The MiFID questionnaire is encapsulated in a KYC Type available in Due Diligence stage. It has the following six item groups:
- MiFID categorisation
- Product categorisation
- Customer categorisation
- General suitability and appropriateness
- Suitability and appropriateness for investment advice and/or portfolio management
‘MiFID categorisation’ is pre-populated based on the input of other item groups – hence it is read-only – and it provides the user with the overview of the outcome of the MiFID analysis, which is often used for reporting purposes.
‘Product categorisation’ is where the user can indicate what services and activities related to the financial instrument(s) are provided to the customer, i.e., investment services and activities and/or ancillary services.
‘Customer categorisation’ is where the determination of the MiFID classification – “Eligible Counterparty” (selectable only for customers being an entity), “Professional”, or “Retail” – occurs.
‘Opt-down/up’ is where the user handles the possible request from the customer to be assigned a different MiFID classification than the one determined by the financial institution; such classification can be:
- “Eligible Counterparty”, “Elective Professional”, or “Retail” for a customer being an entity.
- “Elective Professional” or “Retail” for a customer being an individual.
This item group also contains the relevant data and documents to substantiate the customer request and also the decision by the financial institution to either grant or refuse such request.
The last two item groups are both about suitability and appropriateness for, respectively, Retail customers (item group 5) and customers different than Eligible Counterparties being provided investment advice or portfolio management services (item group 6).
Suitability is the process by which it is assessed whether the customer’s knowledge and experience in the relevant investment field, their financial situation including the ability to bear losses, and their investment objectives match the product or service offered to or demanded by the customer.
Appropriateness is the process by which, for investment services other than investment advice or portfolio management, the customer possesses the necessary knowledge and experience to understand the specific type of product or service offered or demanded as well as the risks related to it.