🤝 Business Conduct and Client Relations

1. Which ONE of the following general principles of the Code of Conduct requires a licensed or registered person to act honestly and fairly in conducting its business activities?

1. General Principle 1: honesty and fairness
2. General Principle 2: diligence and skill
3. General Principle 6: conflicts of interest
4. General Principle 7: regulatory compliance

General Principle 1 (honesty and fairness) provides that a licensed or registered person should act honestly, fairly and in the best interests of its clients and the integrity of the market. General Principle 2 concerns due skill, care and diligence, General Principle 6 concerns avoiding conflicts of interest and General Principle 7 concerns compliance with regulatory requirements, so none of them is the principle on honest and fair conduct.

2. A licensed corporation fails to comply with a provision of the Code of Conduct that applies to it. Which ONE of the following statements is CORRECT?

1. The failure automatically amounts to a criminal offence under the SFO
2. The failure by itself makes the corporation liable to judicial proceedings
3. The SFC considers whether it reflects adversely on fitness and properness
4. The Code cannot be cited in SFO proceedings as it lacks the force of law

Paragraph 1.4 of the Code of Conduct provides that a failure to comply does not by itself render the person liable to judicial or other proceedings, but the Commission shall consider whether the failure tends to reflect adversely on the person's fitness and properness (see also section 169 of the SFO). The failure is therefore not automatically an offence or a ground of liability, and the Code is admissible in evidence in proceedings under the SFO and must be taken into account if relevant.

3. Under General Principle 4 of the Code of Conduct, a licensed or registered person should seek from its clients information about which ONE of the following sets of matters, relevant to the services to be provided?

1. Financial situation, investment experience and investment objectives
2. Financial situation, tax residence and expected investment horizon
3. Employment history, investment experience and general risk appetite
4. Credit rating, investment objectives and detailed family circumstances

General Principle 4 (information about clients) requires a licensed or registered person to seek information about the client's financial situation, investment experience and investment objectives relevant to the services to be provided. Tax residence, employment history, risk appetite, credit rating, investment horizon and family circumstances are not the matters named in that principle.

4. Mr Chan instructs Harbourview Securities Limited to buy 5,000 shares of a listed company at the market. Harbourview executes the order at once and in line with his instruction, but at a price worse than the best price then available to it. Which ONE of the following obligations has Harbourview most likely breached?

1. Prompt execution of the client's order
2. Best execution of the client's order
3. Prompt and fair allocation to client accounts
4. Immediate time stamping of order records

Paragraph 3.2 of the Code of Conduct requires client orders to be executed on the best available terms, which Harbourview did not do. Prompt execution under paragraph 3.1 was satisfied because the order was executed at once and in accordance with the instruction. Allocation under paragraph 3.3 concerns spreading executed transactions among client accounts, and time stamping under paragraph 3.9 concerns order records, so neither is engaged by a poor price.

5. Which ONE of the following is NOT among the minimum provisions that a Client Agreement should contain under paragraph 6.2 of the Code of Conduct?

1. The client's full name and address as verified by an official document
2. The licensed person's licensing status with the SFC and its CE number
3. A description of the remuneration payable by the client and its basis
4. A statement of the client's annual income and total net worth

Paragraph 6.2(a), (b) and (e) of the Code of Conduct require the verified name and address of the client, the licensing status and CE number of the licensed or registered person, and a description of the remuneration payable by the client. There is no requirement for the Client Agreement to record the client's annual income and net worth; the client's financial situation is obtained through the know your client procedures (General Principle 4 and paragraph 5.1), not as a minimum clause of the agreement.

6. Which ONE of the following statements about the suitability clause that a Client Agreement should contain under paragraph 6.2 of the Code of Conduct is CORRECT?

1. It may be overridden by a signed client statement of no reliance on its advice
2. No other provision of the agreement or related document may derogate from it
3. It is required for securities margin accounts but not for cash accounts
4. It is limited to recommendations that are given to the client in writing

Paragraph 6.2 of the Code of Conduct requires the suitability clause to be included in the Client Agreement, after the risk disclosure statements of Schedule 1, and states: “No other provision of this agreement or any other document we may ask you to sign and no statement we may ask you to make derogates from this clause.” A signed no-reliance statement is therefore ineffective (paragraph 6.5 also precludes it). The clause applies to any solicitation or recommendation, whether the account is a margin account or a cash account, and whether or not the recommendation is in writing.

