DISCLOSURE

The Client should read these risk disclosure statements carefully. These statements form an integral part of the Agreement and the Account Opening Form. By executing the Account Opening Form, the Client acknowledges that it has received and read these statements in a language of its choice (English or Chinese) and confirms its understanding of the risks which may arise in connection with the investments and transactions relating to the Accounts. These risk disclosure statements do not disclose or purport to disclose all the risks and relevant considerations in connection with all the investments and transactions relating to the Accounts. The client should refrain from making any investment or transaction unless the Client fully understands the risks involved and has obtained independent legal, tax, financial and other advice from its own advisers as it considers appropriate. The Company is not, and shall not be deemed to be, the Client's financial advisor.

1. Risks in Securities Trading

The prices of securities (including but not limited to bonds or benefits of unit trust funds, mutual funds, or other collective investment schemes) fluctuate, sometimes dramatically. The price of a security may move up or down, and may become valueless. It is as likely that losses will be incurred rather than profit made as a result of buying and selling securities.

Any representation of past performance is not necessarily a guide to future performance.

Where investments involve exposure to foreign currencies, changes in rates of exchange may cause the value of the investments to fluctuate up or down.

Investments in emerging markets need careful and independent assessment by you of each investment and the risks (including without limitation sovereign risk, issuer risk, price risk, liquidity risk, legal and tax risks). Further, you should be aware that, while such investments can yield high gains, they can also be highly risky as the markets are unpredictable and there may be inadequate regulations and safeguards available to investors.

The Company is entitled to act upon your instructions and you cannot assume that the Company will warn you if your instructions are ill-timed or inadvisable for any reason or if the instructions are likely to cause you loss.

Before you make any investment, 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.

2. Risks of Buy-and-Sell Derivatives and Structured Products

Derivative transactions ("Derivative Transactions") can involve a range of products. Such products can either be apparently simple (such as forwards or options) or highly (and perhaps individually) structured. These products can have substantial benefits for users but they carry with them substantial risks which must be clearly understood by their users. Considering the possible risks, you should ensure that you have all necessary information you require to assess a Derivative Transaction before deciding on its appropriateness for you. You should consider what you intend to achieve from the Derivative Transaction, including your financial and operational resources, and any tax and accounting considerations. You should be aware of any general framework for Derivative Transactions established by any governing body. There may also be significant regulatory or other legal considerations to be taken into account.

For the sake of simplicity, Derivative Transactions can be divided into four basic forms, although the forms can be overlapping and one deal can be a combination of those four forms. The basic forms are swaps, options, forwards and hybrid instruments (which are asset, liability, equity or debt obligations with an embedded transaction from one of the other three categories). Derivative Transactions can be settled in cash, by delivery of property against other property or cash, or by normal hold to maturity with no cash settlements. No matter what form is involved, a common feature of all derivatives is that the obligations of one or both of the parties are based on price movements in an underlying financial asset from which the transaction is derived. This financial asset may be, for example, securities (including shares and bonds), interest rates, indices, currencies or the creditworthiness of a reference entity.

You should not enter into a Derivative Transaction unless you fully understand:

• The nature and fundamentals of a derivative and the financial asset underlying such derivative;
• The legal terms and conditions of the documentation for such derivative;
• The extent of the economic risk to which you are exposed as a result of entering into such Derivative Transaction (and you have determined that such risk is suitable for you in light of your specific experience in relation to such Derivative Transaction and/or the relevant derivative and your financial objectives, circumstances and resources);
• The tax treatment of such derivative (which can be complex and/or uncertain); and
• The regulatory treatment of such derivative.

3. General Risks in Relation to Over-the-Counter (OTC) Derivative Transactions

OTC derivative transactions, like other financial transactions, involve a variety of significant risks. The specific risks presented by a particular OTC derivative transaction necessarily depend upon the terms of the transaction and your circumstances. In general, however, all OTC derivative transactions involve some combination of market risk, credit risk, funding risk and operational risk.

Market risk is the risk that the value of a transaction will be adversely affected by fluctuations in the level or volatility of or correlation or relationship between one or more market prices, rates or indices or other market factors or by illiquidity in the market for the relevant transaction or in a related market.

Credit risk is the risk that a counterparty will fail to perform its obligations to you when due.

Funding risk is the risk that, as a result of mismatches or delays in the timing of cash flows due from or to your counterparties in OTC derivative transactions or related hedging, trading, collateral or other transactions, you or your counterparty will not have adequate cash available to fund current obligations.

Operational risk is the risk of loss to you arising from inadequacies in or failures of your internal systems and controls for monitoring and quantifying the risks and contractual obligations associated with OTC derivative transactions, for recording and valuing OTC derivative and related transactions, or for detecting human error, systems failure or management failure.

There may be other significant risks that you should consider based on the terms of a specific transaction. Highly customised OTC derivative transactions in particular may increase liquidity risk and introduce other significant risk factors of a complex character. Highly leveraged transactions may experience substantial gains or losses in value as a result of relatively small changes in the value or level of an underlying or related market factor.

Because the price and other terms on which you may enter into or terminate an OTC derivative transaction are individually negotiated, these may not represent the best price or terms available to you from other sources.

In evaluating the risks and contractual obligations associated with a particular OTC derivative transaction, you should also consider that an OTC derivative transaction may be modified or terminated only by mutual consent of the original parties and subject to agreement on individually negotiated terms. Accordingly, it may not be possible for you to modify, terminate or offset your obligations or your exposure to the risks associated with a transaction prior to its scheduled termination date.

Similarly, while market makers and dealers generally quote prices or terms for entering into or terminating OTC derivative transactions and provide indicative or mid-market quotations with respect to outstanding OTC derivative transactions, they are generally not contractually obligated to do so. In addition, it may not be possible to obtain indicative or mid-market quotations for an OTC derivative transaction from a market maker or dealer that is not counterparty to the transaction. Consequently, it may also be difficult for you to establish an independent value for an outstanding OTC derivative transaction. You should not regard your counterparty's provision of a valuation or indicative price at your request as an offer to enter into or terminate the relevant transaction at that value or price, unless the value or price is identified by the counterparty as firm or binding.

The above does not purport to disclose all of the risks and other material considerations associated with OTC derivative transactions. You should not construe this generic disclosure statement as business, legal, tax or accounting advice or as modifying applicable law. You should consult your own business, legal, tax and accounting advisers with respect to proposed OTC derivative transactions and you should refrain from entering into any OTC derivative transaction unless you have fully understood the terms and risks of the transaction, including the extent of your potential risk of loss.

4. Risks of Synthetic Exchange Traded Funds (ETFs) Trading

Different to the traditional exchange traded funds, synthetic ETFs do not buy the assets in their benchmark. Instead, they typically invest in financial derivative instruments to replicate the benchmark's performance. The investment in synthetic ETFs is highly risky and not suitable to all. Investors must understand clearly and consider the following risks prior to the purchase of synthetic ETFs.

Market Risks

ETFs are typically designed to track the performance of certain indices, market sectors, or group of assets such as stocks, bonds, or commodities. Investors are exposed to the political, economic, currency and other risks related to the ETF's underlying index/assets it is tracking. Investment must be prepared to bear the risk of loss and volatility associated with the underlying index/asset.

