Under MiFID, when a retail client requests CFDs and no investment advice is given, which obligation must the firm fulfill?

• A. assess appropriateness.
• B. provide Mark with a statement of suitability.
• C. assess suitability.
• D. refuse to process until the firm has met Mark face to face.

Answer: (A)

Under MiFID, when a retail client requests a non-advised trade in a complex instrument like CFDs, the firm must perform an appropriateness assessment. This checks whether the client has the necessary knowledge and experience to understand the product and the risks involved, ensuring the service is suitable for them even though no advice is being given. CFDs are complex and can carry significant risk, so the firm needs to confirm the client’s familiarity with such instruments before proceeding.

Providing a statement of suitability is reserved for situations where investment advice or a tailored recommendation is given, which isn’t the case here. Assessing suitability is the process used when advice is provided. Requiring a face-to-face meeting before processing isn’t a standard MiFID obligation for this scenario; the essential step is the appropriateness assessment to gauge whether the trade is suitable for the client’s knowledge and experience.