This notice is provided to you pursuant to Act 144(I) of 2007, as amended.
1. Risk Warning
1.1. all prospective customers should carefully read the following risk warnings contained herein. However, it should be noted that this document does not disclose or explain all of the risks and other significant aspects associated with transactions in financial instruments (including derivative financial instruments such as CFDs).
This notice has been designed to explain in general terms the nature of the risks associated with transactions in financial instruments in a fair and non-misleading manner. The Client should not engage in any direct or indirect investments in financial instruments if he does not know and understand the risks associated with each of the financial instruments. The Company will not provide the Client with any investment advice regarding investments or possible transactions in investments or financial instruments, nor will it provide investment advice of any kind. Therefore, before applying for a trading account with the Company or placing an order, the Client should carefully consider whether investing in a particular financial instrument is suitable for him/her in light of his/her circumstances and financial resources. If the client does not understand the risks involved, he or she should seek advice from an independent financial advisor. If the client still does not understand the risks involved in trading any financial instruments, he should not trade at all. The client must recognize that he has a great risk of incurring losses and damages as a result of buying and/or selling any financial instrument and accept that he is willing to assume this risk. All words and expressions defined in the operational agreements, unless the context otherwise requires, have the same meaning herein.
2. Confirmation of technical risk
2.1 The customer is responsible for the risks of financial loss caused by the failure of information, communication, electronic and other systems. The result of any system failure may be that his order is either not executed in accordance with his instructions, or not executed at all.
2.2. when trading through the client terminal, the client is responsible for the risks of financial losses caused by:
(a)failure of client or company hardware or software, malfunction or misuse;
(b) poor Internet connection by the client or the company, or both, or due to interruptions or disruptions of data transmission or public electric grid or hacking attacks, communication overloads;
(c)improper client terminal settings;
(D)untimely updates to the customer terminal;
(E)the customer does not consider the current rules described in the client terminal user manual and any information that may be presented on the company’s website;
2.3. the customer acknowledges that during periods of excessive transaction flow, the customer may have some difficulty in communicating with the dealer by telephone, especially in a fast market (e.g. when key macroeconomic indicators are released).
Abnormal market conditions
2.4. The client acknowledges that under abnormal market conditions the term of execution of instructions and requests may be extended.
2.5. The client acknowledges that only one request or instruction may be in the queue at a time. As soon as the Client has sent a request or instruction, all further requests or instructions sent by the Client are ignored and the message «order is blocked» appears until the first request or instruction is executed.
2.6. the client acknowledges that the only reliable source of information about the quotation flow is the quotation base of the real/real server. Quotes base in the client terminal is not a reliable source of information about quotes flow, because at some point the connection between the client terminal and the server can be broken, and some quotes simply will not reach the client terminal.
2.7. The client recognizes that when the client closes the window of placing/modifying/deleting an order or the window of opening/closing a position, the instruction or request sent to the server are not subject to cancellation.
2.8 In case the client has not received the result of execution of the earlier sent order, but has decided to repeat the order, the client assumes the risk of making two transactions instead of one.
2.9. The Client acknowledges that if the pending order has already been executed, but the Client simultaneously sends an instruction to change its level and the levels of If-Done orders, the only instruction which will be executed is an instruction to change the levels of Stop Loss and/or Take Profit on the position opened when the pending order triggers.
2.10. The client assumes the risk of any financial loss caused by the fact that the client received a delayed or no notice from the company.
2.11.The client acknowledges that the unencrypted information transmitted by e-mail is not protected from unauthorized access.
2.12. The client is fully responsible for the risks in relation to the undelivered by the company internal mail messages of the trading platform, sent to the client by the company, as they are automatically deleted within three (3) calendar days.
2.13. The client is fully responsible for the confidentiality of information received from the company, and assumes the risk of any financial losses caused by unauthorized access by third parties to the trading account of the client.
