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Client agreements 

01 December 2011

Impact Amber traffic light Low/medium impact although no changes proposed some changes to agreements may be necessary to deal with the changes proposed to e.g. to client classification and client asset rules

Other areas to consider

Reporting to clients; Risk disclosure, Client Classification, Client Assets

Current MiFID rules

Provision of client agreement to retail clients

There are two obligations relating to the provision of a client agreement to retail clients:

  • a firm must enter into a client agreement where it provides MiFID investment services and activities other than investment advice;
  • a firm must provide to a client the terms of any agreement (and certain other information) for the provision of MiFID investment services and activities or MiFID ancillary services to the client (which would include the provision of investment advice) before the client is bound by such agreement or, if earlier, before the provision of services.

Professional clients

MiFID does not expressly impose an obligation on firms to provide terms of business to professional clients. However, it is implicit in MiFID’s record-keeping requirements (see below).


A firm must keep a record that includes the documents agreed with a client setting out the parties’ rights and obligations and a record of the other terms on which it will provide its services to the client. The records must be kept for whichever is the longer, 5 years or the duration of the relationship with the client.

MiFID Level 1 Directive Art: 19(7)

MiFID Implementing Directive Arts: 29(1), 39, 51(1)

FSA rules


Proposed changes

No changes proposed

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