Professional clients are treated differently as they forego the protections provided for Retail clients, but have access to increase leverage.
Qualification criteria in detail
In order to qualify to become a Professional Client, you will need to meet at least 2 out of the 3 eligibility criteria outlined by MiFID II. There will be no change to tax status or any additional cost to change to Professional Client status.
The criteria are as follows:
Trade size & Volume
You have traded, in significant size, in the forex/CFD markets or other leveraged products (e.g. indices, shares, spot FX, futures, options, other derivatives etc.) at an average frequency of 10 transactions per quarter over the previous four quarters (with PhoenixMarkets and/or other providers).
Significant sized trades are classified as having a notional value of €10,000 for equities and €50,000 for forex, indices and commodities or equivalent in local currency.
Size of portfolio
The size of your financial instrument portfolio, defined as including cash deposits and financial instruments, exceeds €500,000 (or equivalent in your local currency).
Acceptable examples of savings and investments: Cash savings, stock portfolio, stocks and shares ISA, trading accounts, mutual funds, SIPP (excluding non-financial instruments).
Unacceptable examples of savings and investments: Company pension, non-tradable assets, property, luxury cars, jewelry.
You work or have worked in the financial sector for at least one year in a professional position, which requires knowledge of the transactions or services envisaged.
Margin close out rules
Margin close-out levels under local regulatory body and following the ESMA proposals for retail clients are at 50% margin close out level. For Elective professionals it is at 25%.