Nerico Brothers Limited > FX > Account Opening
Account Opening

Before client(s) complete the account opening forms, they must read the Futures Contracts & Leveraged Foreign Exchange Trading Account Opening Form, Appendix for Joint Account Holders (if applicable), Client Information Statement and Futures Contracts & Leveraged Foreign Exchange Trading Account Terms and Conditions, including but not limited to Risk Disclosure Statements and Disclaimer, of all which form the “Agreement” between Client(s) and our Company.

The Agreement is legally binding, so client(s) should make sure all the information provided are true and correct. If client(s) are in doubt with the contents of the Agreement, please seek advice from legal advisor, regulator or the relevant authority before they sign it. To protect interests of client(s), they are invited to visit our office in person to open a Leveraged Foreign Exchange trading account. Before client(s) begin to trade, they need to know settlement practices, all the commissions, fee and charges for which they may be liable.

IMPORTANT NOTES:
  • Client(s) need to bring along relevant supporting documents and visit our office in person during business hours to open an account. At the present moment, we do not accept any account opening through the web services.
  • Before Client(s) begin to trade through the internet, please deposit sufficient cleared fund into the account.
  • Head Office: Rm 1101, 11/F, Lee Garden One, 33 Hysan Avenue, Causeway Bay, Hong Kong
  • TEL: (852) 2125 3900
  • FAX: (852) 3101 4007
  • Customer Service Hotline (non-trading matters): (852) 2125 3900
  • Dealing Hotline:
  • Head Office: (852) 2125 3935
  • Fax: (852) 3101 4007
  • Trading Hours: From Monday (Hong Kong Time) 6:00AM to Saturday 4:00AM in US Summer or
  • from Monday (Hong Kong Time) 6:00AM to Saturday 5:00AM in US Winter.
Document Required
Individual Account

The Client(s) need to provide, complete, execute and read the following:

  • Futures Contracts & Leveraged Foreign Exchange Trading Account Terms and Conditions
  • Risk Disclosure Statements and Disclaimer (Appendix 1)
  • Futures Contracts & Leveraged Foreign Exchange Trading Account Opening Form
  • Client Information Statement
  • Copy of Identity Card or Passport
  • Address proof within the last 3 months
Corporate Account

The Client(s) need to provide, complete, execute and read the following:

  • Futures Contracts & Leveraged Foreign Exchange Trading Account Terms and Conditions
  • Risk Disclosure Statements and Disclaimer (Appendix 1)
  • Futures Contracts & Leveraged Foreign Exchange Trading Account Opening Form
  • Client Information Statement (Corporate Account)
  • Certified copy of
  1. Memorandum & Articles of Associations
  2. Certificate of Incorporation
  3. Register of Directors and Register of Shareholders
  4. Latest Annual Return
  5. Business Registration Certificate
  6. Latest audited accounts
  7. ID Cards/passports of all shareholders, directors and authorized person(s)
* If Client(s) cannot open an account in person, our company may approve account opening if they can fulfill the following requirements in accordance with the Guidelines of SFC. However, we reserve the right to reject the application of account opening and shall not be liable for any further explanation.

Account Opening Documents Download

Download Agreement

Please click here to print Futures Contracts & Leveraged Foreign Exchange Trading Account Terms and Conditions and Appendix for your reference.
If you have any inquiries on the terms and conditions, please contact our Customer Service at (852) 2125 3900.

FUTURES CONTRACTS LEVERAGED FOREIGN EXCHANGE TRADING ACCOUNT TERMS AND CONDITIONS

NERICO BROTHERS LIMITED
FUTURES CONTRACTS & LEVERAGED FOREIGN EXCHANGE TRADING ACCOUNT TERMS AND CONDITIONS

1. Definitions and Interpretation

1.1 In the Agreement, unless the context otherwise requires, the following expressions shall bear the following meanings:

“Associated Company” means the ultimate holding company of NERICO BROTHERS and each and every subsidiary of such holding company, as defined in the Companies Ordinance.

“Bid-offer Spread” shall mean the difference between the bid price and the offer price.

“Client” shall in the case where the client(s) is/are individual(s) include the client(s) and his/their respective executors and administrators and in the case where the client is a sole proprietorship firm include the sole proprietor and his executor and administrator and his or their successors in the business and in the case of a partnership firm include the partners who are the partners of the firm at the time when the client’s said account is being maintained and their respective executors and administrators and any other person who shall at any time hereafter be or have been a partner of and in the firm and his or their respective executors and administrators and the successors to such partnership business and where the client is a company include such company and its successors.

“Client’s Account Codes” shall mean the account number, account name, user code, user ID, user password and any other information given by NERICO BROTHERS to the Client for the unique identification of the Client’s account.

“Client’s Liabilities” shall include all obligations and liabilities of the Client to NERICO BROTHERS and its associated companies, whether present or future, actual or contingent and whether incurred solely, severally, or jointly as principal or surety, together with interest, commission, charges and any other costs and expenses, including legal costs on a solicitor and client basis, incurred in respect of the Client’s account.

“Client Money Rules” means the Securities and Futures (Client Money) Rules made by the SFC under Section 149 at the Securities and Futures Ordinance as amended from time to time.

“Client Money Standing Authority” means the standing authority granted by the Client to NERICO BROTHERS in the terms set out in Clause 8.2 as amended from time to time.

“Electronic Service” means any facility provided by NERICO BROTHERS which enables the Client to give electronic instructions to purchase, sell and otherwise deal in futures contracts and /or effect leveraged foreign exchange transactions and any information services and software comprised therein.

“Dealing in futures contracts” has the meaning ascribed to it in the Ordinances.

Agreement means the written agreement between the Client and NERICO BROTHERS regarding the opening, maintenance and operation of the account(s) as amended from time to time, including but not limited to the Account Opening Form, Client Information Statement, Futures Contracts and Leveraged Foreign Exchange Trading Account Terms and Conditions, Risk Disclosure Statement and Disclaimer, all schedules, appendices and attachments thereto, all amendments issued by NERICO BROTHERS in writing from time to time, and any authority given by the Client to NERICO BROTHERS with respect to the account(s) .

“NERICO BROTHERS” shall mean Nerico Brothers Limited, and its successors in title and assigns.

“HKFE” shall mean the Hong Kong Futures Exchange Limited and its clearing house, and their successors and assigns.

“In writing” or “written” includes handwriting, printing, telegraph, telex, fax, the Web Facility, electronic mail and any other means capable of reproducing information in a visible form.

“Leveraged foreign exchange trading” has the meaning ascribed to it in the Ordinances.

“Margin” means the collateral deposited by the Client with NERICO BROTHERS as a guarantee of the Client’s performance in connection with the Client’s Liabilities, as determined by NERICO BROTHERS from time to time.

“Market Conditions” shall include rates, prices, news and any other information of a market (including spot, forward, futures, swap, and any other derivatives) provided by an information provider, a bank, a financial institution or a regulated company, independent of NERICO BROTHERS, construed and interpreted solely by NERICO BROTHERS.

“Ordinances” shall mean the Securities and Futures Ordinances of the Laws of Hong Kong and any subsidiary legislation mode thereunder.

“SFC” shall mean the Securities and Futures Commission of Hong Kong.

“Services” shall mean the services provided by NERICO BROTHERS under the Agreement, through the Electronic Service or otherwise.

“Settlement Currencies” shall mean Hong Kong Dollars and US Dollars, and any other currencies as accepted by NERICO BROTHERS for settlement of monies with the Client from time to time.

“Slippage” refers to an order being filled at a price different from the client’s order price.

“Stop-loss order” refers to an order including stop price and limit price. Stop price refers to the price that triggers a limit order, and a limit price refers to a specific price of the limit order triggered. Once the stop price has been reached, the limit order will be immediately placed on the order book.

“Value Date” means the date on which the FX agreed to be purchased or sold pursuant to a FX Contract is to be delivered or deferred.

1.2 The singular includes the plural and vice versa and words importing a gender include other genders.

1.3 Headings are inserted for reference only and shall not affect the construction and interpretation of the Agreement.

2. Warranties and Representations

2.1 NERICO BROTHERS is licensed with CE number AGK862 under the Ordinances.

2.2 NERICO BROTHERS is registered as an Exchange Participant of Hong Kong Futures Exchange Limited under the category of Futures Commission Merchant, and also registered as a Clearing Participant of HKFE Clearing Corporation Limited.

