General

MiFID's two main issues

• investor protection: the Directive harmonizes the rules in this area and aims at affording customers the same protection all round whatever the European Bank which provides the investment service,
• competition: the Directive does away with the stock exchanges' monopoly, permits the use of several different types of quotation and imposes best order execution, i.e the introduction of procedures that the banks have to implement to yield the best result for their clients. It reflects market trends: most transactions today are via electronic channels and the number of trading locations has increased (the stock exchanges come under competition from electronic trading platforms and from the banks' proprietary trading activity).

• non professional customers,
• professional customers
• eligible counterparties

Client categorisation information

Crédit Agricole CIB classifies clients in the following categories according to the type of investment service provided to a client and the status of that client: retail, professional or eligible counterparty. A client is classified as an eligible counterparty when Crédit Agricole CIB provides to that client eligible services only, that is execution order services, dealing on own account and/or the receipt and transmission of orders.

Objectives and consequences of categorisation

Upon provision of an investment service and/or an ancillary service or in respect of a financial transaction, each client will receive a level of service from Crédit Agricole CIB that accords with that client's classification in relation to the supply of investment and/or related services and/or the settlement of transactions. Applicable rules provide a greater or lesser degree of protection for clients in accordance with the relevant client category, which assumes a deemed level of competence for each category.

Therefore retail clients will receive a greater protection from Crédit Agricole CIB than professional clients, and eligible counterparties will receive very little protection when Crédit Agricole CIB provides an eligible service.

Methods of categorisation and requests for a change in category

Each client is classified according to the relevant rules and to information collected by Crédit Agricole CIB and/or provided by the client. Professional clients and eligible counterparties must inform Crédit Agricole CIB of all changes in their status and/or circumstances that might affect their categorisation.

A client can request to be classified in a different category. A request to change category may result in a change in the level of protection for a client by a decrease in protection (opt up) or by allowing for a higher degree of protection (opt down).

Before any request for a category change, we ask that you review the protections available for each category so that you are well informed about the implications of the various options (Opt up/Opt down) and of the rules that apply to each client category in the Information Document concerning the categorisation of clients. Please also consult your advisors before requesting a change.

The document has full details of:

• The rules applicable to each client category, with a table setting out the key protections available to each
• category of client; and
• The different options (Opt up and down) for a client to change categories.

Information on financial instruments and associated risks

When it provides an investment or ancillary service, an investment service provider must, before any transactions takes place, supply its clients with information about relevant financial instruments and the risks associated with those instruments. This information will be adapted according to the client's classification, and its experience and knowledge of financial instruments, or transactions it undertakes.

In this respect, Crédit Agricole CIB requests that its clients, in particular those classified in the 'Retail Clients' category read the Information in relation to the nature and characteristics of financial instruments and the associated risks.

This document does not describe in a comprehensive manner all the different risks associated with each financial instrument offered by Crédit Agricole CIB. It aims to supply clients with summarised information and general warnings on the risks associated with different types of financial instruments so that clients can reasonably understand the nature and the risks of the proposed financial instruments and, consequently, make investment decisions based, amongst other things, upon their knowledge of those instruments.
 

Order execution policy

Markets in Financial Instruments Directive 2004/39/EC ("MiFID") provides that, from November 1st 2007, an investment service provider must implement an 'order execution policy' and, where an order in relation to a financial instrument is executed on behalf of a client, must take all reasonable steps to achieve best execution of that client's order in accordance with that policy. Therefore Crédit Agricole CIB has produced the present Order execution policy.

Information on the management of conflicts of interests

As a multi-capacity investment service firm Crédit Agricole CIB may encounter situations where certain client interests could be in conflict with those of other clients, or those of Crédit Agricole CIB and its employees. Crédit Agricole CIB must try to avoid conflicts of interests and, where they cannot be avoided, ensure that clients are treated fairly. In order to deal with these types of situations, Crédit Agricole CIB has developed rules and procedures over the years to identify, prevent and manage conflicts of interests.

In accordance with the Markets in Financial Instruments Directive 2004/39/EC ("MiFID"), the existing measures will be enhanced to identify and deal appropriately with the following types of conflicts of interests during the provision of all investment services, ancillary services or a combination thereof:

• those between Crédit Agricole CIB (including its management, employees, tied agents if any, or any person directly or indirectly linked to Crédit Agricole CIB under a control relationship) and Crédit Agricole CIB's client; or
• those between two Crédit Agricole CIB clients.

Crédit Agricole CIB's remuneration and the distribution of Collective Investment Vehicles

Crédit Agricole CIB may receive or pay remuneration from/to a third party in relation to the provision of an investment service.

When a client buys a share / unit of a Collective Investment Vehicle (CIV) managed by the following asset management companies, Crédit Agricole CIB receives the remuneration set out in the table below from these companies: Crédit Agricole Asset Management and CPR Online.

These commissions are equal to a percentage of the management fees of the concerned CIV as indicated in its offering documents.

Crédit Agricole CIB does not receive any part of the purchase fees which are payable to the fund or the asset management company upon purchase of CIV shares / units. 

Securities Account Agreement and RTO

The French regulations that transposed MiFID into French law requires financial institutions to modify (if need appropriate) their services agreements with their clients, and to update those agreements with the new requirements from MiFID particularly as regards client information.

If you received from Crédit Agricole CIB a French law Financial Instruments Custody Account  Agreement  or "Convention de Tenue de Compte-Conservation d'Instruments Financiers et de Services" ("Agreement") before November 1st, 2007, please familiarise yourself with Crédit Agricole CIB's new Agreement which cancels and replaces the previous agreement.

The terms of this new Agreement will apply to your relationship with Crédit Agricole CIB as from November 1st, 2007 for any transaction in relation to the services it covers.