Hong Kong Regulations

LEVERAGED FOREIGN EXCHANGE TRADING (BOOKS, CONTRACT NOTES AND CONDUCT OF BUSINESS) RULES - SECT 7

Risk disclosure statement

Caution: This is a past version. See the current version here.

(1) A licensed trader shall include in every client agreement a risk
disclosure statement which shall be in bold print not smaller than the
ordinary print for the text of the agreement.

(2) The risk disclosure statement shall provide the following warning- "The
risk of loss in leveraged foreign exchange trading can be substantial. You may
sustain losses in excess of your initial margin funds. 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 deposit
additional margin funds. If the required funds are not provided within the
prescribed time, your position may be liquidated. You will remain liable for
any resulting deficit in your account. You should therefore carefully consider
whether such trading is suitable in light of your own financial position and
investment objectives.". (Enacted 1994)