2.14.The company is not responsible if authorized third parties have access to information, including e-mail addresses, electronic communication and personal data, get access to data when it is transmitted between the company or any other person, using Internet or other network communication means, telephone or any other electronic means.
2.15. In the event of force majeure the client assumes the risk of financial loss.
3. RISK WARNING ON FOREIGN EXCHANGE AND DERIVATIVE FINANCIAL INSTRUMENTS
3.1. this notice cannot disclose all risks and other significant aspects of foreign exchange and derivative products, such as futures, options, and contracts for difference. You should not deal in these products unless you understand their nature and the extent of your exposure. You should also be satisfied that the product is suitable for you in light of your circumstances and financial position. Some strategies, such as «spread» or «straddle» can be just as risky as taking a simple long or short position. Although forex and derivatives can be used to manage investment risk, some of these products are unsuitable for many investors.
ou should not engage in any transactions directly or indirectly involving derivative products unless you know and understand the risks involved and that you could lose all of your money. Different instruments involve different levels of risk exposure, and you should consider the following points when deciding whether to trade such instruments:
The effect of leverage.
3.2. in terms of margin trading, even small market movements can have a big influence on the client’s trading account. It is important to note that all accounts are traded under the influence of leverage. The client must keep in mind that if the market moves against the client, the client may incur an overall loss greater than the funds deposited.
The client is responsible for all risks, the financial resources the client uses, as well as for the chosen trading strategy. It is highly recommended that the client maintain a margin level (equity to required margin percentage, which is calculated as equity / required margin * 100%) of at least 1000%.
It is also recommended that a stop loss be placed to limit potential losses and a take profit to collect profits when the client does not have the ability to manage the client’s open positions. Client is responsible for all financial losses caused by opening a position using temporary excess free margin on the trading account, resulting from a profitable position (subsequently canceled by the company), opened on an erroneous quotation (surge) or on a quotation resulting from a manifest error.
3.3. some instruments are traded in wide intraday ranges with volatile price movements. Therefore, the client must carefully consider that there is a high risk of losses as well as profits. The price of derivative financial instruments is determined on the basis of the price of the underlying asset to which the instruments relate (e.g., currencies, shares, metals, indices, etc.). Derivative financial instruments and related markets can be very volatile.
Prices of instruments and the underlying asset may fluctuate rapidly and widely and may reflect unforeseen events or changes in conditions, none of which are within the control of the customer or the company. Under certain market conditions, it may not be possible to execute a client’s order at the stated price, resulting in a loss. The prices of instruments and the underlying asset will be affected by, among other things, changes in the supply and demand balance, government, agricultural, commercial and trade programs and policies, national and international political and economic events and the prevailing psychological characteristics of the relevant market. Therefore, a stop loss cannot guarantee a loss limit.
Client acknowledges and agrees that, regardless of any information that may be offered by the company, the value of instruments may fluctuate up or down, and it is even likely that the investment may become worthless. This is due to the margin system applied to such trades, which usually involves a relatively modest deposit or margin in terms of total contract value, so that a relatively small movement in the underlying market may have a disproportionately large impact on the client’s trade. If the underlying market movement is in the customer’s favor, the customer may make a good profit, but an equally small adverse market movement may not only quickly result in the loss of the customer’s entire deposit, but may also expose the customer to a large additional loss.
3.4. certain underlying assets may not immediately become liquid as a result of a decline in demand for the underlying asset, and the client may not be able to obtain information about the value of these assets or the degree of risk associated with them.
3.5 Transactions in futures entail an obligation to make or take delivery of the underlying asset of the contract at a future date and, in some cases, to settle the position in cash. They carry a high degree of risk. The gearing or leverage often available in futures trading means that a small deposit or down payment can lead to large losses as well as gains. It also means that a relatively small movement can lead to a proportionately larger movement in the value of your investment, and this can work against you as well as for you. Futures trades have a contingent liability, and you should be aware of the implications of this, particularly the margin requirements outlined below.
