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NOTICE OF TREATMENT AS AN ELECTIVE PROFESSIONAL CLIENT FOR THE PURPOSES OF THE FCA’S RULES ON THE BASIS OF EXPERIENCE AND UNDERSTANDING
The purpose of this document is to advise you that under the rules of the Financial Conduct Authority (“FCA”) we are proposing to categorize you as an Elective Professional Client, for all services, on the basis of your experience and understanding of list investment types and of the risks involved.
We are proposing to categorize you as an Elective Professional Client on the basis that:
we have undertaken an assessment of your expertise, experience and knowledge and it gives reasonable assurance, in light of the nature of the transactions or services envisaged, that you are capable of making your own investment decisions and understanding the risks involved (the “qualitative test”); in relation to MiFID business in the course of that assessment, at least two of the following criteria are satisfied: you have carried out transactions, in significant size, on the relevant market at an average frequency of 10 per quarter over the previous four quarters; the size of your financial instrument portfolio, defined as including cash deposits and financial instruments, exceeds €500,000; you work or have worked in the financial sector for at least one year in a professional position, which requires knowledge of the transactions or services envisaged, (the “quantitative test”).
We have, on the basis of the information provided, concluded that you meet the qualitative test and that you meet parts x and x of the quantitative test.
Under the rules of FCA we are required to set out details of the protections that you will lose by virtue of this categorization and to seek your written consent to be categorised as an Elective Professional Client. By being categorized as an Elective Professional Client you will lose the protections of the rules which only apply to Retail Clients.
In particular you should note that rules relating to the following areas do not apply, or only partially apply to Elective Professional Clients:
Communicating with clients, including financial promotions: As an Elective Professional Client the way in which we communicate with you may be different to the way in which we would communicate with a Retail Client. However, we must still ensure that our communications with you are fair, clear and not misleading.
Distance Communications
As an Elective Professional Client it is possible that you may not meet the definition of a “consumer”. If this is the case then the requirements relating to distance communications will not apply.
Information about firm, its services and remuneration There are specific pieces of information about the firm, our services and remuneration that we must provide to Retail Clients. We are obliged to provide information on these areas to all clients but the level of detail, medium and timing of the provision is less specific for those clients that are not Retail Clients.
Client agreements
As an Elective Professional Client we are required to have a client agreement with you. However, the medium or this agreement and the timeframe within which is must be agreed are more flexible than they would have been if you were a Retail Client.
Suitability
When making personal recommendations to you we are entitled to assume that, in relation to the products, transactions and services for which you are classified as an Elective Professional Client that you have the necessary level or experience and knowledge to understand the risk involved in the transaction. We are not required to provide you with a suitability report for any personal recommendations made.
Appropriateness
For transactions where we do not provide you with a personal recommendation (e.g. an execution only trade) we may be required to assess whether the transaction is appropriate for you. In these instances we are entitled to assume that, in relation to the products, transactions and services for which you are classified as an Elective Professional Client that you have the necessary level of experience and knowledge to understand the risks involved in the transaction.
When providing Best Execution to you as an Elective Professional Client, price is likely to be of high relative importance. However we are not obliged to determine the best possible result in terms of the total consideration, representing the price of the financial instrument and the costs related to execution, although this will be one of the factors that we will consider. Furthermore, where there is more than one competing venue to execute an order, as detailed in our Best Execution Policy, we do not have to consider our own commissions and costs relating to each of the eligible execution venues when assessing which to use in order to provide best execution. For further details please refer to our Best Execution Policy.
Reporting information to clients
When providing confirmation that we have carried out your order, the timeframe we have to do so is greater than if you were a Retail Client.
Finally, you should note that the services of the Financial Ombudsman Service may not be available to you as an Elective Professional Client.
If you agree to be categorized as an Elective Professional Client please sign and return the enclosed copy of this letter.
Should you have any queries in relation to this categorization please do not hesitate to contact the undersigned.