2.3 Prior to entering into any transaction on options, the Client is aware of and understands the following:

a) Contract information : -

Strike Price, Expiry Day, underlying commodity, option type, buy or sell order, opening or closing trade, current quoted price, and order type.

b) Underlying commodity : -

method of delivery or settlement, contract size, calculation of settlement prices.

c) Exercise procedure : -

American or European style exercise,

d) Premium : -

Calculation of contract value, settlement of premium.

e) Margin: -

Approximate client margin requirements, variation adjustment payments, collateral that may be lodged as margin, payment details.

f) Transaction costs : -

Minimum Commissions, Exchange and Clearing House Fees, Exercise Fees, and applicable levies.

g) Exchange Participant Representative and Registered Trader Obligations : -

An Exchange Participant Representative or Registered Trader shall have no obligation to provide firm bids and offers with respect to Long-dated Options.

2.4 The Client declares that:

a) the Client is legally capable of validly entering into the Agreement.

b) the Agreement has been fully explained to the Client in a language that the Client can understand and that the Client agrees with the Agreement.

c) the Client has read and understood the contents of the Agreement.

d) the Client has understood from NERICO BROTHERS’s representative(s) any contract specifications, margin procedures, fee and charge schedule that may affect the Client’s trading activities in connection with the Client’s account, and the circumstances under which the Client’s positions may be closed without the Client’s consent.

e) any information given by the Client in the Agreement is true, correct and complete.

2.5 The Client and NERICO BROTHERS shall notify each other forthwith of any material changes in the information supplied in the Agreement.

2.6 The Client shall not attempt to tamper with, modify, de-compile, reverse engineer, or otherwise alter in any way, capture data for onward distribution from, or gain unauthorized access to, the Electronic Service.

3. Services

3.1 NERICO BROTHERS shall not offer discretionary account services for dealing in leveraged foreign exchange trading to the Client.

3.2 NERICO BROTHERS is always acting as an agent for dealing in futures contracts, but a principle OR an agent as NERICO BROTHERS may at its absolute discretion decide from time to time for dealing in leveraged foreign exchange trading. In the event that NERICO BROTHERS is acting as an agent for the client (that is as a broker). NERICO BROTHERS may in its absolute discretion choose the principal (that is the counterparty) on behalf of the Client from time to time, and earn commission, brokerage and/or other fees in accordance with the usual market practices, and the Client hereby direct NERICO BROTHERS that NERICO BROTHERS may from time to time transfer funds of the Client out of NERICO BROTHERS’s segregated account(s) into the account(s) of the said principal or any other account(s), either in Hong Kong or elsewhere, as may be directed by the said principal from time to time for the purposes of meeting the Client’s obligations to meet settlement or margin requirements in respect of all or any such dealing with the said principal carried out by NERICO BROTHERS on behalf of the Client hereunder. 

3.3 NERICO BROTHERS shall have the right without assigning any reason to refuse to act for the Client in any particular trade instruction, including but not limited to the following: a) the trade instruction does not comply with the limitations and requirements specified by NERICO BROTHERS, b) the price given by NERICO BROTHERS, verbally or in writing, shall have expired or has been withdrawn by NERICO BROTHERS, c) the terms of the trade instruction cannot be determined with certainty by NERICO BROTHERS, d) there is a lack of funds in the Client’s account for margin and/or settlement, e) the limit of open positions that the Client may acquire or maintain at NERICO BROTHERS shall have exceeded.

3.4 NERICO BROTHERS does not guarantee the availability of the Electronic Service.  NERICO BROTHERS may in its sole discretion without prior notice to the Client suspend or restrict the Electronic Service, without affecting the rights and/or obligations of NERICO BROTHERS and the Client incurred prior to such suspension or restriction.  NERICO BROTHERS shall not be responsible for any loss or damage caused, directly or indirectly, by any events, actions or omissions beyond the control of NERICO BROTHERS including, without limitation, any delays or inaccuracies in the transmission of orders and/or information due to failure of any transmission or communication facilities in delivering Services to the Client.  

3.5 Where NERICO BROTHERS is acting as a principal, NERICO BROTHERS determines in its sole discretion which products to be tradable by the Client with NERICO BROTHERS, and the Client acknowledges that the size of the bid-offer spread quoted by NERICO BROTHERS is determined by Market Conditions and the Client’s profile and therefore NERICO BROTHERS shall not guarantee at all times the size of the bid-offer spread of any product, and the bid-offer spread may vary from one client to another.  Such bid and offer prices may vary in such a fast manner that trades may seem executed not at the advertised prices on the Electronic Service, and the Client agrees to accept that such prices as NERICO BROTHERS quotes from time to time as the best prices then available.

3.6 Where the Client can access account information via the Electronic Service, the Client hereby consents to accept the posting of such account information on the Electronic Service as delivery of confirmation and account statements in lieu of postal mail or electronic mail.  The Client may revoke this consent at any time upon written notice to NERICO BROTHERS.  

3.7 Written communication is deemed to have been transmitted when NERICO BROTHERS has duly completed the procedure of release.  The Client’s failure to receive any communication in writing released by NERICO BROTHERS shall not relieve NERICO BROTHERS’s right and the Client’s obligation with respect to that communication.

3.8 Written communication for any account activities and statements of the Client’s account shall be conclusive and deemed to be accepted if not objected to in writing by the Client within 2 days after transmittal thereof to the Client.

3.9 The Client acknowledges that any trading recommendation and market information communicated by NERICO BROTHERS and its directors or employees to the Client does not constitute an offer or solicitation for the Client to enter into a transaction.

3.10 Whenever NERICO BROTHERS or its representatives solicit the sale of or recommend any financial product to the Client, the financial product must be reasonably suitable for the Client having regard to his financial situation, investment experience and investment objectives.  No other provision of this agreement or any other document NERICO BROTHERS may ask the Client to sign and not statement we may ask the Client to make derogates this clause.

4. Margins, Payments and Delivery

4.1 Without prejudice and in addition to any general lien, right of set-off or similar right to which NERICO BROTHERS may be entitled by law, all of the Client‘s properties held anywhere by NERICO BROTHERS and its associated companies in any form for any purposes, including safekeeping, shall be subject to a first and paramount lien in the favour of NERICO BROTHERS. NERICO BROTHERS shall also have the right to sell such properties (and NERICO BROTHERS is authorized to do all such things necessary in connection with such sale) and utilize the proceeds to offset and discharge the Client’s Liabilities, regardless of whether any other person is interested in or NERICO BROTHERS has made advances in connection with such property, and irrespective of the number of accounts the Client may carry with NERICO BROTHERS. NERICO BROTHERS shall be entitled at any time without notice to combine and/or consolidate all or any of the Client‘s accounts with NERICO BROTHERS and its associated companies. In respect of any payments by NERICO BROTHERS to offset and discharge any Client’s Liabilities to any associated companies, NERICO BROTHERS shall not be concerned whether or not such Client’s Liabilities exist, provided demand has been made on NERICO BROTHERS by such associated companies.  

4.2 The proper Margin in Settlement Currencies, amount of which as determined solely by NERICO BROTHERS, will be maintained at all times by the Client in all the Client’s accounts.  Such Margin requirements shall be specified by NERICO BROTHERS in writing from time to time.  If the Client deposits Margin to NERICO BROTHERS in a currency other than Settlement Currencies, the Margin value will be converted into Settlement Currencies at a rate according to Market Conditions solely determined by NERICO BROTHERS.  In the case of a transaction effected by NERICO BROTHERS on an exchange, NERICO BROTHERS may require more margin than that specified by the relevant exchange and/or its clearing house.  If NERICO BROTHERS calls for additional margin, the Client must deposit with NERICO BROTHERS such additional margin within the time period specified by NERICO BROTHERS. NERICO BROTHERS may change margin requirements in the sole discretion of NERICO BROTHERS and at any time. No previous margin shall establish any precedent and these requirements once established may apply to existing positions as well as to the new position in the contracts affected by such change.  

4.3 Where the Client fails to meet a margin requirement, NERICO BROTHERS shall have an absolute discretion to carry out any acts as it deems fit to protect its interest. Such acts include, but are not limited to a) closing out the contracts which NERICO BROTHERS entered into with or on behalf of the Client without the Client’s consent, b) canceling any or all outstanding orders or any commitments instructed by the Client.  Any such acts shall be binding upon the Client as if proper instructions to effect the same have been duly given to NERICO BROTHERS by the Client, and the Client irrevocably accepts that in carrying out such acts, NERICO BROTHERS owes no duty or obligation of whatever nature to the Client to minimize or eliminate the Client’s loss.  In particular, where the contracts were HKFE related, NERICO BROTHERS may be required to report to HKFE and SFC particulars of all open positions in respect of which two successive calls for margin are not met.

