RISK DISCLOSURE STATEMENTS FOR INVESTMENT SERVICES

Below are the risk dislcosure statements, please read them carefully and ask questions and take independent advice if clients wish. These risk disclosure statements are intended as general guidance only and are not exhaustive statements of all the risks involved in any specific transaction. Clients should ensure that they have understood that any risks involved in the specific transaction are, in all important respects, suitable for them in light of their experience, objectives, financial resources and other relevant circumstances. If clients are in doubt or do not fully understand a transaction, they should refrain from entering into it or obtain financial advice from an independent financial advisor.

1. General
   

   1.1	Risk of the client's assets received or held outside Hong Kong. Client's assets (including securities) received or held by the bank outside Hong Kong are subject to the applicable laws and regulations of the relevant overseas jurisdiction which may be different from the Securities and Futures Ordinance and the rules made thereunder. Consequently, such client's assets may not enjoy the same protection as that conferred on the client's assets received or held in Hong Kong.
   1.2	Risk of providing an authority to hold mail or to direct mail to third parties. If the client provides the bank with an authority to hold mail or to direct mail to third parties, it is important for the client to promptly collect in person all contract notes and statements of the client's account and review them in detail to ensure that any anomalies or mistakes can be detected in a timely fashion.
   1.3	The bank does not provide tax advice and therefore responsibility for any tax implications of investing in investment products rests entirely with the clients.
   1.4	Investment is not bank deposit and involves risks. Clients should read the relevant offering documents (including the risk factors) and seek for independent and professional / financial / tax advice if needed.
   1.5	RMB is subject to the PRC government's control (for example, exchange restrictions). Besides, there is no guarantee that RMB will not depreciate. If customers convert Hong Kong Dollar or any other currency into RMB so as to invest in RMB denominated investment products and subsequently convert the RMB redemption proceeds back into Hong Kong Dollar or any other currency, you may suffer a loss if RMB depreciates against Hong Kong Dollar or other currency.
   1.6	Investment products are not bank deposit and thus should not be considered as alternative of normal time deposit.
   1.7	In addition to explicit remuneration arrangement (if any), the bank or any of its associates will benefit from the origination and distribution of an investment product which is issued by the bank or any of its associates.

2. Securities
   

   2.1

   Generic Risks (a) Risk of Securities Trading The client acknowledges that the prices of securities fluctuate, sometimes dramatically. The price of a security may move up or down, and may become valueless. It is as likely that losses will be incurred rather than profits made as a result of buying and selling securities. (b) Risk of Trading Growth Enterprise Market Stocks The client acknowledges that Growth Enterprise Market ("GEM") stocks involve a high investment risk. In particular, companies may list on GEM with neither a track record of profitability nor any obligation to forecast future probability. GEM stocks may be very volatile and illiquid. The clients should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professionals and other sophisticated investors. Current information on GEM stocks may only be found on the internet website operated by Stock Exchange of Hong Kong ("SEHK"). GEM companies are usually not required to issue paid announcements in gazetted newspapers. The clients should seek independent professional advice if the client is uncertain of or does not understand any aspect of this risk disclosure statement or the nature and risks involved in trading of GEM stocks. (c) Risk of Trading Nasdaq - Amex Securities at the SEHK The client acknowledges and accepts that the securities under the Nasdaq-Amex Pilot Program ("PP") are aimed at sophisticated investors. The client should consult the bank and become familiarised with the PP before trading in the PP securities. The client should be aware that the PP securities are not regulated as a primary or secondary listing on the Main Board or the GEM of the SEHK. (d) Risk of Margin Trading The client acknowledges that if client maintains a margin account with the bank, the risk of loss in financing a transaction by deposit of collateral is significant. The client may sustain losses in excess of the client's cash and any other assets deposited as collateral with the bank. Market conditions may make it impossible to execute contingent orders, such as stop-loss or stop-limit orders. The client may be called upon at short notice to make additional margin deposits or interest payments. If the required margin deposits or interest payments are not made within the prescribed time, the client's securities collateral may be liquidated without the client's consent. Moreover, the client will remain liable for any resulting deficit in the client's account and interest charged on the client's account. The client should therefore carefully consider whether such a financing arrangement is suitable in light of the client's own financial position and investment objectives. (e) Risk of providing an authority to repledge the client securities collaterals etc. There is a risk if the client provides a licensed or registered person with an authority that allows it to apply the client securities or securities collateral pursuant to a securities borrowing and lending agreement, repledge the client securities collateral for financial accommodation or deposit the client securities collateral as collateral for the discharge and satisfaction of its settlement obligations and liabilities. If the client securities or securities collateral are received or held by the licensed or registered person in Hong Kong, the above arrangement is allowed only if the client consent in writing. The bank does not obtain the aforesaid authority by virtue of this risk disclosure.