7. Harbourview Securities Limited's standard Client Agreement includes a clause in which the client acknowledges that no reliance is placed on any recommendation made or advice given by Harbourview. Ms Lam, a new client, is asked to sign it. Which ONE of the following statements is CORRECT?

1. The clause is permitted if Ms Lam initials it separately
2. The clause is not permitted, as it is inconsistent with the Code
3. The clause is permitted if it appears in a separate signed document
4. The clause is permitted if Ms Lam receives a copy of the agreement

Paragraph 6.5 of the Code of Conduct prohibits any clause in the Client Agreement, or in any other document signed or statement made by the client at the firm's request, that is inconsistent with the firm's obligations under the Code, and its Note specifically precludes a client acknowledging that no reliance is placed on advice. Separate initialling and a separate signed document are both caught by the same wording. Giving Ms Lam a copy is a separate requirement of paragraph 6.1 and does not cure the clause.

8. Under the Code of Conduct, which of the following are factors to determine whether an investment product is a complex product? I. Whether the investment product is a derivative product II. Whether a secondary market is available at publicly available prices III. Whether the issuer of the product is incorporated in Hong Kong IV. Whether features of the product might render it illiquid or difficult to value

1. I and II only
2. II and III only
3. I, II, III and IV
4. I, II and IV only

The Notes to paragraph 5.5 of the Code of Conduct list the factors, which include whether the product is a derivative product, whether a secondary market is available at publicly available prices, and whether any feature might render the product illiquid or difficult to value. The place of incorporation of the issuer is not one of the listed factors, so statement III is wrong and every option containing it is wrong.

9. Under paragraph 5.2 of the Code of Conduct, when a licensed or registered person makes a recommendation or solicitation to a client, it should ensure that the suitability of the recommendation or solicitation for that client is:

1. reasonable in all the circumstances of the case
2. approved in writing by the client beforehand
3. assessed against the best product in the market
4. determined by the product's past performance

Paragraph 5.2 of the Code of Conduct requires the suitability of a recommendation or solicitation to be reasonable in all the circumstances, having regard to the information about the client of which the person is or should be aware through due diligence. The test is not a comparison with the best product in the market, it does not depend on prior written approval by the client, and past performance of the product is not the yardstick: the assessment turns on the particular client.

10. Mr Chan, a client of Harbourview Securities Limited, has no knowledge of derivatives. On his own initiative, and without any solicitation or recommendation by Harbourview, he asks it to buy an exchange-traded derivative product for his account. Which ONE of the following should Harbourview do under the investor characterization requirements of the Code of Conduct?

1. Refuse the order, as such a client may not trade derivatives
2. Warn Mr Chan and advise whether the transaction is suitable for him
3. Execute the order, as no explanation is needed absent solicitation
4. Explain the relevant risks associated with the product to Mr Chan

Under the know your client requirements of the Code of Conduct on investor characterization, where a client without knowledge of derivatives wishes to buy a derivative product traded on an exchange and the licensed or registered person has not solicited or recommended it, the person should explain the relevant risks associated with the product to the client. Warning the client and advising on suitability is the route for products not traded on an exchange. The Code does not bar such a client from trading, and the absence of solicitation does not excuse the person from explaining the risks.

11. Under the investor characterization requirements of the Code of Conduct, a client without knowledge of derivatives wishes to buy a derivative product that is not traded on an exchange, with no solicitation or recommendation, and the transaction is assessed to be unsuitable for the client. The licensed person may proceed to effect the transaction only if:

1. the client signs a written waiver of any claim from the transaction
2. the client is warned a second time and confirms this in writing
3. the firm's senior management approves it in writing in advance
4. doing so would be acting in the best interests of the client

Under the know your client requirements of the Code of Conduct on investor characterization, after warning the client and advising on suitability, if the transaction is assessed to be unsuitable for the client, the licensed or registered person may only proceed if to do so would be acting in the best interests of the client in accordance with the general principles of the Code. A client waiver, advance senior management approval or a repeated warning does not satisfy that condition, and a waiver cannot override the obligations of the Code.

