Client Agreement (including Risk Disclosure Statement)

English Version

 

CLIENT AGREEMENT

 

 

Tiger Brokers (HK) Global Limited 老虎證券(香港)環球有限公司 (CE No. BMU940)

(Licensed Corporation by the Securities and Futures Commission)

1/F, FWD Financial Centre,

308 Des Voeux Road Central, Hong Kong

Tel:(852) 2760 2500    Fax:(852) 3010 8782

 

TBHK-ENA2312

 

 

INDEX

 

PART I – INTRODUCTION AND DEFINITIONS

PART II – GENERAL TERMS AND CONDITIONS

PART III – ADDITIONAL TERMS APPLICABLE TO RESPECTIVE ACCOUNTS AND SERVICES

Schedule A – Additional Terms for Margin Account

Schedule B – Additional Terms for Stock Option Trading Services

Schedule C – Additional Terms for New Listing of Securities

Schedule D – Additional Terms for Fractional Shares Trading Services

Schedule E – Additional Terms for Electronic Trading Services

Schedule F – FATCA and CRS Policy

Schedule G – Additional Terms for Short Selling

Schedule H - Additional Terms for Fund Service

Schedule I - China Connect Terms and Conditions

PART IV – RISK DISCLOSURE STATEMENT

PART V – DATA PRIVACY POLICY



PART I – INTRODUCTION AND DEFINITIONS

This Client Agreement, together with the related Account Opening Form and other related application form, contain important terms and conditions that apply to and constitute this Client Agreement on all Accounts that you currently or in the future will open and maintain with Tiger Brokers (HK) Global Limited (“TBHK”) of 1/F, FWD Financial Centre, 308 Des Voeux Road Central, Hong Kong.

 

Please read this Client Agreement carefully and retain for your future reference. You should consult your own legal, tax and financial or other professional advisers prior to entering into this Client Agreement if you are in any doubt or have any questions about how to complete any part of this Client Agreement. You are fully aware that this Client Agreement constitutes a legally binding agreement.

 

TBHK is duly licensed by the Securities and Futures Commission for Type 1 regulated activity of dealing in securities, Type 2 regulated activity of dealing in futures contracts, Type 4 regulated activity of advising on securities and Type 5 regulated activity of advising on futures contracts (CE No.: BMU940) and is an Exchange Participant of the Stock Exchange of Hong Kong Limited, meanwhile a Direct Clearing Participant of Hong Kong Securities Clearing Company Limited.

 

Definitions

 

1.1          Save as otherwise specifically set out in other sections in this Client Agreement or other documents forming part of this Client Agreement, words and phrases in this Client Agreement shall be read and construed in accordance with the definitions set out below:

 

“Access Codes”

means such password(s), and/or form(s) of personal identification (in numeric, alpha numeric or other format, usually known as login name) prescribed by TBHK from time to time, whether use alone or in conjunction with each other, for gaining access to the Electronic Trading Services.

“Account Opening Form”

means the form(s) which is required to be completed by you and contains information provided by you to us and returned to us for the purpose of Account(s) opening.

“Account(s)”

means any account (including without limitation Cash Account, Margin Account and any sub accounts thereof) from time to time opened in your name and maintained with us for the Services. An Account should be denominated in Hong Kong dollars or such other currencies as we may agree from time to time with you.

“Affiliate”

means with respect of any specific person or entity, any other person or entity, directly or indirectly, controlling or controlled by or under direct or indirect common control with that specified person or entity.

“Applicable Laws and Regulations”

means any statute, law, regulation or order, or any rule, direction, guideline, policy, requirement, code of conduct, notice or restriction (whether or not having the force of law) issued by any regulatory authority, government agency, Exchange or professional body applicable from time to time, or market practices or customs, whether in Hong Kong or other applicable jurisdictions.

“Authorized Person(s)”

means a person duly appointed by you in the Mandate and, in respect of such persons, we have not received any written notice of revocation or termination of such person’s appointment, powers or authority from you.

“Business Day”

means a day (other than Saturday, Sunday or a public holiday) on which we are open for business in Hong Kong.

“Cash Account”

means any cash securities account, as indicated as such in the Account Opening Form, opened by you with TBHK for trading of securities without Margin Facility

“Charge”

means the charge over the Collateral in favor of TBHK to secure repayment of Secured Obligations in accordance with Clause 3.1 in Part III Schedule A - Additional Terms for Margin Account.

“Clearing House”

means Hong Kong Securities Clearing Company Limited (“HKSCC”) in relation to SEHK and in relation to any other Exchange, the clearing house providing services similar to those of HKSCC to such Exchange.

“Client Agreement”

means this Client Agreement (including all Parts, Schedules and Appendices hereunder), the Risk Disclosure Statements, the Account Opening Form, any addendum, any relevant confirmation, and/or any other agreement or document entered into between us for Services and /or Transactions, each as may from time to time be amended or supplemented.

“Code of Conduct”

means Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission issued by SFC and as amended from time to time.

“Collateral”

means, as security or credit support for entering into any Transaction or for any of your obligations under this Client Agreement, collectively, (i)all monies and properties (including Securities Collateral) provided by or through you which are now or hereafter held or controlled by or through us or which are in transit to or from or allocated to or are otherwise in our custody or which are carried in any Account, and (ii)all proceeds or distributions of the same.

“Data Privacy Policy”

means TBHK’s or its Affiliate(s) general policy in relation to the Personal Data (Privacy) Ordinance (Chapter 486 of the Laws of Hong Kong) and any subsidiary legislation made thereunder as amended, consolidated or substituted from time to time and the current version of the policy is set out in Part V of this Client Agreement.

“Dormant”

means in respect of any Account, the status of such Account having recorded no trading activities and no position for a continuous period of twenty-four (24) months or such other time period as we may notify you from time to time in writing.

“Electronic Media”

means any electronic or telecommunications media, including but not limited to the internet, interactive television systems, telephone, wireless application protocol or any other electronic or telecommunications devices or systems as TBHK may from time to time determine and prescribe, through which you give instructions relating to the Transactions.

“Electronic Trading Services”

Means any facility and service (including without limitation those relating to dealing services, information services, email and the software comprised in any of the forgoing) provided or to be provided by TBHK or TBHK’s contractor or agent or service provider from time to time under this Client Agreement which enables you to give instructions relating to any Transaction in the Account(s) or to obtain quotation on prices of securities or other information through any Electronic Media.

“Encumbrances”

means any mortgage, charge, pledge, debenture, lien, assignment by way of security, financial lease, deferred purchase, sale-and-repurchase or sale-and-leaseback arrangement, hypothecation, retention of title by a vendor, third party right or interest, or other encumbrance or security interest of any kind given or arising in respect of any assets, or any arrangement the effect of which is to prefer any creditor or any agreement over any other creditor or agreement, and includes any agreement or obligation to create or grant any of the above.

“Exchange”

means any association, market or exchange with fixed rules and regulations through which you instruct us to transact, without limitation, Securities on your behalf and includes SEHK.

“Hong Kong”

means The Hong Kong Special Administrative Region of The People’s Republic of China.

“Insolvency Event”

means the occurrence of any of the following events in a person, whereby that person (a) becomes or is declared insolvent or bankrupt; (b) is the subject of any proceeding related to its voluntary winding up, liquidation, bankruptcy, insolvency, administration or receivership; (c) is the subject of any proceedings related to the appointment of an administrator, receiver, administrative receiver, trustee, liquidator or any similar or analogous officer; (d) makes an assignment for the benefit of all or substantially all of its creditors; (e) calls a meeting of its creditors or otherwise makes or proposes to enter into an agreement or arrangement with its creditors for the composition, extension, or readjustment of its debts or obligations; (f) a filing is made, petition is presented or resolution passed or proposed for any of the foregoing; (g) becomes or its parent company becomes unable to pay its debts as they fall due; or (h) is subject to an analogous event in any jurisdiction.

“Institutional Professional

Investor”

means a “professional investor” within the meaning of paragraph (a), (b), (c), (d), (e), (f), (g), (h) or (i) of the definition of “professional investor” in section 1 of Part 1 of Schedule 1 to Securities and Futures Ordinance (Cap 571).

“Instructions”

means any instruction given by you in such form and delivered or transmitted to us by such means as we may prescribe from time to time, including, but not limited to, instructions given by telephone, in writing, via the Internet (whether by email or web services), by facsimile, or in person, in each case subject to the applicable minimum and/or maximum amounts as we may prescribe from time to time in respect of any particular type of instruction, for the utilization of the Services.

“Investment”

means all or any of Securities and any other investment products that may be offered by us to you from time to time.

“Investor Compensation

Fund”

means the Compensation Fund established pursuant to the SFO.

“Mandate”

means all mandates between you and us, including, without limitation, the mandate set out in the Account Opening Form or under any power of attorney or letter, documents or instrument to give instructions with respect to the operation of any Account and dealing in Transactions , and in such form as may be acceptable to us, which has been validly executed by you and received by us.

“Margin Account”

means any margin account, as indicated as such in the Account Opening Form, opened by you with TBHK for trading of securities with Margin Facility granted by TBHK.

“Margin Facility”

means the credit facility provided by TBHK to you to facilitate the acquisition of securities and the continued holding of those securities under the Margin Account and for other related purposes.

“Margin”

means the amount, whether cash or non-cash collateral as may from time to time be demanded by TBHK from you by way of margin in relation to any amount drawn under Margin Facility for the purpose of protecting TBHK against any loss or risk of loss on present, future or contemplated obligations under Margin Facility of you, and “margin requirements” means the requirements set by TBHK in respect of the collection and specifications of the Margin.

“Risk Disclosure Statement”

means the risk disclosure statement provided by TBHK to you before the opening of the Account and/or from time to time in form prescribed by the SFC from time to time with the current version set out in Part IV – Risk Disclosure Statement of this Client Agreement.

“Secured Obligations”

means all money, obligations or liability in any currency (together with the accrued interest) falling due, owing or incurred by you to TBHK under the Margin Account or to TBHK’s Affiliates under any other account now and in the future, whether actually or contingently, whether solely or jointly with others.

“Securities” or “securities”

means includes (a) items under the definition of securities in Schedule 1 of the SFO; (b) all investment products listed or traded on Exchanges; and (c) any investment products prescribed by TBHK as such.

“Securities Collateral”

means the Collateral which is in the nature of securities.

“SEHK”

means The Stock Exchange of Hong Kong Limited.

“Services”

means the services (including without limitation: information services), products (including without limitation: securities) and credit facilities, of any type or nature, offered by us to you from time to time.

“SFC”

means in relation to Hong Kong, The Securities and Futures Commission constituted under the SFO, in relation to any other regions, other statutory bodies performing similar functions as The Securities and Futures Commission and have jurisdiction over the relevant Exchanges.

“SFO”

means the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) and any subsidiary legislation made thereunder amended, consolidated or substituted from time to time.

“Transaction(s)”

means the transactions carried out for and on behalf of you in connection with this Client Agreement, including without limitation: the purchase, sale, exchange, disposal and general dealing (including but not limited to deposit and withdrawal and exercise of call and put options) in securities, the disposition of funds and the drawing and repayment under the Margin Facility on behalf of you in connection with this Client Agreement.

“US”

means the United States of America

“We”, “us” or “our” or “TBHK”

means Tiger Brokers (HK) Global Limited and/or its Affiliate.

“You” and “Your” or “Client”

means the person(s) (including any corporation, sole proprietor, or each partner of a partnership) who enter(s) into this Client Agreement and who utilize(s) any particular Account(s) and such person’s successors in title and(if appropriate) personal representative and (as the context requires) shall include each Authorized Person

 

 

1.2          In this Client Agreement:

(a)      words importing the singular shall, where the context permits, include the plural and vice versa;

(b)      words importing gender or neuter includes both gender and neuter;

(c)       The expression “person” shall include a natural person, sole proprietorship, any firm, partnership, association of persons, syndicate and body corporate and any such persons acting jointly and the personal representatives or successors in title of any such person;

(d)      References to “writing” shall include telex, cable and facsimile transmission and texts transmitted through Electronic Media;

(e)      Heading are for convenience only;

(f)        Any reference to Clauses or Schedules in the General Terms and Conditions or in the Additional Terms is a reference to the clauses of or the schedules to the General Terms and Conditions or the Additional Terms respectively, unless otherwise stated;

(g)      References to any statutes, ordinances, rules or regulations shall include such statutes, ordinances, rules or regulations as modified or re-enacted from time to time; and

(h)      Terms and expressions not defined in this Client Agreement shall bear the meaning ascribed to them in the rules of Hong Kong Futures Exchange Limited, the rules of HKEX, SFO, Code of Conducts, Rules Governing the Listing of Securities on SEHK unless otherwise defined in this Client Agreement.

 

 

PART II – GENERAL TERMS AND CONDITIONS

 

1               APPLICATION

1.1          This Client Agreement sets out the conditions based on which we, from time to time, agree to open and maintain one or more Account(s) in your name, for recording all of your purchase, application, subscription, redemption, sale, switching of, provision of custody for, or transfer or other dealings in any of your Securities and other Investments including, without limitation, in Securities listed on SEHK and to provide other Investment products or Services which may offer from time to time to you. All Transactions executed by us for you are subject to this Client Agreement and any applicable supplemental documents.

 

1.2          You hereby agree to observe and be bound by the provisions of this Client Agreement and any deletion, addition or amendment as we may from time to time make at our absolute discretion in accordance with Clauses 4.5 and 4.6 below.

 

2               SERVICES 

2.1          We may do any one or more of the following in accordance with this Client Agreement:

(a)      act on your Instructions;

(b)      execute Transactions in Securities and other Investments for or with you (whether acting as principal and/or your agent to such Transaction);

(c)       clear, carry, transmit and settle Transactions for you;

(d)      keep safe custody of your Securities, other Investments and Collateral; and

(e)      provide such other services as may be specified in this Client Agreement or in other agreement entered or to be entered with you.

 

2.2          We may, at our absolute discretion (such discretion not to be exercised in an unreasonable manner), with or without giving any reason therefore, decline to enter into any Transaction or provide any Service to you.

 

2.3          We are authorized to engage the services of, and delegate the performance of any part of the Services or all or any of our functions, powers, discretion, privileges and duties under this Client Agreement to any person or agent (including any of our Affiliate) who may act as our nominee, principal or agent to us or you. We will exercise such care in the selection of such person as we would employ for our own business, but we shall have no responsibility for any action, omission, negligence or default of any such person and you agree to assume full risk in relation to such person’s performance.

 

2.4          We shall be entitled but not obliged to, without prior notice to or consent from you, take such steps as we may in our absolute discretion determine to be expedient in order to enable us to provide the Services and exercise our powers under this Client Agreement.

 

3               ENTIRE AGREEMENT

3.1          This Client Agreement shall constitute the entire business relationship between you and us and will supersede and replace all other previous terms and conditions which apply to the same. If any particular business relationship between you and us is governed by a separate agreement or terms and conditions, that agreement or those terms and conditions shall prevail over this Client Agreement in respect of the subject matter concerned to the extent that the provisions of that agreement or those terms and conditions are inconsistent with this Client Agreement.

 

4               COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS

4.1          All Transactions shall be subject to this Client Agreement and, in respect of those Exchanges and/or Clearing Houses where the Transactions are processed, the constitution, rules, regulations, practices, procedures and administrative requirements, as amended from time to time of the relevant Exchange and/or Clearing House (and in particular as regarding Transactions effected on SEHK the rules, regulations, practices, procedures and administrative requirements of SEHK and HKSCC) and to all applicable laws whether imposed on you or TBHK, as amended from time to time. All Transactions shall also be subject to the terms of business of dealer or other persons who have been involved in the processing of the Transactions where TBHK deems fit.

 

4.2          In the event that the Client wishes to have transactions pursuant to this Agreement executed on Exchanges other than the SEHK, the Client acknowledges and recognizes that, since such transactions will be subject to the rules and regulations of those Exchanges, and applicable local laws, and not those of the SEHK, the Client may have a markedly different level and type of protection in relation to those transactions compared to the level and type of protection afforded by the rules and regulations of the SEHK and Hong Kong laws (and the Client acknowledges and recognises, without limitation, that such transactions executed on exchanges other than the SEHK will not be subject to a right to claim under the compensation fund established under the SFO where the Client suffers a pecuniary loss).

 

4.3          You confirm that:

(a)      in the event of any conflict between this Client Agreement and the Applicable Laws and Regulations, the latter shall prevail;

(b)      TBHK may take or omit to take any action it considers fit in order to ensure compliance with the Applicable Laws and Regulations including without limitation, adjusting any Account, disregarding any unexecuted orders or rescinding any executed Transactions;

(c)       the Applicable Laws and Regulations as are so applicable and all such actions so taken shall be binding upon you; and

(d)      you shall be responsible for obtaining in advance and maintaining any governmental or other consents required in connection with your entering into of this Client Agreement or TBHK effecting any Transaction in connection with this Client Agreement

 

4.4          This Client Agreement shall not operate insofar as it removes, excludes or restricts any of your rights or obligations of TBHK under the laws of Hong Kong or any other relevant law. If any provisions hereof are or should become inconsistent with any present or future law, rule or regulation of SEHK and HKSCC and/or any Exchange and/or any Clearing House or any other relevant authority or body having jurisdiction over the subject matter of this Client Agreement, such provision shall be deemed to be rescinded or modified in accordance with any such law, rule or regulation. In all other respects this Client Agreement shall continue and remain in full force and effect.

 

4.5          Save as otherwise required by Applicable Laws and Regulations, we may amend any part of this Client Agreement at any time by giving you reasonable notice of the changes in writing at any time. We may employ any reasonable mode of communication for the purpose of notifying you of such changes, such as, without limitation, by posting notice of such amendments on our website, or by sending a written notice or the revised Client Agreement (or relevant parts thereof) to you.

 

4.6          Continued use of our Services and/or the placing of any instruction to enter into any Transaction after such notice as described under Clause 4.5 above will constitute acknowledgment and acceptance of the revised Client Agreement by you. You may review the most current Client Agreement online at any time by referring to our website.

 

4.7          No person other than you and us will have any right under the Contracts (Rights of Third Parties) Ordinance (Chapter 623 of the Laws of Hong Kong) to enforce or enjoy the benefit of any of the provisions of the terms and conditions of this Client Agreement.

 

4.8          This Client Agreement does not create or confer any rights or benefits enforceable by any person not a party to it except:

(a)      an Affiliate of TBHK may enforce any of its rights or benefits in this Client Agreement;

(b)      any of the Indemnified Persons as defined in Clause 18.7 and Clause 5 in Schedule F in Part III may enforce the rights or benefits of the indemnity under such clause; and

(c)       a person who is a permitted successor or assignee of the rights or benefits of this Client Agreement may enforce those rights or benefits.

 

4.9          No consent from the person’s referred to in this Clause 4.8 is required for the parties to vary or rescind this Client Agreement (whether or not in a way that varies or extinguishes rights or benefits in favor of those third parties).

 

5               NON-HONG KONG RESIDENTS OR CORPORATIONS 

5.1          You understand and agree that you will be solely responsible for complying with any selling restrictions in relation to any Investment that may be applicable to you as a result of your nationality, your residency or your giving of Instructions from an overseas jurisdiction. We are not responsible for advising you on the applicability of selling restrictions and will not be responsible for any claims, demands, actions, proceedings, losses, penalties, fines, taxes, damages, costs and expenses (including legal costs) and any liability whatsoever that you may suffer as a result.

 

5.2          If you reside or (being a corporation) are incorporated outside Hong Kong, or give Instructions outside Hong Kong, you agree to ensure and you represent that such Instructions will be given in compliance with all Applicable Laws and Regulations of any relevant jurisdiction(s) which may be applicable to you or from which your Instructions are given, and that when in doubt, to consult or obtain legal advice on the laws of the relevant jurisdiction.

 

5.3          You agree and undertake to pay any taxes, duties, impositions or charges payable to the relevant authorities in respect of your nationality or residing or your giving of any Instructions from outside Hong Kong and the execution of your Instructions. You agree that, when in doubt, you will consult or obtain advice on tax related matters and/or issues from professionals of the relevant jurisdiction(s) at your own costs.

 

6               INSTRUCTIONS       

6.1          Subject to Clause 6.17, TBHK shall be authorized but not bound to act on an instruction given by you or the Authorized Person (if any) to carry out a Transaction (whether directly or through other dealer or otherwise). TBHK may at any time and from time to time impose any limits including trading limits on any Account and you agree not to exceed such limits. If any of the said limits are or to be exceeded, TBHK may decline such an instruction and/or is entitled to close the open position of the Transactions concerned. TBHK may in its absolute discretion refuse to act on any of the instructions received from you without giving any reason, in particular for sell order without evidence of sufficient securities, or buy order without evidence of sufficient funds or compliance with the margin requirements. TBHK is not in any circumstances be liable in any way for any loss of profit or gain, damage, liability or cost or expense suffered or incurred by you arising from or in connection with TBHK’s refusal to act on such instruction or omitting to notify you of such refusal. The Client acknowledges and agrees that the Client retains full responsibility for all Transactions and TBHK is responsible only for the execution, clearing, and carrying of Transactions and has no responsibility or obligation regarding any conduct, action, representation or statement of any introducing firm, investment advisor or other third party in connection with the Account or any Transaction therein. TBHK is not responsible to the Client with respect to the suitability of the Transaction. Nor is TBHK responsible for the profitability, tax, legal or accounting consequences of any Transactions.

 

6.2          TBHK shall act as an agent of you and not as a principal in relation to any Transactions undertaken by TBHK under this Client Agreement except where TBHK gives notice to you to the contrary.

 

6.3          You undertake not to give any Instructions for sale of Securities which you do not own (that is, involves short selling) and we shall treat all sale orders as long sale orders unless otherwise agreed between us. Notwithstanding the foregoing, where you specify that an order is a short selling order (including holding a long position that is less than the quantity being sold), and we consent and agree to your entering into such short selling activities, you may subscribe for short selling services with us. You further acknowledge that: (i) short sales may only be effected in a Margin Account and are subject to Applicable Laws and Regulations and requirements (including in relation to disclosure and reporting of short sales where the short position passes certain thresholds under any relevant Applicable Laws and Regulations), and to the initial margin and margin maintenance requirements stipulated in our credit policy subject to change from time to time; (ii) prior to effecting a short sale order for you, TBHK must be able to borrow such Securities on your behalf to effect delivery of such Securities to the purchaser; (iii) if TBHK is able to borrow stock to enable you to effect a short sale and the lender subsequently issues a re-call notice for such stock, TBHK will attempt to re-borrow the Securities on your behalf, it being expressly understood by you that if TBHK is unable to re-borrow such Securities, then TBHK, without further notice to you, is authorised by you to cover your short position by purchasing Securities on the open market at the then-current market price and you shall be liable for any resulting losses and all associated costs incurred by TBHK, executing broker, and/or its clearing firm.

 

6.4          Because of physical restraints on any Exchange or the very rapid changes in the prices of Securities that frequently take place, there may, on occasions, be a delay in making prices or in dealing. TBHK may not always be able to trade at the prices or rates quoted at any specific time or "at best" or "at market". TBHK shall not be liable for any loss howsoever arising by reason of its failing, or being unable, to comply with the terms of any limit order undertaken on behalf of you or under the circumstances contemplated in this Clause. Where TBHK is for any reason whatsoever unable to perform your order in full, it may in its discretion effect partial performance only. You shall in any event accept and be bound by the outcome when any request to execute orders is made.

 

6.5          Unless otherwise instructed by you (and such Instruction being accepted by us), all Instructions are good for the day on which they were given. They will be automatically cancelled if not executed by the close of trading on the relevant Exchange or such other expiration date or time required by the relevant Exchange. Any Instructions received on a trading day after the close of trading on the relevant Exchange will be carried forward to the next trading day of that Exchange, and this Clause 6.5 will apply accordingly. We may execute the Instructions at any time prior to their automatic cancellation or receipt of cancellation Instructions, and you accept full responsibility (including without limitation, any costs or expenses incurred, if any) for the Transactions so executed.

 

6.6          All orders shall be made by you orally either in person or by telephone, or in writing, delivered by post, by hand or transmitted by facsimile or through Electronic Media at your risk. TBHK may act on such instructions which TBHK believes to come from you without any duty to verify the capacity of the person giving the instruction. TBHK shall not be responsible for the non-performance of its obligations hereunder by reason of any cause beyond TBHK’s control, including, without limitation, transmission or computer delays, errors or omissions, strikes and similar industrial action or the failure of any dealer, Exchange or Clearing House to perform its obligations. You hereby confirm and agree that you shall be responsible to TBHK for all engagements, indebtedness and any other obligations made or entered into in your name whether in writing or orally and howsoever communicated and purporting to be given as aforesaid.

 

6.7          You understand and confirm its agreement that TBHK may record conversations with you whether conducted on the telephone or through any other media or otherwise by tape or electronic means for security, control or record purposes.

 

6.8          You may request to cancel or amend your Instructions, but we may at our absolute discretion (such discretion not to be exercised in an unreasonable manner) refuse to accept any such request. Instructions may be cancelled or amended only before execution. Cancellation of market Instructions are rarely possible as they are subject to immediate execution. In the case of full or partial execution of your Instructions before cancellation has been accepted by us, you agree to accept full responsibility for the executed Transactions (and any costs and expenses related thereto) and we shall incur no liability in connection therewith. You also agree to accept full responsibility for any costs or expenses incurred as a result of any cancellation (whether or not the Instruction has been fully or partially executed).

 

6.9          You hereby acknowledge that we and our directors, employees and/or their associates may from time to time trade on their own accounts. Furthermore, you acknowledge the existence of our interest, relationship or arrangement that is material in relation to any instruction received or Transaction effected for you. In particular, we may, without informing you:

(a)      effect Transactions through us;

(b)      (subject to Clause 6.2) effect Transactions with you as principal for our account and our related parties including but not limited to any of us or our employees, or directors;

(c)       effect Transactions in Securities where we have a position in the relevant Securities or are involved with those Securities as underwriter, sponsor or otherwise;

(d)      take position opposite to the order of you either for our own account or others;

(e)      match your orders with those of other clients of TBHK;

(f)        combine your order with our orders or our other clients for execution;

(g)      contract or enter into any financial, commercial, advisory or other transaction or arrangement with any person which may relate to any Investment (or any person which is the obligor in respect of any such Investment) which for the time being form part of your assets and to be interested in any such contract or transaction; and

(h)      have a relationship with companies or other entities who may have actual or potential conflict of interest with you,

and neither we nor our related parties shall be obliged to account to you or any third party for any profits or benefits received in connection therewith. In event of insufficient Securities to satisfy orders so combined as mentioned in the above paragraph (f), TBHK may in its absolute discretion allocate the transactions between clients and us, having due regard to market practice and fairness to the clients concerned. You acknowledge and accept that such combination and/or allocation may on some occasions operate to your advantages and on other occasions to your disadvantages.

 

You agree that this Clause contains only examples of conflict situations and is not an exhaustive list of situations whereby conflict may arise.

 

You also agree that we may retain for our own absolute use and benefit any profit which we may derive from such dealings or in connection with such dealings.

 

6.10        All Instructions relating to purchase or sale of Securities or otherwise given hereunder which may be executed on more than one Exchange may be executed on any Exchange TBHK selects. TBHK may also in its discretion direct the instructions of you to other dealers for execution without giving any notification to you.

 

6.11        Without prejudice to any other provision in this Client Agreement, where any Instruction is ambiguous or in conflict with any other Instruction, we shall be entitled, but not obliged, to rely and act on any such Instruction in accordance with any reasonable interpretation thereof which any of our directors, officer, employee or agents believes in good faith to be the correct interpretation.

 

6.12        In acting on an Instruction, we shall be allowed such amount of time as may be reasonable having regard to our systems and operations and the other circumstances then prevailing and shall not be liable for any loss arising from any delay on our part in acting on such Instruction.

 

6.13        Subject to the Applicable Laws and Regulations, TBHK may in its absolute discretion determine the priority in the executions of the orders received from its clients, having due regard to the sequence in which such orders were received and you shall not have any claim of priority to another client in relation to the execution of any orders received by TBHK.

 

6.14        Client Referral:

(a)      We may, but shall not be obliged to, refer you to our Affiliate (“Referred Entity”) from time to time. You may elect to engage a Referred Entity to provide any of the Services and in such cases, you shall be solely responsible for complying with the applicable contractual obligations and legal and regulatory requirements of such Referred Entity.

(b)      In referring you to a Referred Entity, we are, at all times, acting as an independent contractor and not an agent or a representative of you. We shall not be responsible for a Referred Entity’s actions and/or omissions whatsoever and no fiduciary relationship shall arise or otherwise be implied as a result of referrals made under this Clause 6.14.

(c)       Any prevailing and/or potential conflicts of interest pursuant to the referral arrangements between us and the Referred Entity shall be unconditionally waived by you in favor of us and the Referred Entity.

 

6.15        We may at any time, at our absolute discretion and without prior notice to you, suspend, prohibit or restrict your ability to give Instructions or to substitute Securities in your Account(s).

 

6.16        Over-The-Counter Transactions

In relation to any Over-The-Counter ("OTC") transactions, including without limitation trading of any new Securities before their listing on the Exchange, entered or to be entered into by the Client, the Client acknowledges and agrees that:

(a)      Subject to Clause 10.6 below, TBHK is acting as agent for the Client and does not guarantee the settlement of such OTC transactions;

(b)      the Client's orders may be partially executed or not executed at all. Trades executed will be cancelled and void if the relevant Securities subsequently fail to list on the Exchange;

(c)       in the event that the Client in selling any Securities fails to deliver such Securities, TBHK is entitled to purchase in the market (including but not limited to OTC market, at the prevailing market price) the relevant Securities required for delivery in respect of such sale effected for the Client in order to complete the settlement of the relevant Transaction. The Client shall bear all losses and costs arising out of or in connection with such Transaction;

(d)      in the event that (1) the Client buys Securities from a seller and such seller fails to deliver the relevant Securities and (2) the purchase of the relevant Securities cannot be effected or TBHK in its absolute discretion determines not to purchase the relevant Securities pursuant to clause 6.16(c), the Client will not be entitled to obtain the relevant Securities at the matched price and shall only be entitled to receive the money paid for the purchase of the relevant Securities;

(e)      in the event that the Client in buying any Securities fails to deposit the necessary settlement amount, TBHK is entitled to sell any and all Securities or collateral held in its Account and use the sale proceeds after deducting all costs in settlement of the transaction. However, if the Client is the seller under such transaction and such transaction cannot be settled, the Client shall only be entitled to the relevant Securities but not the sale proceeds of the relevant Securities; and

(f)        without prejudice to the above, the Client shall bear its own losses or expenses and shall be responsible to TBHK for any losses and expenses resulting from its and/or its counterparty's settlement failures.

 

6.17        If the Client (in the case of an individual) wishes to appoint Authorized Persons, the Client shall in addition to completing the Account Opening Information Form, furnish to TBHK a duly executed power of attorney or other similar instrument of appointment in a form prescribed by or acceptable to TBHK. The Client agrees that TBHK is entitled to act on the Instructions of the Authorized Person until the Client notifies TBHK in writing that the power of attorney has been revoked or varied.

 

7               TRADING ADVICE     

7.1          Notwithstanding that we (including our directors, officers, employees and the agents) may contact you on investment opportunities which we believe may be of interest to you, you agree that you, independently and without reliance on us, make your own decisions and judgments with respect to your Instructions of any Securities, investment products or Transaction.

 

7.2          While the Services enable you to access any investment research reports or other data of the agents through the Internet or other medium, including computerized online data, the availability of such Information (and any other suggestion or recommendation communicated to you) do not constitute any advice, opinion or recommendation to buy or sell all or any of the Securities or investment products. Any Investment decisions you make will be based solely on your own evaluation in light of your financial circumstances and investment objectives.

 

7.3          Any information, suggestion or recommendation communicated to you by us are based on information obtained from sources believed by us to be reliable, are for your own use and consideration only and will not constitute an offer to sell any Investment to you. You further agree that we (including our directors, officers, employees and the agents) shall not be liable in respect the inaccuracy or incompleteness of any information, suggestion or recommendation rendered, whether such information, suggestion or recommendation was given at your request.

 

7.4          If we solicit the sale of or recommend any financial product to you, the financial product must be reasonably suitable for you having regard to your financial situation, investment experience and investment objectives. No other provision of this agreement or any other document we may ask you to sign and no statement we may ask you to make derogates from this clause.

 

7.5          Any exchange rate, interest rate, price of Securities or other similar information quoted to you is for your reference only and shall not be binding on us unless confirmed by us for a Transaction.

 

8               SETTLEMENT

8.1          Unless otherwise agreed or TBHK is already holding sufficient cash or Securities on your behalf to settle the Transaction, in respect of each Transaction, you shall

(a)      pay TBHK cleared funds or deliver Securities to TBHK in deliverable form; or

(b)      otherwise ensure that TBHK has received such funds or Securities.

by such time as TBHK has notified (whether verbally or in writing) you in relation to the relevant Transaction.

 

8.2          Unless otherwise agreed, you agree that if you fail to make such payment or delivery of Securities by the due time as mentioned in Clause 8.1, TBHK is hereby authorized to:

(a)      in the case of a purchase transaction, sell the purchased Securities; and

(b)      in the case of a sale transaction, borrow and/or purchase such Securities in order to settle the Transaction.

 

8.3          You hereby acknowledge that you shall be responsible to TBHK for any loss, costs, fees and expenses incurred by TBHK in connection with your failure to meet your obligation by the due time as set out in Clause 8.1.

 

8.4          The Client shall immediately notify TBHK after payment of funds to TBHK by delivering to TBHK written evidence of such payment. The Client acknowledges that payment of funds to TBHK may not be accredited to the Client’s Account or reflected in any account statement until such notification is received by TBHK.

 

9               MONEY IN THE ACCOUNT(S) 

9.1          The money of you in the Account, after discharging all the indebtedness of you owing to TBHK, shall be treated and dealt with in compliance with the provisions of the SFO. The money of you, after discharging all the indebtedness of you owing to TBHK , which is received and held by TBHK on behalf of you in Hong Kong shall be deposited with a segregated account which is designated as a trust account or client account and maintained by TBHK in Hong Kong with an authorized financial institution or any other person approved by the SFC for such purpose. TBHK may pay the money of you out of the segregated account in accordance with a standing authority pursuant to the SFO.

 

9.2          For so long as there exists any indebtedness to TBHK on the part of you, TBHK may refuse any withdrawal of money in the Account and you shall not without consent of TBHK withdraw any such money.

 

9.3          Unless otherwise agreed between you and us, you agree that any interest accrued on any money of you in the Account shall belong to us absolutely.

 

9.4          Standing Authority under Securities and Futures (Client Money) Rules

Without prejudice to any other right or remedy available to TBHK, you hereby agree to give the standing authority to TBHK to authorize TBHK to deal with money held or received by TBHK in Hong Kong (including any interest derived from the holding of the money which does not belong to TBHK) in one or more segregated account(s) on your behalf ("Monies").

 

Unless otherwise defined, all the terms used in this clause shall have the same meanings as in the SFO and the Securities and Futures (Client Money) Rules as amended from time to time.

 

This clause authorizes TBHK to:

(a)      combine or consolidate any or all segregated accounts, of any nature whatsoever and either individually or jointly with others, maintained by TBHK and/or any of TBHK’s group companies from time to time (“TBHK Group") and we may transfer any sum of Monies (including conversion between currencies) to and between such segregated account(s) to satisfy your obligations or liabilities to any member of TBHK Group, whether such obligations and liabilities are actual, contingent, primary or collateral, secured or unsecured, or joint or several; and

(b)      after your instructions are received by TBHK, no matter in writing or verbally, transfer any sum of Monies (including conversion between currencies at prescribed exchange rate provided by TBHK as principal if not otherwise specified) interchangeably between any of the segregated accounts maintained at any time by any member of TBHK Group; and

(c)       return any rejected deposit from client or third-party due to failure of AML checking to its source at its discretion and without prior consent from client; and

(d)      concerning the overseas markets, may transfer part or all of the transaction amount to the overseas broker’s segregated client account to get pre-trade approval from the broker before the transaction and keep the proceeds of sales in the abovementioned account afterwards.

(e)      for certain Transaction (including but not limited to fund and/or options, if applicable), may transfer the settlement amount from securities account to specific service sub account, and vice versa.

We may do any of these things without giving you notice. This authority is given to TBHK in consideration of its agreeing to continue to maintain securities cash and/or margin account(s) for you. This authority is given without prejudice to other authorities or rights which TBHK Group may have in relation to dealing in Monies in the segregated accounts. This authority is valid for a period of 12 months from the approval date of the opening of the Account.

