PRODUCT RISK DISCLOSURES

(a) General Risk Disclosures

Past performance of an investment is not necessarily a guide as to its future performance. The value of the investments can go up or down. Before making any investment decision, ensure that you fully understand:

(i) how the Authorised Investment works and the market in which the investment is traded in;

(ii) the applicable terms and conditions and be clear on your rights and obligations; and

(iii) all relevant risks, which may include legal and tax risks that you may need to seek professional advice for.

Some investments have a maturity date. This means that you may not be able to sell your investment before it matures, or you may have to sell them at a loss before such maturity date.

(b) Credit Risk

You take on the risk of the product issuer and will likely lose your money if the issuer gets into financial difficulties. Diversify your investments and avoid investing a large portion of your money in a single issuer.

(c) Liquidity Risk

For investments that are illiquid, you may not be able to sell such investments, or you may have to sell them at a loss.

(d) Foreign Exchange Risk

Where an investment involves conversion to a different currency, you will be subject to the risk of exchange rate fluctuations that may cause a loss on such investment. Exchange controls may also be applicable in respect of certain foreign currencies.

(e) Interest Rate Risk

Interest rate fluctuations may have an adverse impact on the value of certain investments, in particular, debt instruments, such as bonds or money market instruments.

(f) Market Risk

Market movements cannot be predicted accurately and you may sustain substantial losses on your investment amount if market conditions move against your positions. Market movements can include changes to price, currency exchange and interest rates. You should fully understand the potential impact of market movements and note that you could end up losing your entire investment amount.

There is a general risk of market failure or collapse which may arise from any political or financial development or any unpredictable event that may immediately result in sharp price movements, volatile market conditions and strained market liquidity.

Under certain market conditions, it may be difficult or impossible to liquidate a position, to assess a fair price or assess risk exposure. This can happen, for example, where the market for an investment or transaction is illiquid, where there is:

(i) no market traders for such investment;

(ii) a failure in electronic or telecommunications systems; or

(iii) occurrence of an event of force majeure.

(g) Investments or Transactions in Other Jurisdictions

Investments or transactions on markets in other jurisdictions other than your home jurisdiction may expose you to additional risk. Such markets may be subject to regulations that may offer different or diminished investor protection.

When you trade in a foreign jurisdiction, you should also take into account the applicable tax and exchange controls, including whether you are able to repatriate the principal and profits.

Before you trade, you should enquire about any rule relevant to your particular investment or transaction. Your local regulatory authority may be unable to compel the enforcement of rules of the regulatory authorities or markets in other jurisdictions where your investments or transactions have been effected. You should be aware about the types of redress available in both your home jurisdiction and the other relevant jurisdictions before you trade.

(h) Emerging Markets

Emerging markets typically refer to markets in countries with moderate to low per capita national income. While investments or transactions involving emerging markets financial instruments may yield large gains, they can also be highly risky and unpredictable. In such cases, there may be inadequate regulations and safeguards available to investors. Besides the risks inherent in all investments, those associated with emerging markets include country risk where government intervention in markets, perhaps in the form of exchange control laws or restrictions in the repatriation of profits, may affect the value of any investment or transaction or your ability to enjoy its benefits. In addition, events (for instance, natural disasters, fluctuations in commodity prices and/or exchange rates and political upheavals) which may have a minor or limited effect in more mature markets could affect emerging markets profoundly.

Any investment or transaction involving emerging markets financial instruments or referencing an emerging market needs careful assessment of the risks in relation thereto (including sovereign risk, issuer risk, price risk, political risk and liquidity risk).

(i) Off-Exchange Investments or Transactions

Off-exchange investments or transactions may be less regulated or subject to a separate regulatory regime and as such, the risk is correspondingly higher. Additionally, such off-exchange investments or transactions may be non-transferable and therefore, it may be difficult or impossible for you to close out or liquidate an open position. Situations may also arise where no market traders are prepared to deal in such off-exchange investments or transactions or no proper information may be available to determine the value or the fair price of such investments or transactions or to assess the exposure to risk. Before entering into any such off-exchange investments or transactions, you should fully familiarise yourself with all applicable rules and the attendant risks.

(j) Leveraged Transactions / Margin Trading

Leveraging may be undertaken by way of a loan, utilisation of margin trading facilities or may be embedded within an instrument such as a structured note. The high degree of leverage resulting from a relatively small margin requirement in respect of any investment or transaction can work against you as well as for you due to fluctuating market conditions. The use of leverage can lead to large losses in excess of the original invested amount, as well as gains.

