Risk Disclosure

1. Key information

1.1. Definitecom Financial Brokerage Services LLC. (hereinafter referred to as the 'Company') is a financial brokerage firm duly incorporated in the United Arab Emirates and authorised and regulated by the Capital Market Authority (CMA) under a Category 1 and Category 5 licence.

1.2. The Company provides execution-only brokerage services in relation to over-the-counter (OTC) derivatives, including Contracts for Difference ('CFDs'), in accordance with applicable UAE laws and regulations. The Company does not provide investment advice.

1.3. This Risk Disclosure Statement is designed to provide you with sufficient information to understand the risks associated with the Products and Services offered by the Company. You are responsible for determining whether such Products are appropriate for your financial objectives, experience, and risk appetite.

1.4. This Risk Disclosure Statement should be read in conjunction with the Company’s Client Agreement, Order Execution Policy, Conflicts of Interest Policy, and other applicable Client Legal Documents.

1.5. This Risk Disclosure Statement forms part of the Company’s Client Agreement.

1.6. Interpretation. Unless the context otherwise requires, the words 'include', 'includes' and 'including' shall be construed as being without limitation, and any examples or lists provided in this Risk Disclosure Statement are illustrative and not exhaustive.

2. Risk warning and important considerations

2.1. Trading in Contracts for Difference ('CFDs') is highly speculative and carries a high level of risk. CFDs are complex financial instruments and may not be suitable for all investors. You may lose all of your initial investment and, in certain circumstances, you may be liable for losses exceeding your deposited funds.

2.2. CFDs are leveraged products. This means that a relatively small movement in the price of the underlying asset may result in a disproportionately large movement in the value of your position, which may be either favourable or unfavourable.

2.3. Trading CFDs on foreign exchange, equities, indices, commodities, metals, or other underlying assets (each a 'Transaction') exposes you to significant risk of loss. Your profit or loss will depend on fluctuations in the price of the underlying asset.

2.4. Before engaging in CFD trading, you are responsible for determining whether such trading is appropriate for you in light of your financial resources, investment objectives, and level of experience.

2.4.1. Leverage risk

Leverage amplifies both gains and losses. A small adverse market movement may result in rapid and substantial losses, including the loss of your entire account balance or more.

You may be required to deposit additional funds at short notice to maintain your positions. Failure to do so may result in the automatic liquidation of your positions at a loss.

2.4.2. Nature of CFDs (no ownership rights)

CFDs are derivative contracts. When entering into a CFD:

  • you do not acquire ownership of the underlying asset
  • you have no rights to delivery of the underlying instrument
  • the transaction is settled in cash based on price differences.

2.4.3. Margin requirements

The Company may require you to deposit an initial margin and maintain a minimum margin level.

The Company reserves the right to:

  • amend margin requirements at its discretion
  • require additional margin deposits
  • close positions without prior notice if margin levels are not met.

2.4.4. Position monitoring

You are solely responsible for monitoring your account and positions at all times. The Company does not monitor your account, positions, or financial exposure on your behalf.

If your account equity falls below required margin levels, the Company may:

  • issue a margin call (without obligation to do so), or
  • close some or all positions without prior notice.

2.4.5. Market risk

CFD trading is subject to market risks, including:

  • volatility: rapid price movements may lead to significant losses
  • slippage: orders may be executed at prices different from requested
  • gapping: prices may jump between levels with no intermediate trading
  • liquidity risk: you may be unable to close positions at desired prices.

Stop-loss orders are not guaranteed and may not limit losses effectively in volatile markets.

Prices quoted by the Company may differ from prices available in the underlying or interbank market.

2.4.6. Gap risk

Market prices may move abruptly from one level to another without passing through intermediate price levels ('gap').

Such gaps may occur during periods of low liquidity, market openings, or following major economic or political announcements.

Stop-loss orders, limit orders, or other risk management tools may not be executed at the requested price and may be executed at the next available price.

This may result in losses greater than anticipated or exceeding the amount initially expected by the Client.

2.4.7. Liquidity risk

In certain market conditions, it may be difficult or impossible to execute an Order at the requested price due to lack of liquidity.

