MiFID regulations provide for three categories of clients: retail client, professional client or eligible counterparty. In practice, the company currently only works with retail clients, i.e. clients who are deemed to have less financial knowledge and experience than a professional and whom the company must therefore protect better by providing more information, education and support. The company's objective is to protect the retail client from herself.
The company's policy is to only accept retail clients. As such, the company implements policies and procedures aimed at a high level of protection for these clients. In particular, the company :
Evaluates the suitability of an investment based on the client's experience, knowledge, investment objectives, financial situation, investment horizon and risk appetite;
Processes and executes client's orders in a fair and optimal manner in accordance with the principles of best selection and execution;
Communicates its fee structure, including any inducements received from third parties, to the client in a transparent, complete and clear manner;
Report to the client in a complete, concise, truthful, clear and periodic manner on the performance and status of their portfolio.
Each of the above items has a separate policy and procedures.
In the event that a professional client or eligible counterparty comes to the firm, she will be treated as a retail client by default, i.e., with a heightened level of care and diligence. If this conservative policy and its associated procedures are found to be inappropriate, e.g., too burdensome for a professional, the New Products and Services Committee shall consider whether this policy should be adapted accordingly.
Each client of the company is deemed to be a retail client and is so informed in the portfolio management agreement (and in the proposal for such agreement).
If a professional client or eligible counterparty wishes to benefit from the company's portfolio management service, the firm shall inform the client that:
For the purposes of its services, each of the company's clients is deemed to be a retail client;
In order to benefit from the services of the company, the said professional client or eligible counterparty must request the company to consider her as a retail client in the contractual relationship.
If a contract is entered into, the professional client or eligible counterparty who has requested it is treated by the company as a retail client.
If the company ever serves professional clients or eligible counterparties, treating them as such, a "MiFID Client Category" field will be added to the database. This field will have three values: retail , professional ou eligible counterpart . Currently, in the provision of its services the company considers all its clients as retail clients.
The Compliance Officer is responsible for enforcing this policy and implementing these procedures within the company.