We need to info to conduct KYC and to determine if the investments on Equivesto are suitable for you.
What is ‘Know Your Customer’ (KYC)?
In Canada, all financial companies offering investments are required to complete KYC and build a detail profile of each customer. Banks, Financial Advisers, Robo-advisers, Investment Professionals, Exempt Market Dealers (who offer investments in private companies), even discount brokerages like Questrade or Scotia iTrade are all required to complete some form of KYC.
KYC allows the financial company to review each client’s situation and confirm which products the company has are suitable for that client. With so many financial products available to investors, regulations place the onus on the financial firm, rather than investors themselves, to make the determination which products fit the clients needs (understanding their own financial products is called ‘Know Your Product’).
Equivesto only offers one type of financial investment product, direct investment in smaller private companies via equity crowdfunding. As such, when we complete our KYC, it is to determine whether equity crowdfunding is suitable for you at the time you apply to the site. If equity crowdfunding is not deemed a suitable investment product for you, Equivesto determines not to provide access to the platform to you. This KYC process also helps us determine what type of investor account best suits you.
Once we make a determination that equity crowdfunding is suitable for you, we are not required to review that determination every time you decide to participate in a campaign, therefore it is important that you update the information you have provided to Equivesto with changes to any information that might affect that determination, such as marriage, family growth, job change or loss or income change.
These are some of the subject areas we review as part of our KYC:
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Investment knowledge
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Investment risk profile
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Investment time horizon
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Understanding of the risks involved
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Ability to absorb investment losses