CIPR 3.3.4 Assessing customers' relevant knowledge, experience and understanding

(1) In deciding whether a customer has sufficient knowledge, experience and understanding of relevant financial markets, products and transactions and the associated risks, an authorised firm must consider all of the following:
(a) the customer's knowledge and understanding of those markets, products and transactions and their associated risks;
(b) whether the customer has been active in those markets, products and transactions (and if so for how long);
(c) the frequency of his or her dealings in those markets, products and transactions, and the extent to which he or she has relied on the firm's advice in those dealings;
(d) whether the customer is employed in a professional capacity, or is otherwise professionally involved, in relation to those markets, products and transactions, and if so for how long;
(e) the size and nature of transactions that have been undertaken by or for the customer in those markets;
(f) whether the customer will rely on the independent advice or judgment of another authorised firm or regulated financial institution in relation to the relevant regulated activities.
(2) The firm must document the assessment and must retain evidence of it.
Derived from QFCRA RM/2019-2 (as from 1st January 2020).