Because of your chosen account configuration, the Investment Industry Regulatory Organization of Canada (IIROC) requires you to read by scrolling on the right, and acknowledge your acceptance of this document at the bottom. Please use the scrollbar to read the entire disclosure and when done signify your acceptance by typing your name exactly as shown at the bottom of the page and clicking Continue.
RISK DISCLOSURE STATEMENT
Risk Disclosure Statement for Futures and Options
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
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.
2. Risk-reducing Orders or Strategies.
The placing of certain orders (e.g. "stop-loss" order, where permitted under local law, 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
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 future, 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 future, the seller will acquire a position in a future 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 future 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
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 obligated 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.
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 future, 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.
6. Deposited Cash and Property
You should familiarize yourself with the protections accorded 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 prorated in the same manner as cash for purposes of distribution in the event of a shortfall.
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.
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.
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.
10. Trading Facilities
Most open-outcry and 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 member firms. Such limits may vary; you should ask the firm with which you deal for details in this respect.
11. Electronic Trading
Trading on an electronic trading system may differ not only from trading in an open- outcry market but also 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. Your ability to recover certain losses which are particularly attributable to trading on a market using an electronic trading system may be limited to less than the amount of your total loss.
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.
Agreements & Disclosures - General Agreements & Disclosures
Based on your selected account configuration, you are required to click on the following disclosures and agreements, read them in their entirety and acknowledge your acceptance below.
Agreements & Disclosures - Clearing Agreement
NOTICE AND ACKNOWLEDGEMENT OF CLEARING ARRANGEMENT
1. This Notice applies to Customers who have been introduced to Interactive Brokers ("Interactive") by Heyder Krueger & Kollegen GmbH ("Introducing Broker"). Interactive Brokers and Introducing Broker are parties to a Fully Disclosed Clearing Agreement pursuant to which Interactive performs certain services with respect to your account and other accounts introduced to Interactive by the Introducing Broker.
2. The terms and conditions of the Interactive Brokers Customer Agreement and the Interactive Brokers Margin Agreement apply to your account and are incorporated herein by reference. TO THE EXTENT THAT THIS NOTICE DIFFERS FROM OR SUPERCEDES SPECIFIC PROVISIONS OF THE INTERACTIVE BROKERS CUSTOMER AGREEMENT OR MARGIN AGREEMENT, THIS NOTICE CONTROLS AND IS BINDING ON YOUR ACCOUNT.
3. Responsibilities of Interactive Brokers:
4. Interactive will be responsible for the following services regarding Customer accounts:
1. Obtaining and verifying account information and documentation and opening and closing Customer accounts.
2. Receiving, segregating, safeguarding and delivering Customer funds, securities, and other property.
3. Extending credit to Customer accounts, collecting margin from the accounts, and determining and enforcing credit or margin limits applicable to the accounts.
4. Receiving orders from you or from your Introducing Broker for your account and executing such orders and clearing executed transactions.
5. Providing confirmations and statements to Customers.
6. Accepting instructions regarding voluntary corporate actions (e.g., tender or exchange offers) and accepting instructions with respect to options and securities rights.
5. Responsibilities of Introducing Brokers:
6. Introducing Broker will be responsible for the following services regarding Customer accounts:
1. Introducing Customer accounts to Interactive Brokers and providing Customers with instructions on how to apply for Interactive Brokers accounts.
2. Providing all customer service and technical support and responding to Customer complaints, inquiries and requests.
3. Accepting Customer orders and transmitting them to Interactive for execution (you may also submit orders directly to Interactive through Interactive's order entry software).
4. Providing notice to Customers of commission rates and fees.
7. Commissions and Fees: Introducing Broker is responsible for notifying Customers of all commissions and fees applicable to Customer accounts. Interactive will deduct applicable commissions and fees from Customer accounts. Commission and fee payments owed by Customers may be shared and allocated between Introducing Broker and Interactive as Introducing Broker and Interactive agree from time to time.
8. Customer Service: Introducing Broker is solely responsible for providing all customer service and technical support for your account and for responding to your questions or inquiries concerning your account, your orders and your trading. You should not contact IB customer support directly, and instead you must contact the Introducing Broker. All disputes and issues concerning Interactive's performance of its responsibilities for Customer accounts (such as trading issues, execution questions, margin and credit issues, etc.) will be forwarded to Interactive by the Introducing Broker and Interactive will communicate the resolution to the Introducing Broker (or in exceptional cases, the Customer). INTRODUCING BROKER SHALL HAVE NO AUTHORITY TO BIND INTERACTIVE OR TO ENTER INTO ANY AGREEMENT, UNDERSTANDING OR COMMITMENT GIVING RISE TO ANY LIABILITY OR OBLIGATION OF INTERACTIVE.
9. Orders: Interactive Brokers is authorized to accept orders from you or from your Introducing Broker for your account. Interactive will not contact you to verify or confirm, prior to execution, orders entered for your account by your Introducing Broker. ALL DISPUTES REGARDING ORDERS ENTERED BY YOUR INTRODUCING BROKER ARE BETWEEN YOU AND THE INTRODUCING BROKER. ERRORS IN COMMUNICATIONS OR TRANSMISSIONS OF ORDERS FROM YOUR INTRODUCING BROKER TO INTERACTIVE ARE THE SOLE RESPONSIBILITY OF YOUR INTRODUCING BROKER.
10. Account Information: Introducing Broker is responsible for providing all customer and technical support regarding your account and is therefore authorized to view all information regarding your account. INTRODUCING BROKER'S MISUSE OR DISCLOSURE OF INFORMATION REGARDING YOUR ACCOUNT IS SOLELY THE RESPONSIBILITY OF INTRODUCING BROKER AND INTERACTIVE SHALL BEAR NO LIABILITY FOR ANY CLAIMS ARISING FROM INTRODUCING BROKER'S ACCESS TO YOUR ACCOUNT INFORMATION.
