Investors Europe Limited (“IEL”), of Suite 745, Europort, Gibraltar is regulated by the Gibraltar Financial Services Commission. In accordance with our regulatory obligations, this is to inform you of various changes that will take effect as from 1st November 2007 with the introduction of the Markets in Financial Instruments Directive (“MiFID”).
MiFID is an important piece of legislation governing dealings in financial instruments across the European Community. Many of the provisions in MiFID will have a direct impact on the relationship between IEL and its customers. We believe this impact will be overwhelmingly positive. As a result of MiFID, your interests will be given stronger protection and we will be required to take greater account of your particular circumstances and financial objectives. The purpose is to inform you of certain changes introduced by MiFID and how these changes will affect your relationship with us.
MiFID introduces two main categories of client, retail clients and professional clients and a separate and distinct third category of client for a limited range of business, eligible counterparty. Different levels of regulatory protection attach to each category and hence to clients within each category.
Retail clients are afforded the most regulatory protection.
Professional clients are afforded fewer regulatory protections on the basis that they are considered to be more experienced, knowledgeable and sophisticated than retail clients.
Eligible counterparties consist of regulated financial institutions and certain other undertakings. MiFID provides a light touch regulatory regime when investment firms bring about or enter into transactions with eligible counterparties.
We would like to inform you that you that Investors Europe has elected to treat you as a “Retail client”. This affects the regulatory protections which you will be provided with as from 1st November 2007. You are deemed to consent to this categorisation in relation to all services, products and transactions if you conduct business with IEL after receipt of this communication.
As a Retail client you will be able to move between categories either generally, or in relation to one or more particular services or transactions, or one or more types of product or transaction.
MiFID provides considerable flexibility to move between categories provided certain criteria are met. As a Retail client you will be able to “opt up” to professional status either generally, or in relation to one or more particular services or transactions, or one or more types of product or transaction.
You must inform us if you wish to opt up to Professional client status and waive the additional protection afforded to Retail clients. We must then evaluate whether opting you into this regime is warranted by the scope of your knowledge, expertise or experience. It is possible that such an “opt up” will only be possible in relation to certain products or services (for example, the fact that you may be knowledgeable and experienced in relation to bonds does not necessarily mean that you are knowledgeable and experienced in relation to equity derivatives).
In addition, we must ensure that you meet two out of three specific criteria to fall within the professional category:
You must have carried out transactions, in significant size, on the relevant market at an average frequency of 10 per quarter over the previous four quarters;
the size of your financial instrument portfolio, defined as including cash deposits and financial instruments, exceeds EUR 500,000;
You work or have worked in the financial sector for at least one year in a professional position which requires knowledge of the transactions or services envisaged.
If you consider that you meet the above criteria and wish to be treated as a Professional client, either generally or in respect of a particular investment service or transaction, or type of transaction or product, you must inform us of the same in writing. After assessing you against the above criteria we must then give you a written warning of the protection and investor compensation rights that you will stand to lose a result of waiving your retail client status. In a separate document to your contract with us you must also state that you are aware of the consequences of waiving the protections afforded to Retail clients.
Under MiFID we are required to have in place a “Best Execution” policy in relation to client orders. We are also required to have in place a “Conflicts of Interest” policy, which we must adhere to in all of our dealings with you. We are required under MiFID to disclose details of these policies to you, which are can be accessed here:
In accordance with our obligations under MiFID we will also be requiring you to complete one or two questionnaires that will enable us to determine whether certain products and services that we offer are suitable and appropriate given your particular level of knowledge and experience. The Suitability and Appropriateness tests are also provided to you here:
and you will be required to complete these before we deal in financial instruments on your behalf. Rest assured, however, that whilst the foregoing will undoubtedly give you better protection, it will in no way not stop or impede you from continuing to trade per normal.
If you wish to discuss any of the issues addressed in this communication, or any other matter relating to your dealings with us, please contact Pierre Boulle / Compliance at compliance@investorseurope.com Our members of staff will also be happy to answer your queries.
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