We note that this paper is primarily directed at those firms that will be subject to MiFID and will carry the burden of implementing the new working practices. However the customers of those firms will feel the impact of MiFID’s implementation so we believe it
is appropriate for the ACT to comment, in our capacity as representing the non financial services corporate customer.
By and large corporate treasurers will be working within companies that will fall within the professional category, but because this level has more investor protections built in (notably best execution) than does the current intermediate category we think many companies will want to opt up to eligible counterparty (ECP). We welcome the flexibility to do this under the MiFID and this should be preserved.
On the other hand, firms have indicated to us that a number of companies, for example those ultimately controlled by an individual, may only be able to qualify as retail clients without the opportunity to “opt up” even to professional. In so far as achievable under the MiFID provisions we believe this should be minimised. Firms dealing with such clients accepting the “opt-up” are expected to advise clients of the consequences of opting up (and, presumably on the possibility of retaining the lower category for some instruments). Clients will not be opting up from a position of ignorance. Accordingly we cannot see any public good in restricting the possibility of “opting-up”.
