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FCA PS13/3, HNWI and Sophisticated Investors
PS13/3 is often mentioned when property investment opportunities are discussed, but it is important to start with the right description. PS13/3 is not itself an Act or regulation. It is an FCA policy statement from 2013 concerning restrictions on the retail distribution of certain unregulated collective investment schemes and close substitutes.
The wider financial-promotion regime comes principally from the Financial Services and Markets Act 2000, the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, FCA rules and subsequent amendments. The rules are more complicated than a simple test of whether somebody describes themselves as a high net worth or sophisticated investor.
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Property investment promotions: do not rely on a simple loan or JV rule
The old version of this page said, in effect, that a straight loan was fine while a joint venture was not. That is not a safe rule. The legal position depends on the investment or arrangement being promoted, who is making the communication, how it is communicated and who receives it.
The FCA continues to warn about high-risk unregulated investments used to finance property development. In particular, its current guidance discusses unregulated loan notes and mini-bonds. A product being described as a loan does not, by itself, put its promotion outside the financial-promotion regime.
Likewise, the fact that a recipient qualifies for an exemption does not automatically make every promotion lawful. The conditions of the relevant exemption and any other rules applying to the product and promoter still matter.
High net worth individual exemption
The current high net worth individual statement uses two alternative financial tests. In the last financial year the individual must have had:
- annual income of £100,000 or more
- and/or net assets of £250,000 or more
For this purpose the net-assets test excludes the individual’s main home and loans secured on it, pension rights or pension withdrawals, and rights under qualifying insurance contracts. The prescribed statement and the promoter’s obligations should always be checked against the current legislation before relying on the exemption.
The relevant investor statement must be current when the communication is made. FCA guidance explains the 12-month requirement; it is therefore better to think in terms of the current statutory statement rather than an informal annual ‘PS13/3 check’.
Self-certified sophisticated investor exemption
The current self-certified sophisticated investor test requires the individual to complete the prescribed statement and satisfy at least one of the statutory criteria. These include:
- membership of a network or syndicate of business angels for at least the previous six months
- working, or having worked within the previous two years, in a professional capacity in private equity or in the provision of finance for small and medium-sized businesses
- being, or having been within the previous two years, a director of a company with annual turnover of at least £1 million
- having made two or more investments in an unlisted company within the previous two years
The wording of the statement matters. The criteria were changed in early 2024 and then amended again, so an old form copied from a website should not be treated as current. The FCA Handbook guidance on financial promotions is a useful starting point.
Certified sophisticated investors are different
There is also a separate exemption for a certified sophisticated investor. This is not the same as self-certification. Broadly, an authorised person must certify that the investor has sufficient knowledge to understand the risks associated with the relevant description of investment, and the investor must also sign the required statement. The FCA Handbook and Article 50 of the Financial Promotion Order should be checked for the current conditions.
Where to check the current rules
The key point is not to use this page as a substitute for regulatory advice. Financial-promotion law changes and different exemptions apply to different communications and investments. Useful primary sources include the Financial Promotion Order 2005, the 2024 amending Order and the current FCA Handbook.
Planning Geek does not provide financial, investment or financial-promotion legal advice. If you are proposing to promote or raise money for a property investment, obtain advice from a suitably qualified financial-regulatory lawyer or authorised professional before advertising the opportunity.
PS13/3 Page Updated: 27th August 2026