 

This authority may be revoked by giving you written notice addressed specified above and such notice shall take effect upon the expiry of seven (7) Business Days from the date of our actual receipt of such notice.

 

You understand that this authority shall be deemed to be renewed upon expiry upon the same terms and conditions as specified in the standing authority for twelve (12) months without your written consent if we issue to you a written reminder at least fourteen (14) days prior to the expiry date of this authority, and you do not object to such deemed renewal before such expiry date. TBHK will give a written confirmation of the renewal of the standing authority to the client within one week after the date of expiry. If you request for revocation of such standing authority or the standing authority has not been renewed by you whom TBHK called upon to do so, TBHK reserves the right to terminate this Client Agreement and operations of the account(s) and then you shall forthwith settle any indebtedness owing to TBHK and/or Affiliate(s).

 

10            COMMISSION, CHARGES, COSTS AND EXPENSES 

10.1        You agree to pay to TBHK all commissions, brokerage or other remuneration payable on all Transactions (including those pursuant to Clause 11) at the rates established from time to time by TBHK. You also agree to reimburse TBHK on a full indemnity basis for all applicable levies (including but not limited to levies imposed by the Exchanges, Clearing Houses and the SFC), fees, stamp duties, expenses and other charges in respect of or connection with the Transactions. Commissions and brokerage are subject to change from time to time and can be ascertained by contacting TBHK. TBHK may impose additional charges for special services furnished at the request of you.

 

10.2        You agree to pay TBHK the following:

(a)      all subscription, service and usage fees are payable one (1) month in advance as prescribed by TBHK and the fees are non-refundable;

(b)      any fee/levies charges by Exchanges or other authorities;

(c)       any other reasonable fees and charges imposed by TBHK from time to time for services and facilities rendered to you; and

(d)      interest on all outstanding sums at such rate and at such mode as TBHK shall notify you in writing,

and TBHK may at its discretion vary the rate of such fees and subscription at any time and from time to time without notice.

 

10.3        TBHK shall be entitled to charge interest on all or any of your indebtedness (including interest accruing after a judgment debt is obtained against you) at such rate(s) (subject to fluctuation) and at such interval to be demanded and notified by TBHK from time to time. TBHK will usually charge interest on a monthly basis. In the absence of such notification:

(a)      in the case of Hong Kong dollars indebtedness, interest shall be charged at the following annual rate which is the higher of:

i.      3 per cent above the Prime Rate quoted by a licensed bank in Hong Kong ; or

ii.      3 per cent above the prevailing overnight Hong Kong Interbank Offered Rate; or

(b)      in case of foreign currency indebtedness, the annual interest rate shall be 8 per cent above the cost of funds of TBHK to be quoted by TBHK in absolute discretion, irrespective of whether TBHK has actually borrowed the funds.

 

10.4        You acknowledge:

(a)      that every purchase or sale recorded on the stock market operated by SEHK or notified to the SEHK is subject to the charge of an Investor Compensation Fund levy and a levy pursuant to the SFO and the cost of each such charge and levy attributable to you shall be borne by you ; and

(b)      that in the case of a default committed by TBHK and you having suffered pecuniary loss thereby, the liability of the Investor Compensation Fund will be restricted to valid claims as provided for in the SFO and will be subject to the monetary limits specified in the SFO and accordingly that there can be no assurance that any pecuniary loss sustained by reason of such a default will necessarily be recouped from the Investor Compensation Fund in full, in part, or at all.

 

10.5        You hereby agree to the imposition upon your Account or Accounts from time to time as TBHK may determine, of a minimum charge in respect of Accounts that maintain only average credit balances of less than such minimum amount as TBHK may from time to time determine.

 

10.6        You agree that TBHK is entitled to solicit, accept and retain for TBHK’s own benefit any rebate, brokerage, commission, fee benefit, discount and/or other advantage from any Transaction effected by TBHK. TBHK may also offer at its absolute discretion any benefit or advantage to any person in connection with such Transaction.

 

10.7        You agree, through your acceptance of the Client Agreement, our US broker(s) may receive compensation for directing orders through designated “market makers” and specialists on registered US exchanges for execution.

 

11            SOFT COMMISSION AND REBATES

11.1        We are hereby authorized, to the extent permitted by Applicable Laws and Regulations, to:

(a)      solicit, receive and retain commission, cash rebates, goods and services and other soft dollar benefits arising out of (i) entering into Transactions for or with you; and (ii) client referrals, from any agent, delegate, broker, our Affiliate and other person in connection with such Transactions and client referrals;

(b)      offer, pay commission, cash rebates, goods and services and other soft dollar benefits arising out of (i) entering into Transactions for or with you, and (ii) client referrals, to any agent, delegate, broker, our Affiliate and other person in connection with such Transactions and client referrals; and

(c)       make and retain gains by entering into Transactions for or with you at prices which are different to the prices at which we have entered into with any other person (including any of our Affiliates).

 

11.2        The Client agrees that the consent given hereunder shall constitute a permission or lawful authority for the purpose of Section 9 of the Prevention of Bribery Ordinance (Cap. 201 of the Laws of Hong Kong).

 

12            DEFAULT  

12.1        The following shall constitute events of default (the “Events of Default”):

(a)      your failure to provide sufficient Collateral within the time limit upon call from TBHK, deposits, purchase consideration or any other sums payable to TBHK, to submit documents or to deliver Securities to TBHK hereunder when called upon to do so or on due date;

(b)      any security created or any part thereof in relation to the indebtedness, obligations or liabilities of the Client under this Client Agreement is or becomes avoided, discontinued, jeopardized or adversely affected, or there is any action commenced or any claim made by any person in respect of any asset or property comprised in such Securities, or such assets and properties deteriorate, decline or depreciate in the market value thereof;

(c)       (for client being an individual) the death of you or you becoming incapacitated from due performance of the terms and conditions of this Client Agreement;

(d)      the filing of a petition in bankruptcy or, as the case may be, winding up or the commencement of other analogous proceedings, or the appointment of a receiver, in respect of you, or a meeting convened for the purpose of making or propose and/or enter into any arrangement or composition for the benefit of your creditors;

(e)      the levy or enforcement of any attachment, execution or other process against you;

(f)        default by you in the due performance or observance of any of the terms and conditions of this Client Agreement;

(g)      any information, representation or warranty made in or in pursuance of this Client Agreement or in any certificate, statement or other documents delivered to TBHK being or becoming incomplete, untrue or incorrect in any material respect;

(h)      any of the consents, authorizations, approvals, licenses, or board resolutions required by you to enter into this Client Agreement or any Client Contract being modified in a manner unacceptable to TBHK or being wholly or partly revoked, withdrawn, suspended or terminated or expiring and not being renewed or otherwise failing to remain in full force and effect;

(i)        the continued performance of this Client Agreement becomes illegal or claim by any government authority to be illegal;

(j)        you being in breach, voluntary or otherwise, of any of the conditions contained herein or of the constitutions, rules and regulations of any Exchange or Clearing House;

(k)       without the consent of TBHK, stops payment to your creditors generally or (if applicable), otherwise than for the purpose of an amalgamation, merger or reconstruction, ceases or threatens to cease to carry on your business or any substantial part thereof or be deemed, for the purposes of Section 178 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32 of the laws of Hong Kong), to be unable to pay your debts or disposes or threatens to dispose of the whole or a substantial part of your undertaking or assets;

(l)        material adverse change in the financial position of you; and

(m)     the occurrence of any event which, in TBHK's sole discretion, TBHK feels shall or might put in jeopardy TBHK's rights conferred under this Client Agreement.

 

12.2        Without prejudice to any other right or remedy which TBHK may have, if any one or more Events of Default occur, TBHK shall be authorized, in its absolute discretion and without further notice to the Client, to take one or more of the following actions no matter separately, successively or concurrently (but shall not be bound to take any such action):

(a)      cover any short position in the Account through purchase of Securities on the relevant Exchange and subject to Clauses 8.1 and 8.2 and/or liquidate any or all of the Collateral;

(b)      cancel any or all outstanding orders or any other commitments made on your behalf and/or decline to take any orders from you

(c)       call upon any Security including but not limited to any guarantees and letters of credit which may have been issued to or in favor of TBHK as security for the Account(s);

(d)      set off, combine, consolidate, realize and/or sell all or any of the Accounts maintained by you with TBHK (including any money or Client’s Securities or Collateral or other properties under such Accounts);

(e)      sell, liquidate, dispose of or otherwise deal with the Securities or other properties held by TBHK on your behalf;

(f)        borrow or buy in any property whatsoever found necessary by TBHK or required to make delivery against any sale (including a short sale) effected for you;

(g)      exercise any of its rights under this Client Agreement; and/or

(h)      terminate this Client Agreement and close the Account(s) forthwith,

provided always that a prior tender, demand for any Collateral or deposit or call of any kind from TBHK, or prior or outstanding demand or call from TBHK, or notice of the time and place of a sale or purchase shall not be considered a waiver of any of TBHK's rights granted by this Client Agreement.

 

12.3        In the event of sale of any Client’s Securities or the Collateral or liquidation of the Accounts in Clauses 12 or 13 or Clause 2 of the Additional Terms for Margin Account, TBHK shall not be responsible for any loss occasioned thereby howsoever arising if TBHK has already used reasonable endeavors to sell or dispose any or all of Client’s Securities and the Collateral in the Account under the prevailing market conditions. TBHK is also entitled to exercise its own judgement in determining the time of the aforesaid sale or disposal or liquidation and to sell or dispose of any of such properties at current market price to its Affiliate(s) without any responsibility for any loss occasioned or being accountable for any profit made by TBHK and/or its Affiliate(s).

 

12.4        After deducting all costs and expenses incurred in connection with taking any action referred to in Clause 12.2, TBHK may apply any remaining proceeds to the payment of any liabilities you may have to TBHK (including all costs, charges, legal fees and expenses including stamp duty, commission and brokerage properly incurred by TBHK); and in the event such proceeds are insufficient for the payment of liabilities, you shall promptly upon demand and notwithstanding that the time originally stipulated for settlement may not then have arrived, pay to TBHK and indemnify and hold TBHK harmless against any differences or deficiencies arising therefrom or in any Account, together with interest thereon and all professional costs (including solicitor's and counsel's fees on a full indemnity basis, should TBHK in its absolute discretion refer the matter to legal advisers) and/or costs and expenses incurred by TBHK in connection with debt collection in relation to the Account or the enforcement of any outstanding position in the Account which shall be for the account of you and properly deductible by TBHK from any funds of you in its possession.

 

12.5        Without prejudice to Clause 12.4, TBHK may place any of the proceeds obtained from performing any actions in Clause 12.2 to the credit of a suspense account with a view to preserve the rights of TBHK to prove for the whole of TBHK’s claim against you in the event of any proceedings in or analogous to bankruptcy, liquidation or arrangement for so long as TBHK in its absolute discretion determines without any obligation to apply the same or any part thereof in or towards discharge of any debts or liabilities due to or incurred by you to TBHK.

 

12.6        You acknowledge that the rights TBHK is entitled to exercise under this Clause 12 are reasonable and necessary for its protection having regard to the nature of the Securities and Margin trading, in particular the volatility in the prices of the Securities.

 

13            LIEN, SET OFF AND COMBINATION OF ACCOUNTS     

13.1        In addition and without prejudice to any general liens, right of set-off or other similar rights to which TBHK is entitled under law or this Client Agreement, all Securities, receivables, monies (in any currency) and other property of you (held by you individually or jointly with others) held by or in possession of TBHK at any time shall be subject to a general lien in favor of TBHK as continuing security to offset and discharge all of the your obligation, arising from the Transactions or otherwise, to TBHK and or its Affiliate(s).

 

13.2        In the event that you have more than one Accounts (of any nature whatsoever including accounts of other clients guaranteed by you and whether in single or joint names) maintained with TBHK and/or its Affiliate(s), in addition to and without prejudice to any general liens or similar rights, TBHK may by itself or as agent of any of its Affiliates at any time, and without notice to you, combine or consolidate all or any of them and set-off or transfer any monies (in any currency) or any other properties standing to the credit of any one or more of them in or towards satisfaction of any of the liabilities to TBHK or its Affiliate of you on any such Accounts or in any other respect, including liabilities under facilities or accommodation for any unexpired fixed term or in respect of dealing in Securities or under guarantees or indemnities or any other instruments whatsoever given or assumed by TBHK at your request, whether such liabilities are present or future, actual or contingent, primary or collateral and joint or several.

 

13.3        The right of set off in this Clause is a continuing security and is in addition and without prejudice to any security interest TBHK may now or hereafter hold. In respect of any payments to set off any liabilities or obligations of you to any other Affiliate(s) of TBHK, TBHK shall not be concerned with whether or not such liabilities or obligations exist provided demand has been made on TBHK by its Affiliate(s).

 

13.4        Where any such set-off or combination requires the conversion of one currency into another, such conversion shall be calculated at the rate of exchange (as determined by TBHK and binding in all respects upon the Client) utilized by TBHK in its normal course of business for such currencies at the time of the combination or set-off.

 

13.5        Nothing herein shall restrict the operation of any general lien or other rights or lien whatsoever which TBHK may have, whether by law or otherwise, and the rights of set off hereby conferred are in addition and without prejudice to any general right of set off arising by law or rights granted to TBHK by Clause 12 or 13 or any lien, guarantee, bill, note, mortgage or other security now or hereafter held by TBHK.

 

13.6        In enforcing the lien, TBHK shall have the right to determine which Securities, Investment and/or properties are to be sold and which contracts are to be closed, and to apply the proceeds of sale, after deduction of all costs and expenses, to satisfy any liabilities, indebtedness and/or obligations owed by you to us.

 

14            ASSIGNMENT AND SUCCESSION  

14.1        You shall not assign or transfer any rights or obligations under this Client Agreement or any Transaction without prior consent of TBHK.

 

14.2        Subject to the provisions of the SFO and any Applicable Laws and Regulations, TBHK may assign or transfer any rights or obligations under this Client Agreement or any other Transaction to another person after written notice to you.

 

14.3        This Client Agreement shall inure to the benefit of our successors and assigns (whether by merger, consolidation or otherwise). All the provisions of this Client Agreement shall survive any changes or successions in TBHK's business and shall be binding, where you are a corporation upon its successors, where you are a partnership upon the partners and their personal representatives, and where you are an individual upon his personal representatives.

 

15            DEATH OR LEGAL INCAPACITY

15.1        Our rights under this Client Agreement shall not be affected by your death or legal incapacity.

 

16            SEVERABILITY

16.1        Each of the term of this Client Agreement is severable and distinct from the others. If any provision or condition of this Client Agreement shall be held to be invalid or unenforceable by any competent court, or regulatory or self-regulatory agency or body, such invalidity or unenforceability shall attach only to such provision or condition. The validity of the remaining provisions and conditions shall not be affected thereby and this Client Agreement shall be carried out as if any such invalid or unenforceable provision or condition were not contained herein.

 

17            NO WAIVER    

17.1        No failure or delay on TBHK’s part in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise preclude any other or further exercise thereof or the exercise of any other right, power or privilege. Any remedy provided to TBHK herein are not intended to be exclusive of any other remedy and each and every remedy shall be cumulative and in addition to every other remedy given hereunder or now or hereafter existing at law or in equity, by statute or otherwise.

 

18            LIABILITIES AND INDEMNITY    

18.1        TBHK will use all reasonable endeavours to comply with and carry out Instructions given by the Client and accepted by TBHK concerning the Account or Transactions but neither TBHK, nor any of its directors, employees, agents or representatives (the Relevant Persons”) shall under any circumstances whatsoever be liable to you (whether under contract, in negligence or otherwise) in the absence of bad faith or willful default of or by the Relevant Persons in respect of any loss, damage, injury sustained or liability incurred by you by reason of:

(a)      any act, advice, statement (express or implied), default or omission of the Relevant Persons, whether such loss, damage, injury or liability be caused by breach or otherwise by the Relevant Persons or howsoever caused; or

(b)      any loss or expense incurred by you as a result of or in connection with the transfer to you or the collection or deposit or crediting to any Account of invalid, fraudulent or forged Investment or any entry in any Account which may be made in connection therewith; or

(c)       any conditions or circumstances which are beyond the reasonable control or anticipation of the Relevant Persons including but not limited to any delay in transmission of orders due to whatsoever reason, failure of electronic or mechanical equipment, telephone or other interconnection problems, unauthorized use of Access Code, prevailing fast moving market conditions, governmental agency or Exchange actions, theft, war, severe weather, earthquakes and strikes; or

(d)      TBHK exercising any of its rights conferred by the terms of this Client Agreement; or

(e)      any conversion of one currency to another pursuant to, in relation to or arising from this Client Agreement; or

(f)        any inaccuracy or omission from any document prepared by us for, or sent by us to or to the order of, you in connection with any offering of investment; or

(g)      we in good faith acting or relying on any Instruction given by you, whether or not such Instruction was given following any recommendation, advice or opinion given by us or by any of our directors, officers, employees or agents; or

(h)      any inability, failure or delay on our part to comply with or carry out any such Instruction or any ambiguity or detect in any such Instruction; or

(i)        any loss or damage suffered by you in connection with any of your Securities, Collateral and other property kept in custody pursuant to Clause 30 or Clause 4.1 in Part III Schedule - A Additional Terms for Margin Account or other part of this Client Agreement unless such loss or damage has been caused as a direct consequence of an act of gross negligence on our part; or

(j)        any curtailment of, or restriction on, the capacity of us to trade in respect of open positions of any Investment as a result of action taken by SFC, the SEHK or any other authority under applicable rules and regulations or for any other reason, and that in such circumstances, you may be required to reduce or close out your open positions with us; or

(k)       any Exchange, Clearing House, agent or other person ceasing for any reason to recognize the existence or validity of Transaction entered into by us on your behalf, or failing to perform or close out positions of any such Transaction provided that such cessation or failure shall not affect your obligations hereunder in respect of any such Transaction or other obligations or liabilities of you arising therefrom; or

(l)        any misunderstanding or misinterpretation of any Instruction given or placed verbally or electronically, or any interruption, suspension, delay, loss, mutilation or other failure in transmission or wrongful interception of any Instruction or other information howsoever caused (including any equipment or system owned and or operated by or for us).

 

18.2        You agree to indemnify the Relevant Persons against and hold the Relevant Persons harmless from all expenses, liabilities, claims and demands arising out of the following, in the absence of bad faith or willful default of or by the Relevant Persons:

(a)      anything lawfully done or omitted to be done by the Relevant Persons in connection with this Client Agreement; or

(b)      any breach by you of its obligations under this Client Agreement.

 

18.3        Indirect Damages

Notwithstanding any provision in this Client Agreement, under no circumstances shall we be liable to you or any other person for any incidental, consequential, indirect, special or exemplary damages of any kind or nature whatsoever or for any loss of revenue, loss of profit, loss of business, loss of opportunity or loss of goodwill (collectively, “Indirect Damages”) arising from any representation, any breach of implied term or any duty at common law or under any statue or express term of this Client Agreement, and whether such liability is asserted on the basis of contract, tort or otherwise, whether or not foreseeable, even if we have been advised or were aware of the possibility of such Indirect Damages.

 

18.4        Verification of Title

We are under no duty to examine or verify the validity of the ownership of or title to any asset in connection with any Transaction and shall not be liable in respect of any defect in ownership or title.

 

18.5        Tax

You shall at all times remain responsible for payment of all taxes due and where applicable, for the making of any claim for exemption from withholding taxes. We may deduct or withhold all forms of taxes (wherever in the world and whenever imposed) from any payment if obliged to do so under the Applicable Laws and Regulations. In accounting for tax or making deductions or withholding of tax, we may estimate the amounts concerned. Any excess of such estimated amount over the final confirmed liability shall be credited or sent to you as quickly as reasonably practicable.

 

18.6        Indemnity to us

You shall indemnify us immediately on demand against any and all claims, demands, actions, proceedings, losses, penalties, fines, taxes, damages, costs, charges and expenses of any nature (including legal costs on a full indemnity basis) incurred by us and any liability whatsoever in connection with:

(a)      any failure of or delay by you in performing any of your obligations under this Client Agreement or any Margin Facility provided to you (if any) including the enforcement and preservation of our rights in connection with this Client Agreement and any costs reasonably incurred by TBHK in collecting any debts due to TBHK or any unpaid deficiency in the Account, in enforcing the rights of TBHK hereunder or in connection with the closure of the Account;

(b)      our performance of any of our obligations or exercise of our right or discretion in connection with this Client Agreement; and

(c)       any penalty charged as a result of any Transaction to TBHK by any Exchange and/or Clearing House.

 

18.7        General Indemnity

Without prejudice to any provision in this Client Agreement, you shall immediately upon demand fully indemnify and keep us, and our respective directors, officers, employees and agents (collectively, “Indemnified Persons”) indemnified against any claims, demands, actions, proceedings, losses, penalties, fines, taxes, damages, costs, charges and expenses, including legal fees, that may be suffered or incurred by any and/or all of the Indemnified Persons, arising out of or in connection with (a) any Investment or Transaction; (b) any action or omission by us pursuant to this Client Agreement; (c) any information provided by you; (d) any breach by you of any of your obligations under this Client Agreement, including any cost reasonably incurred by us in collecting debts due to us from you or unpaid deficiency in any Account and in enforcing our rights hereunder, and any penalty charged as a result of any Transaction to us by any Exchange and/or Clearing House; (e) any investigation, litigation or proceeding by or involving any government agency, market, Exchange, clearing organization or other self-regulatory body, or any third party or other market participant with respect to any Account or Transaction; or (f) closing of any Account.

 

18.8        Indemnity on Instructions

Without prejudice to any provision in this Client Agreement, you shall indemnify immediately on demand and keep us indemnified at all times against and save us harmless from, all claims, demands, actions, proceedings, losses, penalties, fines, taxes, damages, costs, charges and expenses (including all legal costs incurred by us) on a full indemnity basis and any liability whatsoever which may be brought against us or suffered or incurred by us either directly or indirectly as a result of or in connection with (a) our accepting of or acting on any Instruction; (b) any revocation or alteration of any such Instruction; or (c) any error or omission in such Instruction given by facsimile transmission and/or such other electronic means (regardless of whether such Instruction was given by you or an Authorized Person and/or properly authorized by you).

 

18.9        Facsimile and Other Modes of Electronic Submission Indemnity

Without limitation to the generality of the foregoing, in consideration of us agreeing to accept Instructions pursuant to Clause 6 above and/or to accept any other documents/Instructions in relation to the operation of the Account(s) by facsimile transmission and/or such other electronic means as may from time to time be permitted by us, you shall indemnify us immediately on demand against all claims, demands, actions, proceedings, losses, penalties, fines, taxes, damages, costs, charges and expenses (including all legal costs incurred by us) on a full indemnity basis and any liability whatsoever arising out of or in connection with our acceptance of the aforesaid Instructions and/or any other documents/Instructions in the event of any error or omission in such Instructions and/or any other documents/Instructions, or such Instructions and/or other documents/Instructions having been issued without proper authorization on your part. Each of these indemnities (namely in Clauses 18.6, 18.7 and 18.8 above) shall constitute a separate and independent indemnity from any other indemnity contained elsewhere in this Client Agreement or any other agreement entered or to be entered into between you and us.

 

19            WARRANTIES AND UNDERTAKINGS    

19.1        You hereby undertake, represent and warrant on a continuing basis that:

(a)      the information given by you, or on your behalf, to TBHK in the Account Opening Form or otherwise in connection with the opening of any Account is true, full and complete and TBHK shall be entitled to rely on such information until TBHK receives written notice from you of any changes thereto;

(b)      you have the authority and capacity to enter into and execute this Client Agreement and no one except you (unless otherwise disclosed to TBHK pursuant to Clause 22.1) has an interest in the Account(s);

(c)       save as disclosed by you to TBHK pursuant to Clause 22.1 with the consent given by TBHK:

i.      you enter this Client Agreement as a principal and is trading on your own account and does not do so as nominee or trustee for any other person and there exist no arrangements whereby any person other than the person(s) signing this Client Agreement as you have or will have any beneficial interest in this Client Agreement; and

ii.      you are the ultimate beneficiary of the Account and the person ultimately responsible for originating instruction about Transactions;

(d)      this Client Agreement and its performance and the obligations contained in it do not and will not contravene any Applicable Laws and Regulations, contravene any provisions of the memorandum and articles or by-laws (for corporate client), or constitute a breach or default under any agreement or arrangement you are bound;

(e)      subject to any security interest of any Affiliate and the information disclosed to TBHK, all properties including but not limited to Securities provided by you for selling or crediting into the Account(s) are fully paid with valid and good title and whose legal and beneficial titles are owned by you and you will not charge, pledge or allow to subsist any charge or pledge or grant any option over such properties without TBHK’s prior consent;

(f)        you have received, read and understood the contents of the Risk Disclosure Statement and you have sufficient experience to assess the suitability of the Transactions contemplated under this Client Agreement;

(g)      where you or any one of you is a body corporate (in respect of such person):

i.      it is a corporation duly organized and is validly existing under the laws of the country of its incorporation and in every other country where it is carrying on business;

ii.      this Client Agreement has been validly authorized by the appropriate corporate action of you and when executed and delivered will constitute valid and binding obligations of you in accordance with the terms herein;

iii.      the certified true copies of your certificate of incorporation or registration, charter, statute or memorandum and articles or other instrument constituting or defining its constitution and the board resolutions of you delivered to TBHK are true and accurate and still in force; and

iv.      no steps have been taken or are being taken to appoint a receiver and/or manager or liquidator over the assets of, or to wind up you;

(h)      where you or any one of you is an individual, you are legally capable of validly entering into and performing this Client Agreement and is of sound mind and legal competence and is not a bankrupt;

(i)        where you are a partnership and business is carried on under a firm's name, this Client Agreement shall continue to be valid and binding for all purposes notwithstanding any change in the partnership or constitution of the firm by the introduction of a new partner or by the death, insanity or bankruptcy or a retirement of any partner for the time being carrying on the business of or constituting the firm or otherwise;

(j)        any Authorized Person and any person representing you in entering into any Transaction will have been duly authorized to do so on your behalf;

(k)       all necessary consents or authorisations which may be required by you for the signing of this Client Agreement, carrying out of any Transaction on any Exchange and performance of its obligations under this Client Agreement have been obtained and are in full force and effect; and

(l)        you have unencumbered title as beneficial owner to all Collateral and other assets which you deliver to TBHK (for any purposes whatsoever), instruct TBHK to sell or otherwise dispose of pursuant to this Client Agreement. TBHK has no obligation to examine or verify the title of any such Collateral and assets, and TBHK will not be responsible for any defect with such title.

 

19.2        You undertake to notify TBHK immediately upon the occurrence of any material changes in the information supplied in this Client Agreement and/or the Account Opening Form. In particular, you agree to inform TBHK of any change in contact information (including address and telephone number) upon occurrence of such changes. In event that in exercising its rights or discharging its duties under this Client Agreement, TBHK cannot communicate with you using the latest contact details provided by you for over a period of seven (7) days, you agree that this provides sufficient evidence of material breach of this Client Agreement by you which constitutes an Event of Default under Clause 12.1(f).

 

19.3        TBHK will notify you of any material change to: (a) the name and address of its business; (b) its registration status with the SFC and its CE number; (c) the description of the nature of services provided by it; (d) the description of the remuneration payable to TBHK and the basis for such payment; or (e) the margin/short selling facilities.

 

19.4        You accept full risk and responsibility for:

(a)      the monitoring and use of your Account(s) including any of the events set out in Clause 19.5;

(b)      the use and safe custody of any information including your Password, ID, portfolio information, Transaction activities, Account balances and any other information or Instructions available on your personal computer;

(c)       the provision and maintenance of the communications equipment (including personal computers and modems) and telephone or alternative services required for accessing and using the Services, and for all communications service fees and charges incurred by you in accessing our network; and

(d)      any loss or damage caused directly or indirectly by any government restrictions, Exchange rulings, suspension of trading of Securities or other Investments, war, strikes, equipment, software or communications line failure or malfunction, unauthorized access, theft, and other occurrences beyond our reasonable control.

 

19.5        You will immediately notify us in writing if you become aware of any of the following:

(a)      any loss, theft or unauthorized use of the Password, ID and or Account number(s);

(b)      any failure by you to receive a message from us indicating that an Instruction was received and or executed;

(c)       any failure by you to receive an accurate written confirmation of any Transaction;

(d)      any receipt of confirmation from us of any Instructions or Transaction which you did not place or authorize; or

(e)      any inaccurate information in your Account balances, Securities and or other Investment positions, or Transaction history.

In no event shall we be deemed to have received any Instructions given by you until we have actual knowledge of such your Instruction.

 

19.6        Unless you have previously disclosed in writing to us, you are not an officer or employee of any Exchange, board of trade, Clearing House, bank or trust company, or an affiliate of any licensed corporation or registered institution under the SFO, or an introducing broker, or an officer, partner, director or employee of any securities broker or dealer.

 

19.7        Acting as Principal/Responsible Person:

(a)      Unless you have previously disclosed to us in writing, you will be acting as principal, and not as trustee or agent or on behalf of any other person and all such Transactions are effected for your benefit and no other person has any interest therein in relation to each Transaction in your Account and shall stand to gain the commercial or economic benefit of such Transaction and/or bear their commercial or economic risks (except where such other person has been disclosed to us by you by written notice);

(b)      (i) if you are acting on your own behalf, all the Transactions effected are legitimate and all monies and assets applied to such Transactions are the result of bona fide activities, and (ii) if you are acting on behalf of one or more clients (the identities of which have not been disclosed to us), you have conducted and satisfactorily completed your internal “know your client” and anti-money laundry procedures on each such client in accordance with the laws applicable to you and will continue to comply with such procedures in relation to each such client; and

(c)       Unless you provide us with prior written notice of the name and address of and nature of relationship with the person whom you appoint to operate the Account(s) on your behalf, you will operate your own Account(s) at all times, including, for the avoidance of doubt, the giving of orders.

 

19.8        Foreign Account Tax Compliance Act and Common Reporting Standards

You agree to comply with the provisions set out in Schedule F in Part III of this Agreement regarding the requirements of Foreign Account Tax Compliance Act and Common Reporting Standards and understand the consequences resulting from breach of such provisions.

 

20            FORCE MAJEURE

20.1        We shall not in any circumstance be liable to you for loss of any kind whatsoever whether directly or indirectly suffered or incurred by you by reason of any failure or delay in the performance of our obligations hereunder which is caused by or the result of any event which is not within our reasonable control, and any such event shall include (a) the existence or imposition of any form of foreign exchange control, legal, governmental or regulatory restriction or requirement whatsoever; (b) the closure of or ruling by any Exchange (or any division thereof); (c) the suspension of trading of any Investment or underlying; (d) the failure of any Exchange , Clearing House, agent or other person to perform its obligations; (e) the occurrence of an Insolvency Event in relation to our delegate or agent; (f) the occurrence of fire, flood or any disaster; (g) the occurrence of any industrial dispute affecting a third party for which a substitute third party is not reasonably available; and (h) the occurrence of any breakdown, failure or malfunction of any third party telecommunications, computer services or systems.

 

21            INFORMATION GIVEN TO CLIENT

21.1        TBHK may provide financial market data, quotes, news, research or other information, including graphic images (collectively, the “Information”), to you by means of hardcopy, conversation, Electronic Media, website operated by TBHK or otherwise (no matter in writing or verbally). You acknowledge that the rights in the Information are the property of TBHK, the information providers or the licensors (the “Information Providers”) and are protected by applicable copyright and other intellectual property laws and you are allowed to use the Information on this Client Agreement of not engaging in any actions which may infringe the rights of the Information Providers.

 

21.2        You acknowledge that none of the Information Providers makes any representation or warranty of any kind (including but not limited to warranties of merchantability or fitness for any particular use) and does not guarantee the timeliness, sequence, accuracy, adequacy or completeness of the Information. In particular owing to market volatility and possible delay in data transmission process, the market data containing in the Information may not be real time market quotes for the relevant products. Whilst TBHK believes such data to be reliable, it has no independent basis to verify the accuracy or completeness of the Information provided. No recommendation or endorsement from TBHK shall be inferred from such data.

 

21.3        You acknowledge that the Information is provided for informational purpose only and should not be used as a basis for making business, investment or any kind of decision and the Information Providers do not accept any responsibility or liability for any loss or damage howsoever arising from any person acting or refraining from acting in reliance on the Information.

 

21.4         TBHK shall provide to you upon request product specifications, any prospectus or other offering document covering securities which are derivative products in which you wish to consider dealing.

 

22            DISCLOSURE OF INFORMATION ABOUT CLIENT   

22.1        Subject to the provisions of this Client Agreement, TBHK will keep the information relating to the Accounts confidential. You acknowledge that there are laws, rules and regulations of the relevant markets and Exchanges which contain provisions requiring TBHK upon the request of HKEX , the SFC, any government authority and/or any other regulator in Hong Kong (collectively, “relevant regulators”), who having jurisdiction over the Transactions, to disclose details of the Transactions, the name of you , beneficial identity of the Transactions and such other information concerning you as any such relevant regulators may require and that you agree to provide such information concerning you on timely basis as TBHK may require in order for TBHK to comply with the requirements.

 

22.2        Without limiting the disclosure to anything provided in Clause 22.1, you hereby irrevocably authorizes TBHK, without further notice and consent from you, to disclose to any person information, reports, records or documents pertaining to the Account together with such other information as may be required or TBHK may deem appropriate and to produce computerized record or other document relating to you and the Account if that disclosure is required by the relevant regulators for the purpose of assisting them with any investigation or enquiry they are undertaking or by a court of competent jurisdiction or if the disclosure is in the public interest or in TBHK's or your interest or is made with your expressed or implied consent.

 

22.3        You further agree that TBHK may, whether during the continuance or after the termination of this Client Agreement, without notice to you , disclose any information relating to you and the Account(s) to any other TBHK’s Affiliate(s), or to any assignee of any of the rights or obligations of TBHK under this Client Agreement.

 

22.4        You shall provide the information about the identity, address, contact details (“Identity Details”), tax information and any other information of you and the persons or entities which (i) are ultimately responsible for originating the instructions in relation to the Transactions, or (ii) stand to gain the commercial or economic benefit of the Transactions and/or bear its commercial or economic risk or such other information concerning you as any relevant regulator may require in order for TBHK to comply with the Applicable Laws and Regulations. You also authorize TBHK to provide such information about you (including such persons or entities, as the case may be) to such relevant regulator without further consent from or notification to you.

 

22.5        Without prejudice to Clause 22.4, if you effect Transactions for the Account of your clients, whether on a discretionary or non-discretionary basis, and whether as agent or by entering into matching transactions as principal with any clients of you, you agree that, in relation to a Transaction where TBHK has received an enquiry from the relevant regulators, the following provisions shall apply:

(a)      Subject to as provided below, you shall, immediately upon request by TBHK, inform the relevant regulators of the Identity Details of the client for whose Account the Transaction was effected and (so far as known to you ) of the person with the ultimate beneficial interest in the Transaction. You shall also inform the relevant regulators of the Identity Details of any third party (if different from the client/the ultimate beneficiary) originating the Transaction.

(b)      If you effect the Transaction for a collective investment scheme, discretionary account or discretionary trust, you shall:

i.      immediately upon request by TBHK, inform the relevant regulators of the Identity Details immediately upon request by TBHK, inform the relevant regulators of the Identity Details of the person(s) who, on behalf of the scheme, account or trust, has instructed you to effect the Transaction; or

ii.      as soon as practicable, inform TBHK when the discretion to invest on behalf of the scheme, account or trust has been overridden, and you shall immediately upon request by TBHK, inform the relevant regulators of the Identity Details of the person who has given the instruction.

(c)       If you are a collective investment scheme, discretionary account or discretionary trust and in respect of a particular Transaction, the discretion of you or your officers or employees has been overridden, you shall, as soon as practicable, inform TBHK when the discretion to invest on behalf of the beneficiaries of such scheme, account or trust has been overridden and immediately upon request by TBHK, inform the relevant regulators of the Identity Details of the person who has given the instruction in relation to the relevant Transaction.

(d)      If you are aware that your client is acting as intermediary for its underlying clients, and you do not know the Identity Details of any underlying client for whom the Transaction is effected, you confirm that:

i.      you have legally binding arrangements in place with its client which entitle you to obtain the information set out in Clauses 22.5(a), (b) and/or (c) from its client immediately upon request or procure that it be so obtained; and

ii.      you will, upon request from TBHK in relation to a Transaction, promptly request the information set out in Clauses 22.5(a), (b) and/or (c) from its client on whose instructions the Transaction is effected, and provide the information to the relevant regulators as soon as it is received from its client or procure that it be so provided.