4.4 Subject to the Client Money Rules and the Client Money Standing Authority, NERICO BROTHERS is authorized to deposit any monies and other properties in any accounts of the Client with any such financial institution (including with any Associated Company) as NERICO BROTHERS shall think fit, and NERICO BROTHERS (and any such Associated Company) shall be entitled to retain any benefits resulting from such deposit. Client money received or held outside Hong Kong by NERICO BROTHERS shall be subject to the Client Money Rules as if the Client money was received or held in Hong Kong.

4.5 The Client acknowledges that HKFE may do all things necessary to transfer any open positions held by NERICO BROTHERS on the Client’s behalf and any money and security standing to the credit of the Client’s account with NERICO BROTHERS to another exchange participant of HKFE in the event the rights of NERICO BROTHERS as an exchange participant of HKFE are suspended or revoked.

4.6 All monies, securities and other property received by NERICO BROTHERS from the Client or from any other person (including a clearing house) for the account of the Client shall be held by NERICO BROTHERS as trustee and segregated from NERICO BROTHERS’s own assets.  These assets so held by NERICO BROTHERS shall not form part of the assets of NERICO BROTHERS for insolvency or winding up purposes but shall be returned to the Client promptly upon the appointment of a provisional liquidator, liquidator or similar officer over all or any part of NERICO BROTHERS’s business or assets.  However, for transactions related to HKFE, any monies, approved debt securities or approved securities received by NERICO BROTHERS from the Client or from any other person (including HKFE) are held in the manner specified by HKFE’s rules and the Client authorizes NERICO BROTHERS to apply any such monies, approved debt securities or approved securities in the manner specified by HKFE’s rules.  In particular, NERICO BROTHERS may apply such monies, approved debt securities or approved securities in or towards meeting NERICO BROTHERS’s obligations to any party insofar as such obligations arise in connection with or incidental to HKFE related futures and options business transacted on the Client’s behalf.  The Client acknowledges that in respect of any account of NERICO BROTHERS maintained with HKFE, whether or not such account is maintained wholly or partly in respect of HKFE related futures and options business transacted on behalf of the Client and whether or not monies, approved debt securities or approved securities paid or deposited by the Client has been paid to or deposited with HKFE, as between NERICO BROTHERS and HKFE, NERICO BROTHERS deals as principal and accordingly no such account is impressed with any trust or other equitable interest in favour of the Client and monies, approved debt securities and approved securities paid to or deposited with HKFE are thereby freed from the trust aforesaid.

4.7 The Client may make withdrawals from the Client’s account by giving NERICO BROTHERS sufficient notice in writing of his intention to withdraw.  Notwithstanding the currency in which the Margin was deposited into NERICO BROTHERS, the Client can only withdraw in Settlement Currencies.  The minimum notice period shall be made known to the Client from time to time.

5. Dealings

5.1 The Client can choose at his own discretion to place a market order, limit order or stop order to best fit his needs in the currency market.

        5.1.1 Market order

Market order is an order to buy/sell at prevailing two-way dealing quotation. In normal market situation, NERICO BROTHERS will try our best to honor the quotation as the final execution price. Under extreme market fluctuation, if there is positive slippage, the final execution price will be more favourable than the quotation. If there is negative slippage, the final execution price will be less favourable than the quotation.

        5.1.2 Limit order

Limit order is an order to buy/sell at the Client’s pre-set exchange rate. In normal market situation, NERICO BROTHERS will try its best to honor the pre-set exchange rate as the final execution price.  Under extreme market fluctuation where positive slippage occurs, the final execution price will be more favourable than the pre-set exchange rate. Negative slippage does not apply to limit order.

        5.1.3 Stop order

Stop order is an order to close an open position when the quotation has reached or exceeded the Client’s pre-set stop price. In normal market situation, NERICO BROTHERS will try its best to honor the pre-set price as the final execution price. Under extreme market fluctuation where negative slippage occurs, the final execution price will be less favourable than the pre-set price. Positive slippage does not apply to stop order.

5.1.4 Good-til-cancelled order

Good-til-cancelled order is the Client’s instruction to NERICO BROTHERS to buy or sell shares at a particular price at any time, unless the instruction is later stopped. NERICO BROTHERS will try its best to cancel such an order upon the Client’s instruction if any. However under circumstances where NERICO BROTHERS may not be able to cancel the order on a timely basis, it may continue to remain in force and may be eligible for execution.

5.1.5 Liquidation order

Liquidation order is an order to sell the Client’s investments to make them available in the form of money. Under unfavorable market fluctuation, the floating loss may cause the net equity to fall below the maintenance margin thus giving rise to a margin shortfall. A liquidation order is automatically executed by NERICO BROTHERS when the Client’s margin percentage reaches 1%.

5.1.6 Good For Day

Good For Day means the Client’s order will only be valid for that trading date.

5.2     The Client shall provide NERICO BROTHERS with instructions orally or in writing.  Any instruction made by the Client to NERICO BROTHERS shall only be deemed to have been received by NERICO BROTHERS when such instruction has been acknowledged by NERICO BROTHERS orally or in writing.  The mere transmission of an instruction by the Client shall not constitute a valid instruction between NERICO BROTHERS and the Client.

5.3 The Client shall be wholly responsible for the confidentiality, security and use of the Client’s Account Codes. The Client shall be liable to NERICO BROTHERS for orders placed and trades executed with the use of the Client’s Account Codes even if such use may be unauthorized or wrongful. The Client agrees to notify NERICO BROTHERS immediately when a) he has placed an instruction but has not received an accurate acknowledgement in writing, b) he has received an acknowledgement of an instruction in writing that he did not place, c) he becomes aware of any unauthorized access to his account, and/or d) he has difficulties in accessing NERICO BROTHERS’s Services.  

5.4 In any transaction or contract or trading order, NERICO BROTHERS may trade as principal and/or agent for any party or parties. NERICO BROTHERS may take opposition position to Client’s orders.

5.5 Where NERICO BROTHERS is acting as a principal and giving out bid and offer prices to the Client, the obligation of NERICO BROTHERS to execute the Client’s trade instruction at the prices given by NERICO BROTHERS shall be limited to an amount specified and advised by NERICO BROTHERS to the Client.  

5.6 NERICO BRITHERS shall determine the prices of foreign exchange for the purpose of marking to market the Client’s open positions from time to time during the trading hours by reference to the current prices as quoted by other financial institution or price feed, and the Client acknowledges that current prices can be vary by different organization. In addition, interest rates chargeable/ payable on the Client by NERICO BROTHERS will be determined with reference to the prevailing market rates at the discretion of NERICO BROTHERS. All positions will remain open after close of business may be subject to a rollover or swap rate. All positions will be rolled over by debiting or crediting the Client’s account in accordance with the daily rollover rate. Rollover times, rates, and swap rates vary based on the system and are available on the statement.

5.7 Any order pertaining to a specific position will be cancelled when that position is liquidated.

5.8 Should errors occur to the bid and offer prices given by NERICO BROTHERS will not be liable for the resulting errors and reserves the right to make the corresponding correction on the accounts involved. Any dispute arising from such bid and offer price error will be resolved with respect to the fair market price at the time the errors occurred.

5.9 All telephone conversations between NERICO BROTHERS and the Client may be recorded by NERICO BROTHERS. The Client agrees that NERICO BROTHERS will after a retention period destroy such recordings.

5.10 NERICO BROTHERS may, subject to the provisions of the Ordinances and any applicable law, take the opposite position to the Clients order in relation to any exchange traded futures and options contracts, whether on NERICO BROTHERSs own account or for the account of NERICO BROTHERSs associated companies or other clients of NERICO BROTHERS, provided that such trade is executed competitively on or through the facilities of HKFE in accordance with its rules or the facilities of any other exchange in accordance with the rules and regulations of such other exchange.

5.11 Circumstances may arise in which NERICO BROTHERS, another member of the Group or one of their respective officers, employees or agents (each, a “Relevant Party”) has a material interest in a transaction with or for Client or where a conflict of interest arises between Client’s interests and those of other clients or counterparties or of itself. However, if NERICO BROTHERS acts in circumstances where it has a material interest or conflict of interest, NERICO BROTHERS will take reasonable steps to ensure Client is treated fairly. NERICO BROTHERS may, in its discretion, without giving any reason therefor, without notice and without incurring any liability of any nature to Client or any third party, decline to act for Client in such circumstances.

