Glossary · Investors & Compliance
Subscription Agreement
A subscription agreement is the contract by which an investor applies to invest in a fund, making representations and agreeing to the fund’s terms.
The subscription agreement (or subscription booklet) is completed by each investor. It sets out the amount subscribed or committed, confirms the investor has read the private placement memorandum or LPA, and includes representations on investor eligibility, such as accredited investor or qualified purchaser status in the US, and on tax status for FATCA and CRS.
It also collects the information needed for KYC and AML review, bank account details for distributions and redemptions, and contact and reporting preferences. Once accepted by the fund, it binds the investor to the fund’s governing documents.
Pitfalls include incomplete or unsigned pages, inconsistent entity names across documents, missing tax forms, and accepting a subscription before eligibility and KYC checks are complete. Electronic subscription platforms reduce errors but still require review. A checklist review of every subscription before acceptance is the typical control.
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