RISK DISCLOSURE STATEMENT
The purpose of the Risk Disclosure Statement (“the Statement”) is to provide the Client appropriate guidance
on the nature and risks of the specific types of financial instruments offered by Max Capital Limited
(hereafter the “Company”).
The Client acknowledges, understands and agrees with the risks, disclosed below.
- Legal Framework
This Statement is based on the provisions of the Seychelles Securities Act 20017. It should be noted that
this Statement does not purport to disclose, or discuss all of the risks and other significant aspects of
all transactions entered into with or through the Company. We outline the general nature of the risks of
dealing in Financial Instruments on a fair and non-misleading basis. Therefore you need to ensure that your
decision is made on an informed basis and as a minimum you should be taking into consideration all the
following disclosed below.
- Trading is very speculative and risky. Contracts for Difference (‘CFDs’) are complex financial products,
most of which have no set maturity date. Therefore, a CFD position matures on the date you choose to
close an existing open position. CFDs, which are leveraged products, incur a high level of risk and can
result in the loss of all of your invested capital. Trading in CFDs is highly speculative and therefore
is suitable only for those Clients who (a) understand and are willing to assume the economic, legal and
other risks involved, (b) are financially able to assume the risk of losses up to their invested capital
and (c) understand and are knowledgeable about CFDs and the underlying assets. The Client represents,
warrants and agrees that he/she understands these risks, is willing and able, financially and otherwise,
to assume the risks of trading in CFDs. Before deciding to trade, a client should ensure that he
understands the risks involved and take into account his level of experience, and if necessary seek
Risks Associated with Transactions in CFDs When trading in CFDs you need to take into account the
following main risks:
- CFDs are leveraged products; therefore, they carry a higher level of risk to your capital
other financial products and may result in the loss of all of your invested capital. However, it
be noted that the Company operates on a ‘negative balance protection’ basis; this means that you
lose more than your initial investment.
- The value of CFDs may increase or decrease depending on market conditions, and the potential for
profit should be balanced alongside the significant losses that may be generated over a very
period of time when trading CFDs.
- CFD trading, unlike traditional trading, enables you to trade the markets by paying only a small
fraction of the total trade value. However, this entails that a relatively small market movement
lead to a proportionately much larger movement in the value of your position.
- The Client needs to make sure that he has sufficient margin in his trading account, at all
order to maintain an open position. In addition, the Client needs to continuously monitor any
positions in order to avoid positions being closed due to the unavailability of funds; it should
noted that the Company is not responsible for notifying you for any such instances.
- Conflicts of Interests. The Company is the counterparty to all transactions entered into under the
Client Agreement and, as such, the Company’s interests may be in conflict with the Client’s. The
Conflicts of Interest Policy is available at the [BRAND].
- Prices are set by the Company and may be different from prices reported elsewhere. The Company will
provide the prices to be used in trading and valuation of the Client’s positions in accordance with its
Trading Policies and Procedures. As such, they may not directly correspond to real time market levels at
the point in time at which the sale of options occurs.
- Rights to Underlying Assets. The Client have no rights or obligations in respect of the underlying
instruments or assets relating to the CFDs.
- Telephone Orders and Immediate Execution. Market orders executed over the telephone through the
Company’s Dealing Room are completed when the Company’s telephone operator says “deal” or “done”
following the Client’s placing of an order. Upon such confirmation of the telephone operator, the Client
has bought or sold and cannot cancel the order. By placing orders through the Company’s Dealing Room,
the Client agrees to such immediate execution and accepts the risk of this immediate execution feature.
- The Company is not an adviser or a fiduciary to customer. Where the Company provides generic market
recommendations, such generic recommendations do not constitute a personal recommendation or investment
advice and do not consider any of the Client’s personal circumstances or investment objectives, nor is
it an offer to trade, or the solicitation of an offer to trade, in any CFD. Each decision taken by the
Client to trade in CFDs with the Company and each decision as to whether a transaction is appropriate or
proper for the Client is an independent decision made by the Client. The Company is not acting as an
advisor or serving as a fiduciary to the Client. The Client agrees that the Company has no fiduciary
duty to the Client and no liability in connection with and is not responsible for any liabilities,
claims, damages, costs and expenses, including attorneys’ fees, incurred in connection with the Client
following the Company’s generic trading recommendations or taking or not taking any action based upon
any generic recommendation or information provided by the Company.
- Recommendations are not guaranteed. The generic market recommendations provided by the Company are based
solely on the judgment of its personnel and should be considered as such. The Client acknowledges that
it enters into any transactions relying on his/her own judgment. Any market recommendations provided are
generic only and may or may not be consistent with the market positions or intentions of the Company
and/or its affiliates. The generic market recommendations of the Company are based upon information
believed to be reliable, but the Company cannot and does not guarantee the accuracy or completeness
thereof or represent that following such generic recommendations will reduce or eliminate the risk
inherent in trading CFDs.
- No guarantees of profit. There are no guarantees of profit nor of avoiding losses when trading in CFDs.
The Client has received no such guarantees from the Company or from any of its representatives. The
Client is aware of the risks inherent in trading CFDs and is financially able to bear such risks and
withstand any losses incurred.
a. Technical Risks
- Internet Trading. When the Client trades online (via the internet), the Company shall not be
for any claims, losses, damages, costs or expenses, caused, directly or indirectly, by any
or failure of any transmission, communication system, computer facility or trading software,
belonging to the Company, the Client, any exchange or any settlement or clearing system.
- Telephone Orders. The Company is not responsible for disruption, failure or malfunction of
facilities and does not guarantee its telephone availability. For the avoidance of doubt, the
aware that the Company may not be reachable by telephone at all times and thus the Client can
orders through online access to the Company’s Trading Platform
b. Market Conditions. The Client acknowledges that under Abnormal Market Conditions the period during
which the Instructions and Requests are executed may be extended.
- The Company is not responsible for any financial loss caused as a result of delayed or
notices from the Company.
- The Client acknowledges that the unencrypted information transmitted by email is not protected
any unauthorised access.
- The Company is not responsible in respect of any unreceived or unread internal messages sent to
Client through the trading platform(s) as they are automatically deleted if not received or read
(three) calendar days.
- The Client is solely responsible for the privacy of any information received from the Company.
- The Company has no responsibility regarding any loss as a result of authorized/unauthorised
all information between the Company and the Client by third persons
d. Force Majeure Event. In case of a Force Majeure Event the Client shall accept the risk of financial
e. Taxes. The Client shall make sure that investing in CFDs is not subject to tax and/or any other duty
in the Client’s jurisdiction. The Client is responsible for any taxes and/or any other duty which may
accrue in respect of his trades.
- Costs, Swap Value and Other Considerations.Prior to investing in CFDs the Client needs to be aware of
any costs involved, such as spread(s), commission(s) and swap(s). For the purposes of this Statement, a
swap means the interest added or deducted for holding a position open overnight. The swap for a position
opened on Wednesday and held open overnight is three times that of other days; the reason for this is
that the value date of a trade held open overnight on a Wednesday would normally be Saturday, but since
banks are closed, the value date is Monday and the client incurs an extra 2 (two) days of interest. From
Friday to Monday swap is charged once.
- Expiry System Errors. In case the expiry system fails for any reason, it will auto detect un-expired
options and expire them in accordance to the rates stored historically in the archive. If any position
did not expire on time, the system will issue a notification to Risk Manager and Compliance Officer,
detailing all position information, in order to be resolved manually.
I / WE HAVE READ, UNDERSTOOD AND AGREE TO THE RISK DISCLOSURE STATEMENT AND THE TRADING POLICIES AND PROCEDURES SET