Risk Disclosure Statement
1. Important information
Leveraged foreign exchange, derivatives, precious metals, contracts for difference or other non-exchange traded products (which may also be referred to as "over-the-counter transactions" or "over-the-counter derivatives") in the form of margin have a high degree of impact on your investment principal risk. You do not actually hold, or have any rights to, the assets tracked. Trading is not for everyone and it can result in the loss of all of your invested capital. You should only invest an amount that you can afford to lose.
This statement only provides you with a non-exhaustive overview of the main risks in deciding whether to open an account and trade on PRIME MC Prime FINANCE LIMITED (MC Prime). This statement does not explain all the risks involved in trading or how the risks relate to your personal circumstances. Before deciding to open an account and trade with us, please be sure to read the relevant legal documents to fully understand the risks involved in your personal situation. If you are unsure in any way, we recommend that you seek separate counseling advice.
2. No personal advice provided
We provide products and services on a performance basis only, and you are solely responsible for any decisions you make based on our products and services. MC Prime is not a financial advisor and does not provide any regulatory, tax or legal advice. From time to time, we will provide you with general market information and how our various products work. Any information and analysis we provide is general and does not take into account your or your client's personal objectives, financial situation or needs. You should not regard any information we provide to you as investment advice or an offer to trade. Tax benefits may vary depending on your individual circumstances. If you are unsure about the above questions, we recommend that you seek expert advice.
3. Key risks associated with trading Margin FX Contracts and CFDs
(1) Market risk
i. This is the risk that the market moves against you. External market forces are unpredictable and can cause rapid changes in markets and prices. Such forces include changing supply and demand relationships, governmental, national and international political and economic events, and the general psychological characteristics of markets. It is important that you monitor your positions at all times. Since the price of your position is based on the underlying instrument, these factors may affect your position and our ability to execute, settle or close a transaction on your behalf.
ii. Contracts for Difference or Margin Forex trading through our trading platform cannot be considered "risk-free" or "safe". You can mitigate some of the downside risk with our risk management tools. You can find more details in section 10.8 of our Product Disclosure Statement.
iii. Holding both long (i.e. buying) and short (i.e. selling) positions is not necessarily less risky than having a single long (i.e. buying) or short (i.e. selling) position. Holding positions in both directions at the same time may incur more losses for you than holding positions in one direction.iv. During periods of extreme volatility, overnight fees can increase significantly and can quickly erode your initial deposit even before market price fluctuations are taken into account. available on the trading platform and upon requestRequest the latest applicable overnight fee rates. Before making a decision to hold a position overnight, you should vigilantly monitor your position and the applicable interest rate.(2) Trading on the over-the-counter market or off-exchangeMC Prime's products are all over-the-counter (“OTC”) products. Unlike stock exchanges, there are no clearinghouses for margin FX contracts and CFDs. This means that MC Prime products are not subject to deliveryThe scope of protection for exchange-traded products is protected by exchange rules and is not guaranteed by any exchange or clearing company. However, as MC Prime strives to reflect changes in the underlying market and pass the changes on to your positions. Relevant markets (if any) or exchanges will indirectly affect the trading of products offered by MC Prime. You should consider all rules of each relevant exchange that may be relevant to MC Prime contracts. The specific content of these rules is not controlled by MC Prime and may be changed at any time without notifying you.(3) Conflict of interestTrading with MC Prime automatically carries the risk of a real conflict of interest because MC Prime acts as principal for its position with you and MC Prime sets the price of the contract. MC Prime may also trade with other persons or market participants. MC Prime does not guarantee to give you the best price. You can reduce unfavorable pricing or not by monitoring MC Prime contract pricing and monitoring the underlying marketTransparent pricing of your risk. MC Prime also mitigates this risk by engaging outside legal counsel, ongoing board oversight, and implementing compliance procedures.