11. No Investment or Tax Advice: You acknowledge that neither Interactive nor its employees or representatives provide any investment, tax or trading advice; nor do they solicit orders. You further acknowledge that neither Interactive nor its employees or representatives advise you or your Introducing Broker on any matters pertaining to the suitability of any order; offer any opinion, judgment or other type of information pertaining to the nature, value, potential or suitability of any particular investment; or review the appropriateness of investment advice or transactions entered by you or by Introducing Broker on your behalf.
12. Interactive does not control, audit or supervise the activities of Introducing Broker or its registered representatives. Neither Introducing Broker nor any of its officers, directors, employees or representatives are employees or agents of Interactive, nor shall they hold themselves out as such.
OCC Risk Disclosure
Because you have specified futures trading permissions, you are required to read by scrolling on the right, & sign the following CFTC Risk Disclosure. Please read the following document and acknowledge your acceptance at the bottom by signing your electronic signature. This industry standard document is written by the U.S. Commodities Futures Trading Commission.
OCC RISK DISCLOSURE STATEMENT AND ACKNOWLEDGEMENTS
OCC Risk Disclosure
I acknowledge that:
1. I have received and carefully read each section of, and the supplements to, the Options Clearing Corporation ("OCC") document "Characteristics and Risks of Standardized Options <http://www.optionsclearing.com/publications/risks/riskchap1.jsp> " (the "OCC Risk Disclosure Document") ;
2. I have received and carefully read the "Special Statement for Uncovered Option Writers" (set forth below);
3. I have received and carefully read the "Disclosure Regarding Interactive Brokers' Procedures for Allocating Equity Option Exercise Notices Assigned by OCC" ("IB Exercise Allocation Disclosure <https://www.interactivebrokers.com/Universal/servlet/Registration_v2.formProgress?s=4003> "); (Requires Adobe Reader. Download Reader.)
4. <https://www.interactivebrokers.com/Universal/servlet/Registration_v2.formProgress?s=4003>
5. I understand the OCC Risk Disclosure Document, the "Special Statement for Uncovered Option Writers" and the IB Exercise Allocation Disclosure, each of which is in a language I fully understand; and
6. If there is any aspect of the OCC Risk Disclosure Document, the "Special Statement for Uncovered Option Writers" or the IB Exercise Allocation Disclosure that I do not understand, I shall consult my independent adviser and obtain a full understanding of such term(s).
Special Statement for Uncovered Option Writers
There are special risks associated with uncovered option writing which expose the investor to potentially significant loss. Therefore, this type of strategy may not be suitable for all customers approved for options transactions.
1. The potential loss of uncovered call writing is unlimited. The writer of an uncovered call is in an extremely risky position, and may incur large losses if the value of the underlying instrument increases above the exercise price.
2. As with writing uncovered calls, the risk of writing uncovered put options is substantial. The writer of an uncovered put option bears a risk of loss if the value of the underlying instrument declines below the exercise price. Such loss could be substantial if there is a significant decline in the value of the underlying instrument.
3. Uncovered option writing is thus suitable only for the knowledgeable investor who understands the risks, has the financial capacity and willingness to incur potentially substantial losses, and has sufficient liquid assets to meet applicable margin requirements. In this regard, if the value of the underlying instrument moves against an uncovered writer's options position, the investor's broker may request significant additional margin payments. If an investor does not make such margin payments, the broker may liquidate stock or options positions in the investor's account, with little or no prior notice in accordance with the investor's margin agreement.
4. For combination writing, where the investor writes both a put and a call on the same underlying instrument, the potential risk is unlimited.
5. If a secondary market in options were to become unavailable, investors could not engage in closing transactions, and an option writer would remain obligated until expiration or assignment.
6. The writer of an American-style option is subject to being assigned an exercise at any time after he has written the option until the option expires. By contrast, the writer of a European-style option is subject to exercise assignment only during the exercise period.
NOTE: It is expected that you will read the booklet entitled CHARACTERISTICS AND RISKS OF STANDARDIZED OPTIONS available from your broker. In particular your attention is directed to the chapter entitled Risks of Buying and Writing Options. This statement is not intended to enumerate all of the risks entailed in writing uncovered options.
Risks of Trading Equity Options and Terms and Conditions for Trading Equity Options
Customers trading equity options understand and agree to the following:
1. Customer understands that trading equity options is highly speculative in nature and involves a high degree of risk.
2. Prior to entering into its first equity options transaction through Interactive Brokers (“IB”), Customer shall acknowledge to IB that Customer has read and fully understood: (a) the current Options Clearing Corporation ("OCC") disclosure document "Characteristics and Risks of Standardized Options" (the "OCC Document") and (b) the "Special Statement for Uncovered Option Writers." Customer agrees to seek clarification of any term, condition or risk contained in either of these documents prior to making such acknowledgment to IB.
3. Customer is financially able to undertake the risks associated with trading equity options and withstand any losses incurred in connection with such trading (including the total loss of premiums paid by Customer for long put and call options, margin requirements for short put and call options, and transaction costs).
4. Among the risks Customer acknowledges are: (a) option contracts are traded for a specified period of time and have no value after expiration; (b) trading halts in the underlying security, or other trading conditions (for example, volatility, liquidity, systems failures) may cause the trading market for an option (or all options) to be unavailable, in which case, the holder or writer of an option would not be able to engage in a closing transaction and an option writer would remain obligated until expiration or assignment.
5. The IB System is an electronic system and is, therefore, subject to unavailability. Customer represents that it has trading arrangements for the placement of Customer's orders and shall use such arrangements in the event that the IB System becomes unavailable. Although the IB System is designed to perform certain automatic functions, IB does not warrant that the IB System will perform as it is designed to, and IB will not have any liability to Customer for losses or damages which result from such failures of performance or unavailability. Subject to the foregoing, Customer acknowledges that the IB System is designed to automatically liquidate Customer positions if Customer's account equity is not sufficient to meet margin requirements.
