French Monetary and Financial Code
In forceThe retail client may waive part of the protection afforded by the rules of conduct.
In this case, the investment services provider other than an asset management company may treat the retail client as a professional client, provided that it complies with the criteria and procedure set out in Article D. 533-12-1.
However, non-professional clients must not be presumed to have knowledge and experience of the market comparable to that of the clients referred to in article D. 533-11.
This reduction in the protection afforded by the rules of good conduct shall be deemed valid only on condition that an adequate assessment by the investment service provider other than an asset management company of the client's skill, experience and knowledge provides it with reasonable assurance, having regard to the nature of the transactions or services envisaged, that the client is in a position to make its investment decisions and to understand the risks it is incurring.
The suitability criteria applied to the directors and officers of authorised firms on the basis of the financial directives may be considered as one of the means of assessing the client's competence and knowledge.
In the case of a small business that does not meet the criteria set out in article D.533-11.2, the assessment must relate to the person authorised to carry out transactions on its behalf.
As part of this assessment, at least two of the following criteria must be met:
1° Holding a portfolio of financial instruments, defined as including bank deposits and financial instruments with a value in excess of 500,000 euros ;
2° Carrying out transactions, each of a significant size as determined by the general regulations of the Autorité des marchés financiers, in financial instruments, at an average rate of at least ten per quarter over the previous four quarters;
3° Holding a professional position in the financial sector requiring knowledge of investment in financial instruments for at least one year.
