Which type of investor cannot be automatically treated as a professional client by a MiFID investment firm?

• A. Companies.
• B. Pension funds.
• C. Banks.
• D. Life assurance companies.

Answer: (A)

MiFID II designates professional client status by default for certain institutional entities with significant size or expertise. Banks, pension funds, and life assurance companies are explicitly included in that list, so they can be automatically treated as professional clients by a MiFID investment firm. A general company, however, is not automatically considered professional. To gain professional status, it must meet the large undertaking criteria (two of three thresholds: balance sheet total, net turnover, own funds) or be assessed and designated as professional after the firm reviews its characteristics. Therefore, a generic company cannot be automatically treated as a professional client.