1.1. Basfour 3773 (Pty) Ltd (“the Company”) operating under the trade name OINVEST, is an authorised Financial Service Provider (“FSP”), licensed by the Financial Sector Conduct Authority (“FSCA”) in South Africa, with FSP No. 42020 and registration number 2010/002719/07.
1.2. The Company’s relationship with its clients will involve entering into over-the-counter (“OTC”) contracts for differences (“CFDs”) with them.
1.3. As per the terms of General Code of Conduct for Authorised Financial Services Providers and Representatives, 2008 as amended from time to time (“the Code”), the Company is required as an FSP, at the earliest reasonable opportunity, to provide, where applicable, full and appropriate information of any material investment or other risks associated with the Company’s products (“CFDs”), including any risk of loss of any capital amount(s) invested due to market fluctuations.
1.4. This notice aims to communicate the inherent risks associated with trading CFDs on the Company’s Online Trading Platform (“the Platform”).
1.5. The Company cannot disclose all potential risks associated with trading CFDs, thus the Company suggests that clients consult professional advisors regarding legal, regulatory, credit, tax or accounting elements to consider, that may apply to CFDs.
1.6. Before entering into this relationship with the Company, clients acknowledge, understand and agree to the risks involved in this Risk Disclosure.
1.7. If at any time clients have any queries or questions relating to this Risk Disclosure Notice, they shall contact the Company at [email protected] Clients are strongly advised to do so before engaging into trading CFDs.
2.1. Trading CFDs is very speculative, risky, and it involves a significant risk of loss.
2.2. Clients should not invest retirement funds in CFDs.
2.3. CFD Trading is not suitable for all investors. Suitable investors are persons who:
2.3.1. understand and are willing to assume the economic, legal and other risks involved in this trading;
2.3.2. are experienced and knowledgeable about trading in derivatives and in underlying asset types; and
2.3.3. are financially able to afford significant losses that are greater than the margin or the initial deposit.
2.3.4. CFD are some of the riskiest types of investments and can result in large losses. These investments are technical and involve lingo that clients need to understand.
2.3.5. Clients should contact the Company on the details available on its webpage in case they require help understanding any related terms, but they should also seize professional advice and help before investing.
2.3.6. Clients represent, warrant and agree that:
188.8.131.52. They understand these risks;
184.108.40.206. They are willing and able to assume the risks of trading CFDs;
220.127.116.11. They are able to afford the risks financially; and
18.104.22.168. that the loss of their entire account balance will not change their lifestyle.
3.1 Being long in CFD means a client buys the CFDs on the market by speculating that the market price of the underlying asset will rise between the time of the purchase and sale.
3.2 As the owner of a long position, clients will generally make a profit if the market price of the underlying asset rises while their CFD long position is open. Clients will generally suffer a loss, if the market price of the underlying asset falls while their CFD long position is open.
3.3 Clients’ potential loss may therefore be bigger than the initial margin they have deposited. In addition, they might suffer a loss due to the closing of their position if they do not have enough liquidity for the margin on their account in order to maintain their position open.
4.1. Being short in CFD means clients are selling the CFDs on the market by speculating that the market price of the underlying asset will fall between the time of the purchase and sale.
4.2. As the owner of a short position, clients will generally make a profit if the market price of the underlying asset falls whilst their CFD short position is open. Clients will generally suffer a loss if the market price of the underlying asset rises whilst their CFD short position is open.
4.3. Clients’ potential loss may therefore be bigger than the initial margin deposited. In addition, clients might suffer a loss due to the closing of their position, if they do not have enough liquidity for the margin on their account in order to maintain their position open.
5.1. There are specific market conditions, under which a CFD is difficult ot impossible to close-out. This could be for example a result of a suspension or a restriction of trading on the underlying asset of the CFD at times of rapid price movement.
5.2. In case there is no liquidity in the underlying asset of a CFD, clients may not be able to trade that CFD.
5.3. There are circumstances where a client may place a “Stop order” and their losses will still not be limited to the destined amount, as market conditions may make it impossible to execute the stop order ar the stop level specified in the CFD.
