Customer Agreement ECN ACCOUNTS
CONTENT This Customer Agreement Is a Legal Contract, and includes following parts both forming a single legal instrument: CONTENTS RISK DISCLOSURE NOTICE... 3 INTERPRETATION OF TERMS... 6 CUSTOMER AGREEMENT... 14 TRADING TERMS... 32 PLEASE READ THESE CAREFULY IN ITS ENTIRITY 2
RISK DISCLOSURE NOTICE This brief statement does not disclose all of the risk and other significant aspects of Foreign Exchange Trading (FOREX). Foreign Exchange Trading is highly speculative and is only suitable for Customers who understand and are willing to assume the economic, legal and other risks involved, and are financially able to assume losses up to or in excess of Margin or Deposits. The Customer hereby certifies and confirms that the Customer understands these risks and that the Customer is willing and able financially and otherwise to assume the risks of Foreign Exchange Trading and that loss of the Customer s entire Trading Account Balance will not result in a negative change to the Customer s life-style. Opening an Trading Account in order to speculate or assume risk of any sort on Foreign Exchange and other products through the Over the Counter OTC market provided by "FOREX EE" on a Spot basis means assumptions of the following risks: 1. LEVERAGE. Forex Transactions carry a high degree of risk. High Leverage and low Margin can result in significant losses due to small price fluctuations in the traded products. High Leverage allows the Customer to assume more risk, magnifying both losses and profits; which can result in loss up to and in excess of Deposits and Margin. The Customer must consider that if the trend on the market is against him/her the Customer may sustain a total loss of the initial margin funds and any additional funds deposited to maintain open positions. The Customer is responsible for all his/her risks, financial resources he/she uses and for the chosen trading strategy. 2. MARGIN. Margins are set by FOREX EE with a degree of discretion and may differ from other firms. FOREX EE is authorised to convert funds in the Customer s Trading Account for Margin into and from such foreign currency at a rate of exchange determined by FOREX EE in its sole discretion on the basis of thenprevailing money market rates. It is responsibility of the Customer to monitor and maintain the minimum Margin Level requirements to support all Customer s open positions at all times. The Customer hereby assumes that if he/she fails to comply with margin requirements, FOREX EE in its sole discretion may liquidate any or all of Customer s open positions at a loss. 3. RISK REDUCTION. Stop Loss Orders or Stop Limit Orders, which are intended to limit losses to certain amounts and may reduce the losses incurred by price fluctuations, however such orders may not be able to execute under certain abnormal market conditions. 4. CURRENCY FLUCTUATION RISK If the Customer directs the Company to enter into any FX contract: (a) any profit or loss arising as a result of a fluctuation in the exchange rate affecting such instrument will be entirely for the Customer's account and risk; (b) all initial and subsequent deposits for margin purposes shall be made in USD, or any other currency which the Company may choose to accept, in such amounts as the Company may in its sole 3
discretion require, with subsequent deposits being in the same currency as the initial deposit; and (c) the Company is authorised to convert funds in Customer's account for margin into and from such foreign currency at a rate of exchange determined by The Company in its sole discretion on the basis of the then prevailing money market rates. The profit and loss in any given transaction may be affected by a currency rate that is used to convert to the Accounts base currency. 5. VOLATILITY Foreign exchange trading can involve a high degree of volatility which may result in substantial movements in the level of the Customer s multi-currency exposure, possibly leading to significant losses. The Customer acknowledges that market regulations and/or a significant imbalance of supply and demand, or a lack of liquidity may result in the temporary inability to process the orders. This may result in the Customer holding positions for longer than desire or having to liquidate due to insufficient margin, which may result in losses up to or in excess of deposits. 6. MULTI-CURRENCY EXPOSURE The Customer is responsible for the ongoing maintenance of multi-currency exposure which may exposure the Customer to increased risks of losses and may lead to significant losses. The Customer agrees to not hold the Company liable for any losses incurred as a consequence of The Company maintaining such multi-currency exposure in the Customer s account. 7. TECHNICAL If the Customer undertakes transactions on an electronic trading system, the Customer will be exposed to risk associated with the system including the failure of hardware and software. The result of any system failure may be that the Customer s order is either not executed according to the Customer s instructions or is not executed at all. The Customer is responsible for any technical issues sustained on the Customer s side. These issues include but are not limited to: (i) failure of Customer s hardware, software or internet connection; (ii) improper operation of Customer equipment or Improper settings on the Customer s Terminal; (iii) delay of Customer Terminal updates; (iv) MetaTrader Failure on Customer s Computer. 8. 6TRANSMISSION The Customer acknowledged that once a Transmission is made from the Customer Terminal and enters the execution queue and begins being processed it cannot be cancelled. Any other instruction pertaining to the Transmission will be ignored until the Transmission is completed. The Customer should always verify thoroughly that the details of Volume, Product and Price Level prior to submitting any Transaction. 9. 7TRADING AGENTS In the event that the Customer grants trading authority to a third party, the Trading Agent, whether on a discretionary or non discretionary basis, FOREX EE shall in no way be responsible for reviewing the Customer s choice of such Trading Agent and is in no way liable for any losses incurred by such a party and any disputes that may arise will be resolved between Customer and Trading Agent. In case of an unnamed Trading Agent on the Customer s Account, FOREX EE is not liable for rejecting any instruction from a non-authorised party on the Customer s Trading Account. 4
