Risk Disclosure Statements of InvestPower
• Interest rates may rise during the term of the Facility. It is impossible to predict accurately changes in interest rates and they could possibly rise substantially. Borrowing costs under the Facility could turn out to be much higher than expected.
• Customers may be called upon at short notice to deposit substantial additional collateral to maintain their position, and a forced sale of assets, without Customer’s consent, may be necessary, including (but not limited to) in cases where (i) a Customer experiences difficulty in servicing its borrowing under the Facility, (ii) the market value of the collateral falls below the minimum level required by the Bank, (iii) the Lending ratio, Top-up ratio or Sell-down ratio in respect of the collateral is adjusted downwards by the Bank, or (iv) the Bank decides to not to renew the Facility at the annual review. The risk of loss in financing a transaction by deposit of collateral is significant, and Customers may sustain losses in excess of any cash and any other assets deposited as collateral and will remain liable for any resulting deficit in Customer’s account.
• If a Customer purchases investment funds / assets / schemes or any assets in respect of which there is a risk of capital loss with the Facility, Customer should note that the risks will be magnified as they will have a larger amount of capital at risk. Customer should consider carefully before deciding to borrow to finance the holding or purchase of any such assets, and should take independent professional advice before taking out the Facility or purchasing any such asset.
• If the currency of the loan is different from the currency of the underlying collateral, foreign exchange rate risk implications may affect the value of the loan and underlying collateral. Foreign exchange rates can be highly volatile and can be affected by many external factors such as changes in political and economic policy (both overseas and locally), political instability, wars, natural disasters and global market movements.
• InvestPower is subject to the risk of market fluctuation. The value of the Customer’s holdings may be reduced as a result. Customer should have sufficient net worth to be able to assume the risks and bear the potential losses of leveraged investments.Establishing a stop loss level may help limit the amount of losses but the order may be executed at a worse-off price and may not always be effected because market conditions may make it impossible to execute such order.
• The use of leverage in investment means that relatively small price movements will have a multiplying effect on Customer’s corresponding gains or losses, and the degree of investment risk Customers face is greatly increased. The risk of loss in leveraged trading can be substantial. A high degree of leverage can work against Customers as well as for them, and the use of leverage can lead to large losses as well as gains. Customer may sustain losses in excess of Customer’s initial margin funds. Placing contingent orders, such as “stop-loss” or “stop-limit” orders, will not necessarily limit losses to the intended amounts. Market conditions may make it impossible to execute such orders. Customer may be called upon at short notice to deposit additional margin funds. If the required funds are not provided within the prescribed time, Customer’s position may be liquidated. Customer will remain liable for any resulting deficit in Customer’s account. Customer should therefore carefully consider whether such trading is suitable in light of Customer’s own financial position and investment objectives.
• The Hong Kong Monetary Authority or other governmental or regulatory bodies may take action which has the effect of curtailing or placing restrictions on the Bank’s ability to trade in respect of open positions, and Customer may consequently be required to close or reduce its open positions with the Bank. While the bank may assess your suitability before recommending an investment product to you, this is independent from the assessment of the risks of utilising financing in relation to that investment. Utilising loans to make investments exposes you to higher risks than if you were to enter into the same investments without leverage. Losses as well as gains on the investments will be magnified.
• Please note that using loan facility to subscribe investment products which are medium to long term in nature would result in prolonged interest rate risks and margin call risks. You should also maintain sufficient capital to repay the loan in case of market volatility and the price of your investment product drop drastically.
To borrow or not to borrow? Borrow only if you can repay!
Risk Disclosure Statements of Debt Securities Services
• Investment involves risks. The price of bonds/structured notes fluctuates, sometimes dramatically and the worst case may result in loss of your entire investment amount. There is an inherent risk that losses may be incurred rather than profits made as a result of trading bonds/structured notes.
• Investors should consider their own investment objectives, investment experience, financial situation and risk tolerance level.
• Investors should carefully read the relevant offering documents and the Terms & Conditions of relevant product / service before making any investment decision.
Risk Disclosure Statements of Investment Fund Services
• Investment involves risks. The prices of units/ shares of unit trusts or mutual funds fluctuate, sometimes dramatically and the worst case may result in loss of your entire investment amount. It is as likely that losses will be incurred rather than profit made as a result of buying and selling unit trusts or mutual funds. Past performance of any Investment Fund is no guide to its future performance.
• Investors should carefully read the relevant offering documents and in particular the Terms & Conditions contained therein, the investment policies and the risk factors and latest financial results information. It is desirable that the Investor seeks independent financial advice with respect to any investment decision.
• Investors should ensure they fully understand the risks associated with unit trusts or mutual funds and should also consider their own investment objective, investment experience, financial situation and risk tolerance level before making any investment decision.
Risk Disclosure Statements of Equity Linked Investment Services
• Investment involves risks. The price or value of the Equity Linked Investments (ELIs) fluctuates, sometimes dramatically and the worst case may result in loss of your entire investment amount. It is as likely that losses will be incurred rather than profit made as a result of subscribing for, buying and selling the ELIs. Investors should therefore carefully consider whether such transactions are suitable in light of their financial position and investment objectives before entering into such transactions.
• Not principal protected: ELIs are not principal protected. You may suffer a loss if the prices of the underlying asset(s) of an ELI go against your view. In extreme cases, you could lose your entire investment.
• Limited potential gain: The potential return on your ELI may be capped at a predetermined level specified by the issuer.
• Credit risk of the issuer: When you purchase an ELI, you rely on the credit-worthiness of the issuer. In case of default or insolvency of the issuer, you will have to rely on your distributor to take action on your behalf to claim as an unsecured creditor of the issuer regardless of the performance of the reference asset(s).
• No collateral: ELIs are not secured on any assets or collateral.
• Limited market making: Issuers may provide limited market making arrangement for their ELIs. However, if you try to terminate an ELI before maturity under the market making arrangement provided by the issuer, you may receive an amount which is substantially less than your original investment amount.
• Investing in an ELI is not the same as investing in the reference asset(s): during the investment period, you have no rights in the reference asset(s). Changes in the market price of such reference asset(s) may not lead to a corresponding change in the market value and/or potential payout of the ELI.
• Conflicts of interest: Issuer of an ELI may also play different roles, such as the arranger, the market agent and the calculation agent of the ELI. Conflicts of interest may arise from the different roles played by the issuer, its subsidiaries and affiliates in connection with the ELI.
• Investors should consider their own investment objectives, investment experience, financial situation and risk tolerance level.
• Investors should carefully read the relevant offering documents and the Terms & Conditions of relevant product / service before making any investment decision.
Risk Disclosure Statement of Foreign Exchange
• Foreign exchange involves risks. Fluctuation in the exchange rate of a foreign currency may result in gains or significant losses in the event that the client converts deposit from the foreign currency to another currency (including Hong Kong Dollar).
Risk Disclosure Statement of Renminbi Deposit Services:
• Renminbi 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 Renminbi to another currency (including Hong Kong dollars); and
• Renminbi is currently not freely convertible and conversion of Renminbi through banks in Hong Kong is subject to restrictions specified by the Bank and regulatory requirements applicable from time to time. The actual conversion arrangement will depend on the restrictions prevailing at the relevant time.
