Risk Disclosure
| Risk of Dealing in Securities | |
| Price | The prices of securities can and does fluctuate, sometimes dramatically. The price of securities may move up or down, and may even become valueless. It is as likely that losses will be incurred rather than profits made as a result of buying and selling securities. |
| Liquidity | The liquidity of individual securities may not be active. There is no guarantee that the client could complete the transaction in the prescribed quantity. |
| Product | The risks implied for different type of products may vary from its inherent structure and characteristics. PACSHK suggests client to study the product nature in details and consult independent professionals where necessary. |
| Incident | Risks may be caused by unanticipated incident that affects the dealing in securities, such as the suspension, major transaction, legal dispute and corporate action, resulting in the fluctuation of the price and liquidity. |
| Past Information | The price and trading volume of securities reflects only the historical record, which is not indicative for future movements. The client should make the investment decision judgmentally, and consult independent professionals where necessary. |
| Risk of Trading Growth Enterprise Market stocks | Growth Enterprise Market (GEM) stocks involve a high investment risk. In particular, companies may list on GEM with neither a track record of profitability nor any obligation to forecast future profitability. GEM stocks may be very volatile and illiquid. You should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and other sophisticated investors. Current information on GEM stocks may only be found on the internet website operated by The Stock Exchange of Hong Kong Limited. GEM Companies are usually not required to issue paid announcements in gazetted newspapers. You should seek independent professional advice if they are uncertain of or have not understood any aspect of this risk disclosure statement or the nature and risks involved in trading of GEM stocks. |
| Risk of trading Nasdaq (Amex securities) at The Stock Exchange of Hong Kong Limited | The securities under the Nasdaq-Amex Pilot Program (“PP”) are aimed at sophisticated investors. You should consult the licensed or registered person and become familiarised with the PP before trading in the PP securities. You should be aware that the PP securities are not regulated as a primary or secondary listing on the Main Board or the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited. |
| Risk of Dealing in Futures and Options | |
| Risk | The risk of loss in trading futures contracts and options does fluctuate. When the risk of loss is substantial, client may sustain losses in excess of their initial margin funds. The amount of initial margin is small relative to the value of the futures contract so that transactions are “leveraged” or“geared”. A relatively small market movement will have a proportionately larger impact on the funds client have deposited or will have to deposit. |
| Margin Levels | If the market moves against your position or margin levels are increased, client may be called upon to pay substantial additional funds on short notice to maintain your position. If client fail to comply with a request for additional funds within the time prescribed, their position may be liquidated at a loss and client will be liable for any resulting deficit. |
| Contingent Orders | Placing contingent orders, such as “stop-loss” or “stop-limit” orders, will not necessarily avoid loss. Market conditions may make it impossible to execute such orders. |
| Product Terms and Conditions | Different futures contracts set different terms and conditions, such as exercise and expiration procedures, rights and obligations. The clients are strongly advised to study and understand futures contracts and consider whether such trading is suitable in the light of your own financial position and investment objectives. Under certain circumstances the specifications of outstanding contracts (including the exercise price of an option) may be modified by the exchange or clearing house to reflect changes in the underlying interest. |
| Risk of Selling an Option | Selling an option generally entails considerably greater risk than purchasing options. Although the premium received by the seller is fixed, the seller may sustain a loss well in excess of that amount. The seller will be liable for additional margin to maintain the position if the market moves unfavourably. The seller will also be exposed to the risk of the purchaser exercising the option and the seller will be obligated to either settle the option in cash or to acquire or deliver the underlying interest. If the option is on a futures contract, the seller will acquire a position in a futures contract with associated liabilities for margin. If the option is “covered” by the seller holding a corresponding position in the underlying interest or a futures contract or another option, the risk may be reduced. If the option is not covered, the risk of loss can be unlimited. |
| Incidents | Market conditions (e.g. illiquidity) and the operation of the rules of certain markets (e.g. the suspension of trading in any contract or contract month because of price limits or “circuit breakers”) may increase the risk of loss by making it difficult or impossible to effect transactions or liquidate or offset positions. If client have sold options, this may increase the risk of loss. |