6.1. The high degree of “gearing” or “leverage” is a particular feature of CFDs.
6.2. The effect of leverage makes investing in CFDs riskier than investing in the underlying asset. This is because of the margining system that applies to CFDs. This margining system involves a small deposit that is relative to the size of the transaction. It means that a small price movement in the underlying asset can have a disproportionately dramatic effect on clients’ trades.
6.3. This can be both advantageous and disadvantageous. A small price movement in a client’s favor can provide a high return on the deposit, however, a small price movement against the client, may result in significant losses.
6.4. These losses can occur quickly. The greater the leverage, the greater the risk. The size of leverage therefore contributes towards the result of the investment.
10.1. When trading CFDs with the Company, these transactions will not be performed on a recognized or designated investment exchange. These are known as OTC transactions.
10.2. Because of this, all positions entered into with the Company must be closed with the Company. Clients’ positions cannot be closed with any other entity.
10.3. OTC transactions may involve greater risk than investing in contacts that are on an exchange, because there is no exchange market to close out an open position.
10.4. It may be impossible to liquidate an existing position, to assess the value of the position or to assess the risk exposure.
10.5. Based on best execution policies applicable to the market, the Company will not quote bid prices and ask prices.
10.6. The Company does not have a central clearing system. It further does not provide any guarantee, and no other party guarantees, its payment obligations to clients. This means clients are exposed to their credit risk.
10.7. Prices, margins and valuations may be different from prices reported elsewhere The performance of clients’ CFDs will depend on the prices the Company sets and the market fluctuations in the underlying asset that is the subject of clients’ contract. Each underlying asset carries specific risks that affect the result of clients’ CFDs.
10.8. The Company calculates its prices by looking at the price of the underlying asset. It gets these prices from third party sources or exchanges. For its CFDs it obtains price data from wholesale market participants.
10.9. Although the Company expects that these prices will be related to prices available on the market, its prices may be different to prices available to banks and other market participants.
10.10. The Company has a wide discretion in setting and collecting margin. It isauthorized to convert funds in clients’ accounts for margin. This also involves converting clients’ funds into foreign currency at a rate of exchange that the Companys alone determines. The Company’s rate of exchange is based on the current market rates.
13.1. The Company’s Online Trading System immediately transmits clients’ execution orders once clients enter the speculated amount and click “Buy/Sell.”
13.2. This means that clients do not have an opportunity to review the order after clicking “Buy/Sell”. This also means that Market Orders cannot be cancelled or modified.
13.3. Clients should therefore use the Company’s Demo Trading System to learn about how the Online Trading System works, before they actually trade online with the Company.
13.4. Clients acknowledge and agree that by using the Company’s Online Trading System, they agree to its one-click system. Clients further acknowledge and agree to accept the risk of this immediate transmission/execution feature.
14.1. If clients execute Market Orders over the telephone using he Company’s Trading Desk, these order will be completed when the Company’s telephone operator says “deal” or “done”. When this is completed, clients would have bought or sold, and they cannot cancel the Market Order.
14.2. By placing Market Orders through the Trading Desk, clients acknowledge and agree to this immediate execution. They acknowledge and agree to accept the risk of this immediate execution feature.
15.1. When the Company provides general market recommendations, these recommendations are not in any way a personal recommendation or investment advice. The Company does not consider any of the clients personal circumstances or their investment objectives when it makes their market recommendations.
15.2. When the Company makes its market recommendations, it agrees that it is not an offer to buy or sell, or a solicitation of an offer to buy or sell.
15.3. The clients acknowledge and agree that every time they decide to enter into a CFD with the Company, and each time that they decide that a transaction is appropriate for them, it is an independent decision made by then.
15.4. If clients incur any liabilities, claims, damages, costs and expenses (including attorneys’ fees) when they follow or take any action based on any of the Company’s trading recommendations, they agree that the Company will not be liable or responsible to them. The clients acknowledge and agree that the Company does not act as an advisor to them nor it is a fiduciary to them. Clients agree that the Company has no fiduciary duty towards them.