5.12 NERICO BROTHERS’s directors, employees and representatives shall be allowed to trade contracts on their own accounts, subject to the Ordinances, the rules of HKFE and any other applicable laws.

5.13 The Client may be affected by any curtailment of, or restriction on, the capacity of NERICO BROTHERS to trade in respect of open positions as a result of action taken by SFC under applicable rules and regulations or for any other reason, and that in such circumstances, the Client may be required to reduce or close out his open positions with NERICO BROTHERS.

5.14 In the event that the Client directs NERICO BROTHERS to enter into any contracts in a currency other than the currency in which the Client’s account is denominated: (a) any profits or losses arising as a result of a fluctuation in the exchange rate affecting such currency will be entirely for the account and risk of the Client, (b) all initial and subsequent deposits for margin purposes shall be made in such currency in such amounts as NERICO BROTHERS may, in the sole discretion of NERICO BROTHERS, require, and (c) when such a contract is liquidated, NERICO BROTHERS shall debit or credit the account of the Client in the currency in which such account is denominated at an exchange rate determined by NERICO BROTHERS’s sole discretion according to Market Conditions.

5.15 Where NERICO BROTHERS, on the Client’s oral request, is giving out orally bid and offer prices to the Client, the Client understands and accepts that when the Client instructs orally NERICO BROTHERS to enter into a trade by accepting orally one of such prices (“the accepted price”), the Client is entering into a trade not at the accepted price, but at a price determined by the following:

a) where the accepted price is the bid price, the trade will be entered into at the accepted price less the bid markup for the Client, as posted on the Company’s website from time to time;

b) where the accepted price is the offer price, the trade will be entered into at the accepted price plus the offer markup for the Client, as posted on the Company’s website from time to time.

5.16 For any open position held by the Client in leveraged foreign exchange trading, NERICO BROTHERS shall from time to time credit the Client’s account for interest earned or debit the Client’s account for interest expensed, at an interest rate determined exclusively, and advised to the Client in writing, by NERICO BROTHERS from time to time according to Market Conditions. 

6. Execution

6.1     All foreign exchange dealing rates offered by NERICO BROTHERS to the Client are based on current rates and are real-time. NERICO BROTHERS aggregates bid and ask prices from counterparties and pricing engine (“Liquidity Providers”). The quotes provided to Client by NERICO BROTHERS and order execution price include a mark-up over Liquidity Provider’s prices. The prices provided by Liquidity Providers to NERICO BROTHERS are determined by reference to several independent banks and financial institutions. NERICO BROTHERS acts as a market maker in currency pairs and takes opposite positions to client orders. NERICO BROTHERS is reliant on Liquidity Providers for liquidity. There are certain limitations to liquidity that can affect the final execution of client’s order.

6.2     The Client recognizes that foreign exchange trading spot prices may vary from institution to institution and from minute to minute as a result of, without limitation, a time lag in data transmission. Furthermore, there may be time latency between the placement of the Client’s order and the subsequent hedging of the corresponding order by NERICO BROTHERS, which may prove impossible to effect trades at prices quoted to the Client by NERICO BROTHERS. Thus, the Client accepts that all prices quoted by NERICO BROTHERS to the Client are for reference and merely indicative only. The quotes are not firm.

6.3.    The prices at which a FX Transaction effected are listed in Clause 6.6 and specified in the relevant confirmation.

6.4.    The Client may experience widened spreads and slippage under certain market conditions including but not limited to market lacks liquidity, price volatility, time latency between the placement of the Client’s order and the subsequent hedging of the corresponding order by NERICO BROTHERS, or other factors. Clause 6.6 lists out the slippage policy of NERICO BROTHERS.

6.5.     There may be circumstances where prices quoted by NERICO BROTHERS may later prove to be inaccurate due to specific market circumstances, without prejudice to any rights it may have under the laws of Hong Kong, NERICO BROTHERS shall not be bound by any FX transaction which purports to have been executed (regardless whether the FX transaction has been confirmed), at the transacted price under the following circumstances:

a) lack of market liquidity;

b) suspension or error in quotes from NERICO BROTHERS’s designated counterparty;

c) NERICO BROTHERS is able to substantiate to the Client that the transacted price was incorrect at the time of the FX transaction; or

d) the transacted price was known by the Client to be incorrect at the time of the FX transaction.

        In such cases, NERICO BROTHERS reserves the right to cancel the FX Transaction or correct the erroneous price at which the FX Transaction was executed with the price at which NERICO BROTHERS hedged the trade or to the historic correct market price subject to all applicable laws, rules and regulations.

6.6     The slippage policy and details about the prices at which a FX Transaction effected:

Order Type

Scenario

Execution Price

Favorable Price Movement

Unfavorable price movements

Normal limit order

normal case

Pre-determined order price

Retained by NERICO BROTHERS

Borne by NERICO BROTHERS

market lacks liquidity (i.e. NERICO BORHTERS could not receive an available price from Liquidity Providers

Stop order & automatic close out order

normal case

Next available price

Retained by Client

Borne by Client

market lacks liquidity (i.e. NERICO BORHTERS could not receive an available price from Liquidity Providers

      * For market orders, Clients can specify maximum acceptable negative slippage in pips (i.e. final execution rate is worse than the requested rate). Such slippage limit will not affect the positive slippage that client receives when there is a favourable price movement. Please note in volatile markets the lower pip the client specified, the lower the probability of receiving execution. If the order cannot be executed within the specified range the order will be cancelled.

6.7     Unless NERICO BROTHERS has agreed otherwise pursuant to Clause 6.8 herein, Client shall not take delivery of FX on the Value Date pursuant to any FX Contract (other than a Physically Settled FX Contract) and Client shall be deemed to have agreed with NERICO BROTHERS to extend the term of such FX Contract concerned beyond the Value Date until the happening of any of the following events:

6.7.1    NERICO BROTHERS has received instruction from Client to Close Out the outstanding FX Contract concerned; or

6.7.2    NERICO BROTHERS exercises its rights under Clause 12 herein to Close Out the outstanding FX Contract concerned.

6.8     In the event that the date on which the FX agreed to be purchased or sold pursuant to a FX Contract is deferred, the FX Contract will be subject to a computation of the interest rate differentials which are charged or paid by NERICO BROTHERS on a daily basis of being long or short, one currency against another until the FX is delivered or the Value Date of the Closing Out of the FX Contract.

6.9

6.9.1   In the event of a profit for the Account resulting from FX Transactions carried out by NERICO BROTHERS with Client, NERICO BROTHERS shall credit such amount of profit in the Account.

6.9.2   In the event of a loss for the Account resulting from FX Transactions carried out by NERICO BROTHERS with Client, NERICO BROTHERS shall debit the Account with such amount of loss and shall be entitled to set off such loss against the sums available.

6.9.3   Such profit or loss as referred to in Clauses 6.9.1 and 6.9.2 above shall be conclusively determined by NERICO BROTHERS with reference to the following criteria:

6.9.3.1 NERICO BROTHERS shall make reference to the bid and offer prices as from time to time quoted and disseminated to the public, or to subscribers, by any reputable financial information services organisation in choosing the prices for the purposes of marking to market Client’s open positions or Closing Out.

6.9.3.2 NERICO BROTHERS shall determine the interest rates for calculating Client’s interest income and expenses by reference to the prevailing interest rates quoted by major participants or bankers in the market of FX trading.

6.10    Client may Close Out any outstanding position (notwithstanding that the Value Date of the FX Contract concerned has passed) during trading hours as stated on the Company’s website. The net balance representing the profit or loss derived from the aforesaid Closing Out as referred to in Clause 6.9 herein shall be credited or charged to the Account on the date of Closing Out, or Value Date, of the FX Contract concerned or on such other date as reasonably determined by NERICO BROTHERS.

7. Charges and Costs

The Client shall pay on demand such brokerage, commission, fee, duty, tax, levy, interest and all other charges incurred by the Client to NERICO BROTHERS and all other parties (including without limitation, regulators, exchanges, clearing houses, governments and agents of NERICO BROTHERS) arising out of usage of Services, and the Client hereby authorizes NERICO BROTHERS to withdraw the amount of any of such aforesaid charges from the Client’s account. A description of the charges (and the basis for payment) by the Client to NERICO BROTHERS shall be provided to the Client from time to time. Specifically, every contract entered into by the Client on HKFE shall be subject to the charge of an Investor Compensation Fund levy and a levy pursuant to the Ordinances, the cost of both of which shall be borne by the Client.

