FTD Limited (hereinafter the “Company”) is a global online trading broker, whose registered office is at Kingston Chambers, PO Box 173, Road Town, Tortola, British Virgin Islands, and incorporated under the laws of the British Virgin Islands as a BVI Business Company with registration number 1944994, licensed and regulated by the BVI Financial Services Commission (FSC) under Investment Business License number SIBA/L/19/1123.
The purpose of the Risk Disclosure Notice is to provide the Customer appropriate guidance on the nature and risks of the specific types of financial instruments offered by FTD Limited. It is important that you fully understand the risks involved before making a decision to trade FX, CFDs or Future Contracts. This Notice is based on the BVI FSC adopted Regulatory Code, 2009 (as amended from time to time) under the Financial Services Commission Act, 2001 (the “FSC Act”) regarding the provision of investment services, the exercise of investment activities and the operation of regulated and OTC markets. It should be noted that this Notice does not purport to disclose or discuss all of the risks and other significant aspects of all transactions entered into with or through the Company. We outline the general nature of the risks of dealing in Financial Instruments on a fair and non-misleading basis. Therefore, the Customer acknowledges, understands and agrees with the risks, disclosed below.
Leveraged trading in futures, foreign currency contracts or other off-exchange products (CFDs) on margin carries a high level of risk and may not be suitable for everyone. We advise you to carefully consider whether trading is appropriate for you in light of your personal circumstances. You may lose more than you invest. If the price of the underlying financial product moves against your position, you may sustain a total loss of the Margin Requirement in respect of your account that you deposit with or pay to FTD to establish or maintain a position and, you may be required to pay substantial additional funds at short notice but if you fail to do so within the required time, your investment position may be liquidated at a loss to you and you will be liable for any remaining deficit in your trading account. The close out process is automatically triggered when the equity in your account falls below the Margin Close-Out Amount. The Margin Close-Out Rule is imposed on a per account basis. FTD recommend that you fully understand the risks involved before the start of margin trading. CFDs, MT5 hedging capabilities and leverage ratios exceeding up to 1:100 are not available at residents of countries where its distribution, or use by any person, would be contrary to local law or regulation.
Speculative trading is the trading of leveraged financial instruments, without the intention of actually obtaining the underlying asset. Traders buy or sell those contracts with the intention of closing their positions before the maturity date. They expect the price of related contract to move in their favor. Speculative trading in a financial instrument involves high risk, in expectation of significant returns. This type of trading is a challenging prospect, even to customers with wider market experience and an understanding of the investment risks involved. Only funds that a customer would allocate to high-risk investments should be used in margin trading.
The CFDs available for trading through the Company are non-deliverable spot transactions, giving an opportunity to make profit on changes in currency rates, indices and commodities. Prices could move rapidly and If the underlying instrument movement is in the Customer's favor, the Customer can make a significant profit, but an equally small adverse market movement can quickly result in the loss of the Customer’s entire initial deposit. The Customer must not enter into CFDs unless he/she is willing to undertake the risk of losing all the money he/she has invested.
Trading in a Contract for Differences carries the same risks as trading in a future or an option contract and the Customer should be aware of the risks involved. Transactions in CFDs may also have a contingent liability and Customers should be aware of the implications of their outcomes.
CFDs on FX, indices and commodities are off-exchange transactions. The Customer acknowledges that the transactions entered in CFDs with the Company are not undertaken on a recognized exchange, rather, they are undertaken over the counter (OTC) and as such they may expose the Customer to greater risks than regulated exchange transactions. Despite some off-exchange markets are highly liquid, transactions in off-exchange or nontransferable derivatives may involve greater risk than investing in on-exchange derivatives. It may be impossible 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. So CFD trading does not have the same protection as trading in regulated exchange.
Before Customers begin to trade, they should make themselves aware of all commissions and other charges for which they will be held liable. If any charges are not expressed in monetary terms, the Customer should ensure that they understand the true monetary value of the charges. To open a position in some types of CFDs the Customer may be required to pay commission and/or swap fees, the amount of which is disclosed on the Company Website. The value of opened positions in some types of CFDs is increased or reduced by a daily swap rate throughout the life of the contract. Swap rates are based on prevailing market interest rates, which may vary over time.
Market volatility may affect the price, execution speed and volume of the trading instrument. Therefore, trading during volatile conditions, where unexpected economic events occur or important news and data releases are made, is highly risky and since the best execution criteria might not be applied. If prices move against you in a fast market, the Company may be unable to execute your instructions at the requested price. It is important to refer to slippage which can occur during periods of high volatility. As an industry standard, the execution pricing will always be provided at the first available price.
Market risk refers to the overall economy, while specific risk that an investment may face due to fluctuations in the market. Some of such risks include currency, interest rate, inflation, natural disasters and political instability. Some market risks are not possible to foresee and may affect the value of your investments. It should be noted that global events and other factors are not controllable by anyone can impact the value of your investments. Therefore, customers need to acknowledge and accept the potential uncontrollable market risks beforehand.
