Risk disclosure statements

General Risk Disclosures

This brief statement does not disclose all of the risks and other significant aspects of trading insecurities, futures, options and fund. 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 securities, futures, options and fundis 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.

Risk of securities trading

The prices of securities fluctuate, sometimes dramatically. Theprice of a security may move up or down, and may becomevalueless. It is as likely that losses will be incurred rather thanprofit made as a result of buying and selling securities.

Risk of trading Growth Enterprise Market stocks

Growth Enterprise Market (GEM) stocks involve a high investmentrisk. In particular, companies may list on GEM with neither a trackrecord of profitability nor any obligation to forecast futureprofitability. GEM stocks may be very volatile and illiquid.You should make the decision to invest only after due and carefulconsideration. The greater risk profile and other characteristics ofGEM mean that it is a market more suited to professional and othersophisticated investors.Current information on GEM stocks may only be found on theinternet website operated by The Stock Exchange of Hong KongLimited. GEM Companies are usually not required to issue paidannouncements in gazetted newspapers.You should seek independent professional advice if you areuncertain of or have not understood any aspect of this riskdisclosure statement or the nature and risks involved in trading ofGEM stocks.

Risk of margin trading

The risk of loss in financing a transaction by deposit of collateral issignificant. You may sustain losses in excess of your cash and anyother assets deposited as collateral with our Group. Market conditions may make it impossible to executecontingent orders, such as "stop-loss" or "stop-limit" orders. Youmay be called upon at short notice to make additional margindeposits or interest payments. If the required margin deposits orinterest payments are not made within the prescribed time, yourcollateral may be liquidated without your consent. Moreover, youwill remain liable for any resulting deficit in your account andinterest charged on your account. You should therefore carefullyconsider whether such a financing arrangement is suitable in lightof your own financial position and investment objectives.

Risk of trading Nasdaq-Amex securities at The Stock Exchange of Hong Kong Limited The securities under the Nasdaq-Amex Pilot Program (“PP”) areaimed at sophisticated investors. You should consult our Group and become familiarised with the PP beforetrading in the PP securities. You should be aware that the PPsecurities are not regulated as a primary or secondary listing on theMain Board or the Growth Enterprise Market of the StockExchange of Hong Kong Limited.

Risk disclosure of Investment Funds

Risks are involved in investing in funds and unit trusts. The prices of funds and unit trusts may fluctuate, sometimes dramatically. The price of funds and unit trusts may move up or down, and may become valueless. It is likely that losses will be incurred rather than profits made as a result of buying and selling funds and unit trusts. Past performance is not indicative of future performance. You should carefully read the offering documents for details before making any investment decision.

Risk of trading in Futures

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 Group 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.

2. Risk-reducing orders or strategies The placing of certain orders (e.g. “stop-loss” orders, or “stoplimit” 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.

Risk of trading in Options

1. 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 willconsist 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 unfavorably. 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 sellerholding 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.

Risks of using electronic trading Services

1. Protection of client login passwords The Internet Trading Services are for the sole and exclusive use by our Clients. Clients shall not use or knowingly allow any other person to use the Services for or in connection with any illegal purpose or activity. Client shall exercise reasonable care and diligence in keeping its Customer ID and Password in secrecy. Under no circumstances shall the Client disclose its Customer ID and Password to any other person. Client shall bear the risks of its Customer ID and Password being used by unauthorised persons or for unauthorised purposes.

2. The internet or other electronic telecommunications media unreliability The internet or other electronic telecommunications media are, due to unpredictable transmission congestion and other reasons, an inherently unreliable medium of communication and that such unreliability is beyond ourGroup 's control. There may also be delays or outages in our on-line services system due to the necessity of system upgrades or changes or some other possible causes. As a result of such unreliability, transactions conducted over the internet or via other electronic or telecommunications media are subject to possible failure or delays in the transmission and receipt of instructions for any or all transactions inor other information, and/or possible failure or delays of execution or execution at prices different from those prevailing at the time when Client’s instructions were given.

3. System failure Risk There are risks associated with the system, including the failure of hardware and/or software, and that the result of any such system failure may be that the Client's instruction for any of all transactions in securities is not executed.

4. Unable to cancel an order instruction There are risks of transmission interruption, distortion, omission or blackout, interception of instructions for any or all transactions in investors, as well as of misunderstanding or errors in any communication.

It is not usually be possible to cancel an instruction for any or all transactions in securities, futures and options after it has been given. All instructions given, as understood and acted on by the Group in good faith, shall be irrevocable and binding on the Client whether given by the Client or by any other person purporting to be the Client. OurGroup shall be under no duty to verify the identity or authority of the person giving any such instruction or the authenticity of such instruction apart from verifying the Customer ID and Password submitted.

5. Market data may not be accurate, complete and timely The information and data provided through the internet trading services relating to the markets has been obtained from any exchanges and from other third party service providers. Owing to market volatility, possible delay in data transmission process and other reasons, the information and data may not be accurate, complete, timely and in correct sequence. Thus, the Client acknowledges and agrees that any reliance on such information and data may lead to incorrect investment decisions and/or other actions. The Client shall verify any Information and determine independently market prices and rates for trading purposes before relying or acting on it. This brief statement cannot disclose all risks. You should therefore study the offering materials (including but not limited to any Fact Sheets, Prospectus and/or Offering Memorandum) in connection with the Account or any Transaction therein. You should also independently and without reliance on ourGroup, makes its own judgments on transactions and seek for independent and professional advice if necessary. If there is any inconsistency or conflict between the English and Chinese versions of this Risk Disclosure statement, the English version shall prevail.