8. Standing Authority

8.1 The Client Money Standing Authority covers money held or received by NERICO BROTHERS in Hong Kong and elsewhere (including any interest derived from the holding of the money which does not belong to NERICO BROTHERS) in one or more segregated account(s) on the Client’s behalf (“Monies”).

8.2 The Client authorizes NERICO BROTHERS to:

8.2.1 combine or consolidate any or all segregated accounts, of any nature whatsoever and either individually or jointly with others, maintained by NERICO BROTHERS or any of NERICO BROTHERS’s associated companies and NERICO BROTHERS may transfer any sum of Monies to and between such segregated account(s) to satisfy the Client’s Liabilities; and

8.2.2 transfer any sum of Monies interchangeably between any of the segregated accounts maintained at any time with NERICO BROTHERS or any NERICO BROTHERS’s associated companies.

8.3 NERICO BROTHERS may do any of the things mentioned in Clause 8.2 without giving the Client notice.

8.4 The Client Money Standing Authority is given without prejudice to other authorities or rights which NERICO BROTHERS or any of the NERICO BROTHERS’s associated companies may have in relation to dealing in Monies.

8.5 The Client Money Standing Authority shall be valid for a period of 12 months from the date of the Agreement, subject to renewal by the Client or deemed renewal under the Client Money Rules as referred to in Clause 8.7.

8.6 The Client Money Standing Authority may be revoked by giving NERICO BROTHERS written notice. Such notice shall take effect upon the expiry of two weeks from the date of NERICO BROTHERS’s actual receipt of such notice.

8.7 The Client understands that the Client Money Standing Authority may be deemed to be renewed on a continuing basis without the Client’s written consent if NERICO BROTHERS issues the Client a written reminder at least 14 days prior to the expiry date of the Client Money Standing Authority, and the Client does not object to such deemed renewal before such expiry date.

9. Electronic Services

9.1 Unless otherwise specified, section 9 is made without prejudice and in addition to all the other provisions in this Agreement.

9.2 NERICO BROTHERS may provide the Client with Electronic Services, and the Client hereby requests the provision of such services, upon the terms and conditions as embodied in the Agreement, as modified, amended or expanded by any notice, letter, publication or such other document as may be issued from time to time by NERICO BROTHERS.

9.3 The Client may from time to time instruct NERICO BROTHERS, acting as the Client’s agent, to deposit, purchase and/or sell securities for the Account(s) or otherwise deal with securities, receivables or monies on behalf of the Client through the Electronic Services.

9.4 The Client shall be the only authorized user of the Electronic Services under this Agreement. The Client shall be wholly and solely responsible for the confidentiality security and use of the Access Codes issued to the Client by NERICO BROTHERS.

9.5 The Client shall be wholly and solely responsible for all instructions entered through the Electronic Services. The Client further acknowledges that the Electronic Services, NERICO BROTHERS’s website, and the software comprised in them, are proprietary to NERICO BROTHERS. The Client undertakes and warrants that the Client shall not, and shall not attempt to, tamper with, modify, decompile, reverse engineer, damage, destroy or otherwise alter in any way, and shall not attempt to gain unauthorized access to, any part of the Electronic Services, NERICO BROTHERS’s website, and any of the software comprised in them. The Client agrees that NERICO BROTHERS shall be entitled to close any or all of the Account(s) immediately without notice to the Client, and the Client acknowledges that NERICO BROTHERS may take legal action against the Client, if the Client at any time breaches this warranty and undertaking or if NERICO BROTHERS at any time reasonably suspects that the Client has breached the same. The Client undertakes to notify NERICO BROTHERS immediately if the Client becomes aware that any of the actions described above in this paragraph is being perpetrated by any other person.

9.6 As and when NERICO BROTHERS allows the Client to open an Account on-line with NERICO BROTHERS, in addition to completing and returning the Agreement through the internet, the Client agrees to return to NERICO BROTHERS the hard copy of the Agreement duly completed and executed.

9.7 Unless otherwise agreed between NERICO BROTHERS and the Client, NERICO BROTHERS will not execute any trading orders of the Client until there are sufficient cleared funds, securities or other assets acceptable to NERICO BROTHERS in the Client’s Account(s) to settle the Client’s transactions and upon receipt of the documents as stated in section 8.6.

9.8 NERICO BROTHERS will not be deemed to have received the Client’s instructions or have executed the Client’s orders unless and until the Client is in receipt of NERICO BROTHERS message acknowledging receipt or confirming execution of the Client’s orders, either electronically or by hard copy.

9.9 As a condition of using the Electronic Services to give instructions, the Client shall immediately notify NERICO BROTHERS if:

9.9.1 an instruction has been placed through the Electronic Services and the Client has not received an Instruction number or has not received an accurate acknowledgement of the instruction or of its execution (whether by hard copy, electronic or verbal means);

9.9.2 the Client has received acknowledgement (whether by hard copy, electronic or verbal means) of a transaction which the Client did not instruct or any similar conflict;

9.9.3 the Client becomes aware of any of the acts stated in section 9.5 being done or attempted by any person;

9.9.4 the Client becomes aware of any unauthorized use of the Client’s Account Codes;

9.9.5 the Client has difficulties with regard to the use of the Electronic Services.

9.10 The Client should review every order before entering it as it may not be possible to cancel the Client’s instruction once given.

9.11 NERICO BROTHERS shall not be liable for any loss or damage the Client or any other person may suffer as a result of using or attempting to use the Electronic Services unless such loss or damage are caused by willful default or gross negligence on the part of NERICO BROTHERS. The Client further undertakes to indemnify NERICO BROTHERS, on demand, for any loss or damage NERICO BROTHERS may suffer as a result of the use of the Electronic Services, except to the extent that such loss or damage is outside the Client’s control.

9.12 If the mode of communication used by the Client in the course of the Electronic Service becomes temporarily unavailable, the Client can during such period continue to operate the relevant Account subject to the right of NERICO BROTHERS to obtain such information regarding the verification of the Client’s identity as it may from time to time think fit.

9.13 Exchanges and certain associations may assert proprietary interests and rights over all market data they furnish to parties who disseminate such data and agrees not to do any act which would constitute any infringement or encroachment of such rights or interests. NERICO BROTHERS does not guarantee the timeliness, sequence, accuracy or completeness of market data or any market information (including any information provided to the Client through the Electronic Services). NERICO BROTHERS shall not be liable in any way for any loss arising from or caused by (1) any inaccuracy, error in or omission from any such data, information or message, (2) any delay in the transmission or delivery thereof; (3) any suspension or congestion in communication; (4) any unavailability or interruption of any such data, message or information whether due to any act of NERICO BROTHERS, or (5) by any forces beyond the control of NERICO BROTHERS.

10 Charge Schedule

The current information is posted on NERICO BROTHERS’s website from time to time. Before the Client begins to trade, he should read the charge schedule and ensure he fully understands it. These charges may affect the Client’s net profit (if any) or increase his loss.

11. Contract Specifications and Margin Requirements

The current information is posted on NERICO BROTHERS’s website from time to time. Before the Client begins to trade, he should read the contract specifications and margin requirements, and ensure he fully understands it. This information may affect the Client’s net profit (if any) or increase his loss.

12. Termination

12.1 NERICO BROTHERS and the Client may terminate the Agreement at any time by written notice to the other party. Such notice shall not affect any transaction entered into by NERICO BROTHERS prior to the receipt of such written notice and shall be without prejudice to any of the rights, power or duties of NERICO BROTHERS or the Client prior to such receipt. NERICO BROTHERS may liquidate the Client’s account(s) as herein before provided or transfer the Client’s account(s) to such broker or dealer as agreed by the Client and NERICO BROTHERS.

12.2    Upon closure of the Client’s account(s), NERICO BROTHERS shall repay the Client any positive balance left in the Client’s account(s) or the Client shall repay NERICO BROTHERS any negative balance in the Client’s account(s).  Negative balances in such accounts shall be charged per calendar month with interest at 5% per annum above the prime lending rate applicable to the Settlement Currencies and the Client shall promptly settle all liabilities outstanding to NERICO BROTHERS, together with all costs of collection (including reasonable legal fees).