Risks of Counterparties

Where a synthetic ETF invests in derivatives to replicate the index performance, investors are exposed to the credit risk of the counterparties who issued the derivatives, in addition to the risks relating to the index. Further, potential contagion and concentration risks of the derivatives issuers should be taken into account (e.g. since derivative issuers are predominantly international financial institutions, the failure of one derivative counterparty of synthetic ETF may have a "knock-on" effect on other derivative counterparties of the synthetic ETFs). Some Synthetic ETFs have collateral to reduce the counterparty risk, but there maybe a risk that the market value of the collateral has fallen substantially when the synthetic ETF seeks to realize the collateral.

Liquidity Risk

There is no assurance that a liquid market exists for an ETF. A higher liquidity risk is involved if a synthetic ETF involves derivatives which do not have an active secondary market. Wider bid-offer spreads in the price of derivatives may result in losses. Therefore, they can be more difficult costly to unwind early, when the instruments provide access to a restricted market where liquidity is limited.

Tracking Error Risk

There may be disparity between the performance of the ETFs and the performance of the underlying index due to, for instance, failure of the tracking strategy, currency differences, fees and expenses.

Trading at Discounts or Premiums

Where the index/market that the ETF tracks is subject to restricted access, the efficiency in unit creation or redemption to keep the price of the ETFs in line with its net asset value (NAV) may be disrupted, causing the ETF to trade at a higher premium or discount to its NAV. Investors who buy an ETF at a premium may not be able to recover the premium in the event of termination.

5. Risks of Foreign Exchange

Investors trading ETFs with underlying assets not denominated in Hong Kong dollars are also exposed to exchange rate risk. Currency rate fluctuations can adversely affect the underlying asset value, also affecting the ETFs price.

6. Risks of Trading Futures-based Exchange Traded Funds (ETFs) Risk of Rolling Futures Contracts

Futures contracts are binding agreements that are made through futures exchanges to buy or sell the underlying assets at a specified time in the future. "Rollover" occurs when an existing futures contract is about to expire and is replaced with another futures contract representing the same underlying but with a later expiration date. When rolling futures contracts forward (i.e. selling near-term futures contracts and then buying longer-term futures contracts) in a situation where the prices of the longer-term futures contract are higher than that of the expiring current-month futures contract, a loss from rolling (i.e. a negative roll yield) may occur. Under such circumstances, the proceeds from selling the near-term futures contracts will not be sufficient to purchase the same number of futures contracts with a later expiration date which has a higher price. This may adversely affect the NAV of the futures-based ETF.

7. Risk of Statutory Restrictions on Number of Futures Contracts Being Held

There is a statutory position limit restricting the holding of futures contracts traded on the recognised exchange company to no more than a specific number of such futures contracts. If the holding of such futures contracts of a futures-based ETF grows to the limit, this may prevent the creation of units of the ETF due to the inability to acquire further futures contracts. This may lead to differences between the trading price and the NAV of the ETF units listed on the exchange.

8. Risks of Trading Leveraged and Inverse Products Investment Risk

Trading L&I Products involves investment risk and are not intended for all investors. There is no guarantee of repaying the principal amount.

Volatility Risk

Prices of L&I Products maybe more volatile than conventional exchange traded funds (ETFs) because of using leverage and the rebalancing activities.

Unlike Conventional ETFs

L&I Products are different from conventional ETFs. They do not share the same characteristics and risks as conventional ETFs.

Long-term Holding Risk

L&I Products are not intended for holding longer than the rebalancing interval, typically one day. Daily rebalancing and the compounding effect will make the L&I Product's performance over a period longer than one day deviate in amount and possibly direction from the leveraged/inverse performance of the underlying index over the same period. The deviation becomes more pronounced in a volatile market.

As a result of daily rebalancing, the underlying index's volatility and the effects of compounding of each day's return over time, it is possible that the leveraged product will lose money over time while the underlying index increases or is flat. Likewise, it is possible that the inverse product will lose money over time while the underlying index decreases or is flat.

9.Risk of Rebalancing Activities

There is no assurance that L&I Products can rebalance their portfolios on a daily basis to achieve their investment objectives. Market disruption, regulatory restrictions or extreme market volatility may adversely affect the rebalancing activities.

Liquidity Risk

Rebalancing typically takes place near the end of a trading day (shortly before the close of the underlying market) to minimize tracking difference. The short interval of rebalancing may expose L&I Products more to market volatility and higher liquidity risk.

Intraday Investment Risk

Leverage factor of L&I Products may change during a trading day when the market moves but it will not be rebalanced until day end. The L&I Product's return during a trading day may be greater or less than the leveraged/opposite return of the underlying index.

Portfolio Turnover Risk

Daily rebalancing causes a higher levels of portfolio transaction when compared to conventional ETFs, and thus increases brokerage and other transaction costs.

Correlation Risk

Fees, expenses, transactions cost as well as costs of using financial derivatives may reduce the correlation between the performance of the L&I Product and the leveraged/inverse performance of the underlying index on a daily basis.

Termination Risk

L&I Products must be terminated when all the market makers resign. Termination of the L&I Product should take place at about the same time when the resignation of the last market maker becomes effective.

10. Leverage Risk (for Leveraged Products Only)

The use of leverage will magnify both gains and losses of leveraged products resulting from changes in the underlying index or, where the underlying index is denominated in a currency other than the leveraged product's base currency, from fluctuations in exchange rates.

11. Unconventional Return Pattern (for Inverse Products Only)

Inverse products aim to deliver the opposite of the daily return of the underlying index. If the value of the underlying index increases for extended periods, or where the exchange rate of the underlying index denominated in a currency other than the inverse product's base currency rises for an extended period, inverse products can lose most or all of their value.

12. Inverse Products vs Short Selling (for Inverse Products Only)

Investing in inverse products is different from taking a short position. Because of rebalancing, the performance of inverse products may deviate from a short position in particular in a volatile market with frequent directional swings.

13. Risks of Trading Single-Stock ETFs

Single-stock ETFs are complex investment products that pay positive or negative multiples of the market performance of the underlying security. These features are known as leveraged and inverse exposures. A single-stock ETF differs from a more traditional ETF that combines multiple securities into a single fund to give an investor exposure to a market segment or asset class. Single-stock ETFs carry heightened risks because leveraged and inverse exposures can generate amplified or unexpected losses.

Instead of reflecting a basket of stocks, single-stock ETFs only track the performance of a single underlying security and typically are not designed to be held for more than one day. The value of a single-stock ETF resets daily, adding another layer of risk to an already risky and complex product. A single-stock ETF's value can diverge significantly from the underlying stock, especially if it is leveraged or inversely leveraged.

