Quick answer
A security token is a financial instrument, so its marketing is governed by MiFID II (Directive 2014/65/EU) and, in Spain, by Law 6/2023 (LMVSI). MiFID II sorts investors into three categories: retail, professional and eligible counterparty. That classification determines the prospectus you need, the tests you must run and the size of the audience you can address.
The three investor categories
Regulatory protection is inverse to the sophistication the rules assume for each profile (Directive 2014/65/EU, Annex II).
| Category | Who qualifies | Protection |
|---|
| Retail | By default, any client that is neither professional nor eligible counterparty. Most individuals. | Highest |
| Professional | Financial institutions, large companies and those who request it while meeting the Annex II criteria. | Medium |
| Eligible counterparty | A subset of professionals (banks, investment firms, governments) in order-execution and reception services. | Lowest |
How a client becomes professional
There are two routes, both defined in Annex II of MiFID II and carried into the LMVSI:
- Per se professional. Credit institutions, investment firms, insurers, collective investment undertakings and their managers, and pension funds. Also large companies that exceed two of these three thresholds: a balance sheet of 20 million euros, net turnover of 40 million, or own funds of 2 million.
- Professional on request. A retail client may waive part of their protection if they meet at least two of three criteria: carrying out transactions of significant size at a meaningful frequency (around ten per quarter over the previous four quarters), a portfolio of financial instruments and cash above 500,000 euros, or one year of professional experience in the financial sector in a role that requires knowledge of these transactions.
The firm must assess and document that this is met. Reclassification is not automatic, and the investor may ask to return to the higher-protection category.
What changes depending on who you sell to
The recipient profile shapes three core aspects of the offering:
| Aspect | Professionals / qualified only | Includes retail |
|---|
| Prospectus | Usually exempt, as the offer targets qualified investors only. | Requires a CNMV-approved prospectus, unless another exemption applies. |
| Client tests | Lighter. | Suitability (advice and management) or appropriateness (other services). |
| Reach | Smaller universe, with less friction and cost. | Larger universe, with more obligations. |
The qualified-investor exemption sits alongside others: offers to fewer than 150 persons per Member State other than qualified investors, a minimum ticket of 100,000 euros per investor, or staying below the exemption threshold, which the EU Listing Act (Regulation (EU) 2024/2809) raises to 12 million euros, with a national option of 5 million (Regulation (EU) 2017/1129, arts. 1 and 3).
The nuance that avoids the costliest mistake
Because the token is a security, its advertising and marketing follow MiFID II rather than the crypto-asset regime. CNMV Circular 1/2022 on crypto-asset advertising does not apply, since that rule covers crypto-assets that are not financial instruments. Mistaking a tokenised security for a crypto-asset, or the other way round, is the most common source of regulatory trouble in this field (Regulation (EU) 2023/1114, art. 2.4).
A decision framework for issuers
Before structuring the offer, it helps to answer three questions: who is your target investor (institutional, family office or individual), what minimum ticket you will set, and through which channel you will distribute. Targeting qualified investors only makes the process faster and cheaper in exchange for a narrower universe. Opening up to retail multiplies reach but adds a prospectus and reinforced conduct obligations. The choice also affects later liquidity and the token secondary market.
If you are structuring an issuance and are unsure which investor to address, book a consultation and we will review it with you.
FAQ
Can I sell security tokens to individuals in Spain?
Yes, as long as you meet the retail-protection obligations: a prospectus unless exempt, a suitability or appropriateness test, and pre-contractual information. It is not forbidden, it is more regulated.
Are qualified investor and professional client the same?
In practice, yes. The Prospectus Regulation refers to the MiFID II definition of professional client, so the qualified investor matches the professional and the eligible counterparty (Regulation (EU) 2017/1129, art. 2).
Does CNMV Circular 1/2022 apply to my STO?
No, if the token is a security. That circular governs advertising of crypto-assets that are not financial instruments. Your offer follows the conduct rules of MiFID II and the LMVSI.
This article is for informational purposes and does not constitute legal, financial or investment advice. Investor classification and prospectus exemptions depend on each specific case; consult a professional before making decisions.