General Risk Factors
1.Foreign exchange (“FX”) transactions involve risks. Fluctuations in the exchange rate of a foreign currency may result in gains or significant losses in the event that the customer converts deposit from the foreign currency to another currency (including Hong Kong Dollar);
2.Renminbi (“RMB”) exchange rate, like any other currency, is affected by a wide range of factors and is subject to fluctuations. Such fluctuations may result in gains and losses in the event that the customer subsequently converts RMB to another currency (including Hong Kong dollars); and
3.RMB is currently not freely convertible and conversion of RMB through banks in Hong Kong is subject to restrictions specified by Standard Chartered Bank (the “Bank”) and regulatory requirements applicable from time to time. The actual conversion arrangement will depend on the restrictions prevailing at the relevant time. Additional Risk Factors applicable to FX Derivative Transactions
4.This is a transaction which involves derivatives. Do not invest in it unless you fully understand and are willing to assume the risks associated with it. If you are in any doubt about the risks involved in the transaction, you may clarify with the intermediary or seek independent professional advice;
5.Where the derivative transaction is denominated in a non-local currency, you face the risk of exchange rate fluctuations and controls (where applicable) that may
(i) affect the applicable exchange rate and result in the receipt of reduced cash settlement amount and/or a loss of principal when converted to your local currency and
(ii) make it impossible or impracticable for the Bank to pay you in the original settlement currency;
6.The derivative transaction may not match your hedging needs perfectly and will not track any changes to your hedging needs, potentially leaving you under or over hedged or giving rise to other exposures;
7.The market value of the derivative transaction is exposed to the movement of interest rates during the tenor of the derivative transaction and whenever it is unwound or terminated prior to maturity;
8.Where the derivative transaction is linked to currencies relating to an emerging or developing market, the derivative transaction involves certain special risks, including risks associated with political and economic uncertainty, adverse governmental policies, restrictions on foreign investment and currency convertibility, currency exchange rate fluctuations, possible differing levels of disclosure and regulation, and uncertainties as to the status, interpretation and application of laws, including those relating to private ownership of assets, expropriation, nationalisation and confiscation; and
9.You assume the full credit risk of the Bank. The derivative transaction constitutes direct, unsecured and unsubordinated general obligations of the Bank. This means that you are relying on the Bank to meet its payment obligations under the derivative transaction. Should the Bank become insolvent or default on its obligations (including payment obligations) or fail in any other way, you may not receive any payments due to you under the terms of the derivative transaction. A credit rating is not a recommendation or assurance as to the creditworthiness of counterparty to a derivative transaction or the risks, returns or suitability of the derivative transaction.