Investors

Generally speaking, an investor is a person who purchases investment products with or without the intervention of a third party, such as a bank or an investment services firm authorised by the FSC or delegates the management of his money to such a person.

There are mainly two kinds of investors — professional and non-professional.

Professional investors are considered to have substantial experience in financial matters and markets, and also substantial know-how and knowledge about investments and investing, and are therefore capable of investing with little or no assistance from an investment services firm. A professional investor would require little or no guidance or protection.

On the other hand, there are investors who would prefer to have the assistance of an investment services firm prior to investing. Such non-professional investors would require an investment services firm to help them understand the characteristics, risks and potential rewards of investing.

There may be investors who have invested in particular types of products for a number of years. Whilst such investors are more experienced than others, this does not necessarily mean that such investors are professional. The level of protection given to a new investor therefore would generally not differ much from that afforded to an investor with some previous experience. Non-professional investors are often referred to as retail investors.

This guide is for non-professional or retail investors, and more generally for those persons who want to know more about investing.

Investment services

Investment services is a general term used to describe a whole range of activities related to investments. It includes, for example, the provision of advice on investing in a range of securities, such as shares, bonds, units in collective investment schemes or life assurance based policies and savings vehicles. It can also include the purchasing of such securities on your own behalf and the management of your investment portfolio on either a non-discretionary or discretionary basis. In Gibraltar, a person or entity — the investment services firm — may only provide such services if they are authorised by the FSC. You should invest your money by seeking assistance only from authorised investment services firms.

Is the FSC authorised to provide investment services?

No. The FSC is prohibited from providing investment services to the public. The FSC is defined as a regulator and its role is to licence, regulate and supervise those persons or entities that provide such services. The FSC is therefore not in a position to provide you with any advice on investments.

How do I make sure that the investment services firm is authorised by the FSC ?

When a company is authorised by the FSC, a licence or letter of authorisation is issued which sets out all those services the investment services firm is allowed to provide. You can, for your peace of mind, request to see this from your investment services firm.

An investment services firm is also required to state that he is authorised by the FSC to conduct investment services on his letterheads, business cards, stationery and advertisements.

To find out whether a firm is authorised you can contact the FSC directly, or check the FSC’s website .