1. Investment firms, shall determine whether that client has the necessary experience and knowledge in order to understand the risks involved in relation to the product or investment service offered or demanded when assessing whether an investment service as referred to in rule 10A.1.1 of the Conduct of Business sourcebook is appropriate for a client.
An investment firm shall be entitled to assume that a professional client has the necessary experience and knowledge in order to understand the risks involved in relation to those particular investment services or transactions, or types of transaction or product, for which the client is classified as a professional client.
2. Investment firms shall maintain records of the appropriateness assessments undertaken which shall include the following:
(a) the result of the appropriateness assessment;
(b) any warning given to the client where the investment service or product purchase was assessed as potentially inappropriate for the client, whet
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