 

22.6        You hereby agree that TBHK shall not be in any way liable for any consequences arising out of any disclosure made under this Clause 22.

 

22.7        You understand that you have supplied or may from time to time supply to TBHK or its Affiliate personal data about you (the “Personal Data”), within the meaning ascribed in the Personal Data (Privacy) Ordinance (Chapter 486 of the laws of Hong Kong), in connection with the opening or maintenance of any Account(s) or the provision of services to you by TBHK or its Affiliate. You acknowledge that you are not required to provide any Personal Data to TBHK and its Affiliate unless you choose to do so. However, if you fail to supply any such Personal Data, TBHK may not be able to open or maintain an Account(s) for you and/or provide you with any Services.

 

22.8        You acknowledge that you have read the Data Privacy Policy of TBHK and agreed to the terms in it.

 

22.9        The terms contained in this Clause 22 shall continue in effect notwithstanding the termination of this Client Agreement.

 

23            CONVERSION BETWEEN CURRENCIES

23.1        In the event that any Transaction effected by TBHK on behalf of you involve conversion between currencies, you agree that:

(a)      any profit or loss arising as a result of a fluctuation in the exchange rate affecting such currency will be entirely for your account and risk and your Account will accordingly be credited or debited (as the case may be) at the exchange rate by referring to that adopted by the relevant bank at the time;

(b)      any conversion from one currency to another required to be made for performing any action or step taken by TBHK under this Client Agreement may be effected in such manner and at such time as it may in its absolute discretion decide; and

(c)       in respect of any Transaction on the Account(s) executed in any currency other than the currency that you have in your Account(s), any profit or loss arising as a result of exchange rate fluctuation will be entirely for the Account and at your risk. You are also responsible for any expenses and charges that may be incurred as a result of such foreign exchange.

23.2        TBHK reserves its absolute right and discretion at any time to refuse to accept any Instructions from the Client in relation to currency conversion.

 

24            AMENDMENTS   

24.1        To the extent permitted by Applicable Laws and Regulations, TBHK may from time to time amend or supplement (whether by the addition of schedules to this Client Agreement or otherwise) any of the terms and conditions of this Client Agreement by notifying you in accordance with Clause 28. If you do not accept the same, you may terminate this Client Agreement by notifying TBHK in writing within seven (7) Business Days from your receipt or deemed receipt of the notice in accordance with Clause 28. If you do not terminate this Client Agreement within such time or if you continue to operate the Account after receipt or deemed receipt of notice of the amendment or supplement, you will be deemed to have accepted such amendment or supplement and shall continue to be bound by this Client Agreement as so amended or supplemented.

 

24.2        Subject to Clause 24.1, no provision of this Client Agreement may be amended or supplemented unless agreed to in writing signed by TBHK's authorized representative(s).

 

25            JOINT CLIENT     

25.1        Where you consist of more than one person:

(a)      the liability and obligations of each of you shall be joint and several and references to you shall be construed, as the context requires, to any one of you;

(b)      TBHK is entitled to, but shall not be obliged to, act on instructions or requests from any of you;

(c)       any notice, payment or delivery by TBHK to any one of you shall be a full and discharge of TBHK’s obligations to notify, pay or deliver under this Client Agreement; and

(d)      TBHK is entitled to deal separately with any one of you on any matter including the discharge of any liability to any extent without affecting the liability of any others.

Notwithstanding the above paragraph (b) and any agreement between any persons of you with TBHK, TBHK reserves the right to demand all the persons of you to give instructions or requests in writing or in any such other manner determined by TBHK before TBHK’s accepting or acting on such instructions.

 

25.2        Where you consist of more than one person, on the death of any of such persons (being survived by any other such persons), the death of one person does not operate to terminate this Client Agreement automatically unless terminated in according to other provisions of this Client Agreement but such death constitutes an Event of Default (Clause 12.1(b)).

 

25.3        Death/Mental and/or Other Incapacity/Insolvency

(a)      You undertake to give us immediate notice in writing of the death of any joint Account holder. In the event of such death, we may take such steps, require such documents, retain any part of any Account and restrict Transactions in any Account as we may at our discretion deem necessary, advisable or desirable to protect our interests with respect to any tax, liability, penalty or loss under any present or future law.

(b)      All instructions and Transactions relating to any joint Account or (as the case may be) any Service, in the event of the death, or mental and/or other incapacity of or the occurrence of an Insolvency Event in relation to any one or more of the joint Account holders shall be subject to any claim or objection of relevant authority and shall be without prejudice to any right which we may have arising out of any lien, charge, pledge, set-off, claim, counterclaim or otherwise whatsoever or any step or legal proceedings which we may in our absolute discretion deem desirable to take in view of any claim by any person other than the survivors, executors, administrators of the deceased.

(c)       Subject to paragraph (b) above, we shall hold on the death, or mental and/or other incapacity of or the occurrence of an Insolvency Event in relation to any of the joint Account holder all credit balance or balances and properties in all the Accounts and all monies due by us to the joint Account holders under any Transactions and Services to the order of the surviving joint Account holder (in case of death of all of the joint Account holders, to the executors or administrators of the last surviving joint Account holder) and any payment by us above shall be an absolute full and conclusive discharge of us as against the joint Account holders (including the deceased and his/her/estate and successor) provided that we may require the production of documentary proof of the death and/or the relevant legal grant to the estate of the deceased.

(d)      Our set off right hereunder may be exercised against any one or more of the joint Account holders such that money, property or proceeds otherwise payable to the joint Account holders may be applied by us in or towards the satisfaction of any obligations or liabilities owing to us by any one or more of the joint Account holders.

 

25.4        Each of joint Account holders agree that any tax or other expenses resulting from the death of any one or more of the joint Account holders, or through the exercise by the deceased’s estate of any rights in such Account, shall be payable out of any Account or chargeable against the interest(s) of the survivor(s) as well as against the interest of the deceased’s estate.

 

26            PARTNERSHIP

26.1        Liabilities and Obligations

If you are a partnership, under this Client Agreement:

(a)      the liabilities and obligations of each partner of the partnership shall be joint and several;

(b)      references to you shall be construed, as the context requires, to any or each partner of the partnership;

(c)       we may accept Instructions from any one or more of partners in respect of an Account held under the name of a partnership if such Instruction is given in accordance with the Mandate (however, we reserve the right to require written Instructions from all such partners at our discretion);

(d)      any delivery of payment or Investment to any one partner shall be a valid and complete discharge of our obligations to each partner of the partnership regardless of whether such delivery is made before or after that partner ceases to be a partner of the partnership;

(e)      any statement of account (including Consolidated Statement of Account & Contract Notes, receipts and Monthly Statement (as defined in Clause 27.1)), Confirmation, receipt, notice and communication sent to one partner will be deemed notice to all partners of the Account;

(f)        we shall be entitled to deal separately with any partner of the partnership on any matter, including the discharge of any liability to any extent, without affecting the liability of any other partner of the partnership; and

(g)      each person who ceases to be a partner of the partnership (whether as a result of death, retirement, resignation, replacement, addition, bankruptcy or otherwise) will remain liable for all liabilities and obligations owed by you to us which have accrued up to and including the date that such person ceases to be a partner of the partnership.

 

26.2        Changes to the Partnership

If you are a partnership, this Client Agreement shall continue to bind the partnership notwithstanding any change in the constitution, name or membership of the partnership by reason of death, bankruptcy, retirement, disability or admission of new partners or the occurrence of any other event which may dissolve the partnership or otherwise affect its obligations under this Client Agreement.

 

27            CONSOLIDATED STATEMENT OF ACCOUNT & CONTRACT NOTE AND MONTHLY STATEMENT

27.1        General

(a)      We will send to you a consolidated statement of account & contract note (“Consolidated Statement of Account & Contract Note”) which summarizing all Transactions effected pursuant to Instructions on the same day or a notification of the availability of such summaries no later than the end of the second Business Day after the date of the relevant Transactions.

(b)      Where required by Applicable Laws and Regulations, we will send a monthly statement of each Account ("Monthly Statement”) to you summarizing the Transactions effected under the relevant Account since the date of the preceding month statement, or a notification of the availability of such statements no later than the end of the seventh Business Day after the end of the monthly accounting period. In addition to such Monthly Statement, we also issue to you such other Account statements in such manner upon your request or as may be required by Applicable Laws and Regulations.

(c)       You are responsible for reviewing all acknowledgements, confirmations, Consolidated Statement of Account & Contract Notes, receipts and Monthly Statement in relation to your Transactions and your Account(s) immediately upon receipt. All Transactions and other information in any acknowledgements, confirmations, Consolidated Statement of Account & Contract Notes, receipts and Monthly Statement will be binding on you unless we receive notice of objection in writing or via electronic mail or by facsimile within forty eight (48) hours after you receive or are deemed to have received the same (whichever is earlier). We reserve the absolute right to determine the validity of your objection to the relevant Transaction or information.

(d)      Subject to any contrary Applicable Laws and Regulations, you agree to any acknowledgement, confirmations, Consolidated Statement of Account & Contract Notes, receipts and Monthly Statement to be in electronic form and further agree to receive them through electronic means as may be prescribed by us from time to time.

(e)      TBHK may not provide you with monthly statements in relation to the Account when during the relevant period there is no transaction or revenue or expense item and no outstanding balance or holding securities position in the Account.

 

28            NOTICES  

28.1        In the event of TBHK being required to give any reports, written confirmations, notice to, or make any demand or request of you or otherwise being obliged to contact you in connection with this Client Agreement notice (including any demand for Margin or Collateral) may be personally delivered, transmitted by post, telex or facsimile or by telephone or through Electronic Media in each case to the address or telex, facsimile or telephone numbers or email address set out in the Account Opening Form or otherwise as notified to TBHK in writing from time to time.

 

28.2        Notices to be delivered by you to TBHK may be personally delivered, transmitted by post, telex or facsimile or by telephone or by other method accepted by TBHK in each case to the address or telex, facsimile or telephone numbers or other destination announced by TBHK set out in this Client Agreement or otherwise as notified by TBHK from time to time.

 

28.3        All notices and other communications shall be deemed to be given at the time of transmission if delivered personally, by telex, facsimile or telephone or through Electronic Media or two days after the date of posting if transmitted by mail whichever shall be the first to occur; provided that any notice or other communication to be given to TBHK shall be effective only when received by TBHK.

 

29            TERMINATION  

29.1        Stoppage of Services

(a)      We may suspend the provision of Services or your access to any part of the Services without prior notice or consent from you in the event that:

i.      we elect at our absolute discretion to discontinue such Service(s) on a temporary or permanent basis;

ii.     you breach any of the provisions under this Client Agreement;

iii.    your Account has recorded no trading activities and/or holds no asset for a period (such period to be determined by us from time to time at our absolute discretion);

iv.    your Account has become an inactive Account or a dormant Account for an extended period of time (such period to be determined at our absolute discretion); or

v.     we are required by any Applicable Laws and Regulations to suspend the provision of any Service.

(b)      We may activate any Service and/or your Account upon your application to us on such terms and the supply of such information about yourself as we may determine from time to time.

 

29.2        Termination of Account(s)

(a)      We may terminate any one or more of the Account(s):

i.      without given prior notice to or obtaining consent from you if you breach or fail to comply with any provision of this Client Agreement or when your Account has become an Inactive Account or a Dormant Account for an extended period of time (such period to be determined at our absolute discretion);

ii.      by giving you not less than one (1) Business Day’s prior written notice; or

iii.      immediately without giving you prior notice or obtaining your consent where we are required by any Applicable Laws and Regulations to terminate and close the Account(s) you have opened with us.

 

29.3        Any termination of the Services or this Client Agreement or the closure of Account(s) shall not affect any Transactions entered into or prejudice or affect any rights, powers, duties, liabilities and obligations of either party accrued prior to the termination.

 

29.4        Consequences of Termination

Upon termination of this Client Agreement,

(a)      you will immediately repay to us all amounts due or owing to us under this Client Agreement;

(b)      you will withdraw any cash or Securities or other Investment balances in the Account within seven (7) Business Days from the date of termination, failing which we may on your behalf and without any responsibility for any loss or consequences on our part sell or dispose of or close out (as applicable) your Securities or other Investment in the market or in such manner and at such time and price as we may reasonably determine and send to you at your own risk our cheque or remittance representing the net sale proceeds and the credit balances in your Account (whether in Hong Kong Dollars or in another currency to be determined by us in our absolute discretion) to your last known address. For the avoidance of doubt, we shall not be responsible for any charges, costs, expenses or losses which may be incurred or arise as a result of such conversion and we shall have the right to deduct such charges, costs, expenses or losses prior to sending cheque or remittance;

(c)       we may sell, realize, redeem, liquidate or otherwise dispose of all or part of Investments to satisfy all of your indebtedness to us and Clause 29.5 below shall apply to any such sale; and

(d)      we shall cease to have any obligation to execute any Instruction received from you.

 

29.5        Proceeds and Documents of Title

Any net cash proceeds received by us pursuant to a sale, realization, redemption, liquidation or other disposal under this Clause 29 shall either be (a) if your Account has not been closed, credited to any of your Account; or (b) returned to you, after first deducting or providing for all monies and sums due or owing and other liabilities accrued or accruing due to us and outstanding (whether actual or contingent, present or future or otherwise). All Investments are not realized or disposed of together with any relevant document of title in our possession shall be delivered to you at your sole risk and expense.

 

30            CUSTODY OF SECURITIES/OTHER INVESTMENTS       

30.1        Act as Custodian

Unless otherwise specified, you appoint us to act as custodian for you to keep custody of your Securities or Collateral. You agree not to pledge, charge, sell, grant an option or otherwise deal in any of your Securities or Collateral forming part of any Account without our prior written consent.

 

30.2        Manner of custody

Any Securities and other Investments which are held by us for your Account may, at our absolute discretion, be either:

(a)      registered in your name or in the name of our associated entity or registered in accordance with the applicable laws of the jurisdiction which your Securities are held; or

(b)      deposited in safe custody in a segregated account (which is designated as a trust account or client account and established and maintained by the intermediary or associated entity for the purpose of holding client securities of the intermediary) with (i) in relation to those of your Securities that are to be kept in Hong Kong, an authorized financial institution, an approved custodian or another intermediary licensed for dealing in securities, (ii) in relation to those of your Securities that are to be kept in a jurisdiction outside Hong Kong, an institution properly authorized by Applicable Laws and Regulations in such jurisdiction(s) applicable to us to hold such Securities (whether or not such Securities may have the same level of protection as those that are kept in Hong Kong).

You acknowledge that any Securities or other Investments held by us for your Account shall be at your sole risk and we have no obligation to insure you against any kind of risk. We shall not be responsible for any losses, costs, damages, interests and charges arising from or in connection with such engagement or custody under the above arrangement, including without limitation any losses arising from fraud or negligence of the party so engaged.

 

30.3        Dividends

(a)      If we receive any dividends or other distributions or benefits in relation to any Securities or other Investments for your Account, they shall be credited to your Account(s). Where your Securities or Investments form part of a larger holding of identical Securities or Investments held for our other clients, you shall be entitled to a proportional share of the dividends, distributions or benefits in question.

(b)      In relation to Securities or other Investments held by us for safekeeping pursuant to this Clause 30 that are not registered in your name, we shall ourselves, or shall procure any associated entity, institution, custodian or intermediary appointed by us to:

i.      in the absence of your prior written Instruction to the contrary, collect and credit any dividend, distribution or other benefit arising in respect of such Securities to the Account or make payment to you as agreed with you. Where the Securities or other Investments form part of a larger holding of identical Securities or other Investments held for our clients, you are entitled to the same share of the dividend, distribution or other benefit arising on the holding as your share of the total holding. If dividend, distribution or other benefit is in the form of securities with fractional shares, such fractional shares may not be converted into equivalent cash amounts and credited to your Account;

ii.      act on any Instruction received from you in sufficient time to enable us to make the necessary arrangements as to the exercise of any voting or other rights attaching to or conferring on such Securities provided that if any payment or expense is required to be made or incurred in connection with such exercise, neither us nor any of our associated entity, institution, custodian or intermediary shall be required to act on any Instruction received from you unless and until we receive all amounts necessary to fund such exercise.

(c)       We are entitled to charge reasonable administrative fee on making distribution dividends or other benefit to you in respect of Securities or other Investments held on your behalf.

(d)      We shall not be responsible for any failure in making distribution of any party who holds the Securities and other Investments for your behalf.

 

30.4        Delivery of Non-identical Client’s Securities, Investments and Collateral

In respect of this Clause 30, we or any of our associated entity, institution, custodian or intermediary is not bound to deliver to you the identical Securities, Investments and Collateral received from or for you but may deliver to you, Securities, Investments and Collateral of like quantity, type and description.

 

30.5        Disposal of Securities, Investments and Collateral

You agree that we may dispose or initiate the disposal by our associated entity of any Securities, Investments and/or Collateral in settlement of any sums owed by you or on your behalf to us, our associated entity or a third party or otherwise as permitted under this Client Agreement.

 

30.6        Limitations on Treatment of Securities, Investments and Collateral

We shall take reasonable steps to ensure that your Securities or Collateral are not deposited, transferred, lent, pledged, re-pledged d or otherwise dealt with for any purpose except as permitted in this Clause 30 or in accordance with any of your Instruction, your Securities Standing Authority or Applicable Laws and Regulations.

 

30.7        Our Discretion

In the absence of contrary Instructions, we are authorized at our absolute discretion, and at your cost and expense:

(a)      to request payment of and receive all interest and other payments or distributions (whether of a capital or income nature) in respect of any Securities or Investments;

(b)      to surrender your Securities or other Investments against receipt of the monies payable at maturity or on redemption of the Securities or other Investments if called prior to maturity;

(c)       to exchange any documents relating to any of your Securities or other Investments, where such documents have been issued, in interim or temporary form for definitive form; and

(d)      to complete and deliver on your behalf as owner any ownership certificates in connection with the Securities or other Investments which may be required to obtain income from your Securities or other Investments or to facilitate their sale.

 

30.8        Voting and Other Rights

(a)      In respect of any Securities or other Investments held by us on your behalf, if we are notified that any voting and/or any other rights or privileges (including without limitation, conversion and subscription rights and any rights or privileges arising in connection with takeovers, other offers or capital reorganizations) attaching to those Securities or other Investments (as applicable) may be exercised, we will use our reasonable endeavors to notify you as soon as reasonably practicable of such rights and/or privileges. If you unambiguously inform us that you wish us to exercise the rights and/or privileges, and you have sufficient cleared funds in the Account, we will do so but only on such terms as you advise orally (subject to our agreement) or in writing within fourteen (14) Business Days of such notice (or such shorter period as may be specified or appropriate) and which are reasonably acceptable to us. Otherwise, we will not exercise any such rights and/or privileges. Notwithstanding the absence of satisfactory Instructions or sufficient funds, in the event that we are notified that subscription rights attaching to any Securities or other Investments that we hold on your behalf, we may, in our absolute discretion, dispose of such rights on your behalf and in such manner as we think fit.

(b)      If we are notified by any company in which we hold Securities or other Investments on your behalf, that such company intends to make calls upon those Securities (or other Investments) (as applicable) in respect of any monies whatsoever unpaid on them, we will use reasonable endeavors to notify you as soon as practicable of such calls. If you provide us with the relevant funds in sufficient time for us to do so, we will satisfy such calls on your behalf and on such terms as you advise orally (subject to our agreement) or in writing and which are reasonably practicable to us. Otherwise we shall take no action on your behalf and will have no liability whatsoever in respect of the consequences of a failure to satisfy the calls, we may do so and you undertake to reimburse us forthwith upon demand for any expenses or costs incurred in relation to such calls.

 

30.9        Charge or Lending of Securities or Other Investments

We shall not, without your prior written consent or standing authority, deposit any of your Securities or other Investments as security for any loans or advances made to us, or lend or otherwise part with the possession of your Securities or other Investments for any purpose.

 

30.10     Pooling of Securities

You agree that any Securities or other Investments deposited with us by you or purchased by us for your Account(s) may, at our absolute discretion, either be treated as fungible or pooled with the other like investments held by our other clients or specially allocated to your Account. You agree that in the event of any dividends or other distributions or benefits accruing or any losses however arising (including losses resulting from a reduction in the number or amount of Securities or other deliverables available for delivery) being suffered, in connection with any given Securities or other Investments held like with like, your Account shall be credited for such dividends or other distributions or benefits payment made to you or, as the case may be, your Account shall be debited with the proportion of such loss equal to the proportion of the total number of amount of relative Securities or such other Investments which shall comprise Securities or Investments forming part of your Account.

 

31            GENERAL   

31.1        This Client Agreement may be translated into Chinese language but in the event of any conflict arising the English version shall prevail.

 

31.2        In case of any conflict between any terms in Part II General Terms and Conditions and any terms in Part III Additional Terms Applicable to Respective Accounts and Services, the provision of the latter shall prevail.

 

31.3        Time shall in all respects be of the essence in the performance of all your obligations under or in connection with this Client Agreement, in particular for your obligation in providing adequate Collateral to TBHK within the prescribed time limit.

 

31.4        Except where TBHK is given express written instructions to the contrary, in accordance with the terms of this Client Agreement, it may make payment of any amounts owing to you by crediting the same to the Account, details of which are specified in this Client Agreement. Payment to such Account shall constitute payments to you for all purposes.

 

31.5        All sums payable by you in connection with this Client Agreement shall be exclusive of all taxes, duties or other charges of similar nature. If any tax, duty or other charge of similar nature is required by law to be withheld from such payments, the amount payable by you shall be increased to the extent necessary to ensure that, after the making of any withholding, TBHK receives on the due date a net sum equal to what it would have received and retained had no deduction been made.

 

31.6        Any provision in this Client Agreement which is invalid for any reason in any jurisdiction shall be ineffective to the extent of such invalidity and shall be severed from this Client Agreement in that jurisdiction without affecting the validity of the remaining provisions of this Client Agreement in that jurisdiction or affecting validity of such provision in any other jurisdiction.

 

31.7        You hereby declare that you have read this Client Agreement in the language of your choice of English or Chinese and that you understand and agree to be bound by the terms of this Client Agreement.

 

31.8        You hereby irrevocably appoint TBHK with full power and authority as your attorney, to the fullest extent permitted by law, to act for and on behalf of you for the purpose of carrying out the provisions of this Client Agreement and taking any action and executing any document or instrument in the name of you or TBHK which TBHK may deem necessary or desirable to accomplish the purposes of this Client Agreement, including (without limitation), in particular for an Account being a Margin Account:

(a)      to execute any transfer or assurance in respect of any of the Collateral;

(b)      to perfect TBHK ’s title to any of the Collateral;

(c)       to ask, require, demand, receive, compound and give a good discharge for any and all moneys and claims for moneys due or to become due under or arising out of any of the Collateral;

(d)      to give valid receipts and discharges and to endorse any cheques or other instruments or orders in connection with any of the Collateral; and

(e)      generally to file any claims or take any lawful action or institute any proceedings which TBHK considers to be necessary or advisable to protect the security created under this Client Agreement.

 

32            DISPUTES AND GOVERNING LAW

32.1        This Client Agreement and its enforcement shall be governed by the laws of Hong Kong and its provisions shall be continuous, shall cover individually and collectively all Accounts which you may open or re-open with TBHK, and shall inure to the benefit of, and bind TBHK, TBHK's successors and assigns, whether by merger, consolidation or otherwise as well as heirs, executors, administrators, legatees, successors, personal representatives and assigns of you.

 

32.2        Any dispute arising under or in connection with this Client Agreement or any Client Contract is to be settled by arbitration or by court proceedings in TBHK 's absolute discretion which shall be binding absolutely on you.

 

32.3        Any dispute which, in TBHK's discretion, is referred to arbitration shall be settled at the Hong Kong International Arbitration Centre conducted in Hong Kong according to the securities arbitration rules of the Hong Kong International Arbitration Centre. You hereby expressly agree to accept the finding of any such arbitration as absolute and final.

 

32.4        By execution and delivery of this Client Agreement you hereby irrevocably submit to and accept unconditionally the non-exclusive jurisdiction of the courts of Hong Kong. In the event of any legal proceedings being brought in the courts of Hong Kong, this Client Agreement shall in all respects be governed by and construed in accordance with the laws of Hong Kong PROVIDED ALWAYS THAT TBHK shall have the right to proceed against you in any other court which has jurisdiction over you or any of your assets and you hereby submit to the non-exclusive jurisdiction of such courts.

 

 

PART III – ADDITIONAL TERMS APPLICABLE TO RESPECTIVE ACCOUNTS AND SERVICES

Schedule A – Additional Terms for Margin Account

1               Application of the Additional Terms

1.1          All provisions in these Additional Terms for Margin Account apply to Margin Accounts.

 

1.2          You shall open and maintain one or more Margin Account with TBHK subject to Part II the General Terms and Conditions and these Additional Terms for Margin Account and the Additional Terms for Electronic Trading Service (if applicable) and the Additional Terms for New Listing of Securities (if applicable) and Part IV Risk Disclosure Statement.

 

1.3          Unless otherwise agreed by us in writing, any Margin Facility made available by us to you from time to time at your request shall be subject to the following terms and conditions.

 

1.4          Capitalised terms used herein shall have the same meanings as in the Client Agreement unless stated otherwise.

 

2               Margin Facility     

2.1          The Margin Facility, of such amount up to the maximum amount of credit facility that the TBHK may, at its sole discretion, grant you irrespective of the amount of the Collateral (“Credit Limit”) and the percentage of the value of the Collateral up to which you are permitted to borrow (or otherwise to secure other forms of financial accommodation) from TBHK against the Collateral (“Margin Ratio”), is extended by TBHK to you for financing the trading of Securities in Margin Account on the Additional Terms for Margin Account and any other terms and conditions which may be indicated by TBHK to you from time to time. The Credit Limit available to you and the Margin Ratio may be varied by notice by TBHK from time to time and at its sole discretion. Notwithstanding the Credit Limit as notified to you, TBHK may at its discretion (1) extend Margin Facility to you in excess of the Credit Limit if circumstances permit/justify and you agree that you shall be liable to repay the full amount of any Margin Facility given by TBHK in accordance with this Schedule, or (2) refuse to make available to you any advance under the Margin Facility at any time even if the Credit Limit applicable at that time has not been exceeded.

 

2.2          TBHK is authorized by you to draw on the Margin Facility to settle any amounts due to TBHK in respect of purchase of Securities and to finance continued holding of Securities, the payment of commission, interest and any other expenses incidental to the operation of the Margin Account and any other sums owing to TBHK and its Affiliates, including costs and expenses that may be incurred in connection with the realization of any Collateral. The Margin Facility is repayable on demand and TBHK may, in its absolute discretion, vary the terms in this Clause 2 or terminate the Margin Facility at any time it thinks fit. TBHK is not obliged in any way to provide financial accommodation to you.

 

2.3          You shall provide and maintain adequate Collateral and provide such additional Collateral in the manner and within the time limit specified by TBHK for the compliance with the margin requirements set by TBHK. TBHK in its absolute discretion determines the amount, type and form, manner of delivery, calculation basis of permissible value and timing of the delivery of the required Collateral. TBHK may change the margin requirements at any time in its absolute discretion without prior notice to you. Any failure of you in providing the required Collateral in Clause 2.5, constitutes an Event of Default and TBHK is entitled to dispose of any of the Collateral without prior notice to you.

 

2.4          The time for provision of Collateral and for payment of margin deposit is of essential importance and if no time is stipulated by TBHK in making a demand for Collateral or margin deposit, you are required to comply with such demand within two hours from the time of making such demand (or in a shorter period if so required by TBHK). You also agree to pay immediately in full on demand any amount owing under the Margin Facility. All initial and subsequent payments for margin deposits shall be made in cleared funds and in such currency and in such amounts as TBHK may in its sole direction require.

 

2.5          Notwithstanding Clauses 2.3 and 2.4, in the event that it is in the sole opinion of TBHK that it is impracticable for TBHK to make demand on you for additional Collateral pursuant to Clause 2.3, TBHK shall be deemed to have made such demand of additional Collateral in such form and amount as TBHK may determine and such demand shall become immediately due and payable by you. The aforesaid impracticality may be due to the following (without limitation) rapid changes or development involving prospective changes:

(a)      in the local, national or international monetary, financial, economic or political conditions or foreign exchange controls which has resulted or is in the opinion of TBHK likely to result in a material or adverse fluctuation in the stock market, currency market, commodities or futures market in Hong Kong and/or overseas; or

(b)      which is or may be of a material adverse nature affecting the conditions of you or operations of the Margin Account.

 

2.6          You shall pay interest on the outstanding amount of the Margin Facilities from time to time at such rate and in such manner as determined by TBHK from time to time. Interest will accrue on the outstanding amount of the Margin Facilities on daily basis and the accrued interest will be deducted from the Margin Account on a monthly basis and shall be payable at any time upon the demand made by TBHK.

 

2.7          If there is a debit balance in any of your Accounts which is a cash account and you hold a Margin Account, interest will be calculated on each debit balance and charged to the Accounts separately.

 

2.8          You shall, upon our demand at any time, repay to us all principal and interest accrued thereon outstanding under the Margin Facility, but nothing in this Clause shall prejudice our rights, powers and remedies under any security document executed in our favor in respect of the Margin Facility.

 

2.9          Repayments of any amount outstanding under the Margin Facility may be made at any time and, subject to availability of funds and the provisions in this Schedule, amounts repaid shall be available for re-drawing.

 

3               Collateral

3.1          You, as beneficial owner of the Collateral, hereby charge in favor of TBHK in respect of all the Secured Obligations by way of first fixed charge all your right, title, benefits and interests in and to the Collateral including any additional or substituted collateral and all dividends, interest paid or payable, rights, interests, money or other properties accruing or offering at any time by way of redemption, bonus, preference, options or otherwise on or in respect of the Collateral as continuing security for the payment and discharge of the Secured Obligations.

 

3.2          The Charge is a continuing security notwithstanding any intermediate payment, settlement of the Margin Account or satisfaction of whole or any part of Secured Obligations and notwithstanding any closure and subsequent opening of such Margin Account.

 

3.3          TBHK is entitled to exercise any voting right or other right in respect of the Collateral for the protection of TBHK’s interest in the Collateral and you shall not exercise any right attaching to the Collateral in any manner which, in TBHK ’s opinion, may be inconsistent with the obligations under this Client Agreement or prejudicial to TBHK’s right in the Collateral.

 

3.4          Whenever there is any Secured Obligations, TBHK has the right, without prior notice or consent from you, to dispose of or otherwise deal with any part of the Collateral at its absolute discretion upon such terms and in such manner it thinks fit for settlement of the Secured Obligations to protect its interest, in particular for your failure in meeting any call for Collateral or margin call made by TBHK or significant fluctuation in market prices. Upon any sale of the Collateral by TBHK, a declaration made by an officer of TBHK that the power of sale has become exercisable shall be conclusive evidence of the fact in favor of any purchaser or other person deriving title to any of the Collateral under the sale and no person dealing with TBHK or its nominees shall be concerned to inquire into the circumstances of the sale. In event of any deficiency after the sale of Collateral, you shall make good and pay on demand to TBHK such deficiency.

 

3.5          You shall pay or reimburse TBHK immediately upon demand all costs (including collection expenses and legal costs on a full indemnity basis) and expenses in connection with the enforcement or preservations of any right of TBHK under this Client Agreement.

 

3.6          Without prejudice to the generality of the foregoing, neither the Charge nor the amounts thereby secured will be affected in any way by:

(a)      any other security, guarantee or indemnity now or hereafter held by TBHK or Affiliate(s) in respect of the Secured Obligations;

(b)      any variation or amendment to or waiver or release of any security, guarantee or indemnity or other document (including the Charge except to the extent of the relevant variation, amendment, waiver or release);

(c)       the enforcement or absence of enforcement or release by TBHK or Affiliate(s) of any security, guarantee or indemnity or other document (including the Charge);

(d)      any time, indulgence, waiver or consent given to you or any other person whether by TBHK or Affiliate(s);

(e)      the making or absence of any demand for Collateral or payment of any sum payable under this Client Agreement made on you whether by TBHK or any other person;

(f)        the insolvency, bankruptcy, death or insanity of you;

(g)      any amalgamation, merger or reconstruction that may be effected by TBHK with any other person or any sale or transfer of the whole or any part of the undertaking, property or assets of TBHK to any other person;

(h)      the existence of any claim, set-off or other right which you may have at any time against TBHK or any other person;

(i)        any arrangement or compromise entered into by TBHK with Client or any other person;

(j)        the illegality, invalidity or unenforceability of, or any defect in, any provision of any document relating to the Margin Facility or any security, guarantee or indemnity (including the Charge) or any of the rights or obligations of any of the parties under or in connection with any such document or any security, guarantee or indemnity (including the Charge), whether on the ground of ultra vires, not being in the interests of the relevant person or not having been duly authorized, executed or delivered by any person or for any other reason whatsoever;

(k)       any agreement, security, guarantee, indemnity, payment or other transaction which is capable of being avoided under or affected by any law relating to bankruptcy, insolvency or winding up or any release, settlement or discharge given or made by you on the faith of any such agreement, security, guarantee, indemnity, payment or other transaction, and any such release, settlement or discharge shall be deemed to be limited accordingly; or

(l)        any other thing done or omitted or neglected to be done by TBHK or any other person or any other dealing, fact, matter or thing which, but for this provision, might operate to prejudice or affect your liabilities under the terms of this Client Agreement governing the Margin Facility.

 

4               Securities in the Account

4.1          Clause 30.2 in Part II the General Terms and Conditions shall not be applicable to Securities Collateral in the Account. Any Securities Collateral which are held by us for your Account may, at our absolute discretion, be either:

(a)      registered in your name or in the name of us or in the name of our associated entity or registered in accordance with the applicable laws of the jurisdiction which your Securities are held; or

(b)      deposited in safe custody in a segregated account (which is designated as a trust account or client account by us or our associated entity for the purpose of holding Securities Collateral of us) or deposited in an account in the name of us or our associated entity (as the case may be) with (i) in relation to those of your Securities that are to be kept in Hong Kong, an authorized financial institution, an approved custodian or another intermediary licensed for dealing in securities, (ii) in relation to those of your Securities that are to be kept in a jurisdiction outside Hong Kong, an institution properly authorized by Applicable Laws and Regulations in such jurisdiction(s) applicable to us to hold such Securities (whether or not such Securities may have the same level of protection as those that are kept in Hong Kong).

You acknowledge that any Securities or other Investments held by us for your Account shall be at your sole risk and we have no obligation to insure you against any kind of risk. We shall not be responsible for any losses, costs, damages, interests and charges arising from or in connection with such engagement or custody under the above arrangement, including without limitation any losses arising from fraud or negligence of the party so engaged.

 

5               Standing Authority under Securities and Futures (Client Securities) Rules

5.1          Without prejudice to any other right or remedy available to TBHK, you hereby agree to give the standing authority to TBHK to authorize TBHK to deal with the Securities Collateral (as defined below) from time to time received or held on your behalf in one or more of the following ways (inter alia), namely to:

(a)      apply any of the Securities or Securities Collateral, for the avoidance of doubt, including but not limited to shares, bonds, notes and other types of fixed income securities, pursuant to a securities borrowing and lending agreement and/or a securities repurchases agreement (for the avoidance of doubt, including but not limited to, any such agreement equivalent to or similar to the International Securities Lending Association’s Global Master Securities Lending Agreement (the “GMSLA”) and/or equivalent to or similar to the International Capital Market Association’s Global Master Repurchase Agreement (the “GMRA”)) between TBHK and a third party, subject to compliance with the Client Securities Rules;

(b)      deposit any of Securities Collateral with an authorized financial institution as collateral for financial accommodation provided to TBHK; or

(c)       deposit any of Securities Collateral with (i) a recognized clearing house; or (ii) another intermediary licensed or registered for dealing in securities, as collateral for the discharge and satisfaction of TBHK's settlement obligations and liabilities.

Such authority shall remain valid for a period of twelve (12) months from the approval date of the opening of the Margin Account unless you give not less than ten (10) Business Days prior written notice to TBHK to revoke the same at any time, provided that no such revocation shall be effective if there is any indebtedness in the Margin Account. You understand that this authority shall be deemed to be renewed upon expiry upon the same terms and conditions as specified in the standing authority for twelve (12) months without your written consent if we issue to you a written reminder at least fourteen (14) days prior to the expiry date of this authority, and you do not object to such deemed renewal before such expiry date. TBHK will give a written confirmation of the renewal of the standing authority to the client within one week after the date of expiry. If you request for revocation of such standing authority or the standing authority has not been renewed by you whom TBHK called upon to do so, TBHK reserves the right to terminate this Client Agreement and operations of the Margin Account and then you shall forthwith settle any indebtedness owing to TBHK and its Affiliate(s).

