This notice is provided to you in accordance with the provisions of the Cyprus Investment Services and Activities and Regulated Markets Law of 2007 and in accordance with the Markets in Financial Instrument Directive (MiFID) of the European Parliament and Council.
General Risk Warning Notice
1. Risk Warning
All prospective Clients should read carefully the following risk disclosure and warnings contained in this document. However it is noted that this document cannot and does not disclose or explain all of the risks and other significant aspects involved in dealing in Financial Instruments (including CFDs). The notice was designed to explain in general terms the nature of the risks involved when dealing in Financial Instruments on a fair and non-misleading basis.
The Client should not engage in any investment directly or indirectly in Financial Instruments unless he knows and understands the risks involved for each one of the Financial Instruments. iFOREX will not provide the Client with any investment advice relating to investments or possible transactions in investments or in Financial Instruments or make investment recommendations of any kind. So, prior to applying for a trading account with iFOREX, or making an order the Client should consider carefully whether investing in a specific Financial Instrument is suitable for him in the light of his circumstances and financial resources. If the Client does not understand the risks involved he should seek advice and consultation from an independent financial advisor. If the Client still does not understand the risks involved in trading in any Financial Instruments, he should not trade at all.
The Client should acknowledge that he runs a great risk of incurring losses and damages as a result of the purchase and/or sale of any Financial Instrument and accept that he is willing to undertake this risk.
2. General Risks
2.1 The Client is warned of the following risks:
(a) iFOREX does not and cannot guarantee the initial capital of the Client’s portfolio or its value or any money invested in any Financial Instrument.
(b) The Client should acknowledge that, regardless of any information which may be offered by iFOREX, the value of any investment in Financial Instruments may fluctuate downwards or upwards and it is even probable that the investment may become of no value.
(c) Information of the previous performance of a Financial Instrument does not guarantee its current and/or future performance. The use of historical data does not constitute a binding or safe forecast as to the corresponding future performance of the Financial Instruments to which the said information refers.
(d) The Client is hereby advised that the transactions undertaken through the dealing services of iFOREX may be of a speculative nature. Large losses may occur in a short period of time.
(e) Some Financial Instruments may not become immediately liquid as a result for example of reduced demand and the Client may not be in a position to sell them or easily obtain information on the value of these Financial Instruments or the extent of the associated risks.
(f) When a Financial Instrument is traded in a currency other than the currency of the Client’s country of residence, any changes in the exchange rates may have a negative effect on its value, price and performance.
(g) A Financial Instrument on foreign markets may entail risks different to the usual risks of the markets in the Client’s country of residence. In some cases, these risks may be greater. The prospect of profit or loss from transactions on foreign markets is also affected by exchange rate fluctuations.
(h) A Derivative Financial Instrument (i.e. option, future, forward, swap, CFD, NDF) may be a non delivery spot transaction giving an opportunity to make profit on changes in currency rates, commodity, stock market indices or share prices called the underlying instrument. The value of the Derivative Financial Instrument may be directly affected by the price of the relevant underlying instrument.
(i) The Client must not purchase a Derivative Financial Instrument unless he is willing to undertake the risks of loosing entirely all the money which he has invested and also any additional commissions and other expenses incurred.
(j) The insolvency of iFOREX or of a Bank or Broker used by iFOREX to effect its transactions may lead to the Client’s positions being closed out against his wishes.
(k) Under certain market conditions it may be difficult or impossible to execute an order.
(l) A Bank or Broker through whom iFOREX may deal with could have interests contrary to the Client’s interests.
(m) The Client’s attention is expressly drawn to currencies traded so irregularly or infrequently that it cannot be certain that a price will be quoted at all times or that it may be difficult to effect transactions at a price which may be quoted owing to the absence of a counter party.
(n) Trading on-line, no matter how convenient or efficient, does not necessarily reduce risks associated with currency trading.
(o) There may be situations, movements and/or conditions occurring at weekend, in the beginning of week or intra-day after release of significant macroeconomic figures, economic or political news that make currency markets to open with price levels that may substantially differ from previous prices. In this case, there exists a significant risk that orders issued to protect open positions and open new positions may be executed at prices significantly different from those designated.
(p) There is a risk that the Client’s trades in Financial Instruments may be or become subject to tax and/or any other duty for example because of changes in legislation or his personal circumstances. iFOREX does not warrant that no tax and/or any other stamp duty will be payable. The Client should be responsible for any taxes and/or any other duty which may accrue in respect of his trades.
(q) Before the Client begins to trade, he should obtain details of all commissions and other charges for which the Client will be liable. If any charges are not expressed in money terms (but for example as a dealing spread), the Client should ask for a written explanation, including appropriate examples, to establish what such charges are likely to mean in specific money terms.
(r) iFOREX may be required to hold the Client’s money in an account that is segregated from other clients and iFOREX’s money in accordance with current regulations, but this may not afford complete protection.
Additional Risk Disclosure
1. Third Party Risks
(a) iFOREX may pass money received from the Client to a third party (e.g. a bank) to hold or control in order to effect a Transaction through or with that person or to satisfy the Client’s obligation to provide collateral (e.g. initial margin requirement) in respect of a Transaction. iFOREX has no responsibility for any acts or omissions of any third party to whom it will pass money received from the Client.