When you undertake any investment or transaction using any margin trading facilities extended to you, you must read through the factsheet (where available), and the facility letter. If you do not agree to the terms and conditions of such facilities, you should not take up the facility.

(k) Transaction Costs and Tax

Before entering into any investment or transaction, you should request for a clear explanation of all commissions, fees and other charges for which you will be liable. Your net returns from any investment or transaction would be affected by any such commissions, fees and other charges, as well as any relevant tax liability (such as income tax). The tax implications of any investment or transaction are dependent upon the nature of your business activities and the investment or transaction in question.

You should be aware that the interest payable by you under any credit facility (where applicable), foreign exchange risks and any negative gearing are variables that add to the risks of any investment or transaction.

(l) Unit Trusts

A unit trust is a pool of money managed collectively by a fund manager who invests in a portfolio of assets to achieve certain investment objectives. Unit trusts are naturally subject to investments risks, including the possible loss of the principal amount invested. The value of units and the income from any unit trust may rise or fall and cannot be guaranteed. Past performance of a unit trust is not necessarily indicative of the future performance of that unit trust.

Any forecast or opinion provided to you by the fund manager are as at the date of the document and is subject to change from time to time. Such forecasts or opinions should not be regarded as a guarantee of future or likely performance of the unit trust. You should also note that there are necessarily limitations whenever performance is stated or comparison is made to another unit trust for a period of less than three years and that there are limitations and difficulties in using any graph, chart, formula or other device to determine whether or not and when to make an investment in any unit trust.

An indicative price on the net asset value of the unit is provided at the point of sale. This may differ substantially from the actual net asset value price that you transact in, especially if market movements become adverse.

(m) Exchange-Traded Funds ("ETFs")

ETFs are open-ended investment funds listed and traded intra-day on an exchange. ETFs are not principal-protected and you may not get back your original investment. You should also be aware that ETFs may not make any distributions or pay any dividends, even if the underlying securities it holds do so.

An ETF is exposed to the liquidity and market risks of the securities it holds and may incur substantial losses due to the inability to dispose of its holdings of any affected securities. Further, an ETF may concentrate its investments in issuers of one or more particular industries or geographical regions. If the particular industry or geographical location performs poorly, this will magnify the negative impact on the value of the ETFs.

You should also be aware that most ETFs are not actively managed. Accordingly, ETFs may be adversely affected by a decline in the market segments relating to its underlying securities.

A number of factors may also affect an ETF's ability to achieve a high correlation with its underlying securities and there can be no guarantee that an ETF will achieve a high degree of correlation. A failure to achieve a high degree of correlation may prevent an ETF from achieving its investment objectives.

There is a risk that the ETF manager's strategy, the implementation of which is subject to a number of constraints, may not produce the intended results. This risk is especially pertinent when the ETF does not replicate its underlying securities, but instead holds non-index securities.

The value of an ETF may decline when the counterparty with whom the ETF purchases financial instruments from and/or enter into agreements with, becomes insolvent or otherwise fails to perform their obligations for any reason.

You should take note of the following additional risks (which are not exhaustive) if you invest in non-traditional ETFs:

(i) Non-traditional ETFs may employ the technique of short selling to achieve an investment exposure consistent with its investment objective. The use of such short selling technique may involve additional transaction costs and other expenses. As a result, the cost of maintaining a short position may exceed the return on the position, which may cause the non-traditional ETF to lose money. Under certain market condition, short selling can increase the volatility and decrease the liquidity of certain securities and may lower the return or result in losses to the non-traditional ETF.

(ii) Non-traditional ETFs may seek to provide a return which is either a multiple and/or an inverse of the daily performance of its underlying investments. A non-traditional ETF rebalances its portfolio on a daily basis, increasing exposure in response to that day's gains or reducing exposure in response to that day's losses and there is a risk of a near-complete loss of the value of the non-traditional ETF. Non-traditional ETFs are designed as short-term trading vehicles for investors who intend to actively monitor and manage their portfolios. They are not intended and/or suitable for investors who do not intend to actively monitor and manage their portfolio.

(iii) For investments or transactions involving leveraged non-traditional ETFs, you will be exposed to the risk that any adverse daily performance of that ETF's underlying will be leveraged.

(iv) Inverse ETFs, a type of non-traditional ETF, are negatively correlated to their underlying and could lose money when the indices rise. This is a result that is opposite from conventional ETFs.