In addition to the Risks of Trading Leveraged and Inverse Products set out above, single-stock ETFs possess other risks, in particular:

1. (1) Lack of diversification Single-stock ETFs track the performance of a single stock as opposed to a variety of stocks, which reduces diversification. But holding a single-stock ETF is not the same as holding the underlying stock, a traditional ETF, or a non-single stock leveraged ETF.
2. (2) New products Single-stock ETFs are new to the retail investor market, and there is uncertainty as to how well they will perform over time.
3. (3) Increased volatility Single-stock ETFs amplify the effect of price movements of the underlying individual stocks, and may generate amplified or unexpected losses. The volatility will be greater than holding the underlying stock itself.
4. (4) Not long-term investments Single-stock ETFs aim to provide returns over extremely short time periods (in some cases even a single day). These short holding periods mean that single-stock ETFs are geared more towards traders, rather than not long-term investors. Returns on these funds over periods longer than one day may diverge significantly from the performance of the underlying stock because of daily rebalancing and the effects of compounding.
5. (5) Rebalancing and compounding risks Returns on single-stock ETFs over periods longer than one day may diverge significantly from the performance of the underlying stock because of daily rebalancing and the effects of compounding.
6. (6) Higher Fees Fees on single-stock ETFs can be meaningfully higher than the fees on traditional ETFs.
7. (7) Capital losses You should understand that there is a risk you may lose your entire investment in a single-stock ETF. It can be risky to invest more than you can afford to lose.
8. (8) Self-directed You should carefully read the prospectus for any single-stock ETF before investing to truly understand the risks associated with the product. Gains and losses can be magnified by the compounding inherent in the investment.
9. (9) Tracking Error Like any ETF, single-stock ETFs may experience tracking errors, which is a deviation between the ETF's performance and the performance of the underlying stock. This could occur due to fees, rebalancing, or other factors.
10. (10) Concentration Risk Unlike traditional ETFs, single-stock ETFs can't makeup poor performance of one stock with the better performance of another.
11. (11) Laws and Regulations Single-stock ETFs can be subject to the applicable laws and regulations of the relevant overseas jurisdiction. These overseas laws and regulations may differ from the laws and regulations in Hong Kong.

14. Risks of the Authorized Third Parties

There are substantial risks in allowing an authorized third party to trade or operate your account, and it is possible that instructions could be given by persons not properly authorized. You accept all of the risks of such an operation and irrevocably releases the Company from all liabilities arising out of or in connection with such instructions, whether taken by the Company or otherwise.

15. Risk of Providing an Authority to Hold Mail or to Direct Mail to Third Parties

If you provide the Company with an authority to hold mail or to direct mail to third parties, it is important for you to promptly collect in person all contract notes and statements of your account and review them in detail to ensure that any anomalies or mistakes can be detected in a timely fashion.

16. Risks of Leaving Money or Other Property in the Custody of the Company or its Nominees or Agents

You acknowledge that there are risks in leaving money or other property in the custody of the Company or its nominees or agents. For example, if the Company is holding your money or other property and becomes insolvent, you may experience significant delay in recovering the same. These are risks that you are prepared to accept.

17. Risks of Receiving or Holding the Client's Assets Outside Hong Kong

Client assets received or held by the Company or its nominee(s) 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.

18. Risks Related to Algorithmic Trading

The Company may make available to the Client a suite of various order types on its trading platform that may use computerized algorithms. These order types allow the Client to input various conditions as part of its Instruction for a Transaction to the Company. The Company's computerized routing systems will attempt to place such effect such Instructions into the market in accordance with the conditions set. Algorithmic order types range from standard limit orders to more complex strategies.

The trading platform may require additional systems on the Client's part in order to function properly.

There are special characteristics and risks associated with algorithmic trading. You should understand these risks and determine whether algorithmic trading is appropriate in light of your objectives and experience.

1. (1) Technical Errors: Algorithmic trading can be effected when your systems, the Company's systems or the Exchanges' systems are experiencing technical difficulties. Risks include possible delays or failures in (i) availability of your connection to the Company's services and of the Company's services to the relevant Exchange; (ii) the operation of databases and internal transfers of data; (iii) the provision of data feeds (accuracy of data and stability of data connections); (iv) possible hardware failures; (v) usage loads, bandwidth limitations, and other bottlenecks inherent in computerized and networked architectures; (vi) issues, disputes, or failures of third party vendors and other dependencies; and (vii) other general risks inherent in computer-based operations. Any of these could lead to delays or failures in order execution, incorrect order execution and other problems.
2. (2) Software and Design Flaws: All software is subject to inadvertent programming errors and bugs embedded in the code comprising that software. Algorithmic order types may contain logical errors in the code to implement them. Errors may exist in the data used for testing the algorithm or the applicable model of the market. Despite testing and monitoring, inadvertent errors and bugs may still cause algorithmic order types to fail or behave incorrectly.
3. (3) Market Impact and Events: Market conditions will impact the execution of algorithmic orders. Possible adverse market conditions include lack of liquidity, price swings, late market openings, early market closings, market chaos, and mid-day trading pauses, and other such disruptive events. The execution of an algorithm can itself have an impact on the market, including causing lack of liquidity or abrupt and unwarranted price swings.
4. (4) Losses: Losses can happen more quickly with electronic and algorithmic trading compared to other forms of trading. Any or all of the other risk factors could cause more significant trading losses when using algorithmic trading compared to other forms of trading.

19. Risks Relating to Repos

The term repo refers to a sale and repurchase transaction in securities. In a repo, the repo seller transfers title in the securities to the repo purchaser. The repo is in effect for a specific period, and at the end of the period the repo purchaser transfers title to equivalent securities (of the same issuer and type) to the repo seller.

The repo purchaser’s obligation to transfer equivalent securities is usually secured againstcollateral. There is, accordingly, credit risk. Selling securities under a repo may also affect your taxposition (although you should seek independent advice on the issue).

As a result of selling securities under a repo the seller will cease to be the owner of them,although the seller will have the right to reacquire at a future date equivalent securities (or incertain circumstances their cash value or the proceeds of redemption). However, except to theextent that the seller have received collateral, the seller’s right to the repurchase of securities issubject to the risk of insolvency or other non- performance by the repo purchaser. Since theseller not the owner of the securities during the period of the repo, the seller will not have votingrights nor will the seller directly receive dividends or other corporate actions although the sellerwill normally be entitled to apayment from the repo purchaser equivalent to the dividend theseller would otherwise have received and the repo purchaser will be required to account for theseller for the benefit of corporate actions.

Repos also entail counterparty default risk and operational risks such as the non- settlement or delay in settlement of instructions.

20. Risk Relating to Trading in US Exchange-listed or Over-the-counter ("OTC") Securities or Derivatives

You should understand the US rules applicable to trades in security or security-like instrument in markets governed by US law before undertaking any such trading. US law could apply to trading in US markets irrespective of the law applicable in your home jurisdiction.

Many (but by no means all) stocks, bonds and options are listed and traded on US stock exchanges. NASDAQ, which used to be an OTC market among dealers, has now also become a US exchange. For exchange-listed stocks, bonds and options, each exchange promulgates rules that supplement the rules of the US Securities & Exchange Commission ("SEC") for the protection of individuals and institutions trading in the securities listed on the exchange.

OTC trading among dealers can continue in exchange-listed instruments and in instruments that are not exchange-listed at all. For securities that are not listed on any exchange, trading can continue through the OTC bulletin board or through the inter-dealer "pink sheets" that carry representative (not actual) dealer quotes. These facilities are outside of NASDAQ.

Options on securities are subject to SEC rules and the rules of any securities exchange on which the options are listed. Options on futures contracts on commodities like wheat or gold are governed by rules of the US Commodity Futures Trading Commission ("CFTC"). There are also commercial options, like options on real estate, that are governed neither by SEC nor CFTC rules.

Whether you are intending to trade in US exchange-listed securities, OTC securities or derivatives (such as Options or Futures), you should understand the particular rules that govern the market in which you are intending trade. An investment in any of these instruments tends to increase the risk and the nature of markets in derivatives tends to increase the risk even further.