1. 2.2

   Risks Associated with Exchange Traded Funds ("ETFs") (a) ETFs have different structures and characteristics. Clients should understand and critically assess the implications arising due to different ETF structures and characteristics. (b) Market risk ETFs are typically designed to track the performance of certain indices, market sectors, or groups of assets such as stocks, bonds, or commodities. ETF managers may use different strategies to achieve this goal, but in general they do not have the discretion to take defensive positions in declining markets. Clients must be prepared to bear the risk of loss and volatility associated with the underlying index/assets. (c) Tracking Errors Tracking errors refer to the disparity in performance between an ETF and its underlying index/assets. Tracking errors can arise due to factors such as the impact of transaction fees and expenses incurred to the ETF, changes in composition of the underlying index/assets, and the ETF manager's replication strategy. (d) Trading at Discount or Premium An ETF may be traded at a discount or premium to its Net Asset Value ("NAV"). This price discrepancy is caused by supply and demand factors, and may be particularly likely to emerge during periods of high market volatility and uncertainty. This phenomenon may also be observed for ETFs tracking specific markets or sectors that are subject to direct investment restrictions. (e) Liquidity Risk Securities Market Makers ("SMMs") are Exchange Participants ("EP") that provide liquidity to facilitate trading in ETFs. Although most ETFs are supported by one or more SMMs, there is no assurance that active trading will be maintained. In the event that the SMMs default or cease to fulfill their role, the clients may not be able to buy or sell the product. (f) Foreign Exchange Risk Clients trading ETFs with underlying assets not denominated in Hong Kong dollars are also exposed to exchange rate risk. Currency rate fluctuations can adversely affect the underlying asset value and further affect the ETF price. (g) Counterparty Risk (i) Full replication and representative sampling strategies An ETF using a full replication strategy generally aims to invest in all constituent stocks/assets in the same weightings as its benchmark. ETFs adopting a representative sampling strategy will invest in some, but not all of the relevant constituent stocks/assets. For ETFs that invest directly in the underlying assets rather than through synthetic instruments issued by third parties, counterparty risk tends to be of less concern. (ii) Synthetic replication strategies ETFs utilising a synthetic replication strategy use swaps or other derivative instruments to gain exposure to a benchmark. Currently, synthetic replication ETFs can be further categorized into swap-based ETFs and derivative embedded ETFs. Swap-based ETFs are exposed to counterparty risk of the swap dealers and may suffer losses if such dealers default or fail to honor their contractual commitments. Derivative embedded ETFs are subject to counterparty risk of the derivative instruments' issuers and may suffer losses if such issuers default or fail to honour their contractual commitments. Even where collateral is obtained by an ETF, it is subject to the collateral provider fulfilling its obligations. There is a further risk that when the right against the collateral is exercised, the market value of the collateral could be substantially less than the amount secured resulting in significant loss to the ETF.

