Fund Subscription Agreement（ETF Included）

Fund Subscription Agreement

Whereas the Client have signed Long Bridge HK Limited Client Agreement (the “Client Agreement”), the appendices, schedules, and other relevant documents (collectively, the "Agreement") with Long Bridge HK Limited (the "Company") and have completed the registration and opening of securities account number ("Account Opening") in the Company, this Fund Subscription Agreement (this “Fund Agreement”) is applicable to Fund Subscription Services provided by the Company.

This Fund Agreement forms an integral part of the Client Agreement and governs the Company's provision of Fund Subscription Services. It supplements, and should be read together with, the Terms and any other terms and conditions governing the services provided by the Company, as they may be amended from time to time. The provisions of the Client Agreement shall prevail in the parts not covered by this Fund Agreement. In case of any contradiction with the Client Agreement, this Fund Agreement shall prevail.

1. Definitions and Interpretations

The definitions and interpretations in the Client Agreement apply to this Fund Agreement. In this Fund Agreement, unless the context requires otherwise, the terms defined in this Fund Agreement shall have the same meaning when used herein. In this Fund Agreement:

“Dealing Procedures” means any procedures agreed between the Company and the Fund or the fund manager of the relevant Fund from time to time to govern the subscription, switching and redemption of Units therein and other incidental matters.

“Fund Subscription Services” means services provided by the Company in connection with the purchase, subscription, switching, transfer, redemption or sale of any Unit in any Fund, and the dealing with any relating proceeds or moneys in accordance with the Client’s instructions.

“Portfolio” means a portfolio of Funds selected by and made available through the Company to the Client from time to time. For the purpose of interpretation of this definition, "portfolio of Funds" under this definition includes closed-end funds and exchange traded funds (ETFs).

“Units” means any shares or units in a Fund (including where such Fund is distributed or made available on a standalone basis or as part of a Portfolio).

2. Scope of Fund Subscription Services

2.1 The Company may (but is not obliged to) provide to the Client the Fund Subscription Services. Additional functions and services in connection with the Fund Subscription Services may be provided by the Company to the Client from time to time, in which case additional terms and conditions (the Company will fully disclose important information related to the transaction) may apply which the Client should read and agree to before using those functions or services. The Fund Subscription Services and any additional services in connection with the Fund Subscription Services shall be provided through the Fund Account and/or the Securities Account.

2.2 Where the Client enters into a Transaction:

(a) the Company may have solicited the sale of or recommended to the Client the relevant Fund or Portfolio, in which case Clause 24.2(a) (Transaction with solicitation of the sale or recommendation of Investment Products by the Company) of the Client Agreement shall apply; and/or (b) the Client may have entered into such Transaction with the Company, without or in circumstances where it is inconsistent with any solicitation, recommendation or advice from the Company, in which case Clause 24.3 (Transactions (excluding transactions in Complex Products) entered into with the Company without any solicitation or recommendation or which is inconsistent with any advice from the Company) or Clause 24.4(Transactions entered into with the Company in Complex Products, without any solicitation, advice or recommendation from the Company or which is inconsistent with any advice from the Company) of the Client Agreement shall apply.

2.3 Subject to Clause 14 (Electronic Services) of the Client Agreement, the Company shall make available to the Client via electronic means (including via the Electronic Services), the offering documents, notices, communications or any other documents (including but not limited to the Subscription Guide, the Fund Redemption Form and the Fund Subscription Form viewable on the relevant webpages) in connection with the relevant Funds or Portfolios. The Client consents to the use of such electronic means (including the Electronic Services) as a mode of delivery of the abovementioned documents.

3. Subscription and Redemption Applications and Payment

3.1 Any Instruction to subscribe for or purchase, redeem, sell or switch any Unit or Portfolio (whether in whole or in part) must be made electronically through the Company’s mobile application or any manner as prescribed by the Company, accompanied by any required documentation as may be required by the Company from time to time.