13. Indemnity

13.1 The Client shall indemnify NERICO BROTHERS in full against all actions, suits, proceedings, claims, demands, costs and expenses (including legal fees on a solicitor and client basis and any interests and commission payments) which may be taken or made against NERICO BROTHERS pursuant to or in connection with any of the Client’s accounts, the Client’s properties of any kinds and forms held by NERICO BROTHERS, the Agreement or the performance of its obligations hereunder or which may be incurred by NERICO BROTHERS in connection with any claims by it for monies payable to NERICO BROTHERS.  Without limiting the foregoing, the Client hereby agrees on demand to indemnify NERICO BROTHERS against:

a) any taxes (including all present and future taxes, levies, imposts or duties whatsoever and wheresoever imposed) for which NERICO BROTHERS is or may be liable or accountable in connection with the Client‘s positions, properties of any forms, the Agreement or the performance of its obligations hereunder provided that this indemnity shall not extend to tax on or attributable to NERICO BROTHERS’s fee income hereunder or for which a deduction or withholding has been made by NERICO BROTHERS.

b) any liabilities hereunder resulting from the fact that the Client‘s commodities and securities of any kinds and forms are registered in the name of NERICO BROTHERS or its nominee or sub-custodian, or as a result of any indemnities properly given by NERICO BROTHERS to a nominee or a sub-custodian to whom NERICO BROTHERS shall have delegated the performance of its duties hereunder against liabilities incurred by such nominee or sub-custodian in the performance of such duties.

13.2 If the Client suffers pecuniary loss by reason of NERICO BROTHERS’s default, the liability of the Investor Compensation Fund will be restricted to valid claims as provided for in the Ordinances and will be subject to the monetary limits specified in the Ordinances and accordingly there can be no assurance that any pecuniary losses sustained by reason of such a default will necessarily be recouped from the Investor Compensation Fund in full, in part or at all.

14. Dispute

Any controversy between NERICO BROTHERS and the Client shall be settled by arbitration in accordance with the provisions of the arbitration rules of the board of arbitration (if any) of the organized market or board of trade or exchange upon which the transaction giving rise to such controversy was effected or (without limitation to the foregoing) in any other arbitral forum, provided that NERICO BROTHERS only, in the sole discretion of NERICO BROTHERS, may at any time before the hearing of the arbitration give notice to the Client in writing that NERICO BROTHERS veto either the arbitral forum or the arbitration of such controversy. The sole obligation of either NERICO BROTHERS or the Client under any claims in court of law by the other shall be to pay such sum as may be awarded under arbitration pursuant to this clause, except where NERICO BROTHERS shall have vetoed such arbitration. Any award resulting from such arbitration shall be final, and a judgement upon the award rendered may be entered in any court having jurisdiction.

15. Miscellaneous

15.1 The Agreement and its enforcement shall be governed by and construed in accordance with the Hong Kong law and its provisions shall be continuous; shall cover individually and collectively all accounts which the Client may open or re-open with NERICO BROTHERS; and shall insure to the benefit of, and bind NERICO BROTHERS, NERICO BROTHERS’s successors and assigns, whether by merger, consolidation or otherwise, as well as the heirs, executors, administrators, legatees, successors, personal representatives and assigns of the Client and the Client hereby submits to the jurisdiction of the court of Hong Kong.  In the event that certain words, sentences, clauses or paragraphs in the Agreement are held unenforceable or against the law by a court of law, then only that word, sentence, clause or paragraph will be considered as such. The rest of the Agreement will be enforceable and within the law.

15.2 No provision of the Agreement shall operate to remove, exclude or restrict any rights of the Client or obligations of NERICO BROTHERS under Hong Kong law or shall in any respects be waived, altered, modified or amended unless such waiver, alteration, modification or amendment be committed in writing by NERICO BROTHERS.

15.3 (a) All transactions under the Agreement shall be subject to the Ordinances and any constitution, rules, regulations, customs, usage, rulings and interpretations, from time to time in force of the exchange or other market, and of their clearing houses, if any, where the transactions are executed.  NERICO BROTHERS is required, upon the request of HKFE or SFC, to disclose the name, beneficial identity and such other information concerning the Client as HKFE or SFC may require, and the Client agrees to provide such information as NERICO BROTHERS may require in order for NERICO BROTHERS to comply with such requirement.

(b) Transactions related to HKFE shall be subject to the rules of HKFE.  If the Client wishes to have transactions executed in markets other than those operated by the HKFE, such transactions will be subject to the rules and regulations of those markets and not the rules and regulations of the HKFE, with the result that the Client may have a markedly different level and type of protection in relation to those transactions as compared to the level and type of protection afforded by the rules of HKFE.  HKFE may take steps to limit the positions or require the closing out of contracts on behalf of the Client who in the opinion of HKFE are accumulating positions which are or may be detrimental to any particular market operated by HKFE, or which are or may be capable of adversely affecting the fair and orderly operation of any market operated by HKFE as the case may be.

(c) To the extent that NERICO BROTHERS enters into a transaction for NYMEX (New York Mercantile Exchange) Contracts on NYMEX ACCESS (an electronic trading system of NYMEX) for the account of the Client,

(i) the transaction shall be subject to the NYMEX Rules; and

(ii) if the Client is dealing in NYMEX Contracts for the benefit of another person, the Client shall ensure that in its agreement with that other person there shall be a provision to the effect of this sub-paragraph (i) and sub-paragraph (ii).

15.4 The Agreement supersedes all previous agreements and arrangements, if any, between the Client and NERICO BROTHERS in relation to the opening of the account(s) with NERICO BROTHERS.

15.5 If there is any inconsistency between the Chinese and English versions of the Agreement, the English version shall prevail.

 

Appendix 1

 

Risk Disclosure Statement and Disclaimer

 

This brief statement does not disclose all of the risks and other significant aspects of trading in futures, options and leveraged foreign exchange.  In light of the risks, you should undertake such transactions only if you understand the nature of the contracts (and contractual relationships) into which you are entering and the extent of your exposure to risk. Trading in futures, options and foreign exchange is not suitable for many members of the public.  You should carefully consider whether trading is appropriate for you in light of your experience, financial resources, objectives and other relevant circumstances.

 

Risk of Trading Futures and Options

 

The risk of loss in trading futures contracts or options is substantial.  In some circumstances, you may sustain losses in excess of your initial margin funds. Placing contingent orders, such as “stop-loss” or “stop-limit” orders, will not necessarily avoid loss. Market conditions may make it impossible to execute such orders.  You may be called upon at short notice to deposit additional margin funds. If the required funds are not provided within the prescribed time, your position may be liquidated.   You will remain liable for any resulting deficit in your account. You should therefore study and understand futures contracts and options before you trade and carefully consider whether such trading is suitable in light of your own financial position and investment objectives.  If you trade options, you should inform yourself of exercise and expiration procedures and your rights and obligations upon exercise or expiry.

 

Risk of Trading in Leveraged Foreign Exchange Contracts

 

The risk of loss in leveraged foreign exchange trading can be substantial.  You may sustain losses in excess of your initial margin funds. Market conditions may make it difficult or impossible for NERICO BROTHERS to quote the bid and ask prices for a leveraged foreign exchange contract. 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.  You may be called upon at short notice to deposit additional margin funds. If the required funds are not provided within the prescribed time, your position may be liquidated without your prior consent.  You will remain liable for any resulting deficit in your account.  You should therefore carefully consider whether such trading is suitable in light of your own financial position and investment objectives. 

 

Risk of Client Assets Received or Held Outside Hong Kong

 

Client assets received or held by the licensed or registered person outside Hong Kong are subject to the applicable laws and regulations of the relevant overseas jurisdiction which may be different from the Securities and Futures Ordinance and the rules made thereunder.  Consequently, such client assets may not enjoy the same protection as that conferred on client assets received or held in Hong Kong.

 

Risk of Providing an Authority to Hold Mail or to Direct Mail to Third Parties

 

If you provide the licensed or registered person with an authority to hold mail or to direct mail to third parties, it is important for you to promptly collect in person all contract notes and statements of your account and review them in detail to ensure that any anomalies or mistakes can be detected in a timely fashion.

 

The licensed or registered person should confirm with the client at least on an annual basis whether that client wishes to revoke the authority.

 

Risk of Margin Trading

 

The risk of loss in financing a transaction by deposit of collateral is significant.  You may sustain losses in excess of your cash and any other assets deposited as collateral with the licensed or registered person.  Market conditions may make it impossible to execute contingent orders, such as “stop-loss” or “stop-limit” orders.  You may be called upon at short notice to make additional margin deposits or interest payments.  If the required margin deposits and interest payments are not made within the prescribed time, your collateral may be liquidated without your consent.  Moreover, you will remain liable for any resulting deficit in your account and interest charged on your account.  You should therefore carefully consider whether such a financing arrangement is suitable in light of your own financial position and investment objectives.