(4) Spread lossSince MC Prime charges a spread on some trades, the price has to move in your favor to break even. That is, even if the price does not change, you will still face losses due to the price difference after entering the transaction.(5) SlippageIn extremely fast-moving or illiquid markets, gaps (or slippage) may occur. Slippage can occur when market prices do not follow a "smooth" or continuous trend, usually due to external factors such as world political, economic and business related events. If the underlying instrument tracked by your product experiences slippage, you may not be able to close or open new positions at the price you have ordered. Additionally, in the event of slippage, conditional orders that have been opened on your account will be covered at the next best available price, which may differ significantly from the price selected when the conditional order was placed.(6) Margin callIf there is an adverse movement in the price of a margin foreign exchange contract or CFD, you may receive a margin call from us, preventing your account from opening any new exposure and allowing us to close out the position without further notice at our sole discretion. If we make a margin call, you must increase the net value of your account to more than the required 100% of the total initial margin to cancel the transaction restrictions on your account and prevent being liquidated. We may also reduce or close positions without further notice if your account equity falls below the maintenance margin level, and you are responsible for making up any shortfall. Positions are marked to market on a daily basis, and account funds are settled daily, reflecting market changes. You must ensure that you have the ability to provide funds upon request at all times. Margin calls must be processed as soon as possible before we can consider a successful payment until cleared funds are received in our account. Although MC Prime has full discretion to close positions after issuing a margin call, MC Prime may have full discretion to suspend the exercise of this right to give you the opportunity to deal with margin calls. In some cases, market changes are unfavorable to your position, but MC Prime has not yet issued a margin call and your account has broken through the threshold of maintenance margin. MC Prime will close the position to protect itself and other customers.(7) LeverageBased on the applicable margin percentage, these products can be highly leveraged, so small changes in the price of the underlying instrument on which they are based can result in large gains or losses that exceed your initial margin. In addition, you may be required to pay other funds representing losses and other charges on closed and open positions. The prices of our products can be volatile, moving up and down rapidly within a wide range. Price fluctuations may be due to uncontrollable times or changes in various circumstances as described in the "Market Risk" section.(8) LiquidityCertain currency pairs or CFDs may not be liquid for certain periods of time. Lack of liquidity may result in you being unable to open a position in foreign exchange or CFD, or unable to liquidate an unfavorable position, and suffer losses accordingly.(9) No execution guarantee for stop loss ordersCertain products can be traded in conjunction with our limit and stop orders, which are designed to optimize market exposure or limit losses by specifying the execution of a trade at a predetermined price level. A stop loss is an instruction you place on MC Prime to close your position when the market trades above a certain level. Stop loss orders are often used to try to limit the amount that can be lost on a position. You need to note that we cannot guarantee stop loss and the execution of such orders depends on market volatility and liquidity. Therefore, although stop loss can generally control potential losses when there are adverse market changes, it should be noted that we cannot guarantee whether the stop loss order can be executed, and the way to limit losses may not be as you expected.(10) Our rights to close positions and impose restrictions(a) If you fail to pay the amount due and payable (including additional margin) or fail to keep the net value of the account equal to or higher than the maintenance margin level, MC Prime has the absolute right to close the position.(b) You confirm that you are aware that margin foreign exchange contracts or CFDs of certain underlying instruments traded on the MC Prime platform may fluctuate in a very short period without any prior warning. In view of the high degree of risk involved, you acknowledge and agree that if we determine in our sole discretion (having regard to our legitimate interests) that any underlying asset is too volatile, we have the right to pressThe MC Prime platform quotes to close all or open trades at that time.(c) If the product is removed from MC Prime's trading platform, we reserve the right to require you to close the transaction in a timely manner. We will endeavor to provide you with prior notice and require you to close the relevant position by the deadline. If the position remains open after the cut-off date, we reserve the right to close the position at the last available price on your behalf.