Further Information

A firm may treat a client as an elective professional client if it complies with (1) and (2):

  1. the firm undertakes an adequate assessment of the expertise, experience and knowledge of the client that gives reasonable assurance, in light of the nature of the transactions or services envisaged, that the client is capable of making his own investment decisions and understanding the risks involved (the "qualitative test");
  2. the following procedure is followed:
    1. the client must state in writing to the firm that it wishes to be treated as a professional client either generally or in respect of a particular service or transaction or type of transaction or product;
    2. the firm must give the client a clear written warning of the protections and investor compensation rights the client may lose; and
    3. the client must state in writing, in a separate document from the contract, that it is aware of the consequences of losing such protections.

In addition, Per Se Professionals are categorised as follows:

Type of Firm/Entity Exclusions Criteria Financial Criteria Other Criteria
An Entity required to be authorised or regulated to operate in financial markets N/A
  • credit institution
  • investment firm
  • any other authorised/regulated financial institution
  • an insurance company
  • a collective investment scheme or management company of such
  • a commodity or commodity derivatives dealer
  • a pension fund or management company of such
  • any other institutional investor
a large undertaking meeting criteria as set out N/A a body corporate or Limited Liability Partnership has or has had in previous 2 years £5m in net assets or called up share capital N/A
an undertaking that meets 2 of the criteria listed N/A an average of 250 employees during the previous year balance sheet total of £12.5m
net turnover of £25m
a partnership of unincorporated association N/A N/A has or has had in previous 2 years in net assets calculated in the case of a limited partnership without deducting loans owing to any of the partners;
a trustee of a trust other than an occupational pension scheme, SSAS, personal pension scheme or stakeholder scheme N/A has or has held in the previous 2 years £10m calculated by aggregating the value of cash and designated instruments forming part of the trusts assets but before deducting its liabilities
a trustee of an occupational pension scheme or SSAS or a trustee or operator of a personal pension scheme or stakeholder pension scheme N/A N/A assets under management of £10m at least 50 members
a local authority or public authority N/A N/A N/A N/A
a national or regional government, a public body that manages public debt, a central bank, an international or supranational institution (such as the World Bank, the IMF, the ECP, the EIB) or another similar international organisation; N/A N/A N/A N/A
another institutional investor whose main activity is to invest in financial instruments (in relation to the firm's MiFID or equivalent third country business) or designated investments (in relation to the firm's other business). This includes entities dedicated to the securitisation of assets or other financing transactions. N/A N/A N/A N/A