Elective eligible counterparties - COBS Provision: Difference between revisions

Revision as of 17:21, 5 November 2018

The JC’s Reg and Leg resource™
UK Edition

To see the current text of COBS 3.6.4 in the FCA handbook, click here.

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Professional clients: per se professional client | elective professional client
ECPs: per se eligible counterparty | elective eligible counterparty | COBS 1 Annex 1 for disapplication of COBS rules to ECPs
Retail client: See COBS 3.4: one who is not a professional client or an ECP
Categorisation decision tree (pdf)

The famous “elective ECP” categorisation:

Many per se professional clients are also per se eligible counterparties — but not all.
Those per se professional clients that are not per se eligible ECPs — i.e., that are elective ECPs — can only be treated as ECPs if they have requested this categorisation. Now one might, of course, gently put that idea in such a client’s head: nothing wrong with that. Politely suggesting an elective ECP might wish to think about requesting an upgrade is one thing — but one cannot unilaterally categorise an elective ECP as an ECP without them first requesting it.
an “elective professional client” (ie one is able to be upgraded from retail to professional) cannot further request to be treated as an ECP.

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 The famous “{{cobsprov|elective ECP}}” categorisation:
 *Many {{cobsprov|per se professional client}}s are also {{cobsprov|per se eligible counterparties}} — but not all.
-*Those {{cobsprov|per se professional client}}s that are not {{cobsprov|per se eligible ECP}}s — i.e., that are {{cobsprov|elective ECP}}s — can only be treated as {{cobsprov|ECP}}s if ''they'' have requested this categorisation. Now one might, of course, gently put that idea in such a client’s head: nothing wrong with that. Politely suggesting an elective ECP might wish to think about requesting an upgrade is one thing — but one cannot unilaterally categorise an elective ECP as an ECP without them first requesting it.
+*Those {{cobsprov|per se professional client}}s that are not ''per se'' {{cobsprov|eligible ECP}}s — i.e., that are {{cobsprov|elective ECP}}s — can only be treated as {{cobsprov|ECP}}s if ''they'' have requested this categorisation. Now one might, of course, gently put that idea in such a client’s head: nothing wrong with that. Politely suggesting an elective ECP might wish to think about requesting an upgrade is one thing — but one cannot unilaterally categorise an elective ECP as an ECP without them first requesting it.
 *an “{{cobsprov|elective professional client}}” (ie one is able to be upgraded from retail to professional) cannot further request to be treated as an {{cobsprov|ECP}}.