Hi,
I'm UK based investor, who still can't categorize himself as an Elective professional in light of FCA implementation of MIFID II:
Source: https://www.handbook.fca.org.uk/handbook/COBS/3/5.html
Looking at the same FCA handbook page, it looks like there might be another way: making myself a Per Se Professional Client:
Source: https://www.handbook.fca.org.uk/handbook/COBS/3/5.html
What do you think? Is this possible? Is so, what would be the path to become "authorised or regulated"?
Whilst you're considering my first question, here are a couple of thoughts.
I presume you are considering 'per se professional' because you don't qualify for elective professional. In other words out of the three criteria:
- client has carried out transactions, in significant size, on the relevant market at an average frequency of 10 per quarter over the previous four quarters;
- client's financial instrument portfolio, defined as including cash deposits and financial instruments, exceeds EUR 500,000;
- client works or has worked in the financial sector for at least one year in a professional position, which requires knowledge of the transactions or services envisaged;
... you only satisfy zero or one of these. Broadly you're eithier
A- a large investor who doesn't trade very often (on ET? Really?) and has zero industry experience
B- a small account trader who trades a lot and in size, but has zero industry experience
C- someone with industry experience who doesn't trade a lot or have a large portfolio
D- someone who doesn't trade a lot and in size, doesn't have a large portfolio, or sufficient industry experience
To become authorised and regulated, you're basically talking about eithier:
i) about getting a job at some kind of financial shop which requires you to become an authorised FCA person (this would eithier be a senior or front office position; the middle office accountants don't need to be FCA authorised), or
ii) starting your own financial shop (broker, hedge fund...), which requires getting the entire shop to be authorised
Let's talk about plan (ii) first. To do this is an astonishing amount of work and money. Putting that to one side, the FCA are going to be interested in whether you are sufficiently okay to be an authorised person. They are going to look at your experience and qualifications (and probity, eg credit rating). If you don't satisfy their requirements to be an elective professional (categories A,B and D) it's also very unlikely you will satisfy their requitements to be an authorised person, unless you've got a Phd in financial econometrics or something. If you're in category C then you might satisfy the FCA that you'd be a good risk, but it's very unlikely that anyone will give you any money since you've never traded in size.
Plan (ii) is basically like plan (i), in that you will need to satisfy the FCA that you should be an authorised person, which is going to mean you will need the same experience again as if you'd gone for the elective professional route. It won't cost as much or be as much hassle since the firm will do it for you; although good luck getting a job in finance right now. By the way, if you're doing this so you can trade your own money, you won't be able to because of compliance restrictions
What I'm trying to say is that it is much harder to become an authorised or regulated person than it is to be an elective professional; if you can't do the latter it's very unlikely you will be able to do to the former. By the way, although I qualify as an elective professional on all 3 counts, I am not one (
though I used to be an authorised person). Which makes me wonder again why you think you need to be one?
GAT