Market makers of OTC bulletin board are unable to use electronic means to interact with other dealers to execute trades. They must manually interact with the market, i.e. use standard phone lines to communicate with other dealers to execute trades. This may cause delays in the time it takes to interact with the marketplace. This, if coupled with increase in trade volume, may lead to wide price fluctuation in OTC bulletin board securities as well as lengthy delays in execution time. You should exercise extreme caution when placing market orders and fully understand the risks associated with trading in OTC bulletin board.

Market data such as quotes, volume and market size mayor may not be as up-to-date as expected with NASDAQ or listed securities.

As there may be far fewer market makers participating in OTC securities markets, the liquidity in that security maybe significantly less than those in listed markets. As such, you may receive a partial execution or the order may not be executed at all. Additionally, the price received on a market order may be significantly different from the price quoted at the time of order entry. When fewer shares of a given security are being traded, larger spreads between bid and ask prices and volatile swings in price may result. In some cases, the liquidation of a position in an OTC security may not be possible within a reasonable period of time.

Issuers of OTC securities have no duty to provide any information to investors, maintain registration with the SEC or provide regular reports to investors.

21. Risks Specific to Initial Public Offerings

If the Offer Securities (as defined in Appendix II (Applications for New Listings) are denominated in a currency other than Hong Kong Dollars (a "Foreign Currency") or in both Hong Kong Dollar and a Foreign Currency, investors are exposed to exchange rate risk and may suffer loss as a result of the fluctuations in exchange rate.

The risk of loss in financing a transaction by deposit of collateral is significant. There is a risk that the company's share price will drop below its initial IPO/listing price, once the company's shares commence trading on the stock market. Clients may sustain losses in excess of their cash and any other assets deposited as collateral with a licensed or registered person. Market conditions may make it impossible to execute contingent orders, such as "stop-loss" or "stop-limit" orders. You should maintain sufficient margin at all times. Clients may be called upon at short notice to make additional margin deposits or interest payments. If the required margin deposits or interest payments are not made within the prescribed time, clients' collateral may be liquidated without their consents. Moreover, clients will remain liable for any resulting deficits in their accounts and interests charged on their accounts. Clients should therefore carefully consider whether such a financing arrangement is suitable in light of their own financial positions and investment objectives.

22. Risks of Trading Futures and Options

The risk of loss in trading futures contracts or options is substantial. In some circumstances, you may sustain losses in excess of your initial margin funds. 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. You may be called upon at short notice to deposit additional margin funds. If the required funds are not provided within the prescribed time, your position may be liquidated. You will remain liable for any resulting deficit in your account. You should therefore study and understand futures contracts and options before you trade and carefully consider whether such trading is suitable in the light of your own financial position and investment objectives. If you trade options you should inform yourself of exercise and expiration procedures and your rights and obligations upon exercise or expiry.

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.

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 Company 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 "stop-limit" 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.

Warnings to Options Holders

• Some options may only be exercised on an expiry day (European-Style Exercise) and other options may be exercised at any time before expiration (American-Style Exercise). You shall understand that, upon exercise, some options require delivery and receipt of the underlying securities, and that other options require a cash payment.
• An option is a wasting asset and there is a possibility that as an option holder client may suffer the loss of the total premium paid for the option. You shall confirm that, as an options holder, in order to realise a profit it will be necessary to either exercise the option or close the long option position in the market. Under some circumstances, it may be difficult to trade the option due to lack of liquidity in the market. You shall confirm that, the Company has no obligation either to exercise a valuable option in the absence of your instruction, or to give to you prior notice of the expiration date of the option.

Warnings to Options Writer

• As the seller/sellers of options, you may be required to pay additional margins at any time. You shall confirm that, as an option writer, unlike an option holder, you may be liable for unlimited losses based on the rise or fall of the price of the underlying securities and the gains are limited to the option premium.
• In addition, writers of American-Style Call (Put) Options may be required at any time before expiry to deliver (or pay for) the underlying securities to the full value of the strike price multiplied by the number of underlying securities. You shall recognize that this obligation may be wholly disproportionate to the value of premium received at the time the options were written and may be required at short notice.

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 unfavorably. 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.

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.

Terms and Conditions of Contracts

You should ask the Company 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.

23. 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".

24. 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.

25. Commissions 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. By commencing any trading activities with the Company, you acknowledge that you have been so informed by the Company.

26. 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 Company for details about the types of redress available in both your home jurisdiction and other relevant jurisdictions before you start to trade.

27. Currency Risks

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.

28. 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 Company for details in this respect.

29. 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.

30. Disclaimer in Relation to Trading of Stock Index Futures Contracts

The definitions used in the Regulations for Trading Stock Index Futures Contracts apply to this paragraph.

Hang Seng Indexes Company Limited ("HSIL") currently publishes, compiles and computes a number of stock indexes and may publish, compile and compute such additional stock indexes at the request of Hang Seng Data Services Limited ("HSDS") from time to time (collectively, the "Hang Seng Indexes"). The marks, names and processes of compilation and computation of the respective Hang Seng Indexes are the exclusive property of and proprietary to HSDS. HSIL has granted to the Exchange by way of licence the use of the Hang Seng Indexes solely for the purposes of and in connection with the creation, marketing and trading of futures contracts based on any of the Hang Seng Indexes respectively (collectively, "Futures Contracts"). The process and basis of compilation and computation of any of the Hang Seng Indexes and any of the related formula or formulae, constituent stocks and factors may at any time be changed or altered by HSIL without notice and the Exchange may at any time require that trading in and settlement of such of the Futures Contracts as the Exchange may designate be conducted by reference to an alternative index or alternative indexes to be calculated.

Neither the Exchange nor HSDS nor HSIL warrants or represents or guarantees to any participant or any third party the accuracy or completeness of the Hang Seng Indexes or any of them and the compilation and computation thereof or any information related thereto and no such warranty or representation or guarantee of any kind whatsoever relating to the Hang Seng Indexes or any of them is given or may be implied. Further, no responsibility or liability whatsoever is accepted by the Exchange, HSDS or HSIL in respect of the use of the Hang Seng Indexes or any of them for the purposes of and in connection with the Futures Contracts or any of them and/or dealings therein, or for any inaccuracies, omissions, mistakes, errors, delays, interruptions, suspension, changes or failures (including but not limited to those resulting from negligence) of HSIL in the compilation and computation of the Hang Seng Indexes or any of them or for any economic or other losses which may be directly or indirectly sustained as a result thereof by any participant or any third party dealing with the Futures Contracts or any of them.

No claims, actions or legal proceedings may be brought by any participant or any third party against the Exchange and/or HSDS and/or HSIL in connection with or arising out of matters referred to in this disclaimer. Any participant or any third party deals in the Futures Contracts or any of them in full knowledge of this disclaimer and can place no reliance whatsoever on the Exchange, HSDS and/or HSIL. For the avoidance of doubt, this disclaimer does not create any contractual or quasi-contractual relationship between any participant or third party and HSIL and/or HSDS and must not be construed to have created such relationship.

31. Disclaimer in Relation to Trading of Stock Index Option Contracts

The definitions used in the Regulations for Trading Stock Index Options Contracts apply to this paragraph.