| Pricing Relationship | Normal pricing relationships between the underlying interest and the futures, and the underlying interest and the option may not exist. This can occur when, for example, the futures contract underlying the option is subject to price limits while the option is not. The absence of an underlying reference price may make it difficult to judge “fair value”. |
| Risk of Margin Trading | |
| Risk | Margin Trading is a leveraged investment product in which the high degree of leverage can lead to large gains as well as losses. You should carefully study the Terms and Conditions and Risk Disclosures for our Margin Trading Services before Trade. If the market moves against your positions, you may have limited time to deposit an amount (which may be substantial) of additional funds in order to maintain your position and may sustain losses in excess of the cash and any other assets deposited as collateral with the licensed or registered person. If the required collateral or interest payments are not deposited or made within the prescribed time, your collateral may be liquidated without consent. Moreover, you will remain liable for any resulting deficit in their account and interest charged on the account. You should therefore carefully consider whether such a financing arrangement is suitable in light of their own financial position and investment objectives. |
| Market Orders | Under certain market conditions, you may find it difficult or impossible to liquidate a position. Placing Price Bounds, Stop Loss or Trailing Stop will not necessarily limit the losses to the intended amounts, since market conditions may make it impossible to execute such orders at the designated price. |
| Incidents | Risks may be caused by unanticipated incident that affects the margin trading, such as the suspension, major transaction, legal dispute and corporate action, resulting in restriction in our capacity to trade in respect of open positions. In such circumstances, you may be required to reduce or close their Open Positions with us. |
| Risk of IPO Investment | |
| Over-subscribing to an IPO | In some cases, IPOs may be oversubscribed. The company may go through a balloting or allocation process to determine whether an investor will receive any securities and if so, in what quantity. An investor may be tempted to subscribe for a greater quantity than he intended to, believing that he will not receive the full amount in case of over-subscription. However if the IPO is not oversubscribed, the investor will receive all the quantity applied for and will have to pay the full cost. |
| Market Risk | Investments involves risk, company’s share prices can fluctuate, and may drop below its initial IPO price. You should carefully consider whether any investment products or services mentioned herein are appropriate for you in view of your investment experience, objectives, financial resources and relevant circumstances |
| Company Risk | It is vital to understand the company and the business of the investment. You should thoroughly study the prospectus, financial reports and even seek professional advice before making investment decisions. |
| Risk of Providing an Authority to Repledge Securities Collateral etc. | |
| Risk of Repledging Securities Collateral | There is risk if you provide the licensed or registered person with an authority that allows it to apply their securities or securities collateral pursuant to a securities borrowing and lending agreement, repledge their securities collateral for financial accommodation or deposit their securities collateral as collateral for the discharge and satisfaction of its settlement obligations and liabilities. A cash account not involving securities borrowing and lending is available from most licensed or registered persons. If you do not require margin facilities or do not wish their securities or securities collateral to be lent or pledged, do not sign the above authorities and ask to open this type of cash account. |
| Consent in Writing | If your securities or securities collateral are received or held by the licensed or registered person in Hong Kong, the above arrangement is allowed only if you consent in writing. Moreover, unless you are a professional investor, their authority must specify
the period for which it is current and be limited to not more than 12
months. If you are a professional investor, these restrictions do not apply. You are not required by any law to sign these authorities. But an authority may be required by licensed or registered persons, for example, to facilitate margin lending to you or to allow your securities or securities collateral to be lent to or deposited as collateral with third parties. You should request the licensed or registered person to explain the purposes for which one of these authorities is to be used. |
| Renewal of Consent | Your authority may be deemed to be renewed (i.e. without written consent) if the licensed or registered person issues you a reminder at least 14 days prior to the expiry of the authority, and you do not object to such deemed renewal before the expiry date of their then existing authority. |
| Risk of Securities Collateral Lent or Deposited to Third Party | If you sign one of these authorities and their securities or securities collateral are lent to or deposited with third parties, those third parties will have a lien or charge on your securities or securities collateral. Although the licensed or registered person is responsible to them for securities or securities collateral lent or deposited under your authority, a default by it could result in the loss of their securities or securities collateral. |
