Investor information.

Learn about the key concepts and main rules that regulate the marketing of investment products at Banco Montepio.

As an investor or potential investor through Banco Montepio, it is important to know some key concepts and regulations to which the Bank is subject, in order to guarantee the level of transparency and protection that the marketing of  investment products requires. 


These concepts and regulations also help you understand some of the steps you have to go through in the process of subscribing to investment products through the Bank.

The Markets in Financial Instruments Directive (MiFID)

Coming into force in January 2018, this community directive is the regulation with the greatest relevance in the activity of marketing financial instruments and with the most direct impact on the subscription process for these products.


MiFID II defined a new legal framework at European Union level and aims to reinforce investor protection and increase the transparency and quality of the functioning of the financial market and the services provided, through the application of a set of rules that focus on: (1) strengthening information obligations to customers; (2) assessing the suitability of products for each customer, through customer classification and identification of the target market for each product; (3) mitigation of conflicts of interest; (4) and strengthening the criteria and mechanisms for confirming and executing orders (including rules on recording telephone conversations or electronic communications and the use of specific identifiers in transaction communications).

Main financial instruments

Among the various types of financial instruments made available by financial entities and covered by MiFID II, the following stand out:


- Securities: shares, bonds, participation units in investment funds (UPs), equity securities (EQs), rights detached from the securities previously described, autonomous warrants and certificates.


- Money market instruments: deposit certificates, commercial paper and treasury bills.


- Derivative instruments: futures, swaps, forward contracts or others relating to securities, currencies, interest rates, issue licenses, indexes or indicators, commodities or for transferring loan risk.


All of these instruments have different characteristics, operating rules and risks, which you should try to understand before undertaking a subscription.

Complexity of financial instruments

MiFID II also introduced two types of classification of financial instruments, according to their degree of complexity, aiming to increase and improve the information provided at the time of subscription:


- Non-complex: shares, bonds, harmonised investment funds, mixed products with harmonised investment funds.


- Complex: bonds incorporating derivatives, non-harmonised investment funds, mixed products with non-harmonised investment funds, equity securities, covered warrants, detached securities rights, derivative instruments for transferring loan risk, options, futures, swaps , interest rate forward contracts and any other derivative contracts.

Customer rating

According to the criteria defined in MiFID II, Banco Montepio classifies its customers as investors into three categories: 


- Non-professional: base classification attributed by the Bank to customers (individuals or companies) who do not meet the criteria defined in the Professional and Eligible Counterparty classifications, as it is considered that, generally speaking, their level of knowledge and experience justifies a higher level of protection in assessing  risks inherent to investment operations; 


- Professional: investors who have the experience, knowledge and competence necessary to make their own investment decisions and assess the associated risks, and must comply with two of the following requirements: (1) have carried out a significant volume of transactions in the relevant market, with an average frequency of 10 operations per quarter, during the last four quarters; (2) have a portfolio of financial instruments, also including cash deposits, that exceeds 500,000 euros; (3) perform or have performed functions in the financial sector, for at least one year, in a position that requires knowledge of the services or operations in question. 


- Eligible counterparty: customers who benefit from the lowest level of protection, as it is assumed that they have the experience, competence and knowledge necessary to make their own investment decisions and duly consider the risks they incur. This category includes investment companies, credit institutions, insurance companies, collective investment bodies in securities and their respective management companies, pension funds and their respective management companies, among others, are classified in this category. 


Each of these categories corresponds to different levels of coverage, with non-professional customers being those who benefit from greater protection. Customers are, however, given the possibility of requesting a change in the classification assigned to them by Banco Montepio. 

Product suitability assessment
In the process of subscribing to investment products, Banco Montepio requests information to  its customers, through a questionnaire drafted to this effect, regarding their knowledge and experience in investment matters, in order to be able to assess whether the customer understands the risks involved. 
Information duties towards investors
Throughout the entire process of subscribing to investment products, Banco Montepio provides its customers (actual or potential) all the information necessary to make a clear and informed decision. The extent and depth of information is greater, the lower the customer’s level of knowledge and experience in investment matters is.
Recording communications with investors
As determined by MiFID II, telephone conversations and electronic communications relating to transactions concluded during own account trading and the provision of services relating to customer orders regarding the reception and transmission or execution of orders are subject to recording by Banco Montepio. These also include those intended to result in completed transactions, even if such conversations or communications do not result in the completion of such transactions or the provision of services relating to customer orders. Recordings must be kept for at least a period of 5 years.
Unique identifier of entities involved in the financial instruments market (LEI Code)

MiFID II requires that all legal entities (legal persons and other parties) participating in transactions relating to financial instruments be identified using a unique and universal identifier, known as the LEI Code (“Legal Entity Identifier”).


This code, unique and permanent and composed of 20 alphanumeric characters, aims to identify, unequivocally and at an international level, any participant in the financial markets, thus contributing to reinforcing transparency and increasing trust in the counterparties of operations and reducing risks of market abuse, financial fraud, money laundering and terrorist financing.


In order to transact financial instruments, legal entities will therefore have to obtain their LEI code, which can be done online, from an entity, public or private, duly accredited for its issuance. These entities are called Local Operating Unit, or in English, Local Operating Unit (“LOU”) and can be consulted on the GLEIF (Global Legal Entity Identifier Foundation) portal.

More information?

For more information about investment products and the rules that regulate the marketing activity of these products, you can consult the websites of the following entities:

Comissão do Mercado de Valores Mobiliários (CMVM)

Banco de Portugal (BdP)

The Global Legal Entity Identifier Foundation (GLEIF)