What is the Entry Knowledge Test?
For investors, a new test is required, in conformity with Regulation 2020/1503 on European crowdfunding service providers for business, before their next investment. This test will consist of two parts:
- The entry knowledge test: this test includes questions on experience, knowledge, investment objectives and financial situation as well as understanding of investment risks (similar to those asked when investing in a bank).
- Loss-bearing capacity simulation: This simulation simulates the loss-bearing capacity, calculated at 10% of net assets.
These two steps have to be completed by non-sophisticated investors* only. Before inviting you to complete the entry knowledge test and the simulation, Spreds will ask you a question to determine whether you qualify as a sophisticated investor. Sophisticated investors will then not be required to complete the entry knowledge test and the loss-bearing capacity simulation.
No data provided during this test will be stored. Only the result of the test will be recorded.
Per Regulation 2020/1503, a sophisticated investor is an investor who possesses the awareness of the risks associated with investing in capital markets and adequate resources to undertake those risks without exposing itself to excessive financial consequences.