3.6. there are many different types of options with different characteristics subject to the following conditions.
Buying options involves less risk than selling options because if the price of the underlying asset moves against you, you can simply let the option fall. The maximum loss is limited to the premium and any commissions or other transaction fees. However, if you buy a call option on a futures contract and then exercise it, you are buying the future. This will expose you to the risks described under «investment transactions in futures and contingent obligations.»
If you write an option, the risk involved is much greater than buying options. You may be liable for margin to maintain your position, and the loss can be far greater than the premium received. By writing an option, you accept a legal obligation to buy or sell the underlying asset if the option is exercised against you, irrespective of how far the market price has moved away from the exercise price. If you already own the underlying asset you have contracted to sell (when the options will be known as covered call options), the risk is reduced. If you do not own the underlying asset (uncovered call options), the risk can be unlimited. Only experienced people should contemplate writing uncovered options, and then only after they are fully informed of the applicable conditions and potential risk.
3.7. CFDs available for trading with the company are non-deliverable spot trades, which give the opportunity to profit from changes in currency rates, commodity, stock indices or stock prices, referred to as the underlying instrument. If the movement of the underlying instrument occurs in favor of the client, the client can make a good profit, but an equally small adverse market movement can quickly lead not only to the loss of the entire deposit of the client, but also to any additional commissions and other expenses incurred. Thus, the client should not enter into contracts for difference, unless he is willing to assume the risk of total loss of all the money invested by him, as well as any additional commissions and other expenses incurred. Investing in a CFD carries the same risks as investing in a future or an option and you should be aware of this, as stated above.
Transactions in contracts for difference may also have a contingent liability and you should be aware of the implications of this as set out below.
OTC TRANSACTIONS WITH DERIVATIVE FINANCIAL INSTRUMENTS
3.8. CFDs, forex and precious metals are OTC transactions. Although some OTC markets are highly liquid, transactions in OTC or non-transferable derivatives may be more risky than investments in exchange-traded derivatives because there is no exchange-traded market in which to close out an open position. It may not be possible to liquidate an existing position, value a position arising from an over-the-counter transaction, or assess risk exposure. Bid and Ask prices are not necessarily quoted, and even where they are, they will be set by dealers on those instruments, and therefore it may be difficult to establish what is a fair price. As for CFD, Forex and precious metals trades with the company, the company uses a CFD trading platform which does not fall under the definition of a recognized exchange because it is not a multilateral trading platform and therefore does not have the same protection.
3.9. foreign markets will involve different risks than domestic markets. In some cases, the risk will be greater. Upon request, the company must provide an explanation of the relevant risks and protections (if any) that will apply to any foreign markets, including the extent to which it will assume responsibility for any default of a foreign firm through which it does business. Potential gains or losses from operations in foreign markets or from contracts denominated in foreign currencies will be subject to exchange rate fluctuations.
3.10 Investment transactions with contingent liabilities, which are margined, require that you make a series of payments against the purchase price, instead of paying the entire purchase price immediately. The margin call will depend on the underlying asset of the instrument. Margin calls may be fixed or calculated based on the current price of the underlying instrument, which can be found on the company’s website.
3.11. If you trade futures, contracts for difference or put options, you may sustain a total loss of the funds you deposited to open and maintain your position. If the market moves against you, you may be forced to pay substantial additional funds at short notice to maintain your position. If you fail to do so within the required time, your position may be liquidated at a loss and you will be liable for the resulting deficit. It is noted that the company will not be required to notify the client of any margin Call to maintain a losing position. Even if the transaction is not a margin call, it may still incur an obligation to make further payments in certain circumstances over and above any amount paid at contract inception. Investment transactions with contingent obligations that are not traded on or in accordance with the rules of a recognized or designated investment exchange may expose you to substantially greater risks.
