before investing in any campaign for the first time, investors will be asked to complete a declaration indicating whether they meet the criteria to be classified as sophisticated investors.
  • Investors who meet the criteria but still wish to be treated as non-sophisticated can choose to remain in the non-sophisticated category.
  • Crowdbase reserves the right to review the declaration and request additional supporting documents if necessary.

Implications of Sophisticated Investor Status

Sophisticated investors:

  • Do not receive the same level of regulatory protections as non-sophisticated investors.
  • Do not need to complete the entry knowledge test or simulation of ability to bear loss.

Client Categorisation Process

  • Upon registration and verification, all investors are initially categorised as non-sophisticated.
  • Before making their first investment, investors must declare whether they meet the criteria for sophisticated status.
  • Investors can request a change in categorisation at any time.
  • Crowdbase reserves the right to reassess and verify categorisations based on regulatory requirements.