1. 2.3

   Risks Associated with Structured Products (a) Issuer Default Risk In the event that a structured product issuer becomes insolvent and defaults on their listed securities, the clients will be considered as unsecured creditors and will have no preferential claims to any assets held by the issuer. Clients should therefore pay close attention to the financial strength and credit worthiness of structured product issuers. (b) Uncollateralised Product Risk Uncollateralised structured products are not asset backed. In the event of issuer bankruptcy, the clients can lose their entire investment. Clients should read the listing documents to determine if a product is uncollateralised. (c) Gearing Risk Structured products such as derivative warrants and callable bull/bear contracts ("CBBCs") are leveraged and can change in value rapidly according to the gearing ratio relative to the underlying assets. Clients should be aware that the value of a structured product may fall to zero resulting in a total loss of the initial investment. (d) Expiry Considerations Structured products have an expiry date after which the issue may become worthless. Clients should be aware of the expiry time horizon and choose a product with an appropriate lifespan for their trading strategy. (e) Extraordinary Price Movements The price of a structured product may not match its theoretical price due to outside influences such as market supply and demand factors. As a result, actual traded prices can be higher or lower than the theoretical price. (f) Foreign Exchange Risk Clients trading structured products with underlying assets not denominated in Hong Kong dollars are also exposed to exchange rate risk. Currency rate fluctuations can adversely affect the underlying asset value and further affect the structured product price. (g) Liquidity Risk The SEHK requires all structured product issuers to appoint a liquidity provider for each individual issue. The role of liquidity providers is to provide two way quotes to facilitate trading of their products. In the event that a liquidity provider defaults or ceases to fulfill its role, the clients may not be able to buy or sell the product until a new liquidity provider has been assigned.

1. 2.4

   Some Additional Risks Involved in Trading Derivative Warrants (a) Time Decay Risk All things being equal, the value of a derivative warrant will decay over time as it approaches its expiry date. Derivative warrants should therefore not be viewed as long term investments. (b) Volatility Risk Prices of derivative warrants can increase or decrease in line with the implied volatility of underlying asset price. Clients should be aware of the underlying asset volatility.

1. 2.5

   Some Additional Risks Involved in Trading CBBCs (a) Mandatory call risk Clients trading CBBCs should be aware of their intraday "knockout" or mandatory call feature. A CBBC will cease trading when the underlying asset value equals the mandatory call price/level as stated in the listing documents. Clients will only be entitled to the residual value of the terminated CBBC as calculated by the product issuer in accordance with the listing documents. Clients should also note that the residual value can be zero. (b) Funding costs The issue price of a CBBC includes funding costs. Funding costs are gradually reduced over time as the CBBC moves towards expiry. The longer the duration of the CBBC, the higher the total funding costs. In the event that a CBBC is called, the clients will lose the funding costs for the entire lifespan of the CBBC. The formula for calculating the funding costs are stated in the listing documents.

3. Overseas Securities Trading Risk Disclosures
   These Overseas Securities Trading Risk Disclosures should be read in conjunction with the "Risk Disclosure Statements for Investment Services", and the Client should seek independent advice as needed. The Overseas Securities Trading Risk Disclosures are only an overview of some of the risks and do not purport to disclose all the risks and other significant aspects of trading in Overseas Securities (including under the Shanghai-Hong Kong Stock Connect). The Client should undertake its own research and studies on the trading of Overseas Securities (including under the Shanghai-Hong Kong Stock Connect) before commencing any trading activities.
   The Client shall refer to Schedule 1A - Terms and Conditions for Overseas Securities Trading of the "Investment Services Terms and Conditions", including the Additional Terms and Conditions for Overseas Securities Trading under the Shanghai-Hong Kong Stock Connect. Unless otherwise defined, capitalized terms shall have the meanings ascribed to them under Schedule 1A - Terms and Conditions for Overseas Securities Trading.
   

