Description of risks

General risks:

  • National / political risk:
    Risk relating to the political or economical stability of the country where the financial instruments are registered.
  • Currency risk:
    Risk arising when foreign currencies rates fluctuate against the currency in which the financial instruments were acquired.
  • Liquidity risk:
    Risk caused by insufficient market liquidity, as a result of which it’s impossible to execute the transaction at the conditions negotiated with the customer.
  • Price risk:
    Risk of loss because of changes in prices of financial instruments.
  • Credit risk:
    Risk arising from partial or complete insolvency of the borrower.
  • Interest rate risk:
    Risk of loss because of unfavourable fluctuations of interest rates.
  • Risk of insolvency of the Depository / Custodian:
    Risk to loose customer’s assets, registered in the name of the client on a subsidiary account of the brokerage company, because of insolvency of the depository or custodian.
  • Tax risk:
    Risk of unfavourable changes in tax rates, terms and conditions of tax payments.
  • Legal risks:
    Risk of loss due to improper execution of an agreement to buy-sell securities, insufficient level of authority for transactions, appearance of extra expenses because of changes in legislation.
  • Securities risk:
    When dealing with financial instruments, a customer should independently monitor the state of his/her positions and, in case of insufficient margin collateral, deposit necessary funds. If a customer did not or does not fulfill the requirements of the Company, Renesource Capital has the right to close all or part of the customer’s positions.

The list of the aforementioned risks is not exhaustive. The above is intended to help a customer to understand risks related to execution of trading transactions and to determine whether such risks are acceptable specifically for him/herself.

Securities risk

When dealing with financial instruments, a customer should independently monitor the state of his/her positions and, in case of insufficient margin collateral, deposit necessary funds. If a customer did not or does not fulfill the requirements of the Company, Renesource Capital has the right to close all or part of the customer’s positions.

When performing transactions using electronic trading platforms, it’s necessary to take into account a variety of specific risks: risk of computer hardware malfunctioning, risk of failure of communication channels, risk of system penetration by unauthorized persons and other risks.

When performing transactions in financial instruments that imply usage of leverage, a customer should understand that such transactions are characterized by increased risk. Using leverage may lead to losses that exceed the customer’s own funds, in case of unfavourable fluctuation of prices.

One should also take into account that trading transactions outside of a regulated market involve a higher level of risk than transactions on a regulated market. There is a chance that trading of financial instruments outside of a regulated market may be stopped and evaluation of open positions may become complicated or impossible.

The list of the aforementioned risks is not exhaustive. The above is intended to help a customer to understand risks related to execution of trading transactions and to determine whether such risks are acceptable specifically for him/herself.

Description of risks related to financial instruments;

To manage some of the risks associated with investment strategies, Renesource Capital offers to its customers the following types of orders:

  • Market order;
  • Limit order;
  • Stop order;
  • Trailing Stop Order;
  • Stop Limit;
  • If done (IFD);
  • One Cancels Other (OCO);
  • Good till (GT);
  • Good till Cancel (GTC);
  • Immediate or cancel (IOC).

Risk Disclosure Statement. Margin transactions (Forex, contracts for difference CFD, futures and futures options, stock options, REPO transactions, transactions in over-the-counter derivatives and transactions using broker credit, including selling short) involve higher risk. The level of risk increases with the leverage ratio. As the result of margin transactions, relatively high profits are possible with low level of initial investments, as well as significant losses which may exceed the principal amount of investments or the amount of the collateral. Please ascertain whether margin transactions in their essence and content suit the risk profile that was assigned to you by AS IBS Renesource Capital and whether the content of margin transactions corresponds to your investment goals.

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