6. Customer has reviewed and understands the applicable margin requirements for trading equity options. Customers who want to trade equity options agree to the following terms and conditions:
A. Each equity option transaction entered into is subject to the rules and regulations of the Securities & Exchange Commission, the Financial Industry Regulatory Authority, the self-regulatory organizations that regulate IB, the relevant options exchange, and the OCC.
B. Equity options traded in the US are issued by the OCC and Customer shall not, alone or in concert with others, exceed the position and exercise limits imposed by exchange rules and regulations.
C. With certain exceptions, IB will not execute a Customer order to purchase an equity option if Customer does not have equity in its account at least equal to the full purchase price of a put or call option (equity options may not be purchased on margin).
D. Customer shall comply with IB margin requirements in connection with Customer's sale of put and call options.
E. Customers who wish to exercise an option on a particular trading day acknowledge that they must provide specific, written instructions to IB using the procedure specified on the IB website before the Close Out Deadline specified. Customer further acknowledges that, absent receipt of such instructions, IB has no obligation to exercise Customer's option on any given trading day or prior to the expiration of the option. Customer acknowledges that, subject to paragraph H below, OCC will automatically exercise any long equity option held by a Customer that is in-the-money by $.01 or more at expiration, absent specific instructions to the contrary provided by Customer to IB using the procedures specified on the IB website.
F. Customer understands that OCC assigns exercises to clearing firms such as IB and Customer acknowledges that it has read and understands the description of the OCC assignment procedures available on request from the OCC as set forth in Chapter VIII of the OCC Document. Customer acknowledges that, upon assignment, Customer shall be required: (1) in the case of an equity option, to deliver or accept the required number of shares of the underlying security, or (2) in the case of an equity index option, to pay or receive the settlement price, in cash. Customer understands that it may not receive notice of an assignment from IB until one or more days following the date of the initial assignment by OCC to IB and that the lack of such notice creates a special risk for uncovered writers of physical delivery call stock options. Customer acknowledges that it has read and understands this risk as described in Chapters VIII and X of the OCC Document.
G. Customer is responsible for entering an offsetting transaction to close out a Customer position, or to exercise an equity option by written e-mail instruction to IB prior to the expiration date, and Customer's failure to do so may result in the equity option expiring worthless, regardless of the monetary value of the equity option on its expiration date.
H. If, prior to expiration of an option contract, Customer does not have sufficient equity to meet the initial margin requirement for the purchase or sale of the underlying security (the higher of IB’s “house” margin requirements or margin requirements mandated by exchanges or regulators), then IB shall have the option, at its discretion, to: (1) decline to purchase or sell such underlying security for the customer’s behalf (e.g., by filing a Contrary Exercise Notice): OR (2) exercise the option and liquidate the underlying security position which results from the exercise of the option contract. If Customer violates the IB Customer Agreement by failing to close out an open option position prior to expiration, which creates a margin deficiency (e.g., upon exercise or automatic exercise of the option), then Customer shall be liable for resulting losses and costs and shall not be entitled to any profits or gains.
I. In connection with the exercise of a long put option that results in a short position in the underlying stock, Customer acknowledges that: (1) short sales may only be effected in a margin account and are subject to initial and maintenance margin requirements; and (2) if IB is unable to borrow such stock on Customer's behalf or if a lender subsequently issues a recall notice for such stock, then IB, without notice to Customer, is authorized by Customer to cover Customer's short position by purchasing stock on the open market at the then current market price and Customer agrees that it shall be liable for any resulting losses and all associated costs incurred by IB. As noted above, the market value of short stock is treated as a debit item to Customer's IB margin account.
CFTC Risk Disclosure
Because you have specified futures trading permissions, you are required to read by scrolling on the right, & sign the following CFTC Risk Disclosure. Please read the following document and acknowledge your acceptance at the bottom by signing your electronic signature. This industry standard document is written by the U.S. Commodities Futures Trading Commission.
Appendix A to CFTC Rule 1.55(c) - Generic Risk Disclosure Statement
Risk Disclosure Statement for Futures and Options
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
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.
2. Risk-reducing orders or strategies
The placing of certain orders (e.g. 'stop-loss' orders, where permitted under local law, 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
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 future, 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 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 future, the seller will acquire a position in a future 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 future 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
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 obligated 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.
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 future, 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.
6. Deposited cash and property
You should familiarize yourself with the protections accorded 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 or distribution in the event of a shortfall.
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.
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.
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.
10. Trading facilities
Most open-outcry and 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 member firms. Such limits may vary: you should ask the firm with which you deal for details in this respect.
11. Electronic trading
Trading on an electronic trading system may differ not only from trading in an open-outcry market but also 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.
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.
I hereby acknowledge that I have received and understood this risk disclosure statement.
Agreements & Disclosures - Risk Disclosure - Floor/Pit Based Exchanges
To disclose all terms and conditions of being an IBLLC-US customer, please read the Customer Agreement below. Use the scrollbar to read the entire agreement and when done, signify your acceptance by typing your name exactly as shown at the bottom of the page, then clicking Continue.
Certain exchanges to which you may route orders through Interactive Brokers (“IB”) are non-electronic, open outcry market places. On such exchanges, orders submitted via the TWS will be routed to the floor electronically but are thereafter delivered into the trading pits manually and are subject to time disadvantages inherent with such markets. Trades execute when 2 brokers meet in the trading pit and verbally agree on a trade price and other trade details.
Traders acting on these exchanges must be aware of the following:
All order actions (new orders, modifications, cancellations) are subject to delays relating to the delivery process. The delays are usually 30-60 seconds but can last several/many minutes in busy conditions such as at the open or close of the trading session.
Frequent order modifications (price or quantity) will often result in poor executions since a modification requires that the pre-existing order be cancelled and a new order instated. If modifications are submitted faster than they can be processed, there is a strong likelihood of poor or missed executions.
