Q&As

Often in terms and conditions of authorised firms which state that if a person wishes to be classified as an elective professional client, they will lose their right to claim compensation under the Financial Services Compensation Scheme as it does not extend to professional clients. Looking at COMP 4.2 I cannot see any reference to client classification per se, being a bar to being an eligible claimant.

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Published by a LexisNexis Financial Services expert
Published on: 21 October 2015

The Financial Services Compensation Scheme (FSCS) is a scheme aimed at the protection of retail consumers and small businesses. The Financial Conduct Authority (FCA) through its Compensation Sourcebook (COMP) makes rules that allow the FSCS to provide compensation at a level appropriate for the protection of retail consumers and small businesses. See COMP 1.1.10AG.

In order to make a claim for compensation through the FSCS a firm must be an eligible Claimant with a protected claim against a relevant person. COMP 4.2 sets out the requirements to meet the criteria

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Jurisdiction(s):
United Kingdom
Key definition:
Professional client definition
What does Professional client mean?

A client who possesses the experience, knowledge and expertise to make its own investment decisions and properly assess the risks that it incurs. In order to be considered a professional client (or to be treated as a professional client on request), the client must comply with the criteria laid down in Annex II to Directive 2014/65/EU (MiFID II).

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