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Suitability & Appropriateness Testing

What is suitability testing and when is it to be carried out?

Suitability testing for the proposed products / services is required in the cases of providers of investment advice and portfolio management for layperson and professional customers. More specifically, the elements to be assessed will be the customer's knowledge and experience in the investment sector relating to that particular category of financial instrument or services, as well as the customer's financial situation. The products proposed must respond to the customer's investment goals and investment profile.

What is appropriateness testing and when is it to be carried out?

Appropriateness testing is required in case of a simple order (execution only) for the buying or selling of complex instruments by Retail customers. In this case, the elements to be assessed will be the customer's knowledge and experience in the investment sector relating to that particular category of financial instrument offered or required, so as to secure that he/she is aware of any risks.

Exactly what difference is there between suitability testing and appropriateness testing?

These are two different types of testing which aim at the investors' best possible protection. The need to carry these out depends on the customer's categorisation, as well as on the service rendered by the Group.

The cases in which each type of testing is carried out are listed in the following table:
Complex instruments Non-Complex instruments
Provision of investment advice
Suitability test Suitability test
Portfolio management
Suitability test Suitability test
Other services (execution only)
Appropriateness test