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PART A – RISK DISCLOSURE STATEMENTS FOR CUSTODIAN ACCOUNT AND MARGIN ACCOUNT

1. RISK OF SECURITIES TRADING

• The prices of Securities 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.
• The Client also acknowledges that there are risks in leaving Securities in the custody of the Broker or in authorising the Broker to lend the client’s Securities to or deposit them with certain third parties (e.g. as collateral for loans or advances made to the Broker) under the Securities and Futures Ordinance and related rules. The Client understands that this is allowed only if he consents in writing, which consent must specify the period for which it is current and cannot exceed 12 months if he is not a professional investor. The Client also understands that he is not required by any law to sign these authorities.

2. RISK OF TRADING GROWTH ENTERPRISE MARKET STOCKS

• Growth Enterprise Market (GEM) stocks involve a high investment risk. In particular, companies may list on GEM with neither a track record of profitability nor any obligation to forecast future profitability. GEM stocks may be very volatile and illiquid.
• The Client should make the decision to invest only after due and careful consideration.  The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and other sophisticated investors.
• Current information on GEM stocks may only be found on the internet website operated by the Stock Exchange. GEM Companies are usually not required to issue paid announcements in gazetted newspapers.
• The Client should seek independent professional advice if the Client is uncertain of or has not understood any aspect of this risk disclosure statement or the nature and risks involved in trading of GEM stocks.

3. RISK OF TRADING NASDAQ-AMEX SECURITIES AT THE STOCK EXCHANGE

• The Securities under the Nasdaq-Amex Pilot Program (“PP”) are aimed at sophisticated investors. The Client should consult a licensed or registered person and become familiarised with the PP before trading in the PP Securities. The Client should be aware that the PP Securities are not regulated as a primary or secondary listing on the Main Board or GEM of the Stock Exchange.

4. RISK RELATING TO TRADING IN US EXCHANGE-LISTED OR OVER-THE-COUNTER (OTC) SECURITIES OR DERIVATIVES 

• The Client 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 the Client’s 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.
  
  Whether the Client are intending to trade in US exchange-listed securities, OTC securities or derivatives, the Client 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 market place. 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. The Client 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 may or 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 may be significantly less than those in listed markets. As such, the Client 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.

 

PART B – RISK DISCLOSURE STATEMENTS FOR MARGIN ACCOUNT

 

1. RISK OF MARGIN TRADING

• The risk of loss in financing a transaction by deposit of collateral is significant. The Client may sustain losses in excess of the Client's cash and any other assets deposited as collateral with the relevant member of the Midas Securities Limited. Market conditions may make it impossible to execute contingent orders, such as "stop-loss" or "stop-limit" orders. The Client 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, the Client's collateral may be liquidated without the Client's consent. Moreover, the Client will remain liable for any resulting deficit in the Client's account and interest charged on the Client's account. The Client should therefore carefully consider whether such a financing arrangement is suitable in light of the Client's own financial position and investment objectives.

2. RISK OF PROVIDING AN AUTHORITY TO REPLEDGE YOUR SECURITIES COLLATERAL ETC.

• There is risk if the Client provides any member of the Midas Securities Limited with an authority that allows it to apply the Client's Securities or Securities collateral pursuant to a Securities borrowing and lending agreement, repledge the Client’s Securities collateral for financial accommodation or deposit the Client’s Securities collateral as collateral for the discharge and satisfaction of its settlement obligations and liabilities.
• If the Client’s Securities or Securities collateral are received or held by the Midas Securities Limited in Hong Kong, the above arrangement is allowed only if the Client consents in writing. Moreover, unless the Client is a professional investor, the Client’s authority must specify the period for which it is current and be limited to not more than 12 months. If the Client is a professional investor, these restrictions do not apply.
• Additionally, the Client’s authority may be deemed to be renewed (i.e. without the Client’s written consent) if the Midas Securities Limited issues the Client a reminder at least 14 business days prior to the expiry of the authority, and the Client does not object to such deemed renewal before the expiry date of the Client’s then existing authority.
• The Client is not required by any law to sign these authorities. But an authority may be required by the Midas Securities Limited, for example, to facilitate margin lending to the Client or to allow the Client's Securities or Securities collateral to be lent to or deposited as collateral with third parties. The Midas Securities Limited should explain to the Client the purposes for which one of these authorities is to be used.
• If the Client signs one of these authorities and the Client's Securities or Securities collateral are lent to or deposited with third parties, those
• third parties will have a lien or charge on the Client' Securities or Securities collateral.    Although the Midas Securities Limited is responsible to the Client for the Client's Securities or Securities collateral lent or deposited under the Client’s authority, a default by it could result in the loss of the Client’s Securities and Securities collateral.
• A Custodian Account not involving Securities borrowing and lending is available from the Midas Securities Limited. If the Client does not require margin facilities or does not wish the Client's Securities or Securities collateral to be lent or pledged, the Client should not sign the above authorities and ask to open this type of Custodian Account.

PART C – RISK DISCLOSURE STATEMENTS FOR ALL TYPES OF ACCOUNTS

 

1. RISK OF PROVIDING AN AUTHORITY TO HOLD MAIL OR DIRECT MAIL TO PARTIES

 

If the Client provides Midas Securities Limited with an authority to hold mail or to direct mail to third parties, it is important for the Client to promptly collect in person all contract notes and statements of the Client's account and review them in detail to ensure that any anomalies or mistakes can be detected in a timely fashion.

 

2. RISKS OF CLIENT ASSETS RECEIVED OR HELD OUTSIDE HONG KONG

Client assets received or held by the Midas Securities Limited 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 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.

 

3. RISKS OF CLIENT ASSETS RECEIVED OR HELD OUTSIDE HONG KONG

 

If Client is trading a complex product, Client must read the following warning statement for complex products before trading:

• Client should exercise caution in relation to the complex products.
• Client is required to read and understand the all relevant product offering documents and understand the product features and risks of the complex products before making investment decisions.
• Client of complex products should note that investment involves risks including the possibility of losing all the capital invested or more than the invested amount (if applicable).
• Client is advised to exercise caution in relation to the offer if the offering documents or information provided by the issuer have not been reviewed by the SFC.
• For complex products described as having been authorized by the SFC, Client should understand that such authorization is not an official recommendation or that SFC authorization is not a recommendation or endorsement of a product nor does it guarantee the commercial merits of a product and its performance.
• Prices of complex products may fluctuate and past performance is not indicative of future performance. Investors should read the relevant offering documents and risks disclosure statements in detail before making any investment decisions.
• For those complex products which are only available to professional investors (PI), please note that the eligible client must be a PI.

Complex Product: Including but not limited to derivative warrant, callable bull/bear contract, exchange traded fund, equity linked instrument/equity linked note, leveraged and inverse product, futures, stock option, other derivative products traded on an exchange in Hong Kong or in a specified jurisdiction, etc.

 

For list of specified jurisdictions, please refer to SFC website:

https://www.sfc.hk/web/EN/rules-and-standards/suitability-requirement/non-complex-and-complex-products/list-of-specified-jurisdictions.html

 

For list of publicly offered investment products, please refer to SFC website:

https://www.sfc.hk/web/EN/regulatory-functions/products/list-of-publicly-offered-investment-products/

 

 

 

If there is any discrepancy between the English and Chinese versions, the English version shall apply and prevail.