This risk disclosure is intended to inform you of the risks that exist in trading activities on financial markets. You must recognise that these risks entail a chance of losing money while trading. This disclosure is informational and must not be considered a list of all possible risks.
1. Introduction
Onys Kapital Ltd is a Securities Dealer Licensee regulated and authorised by the Financial Services Authority (FSA) in Seychelles under licence number SD128 (the “Company”).
This Risk Disclosure Policy outlines key information regarding the products offered by the Company and is intended to assist Clients in making informed decisions when assessing whether such products are appropriate for their individual circumstances. It explains the key risks, rights and obligations associated with the Company’s products and should be considered in light of each Client’s personal objectives, financial situation, needs, knowledge and experience.
Nothing in this Risk Disclosure Policy should be considered as a recommendation to trade in OTC Derivatives or any other financial instruments. The Company does not guarantee the investment performance of OTC Derivative products or the investment performance of the Underlying Assets. Past performance is no indication or guarantee of future performance. Any examples used in this Risk Disclosure Policy are provided for illustrative purposes only and do not reflect the Company’s actions, determinations or any investor’s personal circumstances.
The products described in this Risk Disclosure Policy may not be suitable for all Clients. In particular, OTC Derivatives and other leveraged products are intended for Clients who have sufficient knowledge, experience and financial capacity to understand and bear the risks involved.
The Company may, in accordance with applicable laws and regulations, conduct appropriateness or other assessments and may restrict or refuse access to certain products where such products are deemed inappropriate for the Client.
2. Risk Associated with Transactions in OTC Derivatives
Trading in OTC Derivatives is not suitable for all investors and involves the risk of significant loss as well as potential for profit. Depending on market conditions and the nature of the product traded, losses may be substantial and may result in the loss of all funds held in your trading account, subject to any applicable legal or regulatory protections. Movements in the price of the margin contract’s Underlying Asset (e.g. foreign exchange rates, commodity prices or indices) are influenced by a variety of unpredictable factors of global origin. Violent movements in the price of the Underlying Asset may occur in the market, as a result of which you may be unable to settle adverse trades. The Company is unable to guarantee a maximum loss that you may suffer from your trading activities.
OTC Derivative products are considered speculative products which are highly leveraged and carry significantly greater risks than non-geared investments. You should not invest in OTC Derivative products unless you properly understand the nature of OTC Derivative products and you are comfortable with the risks.
Engaging in CFDs carries a high degree of risk to your capital. You should not engage in this form of investing unless you fully understand the nature of the transactions you are entering into and the true extent of your exposure to the risk of loss. Your profit and loss will vary according to the extent of the fluctuations in the price of the underlying markets on which your transactions are based.
OTC Derivative transactions are not executed on a regulated exchange and are entered into directly with the Company as counterparty. Prices for such transactions are quoted by the Company by reference to underlying markets and liquidity sources in accordance with its execution model.
As a result, execution conditions, including pricing and liquidity, may differ from those available on regulated exchanges or other trading venues, and positions may not always be closed at the expected price or time.
3. Risk Warning
Trading in OTC Derivatives, including CFDs, involves a high degree of risk and may result in losses exceeding your initial investment. These products are complex financial instruments and are not suitable for all investors. You should not trade in such products unless you fully understand the nature of the transactions you are entering into, the risks involved, and your exposure to potential losses, including the possibility of losing more than your initial deposit.
The Company does not and cannot guarantee the initial capital of your portfolio or its value at any time, or any money invested in any security. You acknowledge and accept that, regardless of any information which may be offered by the Company, the value of the securities provided by the Company may fluctuate downwards or upwards, and it is even probable that the investment may become of no value.
4. Leverage
Investing in derivative securities entails the use of “gearing” or “leverage”. In considering whether to engage in this form of investment, you should be aware that the high degree of gearing or leverage is a particular feature of derivative securities. This stems from the margining system applicable to such trades, which generally involves a comparatively modest deposit or margin in terms of the overall contract value, so that a relatively small movement in the underlying market can have a disproportionately dramatic effect on your trade. If the underlying market movement is in your favour, you may achieve a good profit, but an equally small adverse market movement may quickly result in the loss of your entire deposit. You must not purchase derivative securities unless you are willing to undertake the risks of losing all the money which you have invested.