10. HUMAN ERRORS The Customer understands that any error that is made by FOREX EE employee that results in any position opened at an untraded price cannot be honored and will subsequently be deleted. 11. BANKRUPTCY. In case of Bankruptcy creditors retain priority. All transactions entered into with FOREX EE by the Customer are not traded on an exchange. Therefore under the regulating code of law, the Customer s funds may not receive the same protections as funds used to guarantee exchange-traded futures or options contracts. If the company becomes insolvent, the Customer s claim for deposits and profits may not receive priority. The Customer is a general creditor and will be paid as such from any monies still available after priority claims are paid. 12. FORCE MAJEURE. In case of Force Majeure the Customer shall accept the risk of financial losses. THE CUSTOMER HEREBY REPRESENTS AND WARRANTS THAT HE/SHE WILL REVIEW THE COMPANY S RISK DISCLOSURE NOTICE AND ANY ADDITIONAL RISK DISCLOSURE STATEMENT (IF APPLICABLE) EACH TIME THEY ARE AMENDED. THE CUSTOMER WILL NOT AFFECT ANY OPENING TRANSACTION IN CUSTOMER S ACCOUNT UNLESS CUSTOMER UNDERSTANDS THE COMPANY S REVISED RISK DISCLOSURE NOTICE, AND THE CUSTOMER AGREES THAT IN EFFECTING ANY OPENING TRANSACTION IT IS DEEMED TO REPRESENT THAT THE CUSTOMER HAS READ AND UNDERSTANDS THE COMPANY S REVISED RISK DISCLOSURE NOTICE AS IN EFFECT AT THE TIME OF SUCH OPENING TRANSACTION. 5
INTERPRETATION OF TERMS All terms used in this Customer Agreement shall be interpreted in accordance with the definitions provided below: Abnormal Market Conditions - periods in which the markets are experiencing very high volatility including but not limited to: regularly scheduled news events such as the monthly release by the US Department of Labor of the Non-Farm Payrolls statistics; Thin market. Since few transactions take place in a Thin market, prices are often more volatile and assets are less liquid; low number of Bids and Asks, which will also typically result in a larger Spreads. Account History - All activity within an account. The account history is also called a "ledger", depending on where the account is held. Anti-Money Laundering (AML) - a set of procedures, laws or regulations designed to stop the practice of generating income through illegal actions. Applicable Rate - Federal Reserve Funds rate. Application to Open an Individual/Corporate Trading Account - the form to be completed by the Customer and accessed through the Website. Ask - the higher price in the Quote being the price at which the Customer may buy. The Ask is the lowest current price on the market for buyers. Automated System Trading - a method of trading Forex that is based on a series of analyses to determine whether to buy or sell a Currency pair at a given time. Automated System Trading could be based on a set of signals derived from technical analysis charting tools or fundamental news-based events. Balance - the total financial result of all Completed Transactions and Deposit/Withdrawal operations on the Trading Account. Bar/Candle - a graphical representation of a Quotes movement that usually contains the open, high, low and closing prices for a set period of time (for example, a minute, a day, a week). Balance Currency - the currency that the Trading Account is denominated in; it should be noted that all charges including Commissions and Swaps, are calculated in that currency. Balance Operation any transfers which affect the Balance of Trading Account (Deposits, Withdrawals, Bonuses, etc) except trading Transaction. Base Assets Gold, Silver, Platinum, etc. in the Precious Metals Trading Tools. Base Currency - the first currency in the Currency Pair. 6
Bid - the lower price in the Quote being the price at which the Customer may sell. The BID is the highest current price on the market for sellers. Business Day - any day between Monday and Friday, according to Server time. Chart - the graph that displays the intraday or difference period of time movements of a given Currency pair. Customer or You - A Customer means a person or entity, either public or private, who signed a Customer Agreement. Customer Agreement - the agreement between the Company and the Customer. Customer s Login unique number of the Trading Account. Customer Terminal - the MetaTrader program version 4 (can be downloaded on the Website free of charge). Customer Terminal Log-File - the file, which is created by the Customer Terminal in order to record all the Customer's Requests and Instructions. Close Position - executing a Transaction that is the exact opposite of an Open Position. Closing a Long position would entail selling the instrument, while closing a Short position would involve buying it back. Commission - a service charge assessed by a Company in return for handling the purchase or sale of an Instrument. Commissions vary widely depending on type of account. Company, reg.number 10949892, registered address: (hereinafter Company or Forex EE ). Company News Webpage - the page of the Website where the Company news is displayed on. At a day of this Agreement the information is displayed on www.forex.ee. Company s Trading Account - Company s Trading Account with external Counterparty. Completed Transaction - two counter deals of the same size (opening a position and closing a position). Confidential Information limited to persons authorised to use information, documents, etc. Conflict of interest the situation occurs when a Customer or Company is involved in multiple interests, one of which could possibly corrupt the motivation for an act in the other. Contract Specifications - trading terms (Spread, Lot Size, Initial Margin etc.) for each Instrument. Conversion Rate - the ratio at which one currency can be exchanged for another if Deposit was made in currency other than a Balance Currency. Counterparty - the other party that participates in a financial Transaction. Every buyer of an Instrument must be paired up with a seller that is willing to sell and vice versa. Credit IN Balance Transaction when Company increases Customer Balance from own assets. Credit OUT Balance Transaction when Company removes money from Customer Balance. Currency of the Trading Account - US dollars. Currency Pair - the quotation and pricing structure of the currencies traded in the Forex market: the value of a currency is determined by its comparison to another currency. The Currency pair shows how 7