(n) Non-Traditional Funds

Non-traditional funds are investment companies which differ from traditional equity and bond investments on account of their investment style. Such non-traditional funds include hedge funds, alternative investment funds and offshore funds.

If you invest in non-traditional funds, you should be aware of the following risks (which are not exhaustive):

(i) The investment strategies adopted by such non-traditional funds are often high-risk and highly complex. Further, due to the use of leverage, a small movement in the market can lead to a major gain, but any losses will also be magnified sharply. In certain circumstances, the entire amount of your investment could be lost.

(ii) The non-traditional fund industry is largely unregulated and the availability, quality and flow of information may be significantly less than that for traditional investment products. Investors may not be kept informed about the fund's strategies or changes to the fund management team.

(iii) The liquidity and tradability of non-traditional funds can vary a great deal and fixed holding or "lock-up" periods lasting many years are not unusual. Liquidations of such funds may also stretch over many years.

(iv) Certain non-traditional funds may provide for powers to compulsorily redeem all or any portion of an investor's holdings at any time and for any reason upon short notice. The proceeds that an investor may receive upon such redemption may be substantially less than the amount invested in the fund.

(v) Many non-traditional funds have an offshore domicile and may be subject to less stringent legislation and supervision, which in turn offer poorer investor protection. Problems or delays may arise in the settlement of buy and sell orders for units in such funds. There is also no guarantee that your legal rights under the non-traditional funds will be enforceable.

Non-traditional funds can take countless different forms and involve a high degree of risk. Before undertaking any investment or transaction involving non-traditional funds, you should carefully study any information (including the fund offering documents) on the relevant investment of transaction.

(o) Structured Deposits

The returns on structured deposits are not guaranteed and are usually contingent on the performance of one or more relevant underlying assets.

Structured deposits cover a wide range of investment products and may include range deposits and such like products. Prior to entering into any investment or transaction involving structured deposits, you should read and understand all the relevant terms and conditions of, and the risks associated with, such structured deposits.

Structured deposits are generally held for longer tenors than traditional fixed or time deposits, and must be held to maturity. An early termination of the structured deposit is subject to approval by the relevant financial institution and may come with high penalty costs. This means that you may receive substantially less than your principal investment amount.

(p) Securities Trading / Transactions

The prices of securities fluctuate, sometimes dramatically. The prices of securities may move up or down. In certain circumstances, the securities may become valueless. There is therefore an inherent risk that losses rather than profits may be incurred as a result of buying and selling securities.

On certain exchanges, the performance of a transaction by a broker (or any third party with whom it is dealing on your behalf) may be "guaranteed" by that exchange. However, any such guarantee is unlikely in most circumstances to provide full cover and may not protect you completely if the broker or the third party defaults on its obligations to you.

(q) Exchange-Traded Instruments / Electronic Trading Facilities

In respect of investments or transactions involving underlying contracts or instruments which are traded on an exchange, market conditions of the exchange (such as liquidity) and/or the operation of the rules of such exchange (such as any discretion on the part of the exchange to suspend or limit trading of any contract or instrument because of price limits or "circuit breakers") may increase the risk of loss by making it difficult or impossible to effect any transaction (including closing out any investment or transaction) or liquidate or offset any position. Under certain circumstances, the specifications of outstanding contracts (including the exercise price of an option) may also be modified by the exchange or clearing house to reflect changes in the underlying interest.

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 losses may be subject to limits on liability imposed by one or more parties, including the system provider, the exchange, clearing house or member firms and such limits may vary. You should obtain details in this respect from the relevant parties.

If you trade through or on an electronic trading system, you will be exposed to the risks of any defect, deficiency or malfunction in, and/or any breakdown, disruption or failure of, any telecommunications, computer or other electronic equipment or system associated with such electronic system. This could result in a disruption in the trading activities at the exchange or an unavailability of reference prices for the relevant investment or transaction. In such circumstances, the investment or transaction may not be executed according to your instructions or may not be executed at all, which may lead to losses to you.

(r) Alternative Stock Markets

Alternative stock markets (such as the Growth Enterprise Market in Hong Kong) are often established as a market designed to accommodate companies with higher investment risk. In particular, companies may list on an alternative stock market with neither a track record of profitability nor any obligation to forecast future profitability. There may be risks arising out of the emerging nature of companies listed on an alternative stock market and the business sectors or countries in which such companies operate. Securities listed on such alternative stock markets may be susceptible to higher market volatility and/or a lack of liquidity, as compared to mainboard-listed securities. The higher risk profile and characteristics of an alternate stock market mean that it is a market more suited to professional and other sophisticated investors.

