A “professional client” is a client considered to possess sufficient experience, knowledge and expertise to make independent investment decisions and properly assess the associated risks.
Under Annex II to Directive 2014/65/EU (“MiFID II”), professional clients include, in particular:
- regulated financial-market participants, such as credit institutions, investment firms, insurance companies, investment funds and their management companies, pension funds and other institutional investors;
- large undertakings satisfying at least two of the following criteria: a balance-sheet total of at least EUR 20 million, net turnover of at least EUR 40 million, or own funds of at least EUR 2 million;
- national or regional governments, central banks and specified international or supranational institutions; and
- other institutional investors whose principal activity is investing in financial instruments.
Other clients, including individuals, may be treated as professional clients on request only after an authorised investment firm has assessed their knowledge and experience and accepted the request. Under the currently applicable criteria, at least two of the following must ordinarily be satisfied: an average of ten transactions of significant size per quarter during the preceding four quarters; a financial-instrument portfolio, including cash deposits, exceeding EUR 500,000; or at least one year's relevant professional experience in the financial sector. The client must also complete the prescribed written procedure and acknowledge the investor protections and compensation rights that may be lost.
Selecting this checkbox confirms an existing professional-client status. It does not, by itself, classify a retail client as a professional client. Hadean Public Equities GmbH may request supporting evidence before providing access to information.