12. Which ONE of the following statements about client identity under paragraph 5.4 of the Code of Conduct is INCORRECT?

1. A transaction may be effected first, with the identity details collected afterwards
2. The person ultimately responsible for originating the instruction should be identified
3. The records should be kept in Hong Kong and made available to the SFC on request
4. For a discretionary account, the relevant entity is the account and its manager

Paragraph 5.4(c) of the Code of Conduct states that a licensed or registered person should not do anything to effect a transaction unless it has first complied with paragraphs 5.4(a) and (b), so collecting the details afterwards is not allowed. The other statements are correct: the record must be kept in Hong Kong with access for the Commission (5.4(b)), the person ultimately responsible for originating the instruction must be identified (5.4(a)), and for a discretionary account the entity is the account and its manager (5.4(d)).

13. Under paragraph 5.3 of the Code of Conduct, a licensed or registered person providing services to a client in futures contracts or options should assure itself that the client understands the nature and risks of the products and:

1. has sufficient net worth to be able to bear the potential losses
2. has traded derivative products in Hong Kong for at least two years
3. has been classified as a professional investor by the licensed person
4. has deposited cash margin equal to the full value of the contract

Paragraph 5.3 of the Code of Conduct requires the licensed or registered person to assure itself that the client understands the nature and risks of the products and has sufficient net worth to be able to assume the risks and bear the potential losses. The paragraph sets no minimum trading history, does not require professional investor status and does not require margin equal to the full contract value.

14. Which ONE of the following BEST describes a complex product for the purposes of the Code of Conduct?

1. An investment product that is not listed or traded on an exchange
2. An investment product that is offered to professional investors
3. An investment product that retail investors are unlikely to understand
4. An investment product whose price is quoted in a foreign currency

The Notes to paragraph 5.5 of the Code of Conduct refer to “an investment product whose terms, features and risks are not reasonably likely to be understood by a retail investor because of its complex structure”. Being unlisted, being offered to professional investors or being priced in a foreign currency is not the test, although features such as derivative nature or illiquidity are factors in assessing complexity.

15. Under paragraph 3.9 of the Code of Conduct, where client order instructions are received by telephone, a licensed or registered person should maintain the telephone recordings as part of its records for at least:

1. 3 months
2. 24 months
3. 12 months
4. 6 months

Paragraph 3.9 of the Code of Conduct requires a licensed or registered person to use a telephone recording system for client order instructions received by telephone and to maintain the recordings as part of its records for at least six months. Three months is shorter than the minimum, and 12 months and 24 months are longer than the period the paragraph sets.

16. Mr Lee, a dealer at Harbourview Securities Limited, receives a client's order instruction on his mobile phone while at a restaurant, away from the trading room and the usual place of business. Which ONE of the following should he do under paragraph 3.9 of the Code of Conduct and its Notes?

1. Note the details in writing and enter them in the records later
2. Call back the firm's recording system and record the time and details
3. Record the time and details in the order book on the next business day
4. Ask the client to resend the instruction by SMS to his personal mobile phone

The Notes to paragraph 3.9 of the Code of Conduct say that, where orders are accepted by mobile phone outside the trading floor or usual place of business, staff should immediately call back the firm's telephone recording system and record the time of receipt and the order details. Handwritten records are to be used only if the recording system cannot be accessed. Delayed entry the next day or an SMS to a personal phone would not give an immediate, recorded time stamp.

17. Which ONE of the following is NOT one of the nine general principles of the Code of Conduct?

1. Information about clients
2. Client data protection
3. Conflicts of interest
4. Information for clients

The nine general principles of the Code of Conduct are honesty and fairness, diligence, capabilities, information about clients, information for clients, conflicts of interest, compliance, client assets and responsibility of senior management. Client data protection is not the title of any of them.

18. Which of the following are among the nine General Principles of the Code of Conduct? I. Prompt execution II. Compliance III. Best execution IV. Client assets

1. II and IV only
2. I and III only
3. I and II only
4. I, II, III and IV

General Principle 7 (compliance) and General Principle 8 (client assets) are among the nine General Principles of the Code of Conduct, so statements II and IV are correct. Prompt execution and best execution are specific requirements in paragraphs 3.1 and 3.2 of the Code, not General Principles, so statements I and III are wrong.

19. In determining the degree of responsibility of a particular individual under General Principle 9 of the Code of Conduct, regard shall be had to that individual's:

1. total remuneration received from the firm during the period
2. apparent or actual authority over the business operations
3. length of service with the firm in the relevant role
4. number of clients personally served by the individual

General Principle 9 provides that the senior management bears primary responsibility for maintaining appropriate standards of conduct, and that in determining where responsibility lies, regard shall be had to the individual's apparent or actual authority in relation to the particular business operations and the factors in paragraph 1.3. Remuneration, length of service and the number of clients served are not the factors named.

