Risk Warning Notice
Before trading Contracts for Difference, Spread Bets or Foreign Exchange (ForEx or FX), please ensure you fully understand the risks involved. These products may not be suitable for all types of investor. Trading in Contracts for Difference / Spread bets / FX carries a high degree of risk and is generally considered suitable only for the more experienced investor. Leveraged products carry a high degree of risk for your capital, and in some circumstances you may be liable for a greater sum than your initial capital invested. Past performance is not necessarily a guide to future performance. Seek independent financial advice if necessary. These products are suitable only for people over the age of 18. Information and analysis produced by PSL does not constitute a recommendation or offer to make a transaction in any derivatives or securities, and is intended to be general in nature. PSL is authorised and regulated by the Financial Services Authority (“FSA”).
The past performance of any investment is not necessarily a guide to future performance. The value of shares or income from them may go down as well as up. The value of shares may rise as well as fall due to the volatility of world markets, economic conditions/data and/or changes in the rate of exchange in the currency in which the investments are denominated. You may not necessarily get back the amount you invested. If you are in any doubt about investment, you should seek independent financial advice.
Risk Disclosure Notice
This notice is provided to you in compliance with the rules of the FSA.
If you are a private customer you are afforded greater protections than other customers, and you should ensure that your broker tells you what these are. 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. Certain strategies, such as a "spread" position or a "straddle", may be as risky as a simple "long" or "short" position.
Whilst derivative instruments can be utilised for the management of investment 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.
1 Financial Products and Instruments
1.1 Futures
Transactions in futures involve the obligation to make, or to take delivery of the underlying asset of the contract at a future date, or in some cases to settle your position with cash. They carry a high degree of risk. The "gearing" or "leverage" often obtainable in futures trading means that a small deposit or down payment can lead to large losses as well as gains. It also means that a relatively small market movement can lead to a proportionately much larger movement in the value of your investment, and this can work against you as well as for you. Futures transactions may have to be margined and you should be aware of the implications of this, which are set out in paragraph (1.6) below.
1.2 Options
There are many different types of options with different characteristics subject to different conditions:
1.3 Buying options
Buying options involves less risk than selling options because, if the price of the underlying asset moves against you, you can simply allow the option to lapse. The maximum loss is limited to the premium plus any commission or other transaction charges. However, if you buy a call option on a futures contract and you later exercise the option, you will acquire the future. This will expose you to the risks described under "futures (1.1)" and "margined transactions (2)".
1.4 Writing options
if you write an option, the risk involved is considerably greater than buying options. You may be liable for margin to maintain your position and a loss may be sustained well in excess of any premium received. By writing an option, you accept a legal obligation to purchase or sell the underlying asset if the option is exercised against you, however far the market price has moved away from the exercise price. If you already own the underlying asset which you have contracted to sell (known as "covered call options") the risk is reduced. If you do not own the underlying asset (known as "uncovered call options") the risk can be unlimited. Only experienced persons should contemplate writing uncovered options, and then only after securing full details of the applicable conditions and potential risk exposure.
1.5 Contracts for differences
Futures and options contracts can also be referred to as contracts for differences. These can be options and futures on the FTSE-100 index or any other index or share, as well as currency and interest rate swaps. However, unlike other futures and options, these contracts can only be settled in cash. Investing in a contract for differences carries the same risk as investing in a future or an option and you should be aware of these as set out in paragraphs above. Transactions in contracts for differences may also have a contingent liability and you should be aware of the implications of this as set out below.
1.6 Off-exchange transactions
It may not always be apparent whether or not a particular derivative is effected on exchange or is an off-exchange derivative transaction.
While some off-exchange markets are highly liquid, transactions in off-exchange or "non transferable" derivatives may involve greater risk than investing in on-exchange derivatives because there is no exchange market on which to close out an open position. It may not be possible to liquidate an existing position, to assess the value of the position arising from an off-exchange transaction or to assess the exposure to risk. Bid and offer prices need not be quoted, and, even where they are, they will be established by brokers in these instruments and consequently it may be difficult to establish what a fair price is.
The potential for profit or loss from transactions in foreign currency denominated contracts will be affected by fluctuations in foreign exchange rates.
1.7 Foreign markets
Foreign markets will involve different risks from UK markets. In some cases the risks will be greater. The potential for profit or loss from transactions on foreign markets or in foreign denominated contracts will be affected by fluctuations in foreign exchange rates.
2 Contingent liability transactions
Contingent liability transactions which are margined require you to make a series of payments against the purchase price, instead of paying the whole purchase price immediately.
