- The Monetary market instruments, with the exception of the means of payment;
- Certificates of Deposit
- Commercial Paper
- Treasury Bills
- The insurance contracts linked to Investment Funds (Unit-linked) and the individual participation agreements in Open Pension Funds1.
(1) Products similar to financial instruments given the similar function both perform.
The complexity of the financial instruments
Beyond the knowledge on the Customers (KYC - Know Your Customer), already required to the financial intermediaries, the Directive demands that such knowledge is used to assess from the more adequate transaction to the nature, knowledge and experience of the investor.
Thus, and in order to avoid that the compliance with this duty may imply inappropriate and unjustified costs in view of the specific request of the customer, namely when this one only requests the insertion of orders in the system, the MiFID divides the financial instruments in two groups:
- Complex (ex warrants, certificates, units, rights on securities, derivatives, etc) e;
- Non-Complex (ex shares, bonds, units in harmonized investment funds, commercial paper, Treasury Bills, etc).
 Clients Classification
In accordance with the criteria defined by the MiFID, the financial intermediaries are required to classify their Client in three categories: The non Professional Clients, the Professional Clients and the Eligible Counterparties. To each one of these categories correspond different protection levels, being the Non Professional Clients those who receive a greater protection.
- Non Professional Clients
Clients who do not fit in the criteria defined for the following categories since it is considered that, in general, their level of knowledge and their expertise justify a greater level of protection when assessing the risks inherent to the investment operations.
All individual Clients holders of a financial instruments account and/or those to whom investment services are provided have, by default, been classified as Non Professional Clients.
- Professional Clients
Individuals who render investment services or exercise investment activities and large companies which, in accordance with the two last individual financial statements, comply with the following criteria:
- Own Funds: Net worth amounting to EUR 2 Mio;
- Balance Sheet Total to EUR 20 Mio;
- Net Turnover to EUR 40 Mio.
Individuals, who, in accordance with the MiFID specifications, have required to be classified as Professionals.
Credit Institutions, Investment Companies, Insurance Companies, Pension Funds and its respective Managing Companies, other authorized Financial Institutions, National Governments and correspondent services, including Public Organisms, Central Banks and Supra-national Organizations.
- Eligible Counterparties
Credit Institutions, Investment Companies, Insurance Companies, Pension Funds and its respective Managing Companies, other authorized Financial Institutions, National Governments and correspondent services, including Public Organisms, Central Banks and Supra-national Organizations.
The Professional Clients (including the Eligible Counterparties) are those clients who possess the expertise and the necessary knowledge to make their own investment decisions and properly assess the incurred risks. This way, the law foresees a lesser protection degree for these, if compared with the Non-Professional ones.
This distinction is particularly obvious in what concerns the information duties before and after the rendering of the services since the law especially regulates its contents and periodicity if the receiver is a Non Professional Client.
Another issue wherein the two regimes present differences is the one relating to assessment made to the adequate nature of the operation since the intermediary is exempted from assessing the expertise and knowledge of Clients considered Professionals (including the Eligible Counterparties).
Change Classification
The Client is entitled to, at any moment of its relation with the financial intermediary, request the alteration of his/her/its category:
- Eligible Counterparty - to Professional and Non Professional;
- Professional - to Non-Professional and to Eligible Counterparty;
- Non-Professional - to Professional provided he/she/it complies wit the following criteria:
- Have a financial instruments portfolio and deposits in cash amounting to more than EUR 500.000;
- Carried out a minimum of 10 operations per quarter with a significant volume during the last year;
- Have a professional experience in the financial sector of, at least, one year.
The request to change the category, conditioned to the evaluation and decision by the financial Intermediary.
Adequacy Questionnaires
The knowledge that the financial intermediaries must have from their Clients (see"Complexity of the financial instruments") obliges to the making of evaluation tests concerning the appropriateness of the operations to his/her/its investor profile.
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Appropriateness Test - Questionnaire
made when providing investment services consisting solely in the
execution, reception and/or transmission of orders and is based
upon the information on the expertise and knowledge of the Client
in what concerns investments per type of instruments or service
to provide.
The MiFID requires the financial intermediaries to make, at least, the Appropriateness Test to the Non-Professional investors when handling Complex financial instruments.
Even if the financial intermediary is not able to assure the adequacy of the required product to his/her/its risk profile, the Client may accept to continue with the operation under his/her/its sole and total responsibility and the financial intermediary must remain with an undeniable proof of the Client's wish.
Regardless of the execution of this specific order on the financial instrument that lead to this Single Order, the information and statements hereby given by the client shall remain valid for future instructions on orders regarding the same financial instrument.
Suitability Test - Questionnaire made when providing
services of Portfolio Management or Advisory; it requires the gathering of
additional information relating the Client's financial situation
and investment goals.
The Suitability Test is made to all investors, regardless of their classification. |
Inducements (in cash or any other way)
In compliance with the Portuguese legislation, in force as of 1 November 2007 which transposed the Markets in Financial Instruments Directive (MiFID) to National legal system, it is necessary to inform the Clients about inducements (in cash or any other way) that the Bank negotiates or receives from their sales partners in order to allow Clients to take investment decisions with a full knowledge of all relevant information, including the one tied to real or potential benefits to the Bank thus showing the information that could be considered an inducement for the client if not disclosed.
The procedure to be followed is to receive a request by e-mail or letter from the Client,to endorse the request to Compliance Office - FICAM and the answer will be assured in 5 working days.
Execution Orders made out of the regulated market or the multilateral trading system
In compliance with the Portuguese legislation, in force as of 1 November 2007 which transposed the Markets in Financial Instruments Directive (MiFID) to National legal system, it is necessary to publish the price and quantities of the transactions on shares admitted to quotation in regulated markets and traded out of regulated markets or multilateral trading facilities during the previous month.
This information is available here.
More information
For more information on the MiFID please call:
- 707 50 24 24 (Fixed Phone)
- 91 827 24 24, 93 522 24 24 ou 96 599 24 24 (Mobiles)
- +351 707 50 24 24 ou +351 21 005 24 24 (abroad)
To go to the nearest Branch.
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