F1SCHEDULE 1PROFESSIONAL CLIENTS FOR THE PURPOSES OF THIS REGULATION

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PART 4Procedure

6

1

A client satisfying the criteria in Part 3 may only be treated as a professional client if the following procedure is followed—

a

the client must state in writing to the investment firm that it wishes to be treated as a professional client, either generally or in respect of a particular investment service or transaction, or type of transaction or product;

b

the investment firm must give the client a clear written warning of the protections and investor compensation rights it may lose;

c

the client must state in writing, in a separate document from the contract, that it is aware of the consequences of losing such protections.

2

Before deciding to accept any request from a client to be treated as a professional client, investment firms must take all reasonable steps to ensure that the client in question meets the relevant requirements stated in Part 3.

3

Points (1) and (2) do not apply in relation to a client who has already been categorised as a professional client under parameters and procedures similar to those referred to in this Schedule.

4

Investment firms must implement appropriate written internal policies and procedures to categorise clients.

5

A professional client is responsible for keeping the investment firm informed about any change which could affect its current categorisation as a professional client.

6

Should the investment firm become aware however that the client no longer fulfils the conditions which made that client eligible to be treated as a professional client, the investment firm must take appropriate action.