RISK DISCLOSURE STATEMENTRISK DISCLOSURE STATEMENT

RISK DISCLOSURE STATEMENT

To .........................(insert full names of prospective clients), prospective clients —

This statement is given to you as required by section 87 of the Futures Industry Act 1986.

The risk of loss in trading in futures contracts can be substantial. You should therefore carefully consider whether that kind of trading is appropriate for you in the light of your financial circumstances. In deciding whether or not you will become involved in that kind of trading, you should be aware of the following matters:

(a) You could sustain a total loss of the initial margin funds that you deposit with your futures broker to establish or maintain a position in a futures market.

(b) If the futures market moves against your position, you may be required, at short notice, to deposit with your futures broker additional margin funds in order to maintain your position. Those additional funds may be substantial. If you fail to provide those additional funds within the required time, your position may be liquidated at a loss and in that event you will be liable for any shortfall in your account resulting from that failure.

(c) Under certain conditions, it could become difficult or impossible for you to liquidate a position (this can, for example, happen when there is a significant change in prices over a short period).

(d) The placing of contingent orders (such as a “stop-loss” order) may not always limit your losses to the amounts that you may want. Market conditions may make it impossible to execute such orders.

(e) A “spread” position is not necessarily less risky than a simple “long” or “short” position.

(f) The high degree of leverage that is obtainable in futures trading because of small margin requirements can work against you as well as for you. The use of leverage can lead to large losses as well as large gains.

(g) If you propose to trade in futures options, the maximum loss in buying an option is the amount of the premium, but the risks in selling an option are the same as in other futures trading.

This statement does not disclose all of the risks and other significant aspects involved in trading on a futures market. You should therefore study futures trading carefully before becoming involved in it.

Full name(s) of the prospective client(s): ............................

(Please print)

Date on which the statement is signed by the prospective client(s)....19..

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Signature of the futures broker by whom this statement is given

Full name and the address of the futures broker by whom this statement is given —