What is the purpose of the knowledge test for admission and the simulation to bear loss?

We try to keep them brief, but these questionnaires are there to protect the investor. It's a measure brought in by the European Crowdfunding Regulation, mandatory for all EU platforms that, like Goparity, provide crowdlending services, and applicable only to Non-Sophisticated Investors.

Immediately after creating an account, investors with a Non-Sophisticated profile are presented with a multiple-choice questionnaire so that we can assess whether and which services are suitable for you, as well as your ability to withstand losses. These are questions about your financial situation, experience and knowledge of financial and investment products, investment objectives, as well as your basic understanding of the risk inherent in investing in general and the risk associated with investing in crowdlending.

We will ask you to answer these questions every two years and it is essential that you answer on the basis of correct and up-to-date information. 

If, on the basis of your answers, Goparity believes that investing certain amounts is not suitable for your investor profile, we will provide you with a risk warning. Should you wish to invest amounts that we consider too high for your profile, we will also remind you of these risks of loss of capital.      

The maximum recommended capacity for Non-Sophisticated Investors to bear capital losses is 10 % of their net worth

Net worth = (net annual income) + (total net assets) - (annual financial commitments)

Net annual income: the total annual income received by the non-sophisticated investor after deduction of associated costs and charges, social contributions and taxes, i.e., the total annual income shall be the sum of any labour income, any interests on bank deposits or other debt instruments, any dividend payments or any real estate income, whereby:

  • ‘labour income’ shall include wages, unemployment benefits and pension payments received by the non-sophisticated investor, with the exclusion of exceptional payments;
  • ‘interests on bank deposits or other debt instruments’ shall include payments on bank deposits or other debt instruments received by the non-sophisticated investor during the preceding calendar year, with the exclusion of exceptional payments;
  • ‘dividend payments’ shall include payments received by the prospective non-sophisticated investor by virtue of holding shares or units of a collective investment scheme or other equity instruments, with the exclusion of any capital gains realised by selling all or part of such holding;
  • ‘real estate income’ shall include any payment received in relation to the renting of real estate properties, with the exclusion of any capital gain realised by selling all or part of such real estate properties.

Total liquid assets: the sum of the total cash held by a non-sophisticated investor on saving accounts and current accounts, and the value of assets that can be easily and swiftly converted into cash, including:

  • ‘saving products’ that can be turned into cash within a maximum of 30 calendar days;
  • ‘financial instruments negotiated on a regulated market’ (within the meaning of Article 4(1), point (21), of Directive 2014/65/EU);
  • ‘shares and units of collective investment schemes’ offering redemption rights on at least a weekly basis.

The following assets shall not be considered as liquid assets:

  • real estate properties;
  • amounts paid to a pension scheme for occupational retirement purposes;
  • company shares which are not freely redeemable or transferable, including previous crowdfunding investments.

Annual financial commitments: all the expenditures for which a non-sophisticated investor has undertaken a commitment in relation to a given calendar year, including:

  • alimony and child support payments;
  • rent and mortgage payments;
  • repayments of loans;
  • payments of insurance premiums;
  • utilities expenses payments, including those made to cover electricity, heating and water expenses;
  • service subscription payments;
  • income tax and property taxes.

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