Hang Seng Indexes Company Limited ("HSIL") currently publishes, compiles and computes a number of stock indexes and may publish, compile and compute such additional stock indexes at the request of Hang Seng Data Services Limited ("HSDS") from time to time (collectively, the "Hang Seng Indexes"). The marks, names and processes of compilation and computation of the respective Hang Seng Indexes are the exclusive property of and proprietary to HSDS. HSIL has granted to the Exchange by way of licence the use of the Hang Seng Indexes solely for the purposes of and in connection with the creation, marketing and trading of option contracts based on any of the Hang Seng Indexes respectively (collectively, the "Option Contracts"). The process and basis of compilation and computation of any of the Hang Seng Indexes and any of the related formula or formulae, constituent stocks and factors may at any time be changed or altered by HSIL without notice and the Exchange may at any time require that trading in and settlement of such of the Option Contracts as the Exchange may designate be conducted by reference to an alternative index or alternative indexes to be calculated.

Neither the Exchange nor HSDS nor HSIL warrants or represents or guarantees to any participant or any third party the accuracy or completeness of the Hang Seng Indexes or any of them and the compilation and computation thereof or any information related thereto and no such warranty or representation or guarantee of any kind whatsoever relating to the Hang Seng Indexes or any of them is given or may be implied. Further, no responsibility or liability whatsoever is accepted by the Exchange, HSDS or HSIL in respect of the use of the Hang Seng Indexes or any of them for the purposes of and in connection with the Option Contracts or any of them and/or dealings therein, or for any inaccuracies, omissions, mistakes, errors, delays, interruptions, suspension, changes or failures (including but not limited to those resulting from negligence) of HSIL in the compilation and computation of the Hang Seng Indexes or any of them or for any economic or other losses which may be directly or indirectly sustained as a result thereof by any participant or any third party dealing with the Option Contracts or any of them.

No claims, actions or legal proceedings may be brought by any participant or any third party against the Exchange and/or HSDS and/or HSIL in connection with or arising out of matters referred to in this disclaimer. Any participant or any third party deals in the Option Contracts or any of them in full knowledge of this disclaimer and can place no reliance whatsoever on the Exchange, HSDS and/or HSIL. For the avoidance of doubt, this disclaimer does not create any contractual or quasi-contractual relationship between any participant or third party and HSIL and/or HSDS and must not be construed to have created such relationship.

32. HKFE Disclaimer

Stock indices and other proprietary products upon which contracts traded on Hong Kong Futures Exchange Limited (the "Exchange") may be based may from time to time be developed by the Exchange. The HKFE Taiwan Index is the first of such stock indices developed by the Exchange. The HKFE Taiwan Index and such other indices or proprietary products as may from time to time be developed by the Exchange (the "Exchange Indices") are the property of the Exchange. The process of compilation and computation of each of the Exchange Indices is and will be the exclusive property of and proprietary to the Exchange.

The process and basis of compilation and computation of the Exchange Indices may at any time be changed or altered by the Exchange without notice and the Exchange may at any time require that trading in and settlement of such futures or options contracts based on any of the Exchange Indices as the Exchange may designate be conducted by reference to an alternative index to be calculated.

The Exchange does not warrant or represent or guarantee to any member of the Exchange or any third party the accuracy or completeness of any of the Exchange Indices or their compilation and computation or any information related thereto and no such warranty or representation or guarantee of any kind whatsoever relating to any of the Exchange Indices is given or may be implied.

Further, no responsibility or liability whatsoever is accepted by the Exchange in respect of the use of any of the Exchange Indices or for any inaccuracies, omissions, mistakes, errors, delays, interruptions, suspensions, changes or failures (including but not limited to those resulting from negligence) of the Exchange or any other person or persons appointed by the Exchange to compile and compute any of the Exchange Indices in the compilation and computation of any of the Exchange Indices or for any economic or other losses which may be directly or indirectly sustained as a result thereof by any member of the Exchange or any third party dealing with futures or options contracts based on any of the Exchange Indices.

No claims, actions or legal proceedings may be brought by any member of the Exchange or any third party against the Exchange in connection with or arising out of matters referred to in this disclaimer. Any member of the Exchange or any third party engages in transactions in futures and options contracts based on any of the Exchange Indices in full knowledge of this disclaimer and can place no reliance on the Exchange in respect of such transactions.

33. Risks in Relation to Funds

The Client understands that the following risk disclosure statements explain some general risks, but are not meant to be an exhaustive list of all possible risks, involved in the Client's investment or dealing in Funds. For specific risks associated with a particular Fund, the Client should refer to the relevant offering documents for details.

1. (1) Funds are investment products and some may involve derivatives. Funds are not equivalent to time deposits.
2. (2) Whilst derivative instruments may be used in a Fund for hedging purposes, the risks remain that the relevant hedging instrument may not necessarily fully correlate to the investments in a Fund and accordingly, not fully reflect changes in the value of the investment, giving rise to potential net losses.
3. (3) Some Funds may use financial derivatives instruments for investment purposes, which may involve embedded leverage. The use of financial derivatives instruments may expose the Client to additional risks including but not limited to volatility risk and counterparty risk. Fund manager(s) of a Fund may invest a substantial portion of the Funds' net assets in structured products, derivatives and non-investment grade debt securities. During adverse market conditions, the Client may suffer significant financial losses.
4. (4) A Fund that is a hedge fund uses alternative investment strategies and the inherent risks are different and are not typically encountered in traditional funds.
5. (5) The price of the Units of a Fund can and do fluctuate, sometimes dramatically. The value of and income from a Fund is not guaranteed and may move up or down and may even become valueless. There is an inherent risk that losses may be incurred rather than profits made as a result of buying and selling Units of a Fund. The Client may not get back the amount that the Client has initially invested. In the worst case scenario, the value of the Units of a Fund may be worth substantially less than the amount that the Client has invested (and in an extreme case could be worth nothing).
6. (6) Past performance of a Fund is not an indication of future performance.
7. (7) A Fund that invests in certain markets and companies (e.g. emerging markets, commodity markets or smaller companies) may also involve a higher degree of risk and is usually more sensitive to price movements.
8. (8) Deductions of charges and expenses mean that the Client may not get back the amount it invested.
9. (9) The Client's right to redeem Units in a Fund may be restricted by certain circumstances (depending on the feature and terms of the Fund). In other words, there is a risk that Units in a Fund may be difficult to (purchase or) sell depending on those circumstances.
10. (10) The Company will effect the Client's orders as soon as practicable; however, the execution of such orders may not coincide with the dealing days stipulated in the relevant offering document of a Fund. Furthermore, before a Client's order is placed by the Company with the relevant Fund manager for execution, the Company may aggregate and consolidate (either daily or from time to time) a Client's order together with orders placed by the Company's other clients. There may be a discrepancy in the price or value of a Unit between when a Client places an order with the Company and when the order is executed by the relevant Fund manager.
11. (11) A Fund could contain Units that do not permit dealing every day. Investment in such funds will only be realisable on their respective dealing days. The appropriate market price of these investments can only be determined on the relevant Fund's dealing days.
12. (12) An investment in a Fund that is not denominated in HKD or USD is exposed to exchange risk fluctuations. Exchange rates may cause the value of the investment to fluctuate.
13. (13) Units of a Fund held by the Company or any other person appointed by the Company as the Client's nominee outside of Hong Kong are subject to the applicable laws and regulations of the relevant overseas jurisdiction. These overseas laws and regulations may differ from the laws and regulations in Hong Kong. As a result, the Client may not enjoy the same protection for those Units in a Fund as the Client would enjoy for the same Units in a Fund that are held in Hong Kong.
14. (14) There can be no assurance that the investment objective and strategy of a Fund will be successfully achieved.
15. (15) Investment in Funds involve risks and prior to investing, the Client should read the relevant constitutive documents, offering documents and other relevant documents of a particular Fund to understand its features, terms and risks.
16. (16) Before investing or dealing in a Fund, the Client should carefully consider whether that Fund is suitable having regard to the Client's investment experience, investment objectives, financial resources and other relevant circumstances. The Client must also consider these risk disclosure statements together with those set out under the section titled "Risks in Securities Trading" above.