3.2 All Instructions and the resulting transactions and payment in relation to the subscription, switching or redemption of Units shall be subject to the Dealing Procedures and/or any other requirements as prescribed by the Company from time to time. The Company is entitled, without reference to the Client and without giving any reason, for the purpose of Company performing its due diligence, either ignore any Instruction that fails to comply with the Dealing Procedures or such other requirements of the Company, or to execute such Instruction with such modifications to it as may be necessary to comply with the Dealing Procedures or such other requirements of the Company from time to time. The Company may notify the Client within a reasonable period afterwards. For instance, should the Client place an Instruction to redeem any Units and, as a result of such Instruction, there will remain a balance of 0.0001 Unit or less (or any other fractional Unit as determined by the Company from time to time) following the execution of such Instruction (“Remaining Fractional Units”), the Client hereby authorises the Company to redeem any Remaining Fractional Units on behalf of the Client, which transaction shall be deemed to be a part of the original Instruction. The Company will not be responsible to the Client for any losses, damages, costs or expenses that the Client may suffer or incur arising from or in connection with any delay or failure in transmitting or effecting any Instruction to subscribe, purchase, switch, transfer, redeem, sell or otherwise deal with any Units or Portfolios in connection with exercising such discretion.

3.3 The Company is authorised to act on any Instruction given or purportedly given by or on behalf of the Client. Given that the Client's identity verification has been completed in the account opening process and in accordance with Clause 4 (Instructions) of the Client Agreement, the Company does not have any obligation to authenticate, verify the completeness and accuracy of any such Instruction or verify the identity of any person giving such Instruction to the extent permitted by the Applicable Laws.

3.4 The Company shall be entitled to rely and act on any such Instruction which the Company in good faith believes to be genuine and shall not be responsible for any loss which the Client may incur as a result. However, in order to safeguard the best interests of the Client, and for the purpose of Company performing its due diligence, the Company has absolute discretion to refuse to act upon any such Instruction without reason, and the Company will not be responsible to the Client for any losses, damages, costs or expenses that the Client may suffer or incur arising from or in connection with any delay or failure in transmitting or effecting any Instructions to subscribe, purchase, switch, transfer, redeem, sell or otherwise deal with any Units or Portfolios.

3.5 The Client’s right to give Instructions via a particular channel shall at all times be subject to the discretion of the Company. The Company may at any time revoke the Client’s right to give Instructions through a particular channel without prior notice. The Company shall execute any Instructions placed by the Client or any Authorised Person by placing it with the relevant fund manager, Fund or product issuer upon receipt of the Instruction and payment of the purchase price, subscription moneys or expenses payable by the Client to the Company.

3.6 The Company will effect any Instruction as soon as practicable, however, the execution of such Instruction may not coincide with the timeframe stipulated in the relevant offering documents of the Fund. The Client acknowledges that orders placed by the Client with the Company may be aggregated and consolidated either daily or from time to time by the Company together with orders placed by the Company’s other clients for the purpose of placement of such orders by the Company with the relevant fund manager, Fund or product issuer for execution.

3.7 Subject to the continuing operation of an Account, an Instruction will generally be processed on the day of receipt by the Company of such Instruction if a valid and complete Instruction (together with all monies, required information and documents) is received by the Company before the dealing cut off times for the relevant Fund as specified by the Company in its sole and absolute discretion from time to time. If an Instruction (and monies) is received after this dealing cut off time or on a day when a typhoon Signal No. 8 (or above) or black rainstorm warning has been issued in Hong Kong, execution will be done usually on the next dealing date of the Fund in accordance with the terms of the offering documents of the Fund (or as otherwise determined by the relevant fund manager, Fund or product issuer). The Client must specify the choice of the Fund or Portfolio (where appropriate) in order for the Instruction to be processed. The Company reserves the right to delay or refuse to process or accept any Instruction, if in its reasonable opinion, there are grounds for doing so.

