in short...December 2001 Issue No. 17
In Australia & New Zealand Banking Group Ltd v. Cattan & Anor (2 August 2001), the Court has highlighted the significant degree of care required when classifying customers for investment business. Although the requirements of the SROs relating to customer classification were merged as from 1 December 2001 within the FSA Conduct of Business Rules, the case remains of general relevance to future customer classification.
The bank sued for losses incurred by the defendant customer as a result of trading in emerging market debt (EMD). The customer, C, alleged that although he had entered into the trades, he did so as a result of the bank improperly categorising him as non-private investor, in breach of the IMRO Rules, and that he did not possess the knowledge and experience to be so classified. In reality, he asserted, he should have been treated as a private investor to whom the bank owed a duty of care to ensure that he did not enter into deals
