Elective eligible counterparties - COBS Provision

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MiFID Categorisation

• 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)
  

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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.