 

Additional Risk Disclosure for Futures and Options

 

FUTURES

 

1. Effect of ‘Leverage’ or ‘Gearing’

 

Transactions in futures carry a high degree of risk. The amount of initial margin is small relative to the value of the futures contract so that transactions are ‘leveraged’ or ‘geared’. A relatively small market movement will have a proportionately larger impact on the funds you have deposited or will have to deposit; this may work against you as well as for you. You may sustain a total loss of initial margin funds and any additional funds deposited with the firm to maintain your position. If the market moves against your position or margin levels are increased, you may be called upon to pay substantial additional finds on short notice to maintain your position. If you fail to comply with a request for additional funds within the time prescribed, your position may be liquidated at a loss and you will be liable for any resulting deficits.

 

2. Risk-reducing orders or strategies

 

The placing of certain orders (e.g. ‘stop-loss’ orders, or ‘stop-limit’ orders), which are intended to limit losses to certain amounts, may not be effective because market conditions may make it impossible to execute such orders. Strategies using combinations of positions, such as ‘spread’ and ‘straddle’ positions may be as risky as taking simple ‘long’ or ‘short’ positions.

 

OPTIONS

 

3. Variable degree of risk

 

Transactions in options carry a high degree of risk. Purchasers and sellers of options should familiarize themselves with the type of option (i.e. put or call) which they contemplate trading and the associated risks. You should calculate the extent to which the value of the options must increase for your position to become profitable, taking into account the premium and all transaction costs.

 

The purchaser of options may offset or exercise the options or allow the options to expire. The exercise of an option results either in a cash settlement or in the purchaser acquiring or delivering the underlying interest. If the option is on futures, the purchaser will acquire a futures position with associated liabilities for margin (see the section on Futures above). If the purchased options expire worthless, you will suffer a total loss of your investment that will consist of the option premium plus transaction costs. If you are contemplating purchasing deep-out-of-the-money options, you should be aware that the chance of such options becoming profitable ordinarily is remote.

 

Selling (‘writing’ or ‘granting’) an option generally entails considerably greater risk than purchasing options. Although the premium received by seller is fixed, the seller may sustain a loss well in excess of that amount. The seller will be liable for additional margin to maintain the position if the market moves unfavorably. The seller will also exposed to the risk of the purchaser exercising the option and the seller will be obligated to either settle the option in cash or to acquire or deliver the underlying interest. If the option is on futures contract, the seller will acquire a position in futures contract with associated liabilities for margin (see the section on Futures above). If the option is ‘covered’ by seller holding a corresponding position in the underlying interest or a futures contract or another option, the risk may be reduced. If the option is not covered, the risk of loss can be unlimited.

 

Certain exchanges in some jurisdictions permit deferred payment of the option premium, exposing the purchaser to liability for margin payments not exceeding the amount of the premium. The purchaser is still subject to the risk of losing the premium and the transaction costs. When the option is exercised or expires, the purchaser is responsible for any unpaid premium outstanding at that time.

 

ADDITIONAL RISKS COMMON TO FUTURES AND OPTIONS

 

4. Terms and conditions of contracts

 

You should ask the firm with which you deal about the terms and conditions of the specific futures and options which you are trading and associated obligations (e.g. the circumstances under which you may become obliged to make or take delivery of the underlying interest of futures contract and, in respect of options, expiration dates and restrictions on the time of exercise). Under certain circumstances the specifications of outstanding contracts (including the exercise price of an option) may be modified by the exchange or clearing house to reflect changes in the underlying interest.

 

5. Suspension or restriction of trading and pricing relationships

 

Market conditions (e.g. illiquidity) and/ or the operation of the rules of certain markets (e.g. the suspension of trading in any contract or contract month because of price limit or ‘circuit breakers’) may increase the risk of loss by making it difficult or impossible to effect transactions or liquidate/ offset positions. If you have sold options, this may increase the risk of loss.

 

Further, normal pricing relationships between the underlying interest and the futures, and the underlying interest and the option may not exist. This can occur when, for example, the futures contract underlying the option is subject to price limits while the option is not. The absence of an underlying reference price may make it difficult to judge ‘fair value’.

 

6. Deposited cash and property

 

You should familiarize yourself with the protections accorded money or other properties you deposit for domestic and foreign transactions, particularly in the event of a firm insolvency or bankruptcy. The extent to which you may recover your money or property may be governed by specific legislation or local rules. In some jurisdictions, property that had been specifically identifiable as your own will be pro-rated in the same manner as cash for purposes of distribution in the event of a shortfall.

 

7. Commission and other charges

 

Before you begin to trade, you should obtain a clear explanation of all commission, fees and other charges for which you will be liable. These charges will affect your net profit (if any) or increase your loss.

 

8. Transactions in other jurisdictions

 

Transactions on markets in other jurisdictions, including markets formally linked to a domestic market, may expose you to additional risk. Such markets may be subject to regulation that may offer different or diminished investor protection. Before you trade you should enquire about any rules relevant to your particular transactions. Your local regulatory authority will be unable to compel the enforcement of the rules of regulatory authorities or markets in other jurisdictions where your transactions have been effected. You should ask the firm with which you deal for details about the types of redress available in both your home jurisdiction and other relevant jurisdictions before you start to trade.

 

9. Currency risks

 

Any transaction involving foreign currencies, including leveraged foreign exchange trades, involves additional risks not common to transactions denominated entirely in your domestic currency. Currency rates can be highly volatile. The profit or loss in transactions in foreign currency-denominated contracts (whether they are traded in your own or another jurisdictions) will be affected by fluctuations in currency rates where there is a need to convert from the currency denomination of the contract to another currencies.

 

10. Trading facilities

 

Most open-outcry and electronic trading facilities are supported by computer-based component systems for the order-routing, execution, matching, registration or clearing of trades. As with all facilities and systems, they are vulnerable to temporary disruption or failure. Your ability to recover certain losses may be subject to limit on liability imposed by the system provider, the market, the clearing house and/ or member firms. Such limits may vary: you should ask the firm with which you deal for details in this respect.

 

11. Electronic trading

 

Trading on an electronic trading system may differ not only from trading in an open-outcry market but also from trading on other electronic trading systems. If you undertake transactions on an electronic trading system, you will be exposed to risk associated with the system including the failure of hardware and software. The result of any system failure may be that your order is either not executed according to your instructions or is not executed at all. Moreover, communications and personal data may be accessed by unauthorized third party; and there are risks of misunderstanding or errors in any communication and such risks shall be absolutely borne by you.

 

12 Risk of slippage

 

Slippage can be a common occurrence in forex trading. Clients should familiarize themselves with how slippage can occur, so as to effectively manage associated risks. This could happen during periods of high volatility or pricing gaps in the market due to unexpected news or economic data announcements, etc. When an order is filled at a more favorable price, it is known as positive slippage; alternatively, when an order is filled at an unfavorable price to the original order, it is referred to as negative slippage.

 

13 Rollover Risk

 

Depending on the interest rate differential between the two currencies traders can earn rollover or pay rollover. Depending on the volume of the transaction, rollover can add a significant extra cost or profit to the transaction.

 

Subject to market conditions, Stop Loss Orders shall be executed either at the exact exchange rate selected by you, in which case the amount will be calculated automatically, or at the exact amount of loss selected by you, in which case the exchange rate will be calculated accordingly. A transaction of that nature shall be executed as soon as the distinctive (“indicative”) exchange rate is found on the electronic trading platform which, including our spread, is either identical to the order given by you, or indicates an identical amount of loss declared by you. In case no market information is available or under abnormal market conditions when our liquidity provider(s) do not transfer a price to us, the order may return an error message and could be cancelled.

 

14 Credit Risk

 

Clients are unsecured creditors of the issuer of foreign exchange contracts and they have no preferential claim to any assets an issuer may hold. Therefore, clients are exposed to credit risk in respect to the issuer.

 

15 Off-exchange transactions

 

In some jurisdictions, and only then in restricted circumstances, firms are permitted to effect off-exchange transactions. The firm with which you deal may be acting as your counter party to the transaction. It may be difficult or impossible to liquidate an existing position, to assess the value, to determine a fair price or to assess the exposure to risk. For these reasons, these transactions may involve increased risks. Off-exchange transactions may be less regulated or subject to a separate regulatory regime. Before you undertake such transactions, you should familiarize yourself with applicable rules and attendant risks.

