Target Investors Classification
In this step, you will specify which categories of investors will be allowed to participate in your Security Token Offering (STO). Investor classification is a core regulatory determinant that affects how your offering is structured, which legal exemptions apply, what disclosures are required, and what onboarding processes must be implemented.
Clearly defining your target investors ensures that your offering remains legally compliant and is accessible only to eligible participants under the laws of each target jurisdiction.
Select Your Target Investor Categories
Retail Investors Non-professional individuals with limited investment experience or financial thresholds. Subject to strict investor protection rules, suitability checks, and often excluded from private placements unless qualified through specific exemptions.
Accredited / Qualified Investors Individuals or entities that meet certain financial or professional standards (e.g., net worth, income, or licensing). Eligible for participation in private placements with fewer disclosure and filing requirements. Recognized under frameworks such as Reg D (U.S.), Professional Clients (EU), or Qualified Investors (Switzerland).
Institutional Investors Professional entities such as investment funds, banks, insurers, and pension funds. Typically have full access to offerings with minimal investment restrictions. Require detailed due diligence and risk disclosures but benefit from more streamlined onboarding processes.
Why This Matters
Determines which securities exemptions or regulatory frameworks apply (e.g., Reg D, Prospectus Regulation, FinSA)
Influences documentation, such as investor agreements and risk disclosures
Impacts onboarding requirements: KYC, AML, suitability checks, and investment limits
Affects marketing and solicitation rules (e.g., public vs. private offering restrictions)
Defines secondary trading limitations and resale rights (e.g., lock-up periods)
Note: Your investor classification choice will shape legal documentation, offering exemptions, and your ability to advertise or publicly promote the token. It also determines your ongoing compliance obligations and reporting frequency.
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