If you trade in futures, contracts for differences or sell options you may sustain a total loss of the margin you deposit with your broker to establish or maintain a position. If the market moves against you, you may be called upon to pay substantial additional margin at short notice to maintain the position. If you fail to do so within the time required, your position may be liquidated at a loss and you will be liable for any resulting deficit.
Even if a transaction is not margined, it may still carry an obligation to make further payments in certain circumstances over and above any amount 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.
3 Collateral
If you deposit collateral as security onto your account, you should ascertain from your broker 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.
4 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 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. In the case of futures, when commission is charged as a percentage, it will normally be as a percentage of the total contract value, and not simply as a percentage of your initial payment.
5 Suspension of trading
Under certain trading conditions it may be difficult or impossible to liquidate a position. This may occur, for example, at times of rapid price movement if the price rises or falls in one trading session to such an extent that trading is suspended or restricted. Placing a stop-loss order will not necessarily limit your losses to the intended amounts, because market conditions may make it impossible to execute such an order at the stipulated price.
6 Clearing house protections
On many exchanges, the performance of a transaction by your broker (or the third party with whom he is dealing on your behalf) is "guaranteed" by the exchange or its clearing house. However, this guarantee is unlikely in most circumstances to cover you, the customer, and may not protect you if your broker or other party defaults on its obligations to you. On request, your broker must explain any protection provided to you under the clearing guarantee applicable to any on-exchange derivatives in which you are dealing. There is no clearing house for traditional options, nor normally for off-exchange instruments which are not traded under the rules of a recognised or designated investment exchange.
7 Insolvency
Your broker’s 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.
PSL accepts no responsibility for insolvency of, or default by, other brokers involved with your transactions.
8 Stop loss orders
Stop loss orders may be subject to slippage. This means that if the stop loss order cannot be executed at your chosen price in the market, or cannot be executed in the desired volume at the chosen price, the order will be filled at the best available price. Unless you hold a limited risk account, stop losses are not guaranteed.
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9 The Services
9.1 You have an agreement (a "Trading Agreement") in place with a third party broker (the “Broker”) under which you have a trading account with that Broker which you use to enter into trades in various investments (a "Trading Account"). Before you read this Agreement, it is important that you read and understand the Trading Agreement because the services which we, PSL, provide to you relate to your Trading Account.
9.2 This Agreement contains the terms and conditions under which we will provide the following services to you in relation to that Trading Agreement:
(a) Where you have granted us a power of attorney which permits us to operate your Trading Account, receiving and transmitting your orders to the Broker with whom you have your Trading Account (the "Trading Services (12)");
(b) Providing you with individual advice in relation to investment transactions which you enter into using your Trading Account including, without limitation, transactions in shares, derivatives and contracts for difference (the "Advisory Services (15)")Together the "Services".
9.3 Where you have not granted us a power of attorney and we are not permitted to operate your Trading Account, we will provide access through our website (the "Website") to the Broker's electronic trading platform which you can use to provide your instructions in respect of your Trading Account directly to the Broker (the "Trading Platform"). Provision of access through our Website is subject to the terms and conditions (14) .Your use of the Trading Platform is subject to the separate terms and conditions which govern the Trading Platform and which are set out in your Trading Agreement with your Broker.
9.4 This Agreement will come into effect on the date on which we receive a signed copy of this Agreement from you. This Agreement is governed by English law. English will be the language for communication between you and us for the duration of this Agreement.
10 Joint accounts
Where you enter into this Agreement jointly with another person or other people, each of you entering into this Agreement will have joint and several liabilities under this Agreement. This means that:
(a) Each of you is separately responsible for complying with this Agreement;
(b) We can pursue any of you for all amounts owed to us, whether this arises from the actions of all or any of you. This means that you can be liable for the actions of the others who have entered into this Agreement with you; and
(c) Each of you has full authority on behalf of the others to give or receive any instruction, notice, request or acknowledgment under the Agreement in relation to the Services without obtaining the consent of the others, including an instruction to terminate the Agreement.
11 Compliance
11.1 We are authorised and regulated by the FSA (registered number 473551) in the conduct of our investment business. The FSA's registered address is 25 The North Colonnade, London, E14 5HS. Our registered office is 3 Kensworth Gate, 200-204 High St South, Dunstable, Beds, LU6 3HS
11.2 We will treat you as a Retail Client in accordance with the FSA rules, unless we inform you otherwise.
11.3 We have a written internal complaints handling policy, as required by the FSA's rules. You can obtain a copy of this on request, and in the event you should have cause for complaint about the Services which we provide to you, a copy will be sent to you.
