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GENERAL RISK DISCLOSURE NOTICE

This notice does not disclose all of the risks and other significant aspects of derivatives products such as futures and options. You should not deal in derivatives unless you understand the nature of the contract you are entering into and the extent of your exposure to risk. You should also be satisfied that the contract is suitable for you in the light of your circumstances and financial position.
Whilst derivatives instruments can be utilised for the management of risk, some investments are unsuitable for many investors. Different instruments involve different levels of exposure to risk, and in deciding whether to trade in such instruments you should be aware of the following points:
(a) Investing in Credit Derivatives/Credit Default Swaps (“CDS”) carry risks similar to investing in a future or an option and you should be aware of these. Transactions may also involve contingent liabilities and you should be aware of the implications of this as set out in paragraph (h) below.
(b) Credit Derivatives/CDS carries significant risk and is only suitable for sophisticated individuals and institutions. Given the possibility of losing an entire investment, speculation in the credit derivatives/CDS market should only be conducted with risk capital funds that if lost will not significantly affect your personal or institution's financial wellbeing.
(c) If you have pursued only conservative forms of investment in the past, you may wish to study credit derivative/CDS trading further before continuing an investment of this nature. You must also realize that you could lose the entire investment should the investment expire worthless. If you wish to continue with your investment, you acknowledge that the funds you have committed are purely risk capital and loss of your investment will not jeopardize your style of living nor will it detract from your future retirement program. Additionally, you fully understand the nature and risks of such investments and your obligations to others will not be neglected should you suffer investment losses.
(d) Foreign markets. Foreign markets involve different risks from UK markets. In some cases risks will be greater. The potential for profit or loss from transactions on foreign markets will be affected by fluctuations in foreign exchange rates. Such enhanced risks include the risks of political or economic policy charges in a foreign media, which may substantially and permanently alter the conditions terms, marketability or price of a foreign currency.
(e) Risk reducing orders or strategies. The placing of certain orders (e.g. “stop loss” or “stop limits” orders) that are intended to limit losses to certain amounts may not always be affected because market conditions or technological limitations may make it impossible to execute such orders. Strategies using combinations of positions such as “spread” and “straddle” positions, may be just as risky or even riskier than simple “long” or “short” positions.
(f) Prices. The prices quoted may not necessarily reflect the broader market. Although we expect that these prices will be reasonably related to those available on what is known as the interbank market, prices we use may vary from those available to banks and other participants in the interbank market.
(g) Weekend risk. Various situations, developments or events may arise over a weekend (from and including 4:30 p.m. on a Friday to but excluding 6 p.m. on the immediately following Sunday) when the markets generally close for trading, that may cause the markets to open at a significantly different price from where they closed on Friday afternoon. Our customers will not be able to use electronic communication systems to place or change orders over the weekend and at other times when the markets are generally closed. There is a substantial risk that stop-loss orders left to protect open positions held over the weekend will be executed at levels significantly worse than their specified price.
(h) Electronic trading. The use of electronic trading systems and communication networks to facilitate trading customers that trade exposes you to risks associated with the system or communication network including the failure of hardware and software, system or network down time and access or connection failures.
(i) Contingent liability transactions, may carry an obligation to make further payments in certain circumstances over and above any amount paid when you paid when you entered into the contract. Contingent liability transactions, which are not traded on or under the rules of a recognised or designated investment exchange, may expose you to substantially greater risks.
(j) Collateral. If you deposit collateral as security, you should ascertain how your collateral will be dealt with. Deposited collateral may lose its identity as your property once dealings on your behalf are undertaken. Even if your dealings should ultimately prove profitable, you may not get back the same assets, which you deposited and may have to accept payment in cash.
(k) Commissions. Before you begin to trade, you should obtain details of all Commissions and other charges for which you will be liable. If any charges are not expressed in money terms (but, for example, as a dealing spread), you should obtain a clear written explanation, including appropriate examples, to establish what such charges are likely to mean in specific money terms.
(l) Insolvency. Any insolvency or default may lead to positions being liquidated or closed out without your consent. In certain circumstances, you may not get back the actual assets, which you lodged as collateral and you may have to accept any available payment in cash.
(m) You should only engage in credit derivatives/CDS trading if you are prepared to accept a high degree of risk and in particular the risks outlined in the Risk Warning Notice. You must be prepared to sustain the total loss of all amounts you may have deposited with your firm as well as any losses, charges (such as interest) and any other amounts (such as costs) we incur in recovering payment from you.