5. Margin
Clients are required to deposit a Margin with the Company in order to open a position. For retail clients trading restricted speculative investments, margin must be deposited in the form of money in accordance with applicable regulatory requirements. The Margin requirement will depend on the underlying instrument of the derivative securities, level of leverage chosen and the value of position to be established. The Company will not notify the Client of any Margin Call to sustain a loss-making position. The Company may close or liquidate positions when margin levels fall below thresholds determined by the Company from time to time in accordance with its risk management procedures.
It is your responsibility to monitor your account. Should the net value of the account (cash plus running profits minus running losses) fall below the margin required, we may close some or all of your trades at the current market price. This should not however be taken as a guarantee, and it is your responsibility to ensure that sufficient funds are in your account at all times.
Any margin close-out levels, margin calls or automatic liquidation thresholds described herein are indicative only and do not constitute a guarantee that losses will be limited to any specific amount.
The Company retains discretion, in accordance with applicable laws and market conditions, to close positions at different levels where necessary to manage risk.
6. Technical Risks
The Company is not responsible for financial losses arising from malfunctions in your electronic, communication or information systems.
When working with the client terminal, you assume the risks arising from:
- failures in your equipment, software and connection;
- errors in your client terminal settings;
- failure to update your version of the client terminal in a timely manner;
- your failure to follow the instructions for using the client terminal.
The Company is not responsible for errors that occur in the operation of the client terminal and will not compensate losses resulting from errors in the operation of the client terminal, because we have a non-exclusive right to use the MetaTrader trading system (client terminal) for a specific purpose and do not have the right to provide technical support.
7. Market Risks
Margined CFD trading relies on the price movement of underlying financial products. You are therefore exposed to similar, but magnified, risks to holding the underlying assets. In some cases, risks will be greater. You agree that if market conditions become abnormal, the time required to process your orders and instructions may increase.
Under certain market conditions, including periods of extreme volatility, illiquidity or market gaps, prices may move rapidly and significantly between trading levels. In such circumstances, stop loss orders or other risk management tools may not be executed at the requested price, and losses may be greater than anticipated.
8. Commission and Spreads
You should obtain details of all commissions and other charges for which you will be liable prior to trading with the Company. Where charges are not expressed in money terms (such as a bid-offer spread), you should obtain a clear explanation of what such charges are likely to mean in specific money terms. When commission is charged as a percentage it will normally be as a percentage of the total contract value, and not simply as a percentage of your funds initially deposited.
Some types of trades you make may require you to pay financing costs. Trades in currencies different from your base currency may require you to convert those foreign currencies to your base currency. The combination of overnight financing and foreign exchange costs may exceed any profits on your trades or increase the losses that you may incur on your trade.
9. Risks Associated with the Laws of Individual Governments
Clients are responsible for ensuring that their use of the Company’s services complies with the laws and regulations applicable in their country of residence or any jurisdiction from which they access the Company’s services. The Company does not represent that its services may lawfully be used in all jurisdictions.
10. Communication Risks
You must be aware of the risk that information sent via unencrypted email may be accessed by unauthorised parties.
The Company is not responsible for financial losses arising from delayed or failed receipt of a Company message.
You are responsible for the security of the credentials for your personal area and trading accounts, as well as the confidential information that we send you. The Company is not responsible for financial losses arising from your disclosure of this information to third parties.
11. Force Majeure Events
The Company is not responsible for financial losses arising from force majeure events, except where such liability cannot be excluded or limited under applicable law or regulation. These events are extreme and irresistible circumstances that are independent of the will and actions of the agreement participants, that cannot be foreseen, prevented or eliminated, including but not limited to natural disasters, fires, man-made accidents and disasters, emergencies at utility works and on utility lines, DDOS attacks, riots, military actions, terrorist attacks, uprisings, civil unrest, strikes, and the regulatory acts of state and local government authorities.
If you have concerns regarding the risks described in this Policy or the services provided by the Company, you have the right to raise a complaint in accordance with the Company’s Complaints Handling Procedure, details of which are available on the Company’s website or upon request.