 

“Securities Collateral” is defined as the securities collateral which are listed or traded on market operated by SEHK or other Exchanges or interests in an authorized collective investment scheme (as defined in the SFO) and are received or held by TBHK.

 

5.2          Subject to the provisions of the SFO, you agree that TBHK is entitled to retain for its own benefit and not accountable to you for any fee, income, rebate or other benefits resulting from any lending or deposit of the securities of you held in the Account with any third party for any purpose by TBHK.

 

6               Power of Attorney   

6.1          The Client by way of security hereby irrevocably appoints TBHK to be the Client’s attorney on the Client’s behalf and in the Client’s name to do all acts and things and to sign, seal, execute, deliver, perfect and do all deeds, instruments, documents, acts and things which may be required for the purpose of carrying out any obligation imposed on the Client by or pursuant to the Margin Facility terms or for the general purpose of enabling TBHK to exercise its rights and powers conferred on it by or pursuant to the Margin Facility terms or by law including (but without limitation): to execute any transfer in respect of any of the Collateral; to perfect its title to any of the Collateral; to ask, require, demand, receive, compound and give a good discharge for any and all monies and claims for monies due or to become due under or arising out of any of the Collateral; to give valid receipts and discharges and to endorse any cheques or other instruments or orders in connection with any of the Collateral; and generally to file any claims or take any lawful action or institute any proceedings as it deems fit and considers necessary or appropriate to preserve the security created under this Schedule.

 

7               Termination of Facility

7.1          The Margin Facility is repayable forthwith on demand and may be varied or terminated in the sole and absolute discretion of TBHK. In particular, the Margin Facility will be terminated upon the occurrence of (but not limited to) any one or more of the following events: the withdrawal or non-renewal of your authorization to TBHK as required by section 7 of the Client Securities Rules; or any termination in accordance with Clauses 12 and 29 of the Client Agreement, and any notice of termination for that purpose shall be deemed to be a notice of termination of the Margin Facility. Upon termination of the Margin Facility, any outstanding indebtedness by you shall forthwith be repaid to TBHK.

 

7.2          For the avoidance of doubt, repayment of all or any of the loan amounts owed to TBHK in normal circumstances will not of itself constitute cancellation or termination of the Margin Facility.

 

 

Schedule B – Additional Terms for Stock Option Trading Services

The provisions of this Schedule B apply only to Accounts that have requested and TBHK has agreed to provide with Stock Option Trading Services on the terms and conditions of the Client Agreement. This Schedule B sets forth the respective rights and obligations arising from the use of your Account(s) for option trading. It forms an integral part of the Client Agreement and may be amended from time to time.

 

1               Definitions and Interpretation

Words and phrases in Schedule B should be read and construed in accordance with the definitions set out below, capitalised terms used herein which are not otherwise defined below shall have the same meanings as defined in the Client Agreement::

 

“Business Day”

means a day (other than Saturdays, Sundays or public holidays) on which the relevant Exchange opens for trading.

“Expiry Date”

means the last day on which an option can be exercised. If the agreed Expiry Date is not a Business Day, the Expiry Date shall, unless specified otherwise, be the next Business Day.

“in-the-money”

means an option that has a positive Intrinsic Value, or when the Intrinsic Value of an option that trades on the U.S. exchange is at least US$0.01.

“Intrinsic Value”

means the amount by which the underlying security (as determined by TBHK) exceeds (in the case of a call option) or falls short of (in the case of a put option) the Strike Price.

"Margin"

means cash, Investment Products and or other assets as may be acceptable to TBHK, as security for the Client's obligations to TBHK under this Schedule

“Premium”

means the amount that a holder must pay to the writer of an option contract.

“Strike Price”

means the Strike Price is the agreed-upon price in an option contract at which the underlying security may be bought (in the case of a call option) or sold (in the case of a put option) by you until or upon the expiration of the option contract.

 

2               Laws and Rules      

2.1          All option trading is subject to the Applicable Laws and Regulations of the jurisdiction in which the option is traded. You may not, acting alone or in concert with others, exceed the position and/or exercise limits that may be imposed by any relevant Exchanges, Clearing Houses or regulatory authorities at any time. All actions taken by TBHK or such Exchanges, Clearing Houses shall be binding to you.

 

2.2          Trading Restrictions: An Exchange or any relevant regulatory authority may restrict trading/transactions in particular options or the exercise of options in the interests of helping maintain a fair market and protecting investors.

 

2.3          Restrictions on Abandonment/Exercise: Notwithstanding anything to the contrary, TBHK may, at its sole discretion, restrict your right to abandon or exercise an option. Regarding any overseas option contract, you cannot abandon the option unless an Instruction to such effect is given by yourself in the format specified and accepted by TBHK.

 

2.4          Cut-off Times: You are aware of and accept the cut-off times of the relevant Exchanges, markets and Clearing Houses.

 

2.5          Confidentiality: TBHK will keep information relating to the Account confidential. However, we may provide such information to the parties described in TBHK’s privacy policy or to the SFC, the SEHK, the HKEX, and any relevant exchange or regulatory authority as required by them.

 

2.6          Limits: You agree that TBHK may limit the open positions or delivery obligations you may have at any time.

 

3               Options Trading

3.1          Client’s Benefit: You confirm that (i) the account is operated solely for yourself and your own benefit, and not for the benefit of any other person; or (ii) you have disclosed in writing the name of the beneficial person(s) of the Account to TBHK.

 

3.2          Exercise: Subject to the cut-off times prescribed by TBHK and Clause 2.3 (Restrictions on Abandonment/Exercise) of this Schedule, you can exercise the options before the Expiry Date. Exercising instructions provided within the Exchange’s trading hours will be executed that day.

 

3.3          Execution: You acknowledge and accept that there may be a delay in quoting prices or in dealing arising from physical restraints on the Exchanges and rapid changes in the prices of option contracts. TBHK may not be able to trade at the prices quoted at any specific time after making a reasonable endeavor. In this case, TBHK may affect partial Instructions without your prior consent. You accept and will be bound by the outcome of such executions by TBHK. You agree that TBHK takes no responsibility for any loss when it fails to so comply with any terms of your Instructions or execute partial Instructions.

 

3.4          No Notice of Expiration: TBHK is not obliged to give you notice prior to an option’s Expiry Date. You shall be aware of the trading hours and any non-trading day in place where the option is executed, so to ensure the option can be exercised in a timely manner. If you do not submit an exercise Instruction to TBHK within the trading time set by the relevant institutions or Exchange (which TBHK is not obliged to notify), you agree to hold TBHK and its officers, employees, and agents harmless and waive any claim for damages and losses resulting from your failure to exercise the option.

 

3.5          Underlying Securities: TBHK is under no obligation to convey to you any information relating to the underlying Securities covered by the option or any other information relating to the options, whether such information is then or thereafter known or available. You are solely responsible for exercising any right, privilege or obligation relating to your option in a proper and timely manner.

 

3.6          TBHK’s Own Account: TBHK and its affiliates may trade in options and the Securities underlying such options for its own account. Such transactions may occur continuously and may precede, coincide with, or follow any options transactions made for a client’s Account. TBHK and its affiliates may take option positions or hold their underlying Securities, which may be similar to or differ from (a) the positions which you may have in your account, or (b) Transactions that TBHK and its affiliates may affect for you. You understand and accept that such trading may adversely affect your interests.

 

3.7          Long Options and Expiration: If you exercise a long option contract, you agree to pay the full consideration (for a call option) or deliver the underlying Securities (for a put option) specified by the option contract. Your long options may expire and become worthless. As an option approaches expiry, the contract holder must decide whether to sell, exercise, or let it expire. When an option is in the money, it can be exercised or sold. If you do not wish an in-the-money open long option to be exercised on the Expiry Date, you must close the open position of the option contract before the Expiry Date or instruct TBHK not to exercise the option contract using the form specified by TBHK. TBHK may also restrict you from opening a new long position on the same day as the Expiry Date, while the cut-off time for opening a long position on the Expiry Date may be earlier than that of the Exchange.

 

3.8          Long Options and Exercise: If you hold long positions on the Expiry Date, if you do not have sufficient buying power to acquire the underlying Securities pursuant to exercising the option (for a call option) / sufficient underlying Securities for delivery (for a put option), TBHK may, at its discretion, handle the options, including through a force liquidation before market closure, auto/manual exercise of the option or abandon the exercise at its discretion.

 

3.9          Exercise Assignment Notices: TBHK shall allocate exercise assignment notices for option contracts on a fair basis.

 

3.10        Obligations under the options contract: You shall make each payment and delivery in accordance with each option contract to which it is a party, and perform all its obligations thereunder. If your option position is exercised, you will take full responsibility for any obligations or risks arising from the exercise, including settlement obligations, and bear all resulting losses (if any).

 

3.11        Options in the Margin Account: In the case of an option sold or written by the Client in the Margin Account:

a)        with respect to a call option which if exercised against you will require delivery of Securities sold, you shall keep such Securities in the Margin Account until the expiration of the option period, and shall not sell or withdraw such Securities. If the option is exercised, TBHK may deliver such Securities to the purchaser without prior notice to you; and

 

b)        with respect to any put option which if exercised against you will require payment for Securities purchased, you shall keep in the Margin Account sufficient funds for such payment until the expiration of the option period, and shall not withdraw such funds or utilize them for any other purpose. If the option is exercised, TBHK may use such funds for the purchase of such Securities without prior notice to you.

 

4               Margin and Security

4.1          Security: All Securities and funds held in any Account shall be charged pursuant to Clause 3.1 of PART III Schedule A – Additional Terms for Margin Account.

 

4.2          Margin: The Client agrees to provide TBHK with Margin. Such Margin should be paid or delivered as demanded by TBHK from time to time, and any failure by the Client to provide Margin in the manner requested by TBHK shall be an Event of Default. The amounts required by way of Margin should not be less than, but may exceed, the amounts as may be required by Applicable Laws and Regulations (in particular, the rules in respect of the Client's open positions and delivery obligations), and further Margin may be required to reflect changes in market value and/or credit risks and other risks involved.

 

Where the client's option is in-the-money or close to being in-the-money or close to expiration (as determined by TBHK in its sole discretion), TBHK will, from time to time and without further notifying the Client, recalculate the Margin required (in anticipation of the exercise or automatic exercise of the option) and make further demands for Margin where necessary.

 

4.3          Authority to Deliver: The Client shall on request provide TBHK with such authority as TBHK may require under the Rules to authorize TBHK to deliver such Securities, directly or through another broker-dealer, to relevant exchange as collateral resulting from the Client's Instructions to TBHK or such other relevant persons as determined by TBHK in its sole discretion from time to time; and, in respect of options trading only, TBHK does not have any further authority from the Client to borrow or lend the Client's Securities or otherwise part with possession (except to the Client or on the Client's instructions) of any of the Client's Securities for any other purpose.

 

4.4          Sufficient Assets at all times: The Client must ensure that sufficient assets exist in the Account at the time when the Client gives an Instruction to trade an option contract, with the Client maintaining sufficient amount of assets throughout the life of the option until it expires or is exercised.

 

4.5          In the event that an exercise put options contracts or assignment of call options results in your entering into a short sale of the underlying security (i.e. where you have insufficient Securities in your Account to fulfil the delivery obligations under the Options Contracts), you are responsible for the order at the time the order is placed; you acknowledge that short sales may only be executed in a Margin Account subject to initial margin and margin maintenance requirements and the provisions of the Margin Agreement. Prior to the execution of a short sale, TBHK must be able to borrow the specified security on your behalf in order to deliver the security to the purchaser; if the security has been borrowed on your behalf and the lending firm subsequently issues a recall notice, then TBHK will attempt to re-borrow the security on your behalf. However, if in the event the security cannot be re-borrowed or your account is not allowed for short sale, you acknowledge that TBHK may, at its sole discretion and without notice to you, cover your short position by purchasing stock in the open market at the current market price. You shall then be held liable for all related costs incurred by TBHK.

 

5               Premium and Commission

You agree that within the time period specified by TBHK, you will pay to TBHK any Premium, commission and any other charges, and applicable levies imposed by the relevant Exchange, market or Clearing House, resulting from the carrying out of your Instructions. TBHK may deduct such Premium, commissions, charges and levies from your Account.

 

6               Default

If you fail to comply with any of your obligations and/or to meet any of your liabilities, then without prejudice to any other rights TBHK may have, we may:

(a)     decline to accept your further Instructions in respect of option contracts;

(b)     closeout, give up or exercise some or all of the option contracts;

(c)     engage in any option contracts, or any transactions in investment products to hedge the risks concerning your failure to comply; or

(d)     dispose of some or all of your equity to cover your liabilities. TBHK will pay to you any remaining amount resulting from such disposition.

 

7               Risk Disclosure Statements

You fully understand and accept the risk disclosure statements set out in Part IV to this Client Agreement or otherwise provided by TBHK, and accepts in full the risks in relation to options trading.

 

Schedule C – Additional Terms for New Listing of Securities

 

1               Application of the Additional Terms

1.1          The provisions in these Additional Terms for New Listing of Securities apply only to any Account in respect of which you have requested TBHK to apply on your behalf for Securities in new issue for listing on SEHK (the “Application”) on the terms and conditions of this Client Agreement. It forms an integral part of the Client Agreement and may be amended from time to time.

 

1.2          Capitalised terms used herein shall have the same meanings as in the Client Agreement unless stated otherwise.

 

2               Terms for New Listing of Securities

2.1          You authorize TBHK to complete such application form for the Securities offered (“Offer Securities”) by the issuer (“Issuer”) for subscription to the public (“Public Offer”) via itself or any other licensed corporation or registered institution as may be required, and represents and warrants to TBHK that all representations, warranties, confirmations and undertakings on the part of the applicant contained or incorporated in the application form are true and accurate in respect of you.

 

2.2          You agree to be bound by the terms of the new issue and in particular, you hereby:

(a)      warrant and undertake that the Application shall be the only application made by you or on your behalf for your benefit in respect of the same Offer Securities and you shall make no other application in that issue;

(b)      authorize TBHK to represent and warrant to SEHK that no other application shall be made or shall be intended to be made by you or for your benefit;

(c)       acknowledge that TBHK submits an Application for you as your agent for the purpose of applying for the Offer Securities and, unless otherwise notified to you explicitly or through the offering documents of the Public Offer, TBHK is not the agent of the Issuer or other parties involved in the relevant Public Offer;

(d)      acknowledge that any application made by an unlisted company which does not carry on any business other than dealing in the Offer Securities and in respect of which you exercise statutory control shall be deemed to be an application made for the benefit of you;

(e)      acknowledge that TBHK will rely on the above warranties, undertakings and authorizations in making the Application;

(f)        acknowledge that you apply for the Offer Securities as principal only. TBHK reserves the right not to process any Application by you if you are acting as agent, nominee or trustee for any other person;

(g)      acknowledge you must ensure that each Application complies with any minimum, maximum, denomination and/or other requirements (whether in respect of the quantity or value of the Offer Securities or the number of the Application) prescribed by the Issuer of the relevant Public Offer. Any Application which does not fully comply with all such requirements will not be processed by TBHK; and

(h)      acknowledge and agree that any Application, once submitted by TBHK, as agent on behalf of you, or otherwise processed by TBHK, might not be capable of being withdrawn, cancelled or modified.

 

2.3          In relation to a bulk application to be made by TBHK on behalf of TBHK and/or you and/or TBHK’s other clients, you acknowledge and agree:

(a)      that if such bulk application may be rejected for reasons which are unrelated to you, TBHK, in absence of fraud, gross negligence or willful default, shall not be liable to you or any other person in consequence of such rejection;

(b)      to indemnify TBHK against all losses, damages, costs, charges, expenses (including legal fees on a full indemnity basis), claims or demands which may be sustained or incurred by or made against TBHK in accordance with Clause 18.2 of the General Terms and Conditions if such bulk application is rejected because of any breach of representations and warranties or otherwise arising from factors relating to you; and

(c)       in the event that the bulk application is only partially accepted, you agree that TBHK is entitled to distribute the Offer Securities in relation to which the Application is accepted (“Allotted Securities”) in TBHK’s absolute discretion, including distributing the Allotted Securities equally among TBHK’s clients under the bulk application and you shall not have any claim to the Allotted Securities or claim of priority to another client of TBHK or its nominee in relation to the bulk application.

 

2.4          You may at the same time request TBHK to provide a loan to finance the Application (the “Loan”), the following provisions shall apply:

(a)      TBHK has discretion to accept or reject the request for the Loan.

(b)      Upon the acceptance of the request for the Loan, TBHK will verbally or in writing confirm the terms of the Loan (“Agreed Loan Terms”) as agreed between TBHK and you, which shall be conclusive and binding on you.

(c)       Before the provision of the Loan, you shall provide TBHK a deposit, which shall form part of the proceeds for the Application, in the amount and within the time in accordance with the Agreed Loan Terms.

(d)      Unless contrary to the Agreed Loan Terms:

i.      the Loan amount is the total price of the Offer Securities (including applicable charges) applied under the Application less the amount of deposit in Clause 2.4(c); and

ii.      you have no right to repay the Loan, in part or full, before the date of repayment in accordance with the Agreed Loan Terms.

(e)      The interest rate applicable to the Loan shall be determined under the Agreed Loan Terms.

(f)        When TBHK receives any refund in respect of the Application, TBHK has the right, at its discretion, to apply the same or part of it towards the discharge of the Loan including any interest accrued thereon and/or return the same or the remaining balance (if any) to you , whether before or after the repayment date in accordance with the Agreed Loan Terms.

(g)      In consideration for TBHK’s granting of the Loan to you, you charge to TBHK by way of first fixed charge as a continuing security for the full repayment of the Loan and the accrued interest thereon, all the Securities acquired on behalf of you under the Application in respect of which the Loan is provided. You have no right to the possession of the aforesaid Securities until the full repayment of the Loan (including interest accrued thereon). You authorize TBHK to dispose of the aforesaid charged Securities without prior notice to you for discharge of the liabilities owing to TBHK under the Loan so long as the Loan (including interest thereon) has not been repaid in full.

 

2.5          By submitting an Application for the Offer Securities in a Public Offer, you confirm all of the following for yourself and on behalf of all of your clients if applicable:

(a)      You have sufficient opportunity to access and read the offering documents of the Public Offer (“Offering Documents”) and the information disclosed in them and agree to be bound by all applicable terms and conditions contained therein;

(b)      You have not been prohibited from participation in the Public Offer by the terms of the Offering Documents;

(c)       You agree to apply for the Offer Securities in the relevant Public Offer on the terms and conditions and pursuant to the procedures set out in the Offering Documents;

(d)      You acknowledge that the eIPO Services and any material contained on TBHK’s website and/or platform involve no solicitation of, the sale of, or recommendation of, or advice on any product from us and your Application and any related transactions conducted by you through TBHK’s website and/or platform are conducted on an execution-only basis and based on your own judgment;

(e)      You acknowledge and confirm that you comply with the eligibility criteria set out in the DECLARATION above. You acknowledge that TBHK will take your acknowledgement and confirmation at face value and will not be responsible for any inaccurate, untrue or false information or any information which is supplied under false pretenses.

(f)        You represent and warrant to TBHK that in respect of any Application (a) (where multiple Applications for subscription of Offer Securities are not permitted) you have not and you will not make, and has not procured and will not procure, more than one Application for subscription of Offer Securities whether for your own account or for the account of any other person, and (b) you have not placed (whether for your own benefit or for the benefit of any other person) with any shares or warrants or interests which are of the same class or type as those applied for in the Application. You further acknowledge that any breach of or any inaccuracy of the representation and warranty set out in this sub-clause may result in, in addition to the rejection of the Application, the rejection of other applications submitted by TBHK on its own behalf or on behalf of its other clients. You shall indemnify TBHK on demand for all losses resulting from such breach or inaccuracy;

(g)      You are an independent third party and is not connected with or acting in concert with any directors, chief executive, substantial shareholders of the Issuer and/or any of their respective subsidiaries or an associate of any of them, as such terms defined in the Applicable Laws and Regulations. Further, your subscription is not directly or indirectly financed or backed by any such persons; and

(h)      You do not hold any interests in the Issuer prior to the subscription of the Offer Securities.

 

 

Schedule D – Additional Terms for Fractional Shares Trading Services

The provisions of this Schedule D apply only to Accounts that have requested and TBHK has agreed to provide with services in respect of purchase and sale of fractional interests of whole equity securities (the “Fractional Shares”) on the terms and conditions of the Client Agreement (the “Fractional Shares Trading Services”). In the event of any conflict or inconsistency between the Client Agreement and the provisions of these Additional Terms for Fractional Shares Trading Services, the provisions of these Additional Terms shall prevail to the extent of such conflict or inconsistency.

 

This Schedule forms an integral part of the Client Agreement and may be amended from time to time. Capitalised terms used herein shall have the same meanings as in the Client Agreement unless stated otherwise.

 

1               Scope of the Fractional Shares Trading Services

1.1          Fractional Shares Trading Services are generally available for S&P 500 Securities offered via the Services provided by TBHK (the “Eligible Fractional Securities”). TBHK may from time to time adjust the list of Eligible Fractional Securities. However, securities available for fractional trading are subject to change without notice in TBHK’s sole discretion. TBHK may, in respect of certain shares in certain markets, at its discretion accept and execute Orders for Transactions to buy or sell a fraction of such shares.

 

2               Execution of Orders for Fractional Shares   

2.1          Although the shares for which TBHK will provide the Fractional Shares Trading Services may be listed or primarily traded on a particular exchange or marketplace, TBHK will not route such an order for fractional shares for execution (the “Order”) on the exchange or marketplace where the shares are listed or primarily traded. Instead, TBHK will place the Order with an executing broker (the “Executing Broker”) who will arrange for execution of the Order in another marketplace or in an over the counter transaction (and the seller or buyer of the fractional shares may be an affiliate of the Executing Broker or the Executing Broker itself).

 

2.2          The prices that are displayed in respect of shares in the system provided under the  Electronic Trading Service are for whole shares and not fractional shares. You acknowledge that the market for fractional shares is significantly less liquid than the market for whole shares, and the price at which an Order for fractional shares is executed may be materially different from the prevailing prices for the shares that are displayed on the Electronic Trading Service.

 

2.3          During periods of heavy trading and/or wide price fluctuations, there may be delays in executing the Order and the Fractional Shares Trading Service may not be available. If you place an Order in volatile market conditions, there may be a significant difference between the quote you received prior to or at the time you placed the Order and the execution price that you receive.

 

2.4          Unless otherwise specified, both the whole share component of your trade and the fractional share component will be executed by TBHK on an agency basis. TBHK can’t guarantee that the fractional share component of the trade will receive the same price as the full share component and both whole share component and fractional share component will be executed at the same time.

 

2.5          TBHK may round all holdings of Fractional Shares to the fifth decimal place, the value of Fractional Shares to the nearest cent (USD), and any dividends paid on Fractional Shares to the nearest cent (USD).

 

2.6          Due to rounding and price movements, the estimated notional value of the Order may differ from the actual notional value of the Order. There are scenarios where the converted share quantity calculation upon receipt may differ from the actual quantity received when executed such as the price changes between when the Order was requested and when it was executed, fees are assessed on trading, rounding errors, or taxes are applied.

 

2.7          TBHK will only support payments that are equal to or greater than US$0.01 per share. Amounts smaller than US$0.01, or other indivisible amounts, will not be distributed. If your Fractional Share pays a dividend, the dividend payable to your Fractional Share position must be greater than or equal to US$0.01 in order to be credited to the Account. TBHK does not offer a dividend reinvestment program, and any proportionate dividends received will require you to place an order to invest those funds.

 

2.8          The types of Orders that TBHK will accept, and the trading hours in which such Orders may be placed or executed, in respect of Fractional Shares may be different from Orders in respect of whole shares.

 

2.9          TBHK may decide at its discretion the number of decimal places of such Fractional Shares held and traded and TBHK will not accept an order for a purchase of Fractional Shares of less than minimum dollar amount (currently US$5.00, subject to update from time to time). The proceeds from the sale of the Fractional Shares will be rounded to the nearest US$0.01. If you enter repeated Orders with individual notional values of less than minimum dollar amount, your Account may be restricted from trading.

 

2.10        TBHK is entitled to adjust relevant parameters of Fractional Shares trading from time to time and to modify, suspend or terminate Fractional Shares Trading Service.

 

2.11        Short sale orders for Fractional Shares are not supported. You can only enter sale Orders for Fractional Shares of which you hold a long position in your Account.

 

2.12        TBHK will notify you for any changes of the eligibility of any Fractional Shares held in the Account. If a Security is no longer eligible for the Fractional Shares Trading Service, then the existing Fractional Shares may be subject to liquidation only, meaning that you cannot accumulate more Fractional Shares in the particular Security, but you will be able to divest your Fractional Share interests in that Security.

 

2.13        Cancellation of an Order is not guaranteed. If the Order has been released for execution, you may not be able to cancel the Order, nor can it be modified once it has been submitted.

 

2.14        Fractional shares within the Account:

i.       are unrecognized, unmarketable, and illiquid outside the TBHK platform;

ii.       are not transferrable in-kind; and

iii.       may only be liquidated, with the proceeds available for withdrawal or transfer.

 

2.15        All trading, including fractional trading, is executed by TBHK on a best-efforts basis only. TBHK does not guarantee that there will be a market for a particular security and makes no representations or warranties about its ability or willingness to facilitate trading in fractional shares, or the execution timing of the Order.

 

3               Custody of Fractional Shares       

3.1          You acknowledge and agree that any Fractional Shares that are purchased through TBHK will be held by us in your Account as custodian through a sub-custodian or nominee in accordance with Clause 30.2 of Part II – General Terms and Conditions to the Client Agreement.

 

4               No Withdrawals or Transfers Permitted

4.1          You will not be able to transfer any Fractional Shares that are held in your Account with us to another account you hold with any other custodian or bank.

 

4.2          If your Account is closed (whether by choice or by condition detailed in the Client Agreement), or if funds and/or Securities are transferred to another broker-dealer, the Fractional Shares that you own at that time in the Account may be liquidated. If your fractional position is liquidated, the proceeds will be distributed in cash or a cash equivalent instrument as TBHK may determine. For instance, if you initiate a full asset transfer out of the Account, the Fractional Shares may be liquidated. If you initiate a partial asset transfer, any Fractional Shares you own may remain in the Account as Fractional Shares or otherwise be liquidated.

 

5               Dividends and other Rights

5.1          You will be entitled to receive dividends in relation to any Fractional Shares held in your Account with us.

 

5.2          Notwithstanding Clause 30.8 or any other clause in the Client Agreement, in relation to any Fractional Shares held in your Account with us, TBHK’s clearing firm works with a third-party vendor to facilitate the extension of voting rights to the Fractional Shares. When you vote for your interest in a Fractional Share, although the vendor will record and aggregate your vote with other clients’ for the full balance, the vendor, the issuer and/or the issuer’s designated tabulator for the shareholder meeting or similar shareholder event may not fully count such votes and would discard some fractional positions submitted to it. Therefore, you undertake that you fully understand that your Fractional Share interest may not be counted for the purposes of shareholder voting. As such, you may not be able to exercise any voting rights arising from ownership of the Fractional Shares.

 

5.3          Fractional Shares may be eligible to participate in mandatory corporate actions such as stock splits, mergers, or spin-offs. Where available, TBHK will distribute interests in proportion to ownership interest, inclusive of Fractional Shares. Because of the unpredictable nature of corporate actions, there may be situations that arise that are not described herein. Generally, these situations will be handled in accordance with the concepts applicable to dividends and reorganizations. Interests will be divided and distributed where possible in proportion to your ownership interest. The foregoing notwithstanding, these situations are in all cases subject to the terms contained in the materials prepared by the issuer describing the corporate action, as well as TBHK’s applicable policies and procedures, which may result in a different outcome from what is described above. If you receive Fractional Shares as the result of a corporate action, TBHK may, in its sole discretion, sell such Fractional Shares on the open market or to the issuer or transfer agent and distribute the pro-rata proceeds to the Account. If sold on the open market, the sale price may differ from that offered to certain registered owners by the issuer or transfer agent.

 

6               Others

6.1          TBHK has sole and absolute discretion to determine the time for using the Fractional Shares Trading Service, including when to use and when to prohibit the use of it. Under such circumstances, including but without limitation to market volatility, share suspension, insufficient positions etc., TBHK cannot promise to you that you could use the Fractional Shares Trading Service under any condition. In addition, if a stock is suspended and reach an up or down limit in the open market, you also cannot use the Fractional Shares Trading Service for that stock.

 

6.2          To the extent that TBHK must purchase or sell shares in the market to fulfill any part of the Order, the fractional component of the Order will be fulfilled at the execution price TBHK receives for the corresponding whole share.

 

6.3          In the event that a systemic issue occurs which prevents an Order for a Fractional Share to be promptly executed, TBHK will make best efforts to execute such Order as soon as possible. However, TBHK may choose to cancel the Order if it is impractical to execute.

 

 

Schedule E – Additional Terms for Electronic Trading Services

 

1               Application of the Additional Terms

1.1          The provisions in these Additional Terms for Electronic Trading Services apply only to any Account in respect of which you have requested and TBHK has agreed to provide with Electronic Trading Services on the terms and conditions of this Client Agreement.

 

1.2          This Schedule forms an integral part of the Client Agreement and may be amended from time to time. Capitalised terms used herein shall have the same meanings as in the Client Agreement unless stated otherwise.

 

2               Terms for Electronic Trading Services

2.1          When using the Electronic Trading Service, you warrant that you are the only authorized user of your Access Codes and will be responsible for all instructions placed and all Transactions conducted with the use of the Access Codes. You shall be responsible for the confidentiality, security and use of the Access Codes issued to you by TBHK. TBHK may use authentication technologies in connection with the Electronic Trading Service.

 

2.2          You acknowledge that it may not be possible to change or cancel an instruction given through Electronic Trading Service and agree to exercise caution before placing orders.

 

2.3          TBHK may (but not have obligations) monitor and/or record any of your instructions given or orders transacted through the Electronic Trading Service. You agree to accept such recording (or a transcript thereof) as final and conclusive evidence of the contents and nature of the relevant instructions and Transactions and as binding on you

 

2.4          TBHK will not be deemed to have received or executed the Instructions from you given through the Electronic Trading Service unless and until you have received the relevant acknowledgement or confirmation in such manner specified by TBHK from time to time (including without limitation by posting the status of the Instructions in order journals on the website which is operated by TBHK and is freely accessible by you). TBHK is also entitled to correct any errors in such acknowledgement or confirmation without incurring any liability in connection therewith.

 

2.5          You shall immediately notify TBHK if:

(a)      an Instruction has been placed through the Electronic Trading Service and you have not received an instruction number or acknowledgement of receipt of the instruction or of its execution from TBHK (whether by hard copy, electronic or verbal means); or

(b)      you have received acknowledgement of a Transaction (whether by hard copy, electronic or verbal means) which you did not instruct or you have any suspicion of unauthorized access to the Electronic Trading Service; or

(c)       you become aware of or suspicious of any unauthorized disclosure or use of your Access Codes;

or otherwise, TBHK or its agents, employees or representatives will not be responsible or liable to you or any other person whose claim may arise through you for any claim with respect to handling, mishandling or loss of Instruction placed through the Electronic Trading Service.

 

2.6          You agree that should you experience any problems in reaching TBHK through the Electronic Trading Service or vice versa, you shall attempt to use an alternative method or device, as TBHK may make available, to communicate with TBHK to place your orders and to inform TBHK of the difficulty you have experienced.

 

2.7          You acknowledge that the Electronic Trading Service, the website operated by TBHK, and the software comprised in them, are licensed or proprietary to TBHK. You shall not, and shall not attempt to, tamper with, modify, decompile, reverse engineer or otherwise alter in any way or gain unauthorized access to, any part of the Electronic Trading Service, the website operated by TBHK or any of the software comprised in them.

 

2.8          You acknowledge that you have fully understood the implications of the risks associated with the Electronic Trading Service as set out in the Part IV - Risk Disclosure Statement to this Client Agreement but agrees that the benefits of using the Electronic Trading Service outweigh these risks and waive any claim you might have against TBHK or any Affiliate(s) arising from:

(a)      systemic failures (including hardware and software failures);

(b)      TBHK’s acceptance of any unauthorized instructions which appear or TBHK believes to be from you;

(c)       failure, delay, error in, distortion or incompleteness of, transmission, receipt or in the execution of Instructions from you or execution of your Instructions at prices different from those prevailing at the time the instructions were given;

(d)      any delay or error in, or distortion or incompleteness of, transmission, receipt or execution of Instructions due to either a breakdown or failure of transmission of communication facilities or unreliable medium of communication (whether or not such communication facility or medium has been provided by us);

(e)      your access to the website of TBHK or the Electronic Trading Service being limited or unavailable;

(f)        failure to or delay in dispatch or delivery of any notice or information provided or requested via the Electronic Trading Service or any inaccuracy, error or omission in or from any such notice or in or from any information contained in any such notice;

(g)      your failure to use the Electronic Trading Service in accordance with this Client Agreement or any relevant agreement between TBHK and you; and

(h)      your reliance, use or otherwise acting upon any information or materials provided via the Electronic Trading Service or the website operated by TBHK.

 

3               Data Not Guaranteed

3.1          Use of Data at Your Risk

You expressly agree that your use of the data and information available through the Electronic Trading Services and of any software provided for use in accessing the Electronic Trading Services is at your sole risk. Neither we nor our Affiliates, nor any of our respective directors, officers and employees, the agents and the owners and licensors of such software, including any party disseminating data or information (collectively, the “Disseminating Parties”), warrant that the Electronic Trading Services will be uninterrupted or error free; nor does any of them make any warranty as to the results that may be obtained from the use of the Electronic Trading Services, or as to the timeliness, sequence, accuracy, completeness, reliability or content of any data and information or Transaction provided through us, or with respect to any software provided for use in accessing the Electronic Trading Services.

 

3.2          “As Is” Basis

The data and information available through the Electronic Trading Services is provided on an “as is”, “as available” basis, without warranties of any kind, either express or implied, including those of merchantability and fitness for a particular purpose, other than those warranties which are implied by and incapable of exclusion, restriction of modification under Applicable Laws and Regulations.

 

3.3          Non liability

No Disseminating Party shall be liable in any way to you or to any other person for:

(a)      any inaccuracy, error or delay in, or omission of, (i) any such data, information or message, or (ii) the transmission or delivery of any such data, information or message; or

(b)      any loss or damage arising from or occasioned by (i) any such inaccuracy, error, delay or omission, (ii) non-performance, or (iii) interruption in any such data, in formation or message, due either to any negligent act or omission by any Disseminating Party or to any “force majeure” (such as, without limitation, flood, extraordinary weather condition, earthquake or other act of God, fire, war, insurrection, riot, labor dispute, accident, action of government, power failure, equipment, software or communications line failure or malfunction) or any other case beyond the reasonable control of any Disseminating Party.

 

 

Schedule F – Foreign Account Tax Compliance Act and Common Reporting Standard Policy

 

1               Application of this policy

1.1          All provisions in this policy apply to all types of Accounts. Under the Foreign Account Tax Compliance Act (“FATCA”) and Intergovernmental Agreements between Hong Kong and US, financial institutions in Hong Kong are required to report certain information of certain clients to the Internal Revenue Service (“IRS”) of US and withhold clients’ US source Fixed, Determinable, Annual, or Periodic income in certain circumstances.

 

1.2          Hong Kong has also passed local legislation to implement the Common Reporting Standard (“CRS”) under which all reporting financial institutions in Hong Kong are required to identify the tax residency of their account holders, and to furnish a return periodically reporting the required information in relation to the reportable accounts to the Inland Revenue Department (“IRD”) of Hong Kong for its transfer to the tax authority of the relevant jurisdiction.

 

1.3          For compliance of the regulatory requirement in relation to FATCA, CRS and other related regulations, TBHK has implemented the terms and conditions of this Schedule to govern the relevant rights and obligations between you and us.

 

2               Privacy Waiver         

2.1          You hereby irrevocably authorize us to disclose and/or submit such information provided by you, including without limitations to personal/institutional information, to the competent regulatory or Government Authority in the relevant jurisdiction(s) (including without limitation to IRS, US Department of the Treasury and the IRD) for the purpose of compliance of the requirements under FATCA, CRS and other related laws, regulations, codes and rules.