Liquidity may vary depending on the financial instrument, market conditions, and time of day. The Company does not guarantee the availability of liquidity at all times.

Delays in execution or inability to close positions may occur under certain market conditions.

2.4.8. Execution risk

Orders placed by the Client may be executed at prices different from those requested due to market conditions, latency, or system limitations.

Execution may be subject to delays, re-quotes, slippage, or rejection.

The Company may act as principal in transactions and/or may rely on third-party liquidity providers for execution.

Execution quality depends on factors including price, speed, liquidity, and market conditions.

The Client acknowledges that delays or failures in execution may occur and that the Company shall not be liable for such events except where required under applicable laws and regulations.

2.4.9. Counterparty risk

All CFD transactions are conducted over-the-counter (OTC). Depending on the relevant Product and execution model, the Company may act as principal and counterparty to your Transactions and may hedge some or all of the resulting exposure with third-party liquidity providers.

Accordingly:

  • transactions are not executed on an exchange
  • where the Company acts as counterparty, you are exposed to the Company's credit risk; and
  • positions must be closed with the Company; and
  • the Company may be exposed to counterparty, liquidity, execution, and other risks arising from its arrangements with third-party liquidity providers.

2.4.10. Conflict of interest

The Company may act as principal and counterparty in Transactions with the Client. In such circumstances, the Company's interests may not always align with those of the Client and, where the Company retains some or all of the resulting market exposure, the Company may financially benefit where the Client incurs trading losses. The Company may hedge some or all of its exposure with third-party liquidity providers. The Company maintains policies and procedures to identify, manage, and mitigate conflicts of interest in accordance with applicable regulations. Notwithstanding such measures, conflicts of interest may not be fully eliminated.

2.4.11. Segregation of client funds

Client funds are held in segregated accounts in accordance with applicable UAE regulations.

However:

  • segregation may not provide complete protection
  • in the event of insolvency, full recovery of funds is not guaranteed.

2.4.12. No investment advice

The Company provides execution-only services. The Company does not provide discretionary management or portfolio management services.

  • the Company does not provide investment, legal, tax, or financial advice
  • any market information provided is for informational purposes only
  • all trading decisions are made at your sole discretion

2.4.13. Appropriateness

Where required under applicable laws and regulations, the Company may assess whether the Products or Services are appropriate for you based on your knowledge and experience.

Regardless of any such assessment, you are responsible for ensuring that you understand the nature and risks of CFD trading.

2.4.14. Costs, fees, and charges

You may be subject to:

  • spreads
  • commissions
  • overnight financing (swap) charges
  • other fees disclosed in the Company’s Client Agreement and Fee Schedule, Commission & Charges Disclosure.

These costs may reduce profits or increase losses.

2.4.15. Currency risk

Where transactions are denominated in a currency different from your base currencyechange rate fluctuations may impact your profit or loss.

2.4.16. Taxation

You are solely responsible for your tax obligations arising from your trading activities.

The Company does not provide tax advice.

2.4.17. Electronic trading risks

Trading via electronic platforms involves risks including:

  • system failures
  • connectivity issues
  • delays in execution
  • cybersecurity risks.

The Company is not responsible for losses arising from such technical issues beyond its reasonable control, including failures of third-party service providers or infrastructure.

2.5. General disclaimer

Nothing in this Risk Disclosure constitutes:

  • investment advice
  • a recommendation to trade
  • any form of financial or investment advisory service.

Past performance is not indicative of future results.

2.6. Jurisdictional restrictions

The distribution of this Risk Disclosure Statement and the offering of the Company’s services may be restricted in certain jurisdictions.

It is your responsibility to ensure compliance with applicable local laws.

2.7. Regulatory prevailing clause

In the event of any inconsistency between this Risk Disclosure Statement and applicable UAE laws, regulations, or CMA rules, the latter shall prevail.

3. Acknowledgment

By opening an account and/or entering into Transactions with the Company, you acknowledge that you:

  • have read and understood this Risk Disclosure Statement
  • accept the risks associated with trading CFDs
  • understand the nature and risks associated with CFD trading and acknowledge that CFD trading may not be appropriate for all clients.