much of the Quote currency is needed to purchase one unit of the Base currency. Day Order - an Order which is automatically deleted at the end of the trading session. Deposit a Transaction involving a transfer of funds to Company. Dispute - the conflict situation when the Customer reasonably believes that the Company as a result of any action or failure to act breaches one or more terms of this Agreement or the conflict situation when the Company reasonably believes that the Customer as a result of any action or failure to act breaches one or more terms of this Agreement. Dormant Account see Inactive Account. Equity - is calculated as Balance plus Floating. Error Quote see Spike. Exchange a marketplace in which securities, commodities, derivatives, crypto currencies and other financial instruments are traded. Expert Advisor - is an automated trading system (ATS) or a robot written in the Meta Quotes Language (MQL4) and linked to a Chart on the Meta Trader 4 platform. Fast Market - rapid movement in a market caused by strong interest by buyers and/or sellers for the short period of time often causing Price Gaps. Financial Information Exchange FIX - a FIX protocol system used by funds, investment firms. FIX systems are used to transfer accurate and timely financial information regarding Instruments trades through and across security exchange house. FIX has become a standard in equity trades. Floating - a current profit/loss on an Open Position calculated at the current Quotes. Force Majeure Event - Non-performance by a party is excused if that party proves that the nonperformance was due to an impediment beyond its control and that it could not reasonably be expected to have taken the impediment into account at the time of the conclusion of the contract or to have avoided or overcome it or its consequences (including but not limited to war, strike, crime,. "Act of God"(e.g. flooding, earthquake, volcano eruption). When the impediment is only temporary, the excuse shall have effect for such period as is reasonable having regard to the effect of the impediment on the performance of the contract. The party who fails to perform must give notice to the other party of the impediment and its effect on its ability to perform. If the notice is not received by the other party within a reasonable time after the party who fails to perform knew or ought to have known of the impediment, it is liable for damages resulting from such non-receipt. Forex Over the County market, in which currencies are traded. Free Margin - funds on the Trading Account, which may be used to open a position. It is calculated as Equity less Initial Margin. Freeze Level defined by Company the range between the current Quote and the Order Level. When Customer places any Order in this price range, the server would reject such Request. Freeze Time - defined by Company the period of time before the event announcement. The Company has the right, at its sole discretion, to define the value of the Freeze Time depending on the situation on the currencies market and on the character of the event. 8
FX contract - a leveraged transaction made via electronic trading platform for the purchase or sale of a financial instrument, aimed on generating profit arising out of speculating activity or for hedging purposes, provided that such transaction does not give rise to an obligation relating to, or resulting in physical delivery of financial instrument and does not assume currencies conversion operations subject to physical delivery. For the removable of doubts upon settlement of the FX contract, the difference in value between the opening and closing positions will either be credited or debited to the Customer s account according to the profit or loss for the transaction. GLBR Gold Lease Bid Rate - the rate which bidders are willing to pay for leased gold to the bullion bank. GLOR Gold Lease Offered Rate - the rate at which bullion banks are willing to lease out gold. "GTC" ("Good Till Cancelled") - the Order which is valid until the Customer sends the Instruction to delete the Order. GOFO - Gold Forward Offered Rate - These are rates at which contributors are prepared to lend gold on a swap against US dollars. Quotes are made for 1-, 2-, 3-, 6- and 12-month periods. GOFO mean - provides an international benchmark for gold SWAP rates. It is the gold equivalent of LIBOR for currencies. Hedged Margin - a special low-margin required by the Company sufficient to open and maintain Hedged Positions. The hedge margin is lower because of offsetting positions. The details for each Instrument are in the Contract Specifications. Hedged Positions - Long and Short Positions of the same Transaction Size opened on the Trading Account for the same Instrument. Identity Verification Documents - the documents are required to open a trading account. Inactive Account - a bank or brokerage account in which there have not been any transactions recorded for a specified period, other than crediting of interest, it is considered as a Dormant Account and removed from the file of active accounts. Brokerage accounts are often charged a fee if there is not enough activity. If-Done Order - An "If Done" Order is placed in conjunction with a Stop or Limit order. After the initial Stop or Limit order has been executed, the If- Done order becomes active. Indicative Quote - a Quote at which the Company has the right not to accept any Instructions and Requests or execute any Orders. Initial Margin ( Necessary Margin ) - the margin required by the Company to open a position. The details for each Instrument are in the Contract Specifications. Instant Execution - an Order that is executed at the price that appears on the screen at the time that the Customer sends the Instruction for trading through MetaTrader 4. Instruction - an instruction sent from the Customer to the Company to open/close a position or to place/modify/delete an Order. Instrument - any Currency Pair, Precious metal regarding which FX Contract is entered. Introducing Broker IB - an entity who has a direct relationship with Customers, but delegates the 9
