Client categories
The directive stipulates that all clients who trade in financial instruments must be divided into three distinct categories. This is to allow client protection to be tailored to the needs of each individual.
How the appropriateness assessment works
Under the Swedish Securities Markets Act, the bank must ensure that you have the knowledge and experience required to trade in securities. This is called an appropriateness assessment and is designed to protect those who are active in the securities market.
How is the appropriateness assessment conducted?
If you want to trade in complex financial instruments, such as warrants and derivatives, you must first answer some questions in an appropriateness assessment in accordance with the Swedish Securities Markets Act. These questions relate to the knowledge and experience you have of the instrument in which you are interested. Based on your answers, the bank assesses whether the product is appropriate for you. This assessment is only made the first time you trade in complex instruments.
Classification of instruments
The law distinguishes between complex and non-complex instruments. In the case of the purchase and sale of non-complex instruments, such as shares and fund units, the bank does not need to assess whether the transaction is appropriate for you. In the case of the purchase and sale of complex instruments, such as warrants and derivatives, however, the bank must ensure that you have sufficient knowledge and understand the implications of the transaction.