3.8 The actual bid price (the “Actual Bid Price”) and offer price of a Fund shall be determined at the time when the transaction is effected and settled and any figures which may be quoted or provided to the Client by the Company or its representatives at the time of Instruction (the “Quoted Price”) are for reference only and are not binding on the Company.

3.9 The Actual Bid Price of a Fund may be higher or lower than the Quoted Price. The Client agrees that, in respect of any redemption of a money market fund (or any other fund designated by the Company from time to time), the Company may, in its absolute discretion, advance an amount equivalent to the proceeds of such redemption calculated with reference to the Quoted Price to the Client on its own account (an “Advance”) by crediting the Account (designated by the Client and agreed by the Company to receive the redemption proceeds) with such amount. When the Transaction is settled, and if the actual proceeds of such redemption exceeds the Advance received by the Client, the Company will credit such redemption proceeds in excess of the Advance to the Account. The Company will depend upon the different instruction times placed by the Client to settle the actual redemption amount with a different calculated method subject to the rules displayed at the Company’s specific webpage in relation to the Fund Subscription Services. The Client hereby acknowledges and agrees that, notwithstanding the provisions therein, the Company retains the right, at its sole and absolute discretion, subject to the nature of Fund or requirements set by Fund Manager or product issuer, to stipulate and adjust the rules (“Company Fund Subscription Rules”) concerning the redemption and Advance of Fund Subscription Services which is viewable by the Client at the Company’s website or mobile application’s page; if any inconsistency between the Agreement or this Fund Agreement and then Company Fund Subscription Rules, the latter rules will prevail; furthermore, the Client understands and confirms that the Company will deem the Client agreeing with the Company Fund Subscription Rules if the Client uses or continues to use the Fund Subscription Services.

3.10 The Company has no authority to accept Instructions (or applications) for subscription, switching or redemption of any Unit for and on behalf of any fund manager, Fund or product issuer. Receipt of such Instructions and the requisite payment and any other documentation by the Company shall not amount to acceptance of the Instruction by the relevant fund manager, Fund or product issuer.

3.11 The Client acknowledges that any fund manager, Fund or product issuer who receives an Instruction from the Company is not obliged to accept such order in part or whole. The Company shall have no responsibility nor liability for ensuring that the relevant Fund manager, Fund or product issuer allots the Units or for any losses (including any loss of investment opportunity) which the Client may suffer or incur as a result of any refusal to accept or delay in accepting such Instruction by the fund manager, Fund or product issuer.

3.12 The Client acknowledges that (a) the purchase price, subscription moneys or expenses payable by the Client to the Company (or another person as specified by the Company) in relation to each order to buy or subscribe for Units or Portfolios shall be debited from an Account designated by the Client (or otherwise directed by the Company from time to time);

and (b) any redemption proceeds received by the Company in relation to each order to sell, redeem or otherwise dispose of the Units (whether such Units are part of a Portfolio or not) shall, in any event, be paid or credited to an Account designated by the Client and agreed by the Company in accordance with the settlement periods stipulated in the offering documents of the relevant Funds (or otherwise determined by the Fund manager, Fund or product issuer from time to time).

3.13 If at any time there is insufficient balance in the Account that the Client has elected (or otherwise directed by the Company from time to time) to make the required payments under Clause 3.12(a) of this Fund Agreement (for example, the Client has designated the Securities Account to make such payments), the Client irrevocably directs and authorises the Company to, without prior notice to the Client, set-off or transfer any sum standing to the credit of the Client’s other Account (for example, the Fund Account), towards the satisfaction of any payments to be made under Clause 3.12(a) of this Fund Agreement.

3.14 The Client further agrees that for purchases or subscriptions of Units or Portfolios, the Company reserves the right to reject or delay the processing of any orders if there are insufficient funds in the Account designated for payment or if cleared funds (free of any deductions or withholdings) are not received by such time as prescribed by the Company.

