What is a “professional” client for the purposes of MiFID and the Supreme Court?

The MiFiD (Markets in Financial Instruments Directive) regulations are the sum of Directives 2004/39/EC, 2006/73/EC together with Regulation (EC) 1287/2006. Both Directives are directly applicable since their entry into force on November 1, 2007.

They were intended to create a single harmonized legal framework across the European Union. The aim was to homogenize the markets for financial instruments and the provision of investment services.

What is a “professional” client for MiFID and Supreme Court purposes?

MiFID Protection Levels

Law 47/2007 makes it mandatory to classify customers into three categories with three levels of protection:

1.-Individual Retail Customer. This is a residual category for those who are neither “professionals” nor “eligible counterparties”. It requires the highest level of protection.

2.-Professional clients.  The experience, knowledge and qualifications required to make your own investment decisions are presumed. As well as to correctly evaluate their risks.

Professional clients include financial institutions and other legal entities. To be able to operate in the financial markets, they must be authorized or regulated by States. Whether they are members of the European Union or not. So are States and regional administrations, public entities that manage public debt, and central banks.

So are international and supranational organizations.

Additionally, professional clients are those entrepreneurs who meet certain conditions. These relate to volumes of assets, annual turnover or own funds.

Finally, institutional investors and those others who apply for it will be also professional clients. The necessary condition is that they expressly waive their treatment as individual retail customers. They must also meet certain requirements relating to their experience and knowledge.

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Assessment of appropriateness and suitability

The assessment of appropriateness aims to know the experiences and financial knowledge of the client. The suitability assessment refers to some additional knowledge about those detected in the suitability test.

What does the lack of classification of the client by the issuer entail?

However, and here comes something relevant.  When an institution does not classify the client as professional or as retail, is considered proven that it is a retail client. And this consequence will apply as it happened before the financial product was offered in the first place.

In other words. If there is no specific classification of the client prior to the conclusion of the contract, it is considered proven that the client was a retail client.

The above has its basis in the jurisprudence of the Supreme Court. Among others, we highlight the Sentence 60/2016 of February 12, 2026. Or Sentence 416/2017 of June 29, 2027.

If this article has been of interest, we also suggest you to read the following article published on our website: The incentives of the MiFID Directive