COBS 3.6 Eligible counterparties

1. (1)

   An eligible counterparty is a client that is either a per se eligible counterparty or an elective eligible counterparty.

2. (2)

   A1 client can only be an eligible counterparty in relation to eligible counterparty business (PRIN 1 Annex 1 R is an exception to this).1

Each of the following is a per se eligible counterparty (including an entity that is not from an EEA State3 that is equivalent to any of the following) unless and to the extent it is given a different categorisation under this chapter:

1. (1)

   an investment firm;

2. (2)

   a credit institution;

3. (3)

   an insurance company;

4. (4)

   a collective investment scheme authorised under the UCITS Directive or its management company;

5. (5)

   a pension fund or its management company;

6. (6)

   another financial institution authorised or regulated under EU2 legislation or the national law of an EEA State;

   2
7. (7)

   [deleted]4

8. (8)

   a national government or its corresponding office, including a public body that deals with5 public debt at national level5;

9. (9)

   a central bank; and4

10. (10)

    a supranational organisation.

A firm may treat a client as an elective eligible counterparty in relation to business other than MiFID or equivalent third country business5 if:

1. (1)

   the client is an undertaking and:

   1. (a)

      is a per se professional client (except for a client that is only a per se professional client because it is an institutional investor under COBS 3.5.2 R (5)) and5:

      1
      1. (i)

         is a body corporate (including a limited liability partnership) which has (or any of whose holding companies or subsidiaries has) called up share capital of at least £10 million (or its equivalent in any other currency at the relevant time); or1

      2. (ii)

         meets the criteria in the rule on meeting two quantitative tests (COBS 3.5.2 R (3)(b)); and5

         1
   2. (b)

      requests such categorisation; and6

2. (2)

   the firm adheres to the procedure set out at COBS 3.6.4BEU5.

Provided that it adheres to the procedure set out at COBS 3.6.4BEU, a firm may treat a client as an elective eligible counterparty in relation to MiFID or equivalent third country business if the client:6

1. (1)

   is an undertaking;6

2. (2)

   is a per se professional client, except for a client that is only a per se professional client because it is an institutional investor under COBS 3.5.2R(5); and6

3. (3)

   requests such categorisation.6

[Note: first paragraph of article 30(3) of MiFID]6

A firm may obtain a prospective counterparty's confirmation that it agrees to be treated as an eligible counterparty either in the form of a general agreement or in respect of each individual transaction.

In the case of MiFID or equivalent third country business, in the event of a transaction where the prospective counterparties are located in different EEA States, the firm shall defer to the status of the other undertaking as determined by the law or measures of the EEA State in which that undertaking is established.