3.12. If you deposit collateral as security with the Company, the manner in which it is handled will vary depending on the type of transaction and where it occurs. There may be significant differences in the treatment of your collateral depending on whether you are trading on a recognized or designated investment exchange, applying the rules of that exchange (and its associated clearing house) or trading off-exchange. The deposited collateral may lose its identity as your property once trades are executed on your behalf. Even if your trades end up profitable, you may not get back the same assets you deposited, and you may have to accept payment in cash. You should check with your firm about how your deposit will be treated.
FEES AND TAXES
3.13 Before you start trading, you should be aware of all commissions and other charges for which you will be responsible. If any charges are not expressed in monetary terms (but, for example, as a percentage of the value of the contract), you must make sure you understand what such charges may result in.
3.14. There is a risk that the client’s transactions in any financial instruments, including derivative instruments, may be subject to tax and/or any other duty, for example due to changes in law or his personal circumstances. The Company does not guarantee that no taxes and/or any other stamp duty will be payable. Customer is responsible for any taxes and/or any other duties that may arise in connection with his transactions.
SUSPENSION OF TRADE
3.15. Under certain trading conditions it may be difficult or impossible to liquidate a position. This may occur, for example, at times of rapid price movement if the price rises or falls in one trading session to such an extent that trading is suspended or restricted under the rules of the relevant exchange. Placing a stop loss will not necessarily limit your losses to the amounts anticipated, as market conditions may make it impossible for such an order to be executed at the stipulated price. In addition, under certain market conditions, the execution of a stop loss order may be worse than its stipulated price, and the realized loss may be greater than expected.
CLEARING HOUSE PROTECTION
3.16. On many exchanges, your firm’s (or the third party it deals with on your behalf) performance of the transaction is guaranteed by the exchange or clearing house. However, this guarantee is unlikely to cover you, the customer, in most cases and may not protect you if your firm or another party fails to perform its obligations to you. Upon request, the firm must explain any protection provided to you under the clearing guarantee applicable to any exchange-traded derivatives with which you deal. There is no clearing facility for traditional options, and generally for OTC instruments that are not traded in accordance with the rules of a recognized or designated investment exchange.
3.17. Bankruptcy or default of the Company may result in positions being liquidated or closed without your consent. Under certain circumstances, you may not get back the actual assets you pledged and you may have to accept any available cash payments.
3.18. Segregated funds will be subject to the protections of applicable regulations.
3.19. Unsegregated funds will not be subject to protection under applicable regulations. Unsegregated funds will not be segregated from the money of the company itself and will be used in the operation of the company and you will be considered an ordinary creditor in the event of insolvency of the company.
4. RISK OF LIABILITY TO THIRD PARTIES
4.1 the company may transfer money received from a client to a third party (e.g. bank, market, intermediate broker, OTC counterparty or clearing center) to hold or control in order to effect a transaction through or with that person and to fulfill the client’s obligation to provide collateral (such as an initial margin call) for the transaction. The company doesn’t bear responsibility for any actions or inactions of any third party to whom it will transfer the money received from the client.
4.2. the third party to whom the company will transfer the funds may keep them in an omnibus account, and separate them from the funds of the client or third parties. In the event of insolvency or any other similar proceedings against that third party, the company may only have an unsecured claim against the third party on behalf of the client, and the client will be exposed to the risk that the funds received by the company from the third party will not be sufficient to satisfy the client’s claims with respect to the relevant account. The company shall not be liable for any resulting losses.
4.3. The company may hold client funds on behalf of the client outside of the EEA. The legal and regulatory regime applicable to any such bank or individual will be different from the Vanuatu regime, and in the event of insolvency or any other similar proceeding against that bank or individual, client money may be treated differently from the regime which would have applied if the money had been held in a bank account in Vanuatu. The company shall not be responsible for the insolvency, acts or omissions of any third party referred to in this paragraph.
4.4. the company may deposit the client’s funds with a depository which may have a security interest, pledge or right of set-off in respect of those funds.
4.5. the bank or the broker, through which the company carries out transactions, can have interests that are contrary to the client’s interests.