There is no time or price priority for orders. It is possible that an order will not be executed even though trades are reported at, or better than, the expected price.
Market orders may be executed at unfavorable prices. Use of market orders is permitted, but not recommended.
Cancelled orders may be executed. It is not uncommon that the report of an executed order is delayed due to market volume. When the cancel request is sent, the pit broker is then forced to report the status which may be “filled, too late to cancel”.
IB recognizes the limitations of open outcry trading as compared to electronic trading and has designed the TWS system to remove as many of the problems as possible. Nevertheless, traders should not expect a similar performance from the IB brokerage system for floor-traded markets as for electronic markets.
I acknowledge the limitations of floor-traded markets and agree that IB will not be liable for delays and errors outside of its control relating to the manual open outcry trading process.
SNFE Trading Permissions
INTERACTIVE BROKERS LLC AGREEMENT FOR CUSTOMERS TRADING SYDNEY FUTURES EXCHANGE PRODUCTS
The following terms and conditions are required by Sydney Futures Exchange (“SFE” or “Exchange”) Operating Rule 2.2.25 to be in place between Interactive Brokers LLC (“IB”), an SFE Full Participant, and its clients who wish to trade SFE products.
(a) Governing Law and Rules
The Client and IB are bound by the SFE Operating Rules and the customs, usages and practices of the Exchange’s Markets.
(b) Client to Provide Information
In relation to the Client's trading on the Exchange, the Client will upon IB’s request, provide all information and documentation relevant to that trading, to IB and IB is authorised by the Client to provide the information and documentation to the Exchange.
(c) Benefit to IB of Contract Registration with SFE Clearing
Any benefit or right obtained by IB upon registration of a contract with SFE Clearing by way of assumption of liability of SFE Clearing under any contract or any other legal result of such registration is personal to IB and the benefit of such benefit or right does not pass to the Client.
(d) Client only has Rights Against IB
In relation to all trades conducted on the Exchange by IB and all Contracts registered by IB with SFE Clearing the Client has no rights whether by way of subrogation or otherwise, against any person or corporation other than IB.
(e) Margins
Client acknowledges that:
(i) IB may call for payment of Margin such money or property (or Call for the lodgement of Approved Securities in lieu thereof) as IB, in its absolute discretion, feels is necessary to protect itself from the personal obligation incurred by Dealing in Contracts on behalf of the Client.
(ii) should the Client fail to meet the Call (or lodge Approved Securities) then IB may (without prejudice to any other rights or powers under the Agreement) in its absolute discretion, and without creating an obligation to do so, Close Out, without notice, all or some of the Client's Contracts.
(iii) the time for payment of Margins is of the essence and if no other time is stipulated by IB prior to calling a Margin then the Client is required to comply within twenty-four (24) hours.
(iv) liability to pay the Initial Margin accrues at the time the trade is executed regardless of when a Call is made.
(v) liability to pay Margin accrues at the time the Margin comes into existence regardless of when a Call is made.
(vi) the Client is responsible to pay in cash any deficit owing to IB after closure and that if the Client defaults in payment of such deficit, IB may realise any securities held by IB and apply the proceeds against that deficiency.
(f) Appointment of Attorney
Client appoints the Managing Director of SFE Clearing as the Client's attorney to do all things necessary to transfer any Open Position held by IB on the Client's behalf to another SFE Participant where the SFE Participant status of IB has been suspended or terminated.
(g) Exchange Data
Client acknowledges that:
(i) data made available to the Client by access to electronic order entry facilities is not the property of IB and remains the valuable property of the Exchange; and
(ii) the Client is prohibited from publicly displaying, redistributing or re-transmitting the data in any way without having executed a Market Data Distribution Agreement or similar agreement with the Exchange.
(h) Tape Recordings
Client acknowledges that the Client’s telephone conversations with IB can be recorded by IB or the Exchange. The Client is to be given the right to listen to any recording in the event of a dispute or anticipated dispute.
(i) Right to Refuse to Deal
Client acknowledges that IB reserves the right to refuse to Deal on behalf of the Client in relation to any Dealings in Contracts (other than closing out existing Open Positions held in IB’s account on behalf of the Client) or limit the number of Open Positions held on behalf of the Client or both. IB will inform the Client of any refusal at or before the time of the Client placing the order or as soon as possible thereafter.
(j) Termination and Closing Out
Client acknowledges that:
(i) without affecting any existing obligations or liabilities, either the Client or IB may terminate the agreement at any time by giving the other notice in writing to that effect;
(ii) upon termination of the Client Agreement that unless otherwise agreed in writing, IB will Close out all the Client’s Futures Contracts and Close Out, abandon or exercise any Options not yet exercised.
Hong Kong Risk Disclosure
HONG KONG RISK DISCLOSURE STATEMENTS
A. 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.
B. 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.
C. 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.
D. RISK OF TRADING IN 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.
E. RISK 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.
F. 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.
G. 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.
H. 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
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 with which you deal 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 "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
3. Variable degrees 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') options 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 against him. 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 options 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
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.
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 future, 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.
6. Deposited cash and property
You should familiarize 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.
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.
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.
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.
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.
11. Electronic trading
Trading on an electronic trading system may differ not only from trading in an open-outcry market but also 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.
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.
I. DISCLOSURE REGARDING HONG KONG OPTIONS
• Hong Kong options are treated as normal premium options in that IB will not post changes in variation margin (profits or losses) for such options. The profit or loss will be determined at the time a position is closed and will be the difference between the opening and closing transaction prices. You should note that the end profit or loss calculation result remains identical. It is important to note that positions resulting from strategies with combined futures and options legs may require additional collateral to maintain. This is because commodity accounts must maintain a positive cash balance and adverse market movements may cause the futures portion of the strategy to generate negative cash which will not be offset by options price changes.