3.15 The Company is authorised to take such steps as it may consider expedient to enable it to provide Fund Subscription Services to the Client including the right to withhold and/or make payment of any taxes or duties payable on or in respect of the Units without any liability thereof and to disclose information about the Client (including your authorised persons and beneficiaries), any Units or Portfolios held by the Client or any transactions in connection thereto in accordance with the Applicable Regulations or to any of the Company’s Affiliates, any third party service providers or agents of the Company, a fund manager, a Fund or product issuer (or its representatives) upon request.

3.16 The Client agrees to (and shall procure that any Authorised Person to) provide the Company with such information, materials and documents in such manner and take such steps and by such time as prescribed by the Company from time to time so as to enable the Company or any of its Affiliates to effect an Instruction, perform the Fund Subscription Services and/or to comply with any term of any document in respect of any Funds, Applicable Regulations and the applicable market practice.

4. Title and Registration of Investments

4.1 If the Client subscribes for Units in a Fund (including any Units in a Fund that forms a part of a Portfolio), the Units will be registered in the name of the Company or jointly in the name of the Company and in the Client’s name, or in the Client’s name only (as the case may be). The Company will not be the beneficiary of any of your investments in a Fund.

4.2 No Unit certificates will be issued to the Client. The Client will be sent a confirmation of its subscription/acquisition (or disposal) of any Unit.

5. Reports and Voting

5.1 Subject to the requirements of the Applicable Regulations, the Company and the custodian shall have no duty or obligation to exercise the voting rights or other elective rights of any Units subscribed or acquired, or received or held for the Client, except upon the prior written Instructions of the Client or any Authorised Person in such form and by such time as prescribed by the Company from time to time, and then only upon such terms, conditions, indemnities, fees and charges as agreed upon between the Company and the Client.

5.2 In the absence of such Instructions and agreements, the Company and the custodian shall be entitled to, but not obliged to, exercise the voting rights or other elective rights of any Fund (if any). Under such circumstance, the Client agrees that the Company and the custodian may be exempted from any duty and obligation in respect of notification and delivery of any proxy or other document issued to the Client, unless otherwise provided in the Applicable Regulations.

6. Company as Nominee (if applicable)

6.1 If the Client subscribe for units of the Funds (including any units of the Funds forming part of an Investment Portfolio), such units are registered in the name of the Company whereby the Company will perform the relevant services as your nominee, including without limitation: (a) as the Client's agent and on the Client's behalf, (i) transmit, in the Client's own name, or (ii) either in its own name or in the name of the Company, execute the client's instructions to, subscribe for, redeem, transfer or convert Securities;(b) based solely on the Company's knowledge of the Client's financial situation, investment objectives, personal circumstances and risk tolerance as obtained from the information provided to the Company by the Client, recommend to the Client, Funds which the Company considers are suitable for the Client and when the Client may wish to invest c) receive and hold monies from the Client in the Client other designated account and transfer and withdraw such monies upon the client's instructions or in accordance with this Fund Agreement; and (d) provide to the Client information in respect of Funds (including the latest net asset value, fund fact sheets and offering documents) and Securities and monies held in the Account.

