Module 2 · Chapter 3

Client Categories: Retail by Default, Professional on Request

The law gives ordinary investors the most protection, and every client starts there. This chapter shows how a client can ask to be treated as a professional, and why most cannot.

≈ 7 min read 8-question test

In this chapter

  • Why every client starts as retail, and what that protects
  • The three tests and the four steps for professional status
  • How to refuse a frequent trader who meets only one test

3.1Client categories in one paragraph

MiFID II, the EU law on investment services, sorts clients into categories. A retail client is an ordinary person investing their own money, and gets the most protection. A professional client, such as a bank, is expected to look after itself, so it gets less.

Every client of Thalvia starts as retail. A client may ask to be treated as professional, but only after passing two of three tests in the law, and four more steps follow.

Key point

Retail is the default, and leaving it is hard. A client must pass two of three tests, ask in writing and still satisfy Thalvia’s own judgement.

Also in this chapter

  1. Why every client starts as retail
  2. The three tests and the four steps
  3. A frequent trader asks to be a professional client
  4. Your job

Preview

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