work of trade execution to Company. The relationship between Company and IB is built on the premium commission base. Leverage - ratio in respect of Transaction Volume and Initial Margin. 1:200 ratio means that in Order to open a position the Initial Margin is two hundred times less than Transaction Volume. Libor London Interbank Offered Rate - the interest rate that the banks charge each other for loans. This rate is applicable to the short-term international interbank market. Libid London Interbank Bid Rate the Interest rate at which London banks are willing to borrow from one another in the inter-bank market. Limit Order - an Order placed with a Company to buy or sell a set number of units at a specified price which better than current Quotes. Liquidity - the degree to which an Instrument can be bought or sold in the market without affecting its price. Liquidity Provider external counterparties including but not limited to banks, financial institutions, brokers, agents, clearing houses, exchanges, etc., the Company s customers, the Cumpany and/or the Company s affiliated legal entities. Long Position - the buy position with the expectation that the Base Currency will rise in value. Lot - a unit of Base Currency in the Trading Platform. Lot Size - the number of Base Currency in one Lot defined in the Contract Specifications. Maintenance Margin - the minimum amount of Equity that must be maintained in a margin account. The minimum required level of margin to be maintained is specified by the Company. Market Depth - real-time Quotes that provides with the aggregated volume of all Orders available at each of the top five (optional) price levels Buy and Sell for each Instruments. Маrgin Level - the percentage of Equity to Initial (Necessary) Margin. This ratio is calculated as (Equity Initial Margin) 100%. Margin Trading leverage trading when the Customer may make Transactions having far less funds on the Trading Account in comparison with the Transaction Volume. Market Opening - the time at which the market opens after weekends, holidays etc. Market Order - an Order that a Customer makes through a Company service to buy or sell an Instrument immediately at the best available current price. Market Order could be executed at a price different from initial Order Level. Normal Market Conditions - the Quotes Flow in the Trading Platform have no fast price movements and Price Gap. Normal Market Size - the maximum number of Lots that does not exceed the volume of Market Depth at the moment creation of Request. Off-Quotes message that a Customer receives from the Trading Platform. Instances (but not limited to) are following: a) When markets are opening and there is no available Quote Flow; 10
b) When Customer tries to modify/delete an order that has already been placed into queue for processing Take Profit or Stop Loss. One trading session - a period of one day of buying and selling Instruments at a Trading Platform from the time opening (00:00:00 Trading Platform Time) to the time closing (23:59:59 Trading Platform Time). Open Position - any Long Position or Short Position that has been established and which is not a Completed Transaction. The position will remain open until an opposing trade has taken place. Order - an Instruction from the Customer to the Company to open or close a position. Order Level - the price indicated in the Order. Payment Instructions - details for depositing funds to the Trading Account or withdrawing funds from the Trading Account. Pending Order - an Instruction from the Customer to the Company to open a position once the price has reached the level of the Order. All of the following order types fall under that category: Buy Stop, Sell Stop, Buy Limit and Sell Limit. Personal Cabinet - is a special section at Company website, which is designed for the Customers. In this section Customers can see all their personal and trading information. Point or Pip - the smallest price change. Since most major Currency pairs are priced to four or five decimal places, the smallest change is that of the last decimal point - for most pairs this is the equivalent of 1/100 (1000) of one percent, or one basis point. Post-Pre-Market the time period during which (i) the market is closed for the weekend (Friday to Monday), or (ii) the time period during which the market is closed for holidays, or (iii) other time period during which the Trading platform is switched off. Execution of certain Orders, as specified in the Trading Terms, may take place during the Post-Pre- Market. Precious Metals an Instrument with base assets as Gold, Silver, Platinum, etc. Price Gap - an area within a particular time boundary of activity on a price Chart, showing a price range where no actual trading occurred. There are generally four different types of price gap: a. The common price gap, breakaway price gap, runaway price gap, and the exhaustion price gap. A common price gap is a blank area between two consecutive day's trading ranges. For example, today's lowest price is higher than yesterday's highest price. b. A breakaway price gap occurs when prices suddenly explode out of a congestion formation, leaving behind an empty area in which no trading has taken place in a considerable length of time or in which no trading has ever taken place. c. A runaway price gap appears following an already substantial price move, signaling a further continuation of the established trend. d. An exhaustion price gap is the opposite, marking a reversal of or the final stages of a previous major trend. Price Gap on the Market Opening - the first Ask/Bid of the current trading session is equal or 11