 

2.2          You further acknowledge that we may not notify you such disclosure or submission as required by the Applicable Laws and Regulations and agrees that it will not require us to make such notification to you before or after the disclosure or submission of the information to the relevant authorities.

 

3               Further Assurance for Provision of Information 

3.1          You undertake that you will promptly provide us such information, including without limitations to the personal/institutional information in the related Account Opening Form and other related application forms designated by us from time to time and the relevant tax forms and self-certification forms completed by you, for the purpose of compliance of the requirements under FATCA, CRS and other related laws, regulations, codes and rules.

 

3.2          You shall ensure that the information provided to us under Clause 3.1 of this Schedule shall always be true, complete and accurate without misleading in all materials aspects.

 

3.3          You further undertake that you will promptly (in any event, within fourteen (14) days) notify us whenever any information provided to us under Clause 3.1 of this Schedule is changed or becomes untrue, incomplete, inaccurate or misleading and provide us the necessary information up-to-date.

 

3.4          Upon our request, you shall immediately provide us such additional or substitute certificates and forms and other documentary evidences, including without limitation to the self-certification, substitute tax forms of expired tax forms (if any), your written nationality statement, certificate of loss of nationality of the United States and privacy waivers,.

 

3.5          You acknowledge and agree that failing to provide us information as required under this Clause 3 will entitle us to change the FATCA or CRS status of your Account based on information available to us, suspend the trading activities under your Account(s), withhold the assets in your Account(s), close your Account(s) or sell the assets in the Account(s) to produce withholdable payments at our sole and absolute discretion.

 

3.6          We will keep and use your personal data in compliance with the Personal Data (Privacy) Ordinance (Chapter 486 of the laws of Hong Kong) and other applicable data privacy policy.

 

4               Withholding Authorization 

4.1          You hereby authorize us to withhold any part of or all assets in your Account(s) (in cash or other forms) or sell the assets in the Account(s) to produce withholdable payments if, at our sole and absolute discretion:

(a)      You do not provide us with the information or documents requested in a timely manner or if any information or documents provided are not up-to-date, accurate or complete such that we are unable to ensure its ongoing compliance or adherence with the requirements under FATCA;

(b)      the FATCA status of you is identified as non-participating foreign financial institutions;

(c)       there is no reliable evidence to treat you as exempted from withholding requirement under FATCA or other relevant regulations;

(d)      the withholding is required by competent regulatory or government authorities in the relevant jurisdiction; or

(e)      the withholding is otherwise necessary or appropriate for the compliance of the requirements under FATCA and other Applicable Laws and Regulations.

 

5               Indemnification

5.1          You hereby agree to hold us and our directors, officers, employees and agents (the “Indemnified Persons”) indemnified against all losses, liabilities, costs, claims, actions, demands or expenses (including but not limited to, all reasonable costs, charges and expenses incurred in disputing or defending any of the foregoing) which the indemnified Persons may incur or which may be made against the Indemnified Persons arising out of, or in relation to or in connection with:

(a)      any breach or alleged breach of the terms and conditions hereunder whether by act or omission of you; and

(b)      any non-compliance of FATCA, CRS or any other Applicable Laws and Regulations in relation to you and/or your Account(s),

except where such loss or damages arise from willful default, fraud or negligence of the Indemnified Persons.

 

5.2          You undertake to assist us in any proceeding or investigation arising in any matter out of or in connection with the compliance with the requirements under FATCA, CRS and other Applicable Laws and Regulations. In such case, we will notify you when we become aware of such proceedings, unless prohibited by Applicable Laws and Regulations.

 

5.3          If any payment to be made by you to the Indemnified Persons under the clauses hereunder is subject to deduction or withholding tax, the sum payable by you in respect of which such deduction or withholding is required to be made shall be increased to the extent necessary to ensure that, after the making of the required deduction or withholding, the Indemnified Persons receive on the due date and retain (free from any liability in respect of such deduction, withholding or payment) a net sum equal to what the Indemnified Persons would have received if no such deduction, withholding or payment been made or required to be made.

 

5.4          You shall continue to be bound by the provisions of this Clause despite of ceasing to be Account(s) holder or the termination of any Account(s).

 

 

Schedule G – Additional Terms for Short Selling

 

1               Application of this policy

1.1          The provisions in these Additional Terms for Short Selling apply only to any Account in respect of which you have requested and TBHK has agreed to provide with short selling service on the terms and conditions of this Client Agreement.

 

1.2          This Schedule forms an integral part of the Client Agreement and may be amended from time to time. Capitalised terms used herein shall have the same meanings as in the Client Agreement unless stated otherwise.

 

2               Terms of Short Selling of Securities

2.1          You undertake not to give any Instruction for a sell order in respect of a Security in which you do not hold the equivalent long position (including holding a long position that is less than the quantity being sold) (“Short Sale Order”) unless permitted under this Schedule, the Client Agreement and in accordance with the Applicable Laws and Regulations.

 

2.2          Notwithstanding the foregoing, where you specify that an order is a Short Sale Order and we consent and agree to your entering into such short selling activities, you may subscribe for such short selling services with us.

 

2.3          You acknowledge that TBHK shall at its sole and absolute discretion to decide whether or not to accept such an Instruction and TBHK may effect an Instruction for a Short Sale Order on such grounds, and subject to such other conditions, as we think fit.

 

2.4          You acknowledge that you shall notify TBHK of the Short Sale Order at the same time as notification of the sale order, and you will be taken to have warranted and represented to TBHK that the sale will meet the requirements and conditions of the Applicable Laws and Regulations.

 

2.5          You acknowledge that prior to executing a short-sale order, TBHK must be satisfied that you will have a presently exercisable and unconditional right to vest the relevant Securities in the purchaser. You irrevocably authorize TBHK and/or its Affiliate to borrow any Securities on your behalf to effect delivery of such Securities to the purchaser.

 

2.6          If TBHK is able to borrow stock to enable you to effect a short sale and the lender subsequently issues a re-call notice for such stock, TBHK will attempt to re-borrow the Securities on your behalf. You acknowledge that if TBHK is unable to borrow (or re-borrow after a re-call notice) such Securities, TBHK, without further notice to you, is authorised by you to cover your short position by purchasing Securities on the open market at the then-current market price and you shall be liable for any resulting losses and all associated costs incurred by TBHK, executing broker, and/or its clearing firm arising from such borrowing, re-borrowing or buy-in.

 

2.7          You further knowledge that, in respect of a Short Sale Order, deliver to TBHK such other information in such form, substance and within such time, as prescribed by the Applicable Laws and Regulations and/or TBHK from time to time.

 

2.8          You declare that you understand the Applicable Laws and Regulations. You shall, in respect of any Short Sale Order, comply with the relevant provisions of the Applicable Laws and Regulations.

 

2.9          You fully understand and accept the risk associated with Short Sale Order.

 

Schedule H – Additional Terms for Fund Service

This Schedule governs TBHK's provision of Fund Services. It supplements, and should be read together with, the Client Agreement governing the Fund Services provided by TBHK, which may be amended from time to time. It forms an integral part of the Client Agreement.

1      Definition and Interpretations:

In this Schedule, unless the context requires otherwise, the terms defined in the Client Agreement shall have the same meaning when used herein. Within this Schedule:

Dealing Procedure

means any procedures agreed between TBHK 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

means any unit trust, investment fund or mutual fund distributed by or otherwise made available through TBHK from time to time

 

Fund Services

means services provided by TBHK 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

Units

Any shares or units in a Fund

       

2      Scope of Fund Services

2.1   TBHK may provide to the Client the Fund Services. Additional functions and services in connection with the Fund Services may be provided by TBHK to the Client from time to time, in which case additional terms and conditions may apply which the Client should read and agree to before using those functions or services. The Fund Services and any additional services in connection with the Fund Services shall be provided through the Account.

2.2   Where the Client enters a Transaction, the transaction entered into through TBHK is without any solicitation, advice or recommendation from TBHK.

2.3   TBHK shall make available to the Client via electronic means (including but not limited to Email or TBHK APP), the offering documents, notices, communications, or any other documents in connection with the relevant Funds. The Client consents to the use of such electronic means (including but not limited to Email or TBHK APP) as a mode of delivery of the abovementioned documents.

2.4   In providing any Fund Services, TBHK shall act as an agent but not as principal in relation to any Transaction effected by TBHK on behalf of Client unless TBHK indicates otherwise.

3      Subscription and Redemption Applications and Payment

3.1   Any Instruction to subscribe for or purchase, redeem, sell, or switch any Unit (whether in whole or in part) must be made electronically through specific channel designated by TBHK, accompanied by any required documentation as may be required by TBHK 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 requirements as prescribed by TBHK from time to time. TBHK is entitled, without reference to the Client and without giving any reason, either ignore any Instruction that fails to comply with the Dealing Procedures or such other requirements of TBHK, 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 TBHK from time to time. TBHK 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 in connection with exercising such discretion.

3.3   TBHK is authorized to act on any Instruction given or purportedly given by or on behalf of the Client. TBHK 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.

3.4   TBHK shall be entitled to rely and act on any such Instruction which TBHK in good faith believes to be genuine and shall not be responsible for any loss which the Client may incur as a result. However, TBHK has absolute discretion to refuse to act upon any such Instruction without reason, and TBHK 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.

3.5   The Client’s right to give Instructions via a particular channel shall at all times be subject to the discretion of TBHK. TBHK may at any time revoke the Client’s right to give Instructions through a particular channel without prior notice. TBHK shall execute any Instructions placed by the Client or any Authorized 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 TBHK.

3.6   TBHK 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 TBHK may be aggregated and consolidated either daily or from time to time by TBHK together with orders placed by TBHK’s other clients for the purpose of placement of such orders by TBHK 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 TBHK of such Instruction if a valid and complete Instruction (together with all monies, required information and documents) is received by TBHK before the dealing cut off times for the relevant Fund as specified by TBHK 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 in order for the Instruction to be processed. TBHK 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 TBHK at the time of Instruction (the “Quoted Price”) are for reference only and are not binding on TBHK. The Actual Bid Price of a Fund may be higher or lower than the Quoted Price.

3.9   The Client acknowledges and agrees that, the actual redemption amount received by TBHK from the Fund house (the "Actual Proceeds") upon settlement of the transaction may be different from the Client's redemption amount at the time of Instruction. If the Actual Proceeds are different from the Client's redemption amount, TBHK will have full discretion to handle the difference in accordance with applicable laws and regulations, market practices and offering documents.

3.10 As each Fund house has different operational arrangements, the calculation of the Actual Proceeds may subject to adjustment in accordance with the operational arrangements of Fund house’s. The Client hereby acknowledges and agrees the agreements between TBHK and the Fund houses shall be determinative of the applicable calculation method, and that TBHK has absolute discretion regarding such matters.

3.11 The Client acknowledges and agrees that, subject to the terms and conditions as set out in the prospectus or offering documents of such Relevant Fund (as the case may be), a subscription limit and/or redemption limit may be imposed and thus the Fund house may not be able to promptly meet the subscription and/or redemption requests of the Relevant Fund in accordance with the Instruction as and when made. In the event that such Instruction is not fulfilled on a trading day, such Instruction shall be treated as if it were received in time to be dealt with on the following trading day(s) (or such other day(s) as set out in the prospectus or offering documents of such Relevant Fund) until the transaction contemplated under such Instruction has been fully settled.

3.12 TBHK 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 TBHK shall not amount to acceptance of the Instruction by the relevant fund manager, Fund or product issuer. All Instructions and the resulting dealings, transactions and payment in relation to the subscription, switching, redemption or other disposal of Units shall be subject to the offering documents and the Dealing Procedures.

3.13 The Client acknowledges that any fund manager, Fund or product issuer who receives an Instruction from TBHK is not obliged to accept such order in part or whole. TBHK 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.

3.14 The Client acknowledges that (a) the purchase price, subscription moneys or expenses payable by the Client to TBHK (or another person as specified by TBHK) in relation to each order to buy or subscribe for Units shall be debited from an Account designated by the Client (or otherwise directed by TBHK from time to time); and (b) any redemption proceeds received by TBHK in relation to each order to sell, redeem or otherwise dispose of the Units shall, in any event, be paid or credited to an Account designated by the Client and agreed by TBHK 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).

3.15 If at any time there is insufficient balance in the Account that the Client has elected (or otherwise directed by TBHK from time to time) to make the required payments under Clause 3.14(a) of this Schedule (for example, the Client has designated the Account to make such payments), the Client irrevocably directs and authorizes TBHK to, without prior notice to the Client, set-off or transfer any sum standing to the credit of the Client’s other Account (if applicable), towards the satisfaction of any payments to be made under Clause 3.14(a) of this Schedule.

3.16 The Client further agrees that for purchases or subscriptions of Units, TBHK 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 TBHK.

3.17 TBHK is authorized to take such steps as it may consider expedient to enable it to provide Fund 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 authorized persons and beneficiaries), any Units held by the Client or any transactions in connection thereto in accordance with the Applicable Laws and Regulations or to any of TBHK’s Affiliates, any third party service providers or agents of TBHK, a fund manager, a Fund or product issuer (or its representatives) upon request.

 

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

4      Title and Registration of Investments

4.1   If the Client subscribes for Units in a Fund, the Units will be registered in the name of TBHK or jointly in the name of TBHK and in the Client’s name, or in the Client’s name only (as the case may be). TBHK 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.

4.3   TBHK may not lend any Unit or title documents to any third party, and may not borrow against the security of any Unit or such documents, unless otherwise provided in the Client Agreement.

5      Reports and Voting

5.1   Subject to the requirements of the Applicable Laws and Regulations, TBHK 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 Authorized Person in such form and by such time as prescribed by TBHK from time to time, and then only upon such terms, conditions, indemnities, fees and charges as agreed upon between TBHK and the Client.

5.2   In the absence of such Instructions and agreements, TBHK 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 TBHK 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 Laws and Regulations.

6      Termination

6.1   Upon termination of the Account with TBHK or termination of the Fund Services, the Client or any Authorized Person will be deemed to have given TBHK 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 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 TBHK or any of its Affiliates) to be remitted to the Client and/or settle any liability incurred by the Client, TBHK 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.

Risks Disclosure:

 

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 remain 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) We 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 us with the relevant Fund manager for execution, we may aggregate and consolidate (either daily or from time to time) a Client’s order together with orders placed by our other clients. There may be a discrepancy in the price or value of a Unit between when a Client places an order with us 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 us or any other person appointed by us 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. It is desirable that Client seeks independent financial advice with respect to any investment decision.

 

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 in PART IV - Risk Disclosure Statement of this Client Agreement.

Schedule I: China Connect Terms and Conditions

This Schedule shall apply to all transactions under China Connect which Tiger Brokers (HK) Global Limited (“TBHK”) conducts on the Client’s behalf. The terms and conditions under this Schedule are supplemental to, and without prejudice to, the Client Agreement (including risk disclosure statement contained therein) governing the services provided by TBHK and/or other relevant agreements between the Client and TBHK. This Schedule shall prevail in the event of conflicts or inconsistency with any other agreements between the Client and TBHK.

This Schedule forms an integral part of the Client Agreement and may be amended from time to time. Capitalised terms used herein shall have the same meanings as in the Client Agreement unless stated otherwise.

1. Definitions and Interpretation:

1.1 In this Schedule, the following expressions, unless the context requires otherwise, shall have the following meanings:

A Shares

means any securities issued by companies incorporated in Mainland China which are listed and admitted to trading on the stock exchanges of Mainland China (including SSE and SZSE) and not on SEHK.

Cash

means all cash or cash equivalents in Renminbi received and held by us pursuant to these China Connect Terms and Conditions.

CCASS

means the Central Clearing and Settlement System operated by HKSCC for the clearing of securities listed or traded on The Stock Exchange of Hong Kong Limited and/ or any system established for the purpose of China Connect.

China Connect

means Shanghai-Hong Kong Stock Connect or Shenzhen-Hong Kong Stock Connect, or such other securities trading and clearing links program developed or to be developed between SEHK and a trading platform in Mainland China, as applicable.

China Connect Authorities

means the exchanges, clearing systems and regulators which provide services in relation to and/or regulate China Connect and activities relating to China Connect, including without limitation, SEHK, HKSCC, an SEHK Subsidiary, ChinaClear, a China Connect Market Operator, the CSRC, PBOC, SAFE, SFC and any other regulator, agency or authority with jurisdiction, authority or responsibility in respect of China Connect.

China Connect Laws

means the laws, regulations, rules and guidelines promulgated by any China Connect Authority from time to time in respect of China Connect or any activities arising from China Connect, including without limitation, the China Connect Rules.

China Connect Market

means the SSE or SZSE, as applicable.

China Connect Market Operator

means the SSE or SZSE, as applicable.

China Connect Market System

means the system used for the trading of China Connect Securities on a China Connect Market, as operated by the relevant China Connect Market Operator.

China Connect Rules

means any rules, policies or guidelines published or applied by any China Connect Authority from time to time in respect of China Connect or any activities arising from China Connect.

China Connect Securities

means any securities listed on a China Connect Market which may be eligible for trading by Hong Kong and international investors through China Connect.

China Connect Service

means the order-routing service through which Northbound orders placed by an Exchange Participant may be transmitted by an SEHK Subsidiary to a China Connect Market for the buying and selling of China Connect Securities and any related supporting services.

China Connect Terms and Conditions

means these China Connect Supplemental Terms and Conditions, as may be amended, supplemented, modified or varied from time to time.

ChinaClear

means China Securities Depository and Clearing Corporation Limited.

Clearing Participant

has the meaning given to such term in the rules of the Central Clearing and Settlement System of Hong Kong.

Client Information

has the meaning given in Clause 11.1.

ChiNext Shares

means any A Shares accepted for listing and admitted to trading on the ChiNext market operated by the SZSE from time to time.

CSC

means the China Stock Connect System for receiving and routing orders under Stock Connect to the trading system on a China Connect Market for automatic matching and execution.

Client Transaction

has the meaning given in Clause 11.1.

CSDCC

means China Securities Depository and Clearing Corporation Limited.

CSRC

means China Securities Regulatory Commission.

CSRC China Connect Rules

means the rules published by CSRC for the operation of the China Connect.

Exchange Participant

means a China Connect Exchange Participant as defined in the SEHK Rules.

Existing Terms

means the applicable existing terms of our Client’s Agreement, client account agreements and/or other relevant notices and disclosure between you and us that govern our provision of securities dealing services to you whether written or unwritten.

Forced-sale Notice

has the meaning given in Clause 10.1.

H Shares

means any securities issued by companies incorporated in Mainland China and listed on the SEHK.

HKEX

means the Hong Kong Exchanges and Clearing Limited.

HKSCC

means the Hong Kong Securities Clearing Company Limited, a wholly-owned subsidiary of HKEX.

Institutional Professional Investor

means any person falling under paragraphs (a) to (i) of the definition of "professional investor" in section 1 of Part 1 of Schedule 1 to the SFO.

List of Eligible SSE Securities for Short Selling

means the list published by the SEHK from time to time setting out the China Connect Securities listed on the SSE that are eligible for Short Selling.

List of Eligible SZSE Securities for Short Selling

means the list published by the SEHK from time to time setting out the China Connect Securities listed on the SZSE that are eligible for Short Selling.

Mainland China or the PRC

means the People’s Republic of China (excluding Hong Kong, Macau and Taiwan).

Mainland China Investor

means: (a) any individual that possesses a resident identification card or other equivalent government issued identification of the PRC; (b) each holder of a joint account if one of the holders of such joint account is considered as a Mainland China Investor under (a); or (c) a corporate or an unincorporated entity which is registered in the Mainland China.

Mainland China Investors do not include (i) any individual who holds a permit for proceeding to Hong Kong and Macao, i.e. one-way permit (前往港澳通行證, i.e., 單程證), or who has obtained an identity document as proof of permanent residence in a country or region outside Mainland China; and (ii) any branch or subsidiary of a corporate or unincorporated entity registered in Mainland China which branch or subsidiary is lawfully registered in a country or region outside Mainland China.

Mainland China Listco

means a Mainland China incorporated company which is listed on a Mainland China stock exchange.

Non-trade Transfer

means a transfer of China Connect Securities which involves a change in the beneficial ownership of the China Connect Securities and which is not conducted through the China Connect Service and executed on the China Connect Market.

Northbound

means the trading of China Connect Securities by Hong Kong and international investors through China Connect.

Operator China Connect Rules

means the SSE China Connect Rules or the SZSE China Connect Rules, as applicable.

Operator Rules

means the SSE Rules or the SZSE Rules, as applicable.

PBOC

means the People’s Bank of China.

Pre-Trade Checking

means the requirement under the China Connect Laws pursuant to which the relevant China Connect Market Operator may reject a sell order if an investor does not have sufficient and available China Connect Securities in its account.

Related Person

means any of TBHK’s Affiliates, or any director, employee, agent or representative of TBHK or TBHK’s Affiliates.

Renminbi or RMB

means the lawful currency of Mainland China, deliverable in Hong Kong.

SAFE

means the State Administration of Foreign Exchange.

SEHK Rules

means the rules of HKEX, as amended for the purposes of implementing China Connect, and as amended, supplemented, modified and/or varied from time to time.

SEHK Subsidiary

means a wholly-owned subsidiary of SEHK duly authorised as an automated trading service provider under the SFO and licensed under applicable laws in Mainland China to provide the order-routing service under China Connect.

Shanghai-Hong Kong Stock Connect

means the securities trading and clearing links programme developed by SEHK, SSE, HKSCC and CSDCC for the establishment of mutual market access between SEHK and SSE.

Shenzhen-Hong Kong Stock Connect

means the securities trading and clearing links programme developed by SEHK, SZSE, HKSCC and CSDCC for the establishment of mutual market access between SEHK and the SZSE.

Special China Connect Securities

means any securities listed on a China Connect Market which SEHK (after consulting with the relevant China Connect Market Operator) from time to time accepts or designates as eligible only for China Connect sell orders and not China Connect buy orders.

SSE

means the Shanghai Stock Exchange.

SSE China Connect Rules

means the rules and regulations on Shanghai-Hong Kong Stock Connect which have been published by SSE for the purpose of implementing Shanghai-Hong Kong Stock Connect, as amended, supplemented, modified and/or varied from time to time.

SSE STAR

means the Sci-Tech Innovation Board operated by SSE.

STAR Shares

means A shares accepted for listing and admitted to trading on the SSE STAR market from time to time which may be eligible for trading by Hong Kong and international investors on China Connect.

SSE Rules

means the SSE China Connect Rules and the business and trading rules and regulations of the SSE, as amended, supplemented, modified and/or varied from time to time.

SZSE

means the Shenzhen Stock Exchange.

SZSE China Connect Rules

means the rules and regulations on Shenzhen-Hong Kong Stock Connect which have been published by SZSE for the purpose of implementing Shenzhen-Hong Kong Stock Connect, as amended, supplemented, modified and/or varied from time to time.

SZSE Rules

means the SZSE China Connect Rules and the business and trading rules and regulations of the SZSE, as amended, supplemented, modified and/or varied from time to time.

Taxes

means all retrospective, present or future taxes, duties, levies, imposts, charges, assessments, deductions, withholdings and related liabilities, including additions to tax, penalties and interest imposed on or in respect of (i) China Connect Securities or Cash, (ii) any transaction effected under these China Connect Terms and Conditions or (iii) you.

Trading Day

means a day on which SEHK is open for Northbound trading, where "T day" denotes the Trading Day on which a transaction is executed and "T+1 day" denotes the day which is one Trading Day, or in the context of the settlement of funds, one business day (on which banks in Hong Kong and Shanghai (in the case of Shanghai-Hong Kong Stock Connect) or Shenzhen (in the case of Shenzhen- Hong Kong Stock Connect) are generally open for business) after T day.

2. Eligible Investors

2.1 Eligible Investors: Northbound trading is only available to Hong Kong and overseas investors. You represent and undertake on a continuing basis, including without limitation on the first date that these China Connect Terms and Conditions are effective and on each date that you place an order or give an Instruction in respect of China Connect Securities under these China Connect Terms and Conditions, that:

(a)    you are not a Mainland China Investor;

(b)   your investment in China Connect Securities does not violate the laws and regulations of Mainland China, including those in relation to foreign exchange control and reporting; and

(c)    unless you are an Institutional Professional Investor and such status has been confirmed by us, you will not place any order with us or give us any instruction to buy or sell ChiNext Shares and STAR Shares under China Connect (other than Special China Connect Securities which are eligible for sell orders only).

3. China Connect Trading Restriction

3.1 Restriction on Day Trading: Unless SEHK otherwise determines, day (turnaround) trading is not permitted on the Mainland China A Share market. If the Client buys China Connect Securities on T day, the Client may be able to sell the China Connect Securities only on or after T+1 day. Due to Pre-Trade Checking requirements, we may process an instruction to sell China Connect Securities that were bought on T day only on or after the applicable cut-off time (as notified to the Client by us from time to time) on T+1 day, subject to the applicable China Connect Laws.

3.2 Short Selling: Covered short selling of China Connect Securities may be available provided such covered short selling satisfies the requirements specified by the relevant China Connect Authorities. However, naked short selling of China Connect Securities is prohibited.

3.3 No OTC: All trading under China Connect must be conducted on SSE and/or SZSE (as the case may be), and no over-the-counter (OTC) or manual trades are allowed.

3.4 Institutional Professional Investors: ChiNext Shares and STAR Shares will be limited to Institutional Professional Investors.

4. Compliance with China Connect Laws

4.1 Compliance: Any trading in China Connect Securities must comply with all China Connect Laws and relevant rules.

4.2 No advice: You shall be fully responsible for understanding and complying with all China Connect Laws (including but not limited to laws and regulations on short-term trading profits and disclosure obligations) and for any consequences of Northbound trading. We will not, and do not intend to, advise you on any China Connect Laws. For further information, please refer to the web pages on the HKEX website and the SFC website relating to China Connect from time to time and other relevant sources. You are strongly urged to consult your own legal adviser if in doubt.

4.3 Further Requirements: We shall have the right to apply any procedures or requirements in respect of any trading of China Connect Securities through China Connect which we determine in absolute discretion to be necessary or desirable for the purpose of any applicable China Connect Laws or market practice. Neither we nor any Related Person shall have any liability for any losses or risks which may result directly or indirectly from such procedures or requirements.

4.4 Discretion to Refuse: We may, in our absolute discretion, refuse to execute any instruction given by you, if (for example, and without limitation):

(a) such instruction is not compliant with any China Connect Laws or if we reasonably believe that such instruction may not be compliant with any China Connect Laws or if we are required by SEHK not to accept such instruction;

(b) without prejudice to your obligations in Clause 8 (Compliance with Pre-Trade Checking Requirements), in respect of any instruction to make a Northbound sell order, we determine in our absolute discretion that you do not have sufficient securities at the time of such order instruction to settle the delivery obligation;

(c) in respect of any instruction to make a Northbound buy order, we determine in our absolute discretion that you do not have sufficient funds to settle the payment obligation in respect of such order on the settlement day; or

(d) you do not satisfy the relevant eligibility requirements as set out in Clauses 2 and 3. Neither we nor any Related Person shall have any liability for any losses or risks which may result directly or indirectly from such refusal.

4.5 Change of Professional Investor Status: With respect to Clause 4.4(d) and the eligibility requirements as set out in Clause 3 , if we determine in our sole and absolute discretion that you are not an Institutional Professional Investor since a certain date ("Determination Date"), you agree to unwind any positions of ChiNext Shares and/or STAR Shares acquired by you through us since the Determination Date as soon as possible after our notification to you in relation to your change of Professional Investor categorization status.

4.6 Absolute Discretion: Without limitation to the foregoing, we may in our absolute discretion suspend, terminate or limit your ability to access the China Connect through us without advance notice to you, including but not limited to where requested or directed by a China Connect Authority. You acknowledge and accept that any Northbound order placed by you may also be rejected by any China Connect Authority if such order is not compliant with any market requirements or if the relevant China Connect Authority believes that such order may not be compliant with any market requirements. Neither we nor any Related Person shall have any liability for any losses or risks incurred or suffered, directly or indirectly, by you arising out of or resulting from such refusal by us or rejection by any China Connect Authority.

5. Risk Disclosures and Acknowledgement

5.1 By instructing us in respect of any transaction relating to China Connect Securities, you acknowledge and confirm that:-

 

(a)    you have read and understood the risk disclosures, the obligations and other information set out in Appendix hereto;

(b)   there is a risk of prohibition from trading China Connect Securities and that your instructions to trade China Connect Securities may not be accepted;

(c)    neither we nor any Related Person shall be liable for any loss, liability or third party claim or demand that you may suffer directly or indirectly as a result of any action or inaction by us or any Related Person in connection with the provision of trading services in respect of China Connect Securities to you by us;

(d)   SEHK has the power not to extend the China Connect Service to you, and the power to require us not to accept instructions from you, if it is found that you, we or any of our clients have or may have committed any abnormal trading conduct set out in the Operator Rules or failed to comply with any China Connect Rules;

(e)   if the relevant China Connect Rules are breached, or the disclosure and other obligations referred to in any China Connect Laws are breached, (i) the relevant China Connect Market Operator has the power to carry out investigations, and may, through SEHK (or through the relevant SEHK Subsidiary, or any other governmental or regulatory body), require us or a Related Person to (a) provide relevant information and materials relating to you including, without limitation, in relation to your identity, personal data and trading activity; and (b) to assist in a China Connect Authority’s investigation in relation to you and/or your trading activity; and (ii) you may be subject to regulatory investigations and legal and regulatory consequences if you are in breach of, or fail to comply with, such laws, rules and regulations;

(f)     SEHK may (for the purpose of assisting a China Connect Market Operator in its regulatory surveillance of the relevant China Connect Market and enforcement of the relevant Operator China Connect Rules and as part of the regulatory cooperation arrangement between SEHK, the relevant SEHK Subsidiary and the relevant China Connect Market Operator), at the request of the relevant China Connect Market Operator, require us to provide information (including, without limitation, in relation to your identity, personal data and trading activity) in relation to you and any other persons referred to in the SEHK Rules with respect to any China Connect orders placed or China Connect transactions made or entered into by us on your or their behalf. SEHK may on-forward to SSE or SZSE for surveillance and investigation purposes;

(g)    where a China Connect Authority considers that there is a serious breach of any Operator Rules, we may be required by a China Connect Authority to (a) issue warning statements (verbally or in writing) to you; and (b) cease providing you with any service relating to trading China Connect Securities through China Connect;

(h)   prior to us informing you that a Northbound buy order instructed by you has been settled, you shall not instruct a Northbound sell order in respect of the China Connect Securities which are the subject of such Northbound buy order;

(i)      you consent to us and/or any Related Person providing information relating to you and your profile, including the type and value of Northbound buy and sell orders and transactions executed on your behalf to a China Connect Authority at such intervals and in such form as such China Connect Authority may specify from time to time including in relation to an enquiry, investigation or surveillance by a China Connect Authority;

(j)     you accept responsibility for paying all fees, charges, levies and taxes and shall comply with any filing or registration obligations as may be required under any China Connect Authority or China Connect Laws relating to any China Connect Securities;

(k)    you accept that we will be subject to record keeping requirements under the China Connect Rules and may therefore retain records (including telephone and electronic communications and account information) in relation to your Northbound orders and trading for 20 years or as otherwise required under the China Connect Laws;

(l)      you accept that SEHK may upon a request by a China Connect Market Operator requires us to reject any order made on your behalf; and

(m) you accept that none of the China Connect Authorities or their respective directors, employees and agents shall be responsible or held liable for any loss or damage directly or indirectly suffered by us or any Related Person, you or any other third party arising from or in connection with (i) the trading of China Connect Securities or the operation of the CSC in respect of China Connect Securities, or (ii) any amendments, making or enforcement of the China Connect Rules; or (iii) any action taken by a China Connect Authority in discharge of its supervisory or regulatory obligations or functions (including any action taken in respect of abnormal trading activities).

6. Representations

6.1  Continuity: You make the representations to us on a continuing basis that:

(a)    you are aware of and shall comply with all China Connect Laws and other Applicable Regulations to which you may be subject;

(b)   the execution of any Instruction you give to us shall not result in any breach of any China Connect Laws;

(c)    you understand and have assessed the risks relating to China Connect and you are willing to undertake the risks relating to China Connect;

(d)   any funds used by you for the purpose of trading in China Connect Securities is permitted under PRC laws and regulations to be used for such purpose and are placed in an account outside Mainland China;

(e)   (i) your opening of any account with TBHK (or other member of TBHK) is not prohibited by or restricted under any applicable PRC laws or regulations; (ii) all governmental and other consents (including, but not limited to, any approval by SAFE) that are required to have been obtained with respect to the opening of any account by you have been obtained and are in full force and effect; and (iii) all conditions of any such consents have been complied with; and

(f)     any Personal Data provided to TBHK is not a state secret as defined under PRC law and you will indemnify the Company and hold TBHK harmless from any illegal disclosure of state secrets.

6.2 Placing an Order: You make the following representations to us on each date you instruct an order to sell China Connect Securities that:

(a)    you do not know of any fact that might impair the validity of such China Connect Securities and that you have full authority to receive, deal with and give Instructions, authorizations or declarations in respect of the same;

(b)   there is no restriction on the transfer of such China Connect Securities other than those expressly provided for under the SEHK rules or CCASS rules; and

(c)    where your order to sell is for a sale of odd lots in respect of a China Connect Security, such order relates to the sale of all of the odd lots held by you in respect of that China Connect Security.

7. Order Handling

7.1 Aggregation: We may aggregate your northbound orders with the northbound orders of any other Client or of its Affiliates when we process such orders. This may sometimes operate to your disadvantage and, because of the quota restrictions described in Risk Disclosure Statements in appendix hereto, may result in your order only being partially executed or not at all.

7.2 Fair and Equal Opening: All client orders and transactions to be undertaken for clients ("Client Orders") which are for submission to the applicable open auction or start of continuous trading session (the "Opening") shall be handled by us in a way that seeks to ensure that all such Client Orders have a fair and equal opportunity to participate in the Opening. We will regard all such Client Orders as having been received by us only at the point at which our system submits Client Orders into the applicable opening auction or start of continuous trading session.

7.3 Sufficient Shares: You acknowledge and agree that you must ensure you have sufficient shares in your Account when placing sell orders. If the shares are kept in an account opened with another Exchange Participant or a custodian, investors must first transfer the shares to an Account with the Company on T-1 in order to sell their shares on T day.

7.4 Cancellation: We have the right to cancel the client’s orders in case of contingency such as hoisting of Typhoon Signal No 8 (or above), issuance of Black Rainstorm Warning and/or Extreme Condition in Hong Kong;

8. Compliance with Pre-Trade Checking Requirements

8.1 Compliance: You undertake that you will comply with any requirements relating to Pre-Trade Checking mandated by the China Connect Authorities or as notified to you by us.

8.2 Sufficient China Connect Securities: In addition, you undertake to ensure there are sufficient and available China Connect Securities in your Account by the applicable cut-off time (including any pre-trade cut-off time, as notified to you by us from time to time) to cover any proposed sell order given on the relevant Trading Day.

8.3 If we consider that you do not for whatever reason have sufficient and available China Connect Securities in your account to settle a sell order by the applicable cut-off time (as notified to you by us from time to time) we may in our absolute discretion:

(a)    reject your sell order (in whole or in part);

(b)   use any China Connect Securities in the designated CCASS stock account(s) which we hold for ourselves or on behalf of our other clients to fulfil the Pre-Trade Checking requirement in respect of your sell order, in which case you shall reimburse us for any costs, losses or expenses which we incur as a result of buying in or otherwise sourcing the amount of China Connect Securities which you have failed to deliver in respect of your sell order on such terms and at such price (including any associated fees and expenses) and at such time as we shall determine in our absolute discretion; or

(c)    perform any other act which we consider necessary or desirable to comply with Pre-Trade Checking and/or relevant China Connect Laws and to cover your shortfall (including but not limited to applying any other China Connect Securities available to us from other sources).

8.4 In addition, we may in our absolute discretion reject your sell order (in whole or in part) if for any other reason we consider that there is or may be non-compliance with any China Connect Laws or China Connect Rules. Any risk, loss or cost resulting from non-compliance or potential non-compliance with Pre-Trade Checking and/or the relevant China Connect Laws or China Connect Rules shall be borne by you.

8.5 If you give any sell order in respect of any China Connect Securities allocated to any fund managed by you, you undertake to ensure that there are sufficient and available China Connect Securities in your account allocated to such fund by the applicable cut-off time (as notified to you by us from time to time) to cover any such proposed sell order on the relevant Trading Day. In all cases, it is your responsibility to ensure that each of the funds managed by you complies with all China Connect Laws and China Connect Rules to which the relevant fund may be subject.

