How do I review the mPASS information? 

Element

Function

A

Client Risk Appetite

Many regulatory frameworks require firms to obtain the client’s investment objectives, and create a profile of them as an investor. This is usually done as part of the Suitability assessment, which is an assessment that is sometimes required while providing certain financial services. To aid you in this task, the Platform includes a built-in Suitability assessment, whose results will be presented also in a form of a “risk appetite” section, that includes a “risk bar” as well as wording that describe each risk profile.

The section will only show if a Suitability assessment is triggered.

Below you will find the different investor profiles, and the wording which appears when a certain profile is assigned (the wording is a general, broad description of the profile, not of the specific client).

This investor profile is concerned with capital protection and is somewhat concerned when this does not occur. They have a very basic understanding of the investment markets and their operations. When they consider the term “risk”, they are likely to take it that it means “danger”. Whilst making a financial decision, this investor type would be focused on possible losses. They do seek moderate returns and do not wish to take on more than a low level of risk.

This investor profile is prepared to establish a diversified portfolio to partially protect them from inflation and tax. They have a general understanding of the investment markets but would like to have a broader understanding in order to explore the possibilities. When they consider the term “risk”, they are likely to take it that it means as “uncertainty”. Whilst making a financial decision, this investor type would be focused on the possible losses but will keep in mind the possible gains. They are prepared to accept a limited level of risk (and therefore volatility) in the overall capital value of their investments.

This investor profile is prepared to adopt a diversified portfolio that will somewhat protect them from inflation and tax. They have a reasonable understanding of the investment markets and their operation. When they consider the term “risk” they are focused on possible gains but will also keep in mind the possible losses. They can accept that there is some volatility in the value of their investments. They are a moderate risk taker and can accept some moderate levels of investment risk.

This investor profile is interested in investing in a broad spread of quality investments, but predominantly in growth assets to achieve higher growth. They understand that investment markets can and will fluctuate and that different market sectors would offer different levels of risks, income and growth. Their investment time horizon is likely to be for the long term at 7 years or more. When they consider the term “risk”, they are likely to take it that it means “opportunity”. Whilst making a financial decision, they are likely to focus on possible gains. They are a high risk taker and can accept higher levels of investment risks. They are seeking to achieve a reasonably high rate of growth on the capital invested.

This investor profile is interested in capital growth and accumulating wealth more quickly relative to your investment timeframe. They understand the cyclical nature of investments and accept that there will be a very high level of volatility in the value of their investments. They are experienced in all major investment markets and have a very good understanding of the investment markets. They are aware of the factors that may affect investment performance in investment markets. Their investment time horizon is likely to be for the long term at 7 years or more. When they consider the term “risk”, they are likely to take it that it means “thrill”. Whilst making a financial decision, they always focus on possible gains. They can accept very high levels of variability in investment returns, as they understand that the higher the risks associated with their investments, the higher the potential level of returns would be.

B

Org Name

Here the name of your Platform will appear.

C

Country

In this column will appear the country in which your firm is licensed in, as well as the country your client resides in.

D

Financial Instrument

In this column will appear the different financial instruments your client indicated, in the client journey, they are interested in trading in. Of course, you can choose which instruments you offer (more on that in Section 6.2.3 of this manual). 

E

Financial Service

In this column will appear the different financial services your client indicated, in the client journey, they are interested in receiving from you, in relation to a certain financial instrument. Of course, you can choose which services you offer (more on that in Section 7.2 of this manual). 

F

Categorisation

In this column the client’s category, as determined by the Platform, will appear. The determination will be made according to the legislation in both the firm’s country of license and the client’s place of residence. It will also be specific to the service and instrument provided).

G

Permission and Result

In these columns, you will see the basis on which you may provide the certain financial service and/or instrument (as configured by you on the Platform. This can be, for example: a license, if the client resides in a country the firm is licensed in; Passporting, if the client resided in a country which allows firms with licenses similar to the firm’s license to provide services in, etc. For more on that see Section 7.2, and whether you are allowed to provide them in this specific case, on the basis of the client’s categorisation.  The determination will be made both according to the legislation in the frim’s country of license and the client’s place of residence).

The possible indications are shown in RAG (Red, Amber, Green) form:

If this RAG appears, it means your firm may provide the requested service in relation to the selected instrument in the relevant jurisdiction to the client based on the client's categorisation and your firm’s license in the said jurisdiction.

If this RAG appears, it means your firm may NOT provide the requested service in relation to the selected instrument in the relevant jurisdiction to the Client, as no permissions have been configured in the Platform for this service/instrument combination. Meaning, the Platform hasn’t been configured to deal with this combination (more on how to configure mPASS™ in Section 7.

If this RAG appears, it means your firm is allowed to provide the specific service in relation to the specific instrument, but with restrictions. If you click on the RAG, the said restrictions will pop-up.

If this RAG appears, it means your firm is NOT allowed to provide the specific service in relation to the specific instrument (based, again, on the Platform’s configuration).

H

Suitability and Appropriateness

In this column you will see if the specific service in relation to the specific instrument is suitable and/or appropriate to the client, on the basis of their answers in the client journey and the relevant legislative frameworks.

The possible indications are:

The requested service in combination with the selected instrument is appropriate for the client.

The requested service in combination with the selected instrument is NOT appropriate for the client. You may still be allowed to offer the requested service to the client provided that proper risk warnings are presented to them.

The requested service in combination with the selected instrument is suitable for the client.

The requested service in combination with the selected instrument is NOT suitable for the client. You may still be allowed to offer the selected instrument to the client on a non-advised/ execution only basis if the client wishes to do so, and has agreed to this, provided that proper risk warnings are presented to the client in accordance with the appropriateness obligation.

The determination is not applicable to the said service and/or instrument (for example, if there is no requirement for suitability and/or appropriateness under the relevant legal framework.

H1

Financial Situation

Indicates if the client’s financial situation upholds the legal requirements for the provision of the said product and service.

H2

Investment Objectives

Indicates if the client’s investment objectives suit the legal requirements for the provision of the said product and service.

H3

Knowledge & Experience

Indicates if the client’s knowledge & experience suit the legal requirements for the provision of the said product and service.

Some possible indications in H1-H3

Blue – the client’s financial situation / investment objectives / knowledge & experience are assumed suitable / appropriate, on account of their categorisation (as, for example, professional clients).

Green – the client’s financial situation / investment objectives / knowledge & experience are suitable / appropriate.

Red – the client’s financial situation / investment objectives / knowledge & experience are NOT suitable / appropriate.

This appears when, for example, the law has no Suitability and/or Appropriateness requirement.