What is MiFID?

The European Markets and Financial Instruments Directive (“MiFID”) is the European legislation applicable starting with January 1, 2017 with a major impact on how financial services are made available to customers throughout the European Union.
The MiFID Directive was implemented in the national legislation by Law no. 126/2018 on markets in financial instruments, in application of which the Financial Supervisory Authority (FSA) issued Regulation no. 5/2019.

What does MiFID mean in relation to clients?
From a MiFID perspective, the main aspects that Investimental must take into account in the relationship with customers are the classification and assesment of clients according to the investment services provided.

a) Client Classification – According to MiFID, clients are classified into three categories: Retail Clients, Professional Clients, Eligible Counterparties.

• Retail Clients – are those clients who benefit from the highest degree of protection in terms of the information, evaluation, transparency and communication requirements that an investment firm must meet in relation to them; this category usually includes individuals as well as legal entities that do not meet the criteria for the classification of professional clients.
• Professional Clients – are clients who possess the experience, knowledge and ability to make an investment decision and assess the risks involved. Professional customers benefit from a lower degree of protection than retail customers.
• Eligible Counterparties – are entities authorized or regulated to operate on the financial markets (credit institutions, financial investment services companies, insurance companies, collective investment undertakings and their management companies, etc.). These customers benefit from the lowest degree of MiFID protection.

The classification of clients in one of the MiFID categories is made at the time of initiating the business relationship with Investimental, based on the documents and information provided by the client in the process of opening the trading account, with the appropriate information of each client.

As a rule, if at the beginning of the contractual relationship, based on the available information, you do not fall into the categories of professional client or eligible counterparty, you are considered to be classified in the category of retail clients, thus benefiting from all the advantages arising from this classification.

Clients classified as professionals by law are responsible for requesting a higher level of protection if they feel that they are unable to properly assess or manage the risks involved.

b) Assesment of clients according to the financial investment services provided – Investimental has the obligation to request certain information from clients in order to evaluate them and determine the appropriateness of the financial investment services provided.

• Financial investment services, other than investment advice and portfolio management: Investimental will request certain information from each client to assess whether the investment services or financial instruments envisaged are suitable for the profile of that client.
• Investment advice and portfolio management services: Investimental would be required to obtain certain information from the client as part of a suitability assesmentin order to recommend to that client or potential client the investment services and financial instruments that are suitable for them. Investimental does not currently provide such services.