A MiFID investment firm has received an order from a retail client to invest in CFDs without providing investment advice. The firm is required to:

• A. A assess the suitability of the CFDs for the client.
• B. B provide the client with a statement of suitability for the transaction.
• C. C assess the appropriateness of the CFDs for the client.
• D. D refuse to process the transaction until a face-to-face meeting.

Answer: (C)

The concept being tested is how MiFID handles non-advised, execution‑only transactions for complex products. When a retail client asks to trade a complex instrument like CFDs without investment advice, the firm must perform an appropriateness assessment. This means checking whether the client’s knowledge and experience are sufficient to understand the risks and features of CFDs, and whether the product is appropriate given the client’s financial situation and investment objectives. CFDs are high‑risk and require careful consideration, so the firm must verify appropriateness before proceeding.

S suitability assessment is used when the firm provides a personal recommendation or advice, not for execution without advice. A statement of suitability is a document tied to advised sales to confirm the suitability of the recommendation, not relevant in this non-advised context. Requiring a face‑to‑face meeting is not a MiFID mandate for execution‑only transactions; the key requirement is the appropriateness assessment based on information gathered from the client.