higher/lower than the last Ask/Bid of the previous session in four spreads in particular Instrument. Profit / Loss - a financial benefit that is calculated for a Completed Transaction. Quote - the information of the current price Bid/Ask for a particular Instrument. Quote Currency - the second currency in the Currency Pair. Quotes Flow - the stream of Quotes in the Trading Platform for each Instrument. Rate - the value of the Base Currency in the terms of the Quote Currency or the price of one oz. worth of the Precious metal against the currency specifies in the Contract Specification for the Instrument. Request - a request from the Customer to the Company given to get a Quote. Such a Request shall not constitute and obligation to make a Transaction. Risk Management - the identification, control, and avoidance, minimisation, or elimination of unacceptable risks. An organisation may use risk avoidance, risk transfer, or any other strategy (or combination of strategies) in proper management. Rollover ( SWAP ) - a charge that is incurred by Customers who move their positions to the next trading session. Scalping - a trading strategy that attempts to make many profits on small price changes. Traders who implement this strategy belief that small moves in security price are easier to catch than large ones. Screenshot - is an image taken by a computer to record the visible items displayed on the monitor, television, or another visual output device. Security - financial Instruments such as share, future, option, commodity, interest rate, bond or stock index. Server Log-File - the file created by the Server, which records all Requests and Instructions sent by the Customer to the Company. Server - the MetaTrader Server version 4 program. The program is used to execute the Customer's Instructions or Requests, to provide trading information in real-time mode. SIFO mean - Silver Forward Mid Rate - This is the Silver Forward Mid Rate and provides indicative forward rates for silver based on the midmarket rates (the midpoint between the bid and offer sides of the swap). As these are only indicative rates. Short Position a sell position with the expectation that the Base Currency will fall in value. Slippage - the difference between the expected price of a trade, and the Order Level price. Slippage often occurs during periods of higher volatility, when Market Orders are used, and also when large orders are executed when there may not be enough interest at the desired price level to maintain the expected price of trade. Slippage Control ECN/STP platform procedure which is designed to protect Customers from high Slippage occurring. Slippage Control mechanism applies to Market (Buy and Sell) Orders, as well as Pending Orders. Spike a quote error with the following characteristics: a) significant Price gap; b) price rebound in a short time period within a Price gap; 12
c) absence of rapid price movement before its appearance; d) absence of important macroeconomic indicators and/or corporate news before its appearance; e) absence of Abnormal Market Conditions. Spread - the difference between Ask and Bid. Stop Out - the closing of the Customer's Open Position(s) without the prior notice in a case of insufficient funds required to maintain Open Positions. Stop Order - there is no 100% guarantee of getting the desired entry/exit points. For instance, if a Quotes gaps down, the trader's stop order will be triggered (or filled) at the first available Quote which is presented in the Quotes Flow instantly after the Price Gap. SWAP History page of the Company s web-site that contains historic data about Rollovers. Take Profit - the price to close an opened position at a more profitable price than the current price. Thin Market - a market with a low number of buyers and sellers; few Transactions take place in a thin market, prices are often more volatile and assets are less liquid. The low number of Bids and Asks will also typically result in a larger Spread between the two Quotes. Ticker - the unique number assigned to each Open Position, Pending Order or Deposit/Withdrawal Transaction through the Trading Platform. Trademark of Company - a symbol, word, phrase, logo, or combination of those that legally distinguishes one company's product or service from any others. Trading Account - the account, which has a unique number, maintained by a Customer for the purposes of trading financial Instruments through the Company s Trading platform. Trading Platform Time ( Server time ) the time shows on the Trading Platform. It used for marks to start and close of all trading sessions. Trading Platform the software through which traders can open, close and manage Transactions. Trading Recommendation any form of advice to induce trading activity. Trading Tools see Instrument. Trailing Stop an Order entered with a stop parameter that creates a moving or trailing activation price. Note: Trailing Stop works on a Customer s terminal and not on a Server. Thus it will not work if a Customer is not logged in. Transaction - any FX contract or transaction entered into or executed by the Customer. Transaction Volume the transaction s size multiply to number of Lots of Transaction. Trading Platform Time Zone - the time zone in which the Server Log-File records any event. At the time of the release of this document the Trading Platform Time Zone is GMT+2:00. Website the Company s website www.forex.ee. Withdrawal - a removal of funds from a Customer Balance according to his/her acceptable instruction. Written Notice - any notice which is made to the Customer by the Company via: a) The Company Meta Trader - 4 Platform internal mail; b) email; c) facsimile transmission; d) post; or e) information 13