6.2 Limitation in Services. The Company: (a) has no obligation to monitor the performance of the investments held by the Client or on the Client's behalf, either at a portfolio level or in respect of individual Funds and has no obligation to end the subscription or redemption of any Securities based on any change in any circumstance or otherwise; (b) has no obligation to verify any information provided to it by any Fund and makes no representation；(c) makes recommendations only in respect of Funds distributed or made available by or through it and does not, in assessing the Client's individual circumstances, consider the suitability of unit trusts, investment funds or mutual funds not distributed by or available through it; (d) shall not make available to the Client Funds which have been classified by the Company as being derivative products so long as the Client is assessed by it as not having knowledge of derivatives; and(e) shall not be responsible for advising the Client on its tax position or in respect of foreign exchange controls, investment restrictions or other laws and regulations applicable to the Client or the Securities.
6.3 Subscription and redemption prices of Securities of Funds are determined by the Funds. Any price or value provided by the Company to the Client in respect of any Securities is not conclusive and is indicative only. Execution of Instructions to subscribe for, redeem, or convert Securities will be at the price determined by the relevant Fund at the time of execution. The Client agrees that in providing any Instructions in respect of Securities, the Client is not relying on any such pricing information provided to it by the Company and acknowledges that the price at execution may be different from the indicated or quoted prices. Any advice given to the Client by the Company shall be based on projections and information available at the time such advice is given and should not be relied upon by the Client as a guarantee of any future performance.

6.4 Investments. Unless otherwise instructed by the Client or required, the Client authorizes the Company to (i) hold Securities by depositing such Securities in an account in the name of the Company with the Fund or the distributor of the Fund which issued or distributed such Securities or by registering such Securities in the name of the Company on behalf of the Client and (ii) withdraw Securities from such account or take such other action as may be necessary to settle any Transaction. Without incurring legal liability therefor, the Company shall use its reasonable endeavours to notify the Client of any notices, reports and advices relating to Securities of the Client held by it.

6.5 Client Money. (a) The subscription fee rate of the Fund shall be determined by the Company and set out in the Fund Subscription Form viewable on our relevant webpages. The Company may give a certain discount on the Fund subscription fee to the Client based on actual conditions (subject to the notice of the Company, if any). The Fund subscription fee shall not be included in the Fund assets. The Client shall, within the prescribed time limit in accordance with the notice of the Company. The fund subscription fee is not included in the fund property, and the client shall pay the fund amount and fee in full within the specified time according to the notice of the company;(b) Where the Client instructs the Company to execute any order to apply for, subscribe for or redeem Securities [in the name of the Company], the Client shall pay all subscription monies into its Account and all redemption monies shall be paid into its Account;(c) For the avoidance of doubt, if at any time the balance of the Client's funds in the Account is insufficient to satisfy any liability owed by the Client to the Company, the Client irrevocably directs and authorizes the Company, without further notice to the Client, to redeem any Security held by the Company for the Client and to apply the proceeds of such redemption to discharging such liability.

7. Termination

7.1 Upon termination of the Account with the Company or termination of the Fund Subscription Services, the Client or any Authorised Person will be deemed to have given the Company instructions to, at its discretion: (a) cause any Units then held by the custodian for the Client's account to be redeemed or otherwise dealt with on the effective date of termination of the Fund Account, or if that day is not a dealing day or is after the latest time for dealing as specified in the offering document of such Fund, on the next dealing day ("Effective Date") and for the redemption or dealing proceeds thereof (after settling any outstanding liabilities, costs and expenses owed to the Company or any of its Affiliates) to be remitted to the Client and/or settle any liability incurred by the Client, the Company or any custodian; (b) cause any Units then held by the custodian for the account of the Client to be transferred by the custodian on the Effective Date directly into the Client’s name (if applicable); and (c) cancel any unexecuted transactions.

8. Handling Fee

8.1 Pursuant to Clause 3.9(a) of this Fund Agreement, the Client authorises the Company to retain any redemption proceeds in excess of the Advance as a handling fee for processing and arranging for the execution of an Instruction to redeem or transfer out any Unit in a money market fund.

9. Rebate

9.1 The Company may receive fees, rebates or non-monetary benefits from Issuers in consideration of directing transaction business ultimately on behalf of the Client. The Client agrees to the receipt by the Company of such fees, rebates and non-monetary rebates. The Company will provide details, or the nature and existence, of such fees, rebates or non-monetary rebates to the Client in accordance with the requirements of the Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission.

10. Governing Law, Jurisdiction and Dispute Resolution

10.1 The Fund Agreement and all rights, obligations and liabilities of the parties shall be governed by and construed in accordance with the laws of Hong Kong.