11.4 In the event that we are unable to meet our obligations to you; you may have a right to seek compensation from the Financial Services Compensation Scheme (the "FSCS") in respect of the Services. As at the date of this Agreement, compensation is limited to 100% of the first £30,000 and 90% of the next £20,000 - with a maximum of £48,000.
11.5 We are required, in accordance with the FSA rules, to take all reasonable steps to identify conflicts of interests between ourselves and our clients, or between one client and another, that arise through the provision of our investment services.
12 The Trading Services
12.1 Where you have granted us a power of attorney this permits us to operate your Trading Account on your behalf. This means that when you give an instruction to us in respect of a particular investment, we will then pass that instruction on to the Broker unless the circumstances in clause 12.3 apply.
12.2 You may provide us with instructions in relation to the Trading Services:
(a) By telephone; and
(b) By email, if we have agreed to that in writing, and subject to any additional terms and conditions that we may impose if we agree to that;
In the first instance to your Relationship Manager or if your Relationship Manager is unavailable, then to another one of our traders.
12.3 We may in the following circumstances refuse to transmit your order to the Broker:
(a) Where your instruction is not given in accordance with this Agreement;
(b) In order to comply with anti-money laundering procedures;
(c) Where we reasonably suspect that the instruction is fraudulent or unauthorised by you;
(d) Where your instruction is not clear or you have not provided us with the correct details;
(e) Where there is a legal requirement or a court or other authority that tells us to act in that way; or
(f) Where we cannot comply with your instruction because the circumstances described in clause 12.3(d) have arisen.
12.4 You are responsible for all decisions on whether to invest in, hold or dispose of any investment or to enter into any agreement resulting from our Advisory Service, or in relation to which you provide us instructions through our Trading Service, under this Agreement. We will only receive and transmit your orders to the Broker as you instruct.
12.5 We are not obliged to assess the suitability for you of any order which you instruct us to transmit to the Broker unless we have provided the Advisory Services to you in relation to that order.
12.6 Where we provide the Trading Services to you, we are required to assess whether an investment is appropriate for you, taking into account a number of factors including, but not limited to, your knowledge and experience in the relevant investment field.
12.7 As part of the process of assessing the appropriateness of an investment for you, we will ask you to provide us with information illustrating your knowledge and experience in relation to the relevant investments and markets. If the information you provide to us is incomplete or inaccurate then this may impair our ability to assess the appropriateness of a transaction for you.
13 Trading Platform
13.1 Where you have not granted us a power of attorney we are not permitted to operate your Trading Account on your behalf and we will not pass your instructions on to the Broker. We will provide you with access through our Website (subject to the Website Usage Terms and Conditions) to the Trading Platform which allows you to provide your instructions in respect of your Trading Account directly to the Broker. The Broker's provision of the Trading Platform and your use of it are governed by your Trading Agreement with your Broker.
14 Website Usage Terms and Conditions
14.1 This web site contains material which is proprietary to Pretium Securities Limited, (“PSL"). Viewers are invited to review the PSL web site (“Web Site”) subject to agreeing to the conditions below: |
14.2 The contents of the Web Site have no regard to the specific investment objectives, financial situation or particular needs of any specific viewer. This Web Site is published for information purposes and is not to be construed as a solicitation or an offer to buy or sell any financial products/instruments. Unless specifically stated otherwise, all price information is indicative only. No representation or warranty, either express or implied, is provided in relation to the accuracy, completeness or reliability of the contents of the Web Site, nor are the contents a complete statement of the financial products/instruments, markets or developments referred to herein. The Web Site should not be regarded by recipients as a substitute for the exercise of their own judgment. Any opinions are subject to change without notice and may differ or be contrary to opinions expressed by other business areas or groups of PSL as a result of using different assumptions and criteria. PSL is not under any obligation to update or keep current the information contained herein. |
14.3 PSL, its related entities, directors, employees, associates and agents accepts no liability whatsoever for any loss or damage of any kind arising out of the use of all or part of the Web Site. Certain laws and regulations impose liabilities which cannot be disclaimed. This disclaimer shall in no way constitute a waiver or limitation of any rights a person may have under such laws and/or regulations. |
15 The Advisory Services
15.1 The nature of this agreement and your relationship with PSL is on an advisory basis which means that, although you may seek advice from PSL and/or PSL may offer advice to you in connection with an investment transaction, you have the final decision in relation to the execution of every investment transaction. Consequently, you should make every effort to ensure that you are fully satisfied that you understand the advice given to you in relation to every investment transaction as, unless you indicate otherwise, PSL will be entitled to assume that you do.
I/we accept that when PSL provides advisory services it will be under the following conditions:
15.2 You may request that we provide the Advisory Services to you in relation to transactions which you wish to enter into using your Trading Account. Where you make such a request we will provide you with this in accordance with the terms of this Agreement.