   3.1

   General (a) Assets held Overseas The Client's assets (including Overseas Securities) received or held by the Bank outside Hong Kong are subject to the applicable laws and regulations of the relevant overseas jurisdiction which may be different from the Securities and Futures Ordinance and the rules made thereunder. Consequently, such assets may not enjoy the same protection as that conferred on the Client's assets received or held in Hong Kong. (b) Risk of Trading Options The risk of loss in trading options is substantial. In some circumstances, the Client may sustain losses in excess of its initial margin funds. Placing contingent orders, such as "stop-loss" or "stop-limit" orders, will not necessarily avoid loss. Market conditions may make it impossible to execute such orders. The Client may be called upon at short notice to deposit additional margin funds. If the required funds are not provided within the prescribed time, its position may be liquidated. The Client will remain liable for any resulting deficit in its account. The Client should therefore study and understand options before it trades and carefully consider whether such trading is suitable in the light of its own financial position and investment objectives. If the Client trades options it should inform itself of exercise and expiration procedures and its rights and obligations upon exercise or expiry. (c) Risk of Trading Warrants Warrants often involve a high degree of gearing so that a relatively small movement in the price of the underlying securities, structured investments and trading assets to which the warrant relates may result in a disproportionately large movement, unfavourable or favourable in the price of the warrant. (d) Custodian and Broker Risk Client assets may be held or delivered for settlement to a custodian or broker or other service provider appointed in good faith by the Bank, or sub-custodians. Such persons are not under the control of the Bank, and the Bank accepts no liability for any default of any nature by such third party custodians or brokers, or arising from the transfer of client assets to any such third party for any purposes, and in the event of any such default the Client may suffer total or partial loss in respect of the Client's investment. The Client should familiarise himself with the protections given to money or other property which the Bank deposits on the Client's behalf for domestic and foreign Transactions, particularly in the event of the insolvency or bankruptcy of a custodian or broker. The extent to which the Client may recover his money or property may be governed by specific legislation or local rules. In some jurisdictions, property which may be identified as the Client's will be pro-rated in the same manner as cash for purposes of distribution in the event of a shortfall. (e) Country Risk If an investment is made in any asset or issued by a party subject to foreign laws or if Transactions are made on markets in other jurisdictions, including markets formally linked to a domestic market, recovery of the sums invested and any profits or gains may be reduced, delayed or prevented by exchange controls, debt moratorium or other actions imposed by the government or other official bodies. Before the Client trades the Client should enquire about any rules relevant to the Client's particular Transactions. The Client's local regulatory authority will be unable to compel the enforcement of the rules of regulatory authorities or markets in other jurisdictions where the Transactions have been effected. The Client should obtain details about the different types of redress available in both the Client's home jurisdiction and other relevant jurisdiction before starting to trade. The money received or held by the Bank for the Client in respect of Overseas Securities may not be protected deposit under the Deposit Protection Scheme in Hong Kong. Where Overseas Securities are not securities or futures contracts listed or traded on a recognized stock market (as defined under the Securities and Futures Ordinance), recognized futures market (as defined under the Securities and Futures Ordinance), or other markets currently prescribed by rules made under the Securities and Futures Ordinance, they may not be covered by the Hong Kong Investor Compensation Fund ("Investor Compensation Fund"). (f) Currency Risk The profit or loss in Transactions in foreign currency-denominated contracts (whether they are traded in the Client's own or another jurisdiction) will be affected by fluctuations in currency rates where there is a need to convert from the currency denomination of the contract to another currency. (g) Taxation Income or profit from trading in any investments may be subject to withholding tax or capital gains tax or other tax of the country of the issuer or the country in which such investments are traded. In particular, in the case of cash dividend and bonus issues, the Client may be subject to dividend withholding tax imposed by SAT or other relevant Regulators. In such event, unless the issuer agrees to gross-up the income or profit received by the Client, the Client may only receive any payment or proceeds of sale or redemption of the investment less the withholding tax or capital gains tax or other tax, as required by the Applicable Laws. Clients may not be able to claim the benefits of a double income tax treaty or otherwise qualify for a reduction of withholding tax in respect of investments made through the Bank. The inability to claim the benefits of a double income tax treaty or otherwise qualify for reductions of withholding tax will increase the tax paid in respect of the investment compared to if such treaty qualification or withholding deduction were available. (h) Overseas fees and levies Trading in Overseas Securities may be subject to additional fees and levies under the Applicable Law and from overseas Regulators. The amounts of such fees and levies may change from time to time. The Client may only receive any payment or proceeds of sale or redemption of the investment less such fees and levies. (i) Risk of margin trading The risk of loss in financing a transaction by deposit of collateral is significant. The Client may sustain losses in excess of the Client's cash and any other assets deposited as collateral with the Bank. Market conditions may make it impossible to execute contingent orders, such as "stop-loss" or "stop-limit" orders. The Client may be called upon at short notice to make additional margin deposits or interest payments. If the required margin deposits or interest payments are not made within the prescribed time, the Client's collateral may be liquidated without the Client's consent. Moreover, the Client will remain liable for any resulting deficit in the Client's account and interest charged on the Client's account. The Client should therefore carefully consider whether such a financing arrangement is suitable in light of the Client's own financial position and investment objectives.

