Foreign Exchange and Gold Trading Service

Investment involves risks. The following risks disclosure statements are not exhaustive. Before making any investment decision, you should read and understand all the relevant documents and risk disclosure (in particular, the Term and Conditions for Foreign Exchange and Gold Margin Trading Service / the Term and Conditions for Foreign Exchange and Gold Pro Trading Service and the Risk Disclosure Statement contained therein) and are recommended to obtain independent professional advice. You should carefully consider whether such trading is suitable for you in light of your financial condition, experience and investment objective.

Risk of margin trading (for Margin Account only). The risk of loss in financing a contract by deposit of collateral is significant. You may sustain losses in excess of your cash and any other assets deposited as collateral with the Bank. Placing contingent orders, such as "stop-loss" or "stop-limit" orders, will not necessarily limit losses to the intended amounts. Market conditions may make it impossible to execute such orders. You may be called upon at short notice to make additional margin deposits or interest payments. If the required margin deposits or interest payments are not made within the prescribed time, your collateral may be liquidated and your contract(s) may be closed out without prior notice to, and without your consent. You will remain liable for any resulting deficit and interest charged in your account. You should therefore carefully consider whether such trading is suitable in light of your own financial position and investment objectives.

Risk of trading by collateral (for Pro Account only). The risk of loss in financing a contract by deposit of collateral is significant. You may sustain losses in excess of your cash and any other assets deposited as collateral with the Bank. Placing contingent orders, such as "stop-loss" or "stop limit" orders, will not necessarily limit losses to the intended amounts. Market conditions may make it impossible to execute such orders. For example, certain foreign exchange transactions may be highly illiquid in some circumstances and low liquidity may result in the exchange rate of the relevant contract type moves sharply higher or lower or in a volatile pattern so that the transactions may not be closed out at the desired price to limit the loss. You may not be able to close out your outstanding Contract(s) to limit loss outside normal banking hours. You may be called upon at short notice to make additional collateral deposits (which may be substantial). If the required collateral deposits are not made within the prescribed time, the Contract(s) entered into by you may be closed out without prior notice to, and without consent from, you. Closing out of the Contract(s) may result in a loss to you and moreover, you will remain liable for any resulting deficit in your account and interest charged on your account. You should therefore carefully consider whether such a financing arrangement is suitable in light of your own financial position and investment objectives.

Risk of leveraged trading (for Margin Account only). The high degree of leverage which is often obtained in connection with the contracts can work against you as well as for you. The use of leverage can lead to large losses as well as gains.

No physical delivery and non-deliverable transactions. You have no right to require any delivery or tender delivery of the relevant currencies and/or gold in any physical form in Hong Kong or elsewhere under any foreign exchange and gold margin / Pro trading contract. The transactions carried out under the Bank’s foreign exchange and gold margin trading / Pro trading service are non-deliverable, i.e. settlement of each contract will be made in the account currency only.

Volatility of foreign exchange rates and gold price. Foreign exchange rates and the price of gold are volatile. You should recognise that the foreign exchange rates and the price of gold may go down as well as up. In the worse cases, losses will be incurred rather than profit made as a result of entering into foreign exchange or gold margin / Pro trading contract. In addition, if your trade is denominated in a currency other than the account currency (i.e. either USD or HKD), you will be exposed to fluctuations in the prevailing exchange rate between such currency and the account currency when your trade is settled.

Risks relating to CNY. For any transaction involving Chinese Yuan ("CNY"), you should note that:

(i)

Offshore CNY exchange rate risks – The Bank uses offshore CNY exchange rate, which may deviate significantly from the onshore CNY exchange rate, in its calculations for trades involving CNY. The offshore CNY exchange rate fluctuates and will be affected by, amongst other things, the PRC government's foreign exchange control (for example, the PRC government regulates conversion between CNY and foreign currencies), which may adversely affect your return. The risk of loss can be substantial.

(ii)

Limitations on conversion of CNY - CNY is currently not freely convertible. The actual conversion arrangement will depend on the restrictions prevailing at the relevant time.

Risk relating to electronic and online trading. You are exposed to risks associated with the electronic and online trading system including the failure of hardware and software, interruption, transmission blackout, etc., and the risk that your order may not necessarily be executed at the price or rate indicated on the Internet or may not be executed at all.