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Risk Disclosure Statement

Internet Related Risk

As the media for transmitting information and data, the Internet is inherently inadequate in reliability and security. Thus, communication through Internet will expose clients to a certain degree of risk. There may be restrictions or delays when connecting and accessing the website due to peak network utilisation rate or any other reasons whereby we cannot provide our services temporarily to you.

 

Apart from the above,

(i)

Trading instruction execution may fail or experience delay, resulting in a disparity between the execution price and the market price as per the Client's instructions;

(ii)

Unauthorised third parties may have access to your contact and personal details; and

(iii)

Information published on our website may not be updated immediately.


MSCG shall not be liable to you or any other persons for any loss or expenses incurred due to communication delay, breakdown, inaccuracy, or lack of secrecy that are beyond the reasonable control of MSCG.

 

Risk of Securities Transactions

Prices of securities may be highly volatile. In addition, securities prices could go up or down or even become worthless. Therefore, you should pay attention to the fact that trading securities may not generate profits and, on the contrary, may incur losses to you.

 

Risk Associated with Stock Trading on GEM

Trading of securities on the Growth Enterprise Market ("GEM") involves tremendous investment risks. These companies can list on GEM without providing a track record on profits and future profit forecasts. In addition, GEM shares may be highly volatile, and their liquidity may be incredibly low. Considering the level of risk associated with stock trading on GEM, this market is more suitable for professional investors and investors who are well versed in investment techniques. MSCG advises that Clients consider prudently before making relevant investment decisions.

 

At present, information relating to GEM shares is available only on the websites operated by the Stock Exchange of Hong Kong Limited. In general, there is no requirement for GEM listed companies to publish paid announcements on those newspapers designated on the Gazette. However, suppose you doubt the contents of this Risk Disclosure Statement, the nature of the GEM market, or the risk associated with stock trading on GEM. In that case, MSCG advises that you seek professional advice.

 

Risk Associated with Giving Written Authorisation for Lending to or Depositing Securities with Third Parties

A certain degree of risk exists when you authorise MSCG to lend your securities to or deposit them with a third party according to the "Securities and Futures Ordinance" and the relevant rules and regulations. Therefore, the authorisation will only become effective under the circumstance that you have given written consent in respect thereof. In addition, the above-written consent shall specify the effective date, and the relevant, effective period shall last for no more than 12 months. While the current legislation does not require you to sign the said written authorisation, you should note that certain circumstances may need this type of written authorisation. These circumstances include providing margin borrowings to you, authorising your securities lending to third parties, or depositing these securities with third parties as collateral.


Before signing the written authorisation, you may make enquiries with MSCG to ascertain its purpose. Suppose you sign on the written authorisation. Your securities have already been lent to or deposited with a third party. In that case, such a third party shall have a lien or charge over your securities. Although your dealers or securities margin financiers shall be liable to you regarding the lending or depositing of your securities according to the written authorisation, the defaults of the above dealers or securities margin financiers may result in the loss of your assets. Because of this, MSCG provides cash accounts that do not involve any securities lending activities. Suppose you have no need for margin borrowings or do not wish your securities to be lent or charged. In that case, you should not sign on to the above-written authorisation and, alternatively, request the opening of such cash accounts with MSCG.

 

Trading Instructions or Investment Strategies for Reducing Risk

The intent of specific trading instructions (for instance, "stop-loss" or "stop-loss limit" orders) are to pre-set the limits of loss. However, their effectiveness may deviate from expectations since the market situation may render the execution of such trading instructions moot. Furthermore, regarding the strategies of using the various portfolio of positions, for instance, the portfolio of "spread" or "straddle", the level of risk may not be lower than the holding of basic "long" or "short" position.

 

Risk Associated with Receiving or Holding Clients' Assets Outside Hong Kong

The receipt or holding of your assets by MSCG or its agent elsewhere outside Hong Kong is subject to regulating the applicable laws and regulations of the relevant overseas jurisdiction. These laws and regulations may differ from the "Securities and Futures Ordinance" (Chapter 571) and its respective provisions. In this case, your assets may not enjoy the same protection as assets being received or held in Hong Kong.

 

Risk Arising from Transactions Conducted in Other Jurisdiction

Additional risks may arise from transactions conducted in markets of other jurisdiction (including those that have established formal connection with the local market). Subject to the regulations of these markets, the coverage extended to investors in different jurisdiction may vary or even be reduced. Therefore, before conducting any transaction, you should examine all rules relevant to the transaction to be completed in such jurisdiction. The regulatory institution of the place where you are situated shall not force the regulatory institution or market under the jurisdiction of which its stock exchange has executed the said transaction to implement the relevant regulations. As such, before conducting any transaction, you must make enquiries with the appropriate firms to confirm the availability of remedy measures at the jurisdiction where you are situated and other jurisdiction together with the pertinent details.

 

Risk Relevant to Cash and Property Deposited

Where you deposit money or other property to conduct transactions locally or in overseas countries, you should clarify the protection concerning the said money or property at a time when the relevant firms are being wound up or become insolvent. The amount of money or property ultimately recovered will be subject to specific legislation or local regulations. You should note that in certain jurisdictions, in the case of a money shortfall or recovery of property, the property that should have belonged to you shall be distributed to you as cash on a pro-rata basis.

 

Currency Risk

Profit or loss arising from securities trading in foreign currency denomination (whether the transactions are conducted in the jurisdiction where you are situated or in other regions) are prone to foreign exchange rate fluctuations when inter-currency conversions occur.

 

Commissions and Other Fees

Before conducting any transaction, you must ascertain all commissions, fees, and other charges payable by you. These fees will directly impact the net profits (if any) you gain or the loss you incur.

 

Over-the-counter Risk

Certain jurisdictions or circumstances may permit MSCG to carry out over-the-counter trading. For example, MSCG may be the only counterparty of the Client's securities transaction. Under such circumstances, it may be difficult or impossible for you to close the open position, carry out an evaluation, determine a fair price or assess the relevant risk. The said trading, therefore, may involve a higher degree of risk. In addition, the regulation of over-the-counter trading may be relatively relaxed, or securities trading may be subject to a different regulatory system. Considering this, before conducting the said over-the-counter trading, you should understand applicable regulations and the relevant risk.