| Risk of Internet Trading | |
| Data Transmission | Based on the inherent nature of Internet and implanted risk, the computer-based component systems, such as the order-routing, execution, matching, registration or clearing trades, are vulnerable to temporary disruption or failure, the client shall bear the risk of any delay, loss, diversion, alteration or corruption of any message either sent to, received from or via the Internet. PACSHK will not be responsible for any losses or damages incurred. PACSHK is not responsible in any manner for direct, indirect, special or consequential losses or damages arising out of the use of internet trading. |
| Security | The client is responsible for the security of their computer system in order to prevent it from infection of computer virus or hacking, which might cause unauthorised access of the Internet Trading system. |
| Identification Authentication | The identification code(s), password(s), login name(s) or personal identifier(s) as may be issued by PACSHK from time to time are the authentication information of client identity. The Client shall accept full responsibility for all instructions placed with the use of his Access Codes (whether authorized by the Client or not). Please notice PACSHK immediately upon losing or disclosure of the identification authentication information. |
| Automatic Processing | The Client instruction is transmitted and executed by the automated internet trading system, which may not be subject to human review, and it may be impossible to be terminated or amended. The Client shall place investment instructions carefully. |
| Other Risks | |
| Currency Risk | The profit or loss in transactions in foreign currency denominated contracts (whether they are traded in your own or another jurisdiction) will be affected by fluctuations in currency rates where there is a need to convert from the currency denomination of the contract to another currency. |
| Commission and Other Charges | Before you begin to trade, you should obtain a clear explanation of all commission, fees and other charges for which you will be liable. These charges will affect your net profit (if any) or increase your loss. |
| Risks of client assets received or held outside Hong Kong | Client assets received or held by the licensed or registered person outside Hong Kong are subject to the applicable laws and regulations of the relevant overseas jurisdiction which may be different from the Securities and Futures Ordinance (Cap.571) and the rules made thereunder. Consequently, such client assets may not enjoy the same protection as that conferred on client assets received or held in Hong Kong. |
| Additional risk disclosure for futures and options trading This brief statement does not disclose all of the risks and other significant aspects of trading in futures and options. In light of the risks, you should undertake such transactions only if you understand the nature of the contracts (and contractual relationships) into which you are entering and the extent of your exposure to risk. Trading in futures and options is not suitable for many members of the public. You should carefully consider whether trading is appropriate for you in light of your experience, objectives, financial resources and other relevant circumstances. |
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| Futures | |
| Effect of “Leverage” or “Gearing” | Transactions in futures carry a high degree of risk. The amount of initial margin is small relative to the value of the futures contract so that transactions are “leveraged” or “geared”. A relatively small market movement will have a proportionately larger impact on the funds you have deposited or will have to deposit: this may work against you as well as for you. You may sustain a total loss of initial margin funds and any additional funds deposited with the firm to maintain your position. If the market moves against your position or margin levels are increased, you may be called upon to pay substantial additional funds on short notice to maintain your position. If you fail to comply with a request for additional funds within the time prescribed, your position may be liquidated at a loss and you will be liable for any resulting deficit. |
| Risk-reducing orders or strategies | The placing of certain orders (e.g. “stop-loss” orders, or “stoplimit” orders) which are intended to limit losses to certain amounts may not be effective because market conditions may make it impossible to execute such orders. Strategies using combinations of positions, such as “spread” and “straddle” positions may be as risky as taking simple “long” or “short” positions. |
| Options | |