 


DISCLAIMER delivered pursuant to Circular Ref CIR/LEGAL/980141 issued by the Hong Kong Futures Exchange Limited dated 8th May 1998

 

Stock indices and other proprietary products upon which contracts traded on Hong Kong Futures Exchange Limited (the “Exchange”) may be based may from time to time be developed by the Exchange. The HKFE Taiwan Index is the first of such stock indices developed by the Exchange. The HKFE Taiwan Index and such other indices or proprietary products as may from to time be developed by the Exchange (the “Exchange Indices”) are the property of the Exchange. The process of compilation and computation of each of the Exchange Indices is and will be the exclusive property of and proprietary to the Exchange. The process and basis of compilation and computation of the Exchange Indices may at any time be changed or altered by the Exchange without notice and the Exchange may at any time require that trading in and settlement of such futures or options contracts based on any of the Exchange Indices as the Exchange may designate be conducted by reference to an alternative index to be calculated. The Exchange does not warrant or represent or guarantee to any Member or any third party the accuracy or completeness of any of the Exchange Indices or their compilation and computation or any information related thereto and no such warranty or representation or guarantee of any kind whatsoever relating to any of the Exchange Indices is given or may be implied. Further, no responsibility or liability whatsoever is accepted by the Exchange in respect of the use of any of the Exchange Indices or for any inaccuracies, omissions, mistakes, errors, delays, interruptions, suspensions, changes or failures (including but not limited to those resulting from negligence) of the Exchange or any other person or persons appointed by the Exchange to compile and compute any of the Exchange Indices in the compilation and computation of any of the Exchange Indices or for any economic or other losses which may be directly or indirectly sustained as a result thereof by any Member or any third party dealing with futures or options contracts based on any of the Exchange Indices. No claims, actions or legal proceedings may be brought by any Member or any third party against the Exchange in connection with or arising out of matters referred to in this disclaimer. Any Member or any third party engages in transactions in futures and options contracts based on any of the Exchange Indices in full knowledge of this disclaimer and can place no reliance on the Exchange in respect of such transactions.

 

DISCLAIMER delivered pursuant to Relevant Provision of the Regulations for the Hang Seng Index Futures Market, the Hang Seng Sub-Index Futures Market

 

The Hang Seng Index and each of the four Sub-Indices of the Hang Seng Index (namely Hang Seng Finance Sub-index, Hang Seng utilities Sub-Index, Hang Seng Properties Sub-Index and Hang Seng Commerce & Industry Sub-Index [collectively “the Hang Seng Sub-Index”]), their respective marks, names and processes of compilation and computation are the exclusive property of and proprietary to Hang Seng Data Service Limited and are published, compiled and computed by HSI Services Limited. HSI Services Limited has granted to the Exchange by way of license the use of the Hang Seng Index and the Hang Seng Sub-Indices solely for the purpose of and in connection with the creation, marking and trading of futures and index option contracts based on the Hang Seng Index and the Hang Seng Sub-Indices (collectively “the Futures and Index Option Contracts”). The process and basis of compilation and computation of Hang Seng Index and each of the Hang Seng Sub-Indices and any of the related formula and formulae, constituent stocks and factors may at any time be changed or altered by HSI Services Limited without notices and the Exchange may at any time require that trading in and settlement of such of the Futures Contracts and Index Option as the Exchange may designate be conducted by reference to an alternative index or alternative indices to be calculated. Neither the Exchange nor Hang Seng Data Services Limited nor HSI Services Limited warrants or represents or guarantees to any Exchange Participant or any third party the accuracy or completeness of the Hang Seng Index and/or any of the Hang Seng Sub-Indices and its compilation and computation or any information related thereto and no such warranty or representation or guarantee of any kind whatsoever relating to the Hang Seng Index and/or any of the Hang Seng Sub-Indices is given or may be implied. Further, no responsibility or liability whatsoever is accepted by the Exchange, Hang Seng Data Services Limited or HSI Services Limited in respect of the use of the Hang Seng Index and/or any of the Hang Seng Sub-Indices for the purpose of and in connection with the Futures and Index Option Contracts and/or dealings therein, of for any inaccuracies, omission, mistakes, errors, delays, interruptions, suspension, changes of failures (including but not limited to those resulting from negligence) of HSI Services Limited in the compilation and computation of Hang Seng Index and/or any of the Hang Seng Sub-Indices or for any economic or other losses which may be directly or indirectly sustained as a result thereof by any Exchange Participant or any third party dealing with the Futures and Index Option Contracts. No Claims, actions or legal proceedings may be brought by any Exchange Participant or any third party against the Exchange and/or Hang Seng Data Services Limited and/or HSI Services Limited in connection with or arising out of matters referred to in this disclaimer. Any Exchange Participant or any third party deals in the Futures and Index Option Contracts in full knowledge of this disclaimer and can place no reliance whatsoever on the Exchange, Hang Seng Data Services Limited and/or HSI Services Limited.

 

At Nerico Brothers Limited (“NERICO BROTHERS”), we want to provide the best service possible to our customers. One way that we do this is by using customer information to provide our customers with convenient access to the right products and services. We also recognize that our customers have important expectations regarding the use of that information.  The following is our policy on the collection and use of customers’ personal data.

 

1. From time to time, it is necessary for customers to supply NERICO BROTHERS with data that are personal data (“Data”) for the purposes of the Personal Data (Privacy) Ordinance.  The purposes for which Data relating to a customer may be used are as follows:-

u The daily operation of the services and facilities provided to customers;

u Conducting credit checks;

u Assisting other financial institutions to conduct credit checks;

u Ensuring ongoing credit worthiness of customers;

u Designing financial services or related products or customers’ use;

u Marketing financial services or related products;

u Determining the amount of indebtedness owed to or by customers;

u Collection of amounts outstanding from customers and those providing security for customers’ obligations;

u Meeting the requirements to make disclosure under the requirements of any legal and/or regulatory requirements or court orders binding on NERICO BROTHERS; and

u Purposes relating thereto.

Use of data in direct Marketing NERICO BROTHERS intends to use the client’s data in direct marketing and NERICO BROTHERS requires client’s consent (which includes an indication of no objection) for that purpose.  If client does not wish NERICO BROTHERS to use his/her data for use in direct marketing, client may exercise his/her opt-out right by notifying NERICO BROTHERS at any time and without charge. (To opt-out, please send your request to our customer services with your account number, phone number or other contact information by email cs@nericobrothers.com , fax (852) 3101 4007 or post to Rm 1101, 11/F, Lee Garden One, 33 Hysan Avenue, Causeway Bay, Hong Kong.

 

2. Failure to supply such data may result in NERICO BROTHERS being unable to open or continue accounts or establish or continue margin facilities or provide advisory or investment banking services.

 

3. It is also the case that data are collected from customers in the ordinary course of the continuation of the investment banking relationship, for example, when customers write cheques, deposit or money.

 

4. Data held by NERICO BROTHERS relating to a customer will be kept confidential but NERICO BROTHERS may provide such information to:-

u Any agent, contractor or third party service provider who provides administrative, telecommunications, computer, trade execution, payment or other services to NERICO BROTHERS in connection with the operation of its business;

u Any other person under a duty of confidentiality to NERICO BROTHERS including a related company of NERICO BROTHERS which has undertaken to keep such information confidential;

u Any financial institution with which the customer has or proposes to have dealings;

u Any actual or proposed assignee of NERICO BROTHERS or participant or sub-participant or transferee of NERICO BROTHERS’s rights in respect of the customer; and

u Any exchanges, entities, agency, regulatory bodies or Government in any jurisdictions if required by law or pursuant to any court orders, rules or regulations to which NERICO BROTHERS are subject. In such cases, NERICO BROTHERS is usually under a duty of secrecy and will not be able to notify a customer or seek his consent in relation to such release of information.

 

5. NERICO BROTHERS’s customers may have the rights to

u Check whether NERICO BROTHERS holds data about him and the right of access to such data;

u Require NERICO BROTHERS to correct any data relating to him which is inaccurate;

u Ascertain NERICO BROTHERS’s policies and practices in relation to data and to be informed of the kind of personal data held by NERICO BROTHERS;

u NERICO BROTHERS may charge a reasonable fee for processing such data access request.

6 The person to whom requests for access to data or correction of data or for     information regarding policies and practices and kinds of data held are to be addressed as follows:

The Data Protection Officer

Nerico Brothers Limited

Rm 1101, 11/F

   Lee Garden One

   33 Hysan Avenue

   Causeway Bay, Hong Kong

Tel No: (852) 2125 3900




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