Regulatory Info and Additional Provisions for Users from Hong Kong
REGULATORY INFORMATION AND ADDITIONAL PROVISIONS FOR USERS FROM HONG KONG & USERS TRADING ON HONG KONG EXCHANGES
Your agreement is with Interactive Brokers' United States office ("IB"). IB wants to make sure that you are aware that:
• As of March 6, 2000, The Stock Exchange of Hong Kong Limited (“SEHK”), Hong Kong Futures Exchange Limited (“HKFE”) and Hong Kong Securities Clearing Company Limited (“HKSCC”) merged under a single holding company, Hong Kong Exchanges and Clearing Limited (“HKEx”). The SEHK Options Clearing House Limited (“SEOCH”) and the HKFE Clearing Corporation Limited are also wholly-owned subsidiaries of HKEx.
• IB is not a member of the HKFE.
• IB is not a member of the SEHK.
• Factual information, including market quotations and other data, is provided as a discretionary courtesy; and IB does not warrant in any fashion, and is not responsible for, the accuracy or timeliness of such information. Reliance on such information is at the Customer's own risk. (See paragraph 25 of the IB Customer Agreement).
• Electronic or computer-based facilities and systems such as those used by IB are vulnerable to disruption or failure. Your ability to make claims or recover losses may be subject to limits on liability imposed by the IB Customer Agreement. (See paragraph 28 of the IB Customer Agreement).
• Because information is being sent to you, and from you, through internet facilities, there will be a time delay with respect to price quotations and data transmission and your orders may not necessarily be executed at the price indicated to you through the internet.
The following "Additional Provisions" are applicable to Users from Hong Kong and Users trading on Hong Kong Exchanges and are in addition to the Provisions of the IB Customer Agreement. To the extent that there is any conflict between the terms of the IB Customer Agreement and the terms of the Additional Provisions, the Additional Provisions shall prevail.
The following definitions are applicable to the Additional Provisions:
• "Agreement" refers to the IB Customer Agreement and these Additional Provisions;
• “Commission” means the Securities and Futures Commission;
• "HKFE" means Hong Kong Futures Exchange Limited;
• "the HKFE Clearing House" means HKFE Clearing Corporation Limited;
• "SEHK" means The Stock Exchange of Hong Kong Limited;
• "SEOCH" means The SEHK Options Clearing House Limited;
• “CCASS” means the Central Clearing and Settlement System operated by Hong Kong Securities Clearing Company Limited;
• “HKSCC” means Hong Kong Securities Clearing Company Limited;
• "IB" means Interactive Brokers LLC, an overseas company registered with the Securities and Futures Commission as a Dealer and also registered in the United States as a broker-dealer with the U.S. Securities and Exchange Commission and a Futures Commission Merchant with the U.S. Commodity Futures Trading Commission;
• "Procedures" means the practices, procedures and administrative requirements prescribed from time to time by the HKEx, HKFE, SEHK, HKFE Clearing House, CCASS/HKSCC or SEOCH, as applicable;
• "the Ordinance" means the Securities and Futures Ordinance, Chapter 571 of the Laws of Hong Kong as amended from time to time;
• "THSHK" means Timber Hill Securities Hong Kong Limited, an entity registered with the Securities and Futures Commission and a member of the SEHK, HKFE, HKFE Clearing House, SEOCH and HKSCC; THSHK is an affiliate of IB.
• "Rules" means the Rules and Regulations of the HKEx, HKFE, SEHK, HKFE Clearing House, CCASS/HKSCC or SEOCH, as applicable, and any amendments, supplements, variations or modifications thereto.
1. These Additional Provisions are subject to and governed by the provisions of the Ordinance and Hong Kong Law.
2. The rules and regulations of the HKEx, HKFE or SEHK as applicable, and the HKFE Clearing House, CCASS/HKSCC or SEOCH, as applicable, shall be binding on the Customer and IB. Those rules and regulations contain provisions which require IB, in certain circumstances, to disclose the name and beneficial identity or such other information concerning Customer as the exchange or Commission may request. Customer agrees to provide such information to IB in compliance with the Ordinance, exchange Rules, Regulations and Procedures or as the exchange or Commission may require. Customer acknowledges that if such information is not provided, the Chief Executive of the exchange may require the closing out of Customer’s positions or the imposition of a margin surcharge on Customer's positions.
3. IB, its affiliates, including THSHK, and their respective directors and/or employees may trade on their own account and, subject to the provisions of the Ordinance, IB and its affiliates may take the opposite position to the Customer's order in relation to any futures/options contract, whether on IB's or its affiliate's own account or for the account of other customers of IB, provided that such trade is executed competitively on or through the facilities of HKFE in accordance with its rules or the facilities of any other commodity, futures or options exchange in accordance with the rules and regulations of the exchanges and clearinghouses governing the relevant markets.
4. Unless otherwise confirmed in writing by IB and agreed to by the Customer and IB, IB is acting solely as broker to any transactions made with IB by the Customer.
5. In all transactions referred to in the Agreement, IB or its affiliates are authorized to engage in proprietary trading and may contract as principal.
6. The Customer submits to the non-exclusive jurisdiction of the Courts of Hong Kong in respect of all disputes, differences and claims relating to or arising out of the Agreement.
7. The Customer is bound by rule 631 of the HKFE which permits the HKFE or Chief Executive of the HKFE to take steps to limit positions or require the closing out of contracts of the Customer who in the opinion of the HKFE or the Chief Executive are accumulating positions which are or may be detrimental to any particular Market or Markets, or which are or may be capable of adversely affecting the fair and orderly operation of any Market or Markets as the case may be. In addition, IB may be required to report information regarding large open positions held by its Customers in accordance with relevant regulations. More information on these requirements can be found in HKFE rules 628 – 633 and the Securities and Futures (Contracts Limits and Reportable Positions) Rules and related guidance notes issued by the Commission.