You should also be aware that companies listed on an alternative stock market are generally not required to issue announcements in gazetted newspapers. As such, the principal means of information dissemination on such markets is through publication on an internet website. Accordingly, you should ensure that you have access to up-to-date information on the companies listed on an alternative stock market as published on the relevant Internet website.

(s) Bonds / Fixed Income Investments

Fixed income instruments such as bonds are debt instruments issued by entities to raise funds. Although investments in bonds are perceived to be conservative investments and more predictable than equities, they are not without risks.

You take on the credit risk of the bond issuer and may lose all or part of your principal amount if the issuer gets into financial difficulties. In this regard, published ratings of any bond issuer should be supplemented by your own credit analysis of the issuer's credit risk as changes in the ratings of any issuer may lag behind changes in financial conditions. You should perform periodic analysis to determine the credit risk of the bond issuer and evaluate the merits and risks of such investment.

You are exposed to liquidity risk as there may be no market for the bond and you may not be able to sell it at the desired time or price. Even when a market exists, there may be a substantial difference between the offer and purchase price for the bond.

You are exposed to the risk of interest rate fluctuations as the value of bonds will fluctuate with changes in interest rates. The degree of interest rate sensitivity depends on the maturity, coupon and call provisions of the bond. Floating rate bonds lessen your interest rate risk to the extent that the interest rate adjustments are responsive to market rate movements. If the bond issuer has the right to redeem the bond before maturity, this can adversely affect your exposure.

(t) Structured Notes ("Notes")

Notes comprise a debt-like instrument linked to a specific underlying asset which may include stocks, bonds, currencies, commodities, indices and/or funds. Notes are subject to investment risks, including the possible loss of the principal amount invested. By investing in a Note, you are exposed to the credit risk of the Notes issuers as well as the issuers of the underlying assets. The value of the underlying assets may be affected by the activities undertaken by the asset issuers, or any financial or economic difficulties the asset issuer may face. This may in turn affect the redemption under the Notes. In the worst-case scenario, where the issuer or the underlying asset becomes insolvent or defaults on its obligations, you will lose your original investment amount.

Where physical delivery of underlying assets is allowed, and if delivery is not practicable by reason of a settlement disruption event, the delivery date will be postponed until such time as the settlement disruption event ceases. You will not be entitled to receive any compensation in respect of such delay. Where such a delay occurs, the market price of the relevant underlying asset may deteriorate further during the period of such delay. The issuer has the sole discretion to pay the disruption cash settlement price in lieu of effecting delivery of the relevant underlying asset if a settlement disruption event occurs. You do not have any right to elect to receive the disruption cash settlement price in lieu of delivery of the relevant underlying asset. The disruption cash settlement price is likely to be substantially less than the original amount invested.

There may be limited liquidity for the Notes in the secondary market and if such market is available, the market price of the Notes may fluctuate depending on the factors such as the conditions of the market(s) where the underlying asset is traded, the sentiments towards and price movements of the underlying asset and the creditworthiness of the issuer.

Where the Notes are issued with a maturity date, you should note that there are risks involved if you redeem or sell the Notes prior to the maturity date. The buyback price quoted will be determined by the Notes issuer or its calculation agent in its absolute discretion and may depend on various factors as may be set out or described in any offering document or term sheet or other document governing the Notes. Even if the Notes are principal-protected, you may lose part or all of the principal amount if you opt for buyback, withdrawal or termination before the said maturity date. Before investing in the Notes, you should ensure that you can stay invested up to the maturity date.

(u) Commodities

Investments or transactions involving commodities carry a high degree of risk and the extent of loss due to market movements can be substantial or even result in a total loss of the original investment.

Investments or transactions in commodities may be undertaken in many forms, including futures contracts, forward contracts, leveraged trading contracts, contracts made pursuant to trading in differences, spot trading contracts, swaps, options and other derivative transactions involving any combination of one or more of any of the foregoing.

The market for other commodities is speculative and may be highly volatile. Prices for commodities are affected by a variety of factors, including changes in supply and demand relationship, governmental programmes and policies, national and international political and economic events, wars and acts of terror, changes in interest and exchange rates, trading activities in commodities and related contracts, weather and agricultural harvest, trade, fiscal, monetary and exchange control policies. You will also be subject to the volatility of the commodities markets and political and other risks in the jurisdictions in which commodities are traded. The value of the commodities may experience downward movements and may under some circumstances even become valueless. Past performance of the commodities is not indicative of future results as prices can go up or down. There is therefore an inherent risk that losses rather than profits may be incurred as a result of buying or selling the commodities.