published on the Company's News Webpage or Forum. CUSTOMER AGREEMENT 1. INTRODUCTION This Customer Agreement (hereinafter referred to as Agreement ) is a legal contract between (hereinafter referred to as Company or Forex EE ) and any individual or legal entity or other corporate body (hereinafter referred to as "Customer") who has completed the Application to Open an Individual/Corporate Trading Account. This Agreement shall not be deemed to be accepted by the Company nor become a binding contract between Customer and the Company until approved by the Company. WHERAS the Customer wishes the Company to carry one or more accounts of the undersigned Customer and to provide services to the Customer in connection with entering into foreign exchange contracts, the Customer agrees to the following: 2. SUBJECT OF THE AGREEMENT Subject to the terms expressly stipulated below the Company shall provide services in respect of foreign exchange and precious metals contracts (hereinafter referred to as FX contracts ) to retail and wholesale Customers. FX contract shall mean a leveraged transaction made via electronic trading platforms for the purchase or sale of a financial instrument, aimed on generating profit arising out of speculating activity or for hedging purposes, provided that such transaction does not give rise to an obligation relating to, or resulting in physical delivery of financial instrument and does not assume currencies conversion operations subject to physical delivery. For the removable of doubts upon settlement of the FX contract, the difference in value between the opening and closing positions will either be credited or debited to the Customer s account according to the profit or loss for the transaction. The Company shall carry out all FX contracts with the Customer on an execution only basis. The Company is entitled to execute FX contracts notwithstanding that a transaction may be not suitable for the Customer. The Company executes all trading orders subject to the available liquidity. The Company will provide execution through the ECN/STP trading system. The Customer shall not be entitled to ask the Company to provide investment advice or to make any statements of opinion to encourage the Customer to make any particular transaction. The Company shall not provide physical delivery in relation to any FX Contract. Profit or loss in the Currency of the Trading Account is deposited in/withdrawn from the Trading Account once the Transaction is closed. The Company reserves the right, at its discretion, at any time to refuse to provide the services to the Customer and the Customer agrees that the Company 14
will have no obligation to inform the Customer of the reasons. 3. AUTHORIZATION TO TRADE The Company is authorised to provide services in respect of FX Contracts for the Customer with a counterparty bank or financial institution, or any other person as the Company deems appropriate. The Company is authorised to execute all Customer s orders with such bank, financial institution, person as the Company deems appropriate. The provisions of this Clause 3 should not limit the Company s right to determine the counterparty for the execution of Customer s orders in Company s sole discretion. The Company shall be entitled to rely upon any instruction received form the Customer and shall treat the Customer as the customer for all purposes so long as the Company does not have actual knowledge of the Customer s login is used by third party. The Customer agrees that he is obliged to provide the Company with the clear authorisation (letter of direction) in respect of such third party. In case of lack of authorization the Customer is baring all associated risks. The Company shall execute all trading orders subject to the available liquidity. The Company shall provide execution through the ECN/STP trading system. The Company holds the multi-currency exposure as such corresponds to all the Customer s transactions. 4. KEEPING YOUR ACCOUNT SAFE The registered e-mail address and the Password are used to enter to your Trading account. You must take all reasonable steps to keep Your registered e-mail address, the Password, login and password to the Trading Account and Exchange Platform Terminal, telephone password used for communications with the Comapny (collectively - Credentials) safe at all times and never disclose it to anyone. You must take all reasonable care to ensure that Your registered e-mail account as part of the Credentials is secure and only accessed by You, as Your registered e- mail address may be used to reset other Credentials or to communicate with You about the security of Your Trading Account. In case the registered e-mail address is compromised, You should without undue delay after becoming aware of this contact Customer Service and also contact Your registered e-mail service provider. In relation to the Credentials, You hereby acknowledge and undertake that: (a) You will be responsible for the confidentiality and use of Your Credentials; (b) other than with the Company prior written consent, You will not disclose Your Credentials to persons other than your authorized representatives for any purpose whatsoever; (c) the Company may rely on all instructions, orders and other communications entered using valid Credentials, and You will be bound by any transaction entered into or expense incurred on the Your behalf in reliance on such instructions, orders and other communications; and (d) You will immediately notify the Comapny at our sales and/or customer support desk if You become aware of the loss, theft or disclosure to any third party or of any unauthorized use of Your Credentials. Our personnel will never ask You to provide Your Password and/or login to the registered email to us or 15
to a third party. Any message You receive or website You visit that asks for Your Credentials, other than the Website, should be reported to us. If You are in doubt whether a website is genuine, You should contact our Customer Service. You must never allow anyone to access Your Trading Account or watch You accessing Your Trading Account. If you have any indication or suspicion that Your Credentials being lost, stolen, misappropriated, used without authorisation or otherwise compromised, You are strongly advised to change all your passwords forming part of Your Credentials. You must contact Customer Service without undue delay on becoming aware of any loss, theft, misappropriation or unauthorised use of Your Credentials. Regardless of Your notification You shall be liable for any losses as a result and You agree to indemnify and hold the Company, its affiliates, employees, agents, successors and assigns harmless from and against any and all liabilities, losses, damages, costs and expenses, including attorney's fees, incurred by us arising out of Your failure to fully and timely perform the Your obligations herein or should any of the representations and warranties fail to be true and correct. You also agree to pay promptly to us all damages, costs and expenses, including attorney's fees, incurred by us arising out of Your failure to fully and timely perform the Your