When can an FCA authorised firm be classified as an eligible counter-party?

An FCA authorised firm can be classified as an eligible counterparty when it has obtained consent from the client. This concept is rooted in the regulatory framework that governs relationships between firms and their clients. The classification of a firm as an eligible counterparty allows it to be treated differently regarding the level of regulatory protection afforded to clients, which typically involves a lower level of expected protection compared to retail clients.

For instance, under the FCA rules, the classification of a client as an eligible counterparty implies that the client is deemed to have a greater understanding of investing and the financial markets, thus permitting firms to engage in certain types of transactions with them without adhering to all the protective measures required for retail clients. Consent is vital in this process, as it ensures that the client understands and agrees to the implications of being classified in this manner, allowing both parties to operate under a more streamlined regulatory framework.

The other options do not accurately reflect the necessary criteria for classification as an eligible counterparty. The size of the firm, its capitalization, or its status as a public limited company is not relevant to this specific classification. Instead, the focus is on client consent, emphasizing the importance of mutual understanding and agreement in the context of financial services.