10.2 The courts of Hong Kong have exclusive jurisdiction to settle any dispute arising out of or in connection with the Fund Agreement (including any dispute regarding the existence, validity or termination of the Fund Agreement) (a "Dispute"). The parties agree that the courts of Hong Kong are the most appropriate and convenient courts to settle Disputes and accordingly, no party will argue to the contrary. Notwithstanding the aforesaid, the Company shall not be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by Applicable Regulations, the Company may take concurrent proceedings in any number of jurisdictions.

10.3 If the Client does not have a place of business or is not a resident in Hong Kong, the Client may be required by the Company to appoint a person as the Client's process agent in to receive and acknowledge on the Client's behalf service of any notice of legal process in Hong Kong. The Client agrees that any legal process shall be deemed to have been sufficiently served on it if delivered to such process agent at the address specified by the Client. If the Client is required to appoint a process agent, and for any reason any person ceases to act as process agent, the Client shall promptly appoint a successor process agent and notify the Company in writing of such appointment. If the Client fails to give the details of its process agent, the Client irrevocably authorises the Company to appoint the process agent on its behalf. The Company shall promptly notify the Client of such appointment with the details of such agent in writing.

10.4 Unless expressly stated otherwise in the Fund Agreement, nothing in the Fund Agreement is intended to grant to any third party any right to enforce any term of the Agreement or to confer on any third party any benefits under the Fund Agreement for the purposes of the Contracts (Rights of Third Parties) Ordinance (Cap. 623 of the laws of Hong Kong).

11. Miscellaneous Provisions

11.1 The Company may, at its discretion, amend, delete or substitute any of the terms of the Fund Agreement or add new terms to the Fund Agreement by notifying the Client and setting out such amendment, deletion, substitution or addition. These changes shall be deemed to have been incorporated in the Fund Agreement and shall be binding on the Client upon the earlier of (a) the Client's continued use of any service provided under the Fund Agreement or (b) 7 days from the date of such notice. If the Client does not agree to such changes, the Client must not use any services provided under the Fund Agreement and shall raise its objections with the Company in writing within 7 days from the date of such notice.

11.2 Each of the provisions of the Fund Agreement is severable and distinct from the others. Any provision of the Fund Agreement, which is illegal, invalid or unenforceable for any reason in any jurisdiction shall be ineffective only to the extent of such illegality, invalidity or unenforceability and shall not affect the legality, validity or enforceability of the remaining provisions or the legality, validity or enforceability of such provision in any other jurisdiction.

11.3 The Client shall not assign or transfer its rights and/or obligations under the Fund Agreement or any Investment Product without the prior written consent of the Company. The Company may assign or transfer any of its rights and/or obligations under the Fund Agreement without the prior consent of the Client.

STATEMENT: The Client has been aware of the laws, regulations and related policies of securities/fund investment in Hong Kong, has carefully read the terms of this Fund Agreement and is willing to be bound thereby. The Client warrants that the sources of subscription/purchase funds are legal; otherwise, all responsibilities arising therefrom shall be borne by the Client. The Client voluntarily fulfills the obligations of the investor, bears the risk of product investment, guarantees the authenticity and validity of the information provided, and confirms the authenticity and accuracy of the information filled in this Fund Agreement.

Schedule I: Risk Disclosure Statements

The Client should read these risk disclosure statements carefully. These statements form an integral part of the Fund Agreement and the Account Opening Form. By executing the Account Opening Form, the Client acknowledges that it has received and read these statements in a language of its choice (English or Chinese) and confirms its understanding of the risks which may arise in connection with the investments and transactions relating to the Accounts. These risk disclosure statements do not disclose or purport to disclose all the risks and relevant considerations in connection with all the investments and transactions relating to the Accounts. The client should refrain from making any investment or transaction unless the Client fully understands the risks involved and has obtained independent legal, tax, financial and other advice from its own advisers as it considers appropriate. The Company is not, and shall not be deemed to be, the Client's financial advisor.

