1. Key information
1.1. Uni Fin Invest is an Investment Dealer (Full Service Dealer excluding Underwriting) regulated by the Financial Services Commission (‘FSC’) in Mauritius under the license number GB21027161 (hereinafter referred to as the ‘Company’).
1.2. This Risk Disclosure is designed to provide you with the information you need to determine whether the products we offer are appropriate for your personal objectives, financial situation, and needs by explaining the risks, rights, and obligations associated with our products.
2. Risk warning and important considerations
2.1. Trading contracts for difference (hereinafter referred to as ‘CFD’) is not suitable for all investors and involves the risk of significant loss as well as potential for profit. Movements in the price of the contract's underlying asset (such as foreign exchange rates, commodity prices, or indices) are influenced by various unpredictable factors of global origin. The maximum loss you may suffer from your trading activities equals your account balance.
2.2. CFDs are considered speculative assets which are highly leveraged and carry significantly greater risks than other investments. You should not invest in CFD assets unless you understand their nature and are comfortable with the risks.
2.3. CFD trading of currency pairs, equity indices, metals, commodities, and other underlying assets (in this notice referred to as a ‘Transaction’) carries a high risk to your capital. You should not engage in this form of investing unless you fully understand the nature of the Transaction you are entering and the true extent of your exposure to the risk of loss. Your profit and loss will vary depending on the fluctuations in the price of the underlying assets on which your Transaction is based.
2.4. Before engaging in CFD trading, consider carefully whether such investment instruments are suitable for you in light of your circumstances, financial resources, and investment objectives. In considering whether to engage in this form of investing, you should be aware of the following:
2.4.1. Leverage. The high degree of leverage is a particular feature of this type of Transaction. Therefore, a relatively small movement in the underlying asset's price can have a disproportionate effect on your Transaction. If the underlying market movement is in your favour, you may achieve a good profit, but an equally small adverse market movement may result in the quick loss equal to your full account balance. If you decide to engage in marginated CFD trading, you must accept this degree of risk.
We may ask you to deposit a substantial additional margin at short notice to maintain your position(s). If you do not provide such additional funds within the required time, your position(s) may be closed at a loss. If you are in any doubt regarding our products, you should seek independent professional advice.
2.4.2. Margined CFDs. The purpose of a margined CFD Transaction is to secure a profit or avoid a loss by reference to fluctuations in the price of the underlying asset or an index. In the context of our activities, the underlying asset may be a securities index, exchange rate between two currencies, or CFDs on gold, silver, oil, or other investments. It is an express term of each CFD Transaction that:
- neither you nor us acquire any interest in or right to acquire or are obliged to sell, purchase, hold, deliver, or receive the underlying asset
- the rights and obligations of each party under the CFD Transaction are needed to make and receive such related payments.
2.4.4. Position monitoring. It is your responsibility to monitor your account. Should the net value of the account (cash plus running profits minus running losses) fall below the margin required, we may close some or all of your trades at the current market price. It is your responsibility to ensure that there are sufficient funds on your account at all times.
2.4.5. Market risk. Margined CFD trading relies on the price movements of underlying financial products. You are therefore exposed to similar but magnified risks to holding the underlying assets. In some cases, risks will be greater.
Creating a stop-loss order may limit your loss but this is not guaranteed as your losses may be greater in some circumstances. Slippage occurs when a stop loss does not get filled at the exact order price, but slips to a higher or lower price. This may be because the particular underlying asset or index has become unusually volatile for a period of time. When this happens, a stop loss may not be effective and your position will be closed at the current underlying asset price.
Gapping is when a particular market jumps significantly, resulting in your stop loss being missed and your trade closed at a much higher or lower price than intended. Accordingly, when you have an open position in a volatile market environment, you must understand the potential impact of these events, as you could be filled at the next available underlying asset price.
Under certain trading conditions, it may be difficult or impossible to liquidate a position. This may occur at times of rapid price movement if the price rises or falls in one trading session to such an extent that trading is restricted or suspended.
At market opening and closing times and prior to announcements, the market spread may widen substantially. Consequently, you must ensure that you have sufficient funds on your account to cover this eventuality.
2.4.6. Credit. No credit is extended to you. Neither a variation margin credit allocation, nor an initial margin credit allocation constitute a credit facility.
2.4.7. Counterparty risk. We are the counterparty to all your trades. None of our products are listed on an exchange, nor can any rights, benefits, or obligations be transferred to anyone else. While we undertake our obligation to provide you with best execution and to act reasonably and in accordance with our published Customer Agreement, Margined CFDs opened on your account with us must be closed with us, based on our prices and on the terms and conditions that you have contracted with us.
2.4.8. Segregated accounts. The Company is required to hold client funds in segregated trust accounts in accordance with the regulations of the Financial Services Act, 2007, but this may not afford complete protection. While we monitor the creditworthiness of our banks closely and select them on the basis of robustness and solidity, this does not mean that they are risk-free. If you deposit collateral as security with the Company, you should ascertain from the Company how your collateral will be dealt with.
2.4.9. Financial services compensation scheme. As an FSC regulated firm, your trading with the Company is not covered under any client compensation scheme under the laws of Mauritius.
2.4.10. Tax. You take the risk that your trades and any related profits may be or become subject to tax. You are responsible for all taxes and stamp duty in respect of your trades. We do not provide any tax advice to clients, and you are responsible for your own tax affairs.
You should obtain financial, legal, taxation, and other professional advice as necessary prior to entering a CFD Transaction to ensure they are appropriate for your objectives, needs, and circumstances. The taxation consequences of CFD Transactions can be complex and will differ for everyone's financial circumstances. Your tax adviser should be consulted prior to entering into such a Transaction.
2.4.11. Commission and spreads. You should obtain details of all commissions and other charges for which you will be liable prior to trading with the Company. Where charges are not expressed in money terms (such as a bid offer spread), you should obtain a clear explanation of what such charges are likely to mean in specific money terms. When commission is charged as a percentage, it will normally be as a percentage of the total contract value, and not simply as a percentage of your initial payment.
Some types of trades you make may require you to pay financing costs. The combination of such costs may exceed any profits on your trades or increase the losses that you may incur on your trade.
2.5. We also recommend that you seek independent advice to ensure the products are appropriate for your particular financial objectives, needs and circumstances. Nothing in this Risk Disclosure should be considered a recommendation to trade CFDs or any other financial instruments. We do not guarantee the investment performance of CFDs or the investment performance of their underlying assets. Past performance is no indication or guarantee of future performance. Use of examples in this Risk Disclosure are provided for illustrative purposes only and do not reflect our actions or determinations or an investor’s personal circumstances.
2.6. The distribution of this Risk Disclosure (electronically or otherwise) in any jurisdiction outside Mauritius may be restricted by law. Persons who come into possession of this Risk Disclosure should seek advice on and observe any such restrictions. The information in this Risk Disclosure is not directed at residents in any country or jurisdiction where such distribution or use would be contrary to local law or legislation.
2.7. Please note that, in case of any inconsistency between this Risk Disclosure and applicable legislations, rules and regulations, the latter shall prevail.