The Markets in Financial Instruments Directive (MiFID) recognizes that investors have different levels of experience, knowledge, and expertise. Investment firms are required to assign investors one of 3 categories to make sure they receive appropriate protection and support.
Most investors on Mintos will be considered retail clients. Retail clients have less experience compared to the other categories, and are afforded the highest level of regulatory protection. For example, we will provide them with additional reporting and disclosures, and they are protected by the investor compensation scheme when they hold financial instruments with Mintos . By default, any investor who is not considered a professional client or eligible counterparty is considered a retail client under MiFID regulation.
Professional clients are deemed capable of making their own investment decisions, and understanding the risks involved, with greater autonomy than retail clients. This means they may be able to access certain offers, but will waive some regulatory protections afforded to retail clients. Professional clients are typically institutional investors, or in some cases individuals with extensive investment experience and considerable net worth.
Eligible counterparties are considered to be the most sophisticated investors. They are typically investment firms, credit institutions, investment funds, or other regulated financial institutions. They are afforded less regulatory protection compared to professional investors.
Investors will be able to request to be assigned a different category once Mintos receives the Investment Firm license and becomes a regulated platform. For more details, see MiFID regulation, Annex II.