The Company places a significant importance on the speed of market execution of the Customer’s placed orders within the limitations of technology. There are certain risks due to the nature of internet-based trading. These may include, but not be limited to, the failure of hardware, software, and Internet connection. Since the Company does not control internet providers, their equipment and technology, internet connection speed or reliability, configuration of customer equipment or reliability of its connection. FTD cannot be held responsible for communication failures, public electricity network failures, distortions or delays when trading via the Internet.
Trading platforms software uses a sophisticated order entry mechanism and order tracking system. FTD and counterparties do their best to fill customer trade at the price requested. Internet trading, regardless of how convenient or efficient, does not necessarily reduce risks associated with online trading.
The Customer also may give instructions to trading desk by telephone to modify or close a position. The Company is not responsible for disruption, failure or malfunction of telephone facilities and does not guarantee its telephone availability. For the avoidance of doubt, the Customer is aware that the Company may not be reachable by telephone at all times and thus the Customer can place his/her orders through online access to the Company’s Trading Platform. If the Customer undertakes transactions on a Trading Platform, the Company bears no responsibility for any loss that arises as a result of encrypted information sent to the Customer by the Company, that has been accessed via unauthorized means. Security of his/her account access data is customer’s sole responsibility and as highlighted before, he/she will be exposed to risks associated with the system, including the failure of hardware and software.
The Customer is responsible for any taxes and/or any other duty which may accrue in respect of his/her trades in any Financial Instruments including derivative instruments. In case of changes in legislation or customer’s personal circumstances, the Company does not warrant that no tax and/or any other stamp duty will be payable.
The funds that a Customer deposits in its FTD account are held in segregated accounts at such banks. Customer funds will be administered according to British Virgin Islands bankruptcy law in the event of the bankruptcy or insolvency of FTD.
The Company may transfer money received from the Customer to a third party (e.g. a bank, liquidity provider, intermediate broker, OTC counterparty) to hold or control in order to effect a transaction through or with that person, or to satisfy the Customer's obligation to provide collateral (e.g. margin requirement) in respect of a transaction. The Company has no responsibility for any acts or omissions of any third party to whom it will pass money received from the Customer. The third party to whom the Company will pass money, may hold it in an omnibus account and it may not be possible to separate it from the Customer's money, or the third party's money. In the event of the insolvency or any other analogous proceedings in relation to that third party, the Company may only have an unsecured claim against the third party on behalf of the Customer, and the Customer will be exposed to the risk that the money received by the Company from the third party, is insufficient to satisfy the claims of the Customer with claims in respect of the relevant account. The Company does not accept any liability or responsibility for any resulting losses.
The spread is the gap between the bid and the ask prices of a financial instrument. The risk occurs when the Customer trades one or more financial instrument contracts and for the hedging purpose, purchases one or more to balance the effect of an opposite. It should be recognized, though, that the risk from a widening spread could be considered. An adverse widening or narrowing of the spread during a particular time period may exceed the change in the overall level of the Customer trading account. And it is possible to experience losses while those contracts put on risk to overall margin limits of the Customer. Even those are hedged position may cause risk. And also, trading by that way increases transaction costs because the Customer will be charged commissions (at some CFDs and Futures) and/or undertakes the risk of swap differences on each opened contract.
Customers trading at the FX, CFDs and Futures markets also undertake different types of risk. One of the most well-known risk is called as a weekend risk. There are several reasons not to leave a position open over a weekend in most markets. Various events may arise over a weekend (Friday from [10:00 p.m. GMT] till Sunday at [10:00 p.m. GMT]), or during a holiday when the financial markets generally close for trading, that may cause the markets to open at a significantly different price from where they were closed and hence any stop loss would be ineffective.
FTD does not provide market recommendations and the Customer acknowledges that the Company services do not include the provision of investment advice in financial products. The Customer represents that he/she has been solely responsible for making his/her own independent appraisal and investigation into the risks of the Transaction. The content published on the Web Site is solely for informational purposes and is not to be construed as solicitation or any offer to buy or sell any FX transactions or derivatives. The Company does not represent or guarantee that any content on the Web Site is accurate, nor that such content is a complete statement or summary of the marketplace. Nothing contained in the Web Site is intended to constitute professional advice and the Customer should not rely on the data or other information for making financial decisions. The Customer should consult with an appropriate professional for specific investment advice.
The Customer agrees that the Company is not responsible for any liabilities, claims, damages, costs and expenses, including attorney’s fees, incurred in connection with the information in the Web Site provided by the Company.
The Company provides no guarantee of profit or of avoiding losses when trading. The Customer has received no such guarantees from the Company or from any of its representatives. The Customer must be aware of the risks inherent in trading and is financially able to bear such risks and withstand any losses incurred.
In case of a force majeure event as; acts of war, terrorist attacks, natural disasters, financial market trading stops, currency interventions, government decisions, instability on financial markets with rapid drops of liquidity, the Customer shall accept the risk of any loss arising.