(b) The third party to whom iFOREX will pass money may hold it in an omnibus account and it may not be possible to separate it from the Client’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, iFOREX may only have an unsecured claim against the third party on behalf of the Client, and the Client will be exposed to the risk that the money received by iFOREX from the third party is insufficient to satisfy the claims of the Client with claims in respect of the relevant account. iFOREX does not accept any liability or responsibility for any resulting losses.
(c) Client money might be held outside of the European Economic Area and may be subject to the law of a jurisdiction of that territory, and clients’ rights may differ accordingly.
(d) iFOREX may deposit client money with a depository who may have a security interest, lien or right of set-off in relation to that money.
(e) A Bank or Broker through whom the Company may deal with could have interests contrary to the Client’s Interests.
2. Charges and Taxes
(a) There is a risk that the Client’s trades in Financial Instruments may be or become subject to tax and/or any other duty for example because of changes in legislation or his personal circumstances. iFOREX does not warrant that no tax and/or any other stamp duty will be payable. The Client is responsible for any taxes and/or any other duty which may accrue in respect of his trades.
(b) Before the Client begins to trade, he should obtain details of all commissions and other charges for which the Client may be liable. If any charges are not expressed in money terms (but for example as a dealing spread), the Client should ask for a written explanation, including appropriate examples, to establish what such charges are likely to mean in specific money terms.
(c) Before the Client begins to trade, he/she should obtain details of all commissions and other charges for which the Client will be liable, which may be found on iFOREX’s website. Some charges may not be expressed in money terms but for example as a dealing spread.
3. Technical Risks:
(a) If the Client undertakes transactions on an electronic system, he will be exposed to risks associated with the system including the failure of hardware and software (Internet / Servers). The result of any system failure may be that his order is either not executed according to his instructions or it is not executed at all. iFOREX does not accept any liability in the case of such a failure.
(b) The Client shall be responsible for the risks of financial losses caused by failure of information, communication, electronic or other systems.
(c) iFOREX has no responsibility if authorized third persons have access to information, including electronic addresses, electronic communication and personal data, access data when the above are transmitted between iFOREX or any other party, using the internet or other network communication facilities, telephone, or any other electronic means.
(d) The Client acknowledges that the unencrypted information transmitted by e-mail is not protected from any unauthorized access.
(e) At times of excessive deal flow the Client may have some difficulties to be connected over the phone or the Trading Platform, especially in fast Market (for example, when key macroeconomic indicators are released).
(f) The Client acknowledges that the internet may be subject to events which may affect his access to iFOREX Website and/or Trading System, including but not limited to interruptions or transmission blackouts, software and hardware failure and internet disconnection. iFOREX is not responsible for any damages or losses resulting from such events which are beyond its control or for any other losses, costs, liabilities, or expenses (including, without limitation, loss of profit) which may result from the Client’s inability to access iFOREX Website and/or Trading System or delay or failure in sending Orders or Transactions.
(g) iFOREX is not an Internet Service Provider and cannot be responsible for not fulfilling any obligations with its Clients because of internet connection failures or public electricity network failures or hacker attacks.
(h) The Client is warned that when trading in an electronic platform he assumes risk of financial loss which may be a consequence of amongst other things:
- Failure of Client’s devices, software and poor quality of connection;
- iFOREX’s or Client’s hardware or software failure, malfunction or misuse;
- Improper work of Client’s equipment;
- Wrong setting of Client’s terminal;
- Delayed updates of Client’s terminal.
(i) In connection with the use of computer equipment and data and voice communication networks, the Client bears the following risks amongst other risks in which cases iFOREX has no liability of any resulting loss:
- Power cut of the equipment on the side of the Client or the provider, or communication operator (including voice communication) that serves the Client.
- Physical damage (or destruction) of the communication channels used to link the Client and provider (communication operator), provider, and the trading or information server of the Client.
- Outage (unacceptably low quality) of communication via the channels used by the Client, or the channels used by the provider, or communication operator (including voice communication) that are used by the Client.
- Wrong or inconsistent with requirements settings of the Client terminal.
- Untimely update of the Client Terminal.
- When carrying out transactions via the telephone (land or cell phone lines) voice communication, the Client runs the risk of problematic dialing, when trying to reach an employee of the broker service department of iFOREX due to communication quality issues and communication channel loads.
- The use of communication channels, hardware and software, generate the risk of nonreception of a message (including text messages) by the Client from iFOREX.
- Trading over the phone might be impeded by overload of connection.
- Malfunction or non-operability of the trading system (platform), which also includes the Client Terminal.
- Outage (unacceptably low quality) of communication via the channels used by iFOREX, in particular physical damage (destruction) of the communication channels by third parties.
4. Trading Platform
The Client acknowledges that the only reliable source of Quotes is that of the live Server feed. Quotes in the Client terminal are not a reliable source of information, since the connection between the Client terminal and the server may be disrupted at some point and some of the quotes simply may not reach the Client terminal.
The Client acknowledges that when the Client closes the order placing/modifying/deleting window or the position opening/closing window, the instruction, which has been sent to the Server, shall not be cancelled.
5. Force Majeure Events
In case of Force Majeure Events the Client shall accept the risk of financial loss.
iFOREX’s insolvency or default, may lead to positions being liquidated or closed out without the Client’s consent. In certain circumstances, the Client may not get back the actual assets which he lodged as collateral and he may have to accept any available payments in cash.
7. Foreign Currency
When a financial instrument traded in a currency other than the currency of the Client’s country of residence, any changes in the exchange rates may have a negative effect on its value, price and performance and may lead to losses for the Client.