Risks in Relation to Funds

The Client understands that the following risk disclosure statements explain some general risks but are not meant to be an exhaustive list of all possible risks, involved in the Client’s investment or dealing in Funds. For specific risks associated with a particular Fund, the Client should refer to the relevant offering documents for details.

1. Funds are investment products, and some may involve derivatives. Funds are not equivalent to time deposits.
2. Whilst derivative instruments may be used in a Fund for hedging purposes, the risks remains that the relevant hedging instrument may not necessarily fully correlate to the investments in a Fund and accordingly, not fully reflect changes in the value of the investment, giving rise to potential net losses.
3. Some Funds may use financial derivatives instruments for investment purposes, which may involve embedded leverage. The use of financial derivatives instruments may expose the Client to additional risks including but not limited to volatility risk and counterparty risk. Fund manager(s) of a Fund may invest a substantial portion of the Funds' net assets in structured products, derivatives and non-investment grade debt securities. During adverse market conditions, the Client may suffer significant financial losses.
4. A Fund that is a hedge fund uses alternative investment strategies and the inherent risks are different and are not typically encountered in traditional funds.
5. The price of the Units of a Fund can and do fluctuate, sometimes dramatically. The value of and income from a Fund is not guaranteed and may move up or down and may even become valueless. There is an inherent risk that losses may be incurred rather than profits made as a result of buying and selling Units of a Fund. The Client may not get back the amount that the Client has initially invested. In the worst case scenario, the value of the Units of a Fund may be worth substantially less than the amount that the Client has invested (and in an extreme case could be worth nothing).
6. Past performance of a Fund is not an indication of future performance.
7. A Fund that invests in certain markets and companies (e.g., emerging markets, commodity markets or smaller companies) may also involve a higher degree of risk and is usually more sensitive to price movements.
8. Deductions of charges and expenses mean that the Client may not get back the amount it invested.
9. The Client’s right to redeem Units in a Fund may be restricted by certain circumstances (depending on the feature and terms of the Fund). In other words, there is a risk that Units in a Fund may be difficult to (purchase or) sell depending on those circumstances.
10. The Company will effect the Client’s orders as soon as practicable; however, the execution of such orders may not coincide with the dealing days stipulated in the relevant offering document of a Fund. Furthermore, before a Client’s order is placed by the Company with the relevant Fund manager for execution, the Company may aggregate and consolidate (either daily or from time to time) a Client’s order together with orders placed by the Company’s other clients. There may be a discrepancy in the price or value of a Unit between when a Client places an order with the Company and when the order is executed by the relevant Fund manager.
11. A Fund could contain Units that do not permit dealing every day. Investment in such funds will only be realisable on their respective dealing days. The appropriate market price of these investments can only be determined on the relevant Fund’s dealing days.
12. An investment in a Fund that is not denominated in HKD or USD is exposed to exchange risk fluctuations. Exchange rates may cause the value of the investment to fluctuate.
13. Units of a Fund held by the Company or any other person appointed by the Company as the Client’s nominee outside of Hong Kong are subject to the applicable laws and regulations of the relevant overseas jurisdiction. These overseas laws and regulations may differ from the laws and regulations in Hong Kong. As a result, the Client may not enjoy the same protection for those Units in a Fund as the Client would enjoy for the same Units in a Fund that are held in Hong Kong.
14. There can be no assurance that the investment objective and strategy of a Fund will be successfully achieved.
15. Investment in Funds involve risks and prior to investing, the Client should read the relevant constitutive documents, offering documents and other relevant documents of a particular Fund to understand its features, terms and risks.
16. Before investing or dealing in a Fund, the Client should carefully consider whether that Fund is suitable having regard to the Client’s investment experience, investment objectives, financial resources and other relevant circumstances.The Client must also consider these risk disclosure statements together with those set out under the section titled "Risks in Securities Trading" above.