15.3 We may, at our discretion, provide investment advice to you on our own initiative. However, we are not obliged to provide you with investment advice in these circumstances.
15.4 in providing the Advisory Services we may, at our discretion, provide investment advice to you either in written or oral form.
15.5 If we provide the Advisory Services to you, this does not provide any guarantee that any investment recommended will provide a return or that it will meet your investment objectives. It is important to remember that investments may go down as well as up and that past performance is not a guarantee of future performance.
15.6 Where we provide Advisory Services to you and we recommend that you purchase an investment, we are required to take reasonable steps to ensure that the investment is suitable for you, taking into account your knowledge and experience in the relevant investment field, your financial situation and your investment objectives.
15.7 as part of the process of assessing the suitability of our investment advice for you, we will ask you to provide us with information illustrating your knowledge and experience in relation to the investments and markets on which we are advising and also information about your financial situation. If the information which you provide to us is incomplete or inaccurate then this may impair our ability to assess the appropriateness of a transaction for you.
15.8 As part of our disclosure practice some client orders may be aggregated with other client order(s). This may work to the clients disadvantage in relation to a particular order.
15.9 We do not offer tax advice to clients. If you require tax advice, you should consult an independent tax adviser.
16 Monitoring of open positions
16.1 Where you purchase investments using your Trading Account (whether on an execution only basis or following the provision by us of investment advice), we are not obliged to keep your holdings in these investments under review for you or to monitor their performance.
16.2 In addition, we are not obliged to bring investment opportunities to your attention or to continue to monitor or update any information or investment advice which we have provided to you. It remains your sole responsibility to manage and monitor your positions.
17Research
17.1 In addition to the Advisory Services or Trading Services, we may also provide you with research recommendations which recommend or suggest an investment strategy, express a particular investment recommendation or which express an opinion as to the present or future value or price of an investment which is not tailored to your individual circumstances but which is intended for general distribution to our
clients ("Research").
17.2 When any Research which we provide to you carries restrictions with regard to the individuals or category of individuals to whom it may be disseminated, you must not distribute that document to any individual or category of individuals to whom it may not be disseminated.
18 Research Usage Terms & Conditions
18.1 The Research and Analysis Service is produced for PSL by PSL who are Authorised and Regulated by the FSA. PSL Research and Analysis Service is provided by PSL for information purposes only.
18.2 It is general in nature and does not constitute an offer or a recommendation to enter into any transaction. The opinions contained in the report were considered by PSL to be valid when published. Whilst PSL has taken all reasonable steps to ensure this information is correct, PSL does not offer any warranty as to the accuracy or completeness of such information. Any person placing reliance on the Report to undertake trading does so entirely at their own risk and PSL does not accept any liability as a result.
18.3 Securities and derivatives markets may be subject to rapid and unexpected price movements and past performance is not necessarily a guide to future performance. Trading in these markets is generally considered to be suitable only for the more experienced investor as it carries a high degree of risk. The investor may not receive back the amount of his original investment and in certain circumstances may be liable for a greater sum than this. Foreign currency denominated securities and financial instruments are subject to fluctuations in exchange rates that may have a positive or negative effect on their value. If in any doubt, please seek independent advice.
18.4 Some services on this web site are not available to private inexperienced investors or are password protected to restrict access. Services may also not be available to certain investors due to regulatory or other constraints either in the UK or elsewhere. You are advised that services, including subscription to the PSL Research and Analysis Service, are only available following completion of PSL documentary and other account opening requirements. Further information is available on request at info@pretiumsecurities.co.uk or call on 020 7 613 8383.
19 Liabilities
19.1 When we provide you with the Advisory Services and/or Research, we give no warranty, guarantee or representation as to the completeness or accuracy of the information (subject to our obligation to assess the suitability of investment advice) or to the tax consequences of any transactions or investments.
19.2 We will attend to your affairs with due care and diligence but we do not guarantee the performance or profitability of investments we recommend or process an order in relation to for you.
19.3 Save as set out in clause 19.4, we accept liability to you where you have suffered loss as a direct result of our breach of the terms of this Agreement or as a direct result of our negligence, fraud or willful default.
19.4 We will not be liable to you for any losses which you suffer that:
(a) are losses incurred in relation to transactions which you enter into through your Trading Account or using the Trading Platform unless such losses are as a result of our breach of this Agreement, negligence, fraud or wilful default;
(b) Were not, at the time you entered into the Agreement, a foreseeable consequence of the breach;
(c) Arise from any act or omission caused by circumstances beyond our reasonable control, including any act of God, government or state, natural disaster, war or other hostilities, terrorist activity, industrial action and any failure of power supplies, computer systems or communication lines;
(d) Are caused by any other person (including the Broker with whom you have entered into the Trading Agreement);
(e) Are caused by your own failure to comply with your obligations under this Agreement; or
(f) Are caused by our taking an action or failing to take an action, where in our reasonable opinion this is necessary to avoid a breach of any applicable law or regulation.