The Client understands that the following risk disclosure statements explain some general risks, but are not meant to be an exhaustive list of all possible risks, involved in the Client's investment or dealing in Funds. For specific risks associated with a particular Fund, the Client should refer to the relevant offering documents for details.

34. Risk of Trading Virtual Assets

Unless the context requires otherwise, the terms defined in the Agreement and Appendix XV shall have the same meaning when used herein.

Issuer Default Risks

Unless expressly stated otherwise, the Company does not issue Virtual Assets. Virtual Assets are issued by third parties. Investors should read the relevant terms, offering document, white paper, information, risk disclosures and other documents provided by the issuers carefully before entering into any VA Transaction. The Client should note that the offering document, white paper or product information provided by the issuer have not been subject to scrutiny by any regulatory body, including any Hong Kong Regulators.

For any Virtual Assets authorized by a regulator, the Client should note that authorization does not imply any official recommendation or endorsement of the Virtual Asset, nor does it guarantee the commercial merits of such Virtual Asset or its performance.

In the event that a Virtual Asset issuer becomes insolvent and defaults on their issued products, the Client may be considered as unsecured creditors and may have no preferential claims to any assets of the issuer. The Client should therefore pay close attention to the financial strength and credit worthiness of issuers and conduct their own assessment on the potential of their project.

Since Virtual Assets are not legal tender and Virtual Asset products are not backed by any government and authorities, in the event of the bankruptcy, administration or liquidation of the issuer or the cessation of operations of the issuer, the Virtual Asset products issued by the issuer may no longer have any value and the Client can lose their entire investment. The Company makes no representations or warranties about whether any Virtual Asset will always continue to trade in a Virtual Asset Exchange. Any Virtual Asset is subject to delisting by a Virtual Asset Exchange without prior notice and in the sole discretion of the Virtual Asset Exchange. The Client should seek independent professional advice before making any investment decision.

Market, Liquidity and Conversion Risks

Where VA Transactions are denominated in a particular type of Virtual Assets or fiat currencies, or where the Client uses one type of Virtual Assets to purchase another type of Virtual Assets upon carrying out a VA Transaction, there is a risk of the exchange markets moving against the Client, resulting in the net proceeds being significantly less than the initial amount upon maturity or any earlier dealing, and any income or gains may be entirely negated.

The value of a Virtual Asset may be derived, among other things, from the continued willingness of market participants to exchange fiat currency for that Virtual Asset, this means that the value of a particular Virtual Asset may decline, or be completely and permanently lost should the market for that Virtual Asset disappear. The Client should further note that there is no assurance that a market that existed for a particular Virtual Asset will continue to exist in the future, or that a person who accepts a Virtual Asset as payment today will continue to do so in the future. The Client may not be able to trade any Virtual Asset outside the Trading Hours, even if the market declines or advances sharply.

Liquidity risk is the risk of losses attributable to a lack of liquidity (for example very few active market participants) in a particular market. This is usually indicated by wide bid / offer spreads and very few transactions being carried out in a particular product or market. The risk is that changes in the underlying market price may be infrequent but very large, and that it is not possible to unwind or transfer a particular transaction in a timely manner, at near the price the Client had expected, or at all. Such liquidity risk in an asset may be caused by the absence of buyers, limited buy/sell activity or underdeveloped secondary markets for certain Virtual Assets. Investors should note that there is no assurance that a person who accepts a Virtual Asset as payment, will continue to do so in the future.

The Client may also suffer loss as a result of depreciation of the value of the fiat currency paid as a result of foreign exchange controls imposed by the country issuing the fiat currency. Repayment or payment of amounts due to the Client may be delayed or prevented by foreign exchange controls or other actions imposed by governmental or regulatory bodies over fiat currencies which they control or regulate.

Volatility Risks

The extreme volatility and unpredictability of the price of Virtual Asset relative to other Virtual Asset or fiat currencies may result in significant losses over a short period of time. Such fluctuations could affect the price of any Virtual Assets. Any Virtual Asset may decrease in value or lose all of its value due to various factors including discovery of wrongful conduct, market manipulation on trading, lending or other dealing platforms, change to the nature or properties of the Virtual Asset, governmental or regulatory activity, legislative changes, suspension or cessation of support for a Virtual Assets by Virtual Asset Exchanges or service providers, public opinions, or other factors outside of our control. Technical advancements, as well as broader economic and political factors, may cause the value of Virtual Assets to change significantly over a short period of time. Virtual Assets are highly risky and the Client should exercise caution when trading with any Virtual Assets.

Trading Suspension Risks

During the suspension of trading of the Virtual Assets of the Virtual Asset Exchanges and outside the Trading Hours of the Company, the Clients cannot buy and sell Virtual Assets through such Virtual Asset Exchange. If the trading is suspended or stopped, the subscription and redemption of such Virtual Assets or securities may also be suspended. It may also be difficult or impossible to liquidate a position in the Virtual Assets under certain circumstances. Certain airdrops, forks or network events may occur rapidly and affect our ability to execute a VA Transaction for the Client. Information relating to such events may be difficult to ascertain ahead of time and may be subject to limited oversight by any third party who is capable of intervening to stabilise the network.

Risks Related to Delayed Funds Deposit or Transfer

The fund deposits to VA Account are not always instantaneous and may take some time to process, even when the fund is transferred from another account maintained with the Company. You may experience an inability to open a position until the fund deposit or transfer process is completed and the funds are fully accessible in the VA account. Consequently, there is an inherent risk of delay in the availability of funds for executing buy orders. The Client shall anticipate and plan for potential delays when initiating such transfers.

Investor Compensation Risks

The protection offered by the Investor Compensation Fund under the SFO does not apply to VA Transactions (irrespective of the nature of the Virtual Assets). The Clients should note that any Virtual Assets or fiat currency held in a VA Account may not be protected. This means that VA Transactions and Virtual Assets may have reduced level or type of protection compared to other Investment Products and asset classes afforded by Applicable Regulations.

Not a Bank Deposit under Applicable Laws

Any fiat currencies or Virtual Assets held by the Virtual Assets Exchange are not held as "deposits" within the meaning of the Banking Ordinance (Cap. 155 of the Laws of Hong Kong). Without limitation, neither the Company nor the Virtual Assets Exchange is regulated by the Hong Kong Monetary Authority in respect of the foregoing.

Jurisdiction Risks

Residents, tax residents or persons having a relevant connection with certain jurisdictions are excluded from carrying out VA Transactions. Changes in the Client's place of domicile or the Applicable Regulations may result in the Client violating any Applicable Regulations of the applicable jurisdiction and the terms of this Agreement. The Client is responsible for ensuring that any VA Transaction is, and remains lawful despite changes to Applicable Regulations, the Client's place of domicile and circumstances.