| Variable degree of risk | Transactions in options carry a high degree of risk. Purchasers and sellers of options should familiarize themselves with the type of option (i.e. put or call) which they contemplate trading and the associated risks. You should calculate the extent to which the value of the options must increase for your position to become profitable, taking into account the premium and all transaction costs. The purchaser of options may offset or exercise the options or allow the options to expire. The exercise of an option results either in a cash settlement or in the purchaser acquiring or delivering the underlying interest. If the option is on a futures contract, the purchaser will acquire a futures position with associated liabilities for margin (see the section on Futures above). If the purchased options expire worthless, you will suffer a total loss of your investment which will consist of the option premium plus transaction costs. If you are contemplating purchasing deep-out-of-the-money options, you should be aware that the chance of such options becoming profitable ordinarily is remote. Selling (“writing” or “granting”) an option generally entails considerably greater risk than purchasing options. Although the premium received by the seller is fixed, the seller may sustain a loss well in excess of that amount. The seller will be liable for additional margin to maintain the position if the market moves unfavourably. The seller will also be exposed to the risk of the purchaser exercising the option and the seller will be obligated to either settle the option in cash or to acquire or deliver the underlying interest. If the option is on a futures contract, the seller will acquire a position in a futures contract with associated liabilities for margin (see the section on Futures above). If the option is “covered” by the seller holding a corresponding position in the underlying interest or a futures contract or another option, the risk may be reduced. If the option is not covered, the risk of loss can be unlimited. Certain exchanges in some jurisdictions permit deferred payment of the option premium, exposing the purchaser to liability for margin payments not exceeding the amount of the premium. The purchaser is still subject to the risk of losing the premium and transaction costs. When the option is exercised or expires, the purchaser is responsible for any unpaid premium outstanding at that time. |
| Additional risks common to futures and options | |
| Terms and conditions of contracts | You should ask the firm with which you deal about the terms and conditions of the specific futures or options which you are trading and associated obligations (e.g. the circumstances under which you may become obliged to make or take delivery of the underlying interest of a futures contract and, in respect of options, expiration dates and restrictions on the time for exercise). Under certain circumstances the specifications of outstanding contracts (including the exercise price of an option) may be modified by the exchange or clearing house to reflect changes in the underlying interest. |
| Suspension or restriction of trading and pricing relationships | Market conditions (e.g. illiquidity) and/or the operation of the rules of certain markets (e.g. the suspension of trading in any contract or contract month because of price limits or “circuit breakers”) may increase the risk of loss by making it difficult or impossible to effect transactions or liquidate/offset positions. If you have sold options, this may increase the risk of loss. Further, normal pricing relationships between the underlying interest and the futures, and the underlying interest and the option may not exist. This can occur when, for example, the futures contract underlying the option is subject to price limits while the option is not. The absence of an underlying reference price may make it difficult to judge “fair value”. |
| Deposited cash and property | You should familiarise yourself with the protections given to money or other property you deposit for domestic and foreign transactions, particularly in the event of a firm insolvency or bankruptcy. The extent to which you may recover your money or property may be governed by specific legislation or local rules. In some jurisdictions, property which had been specifically identifiable as your own will be pro-rated in the same manner as cash for purposes of distribution in the event of a shortfall. |
| Commission and other charges | Before you begin to trade, you should obtain a clear explanation of all commission, fees and other charges for which you will be liable. These charges will affect your net profit (if any) or increase your loss. |
| Transactions in other jurisdictions | Transactions on markets in other jurisdictions, including markets formally linked to a domestic market, may expose you to additional risk. Such markets may be subject to regulation which may offer different or diminished investor protection. Before you trade you should enquire about any rules relevant to your particular transactions. Your local regulatory authority will be unable to compel the enforcement of the rules of regulatory authorities or markets in other jurisdictions where your transactions have been effected. You should ask the firm with which you deal for details about the types of redress available in both your home jurisdiction and other relevant jurisdictions before you start to trade. |
| Currency risks | The profit or loss in transactions in foreign currencydenominated contracts (whether they are traded in your own or another jurisdiction) will be affected by fluctuations in currency rates where there is a need to convert from the currency denomination of the contract to another currency. |
