FCA client classification requirements

The following Financial Services practice note provides comprehensive and up to date legal information covering:

  • FCA client classification requirements
  • COBS definition of 'client' and changes introduced by the MiFID II framework
  • Financial promotion rules
  • Appointed representatives and tied agents
  • Agent as client
  • Client scenarios
  • Client categorisation and regulatory impact
  • Retail clients
  • Per se professional clients
  • Elective professional client
  • More...

FCA client classification requirements

BREXIT: 11pm (GMT) on 31 December 2020 (‘IP completion day’) marked the end of the Brexit transition/implementation period entered into following the UK’s withdrawal from the EU. Following IP completion day, key transitional arrangements come to an end and significant changes begin to take effect across the UK’s legal regime. This document contains guidance on subjects impacted by these changes. Before continuing your research, see: Brexit and financial services: materials on the post-Brexit UK/EU regulatory regime.

COBS definition of 'client' and changes introduced by the MiFID II framework

The Financial Conduct Authority’s (FCA's) definition of a client is set out in chapter 3 of the Conduct of Business sourcebook (COBS 3) and historically derived from the Markets in Financial Instruments Directive (Directive 2004/39/EC) (MiFID). MiFID has been replaced by the recast Markets in Financial Instruments Directive (Directive 2014/65/EU) (MiFID II Directive) and the Markets in Financial Instruments Regulation (Regulation (EU) 600/2014) (MiFIR) (together the MiFID II framework). Both the MiFID II Directive and MiFIR entered into force on 2 July 2014. As amended, the majority of the MiFID II framework has applied since 3 January 2018, and EU Member States had until 3 July 2017 to transpose the provisions of MiFID II into national law. The MiFID II Directive contains provisions which amended the original client categorisation requirements under MiFID.

The FCA consulted its implementation approach to

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