20. In considering the conduct of a representative under the Code of Conduct, which ONE of the following will the Commission take into account where a firm has failed to follow the Code?

1. The number of years for which the representative has been licensed
2. The representative's level of control or knowledge of the failure
3. The commission the representative earned from the clients concerned
4. Whether the representative is licensed for Type 1 regulated activity

Paragraph 1.3 of the Code of Conduct says that the Commission will consider a representative's level of responsibility within the firm, any supervisory duties and the levels of control or knowledge concerning any failure by the firm or persons under supervision to follow the Code. Years of licensing, commission earned and the type of licence held are not factors named in that paragraph.

21. Harbourview Securities Limited distributes leaflets to the public promoting its brokerage services. The leaflets state, without any basis, that a competing broker overcharges its clients. Which ONE of the following requirements of the Code of Conduct has Harbourview most likely breached?

1. Accurate representations made to a client when advising
2. Fair and reasonable charges, mark-ups and fees to clients
3. Employment of staff who are fit and proper and qualified
4. Advertisements free of false or disparaging information

Paragraph 2.3 of the Code of Conduct requires a licensed or registered person to ensure that invitations and advertisements do not contain information that is false, disparaging, misleading or deceptive; promotional leaflets attacking a competitor without basis are caught. Paragraph 2.1 concerns representations made to a client when advising or acting for the client, paragraph 2.2 concerns the fairness of charges applied to clients, and paragraph 4.1 concerns the fitness and properness of staff, so none of them is the requirement engaged.

22. Harbourview Securities Limited promotes a specific unit trust and offers a free tablet computer to clients who subscribe to it. Which ONE of the following statements is CORRECT under paragraph 3.11 of the Code of Conduct?

1. The gift is not permitted, as only a discount of fees or charges is allowed
2. The gift is permitted if its value is small compared with the subscription
3. The gift is permitted if the product issuer, not Harbourview, bears its cost
4. The gift is permitted if the gift is disclosed to clients in writing

Paragraph 3.11 of the Code of Conduct states that, in promoting a specific investment product to a client, a licensed or registered person should not offer any gift other than a discount of fees or charges. A tablet computer is a gift of another kind, so it is not allowed whatever its value, whoever bears its cost and whether or not it is disclosed.

23. Under paragraph 2.4 of the Code of Conduct, a licensed or registered person should be familiar with which ONE of the following Ordinances and follow related guidance issued by the Independent Commission Against Corruption?

1. Personal Data (Privacy) Ordinance
2. Securities and Futures Ordinance
3. Prevention of Bribery Ordinance
4. Organized and Serious Crimes Ordinance

Paragraph 2.4 of the Code of Conduct (anti-bribery guidelines) requires a licensed or registered person to be familiar with the Prevention of Bribery Ordinance (Cap. 201) and to follow related guidance of the Independent Commission Against Corruption, because an agent who solicits or accepts an advantage without the principal's permission may commit an offence. The Securities and Futures Ordinance, the Personal Data (Privacy) Ordinance and the Organized and Serious Crimes Ordinance are not the ones named in that paragraph, and the guidance to be followed is that of the ICAC.

24. Under paragraph 4.3 of the Code of Conduct, a licensed or registered person should have internal control procedures and financial and operational capabilities that can reasonably be expected to protect its operations and clients from financial loss arising from:

1. movements in market prices, interest rates and exchange rates
2. changes in legislation, taxation and applicable accounting standards
3. theft, fraud and other dishonest acts, or professional misconduct
4. a decline in trading volumes and the loss of clients to competitors

Paragraph 4.3 of the Code of Conduct refers to financial loss arising from theft, fraud and other dishonest acts, professional misconduct or omissions, and requires the controls to protect the firm's operations, its clients and other licensed or registered persons. Market price movements, legal and accounting changes and a loss of business are not the sources of loss named in that paragraph.

25. Harbourview Securities Limited recommends a stock to Client K while its affiliate holds a large position in the same stock. Harbourview concludes that this conflict of interest cannot be avoided. Which ONE of the following should it do under General Principle 6 of the Code of Conduct?