obligations herein. The processing of Your data is governed by our Privacy Policy which can be found on the Website. By accepting this Agreement, You also agree to the terms of our Privacy Policy. We may suspend Your or otherwise restrict its functionality on reasonable grounds relating to the security of the Trading Account or any of the Credentials or if we reasonably suspect that an unauthorised or fraudulent use of Your Trading Account has occurred or that any of the Credentials have been compromised. We will notify You of any suspension or restriction and of the reasons for such suspension or restriction in advance or, where we are unable to do so, immediately after the suspension or restriction has been imposed, unless notifying You would be unlawful or compromise our reasonable security interests. We will lift the suspension and/or the restriction as soon as practicable after the reasons for the suspension and/or restriction have ceased to exist. Further, if we believe that You supplied Your Credentials to other persons in breach of subparagraph above, then we may terminate this Agreement immediately or take such other action as we may determine in its sole and absolute discretion You shall be solely responsible for providing and maintaining any equipment and software and for making all appropriate arrangements with any telecommunications suppliers or, where access to the Trading Account is provided through a third party server, any such third party, necessary in order to obtain access to the Trading Account. Neither we nor any company maintaining, operating, owning, licensing, or providing services to us in connection with Trading Account makes any representation or warranty as to the suitability or otherwise of any such equipment, software or arrangements. Irrespective of whether You are using a public, a shared or Your own computer to access Your Trading Account, You must always ensure that Your login details are not stored by the browser or cached or otherwise recorded. You should never use any functionality that allows login details or passwords to be stored by the computer You are using. 5. CROSS TRADE CONSENT The Customer hereby acknowledges and agrees that a situation may arise whereby an officer, director, affiliate, associate, employee, bank, bank employee or 16
dealer or any other third party associated with the Company may be the opposing broker for a trade entered for the undersigned's account. The Customer hereby consents to any such transaction, subject to the limitations and conditions, if any, contained in the rules or regulations of any bank, institution, exchange or board of trade upon which such buy or sell orders are executed, and subject to the limitations and conditions, if any, contained in any applicable regulations of any applicable regulatory agency. 6. TRADING RECOMMENDATIONS The Customer acknowledges that (i) any market recommendations and information communicated to the Customer by the Company or by any person within the company, does not constitute financial advice or a solicitation of an offer to sell or an offer to buy any FX contract, (ii) such recommendation and information, although based upon information obtained from sources believed by The Company to be reliable, may be based solely on a broker's opinion and that such information may be incomplete and may be unverified, and (iii) the Company makes no representation, warranty or guarantee as to, and shall not be responsible for, the accuracy or completeness of any information or trading recommendation provided to the Customer. The Customer acknowledges that the Company and/or its officers, directors, affiliates, associates, stockholders or representatives may have a position in or may intend to buy or sell currencies, which are the subject of market recommendations provided to the Customer, and that the market position of The Company or any such officer, director, affiliate, associate, stockholder or representative may not be consistent with the recommendations furnished to the Customer by the Company. The Customer acknowledges that the Company makes no representations concerning the tax implications or treatment of FX contracts. 7. EXPERT ADVISORS Most types of Expert Advisors are generally allowed by the Company, providing that the "Expert Advisors" for the purpose of this Agreement shall be determined as an automated trading system which allows trade operations to be carried out without the Customer's participation. The Customer agrees and acknowledges that the Company may in its sole discretion disable the Customer's ability to use Expert Advisors, without any prior notice. The Customer agrees and acknowledges that no claims will be accepted for any loss directly or indirectly resulting from the disabling of Expert Advisors use on the Customer's account. The Company may, at its sole discretion, reinstate Expert Advisors privileges after an indefinite period of time; 8. MARGINS AND DEPOSIT REQUIREMENTS The Customer shall provide to, and maintain with the Company margin in amounts and in forms as the Company, in its sole discretion, requires. The Customer is aware and acknowledges that the requirements for margin may vary and may be changed from time to time by the Company in its sole discretion. No previous Margin requirement by the Company shall preclude the Company from increasing or decreasing that requirement without prior notice to the Customer. The Company retains the right to limit the amount and/or total number of open 17