 

9. Settlement and Currency Conversion

9.1 Conversion: As all Northbound trading is effected and settled in Renminbi, if we do not receive sufficient Renminbi before settlement of a Northbound buy order to settle such purchase of China Connect Securities, settlement may be delayed and/or fail and you may not acquire title to, or become entitled to sell or transfer the relevant China Connect Securities. Where we hold any funds on your behalf, if there are insufficient Renminbi funds to settle any Northbound buy order or other payment obligation in connection with China Connect, then, without prejudice to 9.1 of this Schedule, you authorise us to convert any funds in any other currency which we hold on your behalf into Renminbi for the purposes of settlement thereof at our discretion.

9.2 Automatic Conversion: Notwithstanding any other provisions of the Agreement, where it is necessary to convert one currency to another pursuant to these China Connect Terms and Conditions, such conversion may be carried out automatically by us in a commercially reasonable manner without prior notice to you. Any risk, loss or cost (including fees, charges and/or commissions) in connection with or resulting from any conversion of one currency into another currency pursuant to these China Connect Terms and Conditions shall be borne by you.

9.3 Further Action: You agree that in the event that you fail to settle in a timely manner any payment obligation in relation to an instruction to purchase China Connect Securities, we have the right to immediately and without prior notice to you take such action as we consider appropriate to reduce or eliminate any loss or liability that we suffer or may suffer (including but not limited to taking any steps to sell, realize, dispose of or otherwise deal with the relevant China Connect Securities) and that you shall indemnify and hold us harmless for any liabilities, expenses or other losses we may incur in exercising the foregoing right. You further agree that we shall have no liability to you for any loss, diminution in value or other damages whatsoever for any action or inaction of us or our agents pursuant to this Clause.

9.4 Insufficient Liquidity of RMB: Notwithstanding any other provisions of the Agreement, where we determine that there is insufficient liquidity in RMB to settle any buy orders, we may, in our sole and absolute discretion, reject your instructions to place such buy order.

9.5 Contingency: We may not be able to send the Client’s order cancellation requests in case of contingency such as when SEHK loses all its communication lines with SSE, etc. and the client should still bear the settlement obligations if the orders are matched and executed;

10. Sale and Transfer

10.1 Forced-sale: Where, under the terms of the China Connect Rules, we receive notice (a "Forced-sale Notice") from a China Connect Authority requiring us to sell and liquidate a specified number of China Connect Securities, we shall be entitled to issue a corresponding notice (a "Client Forced-sale Notice") to you requesting you to sell and liquidate any number of such China Connect Securities that you hold in your account with us (as determined by us in our sole discretion) within the period specified by the relevant China Connect Authority, and you undertake to comply with any such Client Forced-sale Notice.

10.2 Discretion pursuant to Forced-sale Notice: In relation to any Forced-sale Notice, you authorise us to sell or arrange for the sale of such China Connect Securities on your behalf at such price and on such terms as we may determine in our absolute discretion if you fail to comply in a timely manner with a Client Forced-sale Notice, to the extent necessary to comply with all China Connect Laws and China Connect Rules.

10.3 Further Action: You authorise us to sell or arrange for the sale of any amount of China Connect Securities owned by you if we receive notice from any China Connect Authority requiring you to disgorge any profits as a result of the “short swing profit rule”, as described in the Appendix hereto.

10.4Further Action: In addition to the above, you authorize us to sell, transfer or carry out any other action in relation to China Connect Securities owned by you if we are instructed to do so by any China Connect Authority or if we otherwise determine in our absolute discretion that it is necessary or desirable to do so in order to comply with any China Connect Laws.

10.5 No Liability: Neither we shall nor any Related Person have any liability for any losses or risks which may result directly or indirectly from any actions taken by us or a Related Person in respect of this Clause.

11. Client information

11.1 Retention of records: If you instruct us to effect a Northbound transaction in China Connect Securities on behalf of your client (a "Client Transaction"), you shall retain for a period of not less than 20 years (or such other period as we may instruct you in accordance with China Connect Laws or China Connect Rules) records of any client instructions and account information in relation to the Client Transaction (such records the "Client Information").

11.2 Your client acting as intermediary: If you instruct us to effect a Client Transaction and you are aware that your client is acting as an intermediary (either directly or indirectly through other intermediaries) for another person who is the beneficial owner of the Client Transaction, you undertake and confirm that you have arrangements in place:

(a) requiring your client to retain or procure the retention of the Client Information in relation to the beneficial owner of the Client Transaction for the period specified in 11.1 Retention of Records; and

(b) which entitle you to obtain and disclose the Client Information in relation to the beneficial owner upon request and within the required time limit specified by us or procure that it be so obtained and disclosed.

11.3 Disclosure of information to China Connect Authority: If we receive an enquiry from any China Connect Authority in relation to a Client Transaction, you shall, upon request and within the time limit specified by us, disclose to us or to the relevant China Connect Authority the Client Information, or procure such disclosure, in relation to the beneficial owner of the Client Transaction.

12. Indemnity

12.1 In addition and without prejudice to any of our rights under other sections of the Agreement, you will indemnify us and any Related Persons (together, the "Indemnified Parties") on a full indemnity basis against any claims, demands, actions, proceedings, damages, costs, expenses, losses and all other liabilities whatsoever arising directly or indirectly from us or any Related Persons providing any services to you in respect of your trading or investment in China Connect Securities, including, without limitation, to (a) any Taxes resulting from any trading or holding of China Connect Securities in relation to China Connect, (b) the materialization of any risk referred to in Risk Disclosure Statements in the appendix hereto, (c) any legal costs which any of the Indemnified Parties may incur in connection with any instruction given by you, (d) any fees or expenses payable to any clearance systems arising from the holding of China Connect Securities or (e) any costs incurred in connection with Clause 10 above.

12.2 In addition and without prejudice to any other right or remedy which we may have, we shall be entitled in our absolute discretion, without further notice or demand, forthwith to satisfy any claims, demands, actions, proceedings, damages, costs, expenses, losses and all other liabilities whatsoever referred to in Clause 12.1 above, and any of our or Related Person’s obligation for you to pay or account for any amounts in respect of any Taxes, by selling, realising or otherwise dealing with, in such manner as we in our absolute discretion may determine, all or part of any property held by us or any Related Person for any purpose in any of the your accounts with us or any Related Person, and to apply the proceeds in reduction of all or part of your liability to any tax authority or us or our any Related Person.

12.3 Neither us nor any of our Related Person shall have any liability for any losses or risks which may result directly or indirectly from any actions taken by us or any of our Related Person in connection with the foregoing.

12.4 You shall be fully and solely responsible for paying all fees, charges, levies and taxes, and you shall be required to comply with any filing or registration obligations, in each case as may be required by any China Connect Authority or any applicable market requirements, relating to any trading or investment or holding by you of or in China Connect Securities.

13. Fees and Taxation

13.1 Fees: You will pay fees, charges and expenses in respect of these China Connect Terms and Conditions in accordance with our fee scale from time to time in force.

13.2 Taxes: You shall be responsible for paying all Taxes, and you shall be required to comply with any filing or registration obligations, in each case as may be required under any China Connect Laws relating to any China Connect Securities and any dividends or entitlements in respect of such China Connect Securities. In this regard, you must seek independent professional advice from your own tax advisors to determine the your tax position, liabilities and obligations in relation to the relevant Securities or investments. We assume no responsibility for advising on or handling such tax issues, liabilities and/or obligations nor shall we provide any service or assistance in this regard.

13.3 Further Information: In the event we are required under China Connect Laws or China Connect Rules to pay any Taxes, we may notify you whenever necessary and request that you provide us with relevant information as we made deem necessary to fulfil our obligations. You must provide to us, promptly on such request, such information and documents such as but not limited to costs of your purchase of the China Connect Securities, your and/or any underlying beneficial owner’s tax status or residence. We may withhold or deduct relevant Taxes from any amount due to you and you will remain liable for any shortfall.

13.4 Non-Receipt of Information: In the event we do not receive any requested information from you within a reasonable period of time to fulfil our obligations, we shall be forthwith entitled in our absolute discretion, without further notice or demand to you, to satisfy any obligation of us or you to pay or account for any amounts in respect of any Taxes by selling, realizing or otherwise dealing with, in such manner as we in our absolute discretion may determine, all or part of any property held by us for any purpose in any of your accounts held with us, and to apply the proceeds in reduction of all or part of your liability to any tax authority or us.

13.5 Accuracy: We shall have no responsibility to verify the accuracy of the information provided by you and is entitled to rely on such information to fulfil our obligations.

13.6 Tax Relief: We shall have no liability whatsoever for the lack of any tax relief, or any failure to obtain the benefit of any tax credit.

14. Liability

Notwithstanding any other provision in these China Connect Terms and Conditions, neither we nor any Related Person shall be responsible for or have any liability to you for any damage, liability or loss (including loss of profit) unless such damage, liability or loss is a direct result of our or a Related Person’s fraud, wilful default or gross negligence.

15. Termination

Without limiting any other rights we may have pursuant to Existing Terms, these China Connect Terms and Conditions may be terminated by either party upon not less than 30 days' written notice to the other or automatically upon termination of the Agreement. Clause 4 (Compliance with China Connect Laws), Clause 5 (Risk Disclosures and Acknowledgement), Clause 10 (Sale and Transfer), Clause 12 (Indemnity), Clause 14 (Liability), Clause 16.2 (Information Request) and Clause 16.3 (Amendment) shall survive termination of these China Connect Terms and Conditions. On the termination of these China Connect Terms and Conditions, we shall deliver China Connect Securities and cash in accordance with your Instructions. If you fail to give Instructions, we shall continue to hold China Connect Securities and/or cash for such fee(s) as we may in our sole discretion determine. We shall in any event be entitled to retain such China Connect Securities and/or cash as we may in our sole discretion determine in order to complete any Transaction required to be settled on your behalf.

16. Miscellaneous

16.1 Further Assurance: You will execute any further documents and provide any materials and/or information as we may reasonably request to enable us to perform our duties and obligations under these China Connect Terms and Conditions which it deems necessary as and when the China Connect Laws are amended or supplemented from time to time.

16.2 Information Request: You will provide all information (including translations into Chinese, if required) to us which we request if such information is requested by any China Connect Authority or any exchange, regulatory authority or any organization (whether within or outside Hong Kong) with which HKEX or SEHK has entered into an information sharing arrangement or agreement. You acknowledge that, your failure to comply with this provision may, amongst other things, result in a suspension of the provision of the China Connect Service to you.

16.3 Amendment: We reserve the right to vary any of the terms of these China Connect Terms and Conditions by written notice to you in accordance with the Client Agreement.

16.4 Severability: If any provision in these China Connect Terms shall be held to be illegal, invalid or unenforceable, in whole or in part, the provision shall apply with whatever deletion or modification is necessary so that the provision is legal, valid and enforceable and gives effect to the commercial intention of the parties.

16.5 Failure or delay in exercising any right: No failure or delay by either party in exercising any right or remedy provided under these China Connect Terms and Conditions shall operate as a waiver of it, nor shall any single or partial exercise of any right or remedy preclude any other or further exercise of it or the exercise of any other right or remedy. Any waiver of a breach of these China Connect Terms and Conditions shall not constitute a waiver of any subsequent breach.

 

16.6 Investor Compensation Fund: You should note that both SSE and SZSE trading under China Connect will be covered by Hong Kong’s Investor Compensation Fund effective from 1 Jan 2020. However, such policy may subject to change from time to time.

17.   Processing of Personal Data as part of the Stock Connect Northbound Trading

17.1 You acknowledge and agree that in providing our Stock Connect Northbound Trading Service to you, we will be required to:

(a)          tag each of your orders submitted to the CSC with a Broker-to-Client Assigned Number ("BCAN") that is unique to you or the BCAN that is assigned to your joint account with us, as appropriate; and

(b)         provide to the Exchange your assigned BCAN and such identification information (“Client Identification Data” or “CID”) relating to you as the Exchange may request from time to time under the Rules of the Exchange.

17.2 Without limitation to any notification we have given you or consent we have obtained from you in respect of the processing of your personal data in connection with your account and our services to you, you acknowledge and agree that we may collect, store, use, disclose and transfer personal data relating to you as required as part of our Stock Connect Northbound Trading Service, including as follows:

(a)          to disclose and transfer your BCAN and CID to the Exchange and the relevant SEHK Subsidiaries from time to time, including by indicating your BCAN when inputting a China Connect Order into the CSC, which will be further routed to the relevant China Connect Market Operator on a real-time basis;

(b)         to allow each of the Exchange and the relevant SEHK Subsidiaries to: (i) collect, use and store your BCAN, CID and any consolidated, validated and mapped BCANs and CID information provided by the relevant China Connect Clearing House (in the case of storage, by any of them or via HKEX) for market surveillance and monitoring purposes and enforcement of the Rules of the Exchange; (ii) transfer such information to the relevant China Connect Market Operator (directly or through the relevant China Connect Clearing House) from time to time for the purposes set out in (c) and (d) below; and (iii) disclose such information to the relevant regulators and law enforcement agencies in Hong Kong so as to facilitate the performance of their statutory functions with respect to the Hong Kong financial markets;

(c)          to allow the relevant China Connect Clearing House to: (i) collect, use and store your BCAN and CID to facilitate the consolidation and validation of BCANs and CID and the mapping of BCANs and CID with its investor identification database, and provide such consolidated, validated and mapped BCANs and CID information to the relevant China Connect Market Operator, the Exchange and the relevant SEHK Subsidiary; (ii) use your BCAN and CID for the performance of its regulatory functions of securities account management; and (iii) disclose such information to the Mainland regulatory authorities and law enforcement agencies having jurisdiction over it so as to facilitate the performance of their regulatory, surveillance and enforcement functions with respect to the Mainland financial markets; and

(d)         to allow the relevant China Connect Market Operator to: (i) collect, use and store your BCAN and CID to facilitate their surveillance and monitoring of securities trading on the relevant China Connect Market through the use of the China Connect Service and enforcement of the rules of the relevant China Connect Market Operator; and (ii) disclose such information to the Mainland regulatory authorities and law enforcement agencies so as to facilitate the performance of their regulatory, surveillance and enforcement functions with respect to the Mainland financial markets.

17.3 By instructing us in respect of any transaction relating to China Connect Securities, you acknowledge and agree that we may use your personal data for the purposes of complying with the requirements of the Exchange and its rules as in force from time to time in connection with the Stock Connect Northbound Trading. You also acknowledge that despite any subsequent purported withdrawal of consent by you, your personal data may continue to be stored, used, disclosed, transferred and otherwise processed for the above purposes, whether before or after such purported withdrawal of consent.

17.4 Consequences of failing to provide Personal Data or Consent: Failure to provide us with your personal data or consent as described above may mean that we will not, or no longer be able, as the case may be, to carry out your trading instructions or provide you with our Stock Connect Northbound Trading Service. 

PART IV – RISK DISCLOSURE STATEMENT

 

1               Risk of securities trading

The prices of securities fluctuate, sometimes dramatically. The price of a security may move up or down, and may become valueless. It is as likely that losses will be incurred rather than profit made as a result of buying and selling securities.

 

2               Risk of trading futures and options

The risk of loss in trading futures contracts or options is substantial. In some circumstances, 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 avoid loss. 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 study and understand futures contracts and options before you trade and carefully consider whether such trading is suitable in the light of your own financial position and investment objectives. If you trade options you should inform yourself of exercise and expiration procedures and your rights and obligations upon exercise or expiry.

 

3               Risk of trading in leveraged foreign exchange contracts

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.

 

4               Risk of trading Growth Enterprise Market stocks

Growth Enterprise Market (GEM) stocks involve a high investment risk. In particular, companies may list on GEM with neither a track record of profitability nor any obligation to forecast future profitability. GEM stocks may be very volatile and illiquid. You should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and other sophisticated investors. Current information on GEM stocks may only be found on the internet website operated by The Stock Exchange of Hong Kong Limited. GEM Companies are usually not required to issue paid announcements in gazetted newspapers. You should seek independent professional advice if you are uncertain of or have not understood any aspect of this risk disclosure statement or the nature and risks involved in trading of GEM stocks.

 

5               Risks of client assets received or held outside Hong Kong

Client assets received or held by the licensed or registered person 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.

 

6               Risk of providing an authority to repledge your securities collateral etc.

There is risk if you provide the licensed or registered person with an authority that allows it to apply your securities or securities collateral pursuant to a securities borrowing and lending agreement, repledge your securities collateral for financial accommodation or deposit your securities collateral as collateral for the discharge and satisfaction of its settlement obligations and liabilities.

 

If your securities or securities collateral are received or held by the licensed or registered person in Hong Kong, the above arrangement is allowed only if you consent in writing. Moreover, unless you are a professional investor, your authority must specify the period for which it is current and be limited to not more than 12 months. If you are a professional investor, these restrictions do not apply.

 

Additionally, your authority may be deemed to be renewed (i.e. without your written consent) if the licensed or registered person issues you a reminder at least 14 days prior to the expiry of the authority, and you do not object to such deemed renewal before the expiry date of your then existing authority.

 

You are not required by any law to sign these authorities. But an authority may be required by licensed or registered persons, for example, to facilitate margin lending to you or to allow your securities or securities collateral to be lent to or deposited as

collateral with third parties. The licensed or registered person should explain to you the purposes for which one of these authorities is to be used.

 

If you sign one of these authorities and your securities or securities collateral are lent to or deposited with third parties, those third parties will have a lien or charge on your securities or securities collateral. Although the licensed or registered person is responsible to you for securities or securities collateral lent or deposited under your authority, a default by it could result in the loss of your securities or securities collateral.

 

A cash account not involving securities borrowing and lending is available from most licensed or registered persons. If you do not require margin facilities or do not wish your securities or securities collateral to be lent or pledged, do not sign the above authorities and ask to open this type of cash account.

 

7               Risk of providing an authority to hold mail or to direct mail to third parties

If you provide us 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.

 

We will confirm with you at least on an annual basis whether you wish to revoke the authority. For the avoidance of doubt, it will be acceptable for us to send a notification to you before the expiry date of the authority and inform you that it is automatically renewed unless you specifically revoke it in writing before the expiry date.

 

8               Risk of margin trading

The risk of loss in financing a transaction by deposit of collateral is significant. You may sustain losses in excess of your cash and any other assets deposited as collateral with the licensed or registered person. Market conditions may make it impossible to execute contingent orders, such as "stop-loss" or "stop-limit" 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 without your consent. 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.

 

9               Risk of trading Nasdaq-Amex securities at The Stock Exchange of Hong Kong Limited

The securities under the Nasdaq-Amex Pilot Program (“PP”) are aimed at sophisticated investors. You should consult the licensed or registered person and become familiarised with the PP before trading in the PP securities. You should be aware that the PP securities are not regulated as a primary or secondary listing on the Main Board or the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited.

 

10            Risk of electronic trading

Trading on an electronic trading system may differ from trading on other electronic trading systems. If you undertake transactions on an electronic trading system, you will be exposed to risks associated with the system including the failure of hardware and/or software. The result of any system failure may be that your order is either not executed according to your instructions or is not executed at all. In particular, your attention is drawn to the following:

(a)      the internet is, and any other Electronic Media may also be, an inherently unreliable medium of data transmission and communication and that, accordingly, there are risks in conducting Transactions in the Account through the Electronic Trading Service or otherwise communication through the internet or any other Electronic Media;

(b)      access to the website operated by TBHK or the Electronic Trading Service may at any time and from time to time be limited, delayed or unavailable, including during periods of peak demand, market volatility, systemic failures (including hardware and software failures), systems upgrades or maintenance or for other reasons;

(c)       Instructions given or Transactions conducted through the internet or other Electronic Media may be subject to interruption, transmission blackout, delayed transmission or incorrect data transmission due to, where applicable, unpredictable traffic congestion, the public nature of the media used or other reasons;

(d)      Instructions given through the internet or other Electronic Media may not be executed or may be delayed so that they are executed at prices different from those prevailing at the time the instructions were given;

(e)      communications and personal data may be accessed by unauthorized third parties;

(f)        instructions given through the internet or other Electronic Media may be executed without being subject to human review; and

the status of your instructions or orders for Transactions in the Account or execution thereof and your cash position, securities position or other details relating to your Account as reflected in any acknowledgement, confirmation or other record posted on TBHK’s website may not be updated immediately. Such acknowledgement, confirmation or other record will only reflect Transactions in your Account conducted through the Electronic Trading Service and that, in the case of doubt, you should contact TBHK to ascertain the status of your other Transactions in your Account or other details relating to your Account.

 

11            Risks of over-the-counter derivative products

Over the counter derivative products (“OTC Derivatives Products”) are derivative products that are not listed or traded on an Exchange.

 

You are agreed and understand that:

(a)      OTC Derivative Products often involve a high degree of gearing, so that a relatively small movement in the price of the underlying Securities may result in a disproportionately large movement in the price of the OTC Derivative Products. The values of OTC Derivative Products are not fixed, but fluctuate with the market, which may be influenced by many factors, including changes in the economic and/or political environment. The prices of OTC Derivative Products can therefore be very volatile;

(b)      The market value of an OTC Derivative Product may be affected by the changes in the actual or perceived credit standing of the issuer. For example, it may be adversely affected due to downgrading of it or its underlying assets by rating agencies such as Moody’s Investors Inc. or Standard & Poor’s Rating Services;

(c)       You should be aware that although OTC Derivative Products may bring significant benefits, they may also carry substantial risks which you should fully understand when considering whether they are suitable for you. You should not buy an OTC Derivative Product unless you are prepared to sustain a total loss of the money you have invested plus any commission or other transaction charges;

(d)      While OTC Derivative Products are unexercised and if their underlying securities are suspended from trading on the SEHK or any other relevant stock exchange, they may be suspended from trading for a similar period of time as their underlying Securities;

(e)      It is not possible to predict the liquidity of OTC Derivative Products;

(f)        Depending on the terms and conditions of the OTC Derivative Product, you may be obligated to accept the underlying Securities if the conversion price is triggered;

(g)      If there is a stock split, issue of bonus shares or other unexpected event that changes the number of issued shares of the underlying stock, your counterparty may adjust the contract terms, at its sole discretion, to reflect the new market conditions. This may include unwinding the contract. You will be notified in the events of such adjustments;

(h)      OTC Derivative Products have limited liquidity. It may be impossible to liquidate an existing position or to do so at a satisfactory price because the market finds it difficult to assess the value, to determine a fair price or assess the exposure to risk;

(i)        OTC Derivative Products may be imbedded with options. Transactions in options carry a high degree of risk. The risk of loss in trading options can be substantial. You should have prior knowledge of, or experience in option markets. You should carefully consider whether such trading is suitable in the light of your own financial position and investment objectives;

(j)        There is no central source for obtaining prices in relation to an OTC Derivative Product. Any price provided by us in relation to an OTC Derivative Product is based on the latest available market price or derived from sources which we believed to be reliable. Consequently, any such price may only reflect historic prices and may or may not be accurate. You should note that we do not make any warranty or representation as to the accuracy or completeness of any such price and does not accept liability for any losses arising from the use thereof;

(k)       Pre termination prior to maturity is possible subject to prevailing market terms and conditions; and

(l)        The issuers may enter into discount, commission or fee arrangements with brokers and/or any of its affiliates with respect to the primary or secondary market in the OTC Derivative Products.

 

You further understand and agree that prior to entering into any Transaction in relation to an OTC Derivative Product, you shall, in addition to any other relevant considerations:

(m)     evaluate your financial status, risk bearing capabilities and whether the OTC Derivative Product is suitable for you in the light of your own financial position and investment objectives;

(n)      fully understand the nature and related risks of the OTC Derivative Product;

(o)      ensure that you have all necessary information you require to assess all possible risks in the OTC Derivative Product when deciding on its appropriateness for yourself;

(p)      consider what you intend to achieve; and

(q)      be aware of any general framework for the OTC Derivative Product established by any relevant authority or governing body.

You also confirm that:

(a)      unless you have otherwise notified us in advance, you are acting on your own account and you make an independent decision prior to trading in the OTC Derivative Products or any other products in light of your own circumstances; and

(b)      any information supplied by us and/or explanation relating to the terms and conditions of the OTC Derivative Products or any other products given by us or our staff shall not amount to investment advice or a recommendation to purchase the OTC Derivative Products or any other products.

 

12            Risk of HKEx listed structured products

This paragraph is as a general guide to highlight some basic risks associated and does not mean to cover all of the risks and other significant aspects of trading in structured products (such as Futures and Options, Derivative Warrants, Callable Bull/Bear Contracts (CBBC), Exchange Traded Funds (ETF), and Rights etc.). In consideration of the risks associated, you (being the client and Investor of structured products) should undertake such transactions only if you understand the nature of the structure products into which you are entering and the extent of your exposure to risk. Trading in structured products is not suitable for many members of the public. You should carefully consider whether trading is appropriate for you in light of your experience, objectives, financial resources and other relevant circumstances.   

12.1        General

(a)      Issuer default risk

In the event that a structured product issuer becomes insolvent and defaults on their listed securities, you will be considered as unsecured creditors and will have no preferential claims to any assets held by the issuer. You should therefore pay close attention to the financial strength and credit worthiness of structured product issuers.

 

(b)      Uncollateralised product risk

Uncollateralised structured products are not asset backed. In the event of issuer bankruptcy, you can lose your entire investment. You should read the listing documents to determine if a product is uncollateralised.

 

(c)       Gearing risk

Derivative warrants and callable bull/bear contracts (CBBCs) are leveraged and can change in value rapidly according to the gearing ratio relative to the underlying assets. You should be aware that their value may fall to zero resulting in a total loss of the initial investment. 

 

The level of gearing embedded in an inline warrant depends on a variety of factors including but not limited to time-to-expiry and spot price of the underlying asset compared to the lower and upper strike prices. An inline warrant will be expected to have a high effective gearing when trading price close to the lower or upper strike price, and a relatively low effective gearing in other cases. These differences in effective gearing are amplified when inline warrants are close to expiry.

 

(d)      Expiry considerations

Structured products have an expiry date after which the issue may become worthless. You should be aware of the expiry time horizon and choose a product with an appropriate lifespan for your trading strategy.

 

(e)      Extraordinary price movements

The price of a structured product may not match its theoretical price due to outside influences such as market supply and demand factors. As a result, actual traded prices can be higher or lower than the theoretical price.

 

(f)        Foreign exchange risk

You trading structured products 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 structured product price.

 

(g)      Liquidity risk

The Exchange requires all structured product issuers to appoint a liquidity provider for each individual issue. The role of liquidity providers is to provide two way quotes to facilitate trading of their products. In the event that a liquidity provider defaults or ceases to fulfill its role, you may not be able to buy or sell the product until a new liquidity provider has been assigned.

 

12.2        Some Additional Risks Involved in Trading Derivative Warrants

(a)      Time decay risk

All things being equal, the value of a derivative warrant will decay over time as it approaches its expiry date. Derivative warrants should therefore not be viewed as long term investments.

 

(b)      Volatility risk

Prices of derivative warrants can increase or decrease in line with the implied volatility of underlying asset price. You should be aware of the underlying asset volatility.

 

12.3        Some Additional Risks Involved in Trading CBBC

(a)      Mandatory call risk

You trading CBBCs should be aware of their intraday “knockout” or mandatory call feature. A CBBC will cease trading when the underlying asset value equals the mandatory call price/level as stated in the listing documents. You will only be entitled to the residual value of the terminated CBBC as calculated by the product issuer in accordance with the listing documents. You should also note that the residual value can be zero.

 

(b)      Funding costs

The issue price of a CBBC includes funding costs. Funding costs are gradually reduced over time as the CBBC moves towards expiry. The longer the duration of the CBBC, the higher the total funding costs. In the event that a CBBC is called, you will lose the funding costs for the entire lifespan of the CBBC. The formula for calculating the funding costs are stated in the listing documents.

 

12.4        Some Additional Risks Involved in Trading Inline Warrants

(a)      Pricing structure

The pricing structure of the inline warrants requires you to assess accurately the value of the inline warrants in relation to the expected probability of the valuation of underlying asset falling within the range between the upper strike price and the lower strike price (both inclusive).  It may be difficult for you to properly value and/or to use as a hedging tool.

 

(b)      Maximum potential payoff is capped

If the valuation of underlying asset falls within or at the price range between the lower strike price and the upper strike price (both inclusive), you will only receive a maximum payoff of HK$1 per inline warrant at expiry. Therefore, the potential payoff is capped.

 

(c)       Cancellation of trade above HK$1

Due to the pre-determined fixed maximum payment at expiry of HK$1, an inline warrant should not be traded above HK$1. Any trades executed at the price above HK$1 shall not be recognized and will be cancelled by the Exchange.

 

12.5        RISKS OF EXCHANGE TRADED PRODUCTS

(a)      Market risk

The value of an Exchange Traded Product (ETP) represents the value of its underlying assets including but not limited to stocks, bonds, or commodities. ETP issuers may use different strategies to construct the portfolios, but in general they do not have the discretion to take defensive positions in declining markets. You must be prepared to bear the risk of loss and volatility associated with the underlying index/assets.

 

(b)      Tracking error

Tracking error refers to the disparity in performance between an ETP and its underlying index/assets. For ETPs adopting a passive strategy, tracking error can arise due to factors such as the impact of transaction fees and expenses incurred to the ETP, changes in composition of the underlying index/assets, and the ETP issuer’s replication strategy. (The common replication strategies include full replication/representative sampling and synthetic replication which are discussed in more detail below.) For ETPs adopting an active strategy, tracking error will normally higher due to the ETP issuer’s objective to outperform its underlying index/assets. You should be aware of this active risk when considering investing in actively managed ETPs.

 

(c)       Trading at premium or discount

An ETP may be traded at a premium or discount to its Net Asset Value (NAV). This price discrepancy is caused by supply and demand factors and may be particularly likely to emerge during periods of high market volatility and uncertainty. This phenomenon may also be observed for ETPs tracking specific markets or sectors that are subject to direct investment restrictions.

 

(d)      Foreign exchange risk

You trading ETPs 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 ETP price.

 

(e)      Liquidity risk

Market Makers provide liquidity to facilitate trading in ETPs. Although most ETPs are supported by one or more market makers, there is no assurance that active trading will be maintained. In the event that the market makers default or cease to fulfill their role, you may not be able to buy or sell the product.

 

(f)        Delayed Settlement Risk

Market makers may short sell units of an ETF listed on SEHK in market making trades and may apply for one extra day for settlement to cover such short positions. Therefore, the affected buyer(s) would receive the ETP units one day later than normal settlement date without prior notice, but the affected buyer(s) retain the right to sell the bought shares before the completion of settlement. Furthermore, a Participating Dealer may have their redemption settlement process affected by the delayed settlement.

 

12.6        Counterparty risk involved in ETPs with different replication strategies

(a)      Full replication and representative sampling strategies

An ETP using a full replication strategy generally aims to invest in all constituent stocks/assets in the same weightings as its benchmark. ETPs adopting a representative sampling strategy will invest in some, but not all of the relevant constituent stocks/assets. For ETPs that invest directly in the underlying assets rather than through synthetic instruments issued by third parties, counterparty risk tends to be less of concern.

 

(b)      Synthetic replication strategies

ETPs utilising a synthetic replication strategy use swaps or other derivative instruments to gain exposure to a benchmark. Currently, synthetic replication ETPs can be further categorized into two forms:

i.      Swap-based ETPs

Total return swaps allow ETP issuers to replicate the benchmark performance of ETPs without purchasing the underlying assets. Swap-based ETPs are exposed to counterparty risk of the swap dealers and may suffer losses if such dealers default or fail to honor their contractual commitments.

ii.      Derivative embedded ETPs

ETP issuers may also use other derivative instruments to synthetically replicate the economic benefit of the relevant benchmark. The derivative instruments may be issued by one or multiple issuers. Derivative embedded ETPs are subject to counterparty risk of the derivative instruments’ issuers and may suffer losses if such issuers default or fail to honor their contractual commitments.

Even where collateral is obtained by an ETP, it is subject to the collateral provider fulfilling its obligations. There is a further risk that when the right against the collateral is exercised, the market value of the collateral could be substantially less than the amount secured resulting in significant loss to the ETP. It is important that you understand and critically assess the implications arising due to different ETP structures and characteristics.

 

13            Risks of bonds  

13.1 The price of bonds can and does fluctuate, sometimes dramatically. Bonds are not an alternative to ordinary savings or time deposits. The price of a bond may move up or down and may become valueless. It is as likely that losses will be incurred rather than profit made as a result of buying and selling of bonds. Also, there may be risks in leaving bonds in our safekeeping. The holder of bonds bears the credit risk of the issuer and/or guarantor (if applicable) and has no recourse to us unless we are the issuer or guarantor (if applicable).

13.2 Not all bonds provide for repayment of 100% of the face value of the bond. The return on a bond depends on the terms of issue and reference should be made to the corresponding prospectus or term sheet for detail and there may be circumstances that the money and/or value of shares that you receive at maturity may be substantially less than the value of your original investment. If there is any fractional share(s) or other Securities or underlying assets deliverables on maturity, it/they may not be physically delivered.

13.3 In situations where any bond is a product combining note with financial or other derivatives, such as options, its return may be linked to the performance of other financial instruments, such as underlying stocks, commodities, currencies, companies and indices. Unless such bond is listed on Exchange or other regulated stock exchanges, you will only be able to sell such bond in the over-the-counter market, if at all. The prices of bonds in secondary markets are affected by a wide range of factors, including without limitation, the performance of the underlying stocks, commodities currencies, companies, indices, the market view of the credit quality of the reference company, and interest rates. You must be aware that secondary markets do not always exist and even where a secondary market exists, it may not be liquid. You must accept any associated liquidity risk.

13.4 Transactions in options carry a high degree of risk (including products that have options embedded in them such as bonds). Purchasers and sellers of options should familiarize themselves with the type of option (i.e. put or call) which they contemplate trading and the associated risks.

13.5 Key Product Risks It is crucial to understand the specific risks mentioned in the relevant offering documents (if applicable) before investing. Key risks include, but are not limited to, the ones we have listed below:

(a) Credit Risk: The Client assumes the credit risk of the issuer and the guarantor (if applicable). Any changes to the credit rating of them will affect the price and value of the bonds. Bonds are subject to the risk of the issuer defaulting on its obligations, i.e. an issuer fails to make principal and interest payments when due. In the worst case scenario of a bankruptcy of the issuer/guarantor, the Client could risk losing the value of the entire investment. Credit ratings assigned by credit rating agencies do not guarantee the creditworthiness of the issuer;

(b) Liquidity Risk: The bond may have limited liquidity and may not be actively traded and/or quoted by brokers in the market. As such: (i) the value of bond and/or indicative bid/offer price will depend on market liquidity and conditions which may not be available at all times; (ii) it may take a longer time or it may be impossible to sell the bond at prevailing market conditions; and (iii) the executable sale price may differ unfavourably by large amounts from the indicative bid price quoted;

(c) Currency Risk: For bonds denominated in a foreign currency, there may be an exchange loss when converting the redemption amount back to the local or base currency;

(d) Interest Rate Risk: Bonds are more susceptible to fluctuations in interest rates and generally prices of bonds will fall when interest rates rise; and

(e) Market Risk: The value of investments may fluctuate due to changing political, legal and, economic conditions and changes in interest rates. This is common to all markets and asset classes. Investor’s return may be substantially less than the initial investment.

13.6 Transactions in Other Jurisdictions:

(a) Transactions for bond trading on markets in other jurisdictions, including markets formally linked to a domestic market, may expose the Client to additional risk. Such markets may be subject to regulation which may offer different or diminished investor protection. For example, the Company conducts some or all of the transactions for bond trading through overseas intermediaries. Before the Client trades, the Client should enquire about any rules relevant to its particular transactions. The Client's local regulatory authority will be unable to compel the enforcement of the rules of regulatory authorities or markets in other jurisdictions where the Client's transactions have been effected.

(b) The Client should only consider trading outside the Hong Kong market if it fully understands the nature of the relevant foreign market and the extent of its exposure to risks. The Client should carefully consider whether such trading is appropriate for it in light of its experience, risk profile, and other relevant circumstances, and seek independent professional advice when it is in doubt.

(c) In the event that the transaction is being executed outside Hong Kong, the Client recognizes that such transactions will be subject to the applicable local laws, rules and regulations of the overseas jurisdiction, which may be different to those in the jurisdiction of Hong Kong. Particularly, the Client should familiarize itself with the rules and regulations in relation to holding restrictions and disclosure obligations, and comply with the same.

(d) All transactions executed in pursuance of the Client's instructions on an overseas market will be subject to transaction levies and other costs that the relevant exchange may impose from time to time.