Country Risks

If a VA Transaction is made in respect of Virtual Assets issued by a party subject to foreign laws or transactions made on markets in other jurisdictions, including markets formally linked to a domestic market, recovery of the sums invested and any profits or gains may be reduced, delayed or prevented by foreign exchange controls, debt moratorium or other actions imposed by the government or other official bodies. Before conducting any VA Transaction, the Client should be sufficiently familiarised with the Applicable Regulations and any rules or laws relevant to the particular VA Transactions.

The Client should note that their local regulatory authority (and if applicable, the Hong Kong Regulators) will be unable to compel the enforcement of the rules of regulatory authorities or markets in other jurisdictions where the Client's transactions have been effected. It is the sole responsibility of the Client to obtain independent advice about the different types of redress available in both the Client's home jurisdiction and other relevant jurisdictions before starting to trade. If the Client's country of residence imposes restrictions on VA Transactions, we may be required to discontinue your access to the VA Account, and may not be permitted to transfer Virtual Assets back to you or permit you to withdraw Virtual Assets from the VA Account to yourself or others, until such time as the regulatory environment permits us to do so.

Legal and Regulatory Risks

Legal and documentation risks include the risk that transactions and/or their related framework arrangements may not be legally enforceable or that the conduct of the parties violates Applicable Regulations. There is also legal uncertainty on whether Virtual Assets can be regarded as "property" under the law. This may affect the nature and enforceability of your interest in such Virtual Asset. Legislative and regulatory changes may adversely affect the use, storage, transfer, exchange, and value of Virtual Assets. You are solely responsible for knowing and understanding how the laws applicable to you or your property, rights or assets or the applicable tax for the Virtual Assets you trade or the leverage you provide.

Regulatory Measures

The planning, development, marketing, promotion, execution or otherwise of the Virtual Assets may be seriously affected, hindered, postponed or terminated as a result of any new laws and/or regulations. Since regulatory policies can change with or without prior notice, any existing regulatory permissions for or tolerance of Virtual Assets in any jurisdiction may be withdrawn without warning. Cryptographic-tokens and cryptocurrencies could be deemed from time to time as a commodity or virtual commodity, a digital asset or even as money, securities or currency in various jurisdictions and therefore the securities could be prohibited from being entered into, traded or held in certain jurisdictions pursuant to local regulations. In turn, the Virtual Assets could be deemed to be a regulated or restricted product. There is no guarantee that the Virtual Assets can maintain any particular legal or regulatory status in any particular jurisdiction at any time.

Risks Relating to Authorised Persons

There are substantial risks in allowing another person to trade or operate an Account, and it is possible that Instructions could be given by persons who are not properly authorised. You accept all of the risks of such an operation and irrevocably release us from all liabilities arising out of or in connection with such Instructions.

Virtual Assets may be Complex Products

Virtual Assets may be complex products by virtue that the terms, features and/or risk are not understood due to the complex structure, novelty and reliance on technological features.

Commissions and Fees

The Client should obtain details of all fees, costs, charges, expenses and commissions for which the Client will be liable before conducting any VA Transaction. If any of the foregoing is unclear to the Client, it is the responsibility of the Client to clarify such fees, costs, charges, expenses and commissions before entering into the VA Transaction.

Tax Treatment and Accounting

Some VA Transactions may be subject to the tax laws and regulations in an applicable jurisdiction. The tax treatment and accounting of Virtual Assets is a largely untested area of law and practice that is subject to changes. Tax treatment of Virtual Assets may vary amongst jurisdictions. We may receive queries, notices, requests or summons from tax authorities and as a result may be required to furnish certain information about the VA Transaction.

Among the accounting profession, there are no agreed standards and practices for how an auditor can perform assurance procedures to obtain sufficient audit evidence for the existence and ownership of the Virtual Assets, and ascertain the reasonableness of the valuations.

If you are unsure about the tax implications of your VA Transactions, you should seek independent professional advice before carrying out a VA Transaction.

Inflation and Deflation Risks

Virtual Assets may, either because of the inherent design of the Virtual Assets, not be a fixed supply of assets. Where additional Virtual Assets are created or the total supply of a Virtual Asset is reduced, their price may change due to inflationary or deflationary effects.

Concentration Risks

At any point in time, one or more persons may directly or indirectly control significant portions of the total supply of any particular Virtual Asset. Acting individually or in concert, these holders may have significant influence, and may be able to influence or cause forks or network events which may have a detrimental effect on price, value or functionality of the Virtual Assets. Network participants may make decisions that are not in your best interest as a holder of Virtual Assets.

Cryptographic Protection

Cryptography is evolving and there can be no guarantee of security at all times. Advancement in cryptography technologies and techniques, including but not limited to code cracking, the development of artificial intelligence and/or quantum computers, could be identified as risks to all cryptography-based and/or blockchain based systems including the underlying assets of the Virtual Assets. The security of Virtual Asset Exchanges cannot be guaranteed as the future of cryptography or security innovations is unpredictable.

Loss of Private Key is Permanent and Irreversible

The Client should note that Virtual Assets not received nor held by the Company and/or the Virtual Assets Exchange in a VA Account is the Client's sole responsibility, and that the Client alone is responsible for securing the private key for any address with respect to such Virtual Assets. Any loss of control of the private key will permanently and irreversibly deny the Client's access to such Virtual Assets. Neither the Company nor any other person will be able to retrieve or protect the Virtual Assets not held by the Company and/or the Virtual Assets Exchange in a VA Account. Once lost, the Client will not be able to transfer such Virtual Assets to any other address or wallet. This means that the Client will also not be able to realize any value or utility that the Virtual Assets may hold now or in future.

Cyber-attacks and Fraudulent Activity, including Theft of Virtual Assets on the Virtual Asset Exchanges

There may be attempts to steal the Virtual Assets on the Virtual Asset Exchanges or otherwise intervene in a VA Transaction or any of the VA Services. The nature of Virtual Assets exposes the Client to an increased risk of fraud or cyber-attack. Virtual Assets, the VA Account, any VA Service, any service provided by Virtual Assets Exchange, and the website or application may be targeted by malicious persons who may attempt to steal Virtual Assets or fiat currencies, or otherwise intervene in a VA Transaction or any service provided by Virtual Assets Exchange. This includes (but is not limited to) interventions by way of distributed denial of service, sybil attacks, phishing, social engineering, hacking, smurfing, malware, double spending, majority-mining, consensus-based or other mining attacks, misinformation campaigns; forks; and spoofing.

These malicious entities may target the Client in an attempt to steal any asset held by the Client, or to claim any asset that the Client may have purchased. This may involve unauthorised access to a VA Account, the Client's private keys, addresses, passwords, email or social media accounts, log-in details or access method for the VA Account, as well as unauthorised access to the Client's computer, smartphone and any other devices used by the Client. The Client alone is responsible for protecting against such actions.

Virtual Assets, the Client's VA Account, any service provided by Virtual Assets Exchange, and the website and application of the Company may also be vulnerable to exploitation of vulnerabilities in smart contracts and other code, as well as to human error.

A limited amount of your Virtual Assets may be stored in hot wallets (i.e. online environments which provide an interface with the internet), which can be prone to hacking or cyber-attacks. Cyber-attacks resulting in the hacking of Virtual Asset Exchanges and thefts of Virtual Assets are common. Victims may have difficulty recovering any losses resulting from these attacks. This could result in significant loss and/or other impacts that may materially affect the Client's interests.

