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---
title: "ESMA Q&A 1850 — Q&A — Client categorisation [Answer Published]"
shortTitle: "ESMA Q&A 1850 — Q&A — Client categorisation [Answer Published]"
answer_id: ESMA_QA_1850
topic: "Client categorisation"
status: "Answer Published"
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instrument_type: qa
authority: ESMA
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binding_character: non_binding
legal_status: in_force
regulation: "MiFID II"
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legal_basis: "MiFID II"
date: 25 May 2018
source_link: https://www.esma.europa.eu/publications-data/questions-answers/1850
lifecycle: "Answer Published"
text_version: "ESMA Q&A register, 25 May 2018"
source_url: "https://www.esma.europa.eu/publications-data/questions-answers/1850"
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---

**Answer by ESMA, published in its Q&A tool · not legislation · published 5 May 2018 [Answer Published]**

*Answer Published · ESMA Q&A register, 25 May 2018 · Checked against the ESMA publication on 26 Oct 2026 · [Official source](https://www.esma.europa.eu/publications-data/questions-answers/1850)*

| | |
|---|---|
| **Full title** | ESMA Q&A 1850 — Q&A — Client categorisation \[Answer Published\] |
| **Prepared by** | ESMA |
| **Published by** | ESMA, in the ESMA Q&A tool |
| **Reference** | ESMA_QA_1850 |
| **Document type** | Q&A |
| **Legal nature** | Not legislation |
| **Addressees** | Not stated in the document |
| **Dates** | Published 5 May 2018; question submitted 25 May 2018 |
| **Legal basis** | MiFID II |
| **Related instruments** | None recorded |
| **Text on this page** | Word for word — the full text of the ESMA publication |

**Client categorisation**

### Question

How should an investment firm assess whether a private individual investor has carried out transactions of a “significant size” in accordance with the first limb in the fifth paragraph of Section II.1 of Annex II of MiFID II?

***

### Answer

\[ESMA 35-43-349 Q&As on MIFIDN II Investor protection Ch 11, question 4\]

When assessing whether a client transaction is of a significant size, investment firms shall, inter alia, take into account the size of transactions on the relevant market. For the purpose of determining the relevant threshold, the scope of the analysis should not be limited to (the size of) transactions previously carried out by the relevant client or by clients of the relevant investment firm on the relevant market.

To assess whether transactions are of a significant size, investment firms should consider whether the transactions were individually large enough to provide the client with meaningful exposure to the relevant market so that it contributed to the client’s acquiring the required expertise, experience and knowledge of the transactions or services envisaged.

In relation to leveraged positions or financial instruments for which a margin is deposited, ESMA considers it likely that the typical notional value of transactions in such financial instruments will be commensurately higher than in non-leveraged products, and therefore would expect firms to assess “significant size” at a level appropriate to that market. In the case of derivatives, a firm may also need to consider if the “relevant market” should be distinguished by the underlying asset class, index or reference price to which exposure is provided to ensure “significant size” is appropriately assessed.

***

**Source:** [ESMA original document](https://www.esma.europa.eu/publications-data/questions-answers/1850)