Terms & Policies
1. INTRODUCTION
StoneX Europe Ltd (hereafter ‘’SEL’’ or the ‘’Company’’ or ‘’us’’), is a Cyprus Investment Firm (CIF) company registered to the Department of Registrar of Companies and Official Receiver with a Registration Number HE409708, and authorized and regulated by the Cyprus Securities & Exchange Commission (CySEC) - (CIF License No…) and a Member of the Investor Compensation Fund (ICF).
FOREX.com is a trading name of StoneX Europe Limited and FOREX.com/ie is a domain operated by StoneX Capital Europe Ltd. FOREX.com is a trademark of StoneX Europe Ltd, a member of StoneX group Inc.
This notice is provided to you, in accordance with the CySEC’s Law 87(I)/2017 and all other relevant CySEC’s Circulars and Directives, because you are considering dealing with us in financial instruments and investment contracts relating to various financial markets. Unless separately defined in this notice, words and expressions shall have the meanings given to them in the General Terms.
You should read this notice in conjunction with the Supplemental Terms which provide a general description of the nature of each specific type of Products we offer, how they work, and which set out the terms and conditions under which we make these Products available to you.
This notice is designed to explain in general terms the nature of the risks particular to our Products and the trading of these Products. We provide this warning to help you to take investment decisions on an informed basis. However, please note that each Trade will carry its own unique risks which cannot be explained in a general note of this nature. For a better understanding of the risks associated with the financial products offered by the Company, you should among other sources, review and understand the Key Information Document (KID) for each type of product as found on the Company’s website.
Our Products carry a higher risk of loss than trading many traditional instruments, such as shares in many large companies or fixed income securities such as bonds issued by governments or large companies. For many members of the public trading in our Products is not suitable. It is very important that you should not engage in trading in our Products unless you know, understand and are able to manage the features and risks associated with such trading and are also satisfied that trading in our Products is suitable for you in light of your circumstances and financial resources.
2. PRODUCTS AND ASSOCIATED RISKS
SEL is offering Contracts for Differences (CFDs) and margined FX products. CFDs are complex derivative products whose price is dependent or derived from the price of another underlying instrument. These are Over-The-Counter (OTC) products, that allows an investor to obtain an exposure to the price movements of the underlying financial instrument, without the need to physically own the underlying asset. SEL is the sole execution venue for its clients’ orders and hence the Counterparty to all clients’ orders.
CFDs are complex derivative products and as such are not appropriate for every investor. These are products that are most suitable for knowledgeable and experienced investors and professional clients since there is a risk of losing your entire invested capital within a relatively short period of time.
SEL provides the below risk disclaimer to all its clients and potential clients to inform them on the risks of dealing with complex financial instruments such as CFDs:
‘CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.’
In considering whether to engage in trading our Products, you should be aware of the following risks:
a) Leverage
A high degree of “gearing” or “leverage” is associated with trading our Products. This stems from the margining system applicable to our Products which generally involves comparatively modest funds of the overall contract value to open a Trade. This can work for you and against you. A small price movement in your favour can result in a high return on the money placed in the Account; however, a small price movement against you may result in substantial losses and you may lose, the money placed in the Account.
Prices can move quickly particularly at times of high market volatility (see below) and, if these price movements are unfavourable to your Trade(s), you could quickly build up significant losses. If you do not maintain enough funds in your Account to satisfy your Margin Requirements, we may close any or all of your Open Positions (in some circumstances without warning). Unless you have been classified as a Professional Client or an Eligible Counterparty, if the Margin Level for your Account reaches or falls below the Margin Close Out level, to the extent required under applicable laws and
regulations we will close any or all of your Open Positions that are not Established Positions (in some circumstances without warning). This measure is designed to help limit the extent of your trading Losses. Your Open Positions may be closed at a loss for which you will be liable in accordance with the terms of this Agreement.
b) Nature of Margined Trades
Our Agreement explains in detail how our Products operate. You need to review this notice along with our General Terms, Supplemental Terms, as well as your Application Form. Also, you should review examples and explanations found on our Website – although these are not part of the Agreement, they provide useful guidance on trading in our Products (and the risks associated with them).
A Trade in one of our Markets is a Trade based on movements in Our Price. Our Price for a Market is set by us but relates to the price of the relevant Underlying Instrument. Whether you make a profit or loss will depend on the prices we set and fluctuations in the Underlying Instrument to which your Trade relates. Trades in our Products can only be settled in cash. Trades in our Products are legally enforceable. You must ensure that you understand the potential consequences of a particular Product or Trade and be prepared to accept that degree of risk. You will not acquire the Underlying Instrument nor any rights or delivery obligations in relation to the Underlying Instrument.
c) Client Money and Counterparty Risk
SEL keeps clients’ funds in segregated accounts in credit institutions within or outside the EEA. Retail Clients’ funds are always segregated from the Company’s own funds and no Title Transfer Collateral Arrangement (TTCA) is allowed.
We operate a margin close out policy which closes out Open Positions where the client Margin Level reaches or falls below the Margin Close Out Level. This policy significantly reduces the likelihood of losses arising from client default that would result in our insolvency.
SEL’s retail clients are entitled to compensation from the Investor Compensation Fund (ICF) Scheme in the Republic of Cyprus, in the unlikely event of the Company’s insolvency. SEL is a member of the ICF with a membership number. We publish the ICF Policy on the Company’s website.
d) Volatility
As mentioned above, whether you make a profit or a loss will depend on the prices we set and fluctuations in the price of the Underlying Instrument to which your Trade relates. Neither you nor we will have any control over price movements in the Underlying Instrument. Price movements in the Underlying Instrument can be volatile and unpredictable.
A feature of volatile markets is “Gapping”, the situation where there is a significant change to Our Price between consecutive quotes. Gapping may occur in fast and falling markets or if price sensitive information is released prior to Market opening. The price at which we execute your Orders may be adversely affected if Gapping occurs in the relevant Market. Guaranteed Stop Loss Orders will always be executed at your specified Order price, but all other types of Orders will be executed when Our Price meets or exceeds your specified Order price. If Gapping occurs, the price at which your Order is executed may significantly exceed your specified Order price.
e) Liquidity
A decrease in liquidity (a term which describes the availability of buyers and sellers who are prepared to deal in an Underlying Market) may adversely impact Our Price and our ability to quote and trade in a Market. If there is a significant reduction or a temporary or permanent cessation in liquidity in an Underlying Instrument, such events may be deemed an Event Outside of Our Control or Market Disruption Event (as applicable) under the General Terms and we may increase Our Price, suspend trading or take any other action we consider reasonable in the circumstances. As a result you may not be able to place Trades or to close Open Positions in any affected Market.
f) Dealing Off-Exchange
Dealing in our Products is conducted exclusively off-exchange, a type of trading which is also called dealing "over-the-counter" or “OTC”. In dealing with us off-exchange you deal directly with us and we are the counterparty to all of your Trades. When dealing on Markets which are not Centrally Cleared Markets, there is no exchange or central clearing house to guarantee the settlement of Trades.