1. Key information
1.1. Elev8 Markets is an Investment Dealer (Full Service Dealer excluding Underwriting) regulated by the Financial Services Commission ('FSC') in Mauritius under the license number GB21027161 (hereinafter referred to as the 'Company').
1.2. This Risk Disclosure is designed to provide you with the information you need about the nature and material risks associated with the products and services offered by the Company. It is intended to help you understand those risks before deciding whether to trade. It does not constitute investment, financial, legal, or tax advice.
1.3. The Company provides its services subject to the Securities Act 2005, applicable FSC rules, codes and guidance, its licence conditions, and other applicable laws of Mauritius, in each case as amended. Nothing in this document limits any right or obligation that cannot lawfully be excluded.
2. Risk warning and important considerations
2.1. Trading contracts for difference (hereinafter referred to as 'CFD') may not be suitable for all investors and involves a high risk of loss as well as the potential for profit. Movements in the price of the contract's underlying asset (such as foreign exchange rates, commodity prices, or indices) are influenced by various unpredictable factors of global origin. Under normal circumstances, the maximum loss you may suffer from your trading activities is limited to your account balance, as the Company generally applies negative balance protection by restoring a negative account balance to zero. However, this protection is subject to the Customer Agreement and may not apply where the Company reasonably determines that the negative balance resulted from fraudulent or intentional conduct, or from a breach of the Customer Agreement, on the part of the Customer.
2.2. CFDs are considered speculative assets which are highly leveraged and carry significantly greater risks than other investments. You should not invest in CFD assets unless you understand their nature and are comfortable with the risks.
2.3. CFD trading of currency pairs, equity indices, metals, commodities, and other underlying assets (in this notice referred to as a 'Transaction') carries a high risk to your capital. You should not engage in this form of investing unless you fully understand the nature of the Transaction you are entering and the true extent of your exposure to the risk of loss. Your profit and loss will vary depending on the fluctuations in the price of the underlying assets on which your Transaction is based.
2.4. Before engaging in CFD trading, consider carefully whether such investment instruments are suitable for you in light of your circumstances, financial resources, and investment objectives. In considering whether to engage in this form of investing, you should be aware of the following:
2.4.1. Leverage. A high degree of leverage is a particular feature of this type of Transaction. As a result, a relatively small movement in the underlying asset's price can have a disproportionate effect on your Transaction. If the underlying market movement is in your favour, you may achieve a significant profit, but an equally small adverse market movement may result in a rapid loss equal to your full account balance. If you decide to engage in margined CFD trading, you must accept this degree of risk.
You may be required to deposit a substantial additional margin at short notice to maintain your position(s). However, the Company is not obliged to notify or contact you when a Margin call occurs. If you do not provide such additional funds within the required time, or if your Margin Level falls below the applicable Stop Out level, the Company will close your open position(s) automatically without prior notice and potentially at a loss. If you are in any doubt regarding our products, you should seek independent professional advice.
2.4.2. Margined CFDs. The purpose of a margined CFD Transaction is to secure a profit or avoid a loss by reference to fluctuations in the price of the underlying asset or an index. In the context of our activities, the underlying asset may be a securities index, exchange rate between two currencies, or CFDs on gold, silver, oil, or other investments. It is an express term of each CFD Transaction that:
- neither you nor we acquire any interest in, or right to acquire, the underlying asset, nor is either of us obliged to sell, purchase, hold, deliver, or receive it
- the rights and obligations of each party under the CFD Transaction are limited to settling the profit or loss resulting from changes in the price of the underlying asset.
The Company may change Margin Requirements without prior notice in the event of a Force Majeure Event, as provided in the Customer Agreement.
2.4.4. Position monitoring. It is your responsibility to monitor your account. Should the net value of the account (cash plus running profits minus running losses) fall below the margin required, we may close some or all of your trades at the price available on the trading platform when the closure is processed. It is your responsibility to ensure that there are sufficient funds and margin on your account at all times.
2.4.5. Market risk. Margined CFD trading relies on the price movements of underlying financial products. You are therefore exposed to similar but magnified risks to holding the underlying assets. In some cases, risks will be greater.
Creating a stop-loss order may limit your loss, but this is not guaranteed, as your losses may be greater in some circumstances. Slippage occurs when a stop loss does not get filled at the exact order price, but slips to a higher or lower price. This may be because the particular underlying asset or index has become unusually volatile for a period of time. When this happens, a stop loss may not be effective, and your position will be closed at the current underlying asset price.
Gapping is when a particular market jumps significantly, resulting in your stop loss being missed and your trade being closed at a much higher or lower price than intended. Accordingly, when you have an open position in a volatile market environment, you must understand the potential impact of these events, as you could be filled at the next available underlying asset price.
Under certain trading conditions, it may be difficult or impossible to liquidate a position. This can occur at times of rapid price movement if the price rises or falls during a single trading session to such an extent that trading is restricted or suspended.
The market spread may also widen substantially at market opening and closing times and ahead of announcements. Consequently, you must ensure that you have sufficient funds in your account to cover this eventuality.
2.4.6. Credit. No credit is extended to you. Neither a variation margin credit allocation nor an initial margin credit allocation constitutes a credit facility.