(e) The Client accepts that transactions executed on any exchanges outside Hong Kong will not be subject to a right to claim under the Investor Compensation Fund established under the SFO, and may be marked with different levels or types or protection compared to the protection afforded by the laws of Hong Kong.

 

14            Risk disclosure statement for renminbi products

Renminbi products involve specific risks. You should consider the following factors, among others, in evaluating the merits and suitability of this investment. The value of Renminbi products may fall as well as rise and you may not get back the amount originally invested. Different Renminbi products are subject to different risks. You should read the relevant terms and conditions and risk disclosure statement before making any investment decision. The following specific risks should be carefully considered by you, but the list does not purport to be exhaustive.

 

14.1        Renminbi Currency Risk

Renminbi is currently not fully freely convertible and conversion of Renminbi through banks in Hong Kong SAR may be subject to a daily limit. You should allow time for exchange of Renminbi from/to another currency of Renminbi amount exceeding the daily limit.

 

For Renminbi products which are not denominated in Renminbi or with underlying investments which are not Renminbi denominated, such products will be subject to multiple currency conversion costs involved in making investments and liquidating investments, as well as the Renminbi exchange rate fluctuations and bid/offer spreads when assets are sold to meet redemption requests and other capital requirements (e.g. settling operation expenses).

 

The Mainland China government regulates the conversion between Renminbi and other currencies. If the restrictions on Renminbi convertibility and the limitations on the flow of Renminbi funds between Mainland China and Hong Kong SAR become more stringent, the depth of the Renminbi market in Hong Kong SAR may become further limited.

 

14.2        Currency Exchange Risks

Renminbi products are subject to exchange rate fluctuations which may provide both opportunities and risks. If you choose to convert the Renminbi to other currencies at an exchange rate that is less favorable than that in which made the original conversion to Renminbi, you may suffer loss in principal.

 

14.3        Interest Rate Risks

China has gradually liberalized the regulation of interest rates in recent years. Further liberalization may increase interest rate volatility. For Renminbi products which are, or may invest in Renminbi debt instruments, such instruments are susceptible to interest rate fluctuations, which may adversely affect the return and performance of the Renminbi products.

 

14.4        Limitation on the Provision of Renminbi Funding

You need hold Renminbi bank account and sufficient Renminbi for settlement and clearing purpose. In case you do not have sufficient Renminbi funding to subscribe Renminbi products, subject to compliance with all applicable laws, rules and regulations, we may assist you to convert other currencies to Renminbi. However, we do not guarantee that it can provide sufficient Renminbi funding for you due to the limitation on the flow of Renminbi funds in Hong Kong SAR. We may unwind your trades due to insufficient Renminbi funding and your investment may be adversely affected if you suffer losses due to settlement failure.

 

14.5        Limited Availability of Underlying Investments Denominated in Renminbi

For Renminbi products that do not have access to invest directly in Mainland China, their available choice of underlying investments denominated in Renminbi outside Mainland China may be very limited. Such limitation may adversely affect the return and performance of the Renminbi products.

 

14.6        No Guaranteed Projected Returns

For some Renminbi investment products, their return may not be guaranteed or may only be partly guaranteed. You should read carefully the statement of illustrative return attached to such products and in particular, the assumptions on which the illustrations are based, including, for example, any future bonus or dividend declaration.

 

14.7        Long Term Commitment

For Renminbi products which involve a long period of investment, if you redeem the investment before the maturity date or during the lock up period (if applicable), you may incur a significant loss of principal where the proceeds may be substantially lower than the invested amount. You may also suffer from early surrender withdrawal fees and charges as well as the loss of returns (where applicable) as a result of redemption before the maturity date or during lock up period.

 

14.8        Issuer Risk/Counterparty Risk

Renminbi products are subject to the credit and insolvency risks of their issuers. Prospective investor should consider carefully the credit worthiness of the issuers before investing. Renminbi product may invest in derivative instruments, counterparty risk may also arise as the default by the derivative issuers may adversely affect the performance of the Renminbi products and result in substantial losses.

 

14.9        Liquidity Risks

Renminbi may be less liquid compared to other currencies. Renminbi products may not be regularly traded or have an active secondary market. You should be aware that payments and redemptions of Renminbi products may not always be made within the expected timescales or may have to sell at a deep discount to its value.

 

14.10     Possibility of not Receiving Renminbi upon Redemption

For Renminbi products with a significant portion of non-Renminbi denominated underlying investments, there is a possibility of not receiving the full amount in Renminbi upon redemption. This may be the case if the issuer is not able to obtain sufficient amount of Renminbi in a timely manner due to the exchange controls and restrictions applicable to the currency.

 

15            Further confirmations in relation to trading of OTC derivative products and exchange derivative products

You hereby certify that neither you nor any beneficial owner (each of them being the “Holder of the Products”) of the OTC Derivative Products, Exchange Derivative Products or other products (including but not limited to equity linked notes) (the “Products”) purchased by you from us and/or transacted through or in the Account is a person who is subject to any other limitations in respect of trading in the Products. You shall notify us in writing forthwith upon any changes in any such status of the Holder of the Products. We are entitled to rely fully on any of your certification and confirmation contained for all purposes, unless we receive notice in writing of any changes thereof.

 

16            Risk of Over-The-Counter Transaction

16.1        You should only undertake Over-The-Counter ("OTC") trading if you understand the nature of such trading and such trading facilities and the extent of your exposure to risks. If in doubt, you should seek independent professional advice.

 

16.2        OTC transactions are subject to risk, including counterparty risk, including but not limited to the risk that the particular securities fail to subsequently be listed on the Exchange, lower liquidity and higher volatility. Settlement of the relevant transactions is not guaranteed, and you will be responsible for any losses and/or expenses resulting from your and/or your counterparty's settlement failures.

 

16.3        The prices of Securities traded on OTC market may differ significantly from their opening or traded prices transacted during the regular market hours upon the listing of the Securities on the Exchange. The prices displayed on the OTC market may not reflect the prices in other concurrently operating automated trading systems dealing in the same Securities.

 

16.4        OTC transactions may be cancelled and void if that particular Securities subsequently fails to list on the Exchange. The clients order may only be partially executed, or not at all, as a result of the lower liquidity in OTC market as compared to regular market hours of the Exchange. There may also be greater volatility in OTC market than in regular market hours of the Exchange. The lower liquidity and higher volatility in OTC market may then result in wider than normal spreads for a particular type of Securities.

 

16.5        News announcements made by the issuers may affect the price of their Securities after regular market hours. Similarly, important financial information is often announced outside regular market hours. In OTC market, these announcements may occur during trading and may cause an exaggerated and unsustainable effect on the price of a particular type of Securities.

 

16.6        In particular, the OTC market is not regulated by the Exchange and the relevant transaction will not be covered by the Investor Compensation Fund until it is properly recorded on the trading system of the Exchange upon the listing of the Securities on the Exchange.

 

17         Risk relating to Trading in US Exchange-listed or Over-the-counter ("OTC") Securities or Derivatives

You should understand the US rules applicable to trades in securities or security-like instrument in markets governed by US law before undertaking any such trading. US law could apply to trading in US markets irrespective of the law applicable in your home jurisdiction.

 

Many (but by no means all) stocks, bonds and options are listed and traded on US stock exchanges. Nasdaq, which used to be an OTC market among dealers, has now also become a US exchange. For exchange-listed stocks, bonds and options, each exchange promulgates rules that supplement the rules of the US Securities & Exchange Commission ("SEC") for the protection of individuals and institutions trading in the securities listed on the exchange.

 

OTC trading among dealers can continue in exchange-listed instruments and in instruments that are not exchange-listed at all. For securities that are not listed on any exchanges, trading can continue through the OTC bulletin board or through the inter-dealer “pink sheets” that carries representative (not actual) dealer quotes. These facilities are outside of Nasdaq.

 

Options on securities are subject to SEC rules and the rules of any securities exchange on which the options are listed. Options on futures contracts on commodities like wheat or gold are governed by rules of the US Commodity Futures Trading Commission ("CFTC"). There are also commercial options, like options on real estate, that are governed neither by SEC nor CFTC rules.

 

Whether you are intending to trade in US exchange-listed securities, OTC securities or derivatives (such as Options or Futures), you should understand the particular rules that govern the market in which you are intending trade. An investment in any of these instruments tends to increase the risk and the nature of markets in derivatives tends to increase the risk even further.

 

Market makers of OTC bulletin board are unable to use electronic means to interact with other dealers to execute trades. They must manually interact with the market, i.e. using standard phone lines to communicate with other dealers to execute trades. This may cause delays in the time it takes to interact with the market place. This, if coupled with increase in trade volume, may lead to wide price fluctuation in OTC bulletin board securities as well as lengthy delays in execution time. You should exercise extreme caution when placing market orders and fully understand the risks associated with trading in OTC bulletin board. Market data such as quotes, volume and market size may or may not be as up-to-date as expected with Nasdaq or listed securities.

 

As there may be far fewer market makers participating in OTC securities markets, the liquidity in that securities may be significantly less than those in listed markets. As such, you may receive a partial execution or the order may not be executed at all. Additionally, the price received on a market order may be significantly different from the price quoted at the time of order entry. When fewer shares of a given securities are being traded, larger spreads between bid and ask prices and volatile swings in price may result. In some cases, the liquidation of a position in an OTC securities may not be possible within a reasonable period of time. Issuers of OTC securities have no duty to provide any information to investors, maintain registration with the SEC or provide regular reports to investors.

 

18         Risk Disclosure of Extended-hours Trading in US Market

You should consider the following points before engaging in Extended-hours trading in US securities market. “Extended-hours trading” means trading outside of "regular trading hours". "Regular trading hours" generally means the time between 9:30 a.m. and 4 p.m. ET.

 

  • Risk of Lower Liquidity: Liquidity refers to the ability of market participants to buy and sell securities. Generally, the more orders that are available in a market, the greater the liquidity. Liquidity is important because with greater liquidity it is easier for investors to buy or sell securities, and as a result, investors are more likely to pay or receive a competitive price for securities purchased or sold. There may be lower liquidity in Extended-hours trading as compared to regular trading hours. As a result, your order may only be partially executed, or not at all.

  • Risk of Higher Volatility. Volatility refers to the changes in price that securities undergo when trading. Generally, the higher the volatility of a security, the greater its price swings. There may be greater volatility in Extended-hours trading than during regular trading hours. As a result, your order may only be partially executed, or not at all, or you may receive an inferior price when engaging in Extended-hours trading than you would during regular trading hours.

  • Risk of Changing Prices. The prices of securities traded in extended-hours trading may not reflect the prices either at the end of regular trading hours, or upon the opening the next morning. As a result, you may receive an inferior price when engaging in Extended-hours trading than you would during the regular trading hours.

  • Risk of Unlinked Markets. Depending on the extended-hours trading system or the time of day, the prices displayed on a particular Extended-hours trading system may not reflect the prices in other concurrently operating Extended-hours trading systems dealing in the same securities. Accordingly, you may receive an inferior price in one Extended-hours trading system than you would in another Extended-hours trading system.

  • Risk of News Announcements. Normally, issuers make news announcements that may affect the price of their securities after regular trading hours. Similarly, important financial information is frequently announced outside of regular trading hours. In Extended-hours trading, these announcements may occur during the trading, and if combined with lower liquidity and higher volatility, may cause an exaggerated and unsustainable effect on the price of a security.

  • Risk of Wider Spreads. The spread refers to the difference in price and between what you can buy securities for and what you can sell it for. Lower liquidity and higher volatility in Extended-hours trading may result in wider than normal spreads for a particular security.

  • Risk of Lack of Calculation or Dissemination of Underlying Index Value or Intraday Indicative Value (“IIV”) and Lack of Regular Trading in Securities Underlying Indexes. For certain products, an updated underlying index or portfolio value or IIV will not be calculated or publicly disseminated during Extended-hours. Since the underlying index or portfolio value and IIV are not calculated or widely disseminated during Extended-hours, an investor who is unable to calculate implied values for certain products during Extended-hours may be at a disadvantage to market professionals.

  • Additionally, securities underlying the indexes or portfolios will not be regularly trading as they are during regular trading hours or may not be trading at all. This may cause prices during Extended-hours not reflecting the prices of those securities when they open for trading.

  • Securities affected by a corporate action event may not be allowed to trade during the Extended-hours at TBHK’s discretion unless all relevant orders and positions can be correctly handled.

  • Our Extended-hours Trading rules are subject to change without prior notice. By participating in Extended-hours trading, you are deemed to understand and agree to the unique risks of investing during extended-hours trading sessions and agree to abide by these extended-hours trading rules. To review any rule changes, please refer to these Extended-hours trading rules often. TBHK accounts are self-directed and you are solely responsible for implementing or adopting any investment decision or trading strategy. Extended-hours trading may not be appropriate for every investor.

 

19         Disclosure of Payment for Order flow and Order Routing Information

It is a requirement of the Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) in the US that all brokers-dealers inform their clients of payment for order flow practices when a new account is opened and on an annual basis thereafter and on confirmations.

 

Consistent with the overriding principle of best execution and subject to applicable regulatory requirements, our US broker(s) may route orders to primary exchanges and other market centers, including regional securities exchanges, dealers that make markets over the counter, and Electronic Communication Networks (ECNs). These broker-dealers and market centers may include dealers who make markets in these securities. Our US broker(s) may receive any compensation for routing equity orders to dealers. In exchange for routing your equity orders to certain market centers, our US broker(s) may receive monetary rebates per executed share for equity orders that add liquidity to its book and/or rebates for aggregate exchange fees. The rebates are considered payment for order flow even though it may not necessarily offset our aggregate payments for removing liquidity.

 

Order routing decisions are based on a number of factors including the size of the order, the opportunity for price improvement and the quality of order executions. However, our US broker(s) vest regularly reviews routing decisions, market centers and test trade executions to ensure that your orders meet its duty of best execution.

 

Price improvement occurs when an order is executed at a price more favorable than the displayed national best bid and offer. You agree that our US broker(s) may use discretion in selecting a particular exchange or market center in which to route your order.

 

The source and amount of any compensation received in connection with a transaction and any additional information concerning order flow will be disclosed as required by US law. The source and amount of these payments are available on the website of our US broker(s).

 

20         Risks of Stop Orders and Advanced Orders

Stop Orders and Advanced Orders are provided in certain markets, extra risks include:

  • Stop prices are not guaranteed execution prices. A “stop order” becomes a “market order” when the “stop price” is reached and broker-dealers are required to execute a market order fully and promptly at the current market price. Therefore, the price at which a stop order ultimately is executed may be very different from the investor’s “stop price”. Accordingly, while a client may receive a prompt execution of a stop order that becomes a market order, during volatile market conditions, the execution may be at a significantly different price from the stop price if the market is moving rapidly.

  • Stop orders may be triggered by a short-lived, dramatic price change. Clients should be informed that, during periods of volatile market conditions, the price of a stock can move significantly in a short period of time and trigger an execution of a stop order (and the stock may later resume trading at its prior price level). Clients should understand that if their stop order is triggered under these circumstances, they may sell at an undesirable price even though the price of the stock may stabilize during the same trading day.

  • Sell stop orders may exacerbate price declines during times of extreme volatility. The activation of sell stop orders may add downward price pressure on securities. If triggered during a precipitous price decline, a sell stop order also is more likely to result in an execution well below the stop price.

  • Placing a “limit price” on a stop order may help manage some of these risks. A stop order with a “limit price” (a “stop limit” order) becomes a “limit order” when the stock reaches the “stop price.” A “limit order” is an order to buy or sell securities for an amount no worse than a specific price (i.e., the “limit price”). By using a stop limit order instead of a regular stop order, the client will receive additional certainty with respect to the price the client receives for the stock. However, clients should also be aware that, because brokers cannot sell for a price that is lower (or buy for a price that is higher) than the limit price selected, there is the possibility that the order will not be executed at all. Clients should be encouraged to use limit orders in cases where they prioritize achieving a desired target price more than getting an immediate execution irrespective of price.

  • Advanced Orders may have increased risks due to their reliance on trigger processing, market data, and other internal and external system factors. Due to market conditions and/or timing, advanced orders you enter, or those that are triggered just prior to or near market close may not be executed. It is possible that such order(s) will not be executed during that session, or at all if good for the day only. While a verification process is in place to avoid false triggers of orders, it is possible for an order to be triggered by an erroneous trade.

  • By using advanced orders, you agree that TBHK is not responsible for losses or damages resulting from market data problems, system issues, and user misuse among other factors. TBHK also does not recommend these orders as acceptable for a particular purpose or to meet a specific trading or financial need. Advanced orders can be cancelled at any time based on the above factors. Your use of advanced orders indicates your understanding and acceptance of the risks associated with these orders.

 

21         Additional risk disclosure for futures and options trading

This brief statement does not disclose all of the risks and other significant aspects of trading in futures and options. In light of the risks, you should undertake such transactions only if you understand the nature of the contracts (and contractual relationships) into which you are entering and the extent of your exposure to risk. Trading in futures and options is not suitable for many members of the public. You should carefully consider whether trading is appropriate for you in light of your experience, objectives, financial resources and other relevant circumstances.

 

Futures

 

21.1        Effect of “Leverage” or “Gearing”

 

Transactions in futures carry a high degree of risk. The amount of initial margin is small relative to the value of the futures contract so that transactions are “leveraged” or “geared”. A relatively small market movement will have a proportionately larger impact on the funds you have deposited or will have to deposit: this may work against you as well as for you. You may sustain a total loss of initial margin funds and any additional funds deposited with the firm to maintain your position. If the market moves against your position or margin levels are increased, you may be called upon to pay substantial additional funds on short notice to maintain your position. If you fail to comply with a request for additional funds within the time prescribed, your position may be liquidated at a loss and you will be liable for any resulting deficit.

 

21.2        Risk-reducing orders or strategies

 

The placing of certain orders (e.g. “stop-loss” orders, or “stop-limit” orders) which are intended to limit losses to certain amounts may not be effective because market conditions may make it impossible to execute such orders. Strategies using combinations of positions, such as “spread” and “straddle” positions may be as risky as taking simple “long” or “short” positions.

 

Options

 

21.3        Variable degree of risk

 

Transactions in options carry a high degree of risk. Purchasers and sellers of options should familiarize themselves with the type of option (i.e. put or call) which they contemplate trading and the associated risks. You should calculate the extent to which the value of the options must increase for your position to become profitable, taking into account the premium and all transaction costs. The purchaser of options may offset or exercise the options or allow the options to expire. The exercise of an option results either in a cash settlement or in the purchaser acquiring or delivering the underlying interest. If the option is on a futures contract, the purchaser will acquire a futures position with associated liabilities for margin (see the section on Futures above). If the purchased options expire worthless, you will suffer a total loss of your investment which will consist of the option premium plus transaction costs. If you are contemplating purchasing deep-out-of-the-money options, you should be aware that the chance of such options becoming profitable ordinarily is remote. Selling (“writing” or “granting”) an option generally entails considerably greater risk than purchasing options. Although the premium received by the seller is fixed, the seller may sustain a loss well in excess of that amount. The seller will be liable for additional margin to maintain the position if the market moves unfavourably. The seller will also be exposed to the risk of the purchaser exercising the option and the seller will be obligated to either settle the option in cash or to acquire or deliver the underlying interest. If the option is on a futures contract, the seller will acquire a position in a futures contract with associated liabilities for margin (see the section on Futures above). If the option is “covered” by the seller holding a corresponding position in the underlying interest or a futures contract or another option, the risk may be reduced. If the option is not covered, the risk of loss can be unlimited. Certain exchanges in some jurisdictions permit deferred payment of the option premium, exposing the purchaser to liability for margin payments not exceeding the amount of the premium. The purchaser is still subject to the risk of losing the premium and transaction costs. When the option is exercised or expires, the purchaser is responsible for any unpaid premium outstanding at that time.

 

Additional risks common to futures and options

 

21.4        Terms and conditions of contracts

You should ask the firm with which you deal about the terms and conditions of the specific futures or options which you are trading and associated obligations (e.g. the circumstances under which you may become obliged to make or take delivery of the underlying interest of a futures contract and, in respect of options, expiration dates and restrictions on the time for exercise). Under certain circumstances the specifications of outstanding contracts (including the exercise price of an option) may be modified by the exchange or clearing house to reflect changes in the underlying interest.

 

21.5        Suspension or restriction of trading and pricing relationships

Market conditions (e.g. illiquidity) and/or the operation of the rules of certain markets (e.g. the suspension of trading in any contract or contract month because of price limits or “circuit breakers”) may increase the risk of loss by making it difficult or impossible to effect transactions or liquidate/offset positions. If you have sold options, this may increase the risk of loss. Further, normal pricing relationships between the underlying interest and the futures, and the underlying interest and the option may not exist. This can occur when, for example, the futures contract underlying the option is subject to price limits while the option is not. The absence of an underlying reference price may make it difficult to judge “fair value”.

 

21.6        Deposited cash and property

You should familiarise yourself with the protections given to money or other property you deposit for domestic and foreign transactions, particularly in the event of a firm insolvency or bankruptcy. The extent to which you may recover your money or property may be governed by specific legislation or local rules. In some jurisdictions, property which had been specifically identifiable as your own will be pro-rated in the same manner as cash for purposes of distribution in the event of a shortfall.

 

21.7        Commission and other charges

Before you begin to trade, you should obtain a clear explanation of all commission, fees and other charges for which you will be liable. These charges will affect your net profit (if any) or increase your loss.

 

21.8        Transactions in other jurisdictions

Transactions on markets in other jurisdictions, including markets formally linked to a domestic market, may expose you to additional risk. Such markets may be subject to regulation which may offer different or diminished investor protection. Before you trade you should enquire about any rules relevant to your particular transactions. Your local regulatory authority will be unable to compel the enforcement of the rules of regulatory authorities or markets in other jurisdictions where your transactions have been effected. You should ask the firm with which you deal for details about the types of redress available in both your home jurisdiction and other relevant jurisdictions before you start to trade.

 

21.9        Currency risks

The profit or loss in transactions in foreign currency denominated contracts (whether they are traded in your own or another jurisdiction) will be affected by fluctuations in currency rates where there is a need to convert from the currency denomination of the contract to another currency.

 

21.10     Trading facilities

Electronic trading facilities are supported by computer-based component systems for the order-routing, execution, matching, registration or clearing of trades. As with all facilities and systems, they are vulnerable to temporary disruption or failure. Your ability to recover certain losses may be subject to limits on liability imposed by the system provider, the market, the clearing house and/or participant firms. Such limits may vary: you should ask the firm with which you deal for details in this respect.

 

21.11     Electronic trading

Trading on an electronic trading system may differ from trading on other electronic trading systems. If you undertake transactions on an electronic trading system, you will be exposed to risks associated with the system including the failure of hardware and software. The result of any system failure may be that your order is either not executed according to your instructions or is not executed at all.

 

21.12     Off-exchange transactions

In some jurisdictions, and only then in restricted circumstances, firms are permitted to effect off-exchange transactions. The firm with which you deal may be acting as your counterparty to the transaction. It may be difficult or impossible to liquidate an existing position, to assess the value, to determine a fair price or to assess the exposure to risk. For these reasons, these transactions may involve increased risks. Off-exchange transactions may be less regulated or subject to a separate regulatory regime. Before

you undertake such transactions, you should familiarize yourself with applicable rules and attendant risks.

 

22         Penny Stock Trading Risk Disclosure

This disclosure contains additional important information regarding the characteristics and risks associated with the trading of small-cap stocks (“penny stocks”).

 

22.1        What is a "Penny" Stock?

 

Generally, penny stocks are low-priced shares of small companies. Penny stocks are generally traded over-the-counter and are historically more volatile and less liquid than other equities. For these and other reasons, penny stocks are considered to be speculative investments. Consequently, customers who trade in penny stocks should be prepared for the possibility that they may lose their entire investment, or an amount in excess of their investment if they purchased penny stocks on margin. Before investing in a penny stock, you should thoroughly review the company issuing the penny stock. In addition, you should be aware of certain specific risks associated with trading in penny stocks.

 

22.2        Risks Associated with Penny Stocks

 

There are a number of risks of trading penny stocks, including the following:

 

You Can Lose All or Much of Your Investment Trading Penny Stocks. All investments involve risk but penny stocks are among the most risky and are generally not appropriate for investors with a low risk tolerance. Many penny stock companies are new and do not have a proven track record. Some penny stock companies have no assets, operations or revenues. Others have products and services that are still in development or have yet to be tested in the market. For these reasons therefore, penny stock companies have a greater risk of failure and those who invest in penny stocks have a greater risk that they may lose some or all of their investment.

 

22.3        Lack of Publicly Available Information.

Most large, publicly-traded companies may file periodic reports with the Regulators that provide information relating to the company's assets, liabilities and performance over time. In addition, these companies provide their financial information and operational results online. In contrast, information about penny stock companies can be extremely difficult to find, making it less likely that quoted prices in the market will be based on full and complete information about the company. Penny stock companies may also be more likely to be the subject of an investment fraud scheme, which may also increase risk for the investor.

 

22.4        No Minimum Listing Standards.

Companies that offer shares of their stock on exchanges can be subject to stringent listing standards that require the company to have a minimum amount of net assets and shareholders. Most penny stock companies do not list their shares on exchanges and are not subject to these minimum standards. Again, this fact can contribute to the inherent risk associated with an investment in the shares of a penny stock company.

 

22.5        Risk of Lower Liquidity.

Liquidity refers to the ability of market participants to buy and sell securities. Generally, the more demand there is for a particular security, the greater the liquidity for that security. Greater liquidity makes it easier for investors to buy or sell securities, so investors are more likely to receive a competitive price for securities purchased or sold if the security is more liquid. Penny stocks are often traded infrequently and have lower liquidity. You may therefore have difficulty selling penny stocks once you own them. Moreover, because it may be difficult to find quotations for certain penny stocks, they may be difficult, or even impossible, to accurately price.

 

22.6        Risk of Higher Volatility.

Volatility refers to changes in price that securities undergo when they are being traded. Generally, the higher the volatility of a security, the greater its price swings. Due to their lower liquidity, penny stocks are subject to greater volatility and price swings. A customer order to purchase or sell a penny stock may not execute or may execute at a substantially different price than the prices quoted in the market at the time the order was placed. In addition, the market price of any penny stock shares you obtain can vary significantly over time. Penny stocks are prone to market manipulation since a small amount of capital and a few trades may suffice to move the price, and a small movement in share price can lead to a significant percentage change.

 

22.7        Penny Stocks Can Be Subject to Scams

Penny stocks are frequent vehicles for scams and/or market manipulation due to their generally lower prices and less stringent listing requirements. You should be wary of advertisements, unsolicited e-mails, newsletters, blogs or other promotional reports that emphasize the potential for large profits in penny stocks generally or certain penny stocks. These promotional materials are often used to manipulate or "pump up" the price of penny stocks before the promoter engages in the selling a large volume of shares. Clients are therefore strongly encouraged to do their own due diligence with respect to any penny stock company they invest in and to not rely on any outside promotional reports or newsletters.

 

23         Fractional Shares Trading Risk Disclosure

23.1        Eligibility - Fractional Shares Trading are generally available for S&P 500 Securities offered. TBHK may from time to time adjust the list of Eligible Fractional Securities. However, securities available for fractional trading are subject to change without notice in TBHK’s sole discretion.

 

23.2        Capacity - In connection with any Fractional Share component of any purchase or sale transaction, TBHK will generally act as an agent and will execute that fractional portion of the trade as agency. The Client will always be the beneficial owner of any Fractional Shares in their account and all Fractional Shares owned by a Client are segregated in TBHK’s books and records in the same manner and to the same extent as whole shares owned by such Client.

 

23.3        Transfer of Fractional Shares - While Clients maintain complete day-to-day control of any Fractional Shares in their account, Fractional Shares are not transferable to another broker. If a Client wants to transfer the holdings in an account to another brokerage firm, the Fractional Share holdings cannot be transferred and will need to be liquidated before transfer, which may have tax consequences and will result in commission charges. To effect a request for a transfer, TBHK will liquidate the Fractional Shares from the Client's account and charge commissions on these closing trades, then transfer the remaining whole Share quantities.

 

23.4        Available Order Types - TBHK will only accept certain types of orders for Fractional Shares. In the event that a Client chooses to place a non-marketable limit order with a Fractional Share component, the fractional component may not execute until the order becomes marketable (and therefore may not execute at all), even if the Fractional Share component of the order might have executed earlier if submitted for a whole Share quantity.

 

23.5        Voting Rights - Clients may not have voting rights for any of the Fractional Shares held in their account, may not be able to make voluntary elections on any corporate action (including, without limitation, any tender offers or rights offerings) with respect to such Fractional Shares, and TBHK cannot provide Clients any other shareholder documentation for any holdings of less than one Share. Clients will, however, receive payments of dividends, or in some cases in connection with stock dividends, either dividend shares or value commensurate to the dividend Shares, and will otherwise participate normally in any stock splits, mergers or other mandatory corporate actions.

 

23.6        Five-Decimal Place Recording and Minimum Order Consideration - TBHK records the quantity of Fractional Shares traded or otherwise held in a brokerage account down to five decimal places and subject to change from time to time by TBHK’s discretion. TBHK will not accept an order for a purchase of Fractional Shares of less than minimum dollar amount (currently US$5.00, subject to update from time to time). If Clients enter repeated Orders with individual notional values of less than minimum dollar amount, such Account may be restricted from trading.

 

24         Short Selling Risk Disclosure

24.1        There are additional risks associated with short selling stocks that may expose you to significant losses. This strategy is not suitable for all customers. Fees associated with short selling are available on TBHK’s website.

 

24.2        Short sales must be done in a margin account and are subject to TBHK's margin requirements. TBHK may close out your short position by buying the stock if you do not maintain adequate margin in your account. This may expose you to substantial losses if the price of the stock is above the price at which you sold it short. Short selling carries unlimited market risk and could lead to extraordinary losses because you may have to purchase a stock at a higher price than you sold it for in order to cover a short position, and there is no limit to how high the price of a stock can go. When you sell a stock short TBHK must lend you the shares either from its own inventory or from shares it sources from various stock-loan counterparties. You are charged interest in connection with borrowing securities in order to maintain a short position. Interest rates paid to, or rates and fees collected from, clients in connection with borrowing or lending securities are subject to frequent change without notice and will vary based on the nature of the security being sold short (i.e., the interest charge to finance a short position in a hard-to-borrow stock may be more costly than a stock that is not hard-to-borrow).

 

24.3        Before selling short, TBHK must confirm that it can locate shares of the stock to borrow for delivery to the buyer. Borrowed stock is subject to recall without notice. Stock lenders retain the right to recall their stock at any time. TBHK may buy-in stock on your behalf, without notice to you, to cover short positions in the event that TBHK cannot borrow stock or re-borrow stock after a recall notice. You are liable for any losses or costs incurred in the event of a buy-in, including any associated trade commissions or fees.

 

24.4        You may be liable for dividend payments and certain other corporate actions. If you are maintaining a short settled position as of the close of business two business days prior to the Record Date (or one business day prior to the Ex-Dividend date) you will be liable to the lender for the dividend.

25 Risk Disclosure of China Connect

This Appendix describes some of the key risk factors and other information concerning China Connect. This Appendix does not disclose all the risks and other significant aspects of Northbound Trading through China Connect. You should ensure that you understand the nature and risks of China Connect and Northbound trading and you should consider carefully (and consult your own advisers where necessary) whether trading in China Connect Securities is suitable for you in light of your circumstances. The decision to trade in China Connect Securities is yours, but you should not trade in China Connect Securities unless you fully understand and are willing to assume the risks associated with China Connect and are able to comply with all relevant China Connect Laws and China Connect Rules. You acknowledge the risks and agree to the relevant terms. You are responsible for monitoring changes in the China Connect Laws and China Connect Rules and complying with any new requirements.

We do not represent that the information set out in this Appendix is up to date, and do not undertake to update the information set out in this Appendix. In addition, we do not provide any warranty with respect to such information and no such information is to be construed as legal, financial or tax advice of any kind by us.

1.         Compliance with Applicable Laws and the Rules

If you have failed to comply with or have breached any applicable laws of Mainland China with regard to the trading of China Connect Securities on the relevant China Connect Market through the use of the China Connect Service, we will take such actions, steps or measures to stop and/or to remedy or rectify the breach, including but not limited to not to accept further instructions from you or to act for you according to Exchange’s request.

Trading and Settlement Restrictions

2.         Pre-Trade Checking

SEHK is required to check that in respect of any Northbound sell orders given by an Exchange Participant, the relevant Exchange Participant holds sufficient and available China Connect Securities to be able to fill such Northbound sell orders. Pre-Trade Checking will be carried out prior to the start of each Trading Day.

Accordingly, you may be unable to execute Northbound sell orders due to Pre-Trade Checking related requirements.

Your attention is drawn to the provisions set out in Clause 8 (Compliance with Pre-Trade Checking Requirements) of this Schedule. Note in particular that you may be unable to execute a sell order of China Connect Securities if there has been a delay or failure for whatever reason in the transfer of the relevant China Connect Securities to any clearing account of us or if for any other reason we consider that there is or may be non-compliance with any China Connect Laws.

Any risk, loss or cost resulting from non-compliance or potential non-compliance with Pre Trade Checking and/or the relevant China Connect Laws or China Connect Rules shall be borne by you.

3.         Risks of settlement and trading arrangements

China Connect Market will open on days when both the Mainland and Hong Kong stock markets are open for trading. Northbound China Connect Securities will be settled on T day and money will be settled on T+1 day. You shall note the settlement day of China Connect Securities. Given the differences in public holidays and working days between Mainland and Hong Kong, it is possible that the China Connect Market is closed and you cannot trade in A-shares while the A-shares market is open for trading. You shall note the business days of China Connect Market. You should consider if you can take on the risk of price fluctuations in the A-share market during the time when China Connect Market is closed. In addition, there is difference in trading hours between the Mainland and Hong Kong stock markets. Trading hours for A-shares under Shanghai Connect and Shenzhen Connect is different from Hong Kong and you shall be aware of such difference.

All trading must be conducted on China Connect Market system i.e. no over the counter or manual trades are allowed. Under the following situations, you cannot buy shares, but can only sell shares on hand through trading system.

(a)                A-shares removed from the list of eligible stocks under China Connect will only be allowed for selling but restricted from further buying. You shall be aware of the change of the list of eligible A-shares.

(b)               If the daily Northbound quota of China Connect Securities is used up, i.e. the daily quota balance of China Connect Securities drops to zero or the daily quota is exceeded during a continuous auction session (for closing call auction for Shenzhen Stock Exchange), no further buy orders will be accepted for the remainder of the day while sell orders will still be accepted. Buying services will be resumed on the next trading day. Buy orders already accepted will not be affected by the daily quota being used up and will remain on the order book of China Connect Market Operator unless otherwise cancelled by the relevant brokers.

(c)                If the used up of daily Northbound quota happens during the opening call auction session, new buy orders will be rejected. However, as order cancellation is common during opening call auction, the daily Northbound trading quota balance may resume to a positive level before the end of the opening call auction. When that happens, the SEHK will again accept Northbound buy orders.

4.         Naked shorting selling is not allowed

Foreign shareholding restriction (including the forced sale arrangement) is in place and we should have the right to “force-sell” your shares upon receiving the forced sale notification from SEHK.

You should fully understand the Mainland rules and regulations in relation to short-swing profits, disclosure obligations and follow such rules and regulations accordingly.

Pre-trade checking is in place so that you must have shares transferred to our CCASS account before the commencement of trading on a trading day if you intend to sell the shares during a trading day.

We may have the right to cancel your orders in case of contingency such as hoisting of Typhoon Signal No 8 (or above), issuance of Black Rainstorm Warning and/or Extreme Condition in Hong Kong.

We may not be able to send in your order cancellation requests in case of contingency such as when SEHK loses all its communication lines with China Connect Market Operator, etc and you should still bear the settlement obligations if the orders are matched and executed.

5.         Restriction on Day Trading

Unless SEHK otherwise determines, day (turnaround) trading is not permitted on the PRC A Share market. If the Client buys China Connect Securities on T day, the Client may be able to sell the China Connect Securities only on or after T+1 day. Due to Pre-Trade Checking requirements, we may process an instruction to sell China Connect Securities that were bought on T day only on or after the applicable cut-off time (as notified to the Client by us from time to time) on T+1 day, subject to the applicable China Connect Laws.