The above events may affect the features, functions, operation, use, access or other properties of the Virtual Assets, the Client's VA Account, the website or applications or any services provided by Virtual Assets Exchange. While the Company will endeavour to adopt industry best practices to keep the Virtual Assets safe (including but not limited to the use of cold storage and multi-signature authentications), successful cyber thefts and other fraudulent activities set out above may still occur.

Flaw in the Source Code

While we adopt quality assurance procedures to help ensure the source codes as accurately as possible reflect their intended operation, the flawlessness of the source codes, some of which are open source codes, cannot be guaranteed. They may contain bugs, defects, inconsistencies, flaws or errors, which may disable some functionality, create vulnerabilities or cause instability. Such flaws may compromise the predictability, usability, stability, and/or security of the Virtual Asset Exchanges. Open source codes rely on transparency to promote community-sourced identification and solution of problems within the code.

Unpermissioned, Decentralized and Autonomous Ledger

The Virtual Asset Exchanges are being developed to serve various distributed ledger systems which are unpermissioned protocols that could be accessed and used by anyone. In addition to the use of decentralized ledgers, the Virtual Asset Exchanges may also make use of supporting technologies that also operate on decentralized ledgers. The utility and integrity of the Virtual Asset Exchanges relies on the stability, security and popularity of these decentralized ledgers. Risks arising from relying on such distributed ledger technology include the existence of technical flaws in the technology, targeting by malicious persons, majority-mining, consensus-based or other mining attacks, changes in the consensus protocol or algorithms, decreased community or miner support, rapid fluctuations in value of relevant Virtual Assets, the existence or development of competing networks, platforms and assets, flaws in the scripting language, disputes between developers, miners and/or users and regulatory action. The open, decentralized community and its composition can include users, supporters, developers and other participants worldwide may not be connected with the Virtual Asset Exchanges in any manner. The Virtual Asset Exchanges may be decentralized and autonomous in nature as far as its maintenance, governance and evolution are concerned.

Compromised Security

The Virtual Asset Exchanges rely on open source software and unpermissioned decentralized distributed ledgers including but not limited to Ethereum. Accordingly, anyone may intentionally or unintentionally compromise the core infrastructural elements of the Virtual Asset Exchanges and their underlying technologies. This may consequently result in the loss of any Virtual Assets held on the Virtual Asset Exchanges and may cause our system to fall.

Inadequacy of Processing Power

The ramp up of the Virtual Asset Exchanges may be accompanied by sharp increases in transaction numbers and demand for processing power. If the demand for processing power outgrows that forecasted, the network of the Virtual Asset Exchanges could be destabilized and/or stagnated. This may create opportunities for fraudulent activities including but not limited to false or unauthorized transactions (such as "double-spending") to arise. All these may adversely impact the usability, stability and security of the Virtual Asset Exchanges.

Unauthorized Claim of Virtual Assets

Virtual Assets can be claimed in bad faith by any person who successfully gains access to the wallet, email or the Client's VA Accounts they have registered with us. This can be as a result of deciphering or cracking the user's password, phishing scams and/or other hacking techniques. Subsequently, these Virtual Assets may be sent to anyone and such remittance is not revocable or reversible. It is recommended that all Clients should take appropriate security measures to safeguard their wallet, email and accounts. Each Client is responsible for the security of their wallet, email and account at all times.

Forking and Attacks

Many cryptographic tokens are developed on the Ethereum blockchain, which is an open source protocol. Once released to the open source community, anyone may develop a patch or upgrade for the source code of Ethereum without prior permission by anyone else. The acceptance of patches or upgrades by a significant, but not necessarily overwhelming percentage of the Ethereum holders could result in a "fork" in the Ethereum blockchain.

The temporary or permanent existence of forked blockchains could adversely impact the operation of the Virtual Asset Exchange. Such a fork can undermine the sustainability of the ecosystem of the Virtual Asset Exchange, and may destroy or frustrate the Virtual Asset Exchange. While a fork in the blockchain could possibly be rectified by community-led efforts to re-merge the two separate branches, success is not guaranteed and could take an undetermined amount of time to achieve.

Virtual Assets may also be subject to attacks on the security, integrity or operation of the networks, including network events. Such foregoing events (including a fork) may affect the features, functions, operation, use or other properties of any Virtual Assets, network or platform. The events may also severely impact the price or value, function and/or the name of any Virtual Assets, or even result in the shutdown of the network or platform associated with the Virtual Assets. Such events may be beyond the control of the Company, or to the extent the Company has any ability to impact such event, the Company's decision or actions may not be in your best interests.

Reliance on the Internet and Other Technology-related Risks

VA Transactions rely heavily on the internet and other technologies. However, the public nature of the internet means that either parts of the internet or the entire internet may be unreliable or unavailable at any given time. Further, interruption, delay, corruption or loss of data, the loss of confidentiality in the transmission of data, or the transmission of malware may occur when transmitting data via the internet and/or other technologies. The result of the above may be that your VA Transaction is not executed according to your Instructions, at the desired time, or not at all.

The nature of Virtual Assets also means that any technological difficulties experienced by the Virtual Assets Exchange may prevent Clients from accessing their Virtual Assets. No authentication, verification or computer security technology is completely secure or safe. The internet or other electronic media (including without limitation electronic devices, services of third-party telecom service providers such as mobile phones or other handheld trading devices) are an inherently unreliable form of communication, and such unreliability may be beyond the Company's control.

Any information (including any document) transmitted, or communication or transactions made, over the internet or through other electronic media (including electronic devices, services of third party telecommunication service providers such as mobile phones or other handheld trading devices or interactive voice response systems) may be subject to interruption, transmission blackout, delayed transmission due to data volume, internet traffic, market volatility or incorrect data transmission (including incorrect price quotation) or stoppage of price data feed due to the public nature of the internet or other electronic media.

Transactions Deemed Executed Only when Recorded or Confirmed

Some VA Transactions may be deemed to be executed only when recorded and confirmed by Virtual Assets Exchange, which may not necessarily be the time at which the investors initiate the transaction.

Risks Relating to Timing

A VA Transaction is binding. Following the execution of a VA Transaction, the VA Transaction will not be reversed. There is a risk that the final binding VA Transaction does not occur at the same time as Instructions are provided. You may suffer loss due to the fact that a VA Transaction is not carried out at the desired time.

Irreversible Transactions

VA Transactions may be irreversible, and, accordingly, losses due to fraudulent or accidental transactions may not be recoverable. The Clients should note that once a VA Transaction has been verified and recorded on a blockchain, loss or stolen Virtual Assets generally will not be reversible. This means accidental or fraudulent VA Transactions may not be recoverable.

Other Important Notes

In addition to the above, the Clients should also note:

1. (a) the continuing evolution of Virtual Assets and how this may be affected by global regulatory developments;
2. (b) most trading, lending or other dealing platforms and custodians of Virtual Assets are presently unregulated;
3. (c) counterparty risks when effecting transactions with issuers, private buyers and sellers or through trading, lending or other dealing platforms;
4. (d) risk of the loss of Virtual Assets, especially if held in hot wallets; and
5. (e) new risks which may arise from investing in new types of Virtual Assets or market participants' engagement in more complex transaction strategies