1. Obtain the SFC's prior approval for the recommendation
2. Ask Client K to waive in writing any claim from the conflict
3. Ensure that Client K is fairly treated in the circumstances
4. Give its affiliate priority once the conflict is disclosed

General Principle 6 of the Code of Conduct says that a licensed or registered person should try to avoid conflicts of interest and, when they cannot be avoided, should ensure that its clients are fairly treated. The principle does not require the SFC's prior approval, a client waiver of claims, or priority for the firm's affiliate, and a waiver or priority for the affiliate would be inconsistent with fair treatment.

26. Under the Code of Conduct, which of the following statements are CORRECT? I. A licensed person should collect promptly from clients any amounts due as margin II. A licensed person may withhold market orders when this is more convenient for the firm III. A licensed person may keep a single combined account for all clients' dealings IV. A licensed person should inform clients of applicable derivative position and reporting limits

1. II and III only
2. I and IV only
3. I, III and IV only
4. I, II, III and IV

Paragraph 3.6 of the Code of Conduct requires margin amounts due to be collected promptly from clients, and paragraph 3.8 requires clients to be informed of applicable derivative position and reporting limits. Paragraph 3.5 says orders should not be withdrawn or withheld for the firm's own convenience, and paragraph 3.7 requires separate accounts for each client, so statements II and III are wrong.

27. Under the investor identification regime in paragraph 5.6 of the Code of Conduct, a BCAN is:

1. the account number issued by the clearing house for settlement
2. the CE number assigned by the SFC to each licensed person
3. a unique code generated by the licensed person for a client
4. a code generated by SEHK to identify each exchange participant

Paragraph 5.6 of the Code of Conduct defines a BCAN (Broker-to-Client Assigned Number) as a unique identification code, in the format prescribed by SEHK, generated by a relevant licensed or registered person to identify a client, linked permanently and exclusively to that client. The CE number is the unique identifier assigned by the SFC to the licensed person itself, and the BCAN is neither a settlement account number nor a code generated by SEHK for exchange participants.

28. Ridgeway Asset Management Limited, acting for a unit trust it manages, instructs Harbourview Securities Limited to buy shares listed on SEHK for the trust. Under paragraph 5.4 of the Code of Conduct, which ONE of the following is the entity about which Harbourview must be satisfied on reasonable grounds?

1. The unitholders who hold beneficial interests in the trust
2. The individual at the manager who telephoned the order
3. The unit trust and Ridgeway as the manager of the trust
4. The trustee which holds the assets of the unit trust

Paragraph 5.4(d) of the Code of Conduct provides that, for a collective investment scheme or discretionary account, the entity referred to in paragraph 5.4(a) is the scheme or account and its manager, not those who hold a beneficial interest such as the unitholders of a unit trust. Paragraph 5.4(e) confirms that the paragraph applies here because the shares are listed on a recognized stock market. The unitholders, the individual at the manager who telephoned the order and the trustee are not the entity described.

29. Mr Chan states that he prefers Chinese. Harbourview Securities Limited opens his account by post and sends him the Client Agreement and risk disclosure statements in English only. Which ONE of the following should Harbourview have done under paragraph 6.1 of the Code of Conduct?

1. Provide the documents in Chinese, according to his preference
2. Provide English documents plus a Chinese summary of the key terms
3. Provide English documents with his signed confirmation of understanding
4. Provide the documents in English, as it is the main business language

Paragraph 6.1 of the Code of Conduct requires the Client Agreement, and any other agreement, authority, risk disclosure or supporting document, to be in Chinese or English according to the client's language preference. A summary of key terms, a signed confirmation of understanding or a general business preference for English does not meet that requirement. For a non-face-to-face opening, the covering correspondence should also direct the client's attention to the risk disclosure statements.

30. Under the Code of Conduct, which of the following must a licensed or registered person ensure when providing services to a client in complex products? I. A transaction in a complex product is suitable for the client in all the circumstances II. Sufficient information on the key nature, features and risks is provided to the client III. Warning statements on distribution are provided in a clear and prominent manner IV. The client signs a confirmation that he is a professional investor

1. I and III only
2. II and IV only
3. II, III and IV only
4. I, II and III only

Paragraph 5.5(a) of the Code of Conduct requires the licensed or registered person to ensure suitability in all the circumstances, to provide sufficient information on the key nature, features and risks so that the client can understand the product, and to provide warning statements in a clear and prominent manner. Nothing in paragraph 5.5 requires the client to sign a confirmation of professional investor status, so statement IV is wrong.