(d) If we receive a counter request (also known as a chargeback notification) from your credit card issuer or from any other payment method for any reason, you acknowledge that we have the right to:i. immediately close any or all open trades (whether in profit or loss) and liquidate your account (with or without prior notice);ii. Cancellation, repricing, adjustment or voiding of prior transactions;iii. Immediately impose restrictions on your account (with or without notice), including:(i) restrict the use of any payment method to fund your account;(ii) restrict withdrawals from your account;(iii) restrict the establishment of new positions on the MC Prime platform; the duration of the restriction is at the sole discretion of MC Prime; and/oriv. Termination of Client Agreement.(e) If, in the sole opinion of MC Prime, you are suspected of unauthorized activities, market manipulation, false trading, market manipulation, virtual trading, liquidation, insider trading, short selling, violation of financial services lawsMC Prime reserves the right in its absolute discretion to terminate the Client Agreement (with immediate effect), declare it void, re-price it, or close out the position at any value at any time in case of violation of AML/CFT laws.(f) MC Prime may limit position size and access to products in your account to mitigate our risk.(g) You will also indemnify MC Prime and its employees, agents and representatives for certain losses and liabilities under the Client Agreement. You should read the client agreement carefully to ensure that you understand the above rights and responsibilities.(11) Electronic trading platform and system risk(a) We rely on technology to provide you with a trading platform. You are responsible for providing and maintaining means of access to our trading platforms, including but not limited to personal computers, smartphones, modems and telephone or other access lines. Although the Internet and the World Wide Web are generally reliable, technical problems or other circumstances may delay or prevent access to the network. If you cannot accessInternet and our trading platform, which may mean that you cannot trade the products provided by MC Prime at the ideal time and suffer losses as a result.(b) We also rely on a variety of technical solutions to provide you with an efficient service. Before engaging these providers, MC Prime has conducted due diligence and entered into a service agreement with each provider. Disruptions to MC Prime's operational processes such as communications, computers, networks or external events may cause delays in transaction execution or settlement. An example of disruption includes our baseA "crash" of a computer-based trading system. MC Prime mitigates this risk by conducting regular backups and using appropriate IT systems and protections. This means that you may not be able to trade on certain markets that we offer and you may suffer financial loss or loss of opportunity as a result.(c) We reserve the right to suspend the operation of some or all of the trading platform and website. In such event, we may, at our sole discretion (with or without notice), close out your open position at a price we deem fair and reasonable.(12) Regulatory riskChanges in tax and other legal, governmental, fiscal, monetary and regulatory policies may have a material adverse effect on your margin foreign exchange contract or CFD transactions, as may any regulatory action against MC Prime. We will do our best to notify you of any legal changes that affect your dealings with us.(13) Counterparty risk(a) You must trade directly with MC Prime, open and close positions. Since you are dealing with MC Prime as a counterparty in each transaction, you will be exposed to us in each transaction. This has been described as counterparty risk and is a common feature of all OTC derivatives. If MC Prime becomes insolvent, we may not be able to meet our obligations to you.(b) However, although you consider this risk, you must note that MC Prime fully complies with our specific financial requirements for securities investment business license laws and regulations. We monitor our risk exposures regularly and frequently using real-time software tools and prepare detailed financial reports to ensure that applicable financial requirements are met. We must have our accounts audited at least once a year.(c) MC Prime may choose to limit our exposure to clients with counterparties as principal counterparties in wholesale markets. Therefore, MC Prime faces counterparty risk with hedging counterparties. If these hedging counterparties processed by MC Prime become insolvent, we may not be able to utilize the underlying assets and will become an unsecured creditor of the hedging counterparty, which may affect our ability to meet our obligations to you.