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Version date: 23 June 2020 - onwards
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Chapter 6 Selling of eligible liabilities to retail clients

11 August 2020

6.1 The new Article 44a of BRRDII introduces restrictions on the selling of TLAC and MREL eligible liabilities to retail clients. For these purposes, a retail client is defined as a client who is not a professional client or an eligible counterparty. A professional client is defined as an entity required to be authorised or regulated to operate in financial markets.

6.2 BRRDII establishes that a firm may only sell TLAC eligible liabilities, as defined within the Capital Requirements Regulation II (CRRII), where certain conditions are met.

6.3 The seller must perform a suitability test, in accordance with Article 25 of the Markets in Financial Instruments Directive II (MiFID II), and be satisfied that the liabilities are suitable for the retail client. The seller must then document this suitability.

6.4 The seller must also ensure, if the retail client has a financial instrument portfolio of less than EUR 500 000 at the time of the purchase, that the client does not invest an aggregate