Changes in the price of the commodities can be unpredictable, sudden and large. Such changes may result in the price or value of the commodity or the investment or transaction moving adversely against the investor's interests and negatively impacting upon the return on, or settlement of such investment or transaction. In extreme circumstances, you may lose all, or a significant proportion of, your initial investment amount.

Under certain market conditions, it may be difficult or impossible to liquidate a position. Placing contingent orders, such as "stop-loss" or "stop-limit" orders, will not necessarily limit your losses to the intended amounts, since market conditions may make it impossible to execute such orders.

The price volatility of a commodity also affects the value of the futures, options and forward contracts related to that commodity and therefore its price at any such time. The volatility of commodity prices is significant and often higher than for an equity portfolio. The commodity markets are in most cases less liquid as compared to the markets for equities, interest or currency-related products.

Depending on the investment and/or transaction in question, you should be aware of the following risks (which are not exhaustive):

(i) Certain investments or transactions involving commodities may increase liquidity risk and introduce other significant risk factors of a complex character.

(ii) Over-the-counter bilateral investments or transactions involving commodities may be modified or terminated only by mutual consent and subject to agreement on individually negotiated terms. Accordingly, it may not be possible for you to modify, terminate or offset your obligations or your exposure to the risks associated with such investment or transaction prior to its agreed termination.

(iii) There may be adjustments to the terms of your investments or transactions involving commodities due to events, such as market disruption, insolvency and changes in any Applicable Law, and such adjustments may reduce the return on your investments.

(v) Forwards and Futures

Forwards and futures entail the obligation to deliver or take delivery on a specified expiration date of a defined quantity of an underlying asset at an agreed price. Futures are standardised contracts traded on an exchange while forwards are traded over-the-counter. Forwards and futures may involve high degree of risks.

When buying or selling an underlying asset by way of a forward or futures contract, a specified initial margin must often be supplied at the beginning of the investment or transaction. Additional margin may be required to be provided periodically or at any time during the life of the forward or futures contract if the relevant broker determine that the margin provided by you has fallen below the amount required by it. This usually corresponds to the mark-to-market loss arising from a decline in value of the investment or transaction or the underlying assets.

For forward sales, the underlying asset must be delivered at the strike price agreed even if its market value has risen since the date the investment or transaction was entered into. The seller thus does not benefit from the increase in the market value above the agreed strike price.

For forward purchases, the buyer must take delivery of the underlying asset at the strike price agreed even if its market value has fallen since the date the investment or transaction was entered into. The buyer's potential loss would be the difference between the agreed strike price and the market value of the underlying assets. The maximum loss corresponds to the strike price. Notwithstanding, potential losses can substantially exceed any margin requirements.

(w) Options

Options are essentially contracts whereby the owner of the options has the right, but not the obligation, to purchase or sell an asset at a fixed price on or by a specific date. Investments or transactions involving options carry a high degree of risk and are not suitable for many members of the public. You should only enter into such investments or transactions after you have read, understood and familiarised yourself with the type of options, style of exercise, the nature and extent of rights and obligations and all associated risks.

If you purchase an option, you should be aware of the following:If you purchase an option, you should be aware of the following:

(i) Under certain adverse market conditions when the market moves against an option position, the purchased option can be worthless and you will suffer a total loss of the original investment which would consist of the option premium and the transaction costs. If you are contemplating purchasing deep-out-of-the-money options, you should be aware that ordinarily, the chance of such options becoming profitable is remote.

(ii) In order to realise any value from the option, it will be necessary either to offset the option position or to exercise the option.

(iii) Some option contracts may provide only a limited period of time for the exercise of the option, and some option contracts may provide for the exercise of the option on a specified or stipulated date. For barrier options, the exercise rights will only arise when the market value of the underlying instrument reaches the barrier (in the case of knock-in options) or will expire irrevocably when that barrier is reached (in the case of knock-out options).

(iv) Exercising an option results either in a cash settlement, or the acquisition or delivery of the underlying instrument.

Buying options involves less risk than selling or writing options because if the price of the underlying instrument moves against you, you can simply allow the option to lapse and your maximum loss is limited to the premium, plus any commission or other charges. However, if you buy a call option on an underlying instrument and later exercise the option, you will acquire the underlying instrument and therefore expose yourself to the risks on the underlying instrument.