8. All monies or other properties received by IB from the Customer or from any other person, including the HKFE Clearing House for the account of the Customer in respect of the futures/options contracts transacted on behalf of the Customer, shall be held by IB as trustee, segregated from IB's own assets and paid into a segregated bank account. All monies or other property so held by IB shall not form part of the assets of IB for insolvency or winding up purposes but shall be promptly returned to Customer upon the appointment of a provisional liquidator, liquidator or similar officer over all or any part of IB's business or assets.
9. The Customer hereby authorizes IB to apply any monies, approved debt securities or approved securities which the Customer may pay to IB in order to: (i) meet obligations to the HKFE Clearing House (provided that no withdrawal from the Customer's accounts with IB may be made which would have the effect that the relevant margin requirements or trading liabilities conducted on behalf of any Customer are thereby financed by any other Customer); (ii) pay commission, brokerage, levies and other proper charges for contracts transacted by IB on behalf of the Customer; and/or (iii) make payments in accordance with the Customer's directions (provided that no money may be paid into another account of the Customer unless that account is also a segregated bank account). The Customer acknowledges that IB may apply such monies, approved debt securities or approved securities in or towards meeting IB's obligations to any party insofar as such obligations arise in connection with or incidental to all futures/options contracts transacted on the Customer's behalf. The Customer agrees that IB may retain interest on the Customer's money.
10. In respect of any account of IB, its affiliates, including THSHK, or any other broker acting on their behalf, maintained with the HKFE Clearing House, whether or not such account is maintained wholly or partly in respect of the futures/options contracts transacted on behalf of the Customer and whether or not monies or approved securities paid or deposited by the Customer has been paid to the HKFE Clearing House, as between such entities and the HKFE Clearing House, such entities deal as principal and accordingly no such account is impressed with any trust or other equitable interest in favor of the Customer and the monies and/or approved securities paid to or deposited with the HKFE Clearing House are thereby freed from the trust referred to in paragraph 8, above.
11. In the event that the Customer directs IB to enter into any contract on an exchange or other market on which such transactions are effected in a foreign currency: (i) any profit or loss arising as a result of a fluctuation in the exchange rate affecting such currency will be entirely for the account and risk of the Customer; (ii) all initial and subsequent deposits for margin purposes shall be made in such currency in such amounts as IB may, at its sole discretion, require; and (iii) when such a contract is liquidated IB shall debit or credit the account of the Customer in the currency in which such account is denominated at a rate of exchange (where the relevant contract is denominated in a currency other than that of the account) determined by IB at its sole discretion on the basis of the then prevailing money market rates of exchange.
12. The Customer acknowledges that the HKFE Clearing House may do all things necessary to transfer any open positions held by IB on the Customer's behalf and money and securities standing to the credit of the Customer's account with IB to another member of the HKFE if necessary.
12. LEVIES & COMMISSIONS
• Every contract executed on the floor of the HKFE shall be subject to the charge of an applicable Investor Compensation Fund levy and a levy pursuant to the Ordinance, the cost of both of which shall be borne by the Customer.
• In respect of contracts executed in markets other than those organized by the HKFE, any charges levied on such contracts by the relevant markets shall be borne by the Customer.
• The Customer will pay commission and other charges at rates to be determined by IB and at charges pursuant to Hong Kong law or the rules of the HKFE or other exchanges governing the relevant markets.
13. RULES & LAWS
• All transactions shall be subject to the constitution, rules, regulations, customs, usages, rulings and interpretations, from time to time extant or in force of the HKEx, HKFE or SEHK or other markets as applicable (and of their respective clearing house, if any), where the transactions are executed by IB or IB agents. All transactions under this agreement shall also be subject to any law, rule, or regulation then applicable thereto, including but not by way of limitation, the provisions of the Ordinance, as amended from time to time, and the rules and regulations thereunder.
• All transactions entered between IB and the Customer relating to any money, foreign currency, currency option, currency future, or currency forward contract or foreign exchange contract shall be governed by and subject to all the rules, regulations, orders and laws of the country of the currency or money concerned and those of Hong Kong and/or the by-laws, rules and regulations of the exchange concerned in which the transaction is done.
• All transactions related to futures/options contracts executed in markets other than those organized by the HKFE will be subject to the rules and regulations of those markets and not those of the HKFE, with the result that the Customer may have a markedly different level and type of protection in relation to those transactions as compared to the level and type of protection afforded by the rules of the HKFE.
• No provisions of this Agreement will operate to remove, exclude, or restrict any of your rights or any obligations of IB under Hong Kong law.
14. EXPLANATION OF MARGIN PROCEDURES AND UNILATERAL CLOSING OUT OF CLIENTS' POSITIONS
Margin Procedures
We set out below an explanation of margin procedures and the circumstances under which Customer positions may be unilaterally closed.
• Paragraph 11 of the IB Customer Agreement sets out detailed provisions regarding Margin Requirements.
• IB follows all margin rules laid down by all exchanges on which products are traded on margin.
• Any changes in margin requirements (whether imposed by the exchange or by IB) will be communicated to customers.
• Customers must remember that, in the event of a default, IB may close out the customers' open positions without prior notice to or consent from the customers as provided for by the terms of the Agreement. IB has reserved in the Agreement the right to close out any open positions(s) without notice: (i) when the margins on deposit with IB are exhausted, inadequate in the opinion of IB to protect it against possible price fluctuations or any adverse conditions; or (ii) any other appropriate circumstances. Please Note: IB is required to notify the HKFE (and may be required to report to the HKFE and the Commission particulars of all open positions) if Customer fails to meet two or more successive margin calls or demands for variation adjustments if the total amount in default exceeds HK $150,000.
• No conduct or omission on behalf of IB, nor any agreement purportedly entered into on IB's behalf (save an agreement in accordance with the terms of the Agreement), shall constitute any form of waiver or variation or relaxation of IB's rights to close out customers' positions unilaterally.
• Any steps taken by IB to close out customers' positions unilaterally will be entirely without prejudice to IB's other rights under the Agreement and otherwise, in particular the right to payments from customers of all amounts outstanding.