Risks of Synthetic Exchange Traded Funds (ETFs) Trading

Different to the traditional exchange traded funds, synthetic ETFs do not buy the assets in their benchmark. Instead, they typically invest in financial derivative instruments to replicate the benchmark’s performance. The investment in synthetic ETFs is highly risky and not suitable to all. Investors must understand clearly and consider the following risks prior to the purchase of synthetic ETFs.

1. Market Risks: ETFs are typically designed to track the performance of certain indices, market sectors, or group of assets such as stocks, bonds, or commodities. Investors are exposed to the political, economic, currency and other risks related to the ETF’s underlying index/assets it is tracking. Investment must be prepared to bear the risk of loss and volatility associated with the underlying index/asset.
2. Risks of Counterparties: Where a synthetic ETF invests in derivatives to replicate the index performance, investors are exposed to the credit risk of the counterparties who issued the derivatives, in addition to the risks relating to the index. Further, potential contagion and concentration risks of the derivatives issuers should be taken into account (e.g., since derivative issuers are predominantly international financial institutions, the failure of one derivative counterparty of synthetic ETF may have a “knock-on” effect on other derivative counterparties of the synthetic ETFs). Some Synthetic ETFs have collateral to reduce the counterparty risk, but there may be a risk that the market value of the collateral has fallen substantially when the synthetic ETF seeks to realize the collateral.
3. Liquidity Risk: There is no assurance that a liquid market exists for an ETF. A higher liquidity risk is involved if a synthetic ETF involves derivatives which do not have an active secondary market. Wider bid-offer spreads in the price of derivatives may result in losses. Therefore, they can be more difficult costly to unwind early, when the instruments provide access to a restricted market where liquidity is limited
4. Tracking Error Risk: There may be disparity between the performance of the ETFs and the performance of the underlying index due to, for instance, failure of the tracking strategy, currency differences, fees and expenses.
5. Trading at Discounts or Premiums: Where the index/market that the ETF tracks is subject to restricted access, the efficiency in unit creation or redemption to keep the price of the ETFs in line with its net asset value (NAV) may be disrupted, causing the ETF to trade at a higher premium or discount to its NAV. Investors who buy an ETF at a premium may not be able to recover the premium in the event of termination.
6. Risks of Foreign Exchange: Investors trading ETFs with underlying assets not denominated in Hong Kong dollars are also exposed to exchange rate risk. Currency rate fluctuations can adversely affect the underlying asset value, also affecting the ETFs price.

Risks of the Authorized Third Parties

There are substantial risks in allowing an authorized third party to trade or operate your account, and it is possible that instructions could be given by persons not properly authorized. You accept all of the risks of such an operation and irrevocably releases the Company from all liabilities arising out of or in connection with such instructions, whether taken by the Company or otherwise.

Risk of Providing an Authority to Hold Mail or to Direct Mail to Third Parties

If you provide the Company with an authority to hold mail or to direct mail to third parties, it is important for you to promptly collect in person all contract notes and statements of your account and review them in detail to ensure that any anomalies or mistakes can be detected in a timely fashion.

Risks of Leaving Money or Other Property in the Custody of the Company or its Nominees or Agents

You acknowledge that there are risks in leaving money or other property in the custody of the Company or its nominees or agents. For example, if the Company is holding your money or other property and becomes insolvent, you may experience significant delay in recovering the same. These are risks that you are prepared to accept.

Risks of Receiving or Holding the Client’s Assets Outside Hong Kong

Client assets received or held by the Company or its nominee(s) outside Hong Kong are subject to the applicable laws and regulations of the relevant overseas jurisdiction which may be different from the Securities and Futures Ordinance (Cap.571) and the rules made thereunder. Consequently, such client assets may not enjoy the same protection as that conferred on client assets received or held in Hong Kong.