6.         No off-exchange trading and transfers

You, we and any Related Person shall not trade or provide services to facilitate trading of any China Connect Securities otherwise than through the China Connect Market System, and we shall not match, execute or arrange the execution of any sale and purchase instructions or any transfer instructions from you or effect any Non-trade Transfer or settlement of instructions in respect of any China Connect Securities in any manner other than through China Connect in accordance with the China Connect Rules, except in the following circumstances or as otherwise provided by a relevant China Connect Authority:

(a)          stock borrowing and lending of China Connect Shares which are eligible for covered short selling and with a tenor of no more than one month;

(b)         stock borrowing and lending of China Connect Shares which are eligible for satisfying the Pre-Trade Checking requirement, with a tenor of one day (and which is not renewable);

(c)          post-trade allocation of China Connect Securities by a fund manager across the funds and/or sub funds it manages; and

(d)         any other situations specified by the China Connect Markets and China Clear, including but not limited to any Non-trade Transfer as a result or for the purpose of (a) succession; (b) divorce; (c) dissolution, liquidation or winding up of any company or corporation; (d) donation to a charitable foundation; and (e) assisting in any enforcement action or proceedings of any court, prosecutor or law enforcement agency.

7.         Placing Orders

Only limit orders with a specified price are allowed pursuant to the China Connect Laws, whereby buy orders must not be lower than at the current best price and sell orders may be executed at or higher than the specified price. Market orders will not be accepted.

8.         Price Limits of the China Connect Market

China Connect Securities are subject to a general price limit of a ±10% based on the previous Trading Day’s closing price. In addition, China Connect Securities which are on the risk alert board are subject a ±5% price limit based on the previous trading day’s closing price. The price limit may be changed from time to time. All orders in respect of China Connect Securities must be within the price limit. Any orders with a price beyond the price limit will be rejected by the relevant China Connect Market Operator.

9.         China Connect Securities Eligible for Northbound Trading

SEHK will include and exclude securities as China Connect Securities based on the prescribed criteria under the China Connect Laws. We shall not be under any obligation to inform you of any changes to the eligibility of shares for Northbound trading. You should refer to the HKEX website and other information published by the HKEX for up-to-date information.

According to the SSE Rules and SZSE Rules, if any SSE-listed or SZSE-listed company is in the delisting process, or its operation is unstable due to financial or other reasons such that there is a risk of being delisted or exposing investors’ interest to undue damage, the SSE-listed or SZSE-listed company will be earmarked and traded on the risk alert board. Any change to the risk alert board may occur without prior notice. If a China Connect Security which is eligible for China Connect trading at launch of the programme is subsequently moved to the risk alert board, investors under China Connect will be allowed only to sell the relevant China Connect Security and will be prohibited from further buying.

10.     Account Information of Beneficial Owner

The identity of the beneficial owner of China Connect Securities which are the subject of a sell order may need to be disclosed to HKSCC and/or the relevant Mainland China authorities.

11.     No Manual Trade or Block Trade

There will be no manual trade facility or block trade facility for Northbound trading under China Connect.

12.     Amendment of Orders and Loss of Priority

Consistent with the current practice in Mainland China, if an investor engaged in Northbound trading wishes to amend an order, the investor must first cancel the original order and then input a new one. Accordingly, order priority will be lost and, subject to the Daily Quota restriction, the subsequent order may not be filled on the same Trading Day.

13.     Special China Connect Securities

SEHK will accept or designate securities which cease to meet the eligibility criteria for China Connect Securities as Special China Connect Securities (provided that they remain listed on a China Connect Market). In addition, any securities or options (which are not "eligible for China Connect trading") received by you as a result of any distribution of rights or entitlements, conversion, takeover, other corporate actions or abnormal trading activities will be accepted or designated by SEHK as Special China Connect Securities. You will only be able to sell, but not buy, any Special China Connect Securities.

Mainland China and Hong Kong Legal Issues

14.       Disclosure of Interests

Under Mainland China laws, rules and regulations, if you hold or control shares (on an aggregate basis, i.e., including both domestically and overseas issued shares of the same Mainland China Listco (as defined below), whether the relevant holdings are through Northbound trading, QFII/RQFII regime or other investment channels) in a Mainland China incorporated company which is listed on a Mainland China stock exchange (a “Mainland China Listco”) above a certain threshold as may be specified from time to time by the relevant China Connect Authorities, you must disclose such interest within the period specified by the relevant China Connect Authority, and you must not buy or sell any such shares within the period specified by the relevant China Connect Authority. You must also disclose any substantial change in your holding as

required by the relevant China Connect Authority.

Where a Mainland China incorporated company has both H Shares listed on the SEHK and A Shares listed on the relevant China Connect Market, if an investor is interested in more than a certain threshold (as may be specified from time to time) of any class of voting shares (including A Shares purchased through China Connect) in such Mainland China incorporated company, the investor is under a duty of disclosure pursuant to Part XV of the SFO. Part XV of the SFO does not apply where the Mainland China incorporated company has not listed any shares on the SEHK.

It shall be your responsibility to comply with any disclosure of interest rules from time to time imposed by the relevant China Connect Authorities and arrange for any relevant filings.

 

 

15.     Short Swing Profit Rule

Under Mainland China laws, rules and regulations, the "short swing profit rule" requires you to give up/return any profits made from purchases and sales in respect of China Connect Securities of a particular Mainland China Listco if (a) your shareholding in that Mainland China Listco exceeds the threshold prescribed by the relevant China Connect Authority from time to time and (b) the corresponding sale transaction occurs within the six months after a purchase transaction, or vice versa. You (and you alone) must comply with the "short swing profit rule".

16.     Outside China Ownership Limits

You shall comply, with the 10% individual shareholding limit applicable to outside China investors (including Qualified Foreign Institutional Investors and RMB Qualified Foreign Institutional Investors approved under the applicable laws of Mainland China, and other investors using the China Connect Service), and the 30% aggregate shareholding limit in relation to A shares and the related forced sale requirements applicable to foreign investors who invest in China Connect Securities as stipulated in applicable laws of Mainland China including the CSRC regulations concerning Shanghai Hong Kong Stock Connect and Shenzhen Hong Kong Stock Connect. Such limits are subject to change from time to time and we shall not be under any obligation to inform you of any such changes to foreign ownership limits.

17.     Taxation

Prior to investing in China Connect Securities, you are strongly urged to consult your own tax advisers and counsel with respect to the possible Hong Kong and/or Mainland China tax consequences to you of such investment since such tax consequences may differ in respect of different investors.

You will be fully responsible for any Taxes in respect of China Connect Securities including, without limitation, any capital gains tax or other Mainland China taxes, and will indemnify us and any Related Person from and against all Hong Kong and/or Mainland China Taxes which we or any Related Person may incur arising in connection with any China Connect Securities which you hold, trade or otherwise deal in.

We assume no responsibility for advising on or handling any tax issues, liabilities and/or obligations in connection with China Connect, nor will we provide any service or assistance in this regard.

18.     Insider Dealing, Market Manipulation and Other Market Conduct Rule

Northbound trading through the China Connect will be subject to Mainland China laws and regulations prohibiting activities that constitute market manipulation, insider dealing and related offences. The scope of these restrictions may not be the same as equivalent requirements under Hong Kong law. In particular, defenses applicable under Hong Kong market misconduct rules may not be applicable under Mainland China laws and regulations. If you are unfamiliar with Mainland China market conduct requirements and restrictions, you should seek specialist advice before engaging in trading through the China Connect. You confirm that you are not in possession of inside information when trading China Connect Securities or procuring others to do so.

19.     Client Securities Rules

By way of brief background, the Client Securities Rules prescribe how client assets are to be dealt with by all intermediaries and their associated entities. However, as the China Connect Securities traded through China Connect are not listed or traded on the SEHK, the Client Securities Rules will not apply unless otherwise specified by the SFC or any other relevant China Connect Authority.

 

20.     Investor Compensation Fund

You should note that both SSE and SZSE trading under China Connect will be covered by Hong Kong’s Investor Compensation Fund effective from 1 Jan 2020. However, such policy may subject to change from time to time.

21.     Ownership of China Connect Securities

Hong Kong law recognizes the proprietary interest of investors in shares held for them by their broker or custodian in CCASS. Such recognition should apply equally to China Connect Securities held for Hong Kong and overseas investors by the Clearing Participant through HKSCC. In addition, in Mainland China (where China Connect Securities are registered in a securities account opened with ChinaClear in the name of HKSCC), it is expressly stipulated in the CSRC China Connect Rules that HKSCC acts as the nominee holder and the Hong Kong and overseas investors are the beneficial owners of the China Connect Securities. Accordingly, the regulatory intention appears to be that Hong Kong and overseas investors should also have proprietary rights over China Connect Securities under Mainland China laws. You should conduct your own review of the materials published by HKEX on China Connect in relation to the ownership of China Connect Securities and the applicable China Connect Rules as they may be amended and supplemented from time to time. You should also consult your own legal advisers to make your own assessment of your rights as a Northbound investor in China Connect Securities.

Clearinghouse Risk

22.     Risk of China Clear Default

China Clear has established a risk management framework and measures that are approved and supervised by the CSRC. Pursuant to the General Rules of CCASS, if China Clear (as the host central counterparty) defaults, HKSCC may (but shall have no obligation to) take any legal action or court proceeding to seek recovery of the outstanding China Connect Securities and monies from China Clear through available legal channels and through China Clear’s liquidation process, if applicable. HKSCC will in turn distribute the China Connect Securities and/or monies recovered to Clearing Participants on a pro rata basis as prescribed by the relevant China Connect Authorities. We in turn will be distributing China Connect Securities and/or monies to the extent recovered directly or indirectly from HKSCC. Although the likelihood of a default by China Clear is considered to be remote, you should be aware of this arrangement and of this potential exposure before engaging in Northbound trading.

23.     Risk of HKSCC Default

Our provision of services pursuant to these Agreement Terms also depends upon the performance by HKSCC of its obligations. Any action or inaction of the HKSCC or a failure or delay by the HKSCC in the performance of its obligations may result in a failure of settlement of China Connect Securities and/or monies in connection with them and you may suffer losses as a result. Neither we nor any Related Persons shall have any responsibility or liability for any such losses.

Other Operational Issues

24.     Scripless Securities

China Connect Securities are traded in scripless form and accordingly, China Connect Securities may not be physically deposited into and/or withdrawn from CCASS.

25.     Client Error

Neither we nor any Related Person shall be liable for any loss, damage or expense or consequential loss, damage or expense suffered by an investor as a result of any trading based on the investor’s instructions. We will not be able to unwind any trade, and investors should also take note of the settlement arrangements in respect of China Connect Securities under China Connect, including but not limited to quota restrictions. The China Connect Rules generally prohibit any off-exchange trading or transfers. However transfers may be permitted between you and us to rectify a trade in limited circumstances, although there is a lack of clarity as to the circumstances in which such transfers may be permitted. We shall have absolute discretion to determine whether to conduct any transfer to rectify any error trade and shall have no obligation to do so. Neither we nor any Related Person shall have any liability for any losses which may result directly or indirectly from such errors or any refusal to conduct a transfer to correct an error trade.

26.     Retention of Information

You acknowledge and accept that we will be required under the China Connect Rules to keep records for a period of no less than 20 years of (a) all orders and trades executed on your behalf, (b) any instructions received from you; (c) your account information in relation to Northbound trading; and (d) all relevant information concerning margin trading and stock borrowing and lending of any China Connect Securities (including, without limitation, in respect of any such margin trading, the relevant securities margin trading arrangement and the funds provided).

27.     China Connect Market System

SEHK or the SEHK Subsidiary (after consulting with SEHK) may, under certain circumstances as specified in the SEHK rules and/or whenever the SEHK determines that it is appropriate and in the interest of a fair and orderly market to protect investors, temporarily suspend or restrict all or part of the order-routing and related supporting services with regard to all or any Northbound trading of China Connect Securities, and for such duration and frequency as SEHK may consider appropriate. You will not be able to buy or sell China Connect Securities on SEHK through China Connect during any period in which trading of China Connect Securities is suspended. In particular, you should note that while trading of China Connect Securities is suspended by the SEHK, trading of such China Connect Securities may continue on SSE and/or SZSE. You may remain exposed to fluctuations in the price of China Connect Securities caused by trading on SSE and/or SZSE during the period when trading of such China Connect Securities is suspended by SEHK.

SEHK has absolute discretion to change the operational hours and arrangements of the China Connect Service at any time and without advance notice, whether on a temporary basis, due to operational needs, inclement weather, under emergency situations or otherwise. Moreover, SEHK or the SEHK Subsidiary (with the agreement of SEHK) may cease the provision of the China Connect Northbound trading service permanently. Such suspension, restriction or cessation will affect our ability to accept and process your orders and you are advised to refer to the HKEX website and other information published by the HKEX for up-to-date information. There can be no assurance that your orders will be accepted or processed, notwithstanding that China Connect Securities may be traded through other channels including, without limitation, by PRC investors on the SSE and/or SZSE. Further, the SEHK rules state that where any H Shares with corresponding A Shares eligible as China Connect Securities are suspended from trading on SEHK, but the corresponding A Shares are not suspended from trading on the SSE, the service for routing the China Connect sell orders and China Connect buy orders for such A Shares to the SSE for execution will normally remain available. However, SEHK may, in its discretion, restrict or suspend such service without prior notice and your ability to place sell orders and buy orders may be affected.

The China Connect Market Systems are new platforms for trading of China Connect Securities under China Connect. We provide trading services based on the China Connect Market System which is operated by the relevant China Connect Market Operator. We are not responsible for any delay or failure caused by the China Connect Market Systems and investors accept all risks arising from trading China Connect Securities through the China Connect Market Systems. Neither we nor any Related Person shall be responsible or held liable for any loss or damage directly or indirectly suffered by you arising from or in connection with the China Connect Service or the CSC through Northbound trading including, without limitation, the following:

(a)       a suspension, restriction or cessation of the China Connect Service or the CSC, or any inability to access or use the CSC or the China Connect Service;

(b)      any special arrangement put in place or any action, step or measure taken or not taken to deal with an emergency or contingencies, including but not limited to the cancellation of any or all China Connect orders input by Exchange Participants;

(c)       any suspension, delay, interruption or cessation of trading of any China Connect Securities on SSE or SZSE;

(d)      any delay, suspension, interruption or order cancellation of any China Connect Securities as a result of the hoisting of a Typhoon Signal No. 8 or above or the issuance of the Black Rainstorm Warning in Hong Kong;

(e)      any delay or failure to route any China Connect orders or any delay or failure to send any order cancellation requests or to provide the China Connect Service due to any system, communication or connection failure, power outage, software or hardware malfunction or other events beyond our control or the control of SEHK, us or a Related Person;

(f)        any China Connect order which we have requested to be cancelled not being cancelled for any reason whatsoever;

(g)       in the event that SEHK or SSE or SZSE requires that we reject any order for China Connect Services;

(h)      any delay, failure or error of any China Connect Market System or any system upon which we, the SEHK Subsidiary or a Related Person is reliant in providing the China Connect Service; and

(i)         any delay or failure to execute, or any error in matching or executing, any China Connect order due to reasons beyond the control of SEHK, HKEX, the SEHK Subsidiary, us or any Related Person, including but not limited to any action or decision taken or made, or not taken or made, by any China Connect Authority or any other relevant governmental or regulatory body.

If there is any delay or failure to send any order cancellation requests in any circumstance described in paragraph (e) above, you shall, in the event such order is matched and executed, remain responsible for fulfilling any settlement obligations in respect of such transaction. You acknowledge that HKEX, SEHK, SEHK Subsidiary, SSE, the subsidiary of SSE and their respective directors, employees and agents are not responsible or held liable for any such losses.

28.     Operational Hours

SEHK has absolute discretion to determine from time to time the operational hours of the China Connect service, and will have absolute discretion to change the operational hours and arrangements of the China Connect service at any time and without advance notice whether on a temporary basis or otherwise. We shall not be under any obligation to inform you of any such determinations by the SEHK as to the operational hours of the China Connect Service. Moreover, SEHK or an SEHK Subsidiary (with the agreement of SEHK) may cease the provision of China Connect Northbound trading service permanently. Such suspension, restriction or cessation will affect our ability to accept and process your orders and you are advised to refer to the HKEX website and other information published by the HKEX for up-to-date information.

29.     Margin Trading

Subject to certain conditions prescribed by the China Connect Authorities, Hong Kong and overseas investors may conduct margin trading in China Connect Securities determined by the relevant China Connect Authorities to be eligible for margin trading ("Eligible Margin Trading Securities"). The HKEX will from time to time publish a list of Eligible Margin Trading Securities. Each of the China Connect Market Operators may suspend margin trading activities in any specific A Share if the volume of margin trading activities in such A Share exceeds a threshold determined by such China Connect Market Operator and resume margin trading activities when the volume of margin trading activities drops below a prescribed threshold. Where SEHK is notified by a China Connect Market Operator that a suspension or resumption involves a security on the list of Eligible Margin Trading Securities, the HKEX will disclose such information on its website. In such circumstances, any margin trading (except for margin trading in respect of China Connect Securities buy orders) in the relevant China Connect Security shall be suspended and/or resumed accordingly. Each of the China Connect Market Operators reserves the right to require, at some future date, for margin trading orders to be flagged when routed to China Connect. Neither we nor any Related person shall have any obligation to update you in respect of the list of Eligible Margin Trading Securities or any restrictions or suspensions in respect of margin trading from time to time.

30.     Rights Issuances

Where you receive any form of entitlement security from the issuer of a China Connect Security, if such entitlement security:

(a)    is a China Connect Security, you will be permitted to buy and sell the entitlement security through China Connect;

(b)   is not a China Connect Security but is a RMB denominated security listed on the SSE or SZSE, you may be allowed to sell the entitlement security through China Connect but will not be permitted to buy such entitlement security;

(c)    is an SSE-listed security or SZSE-listed security but is not traded in RMB, you will not be allowed to buy or sell the entitlement security through China Connect; and

(d)   is not listed on the SSE or SZSE, you will not be allowed to buy or sell the entitlement security on China Connect unless and until appropriate arrangements (if any) have been provided by HKSCC. It is possible that no such alternative arrangements will be provided.

31.     Other requirements

We may forward your identity to SEHK which may further forward to China Connect Market Operators for surveillance and investigation purposes. If the China Connect Market Operator Rules are breached, or the disclosure and other obligations referred to in the China Connect Market Operator Listing Rules are breached, China Connect Market Operator has the power to carry out an investigation, and may, through SEHK, require us to provide relevant information and materials and to assist in its investigation.

SEHK may upon China Connect Market Operators’ request, require us to reject orders from you. You need to accept the risks concerned in Northbound trading, including but not limited to prohibition of trading China Connect Securities, being liable or responsible for breaching the China Connect Market Operators Listing Rules, China Connect Market Operators Rules and other applicable laws and regulations.

China Connect Market Operators may request SEHK to require us to issue warning statements (verbally or in writing) to you, and not to extend China Connect service to you. HKEX, SEHK and its Subsidiary, China Connect Market Operators and its Subsidiary and their respective directors, employees and agents shall not be responsible or held liable for any loss or damage directly or indirectly suffered by us, you or any third parties arising from or in connection with Northbound trading or the China Connect Market system.

32.     Odd Lot Trading

Odd lot trading in China Connect Securities is available only for sell orders and all odd lots must be sold in one single order. A board lot order may be matched with different odd lot sell orders, resulting in odd lot trades. Board lot and odd lot orders are matched on the same platform on China Connect and subject to the same share price. The maximum order size is 1 million shares and the tick size is uniformly set at RMB0.01.

33.     Short Selling

Covered short selling of China Connect Securities may be available  provided such covered short selling satisfies the requirements specified by the relevant China Connect Authorities, including that short selling orders are only in respect of China Connect Securities designated as eligible for short selling, are appropriately flagged as such and that they are subject to an uptick rule. However, naked short selling of China Connect Securities is prohibited. The China Connect Authorities may also suspend the ability to engage in short selling of any China Connect Security if the volume of short selling activity exceeds thresholds prescribed by the relevant China Connect Market. You will be fully responsible for understanding and complying with short selling requirements as in effect from time to time and for any consequences of non-compliance.

34.     RMB Conversion

Any conversion of any currency into RMB pursuant to Clause 9 Settlement and Currency Conversion of Schedule of the China Connect Terms and Conditions may be subject to conversion limits. Settlement of a Northbound buy order may be delayed and/or fail if there is a delay in converting the relevant currency into RMB. Any risk, loss or cost resulting from any such delay or failure of settlement shall be borne by you.

35.     Stock Borrowing and Lending

Stock borrowing and lending are permitted for eligible China Connect Securities as specified by the relevant China Connect Market for the purpose of (a) covered short selling and (b) satisfying the Pre-Trade Checking requirement. Stock borrowing and lending of eligible China Connect Securities will be subject to restrictions set by SEHK and the relevant China Connect Market, including but not limited to the following:

(a)    stock borrowing and lending agreements for the purpose of covered short selling shall have a duration of not more than one month;

(b)   stock borrowing and lending agreements for the purpose of satisfying the Pre-Trade Checking requirement shall have a duration of not more than one day (and roll-over is not permitted);

(c)    stock lending will be restricted to certain types of persons to be determined by the relevant China Connect Market; and

(d)   stock borrowing and lending activities will be required to be reported to SEHK.

The relevant China Connect Market will determine a list of China Connect Securities eligible for stock borrowing and lending. Special China Connect Securities are not eligible for stock borrowing and lending for the purpose of covered short selling (but are eligible for the purpose of satisfying the Pre-Trade Checking requirement).We will be required to file a monthly report to the SEHK providing details of our stock borrowing and lending activities with respect to China Connect Securities. This may include (amongst others) details of the borrower, lender, amount of shares borrowed/lent, amount of shares outstanding and date of borrowing/returning.

Where the prescribed proportion of stock borrowing and lending of any China Connect Security exceeds the limit prescribed by the relevant China Connect Market, such relevant China Connect Market may suspend stock borrowing and lending of such China Connect Security and require the relevant SEHK Subsidiary to suspend placement of covered short selling orders relating to such China Connect Security. If and when the prescribed proportion of stock borrowing and lending falls below the prescribed limit, the relevant China Connect Market may resume stock borrowing and lending of such China Connect Security and notify the relevant SEHK Subsidiary that it may resume acceptance of covered short selling orders relating to such China Connect Security.

Investors are advised to refer to the relevant provisions from time to time governing stock borrowing and lending of China Connect Securities under the China Connect Rules and the applicable China Connect Laws. We shall have no obligation to update the Client in respect of any suspension of stock borrowing and lending or any change to the relevant China Connect Rules or the applicable China Connect Laws.

 

36.     Risks associated with trading of ChiNext Shares

The trading of ChiNext Shares is subject to the risks associated with the Shenzhen Stock Exchange ChiNext market, including but not limited to such risks arising from the following:

(a)    volatility and overvaluation of the share price;

(b)   the less stringent requirements on profitability and share capital of the ChiNext market (compared to the main board markets in Mainland China), the ChiNext market listed companies’ business is unstable, and less resilient against market and industry risks;

(c)    given the technological focus of the companies listed on the ChiNext market, such companies are more susceptible to technical failures in their respective business areas; and

(d)   conventional valuation methods may not be entirely applicable to companies listed on the ChiNext market due to the high-risk nature of the relevant industries.

Only Institutional Professional Investors are allowed to place orders with the Company to buy or sell ChiNext Shares which are accepted as China Connect Securities (other than Special China Connect Securities which are eligible for sell orders only) through the use of China Connect Services.

37.     Risks associated with trading of STAR Shares

Please refer to the standard Risk Disclosure Statement in the Investor Eligibility Implementing Measure of STAR Market (上海證券交易所科創板股票風險揭示書必備條款)for risk associated with STAR Shares, as amended, supplemented or updated from time to time. Below is a non-exhaustive list:

(a)    the rules and guidance on listing, trading, disclosure and other matters of the STAR Market vary much from those of the SSE main board. For example, on the listing requirements, lower net profit and revenue requirements will apply for company seeking IPO and listing on the STAR Market. Different trading arrangements will apply for the trading of companies listed on the STAR Market (the “STAR companies”), such as daily price limit, minimum order size and maximum order size;

 

(b)    the delisting standards of the STAR Market are different from those of the SSE main board. There are more situations that will lead to the delisting of STAR companies. STAR companies have greater exposure to the risk of being delisted, and such delisting process may be speeded up;

 

(c)    STAR companies are generally in an early stage of development and have a shorter history. They are usually smaller in scale, have less stable operations, and are less resilient against market risks and industry risks. Although they may have higher growth potential and leverage more on technical innovations, their future performance particularly those without a profit track record is susceptible to great uncertainty;

 

(d)   the share prices of STAR companies may fluctuate largely and frequently due to changing market conditions, investor speculations, inconsistent financial results, etc. The unstable financial result also adds the difficulty to the company valuations; and

 

(e)   there is higher degree of uncertainty whether a STAR company is able to convert its technical innovations into physical products or services. When the industry is experiencing rapid technological development and replacement, its product may be obsolete and may not survive in the market.

 

In light of the above, you should seek independent professional advice if you are uncertain of the nature and risks involved in trading of STAR Shares.

38.     Risks associated with the Circuit Breaker mechanism

The lifting of a Circuit Breaker during a continuous auction session of any China Connect Market Trading Day may result in trades being executed through call auction. Unless otherwise determined by the SEHK, where the Circuit Breaker Provisions allow orders in respect of China Connect Securities to be cancelled requests through the Stock Connect during the period when a Circuit Breaker is in effect. No Stock Connect order is regarded as cancelled unless and until a cancellation confirmation has been issued by the relevant China Connect Market system.

The implementation of the circuit breaker mechanism has been suspended since 8 January 2016. You should take note of any further developments. Details of the circuit breaker mechanism may be found in SSE’s and SZSE’s websites.

Other risks associated with investing in China Connect Securities

39.     General Mainland China related risk

Mainland China is an emerging market that possesses one or more of the following characteristics: a certain degree of political instability, relatively unpredictable financial markets and economic growth patterns, a financial market that is still at the development stage or a weak economy. Emerging markets investments usually result in higher risks such as event risk, political risk, economic risk, credit risk, currency rate risk, market risk, liquidity/gapping risk, regulatory/legal risk, trade settlement, processing and clearing risks and bondholder/shareholder risk.

 

40.     General legal and regulatory risk

You must comply with all China Connect Laws and China Connect Rules. Furthermore, any change in any China Connect Laws or China Connect Rules may have an impact on the market sentiment which may in turn affect the performance of China Connect Securities. It is impossible to predict whether such an impact caused by any such change will be positive or negative for China Connect Securities. In the worst case scenario, you may lose a material part of your investments in China Connect Securities. In addition, any litigation or other legal actions brought before the courts in Mainland China will be subject to Mainland China laws, rules and procedures, which are not the same as those which apply to the courts in Hong Kong.

41.     Currency risk

RMB is subject to foreign exchange controls and restrictions. It may be difficult for investors to convert RMB into other currencies or vice versa at any specific time, and conversion will be subject to conversion costs and such costs and timings for conversion may not be of your preference. The value of RMB against Hong Kong dollars or other foreign currencies may be affected by a wide range of factors. There is no guarantee that RMB will not depreciate. A depreciation of RMB may result in a decrease in the market value of RMB securities and the realization price of RMB securities. There are also significant restrictions on the remittance of RMB into and out of the PRC. The liquidity and trading price of China Connect Securities may be adversely affected by the limited availability of RMB outside the PRC and restrictions on the conversion of RMB. These factors may affect the liquidity of RMB for investors and accordingly adversely affect the market demand for China Connect Securities.

 

PART V – DATA PRIVACY POLICY

 

1.        As a client of TBHK (the “Client”), it is necessary from time to time for the Client to supply his/her personal data (“Personal Data”), within the meaning ascribed in the Personal Data (Privacy) Ordinance (Chapter 486 of the laws of Hong Kong) (the “Privacy Ordinance”) to TBHK or its Affiliates when opening or maintenance of the Accounts, or in the establishment, continuation or provision of investment, dealing or related Services.

 

2.        Failure to supply Personal Data may result in TBHK being unable to open or maintain Accounts or establish, continue or provide investment, dealing or related Services.

 

3.        Personal Data may also be collected in the ordinary course of continuation of the business relationship with TBHK and/or its Affiliates.

 

4.        Subject to the provisions of the Privacy Ordinance, any Personal Data may be used for the following purposes:

(a)      the daily operation of the services provided to the Client;

(b)      conducting credit and/or AML checks;

(c)       ensuring ongoing credit worthiness and AML risk level of the Client;

(d)      marketing investment, dealing or related services or products (please see further details in paragraph 8 below);

(e)      supporting any statements made in any documents in connection with the Services of TBHK;

(f)        assisting other relevant parties, professionals, institutions or relevant regulatory authorities to verify certain facts in connection with the Services of TBHK;

(g)      meeting the requirements to make disclosures under the requirements of any Applicable Laws and Regulations binding on TBHK;

(h)      forming part of the records of the recipient of the data as to the business carried on by it; and

(i)        any other purposes relating to or incidental to any of the above.

 

5.        TBHK will keep Personal Data confidential, but TBHK may provide Personal Data to the following persons in furtherance of the purposes set in the above paragraph 4:

(a)      any agent or third party service provider who provides services to TBHK in connection with the operation of its business;

(b)      an appropriate person under a duty of confidentiality to TBHK including any of its Affiliate which has undertaken to keep such information confidential;

(c)       any person or institution with which the Client has or proposes to have dealings;

(d)      credit reference agencies and debt collection agencies (in the event of default payment);

(e)      any regulatory authorities or exchanges which relate to or govern any business of TBHK and any of its Affiliate;

(f)        any assignee, transferee, delegate, successor or person to whom the account of the Client is transferred and the authorized person of the Client; and

(g)      any of TBHK’s actual or proposed assignee or participant or sub participant or transferee.

 

6.        The Personal Data may be transferred to any place outside Hong Kong, whether for the processing, holding or use of such data outside Hong Kong, and also to service providers which offer services to any TBHK’s Affiliate in connection with the operation of its business.

 

7.        To the extent permitted by law, the Personal Data collected by TBHK from time to time may be used and disclosed in accordance with this Data Privacy Policy.

 

8.        Use of Personal Data in Direct Marketing

TBHK intends to use your Personal Data in direct marketing and we require your consent (which includes an indication of no objection) before we can use your Personal Data for this purpose. Your provision for this purpose is voluntary. In this connection, please note that:

(a)      your name, contact details, products and services portfolio information, transaction pattern and behavior, financial background and demographic data held by TBHK from time to time (“Marketing Personal Data”) may be used by TBHK in direct marketing.

(b)      the following classes of services, products and subjects may be marketed:

i.  financial, insurance, securities, commodities, investment and related services and products and facilities;

ii. reward, loyalty or privileges programmes in relation to the class of marketing subjects as referred to in paragraph 8.b.i above;

iii. services and products offered by TBHK’s co-branding partners (the names of such co-branding partners can be found in the application form(s) for the relevant services and products, as the case may be) in relation to the class of marketing subjects as referred to in paragraph 8.b.i above; and

iv. donations and contributions for charitable and/or non-profit marking purposes;

(c)       the above services, products and subjects may be provided or (in the case of donations and contributions) solicited by TBHK and/or:

i. any of TBHK’s Affiliate;

ii. third party financial institutions, insurers, securities, commodities and investment services providers;

iii. third party reward, loyalty, co-branding or privileges programme providers;

iv. co-branding partners of TBHK (the names of such co-branding partners can be found in the application form(s) for the relevant services and products, as the case may be); and

v. charitable or non-profit making organization;

(d)      In addition to marketing the above services, products and subjects itself, TBHK also intends to provide the Personal Data described in paragraph 8.a above, whether such provision is for gain or not, to all or any of the persons described in paragraph 8.c above for use by them in marketing those services, products and subjects described in paragraph 8.b above (in respect of which TBHK may or may not be remunerated), and TBHK requires your written consent (which includes an indication of no objection) for those purposes;

TBHK may not use your Marketing Personal Data for direct marketing without your consent. Please indicate your consent when signing Account Opening Form or similar document.

If you give your consent but subsequently change your mind and no longer wish TBHK to use or provide to other persons your Marketing Personal Data for use in direct marketing as described above, you may exercise your opt-out right by notifying TBHK in writing addressed to the Data Protection Officer in paragraph 11 of this policy.

Please note however that the right to make such a request is not applicable to you if the direct marketing is addressed to you in your capacity as a representative of a company or business and is not sent to you in your individual or personal capacity.

 

9.        Personal Information Collection Statement under Hong Kong Investor Identification Regime (HKIDR) and Over-the-counter Securities Transactions Reporting Regime (OTCR)

 

9.1 The Client acknowledges and agrees that TBHK may collect, store, process, use, disclose and transfer personal data relating to the Client (including the Client’s CID and BCAN(s)) as required for TBHK to provide Services to the Client in relation to Securities listed or traded on the Stock Exchange of Hong Kong (SEHK) and for complying with the rules and requirements of SEHK and the Securities and Futures Commission (SFC) in effect from time to time. Without limiting the foregoing, this includes:

a)      disclosing and transferring the Client’s personal data (including CID and BCAN(s)) to SEHK and/or the SFC in accordance with the rules and requirements of SEHK and the SFC in effect from time to time;

b)      allowing SEHK to: (i) collect, store, process and use the Client’s personal data (including CID and BCAN(s)) for market surveillance and monitoring purposes and enforcement of the Rules of the Exchange of SEHK; and (ii) disclose and transfer such information to the relevant regulators and law enforcement agencies in Hong Kong (including, but not limited to, the SFC) so as to facilitate the performance of their statutory functions with respect to the Hong Kong financial markets; and (iii) use such information for conducting analysis for the purposes of market oversight;

c)       allowing the SFC to: (i) collect, store, process and use the Client’s personal data (including CID and BCAN(s)) for the performance of its statutory functions including monitoring, surveillance and enforcement functions with respect to the Hong Kong financial markets; and (ii) disclose and transfer such information to relevant regulators and law enforcement agencies in Hong Kong in accordance with applicable laws or regulatory requirements; and

d)      providing BCAN to Hong Kong Securities Clearing Company Limited (HKSCC) allowing HKSCC to: (i) retrieve from SEHK (which is allowed to disclose and transfer to HKSCC), process and store the Client’s CID and transfer the Client’s CID to the issuer’s share registrar to enable HKSCC and/ or the issuer’s share registrar to verify that the Client has not made any duplicate applications for the relevant share subscription and to facilitate IPO balloting and IPO settlement; and (ii) process and store the Client’s CID and transfer the Client’s CID to the issuer, the issuer’s share registrar, the SFC, SEHK and any other party involved in the IPO for the purposes of processing the Client’s application for the relevant share subscription or any other purpose set out in the IPO issuer’s prospectus.

 

9.2 The Client also agrees that despite any subsequent purported withdrawal of consent by the Client, the Client’s personal data may continue to be stored, processed, used, disclosed or transferred for the above purposes after such purported withdrawal of consent.

 

9.3 Failure to provide TBHK with the Client’s personal data or consent as described above may mean that TBHK will not, or will no longer be able to, as the case may be, carry out the Client’s trading Instructions or provide the Client with securities related services (other than to sell, transfer out or withdraw the Client’s existing holdings of Securities, if any).

 

“BCAN” means a “Broker-to-Client Assigned Number”, being a unique identification code in the format prescribed by SEHK, generated by a relevant licensed or registered person in accordance with SEHK’s requirements.

 

“CID” means the “Client Identification Data”, the following information in relation to a client to whom a BCAN is assigned: (i) the full name of the client as shown in the client’s identity document; (ii) the issuing country or jurisdiction of the identity document; (iii) the identity document type; and (iv) the identity document number.

 

10.     In accordance with the terms of the Privacy Ordinance, any individual has the right to:

(a)      check whether TBHK holds data about him/her and access to such data;

(b)      require TBHK to correct any data relating to him/her which is inaccurate;

(c)       be given reasons if a request for access or correction is refused, and object to any such refusal;

(d)      ascertain TBHK’s policies and practices in relation to data and be informed of the kind of personal data held by TBHK; and

(e)      in relation to customer credit, request to be informed which items of Personal Data are routinely disclosed to credit reference agencies or debt collection agencies and be provided with further information to enable the making of an access and correction request to the relevant credit reference agency or debt collection agency.

 

11.     In accordance with the Privacy Ordinance, TBHK has the right to charge a reasonable fee for the processing of any data access request. All requests for access to data or correction of data (when client considers that his/her Personal Data, supplied by the TBHK following a data access request, are inaccurate) or for information regarding policies and practices and kinds of data held or for exercising your opt out right relating to direct marketing should be addressed as follows: Data Protection Officer, 1/F, FWD Financial Centre, 308 Des Voeux Road Central, Hong Kong.