There are three client categories under MiFID and the directive attaches different levels of protection to clients within each category.
Professional Clients
This category applies to a client who possesses the experience, knowledge and expertise to make its own investment decisions and duly assess the risk those investment decisions incurs.
MiFID Professional clients are:
a) Entities that are required to be regulated or authorised to operate in the financial markets:
- Credit institutions
- Investment firms
- Other regulated or authorised financial institutions
- Insurance and reinsurance companies
- Collective investment schemes and management companies of such schemes
- Pension funds and management companies of such funds
- Commodity and commodity derivative dealers
- Local entities who provide/perform investment activities
b) Large undertakings meeting two of the following size requirements:
- Balance sheet total of at least EUR 20 million
- Net turnover of at least EUR 40 million
- Own funds of at least EUR 2 million
c) National and regional governments, public bodies managing public debt (excludes local authorities), central banks, international and supranational institutions
d) Other institutional investors whose main activity is to invest in financial instruments, including entities dedicated to securitisation of assets or other financing transactions
Eligible Counterparties
This is a distinct category that can be applied to a subset of Professional clients where SEB provides services for the reception and transmission of orders on behalf of clients or for clients who are dealing on their own account. Eligible counterparties receive the least investor protection.
They are typically investment firms, credit institutions, insurance companies, UCITS and their management companies and other regulated financial institutions. They are considered to be the most sophisticated investors or financial markets participants.
Retail Clients
By default, any client who does not fall within the Professional or Eligible categories is considered a MiFID Retail client. A SEB MiFID Retail client will be asked a number of questions and be given a Product Group Certificate (PGC). The PGC will determine which financial instruments are appropriate for the client
What do I do if I wish to be assigned a different category?
Clients may opt to have a different category after the initial classification. You must request this. SEB will perform a “fitness test” to assess if the client meets the regulatory criteria. Please contact your SEB Client Representative if you would like to opt.
