EU · MiFID II
Annex II MiFID IIPROFESSIONAL CLIENTS FOR THE PURPOSE OF THIS DIRECTIVE
Defines professional clients: per se professionals (regulated financial entities, large undertakings meeting two of EUR 20 million balance sheet, EUR 40 million turnover and EUR 2 million own funds, governments, central banks, supranationals and institutional investors), who may ask for more protection, and other clients who may opt up on request after an assessment of their expertise. Opting up requires at least two of: significant trading (on average 10 trades a quarter over four quarters), a portfolio above EUR 500,000, or relevant professional experience, plus a written procedure.
Level 3: ESMA Q&As, guidelines and opinions
- Q&ARejectedExplicit reference · 90%
AI summaryAsked whether the presumption in Article 54(3) of the MiFID II Delegated Regulation that professional clients have the necessary knowledge and experience can ever apply, given that Article 54(6) looks to the natural person representing a legal entity. ESMA rejected the question, so there is no answer.
- Q&AAnsweredExplicit reference · 90%
AI summaryUnder reverse solicitation (Article 42 MiFID II), a third-country firm may offer a client products of the same category only during the transaction the client initiated, not later, unless the client again asks on its own exclusive initiative.
- Q&AAnsweredExplicit reference · 90%
AI summaryFor the EUR 500,000 portfolio-size criterion for opting up to professional status, leveraged or margined positions count at their net equity (margin plus unrealised gains or losses), not their notional value.
- Q&AAnsweredExplicit reference · 90%
AI summaryA private individual may be treated as a professional client only on their own written request, in a document separate from other contract terms, after the firm has carried out the Annex II assessment and procedure; firms must not incentivise or pressure clients to make such requests.
- Q&AAnsweredExplicit reference · 90%
AI summaryA private individual who has traded on the relevant market for less than a year cannot meet the trading-frequency criterion for opting up to professional status, since it is assessed over the previous four quarters, but may still meet the portfolio-size and professional-experience criteria.
- Q&AAnsweredExplicit reference · 90%
AI summaryFirms may treat a private individual as a professional client on request only after an adequate assessment of their expertise, experience and knowledge: meeting two of the Annex II quantitative criteria is necessary but not always sufficient, and requests should not be accepted automatically.
- Q&AAnsweredExplicit reference · 90%
AI summaryTo decide whether an individual's past transactions were of 'significant size' for opting up to professional status, firms should consider the size of transactions in the relevant market, not just the client's own history, and whether each was large enough to give meaningful exposure; leveraged and derivative markets need thresholds suited to their typical notional values.
- Q&AAnsweredInferred · 75%
AI summaryUnder Article 45(1) of the MiFID II Delegated Regulation, firms need notify their categorisation only to new clients and existing clients whose categorisation changed under MiFID II, such as certain local public authorities that became retail clients.
Commentary
No law-firm commentary is linked to this provision yet.
393 more documents relate to MiFID II as a whole without naming an article.
UK counterpart
UK transposition not traced in the FCA Handbook. It may sit in FSMA, the Regulated Activities Order or SI 2017/701, which are not yet mapped.
Version history
- From 17 Sept 2014
Each entry is a consolidated version of the act on EUR-Lex in which this provision appears. The text itself is on the official site.