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 the UK7 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 UK provisions which implemented the7 UCITS Directive or its management company;

5. (5)

   a pension fund or its management company;

6. (6)

   another financial institution authorised or regulated under the law of the United Kingdom7;

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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 3.6.4BUK7.

   5

Provided that it adheres to the procedure set out at COBS 3.6.4BUK7, 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.