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2.6. Reclassification of a Professional Client as a Retail Client
FINANCIAL SERVICES LEGISLATION
RULES
CONDUCT OF BUSINESS RULES
Guidance: Purpose of this rulebook
SCHEDULE 1: TRANSACTION RECORDS
SCHEDULE 2: KEY INFORMATION AND CONTENT OF CLIENT AGREEMENT
SCHEDULE 3: TRADE CONFIRMATION
SCHEDULE 4: PERIODIC STATEMENTS
SCHEDULE 5: FINANCIAL PROMOTIONS
Entire Act

2.6. Reclassification of a Professional Client as a Retail Client

2.6.1. Obligation to notify Professional Client of right to be treated as a Retail Client

If an Authorised Firm provides services to Retail Clients and Professional Clients, it must, when first establishing a relationship with a Person as a Professional Client, notify that Person in writing of:

  • (a) that Person’s right to be classified as a Retail Client;
  • (b) the higher level of protection available to Retail Clients; and
  • (c) the period of time within which the Person may choose to be classified as a Retail Client.

If the Person does not choose to be classified as a Retail Client within the time specified by the Authorised Firm, the Authorised Firm may classify that Person as a Professional Client.

2.6.2. Authorised Firm not providing services to Retail Clients

If an Authorised Firm does not provide services to Retail Clients, it must inform its Clients of this fact and any relevant consequences.

2.6.3. Professional Client that asks to be treated as a Retail Client

If a Professional Client makes a request to the Authorised Firm to be treated as a Retail Client, the Authorised Firm must classify it as a Retail Client, unless the Authorised Firm does not provide services to Retail Clients.

Guidance: Request to an Authorised Firm that does not provide services to Retail Clients

An Authorised Firm that does not provide services to Retail Clients may receive a request from a Professional Client asking to be classified as a Retail Client. If the nature of the Client or the level of protection that it requires are such that it no longer meets the requirements to be a Professional Client, then the Authorised Firm should cease providing services to that Client.