positions that Customer may acquire or maintain at the Company. It is the responsibility of the Customer to maintain the minimum Margin Level requirements to support all Customer s open positions without notice from the Company. The Customer hereby assumes that if he/she fails to comply with margin requirements, the Company in its sole discretion may liquidate any or all of open positions as per Stop out procedure. The Company is not obliged to make any warnings to the Customer prior to liquidating the position for insufficient margin. The Company shall not be responsible for any loss or damage caused, directly or indirectly, by any events, actions or omissions including but not limited to loss or damage resulting, directly or indirectly, from any delays or inaccuracies in the transmission of orders and/or information due to a breakdown in or failure of any transmission or communication facilities. 9. CARRYING POSITIONS FORWARD AND ROLLOVERS A position will be carried forward at the initial execution price until it is eventually closed by Customer or by the Company under the provisions of Paragraph 23 (Liquidation of Accounts). Consistent with the Company policy, a position that is carried forward may be credited or debited intersest charges until the position is closed if appropriate,. The Customer authorises the Company to rollover all Open Positions in the Customer's Trading Account, at the Customer's risk, into the next settlement time period upon such terms as the Company determines, in its sole discretion. The positions will be rolled over by debiting or crediting the Customer's Trading Account with the amount calculated in accordance with the Company's Rollover/Interest Policy if appropriate. 10. COLLATERAL All funds, securities, currencies, and other property of the Customer which the Company or its affiliates may at any time be carrying for the Customer (either individually, jointly with another, or as a guarantor of the account of any other person) which may at any time be in its possession or control or carried on its books for any purpose, including safekeeping, are to be held by the Company as security and is subject to a general lien and right to set-off for liabilities of the Customer to the Company whether or not the Company has made advances in connection with securities, commodities, currencies or other property, and irrespective of the number of accounts Customer may have with the Company. The Customer hereby also grants the Company the right to pledge, repledge, hypothecate, invest or loan, either separately or with the property of other Customers, to itself as broker or to others, any securities or other property of Customer held by the Company as margin or security. The Company shall at no time be required to deliver to the Customer the identical property delivered to or purchased by the Company for any account of Customer. 11. STATEMENTS AND CONFIRMATION Reports of the confirmation of orders and statements of accounts for the Customer shall be deemed correct and shall be conclusive and binding upon the Customer, if not objected to immediately upon receipt and confirmed in writing, within one day after electronic transmittal to the Customer. Instead of sending trade confirmations via postal mail, the Company will provide the Customer access to view the Customer's account at any time with an online login via the Internet. 18
12. JOINT ACCOUNTS AND LEGAL ENTITY ACCOUNTS If more than one natural person executes this Agreement as the Customer, all such natural persons agree to be jointly and severally liable for the obligations assumed in this Agreement. If this Agreement is executed on behalf of a corporation, limited liability company, trust, patnership, unincorporated association, custodian or other or other non natural person as a Customer, such Customer hereby agrees to indemnify, defend, save and hold free and harmless the Company for any liabilities, claims, losses, damages costs and expenses, including attorneys' fees, resulting directly or indirectly from breach of any fiduciary or similar duty or obligation or any allegation thereof. If the account with the Company is held by more than one (1) person, all of the joint holders are jointly and severally liable to the Company for any and all obligations arising out of FX contracts and other transactions in the account and agree to be bound by all terms and conditions of this Agreement signed by each party. The Company is authorised to accept instructions and to send confirmations to any one (1) of the joint owners, and each Customer hereby further appoints any and all of other said joint owners as Customer s agent for any and all matters relating to the said joint account, including but not limited to the receipt of confirmations and hereby waives any right to receive confirmations otherwise. Any one (1) or more of the joint owners shall have full authority for the joint account and risk in the said joint account. If the account is a joint account, in the event of the death of any of the Customers, the survivor(s) shall immediately give the Company written notice thereof, and the Company, before or after receiving such notice, may take such action, institute such proceedings, require such papers, retain such portion of the account, and restrict transactions in the account as the Company may deem advisable to protect the Company against any tax, liability, penalty, or loss under any present or future laws or otherwise. The estate(s) of any of the Customers who shall have died shall be liable, and the survivor(s) shall continue to be liable, to the Company for any debit balance or loss in the account in any way resulting from the completion of transactions initiated prior to the receipt by the Company of the written notice of the death of the particular Customer, or incurred in the liquidation of the account, or the adjustment of the interests of the respective parties. 13. RESPONSIBILITIES AND RIGHTS OF THE COMPANY (A) THE COMPANY'S RESPONSIBILITIES: The Company will make all possible endeavors to execute trading orders placed by the Customer. The Customer hereby understands that the Company is unable to guarantee the execution or the Customer s orders or requests and that the Customer will not hold the Company liable for any failure in the execution process. The Company shall not be liable to the Customer for any claims, losses, damages, costs or expenses, including attorneys' fees, caused, directly or indirectly, by any events, actions or omissions, including, without limitation, claims, losses, damages, costs or expenses, including attorneys' fees, resulting from market conditions, inability to communicate with any relevant person or any delay, disruption, failure or malfunction of any transmission or communication system or computer facility, whether belonging to the Company, the Customer, or otherwise, or any market, or any settlement or clearing system. The Company will not be responsible for delays in the transmission of orders due to a 19