Risk Disclosure

This Risk Disclosure Document (“Document“) contains important information on trading in equity, shares, future and options, commodity market, commodity exchange, derivatives including futures and option contracts, mutual funds etc and third-party products like PMSs, Mutual Funds, AIFs and Insurance products (“Instruments“). All prospective investors should read this document before trading in Instruments of the stock exchanges or investing or purchasing units in third-party products.

Earnstock Financial Services (“Earnstock”) or any of its group companies¬†does not singly or jointly and expressly or impliedly guarantee nor make any representation concerning the completeness, adequacy, or accuracy of this Document.

This Document does not disclose all of the risks and other significant aspects of investment. In the 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. You must not rely on the guidance contained in this Document as investment advice based on your personal circumstances, nor as a recommendation to enter into any of the services or invest in any of the products listed below. If you are unclear as to the meaning of any of the disclosures or warnings described below, we would strongly recommend that you seek independent legal or financial advice.

You must know and appreciate that investment in Instruments has a varying elements of risk, is generally not an appropriate avenue for someone of limited resources or limited investment or trading experience and low-risk tolerance. No consideration to trade should be made without thoroughly understanding and reviewing the risks involved in such trading. If you are unsure, you must seek external professional advice on the same.

In the event of any consequences or loss in the future, you shall be solely responsible for such loss and Earnstock shall not be responsible for the same, in any manner whatsoever, and it will not be open for you to take the plea that no adequate disclosure was made or that you were not explained of the risk involved by Earnstock.

The investor will be solely responsible for the consequences and no contract can be rescinded on that account. You must acknowledge and accept that there can be no guarantee of profits or no exception from losses.

In considering whether to trade or authorize someone to trade for you, you should be aware of or must get acquainted with the following risks:-

1. Equity Risk:

It is the risk involved in holding equity in a particular investment. Investors in equity securities may be exposed to a high level of risk. The prices of equity securities can rise and fall significantly in a short period of time. Securities investments are subject to market risks and there can be no assurance or guarantee.

2. Commodities Risk:

The prices of commodities may be volatile and may fluctuate substantially based on force majeure events such as hurricanes, fires or earthquakes, affect the supply or production of such commodities. The prices of commodities may also fluctuate substantially if due to foreign exchange rates, national monetary policies, inflation, conflict or war that affects the supply or production of such commodities. In the event, the interest or the redemption amount payable in respect of any product is linked to the price of a commodity, any change in the price of such commodity may result in the reduction of the amount of interest and/or the redemption amount payable.

3. Derivative Risk:

A derivative financial instrument (i.e. option, future, forward, swap, CFD, NDF) may be a non-delivery spot transaction giving an opportunity to make profit on changes in currency rates, commodity, stock market indices or share prices called the underlying instrument. Investment in derivative securities or markets can be highly volatile. The prices of derivative financial instruments and the underlying assets and indices may fluctuate rapidly and over wide ranges and may reflect unforeseeable events or changes in conditions, none of which can be controlled by you or Earnstock. You should purchase a derivative financial instrument only if you are willing to undertake the risks of losses. Loss of more than capital is also possible and more funds to cover the deficit must be added.

4. Currency Risk:

Currency Risk is the exposure faced by the investors that operate in stock exchanges across different countries. There is a risk of fluctuations in exchange rates on the gain or loss achieved in foreign exchange transactions and transactions in derivatives and securities that are denominated in a foreign currency. There is a possibility that the currency depreciation will negatively affect the value of your assets, investments, and the related interest and dividend payment streams, especially those securities denominated in foreign currency.

5. Short Selling Risk:Short selling is when the investor borrows the shares of a company from an existing shareholder, and later sells those borrowed shares at the current market price. Short selling securities involve risk. There is a possibility that the value of the securities will decline sufficiently during the period of the short sale to offset the borrowing costs associated with shorting to make a profit for the investor.

6. Margin Requirements:

You must maintain the minimum margin requirement in your dematerialized account at all times. It is your responsibility to monitor your account balance. Earnstock or its broking partners have the right to liquidate any account whenever the minimum margin requirement is not maintained and this may result in your contracts being closed at a loss for which you will be liable.

7. Interest Rate Risk:

The prices of most assets are sensitive to changes in interest rates. The interest rate changes are unpredictable. Check here

8. No guarantees of profit:

There is no guarantee of profit or of avoiding losses when trading/investing in the Instruments. You have not received any such guarantees or assurance from Earnstock or from any of its representatives. You should be aware of the risks inherent in the Instruments. Past performance of a security does not guarantee any future results or returns.

9. Specific risks to Advisory Services:

Earnstock has no obligation to cease entering into transactions when the assets on the trading account decrease, even substantially. Therefore, you undertake to control the development of your account so as to be able to terminate the advisory service if, in your opinion, the results do not conform to your expectations or needs.

10. Terms and Conditions of Contracts:

You have the responsibility to fully understand the trading rules and/or terms and conditions of the transactions to be undertaken and the Investment Partnership Agreement you have entered into, including, but without limitation any terms describing risk factors, such as volatility, liquidity, and so on. Prior to the commencement of trading, you should obtain from Earnstock the details of commissions and other charges for which you will be liable. These charges may periodically change. These charges will affect your net profit or loss.

11. Internet/Electronic Trading:

Trading through the trading system designated by Earnstock may differ from trading on other electronic trading systems as well as from trading in a conventional or open market. Trading on an electronic trading system will expose you to risks associated with the system including the failure of hardware, software, and system downtime. 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 and a lack of capability to keep you informed continuously about your positions and fulfillment of the margin requirements. When you trade online, Earnstock shall not be liable for any claims, losses, damages, costs or expenses, caused, directly or indirectly, by any malfunction, disruption or failure of any transmission, communication system, computer facility or trading software, whether belonging to Earnstock, any exchange or any settlement or clearing system.

12. Regulatory/Legal/Structural Risk:

All investments are subject to regulatory, legal or structural risk. Returns on all, and particularly new, investments are at risk from regulatory or legal actions and can alter the profit potential of an investment. Legal changes could even have the effect that a previously acceptable investment becomes illegal. Changes to related issues such as tax may also occur and could have a large impact on profitability. Such risk is unpredictable and can depend on numerous political, economic, and other factors.

In addition to the above risks, businesses are often subject to risks not foreseen or fully appreciated by management. In reviewing this Document, potential investors should keep in mind other possible risks that could be important.