| Trading facilities | Electronic trading facilities are supported by computer-based component systems for the order-routing, execution, matching, registration or clearing of trades. As with all facilities and systems, they are vulnerable to temporary disruption or failure. Your ability to recover certain losses may be subject to limits on liability imposed by the system provider, the market, the clearing house and/or participant firms. Such limits may vary: you should ask the firm with which you deal for details in this respect. |
| Electronic trading | Trading on an electronic trading system may differ from trading on other electronic trading systems. If you undertake transactions on an electronic trading system, you will be exposed to risks associated with the system including the failure of hardware and software. The result of any system failure may be that your order is either not executed according to your instructions or is not executed at all. |
| Off-exchange transactions | In some jurisdictions, and only then in restricted circumstances, firms are permitted to effect off-exchange transactions. The firm with which you deal may be acting as your counterparty to the transaction. It may be difficult or impossible to liquidate an existing position, to assess the value, to determine a fair price or to assess the exposure to risk. For these reasons, these transactions may involve increased risks. Off-exchange transactions may be less regulated or subject to a separate regulatory regime. Before you undertake such transactions, you should familiarize yourself with applicable rules and attendant risks. |
| Risk of Trading Warrants and Callable Bull/Bear Contracts | Warrants and Callable Bull/Bear Contracts (CBBCs) are structured products which involve derivatives. You rely on the creditworthiness of the issuer of warrants and/or CCBCs. Subject to both the actual and perceived measures of the credit worthiness of its issuer and, there is no assurance of protection against a default by its issuer in respect of its payment obligations. Upon insolvency of the issuer, you may get nothing back and the potential maximum loss could be 100% of the investment amount and no return may be received. You are warned that the prices of warrants and CBBCs may fall in value as rapidly as it may rise and holders may sustain a total loss of their investment. CBBCs have a mandatory call feature and may therefore be subject to early termination, upon which (i) investors in category N CBBCs will lose all of their investments in the CBBCs; and (ii) the residual value of category R CBBCs may be zero. Before you purchase any warrants and/or CBBCs, you should ensure you understand the nature of warrants and/or CBBCs and carefully study the full details and risk factors set out in the relevant listing documents and, where necessary, seek professional advice before you invest in any of these products. You should also ensure that you fully understand the potential risks and rewards and independently determine that they are appropriate for you given your objectives, experience, financial and operational resources and other relevant circumstances. |
Disclaimers
| Timeliness and Accuracy of Information | The information shown is based on data obtained from sources believed to be reliable but the PACSHK and the concerned information provider(s) make no representation and accept no responsibility as to its accuracy or completeness and shall not be held liable for damages arising out of any person's reliance upon this information(no matter it is tort liability or contractual liability or other liabilities). The prices quoted and the other information shown are for reference only and are subject to change without notice. |
| Investment Analysis and Recommendation | This information is neither a recommendation, an offer to sell, nor solicitation of an offer to purchase any investment. Neither the information nor any opinions in this site constitute solicitation, invitation, inducement, representation of any kind or offer or form whatsoever by PACSHK to deal in any financial products or provide any service or investment advice. PACSHK should not be treated as persuading any clients in executing any transactions and you shall be liable for comments, purchase or selling executions made on this website. |
| Potential Conflict of Interest | PACSHK and its affiliates companies, directors, staffs or any related person, may from time to time, to the extent permitted by law, buy, sell, hold, subscribe, exchange, transfer or hedge any investment products or relevant derivatives, at any time, that appear in the investment analysis or recommendation provided in this website, in each case either as principal or otherwise. |
| Information Update | PACSHK may discontinue or make changes in the information, products or services provided in this website at any time without prior notice. |
| Linked Sites | Links from this site are for informational purposes only and have not been reviewed by any member of PACSHK. None of PACSHK members shall have any responsibility for the contents of these sites and accepts no liability for any loss or damage whatsoever that may be suffered or incurred as a result of any linking to any location on any linked sites. Access to or use of these linked sites is at your own risk and subject to any terms and conditions applicable to the above. |
| Copyright | The information on this site may not be copied, transmitted, disseminated, sold, distributed, published, broadcast, circulated, stored for subsequent use or commercially exploited in any manner without prior express consent of PACSHK. |
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