19.5 Nothing in these Terms and Conditions will exclude or limit any duty or liability we may have to you under Applicable Law.
19.6 You will reimburse us for any loss which we may suffer as a result of you breaching this Agreement. However, you will not be liable to reimburse us if we, or a third party, are to blame for our loss. We will take reasonable steps to minimise our losses in any situation where you are required to reimburse us.
20 Fees and charges
20.1 We will provide you with details of our fees and charges for providing the Services to you separately before you enter into this Agreement with us. In particular, we will provide you with a rate card which sets out our fees and charges.
21 Confidentiality and data protection
21.1 We will hold in confidence all personal and financial information which we obtain about you as a result of providing the Services to you, subject to clause 21.2.
21.2 We may disclose information about you in the following circumstances:
(a) With your authority;
(b) Where we are required to disclose information pursuant to any court order or similar process;
(c) Where we are otherwise required or permitted by law to make disclosure; or
(d) Where necessary in order to provide you with the Services.
21.3 We will comply with all requirements applicable to us under the Data Protection Act 1998, as amended, supplemented or replaced from time to time.
22 Communications
22.1 If you want to give us a trading instruction then please provide us with the instruction in accordance with clause 12. If you need to contact us for any other reason in relation to this Agreement, please do so:
Pretium Securities Ltd, Beaufort House, 15 St Botolph Street, London EC3 7DT
Tel: +44 (0) 20 7 613 8383
Fax: +44 (0) 20 7 613 8366
22.2 We may contact you and give you any notices in connection with this Agreement by post, telephone, fax or by electronic means using the latest address, telephone number, fax number or electronic mail address which you have given us.
23 Amendment
23.1 We may change the terms of the Agreement for any of the following reasons:
(a) Where we reasonably consider that:
(i) The change would make the terms easier to understand or fairer to you; or
(ii) The change would not be to your disadvantage; or
(b) To cover the improvement of the Services, the introduction of a new service or the replacement of a Service with a new one;
(c) to enable us to make reasonable changes to the way we provide the Services to you as a result of changes in the financial system, technology or the systems we use to run our business; or
(d) As a result of a requirement under applicable law and regulation.
23.2 If a change is to your disadvantage, we will always give you at least 10 business days' written notice before we make the change.
23.3 We may make any change which we reasonably consider not to be to your disadvantage immediately and tell you about it within 10 business days of making the change.
24 Termination
24.1 If you wish to terminate the Services, you may do so at any time by giving us written notice. Any notice of termination which you provide to us will take effect on the day on which we receive it.
24.2 Unless clause 19.6 applies, we may only terminate provision of the Services by giving you not less than one calendar month’s prior written notice.
24.3 On termination of the Services, if you have open positions in relation to transactions which you have entered into through our Trading Service you must pay us any outstanding commission, fees or costs which you are obliged to pay to us in relation to those transactions. In addition, termination of this Agreement will not affect your obligations to any third party (including but not limited to the Broker) in relation to those transactions.
24.4 Where you have granted us a power of attorney in relation to your Trading Account you will also need to terminate that power of attorney in accordance with its terms when you terminate this Agreement.
24.5 Termination of this Agreement does not terminate your Trading Agreement. If you wish to terminate your Trading Agreement with the Broker, you will need to do so in accordance with the relevant terms of your Trading Agreement.
24.6 We may terminate the Services without giving you prior notice if we reasonably believe that you have seriously and/or persistently broken any terms of this Agreement including by:
(a) Giving us any false information at any time;
(b) Using (or allowing someone else to use) the Services illegally or for criminal activity;
(c) Inappropriately authorising a person to give instructions to us in respect of the Services;
(d) Behaving in a manner (for example by abusing people who work for us) that makes it inappropriate for us to continue to provide you with a Service; or
(e) Putting us in a position where we might breach an applicable law or regulation or another duty which applies to us if we continue to provide the Services to you.
25 Previous terms and conditions
25.1 This Agreement supersedes all prior written agreements entered into by you and us in relation to the provision of the Services. This does not affect any rights or obligations that you or we may have under any previous terms and conditions relating to such services. In addition, nothing in this clause shall limit any liability we may have to you in relation to statements or representations we have made to you but which are not expressly set out in this Agreement.
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