The risks associated with selling or writing an option is generally greater than purchasing an option. Although the premium received by the seller is fixed, the seller may sustain a loss well in excess of the amount of premium received. The seller may also be required to deposit additional margin to maintain the position if the market moves unfavourably. If the purchaser exercises the option, the seller would be required to either settle the option in cash or acquire or deliver the underlying instrument. If the option is "covered" by the seller holding a corresponding position in the underlying instrument or another option, the risk may be reduced. An option is described as "covered" if the option seller already has a corresponding quantity of the relevant underlying instrument at its disposal. Conversely, if the option is not covered, the possible loss will be unlimited.

You should carefully calculate the price and the exchange rate (where applicable) which the underlying instrument would have to reach for the option position to become profitable. This would include amounts by which the underlying instrument or the extent at which the exchange rate would have to rise above or fall below the strike price to cover the sum of the premium and all other costs incurred in entering into and exercising or closing the option position.

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

Apart from plain vanilla put and call options, there are other types of options, including non-deliverable foreign exchange options, acquisitions of two or more options commonly known as a combination, and exotic options. There is no limit to the structures, types and terms of such options. Investments or transactions involving such options are very complex and high-risk.

(x) Swaps

A swap transaction involves an exchange of future payment streams, and occasionally, also an exchange of principal at the start of the transaction or on maturity. Examples of swap transactions include interest rate swaps, currency swaps and total return swaps.

An investor who enters into an interest rate swap will be subject to interest rate risk. Interest rates movements will affect the swap's cash flow and mark-to-market value. If the swap involves payments in different currencies, your position will also be affected by fluctuations in exchange rates. As movements in interest and exchange rates may be influenced by a variety of factors, such as inflationary fears and a weakening currency, it is often difficult to anticipate such movements.

A party to a swap transaction also runs the risk that the counterparty will default or otherwise fail to perform its obligations.

A swap agreement may also be combined with an option and is known as a "swaption". As a hybrid, a swaption generates two important exposures: (a) the probability of exercise and (b) the credit risk emerging from the swap. The credit risk of any swaption is the cost to one counterparty of replacing the swaption in the event that the other counterparty is unable to perform. You should also be aware that liquidity risk is high for swaption with long-dated option components.

(y) Credit Derivatives

Credit derivatives are financial instruments that permit one party (the beneficiary) to transfer the credit risk of a reference asset (such as traded sovereign and corporate debt instruments or syndicated bank loans), which it typically owns, to another party (the guarantor) without actually selling the reference asset. Credit derivatives can take the form of swaps, options or hybrid financial instruments.

Credit derivatives involve a liquidity risk. Often, such instruments cannot be sold before maturity as there is no market for such instruments. Investors will additionally be exposed to the credit risk on each of the reference assets, as well as the issuer of the reference assets. Investments or transactions involving credit derivatives carry a high degree of risk.

(z) Private Asset Investments

Private asset investments generally involve the placing of investment capital in private companies and/or funds. Such capital may be used for a variety of purposes, including financing of high-risk projects which are expected to generate higher returns, making acquisitions and corporate restructuring.

The contractual conditions governing a private asset investment often require the contribution of liquid funds in a substantial amount and for a considerable period of time. Such contributions are made either by a single payment or by several payments over a certain period of time. Once you have made the commitment to invest, you must be ready to meet calls for capital contribution, known generally as "capital calls" or "commitment calls", which may be made at short notice. The penalty for failure to honour any capital or commitment calls can be extreme, including a complete forfeiture of any capital already invested.

Any capital invested by you may be tied up, either completely or with restricted access, during such period. As there is no recognised secondary market in private asset investments, such investments may not be sold and/or transferred freely.

Private asset investments may be realised in several ways, including a sale of the participations through eventual public listings on exchanges, mergers with other companies, a sale to another interested party or a recapitalisation. Considerable losses, or even a total loss of your investment may occur, for example, when such private companies and/or funds are either wound up or declared insolvent and/or the commercial interest in the business of the private companies or funds ceases to exist.

(aa) Counterparty and Broker Risks

Transactions executed with counterparties and brokers are dependent on their respective due performance of their obligations. The insolvency or default of such counterparties and brokers may lead to positions being liquidated or closed out and/or may result in difficulties in recovering the Authorised Investments.

The above should not be considered to be an exhaustive list. The Client hereby acknowledges and confirms that it understands the nature and contents of the Product Risk Disclosures.