Risk Disclosure of Over-The-Counter Transaction

 

1.     You should only undertake Over-The-Counter ("OTC") trading if you understand the nature of such trading and such trading facilities and the extent of your exposure to risks. If in doubt, you should seek independent professional advice.

 

2.     OTC transactions are subject to risk, including counterparty risk, including but not limited to the risk that the particular securities fail to subsequently be listed on the Exchange, lower liquidity and higher volatility. Settlement of the relevant transactions is not guaranteed, and you will be responsible for any losses and/or expenses resulting from your and/or your counterparty's settlement failures.

 

3.     The prices of Securities traded on OTC market may differ significantly from their opening or traded prices transacted during the regular market hours upon the listing of the Securities on the Exchange. The prices displayed on the OTC market may not reflect the prices in other concurrently operating automated trading systems dealing in the same Securities.

 

4.     OTC transactions may be cancelled and void if that particular Securities subsequently fails to list on the Exchange. The clients order may only be partially executed, or not at all, as a result of the lower liquidity in OTC market as compared to regular market hours of the Exchange. There may also be greater volatility in OTC market than in regular market hours of the Exchange. The lower liquidity and higher volatility in OTC market may then result in wider than normal spreads for a particular type of Securities.

 

5.     News announcements made by the issuers may affect the price of their Securities after regular market hours. Similarly, important financial information is often announced outside regular market hours. In OTC market, these announcements may occur during trading and may cause an exaggerated and unsustainable effect on the price of a particular type of Securities.

 

6.     In particular, the OTC market is not regulated by the Exchange and the relevant transaction will not be covered by the Investor Compensation Fund until it is properly recorded on the trading system of the Exchange upon the listing of the Securities on the Exchange.