Common use of Retail Client Clause in Contracts

Retail Client. 53.3.1 Although each Consenting Beneficiary would be entitled to request that the Company treats it as a “retail client” subject to additional levels of client protection under FSA Rules, each Consenting Beneficiary confirms to the Company that it does not wish to be so treated. 53.3.2 Each Consenting Beneficiary acknowledges and agrees that professional clients are entitled to fewer protections under the FSA Rules than “retail clients”. In particular: (i) Communications with retail clients and financial promotions In relation to all information addressed to, or disseminated in such a way that it is likely to be received by, a retail client, the Company must ensure that information: (a) includes the Company’s name; (b) is accurate and in particular does not emphasise any potential benefits of relevant business or a relevant investment without also giving a fair and prominent indication of any relevant risks; (c) is sufficient for, and presented in a way that is likely to be understood by, the average member of the group to whom it is directed, or by whom it is likely to be received; and (d) does not disguise, diminish or obscure important items, statements or warnings. This requirement does not apply in the case of professional clients. When the Company communicates advertisements and other financial promotions to retail clients, the Company is required to ensure that certain form and content requirements are included and that certain internal approval and record-keeping procedures are followed. Most of these rules are inapplicable to financial promotions to professional clients. The Company is, however, in addition required to ensure that all information provided to both retail and professional clients is clear, fair and not misleading. (ii) Suitability If the Company makes a personal recommendation or manages investments for a professional client, the Company is entitled to assume that, in relation to the products, transactions and services for which the professional client is so classified, the client has the necessary level of experience and knowledge in order to understand the risks involved in the transaction or in the management of his portfolio. In the case of a retail client, this assumption may not be made and the Company would be required to satisfy itself that the retail client does have the necessary level of experience and knowledge. (iii) Appropriateness When assessing appropriateness for a professional client, the Company may assume that the professional client has the necessary experience and knowledge in order to understand the risks involved in relation to those particular investment services or transactions, or types of transaction or product, for which the client is classified as a professional client. In the case of a retail client, this assumption may not be made and the Company would be required to satisfy itself that the retail client does have the necessary level of experience and knowledge. (iv) Reporting to clients The Company’s obligations to report to clients in respect of transactions (including trade confirmations and periodic statements) are more stringent and detailed in the case of retail clients. (v) Training and competence requirements More stringent requirements as to training and competence of a firm’s staff apply to certain staff that provide services to retail clients.