(d) To mitigate this risk, MC Prime has policies, systems and controls in place. MC Prime uses reputable counterparties, such as established financial institutions with good reputation and sufficient financial resources. In selecting counterparties, MC Prime considers public information, credit agency reports, and the most recent financial statements showing those counterparties' paid-in capital, assets and liabilities. In addition, MC Prime searches the databases of relevant regulators to confirm that a proposed counterparty has all necessary licenses and/or authorizations. We also use lines of credit to manage our exposure to each counterparty.(14) Foreign exchange risk(a) Your account is maintained in the currency you designate (i.e. your local currency). If you trade a product that is denominated in a currency other than your home currency, all initial and maintenance margins, profit and loss, interest rate payments/revenues and financing borrowings in relation to that product will be denominated in the currency in which the product is priced.(b) Accordingly, fluctuations in the relevant exchange rates between the time an order is placed and the time a position is closed, liquidated, set off or exercised may affect your profit or loss.(c) When closing a position priced in a currency other than the account's home currency, the foreign currency balance will be converted to the account's home currency. All conversions will be based on MC Prime quoted exchange rates. Fluctuations in the relevant foreign exchange rates may affect the unrealized profit or loss of a position prior to converting foreign currency balances into domestic currency.(15) Third-party market information(a) MC Prime may, through one or more of its services, provide you with a wide range of financial information generated internally or from its agents, suppliers or third-party providers. This includes, but is not limited to, financial market data, quotes, news, analyst opinions and research reports, charts or data (“Market Information”). The marketing information we provide via email or website is not intended to beAsk for advice. MC Prime does not guarantee or approve such market information, we only provide it to you as a convenient service. MC Prime and its third-party providers do not guarantee the accuracy, timeliness, completeness or correct order of the market information, or the results of your use or reliance on the market information.(b) The reliability of market information may change rapidly for a number of reasons (for example, changes in market conditions or economic conditions). Neither MC Prime nor third-party providers are obliged to update any marketany information or opinions contained in market information, and we may stop providing market information at any time without notice(16) Venture capital onlyYou may lose all deposits paid to open or support positions. All derivatives trading involves risk, and no trading strategy can completely eliminate risk. Backup buy and sell orders, such as stop loss orders, also sometimes fail to limit losses to the amount you expect. Market conditions may make it impossible to execute such orders. In the case of speculation, we recommend that you risk no more capital than you can afford to lose. A good general rule is that the amount of money you invest in speculation should not change your standard of living even in the event of a total loss.(17) Cryptocurrency risk (CFD)(a) MC Prime does not buy or sell cryptocurrencies, nor does it operate as a digital currency exchange provider. Cryptocurrencies are digital currencies. It should be noted that although the instrument structure and specifications of these product solutions are basically similar to other CFDs and even margin foreign exchange contracts, their underlying markets are completely different. Each cryptocurrency is different and created by its respective currency unitproduction, storage and transfer of ownership rules. Explanation of the mechanics behind these underlying cryptocurrency markets is outside the scope of this risk disclosure statement. Before trading CFDs, you should familiarize yourself with the operation of the cryptocurrency market tracked by the CFD you intend to trade.(b) Our cryptocurrency contract prices are based on their underlying market, provided to us by our liquidity providers. In particular, you should be aware that the pricing formation rules for cryptocurrency transactions are not subject to any regulatory supervision, and may be changed by relevant digital exchanges at any time. Likewise, such digital exchanges may introduce trading halts or take other actions that may result in the suspension or cessation of trading on such exchanges, or make price and market data unavailable to us. The above factors may have a material adverse effect on your open positions, including the loss of the entire amount invested.(c) If you trade cryptocurrency CFDs, you should be aware of the risk of hard forks. A hard fork is when a cryptocurrency is split into two, due to the existing code of the cryptocurrency being changed, resulting in an old version and a new version of the cryptocurrency. MC Prime has the right to decide which blockchain (cryptocurrency transaction ledger) and cryptocurrency unit wins the majority consensus, and uses this as the cryptoThe basis of currency contracts. We will endeavor to notify you of potential forks, but it is your responsibility to be aware of possible forks.