This document is a template prepared for review. It must be reviewed, completed and approved by qualified legal and compliance professionals for each jurisdiction in which services are offered before publication. Bracketed items are placeholders.
1. Introduction
[LEGAL ENTITY NAME], trading as JDGlobalFX ("we", "us", "our"), classifies each client as a retail client, professional client or eligible counterparty in accordance with [CLIENT CLASSIFICATION RULES]. Classification determines the regulatory protection you receive and the products, leverage and features available to you.
Unless we notify you otherwise, you are treated as a retail client, which affords the highest level of protection. This document explains what professional classification means, who may be eligible, what protections may be lost, and how to request a change. Requesting professional classification is a significant decision and is not appropriate for most individuals.
2. Types of Professional Client
2.1 Per se professional clients
Certain entities are treated as professional clients automatically because of their nature, such as regulated financial institutions, large undertakings meeting size thresholds, governments and public bodies, and institutional investors, as defined in [CLIENT CLASSIFICATION RULES].
2.2 Elective professional clients
An individual or smaller entity that is otherwise a retail client may request professional treatment. We may agree only where the client satisfies the eligibility criteria and we are satisfied, following an adequate assessment, that the client has the expertise, experience and knowledge to make their own investment decisions and understand the risks involved.
3. Eligibility Criteria
The eligibility criteria for elective professional classification are [ELIGIBILITY CRITERIA]. In general terms, and subject to the precise requirements in your jurisdiction, such criteria commonly require that a client satisfies a specified number of tests relating to:
- the frequency and size of transactions carried out in relevant markets over a recent period;
- the size of the client's financial-instrument portfolio, including cash deposits;
- professional experience in the financial sector in a role requiring knowledge of the relevant transactions or services.
We will ask for evidence supporting any criteria you claim to meet, such as trading statements from other providers, portfolio valuations or employment records. We may decline a request even where the criteria appear to be met if we are not satisfied that the qualitative assessment has been passed.
4. Protections That May Be Lost
Professional clients receive fewer regulatory protections than retail clients. The protections lost or reduced depend on your jurisdiction and include some or all of the following.
| Protection | Retail client | Professional client |
|---|---|---|
| Leverage limits | Subject to [RETAIL LEVERAGE LIMITS] | Up to [PROFESSIONAL LEVERAGE LIMITS] may be available |
| Negative balance protection | [RETAIL NEGATIVE BALANCE PROTECTION ARRANGEMENT] | [PROFESSIONAL NEGATIVE BALANCE PROTECTION ARRANGEMENT] |
| Margin close-out level | [RETAIL MARGIN CLOSE-OUT LEVEL] | [PROFESSIONAL MARGIN CLOSE-OUT LEVEL] |
| Risk warnings | Full standardised risk warnings | Reduced disclosure requirements |
| Appropriateness assessment | We must assess whether products are appropriate for you | We may assume you have the necessary experience and knowledge |
| Communication standards | Highest standard of clarity | Communications may assume greater knowledge |
| Best execution | Total consideration is decisive | Other execution factors may be weighted more heavily |
| Compensation scheme | [RETAIL COMPENSATION SCHEME ELIGIBILITY] | [PROFESSIONAL COMPENSATION SCHEME ELIGIBILITY] |
| Dispute resolution | [RETAIL EDR ELIGIBILITY] | [PROFESSIONAL EDR ELIGIBILITY] |
| Promotional restrictions | Certain incentives prohibited | Restrictions may not apply |
Higher leverage increases the speed and magnitude of potential losses. Losing negative balance protection, where applicable, means you may owe us more than the funds in your account.
5. How to Request Professional Classification
- Submit a written request through the client portal or to [COMPLIANCE EMAIL], stating that you wish to be treated as a professional client, either generally or for specific products or services.
- Complete the professional-client questionnaire and provide supporting evidence for the criteria you claim to meet.
- We assess your request and, if we agree, send you a written notice stating the protections you will lose.
- You must confirm in writing, in a document separate from the Client Agreement, that you are aware of the consequences of losing those protections.
- Your classification changes only after we receive your written confirmation.
We are not obliged to accept any request and may review your classification at intervals of [CLASSIFICATION REVIEW FREQUENCY].
6. Your Ongoing Responsibilities
As a professional client you must inform us of any change in circumstances that could affect your classification, such as a reduction in portfolio size or a change in professional role. If we become aware that you no longer meet the criteria, we may reclassify you as a retail client.
7. Right to Request Re-Classification
You may at any time request to be re-classified as a retail client, generally or for specific products, by writing to [COMPLIANCE EMAIL]. We will confirm the change in writing. Higher leverage and other professional features are removed from the date of re-classification; open positions may need to be reduced to meet retail margin requirements within [RE-CLASSIFICATION ADJUSTMENT PERIOD].
Re-classification is not retrospective. Protections that did not apply while you were a professional client are not applied to transactions carried out during that period.
8. Eligible Counterparties
Certain per se professional clients may be treated as eligible counterparties for specific services, in which case even fewer protections apply. Eligible counterparties may request treatment as professional or retail clients. Further information is available from [COMPLIANCE EMAIL].
9. No Advice
Nothing in this document constitutes advice as to whether you should request professional classification. If you are unsure, seek independent advice or remain classified as a retail client.
10. Contact
Questions about client classification may be directed to [COMPLIANCE EMAIL].