15. STATEMENT OF PARTICULARS OF APPROVED CONTRACTS
IB and THSHK are licensed to trade in the products approved by the HKEx, HKFE or SEHK, as applicable, from time to time. Contract specifications for the products in question are available on request.
16. If Customer suffers pecuniary loss by reason of IB’s default, the liability of the Investor Compensation Fund will be restricted to valid claims as provided for in the Ordinance and the relevant subsidiary legislation and will be subject to the monetary limits specified in the Securities and Futures (Investor Compensation – Compensation Limits) Rules and accordingly 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.
17. We disclose the following to you: Company Name: Interactive Brokers LLC. Licensed for Dealing in Securities, Dealing in Futures Contracts and Leveraged Foreign Exchange Trading. Central Entity Number (CE Number): AEX264. Staff responsible for your account: The IB Customer Service Desk. Name of IB Responsible Officer / Registered Representative: David E. Friedland CE No.: ACP478.
18. RISK DISCLOSURE STATEMENT FOR EQUITY SECURITIES
• Customer acknowledges that the price of securities can and does fluctuate, and that any individual security may experience downward movements, and under some circumstances even become valueless. Customer appreciates therefore that there is an inherent risk that losses may be incurred rather than profit made, as a result of buying and selling securities. This is a risk that the Customer is prepared to accept.
• Customer also acknowledges that there are risks in leaving securities in the custody of the Broker or in authorizing the Broker to deposit securities as collateral for loans or advances made to the Broker or authorizing the Broker to borrow or loan securities.
ACKNOWLEDGEMENTS BY CUSTOMER
I acknowledge that:
• I have read carefully the IB Customer Agreement, the Hong Kong Risk Disclosure Statements and the Regulatory Information and Additional Provisions for Users from Hong Kong and Users Trading on Hong Kong Exchanges;
• The contents of the IB Customer Agreement, the Hong Kong Risk Disclosure Statements and the Additional Provisions for Users from Hong Kong and Users Trading on Hong Kong Exchanges have been fully explained to me by the materials provided by IB in a language which I understand. I have agreed to the Agreement being in English.
• I have been given an adequate opportunity to ask questions of IB's representatives and to consult my own legal advisers about the IB Customer Agreement, the Hong Kong Risk Disclosure Statements and the Regulatory Information and Additional Provisions for Users from Hong Kong and Users Trading on Hong Kong Exchanges.
• I have received the IB Customer Agreement, the Hong Kong Risk Disclosure Statements and the Regulatory Information and Additional Provisions for Users from Hong Kong and Users Trading on Hong Kong Exchanges. I am trading on my own account.
• I have read and completed the Account Application and Supplemental Questions for Hong Kong Users previously provided to me by IB and confirm that the information I have provided is true and complete.
• I agree to electronically sign additional documents included during the account opening process and from time to time, including, but not limited to risk disclosures and other agreements.
IF YOU ARE FROM HONG KONG YOU ARE REQUIRED TO MANUALLY SIGN THIS FORM AND SEND IT TO IB TO EVIDENCE THAT YOU HAVE RECEIVED IT, READ IT, UNDERSTAND IT AND AGREE TO ITS TERMS. IF YOU ARE NOT FROM HONG KONG YOU ARE NOT REQUIRED TO SEND THIS FORM TO IB. RATHER, YOU ARE ONLY REQUIRED TO SIGN IT ELECTRONICALLY TO EVIDENCE THAT YOU HAVE RECEIVED IT, READ IT, UNDERSTAND IT AND AGREE TO ITS TERMS.
ASX Agreement & Disclosures
INTERACTIVE BROKERS LLC SUPPLEMENTAL AGREEMENT & DISCLOSURES FOR TRADING ON THE AUSTRALIAN STOCK EXCHANGE LIMITED
Effect of the Supplemental Agreement & Disclosures
This Supplemental Agreement & Disclosures for Trading on the Australian Stock Exchange Limited (“ASX”) (“the Agreement”) is in addition to the Interactive Brokers (ARBN 091191141; AFSL 245574) (“IB”) Customer Agreement and forms part of the contract between IB and Customer (hereinafter, “Customer” or “Client”) regarding transactions on ASX.
Market Transactions on ASX are entered into subject to the Rules, directions, decisions and requirements of ASX, and the Australian Clearing House Pty Limited (“ACH”) Clearing Rules, and, where relevant, the ASX Settlement and Transfer Corporation Pty Limited (“ASTC”) Settlement Rules; the customs and usages of the Market; and the correction of errors and omissions. Confirmations regarding Customer’s transactions are issued subject to these terms.
ASX Authority Regarding Market Transactions
Customer understands and agrees that ASX has the power under the Rules to cancel or amend Market Transactions or Crossings.
Disclosures Regarding the Execution and Clearing of ASX Transactions
Pursuant to ASX Market Rule 7.1.1, IB provides you with the following information:
IB is not a participant on the ASX. IB’s proprietary trading affiliate, Timber Hill Australia Pty Limited (ABN 25079993534) (“THA”) is a participant on the ASX. IB shall route customers’ ASX orders through THA’s connection to the ASX dedicated to the routing of only IB customer orders.
The business address and phone number for THA is:
Level 25
56 Pitt Street
Sydney
NSW, 2000, Australia
61 2 9240 5145
Orders executed for IB clients shall be cleared by Fortis Clearing Sydney Pty Ltd (“Fortis”), an ACH Clearing Participant. With respect to clients’ orders executed on ASX and cleared by Fortis, Fortis carries the Clearing Obligations and any settlement obligations for all Market Transactions of THA and IB (including those of Customer). As the Clearing Participant, Fortis must settle such transactions as principal with ACH or the relevant counter-party, even though the Market Transaction may have been entered into on Customer’s behalf. The Clearing Obligations and any settlement obligations of Customer are therefore owed directly to Fortis, as the Clearing Participant.
