AI Summary of Article 3 Selling of securitisations to retail clients
Sale of a securitisation position to a retail client, as defined in point 11 of Article 4(1) of Directive 2014/65/EU, is prohibited unless the seller has (a) performed a suitability test in accordance with Article 25(2) of Directive 2014/65/EU, (b) is satisfied on the basis of that test that the position is suitable for the retail client, and (c) immediately communicates the outcome of the suitability test to the retail client in a report.
Where those conditions are met and the retail client’s financial instrument portfolio does not exceed EUR 500 000, the seller must ensure, based on information provided by the retail client, that aggregate investment in securitisation positions does not exceed 10% of the portfolio and that the initial minimum amount invested in one or more securitisation positions is EUR 10 000. The retail client must provide accurate information on the financial instrument portfolio, including investments in securitisation positions; the portfolio includes cash deposits and financial instruments but excludes instruments given as collateral.
Article 3 Selling of securitisations to retail clients
1. The seller of a securitisation position shall not sell such a position to a retail client, as defined in point 11 of Article 4(1) of Directive 2014/65/EU, unless all of the following conditions are fulfilled:
(a) the seller of the securitisation position has performed a suitability test in accordance with Article 25(2) of Directive 2014/65/EU;
(b) the seller of the securitisation position is satisfied, on the basis of the test referred to in point (a), that the securitisation position is suitable for that retail client;
(c) the seller of the securitisation position immediately communicates in a report to the retail client the outcome of the suitability test.
2. Where the conditions set out in paragraph 1 are fulfilled and the financial instrument portfolio of that retail client does not exceed EUR 500 000, the seller shall ensure, on the basis of the information provided by the retail client in accordance with paragraph 3, that the retail client does not invest an aggregate amount exceeding 10 % of that client’s financial instrument portfolio in securitisation positions, and that the initial minimum amount invested in one or more securitisation positions is EUR 10 000.