31. When a licensed person deals with a professional investor, which ONE of the following statements about the Code of Conduct is CORRECT?

1. The SFC must approve each classification before any exemption under the Code is used
2. The suitability requirement is the sole Code requirement that continues to apply to such a client
3. The Code applies to such a client if the SFO's advertising restrictions also apply to it
4. All Code requirements still apply, including the general principles, subject to exemptions

Paragraph 15.1 of the Code of Conduct states that some SFO restrictions (such as those on advertisements and unsolicited calls) do not apply when dealing with professional investors, but all Code requirements, including the general principles of acting honestly and fairly, must still be strictly observed, subject to exemptions. The Code is therefore not limited to suitability and does not depend on the SFO's advertising restrictions. The procedure in Part B of paragraph 15.3 relies on the client's signed declaration, not on any SFC approval of the classification.

32. Under paragraph 15.2 of the Code of Conduct, which ONE of the following is an INSTITUTIONAL professional investor, by reference to the definition of “professional investor” in Schedule 1 to the SFO?

1. A trust corporation falling under section 4 of the Professional Investor Rules
2. An individual falling under section 5 of the Professional Investor Rules
3. An authorized insurer falling within paragraph (d) of that definition
4. A person belonging to a class prescribed under paragraph (j) of that definition

Paragraph 15.2 of the Code of Conduct defines institutional professional investors as persons falling under paragraphs (a) to (i) of the definition of professional investor in Schedule 1 to the SFO, and an authorized insurer falls within paragraph (d). Persons in a class prescribed under paragraph (j) are those covered by the Professional Investor Rules, who are corporate or individual professional investors, not institutional ones. A trust corporation under section 4 of the Professional Investor Rules is a corporate professional investor, and an individual under section 5 of those Rules is an individual professional investor.

33. Mr Chan is an individual professional investor, and Harbourview Securities Limited has complied in full with the procedures in Part B of paragraph 15.3 of the Code of Conduct for him. From which ONE of the following may the firm be exempt when dealing with him?

1. Confirming promptly with him the essential features of each transaction
2. Ensuring that its recommendations to him are suitable for his circumstances
3. Entering into a written client agreement and giving him risk disclosure statements
4. Disclosing the benefits it receives for trades in his discretionary account

Under paragraphs 15.2 and 15.5 of the Code of Conduct, once Part B of paragraph 15.3 has been complied with, a licensed or registered person may deal with an individual professional investor without the prompt confirmation of the essential features of each transaction required by paragraph 8.2. Suitability, the written client agreement with risk disclosure statements and the disclosure of benefits for a discretionary account are exemptions in paragraph 15.4, which are available only for institutional professional investors and for corporate professional investors that also pass the assessment in Part A of paragraph 15.3.

34. Which of the following criteria must a licensed person be reasonably satisfied that a corporate professional investor meets, for the relevant products and markets, before dis-applying paragraph 15.4 of the Code of Conduct? I. It has the appropriate corporate structure and investment process and controls II. Its decision-makers have sufficient investment background, including experience III. It is aware of the risks involved, considered through its decision-makers IV. It is listed on a recognised stock exchange

1. I and IV only
2. I, II and III only
3. II and IV only
4. I, II, III and IV

Part A of paragraph 15.3 of the Code of Conduct requires the licensed or registered person to be reasonably satisfied that the corporate professional investor meets three criteria: the appropriate corporate structure and investment process and controls, the sufficient investment background of the persons making investment decisions, and the corporation's awareness of the risks involved, considered in terms of those persons. A stock exchange listing is not among the criteria, so every combination containing IV is wrong. The assessment should be in writing and be done separately for different product types or markets.

35. Before treating a client as a professional investor under Part B of paragraph 15.3 of the Code of Conduct, what must a licensed person explain about the client's right of withdrawal?

1. The client may withdraw after obtaining the written consent of the SFC
2. The right to withdraw arises annually, at the time of the confirmation exercise
3. The client may withdraw from all products and markets together, not in part
4. The client may withdraw at any time, for any product or market or all of them

Part B of paragraph 15.3 of the Code of Conduct requires the firm to explain the consequences of being treated as a professional investor and that the client may withdraw at any time, in respect of all products or markets or any part of them. The right is not confined to the annual confirmation date, it is not all-or-nothing, and it does not depend on the consent of the SFC.