If Customer fails to pay the amounts due in respect of a Market Transaction; or if Customer fails to fulfill its settlement obligations in respect of a Market Transaction, Fortis has direct rights against Customer, including the rights of sale under the Market Rules. As such, an agreement is deemed to have been entered into between Fortis and Customer upon the terms included herein. Such deemed agreement comes into existence immediately upon the receipt by IB of an order by Customer to enter into a Cash Market Transaction.
The business address and phone number for Fortis are below:
Level 8
50 Bridge Street
Sydney
NSW, 2000, Australia
61 2 8221 3000
National Guarantee Fund Coverage of ASX Market Transactions
IB is not a participant on the ASX and Customer’s market transactions are not covered by the National Guarantee Fund (“NGF”).
Contact
Customer may contact IB’s Customer Service Department with any questions regarding this document. The contact details to reach an IB Customer Service Representative are available on the IB website at: www.interactivebrokers.com <http://www.interactivebrokers.com/> . IB’ s main customer service telephone numbers are as follows:
1-877-442-2757 (from inside the U.S.)
312-542-6901 (from outside the U.S.)
I have read, understand and agree to be bound by these terms.
IF YOUR INTERACTIVE BROKERS ACCOUNT CONFIGURATION WILL INCLUDE PERMISSIONS TO TRADE OPTIONS ON THE AUSTRALIAN STOCK EXCHANGE LIMITED, YOUR ACCOUNT WILL ALSO BE SUBJECT TO THE FOLLOWING TERMS AND CONDITIONS.
INTERACTIVE BROKERS LLC AGREEMENT FOR CUSTOMERS TRADING OPTIONS ON THE AUSTRALIAN STOCK EXCHANGE LIMITED
The following terms and conditions are required by Australian Stock Exchange Limited (“ASX”) Market Rule 7.1.2 to be in place between Market Participants and their customers who trade options on ASX. Though Interactive Brokers (ARBN 091191141) (“IB”) is not a participant on the ASX, IB has implemented the below terms and conditions in accordance with ASX Market Rule 7.1.2.
1. Application of Market Rules
The Client and IB are bound by the Market Rules of Australian Stock Exchange Limited (“ASX”), the Corporations Act and the Procedures, customs, usages and practices of ASX and its related entities, as amended from time to time, in so far as they apply to Options/derivative instruments traded on ASX for the Client. Client authorizes IB to route Client’s orders for equity and index options to the ASX for execution.
1. Explanatory Booklet
The Client has received and read a copy of the current explanatory booklet published by ASX in respect of each ASX Derivative Market Contract.
1. Authority
The Client acknowledges that they are either:
1. acting as principal; or
2. acting as an intermediary on another’s behalf and are specifically authorized to transact the ASX Derivative Market Contracts, by the terms of:-
1. a licence held by the Client;
2. a trust deed (if the Client is a trustee); or
3. an agency contract.
2. Nature of IB’s Obligations
Notwithstanding that IB may act in accordance with the instructions of, or for the benefit of, the Client, the Client acknowledges that any contract arising from any order submitted to the Market, is entered into by IB as principal.
1. Dealing as principal
The Client acknowledges that IB or its affiliates, including Timber Hill Australia Pty Limited (ABN 25079993534) (“THA”), may, in certain circumstances permitted under the Corporations Act and the Market Rules, take the opposite position in a transaction in the ASX Derivative Market Contracts, either acting for another client or on its own account.
1. Commissions and fees
The Client must pay to IB commissions, fees, taxes and charges in connection with dealings for the Client in ASX Derivative Market Contracts at the rates determined by IB from time to time and notified to the Client in writing.
1. Tape recording of conversations
The Client acknowledges that IB may record telephone conversations between the Client and IB. If there is a dispute between the Client and IB, the Client has the right to listen to any recording of those conversations.
1. Client to provide information
The Client will take all reasonable steps to deliver information or documentation to IB, or cause information or documentation to be delivered to IB concerning Option Transactions which are requested by a person having a right to request such information or documentation. IB is authorized to produce the information or documentation to the person making the request.
1. Right to refuse to deal
IB is not an ASX participant. IB’s proprietary trading affiliate, THA, is an ASX participant. For clients wishing to execute trades on ASX, IB shall route such orders through THA’s connection to the ASX Integrated Trading System (‘ITS”).
The Client acknowledges that IB may at any time refuse to deal in, or may limit dealings in, the ASX Derivative Market Contracts for the Client. Neither IB nor its affiliate, THA, the ASX Trading Participant, are required to act in accordance with the Client’s instructions where to do so would constitute a breach of the Market Rules, the Clearing Rules, or the Corporations Act. IB will notify the Client of any refusal or limitation as soon as practicable.
1. Termination of Agreement
Either the Client or IB may terminate this Agreement by giving notice in writing to the other. Termination will be effective upon receipt of the notice by the other party.
1. Effect of termination
Termination does not affect the existing rights and obligations of the Client or IB at termination.
1. Revised terms prescribed by ASX
If ASX prescribes amended minimum terms for a Client Agreement for the ASX Derivative Market Contracts for the purposes of the Rules (the “New Terms”), to the extent of any inconsistency between these minimum terms and the New Terms, the New Terms will override the terms of this Agreement and apply as if the Client and IB had entered into an agreement containing the New Terms.
1. Market Participant to provide Client with copy of changes
IB will provide a copy of the New Terms to the Client as soon as practicable after ASX prescribes the New Terms.
1. Application of Clearing Rules
The Client acknowledges that each Option registered with an Approved Clearing Facility is subject to operating rules and the practices, directions, decisions and requirements of that Approved Clearing Facility.
1. Authority of ASX Regarding Market Transactions
Customer understands and agrees that ASX has the power under the Rules to cancel or amend Market Transactions or Crossings.
I have read, understand and agree to be bound by these terms.