2.4.7. Counterparty and conflict of interest risk. We are the counterparty to all of your trades. None of our products is listed on an exchange, and no rights, benefits, or obligations arising from them may be transferred to any third party. Although we undertake to provide you with best execution and to act reasonably and in accordance with our published Best Execution Policy and Customer Agreement, any Margined CFDs you open with us must also be closed with us, based on the prices available on our trading platform and on the terms and conditions that you have agreed with us.
Given that the Company acts as the client's counterparty, it may benefit when the client incurs trading losses and may suffer losses when the client makes trading profits. This gives rise to an inherent conflict of interest, which the Company manages in accordance with its Conflicts of Interest Policy and Best Execution Policy.
2.4.8. Segregated accounts. The Company holds Client Money in one or more segregated accounts with licensed financial institutions, separate from its own funds, in accordance with the Financial Services Act, 2007. This does not, however, afford complete protection: while the Company exercises due skill, care and diligence in selecting, appointing, and periodically reviewing these institutions, it cannot guarantee their solvency or creditworthiness. Client Money is pooled with that of other clients, and in the event of the Company's or an institution's insolvency, any distribution of pooled Client Money will be made in accordance with the Insolvency Act 2009 of Mauritius, and you may not recover the full amount held on your behalf. If you deposit collateral with the Company, you should ascertain from the Company how it will be held and dealt with. If the Company, a bank, payment institution, custodian, or other relevant third party becomes insolvent or defaults, recovery may be delayed, and you may not recover the full amount attributable to you. The Company exercises due skill, care and diligence in selecting and reviewing relevant institutions but does not guarantee their continuing solvency or performance.
2.4.9. Financial services compensation scheme. As an FSC-regulated firm, your trading with the Company is not covered under any client compensation scheme under the laws of Mauritius. You should not assume that losses arising from the insolvency or default of the Company will be reimbursed by a public compensation arrangement.
2.4.10. Tax. You take the risk that your trades and any related profits may be or become subject to tax. You are responsible for all taxes and stamp duty in respect of your trades. We do not provide any tax advice to clients, and you are responsible for your own tax affairs.
You should obtain financial, legal, taxation, and other professional advice as necessary prior to entering a CFD Transaction to ensure they are appropriate for your objectives, needs, and circumstances. The taxation consequences of CFD Transactions can be complex and will differ for everyone's financial circumstances. Your tax adviser should be consulted prior to entering into such a Transaction.
2.4.11. Commission, spreads, and other charges. You should review and understand the details of all commissions, spreads, and other charges for which you will be liable prior to trading with the Company. Details of the applicable costs and charges are available on the Company's website.
Where charges are not expressed in monetary terms (such as a bid offer spread), you should understand what such charges are likely to mean in specific monetary terms. When commission is charged as a percentage, it will normally be calculated as a percentage of the total contract value, and not simply as a percentage of your initial payment.
Some types of trades you make may require you to pay financing costs.
Other costs or charges may also apply in specific circumstances, in accordance with the Customer Agreement. Taken together, such costs may exceed any profits on your trades or increase the losses that you may incur.
2.4.12. Technology risk. Trading through an electronic platform carries risks arising from the internet, power, device, server, software and communication failures or delays. Such events may prevent or delay the submission, receipt, modification, cancellation, or execution of an Order.
2.4.13. Currency-conversion risk. Where the currency of your Trading Account differs from the currency of the relevant Instrument, profits, losses, Margin Requirements and other amounts may be affected by exchange-rate movements and applicable currency-conversion charges.
2.4.14. Legal, regulatory and product-restriction risk. Changes in law, regulation, tax, sanctions, market rules, licence conditions, or the Company's approved product offering may require the Company to restrict an Instrument, change leverage or margin, place an account in close-only mode, cancel pending Orders or close positions. Such measures may be taken on short notice where required and may result in loss.
2.4.15. AML/CFT, sanctions and account-restriction risk. The Company is required to conduct customer due diligence, sanctions screening and transaction monitoring. Deposits, withdrawals or trading access may be delayed, rejected, frozen or restricted where verification is incomplete, activity is unusual or suspicious, a sanctions or legal restriction applies, or a competent authority issues a direction or order. Where legally prohibited, the Company may be unable to disclose the reason for a restriction or delay.
2.5. We also recommend that you seek independent advice to ensure the products are appropriate for your particular financial objectives, needs and circumstances. Nothing in this Risk Disclosure should be considered a recommendation to trade CFDs or any other financial instruments. We do not guarantee the investment performance of CFDs or the investment performance of their underlying assets. Past performance is no indication or guarantee of future performance. Use of examples in this Risk Disclosure is provided for illustrative purposes only and does not reflect our actions or determinations or an investor's personal circumstances.
2.6. The distribution of this Risk Disclosure (electronically or otherwise) in any jurisdiction outside Mauritius may be restricted by law. Persons who come into possession of this Risk Disclosure should seek advice on and observe any such restrictions. The information in this Risk Disclosure is not directed at residents in any country or jurisdiction where such distribution or use would be contrary to local law or legislation. You are responsible for observing applicable restrictions, and the Company may decline, restrict or terminate services where required by applicable laws, regulatory requirements, licence conditions or its approved business model.
2.7. Please note that, in case of any inconsistency between this Risk Disclosure and applicable legislation, rules and regulations, the latter shall prevail.