1. 3.2

   Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect (a) Not Protected by the Investor Compensation Fund or the China Securities Investor Protection Fund (中國投資者保護基金) ("CSIPF") Investor Compensation Fund Since SSE Securities and SZSE Securities are not securities or futures contract listed or traded on a Recognized Stock Market, recognized futures market (as defined under the Securities and Futures Ordinance), or other markets currently prescribed by rules made under the Securities and Futures Ordinance, they will not be covered by the Investor Compensation Fund. The Investor Compensation Fund is established to pay compensation to investors of any nationality who suffer pecuniary losses as a result of default of a licensed intermediary or authorised financial institution in relation to exchange-traded products in Hong Kong. Examples of default are insolvency, in bankruptcy or winding up, breach of trust, defalcation, fraud, or misfeasance. As for Northbound trading, according to the Securities and Futures Ordinance, the Investor Compensation Fund will only cover products traded in Hong Kong’s recognised securities market (SEHK) and recognised futures market (Hong Kong Futures Exchange Limited, "HKFE"). Since default matters in Northbound trading via the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect do not involve products listed or traded in the SEHK or HKFE, so similar to the case of investors trading other Overseas Securities, they will not be covered by the Investor Compensation Fund. For further information on Investor Compensation Fund, please refer to the website of Investor Compensation Company Limited. For information on licensees and registered institutions under the SFC, please consult the Public Register of Licensed Persons & Registered Institutions in the SFC website. CSIPF Northbound trading under the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect will not be protected by the China Securities Investor Protection Fund ("CSIPF"). According to the Measures for the Administration of Securities Investor Protection Fund《證券投資者保護基金管理辦法》, the functions of CSIPF include “indemnifying creditors as required by China’s relevant policies in case a securities company is subjected to compulsory regulatory measures including dissolution, closure, bankruptcy and administrative takeover by CSRC and custodian operation” or “other functions approved by the State Council”. As far as Hong Kong investors participating in Northbound trading are concerned, since they are carrying out Northbound trading through securities brokers in Hong Kong and these brokers are not PRC brokers, therefore they are not protected by CSIPF in the PRC. (b) RMB Currency Risk RMB is subject to the PRC government's control (for example, exchange restrictions). The Client's ability to remit or repatriate funds into the PRC or out of the PRC will be restricted by Applicable Law. There is no guarantee that the exchange rate of RMB will not depreciate. Hong Kong and overseas Clients who hold a local currency other than RMB will be exposed to currency risk if they invest in a RMB product due to the need for the conversion of the local currency into RMB. During the conversion, the Client may also incur currency conversion costs. Even if the price of the RMB asset remains the same when the Client purchased it and when the Client redeems / sells it, the Client may still incur a loss when converting the redemption / sale proceeds into local currency if RMB has depreciated. (c) Quota used up Once the Daily Quota is used up, acceptance of the corresponding buy orders will also be immediately suspended and no further buy orders will be accepted for the remainder of the day. Buy orders which have been accepted will not be affected by the using up of the Daily Quota, while sell orders will be continued to be accepted. (d) Foreign Shareholding Restrictions The trading, acquisition, disposal and holding of Securities under the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect are subject at all times to the Applicable Law, including the Foreign Shareholding Restrictions, which impose purchasing and holding limits. These limitations and restrictions may have the effect of restricting the Client's ability to purchase, subscribe for or hold any SSE Securities/ SZSE Securities or take up any entitlements in respect of SSE Securities/ SZSE Securities, or requiring the Client to reduce its holdings in any SSE Securities/ SZSE Securities, whether generally or at a particular point of time, and whether by way of forced sale or otherwise, and notwithstanding that the Client's individual holding does not exceed such limitations or restrictions. As such, the Client may incur loss arising from such limitations, restrictions and/or forced sale, including any losses arising from the disgorgement of profits as a result of the "short swing profit rule" under Applicable Law and Requirement. (e) Trading day The Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect may only operate on days when the respective markets are open for trading and when banks in the markets are open on the corresponding settlement days as specified under the Stock Connect Rules. So it is possible that there are occasions when it is a normal trading day for the PRC market but Hong Kong investors cannot carry out any SSE Securities/ SZSE Securities trading. The Client should take note of the days the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect are open for business and decide according to their own risk tolerance capability whether or not to take on the risk of price fluctuations in SSE Securities/ SZSE Securities during the time when the Shanghai-Hong Kong Stock Connect/ Shenzhen-Hong Kong Stock Connect is not trading. (f) Restrictions on selling imposed by front-end monitoring For Clients who keep their SSE Securities/ SZSE Securities outside of their brokers, if they want to sell certain SSE Securities/ SZSE Securities they hold, they must transfer those SSE Securities/ SZSE Securities to the respective accounts of their brokers before the cut-off time as specified by the Bank in its sole discretion from time to time. Only settled SSE Securities/ SZSE Securities are allowed to be sold on any SH Stock Connect Trading Day/ SZ Stock Connect Trading Day. (g) The recalling of eligible stocks The list of SSE Securities/ SZSE Securities are subject to change and certain SSE Securities/ SZSE Securities may be recalled from the scope of eligible securities for trading via the Shanghai-Hong Kong Stock Connect/ Shenzhen-Hong Kong Stock Connect (as the case may be). When a stock is recalled from the scope of eligible stocks for trading via the Shanghai-Hong Kong Stock Connect/ Shenzhen-Hong Kong Stock Connect for any reason, the stock can only be sold but is restricted from being bought. This may affect the investment portfolio or strategies of the Client. The Client should therefore pay close attention to the list of eligible stocks as provided and renewed from time to time by SSE, SZSE and SEHK. (h) SSE Securities/ SZSE Securities and Stock Connect Rules The Stock Connect Rules may be amended or changed from time to time, and such rules may be subject to any amendments or changes to the trading rules of the SSE, SZSE and/or the SEHK, and any Applicable Law. The Applicable Law, Stock Connect Rules and any other relevant Requirements in respect of the SSE Securities, Shanghai-Hong Kong Stock Connect, SZSE Securities and Shenzhen-Hong Kong Stock Connect are still subject to development, and there is uncertainty and risk as to the scope, application, and interpretation of the Applicable Law, Stock Connect Rules, and any other relevant Requirements, including any new taxes, fees or levies and whether the arrangements contemplated under the Shanghai Stock Connect Terms and Conditions or Shenzhen Stock Connect Terms and Conditions are permitted under the Applicable Law, Stock Connect Rules and/or other relevant Requirements. The SSE and SZSE may request the SEHK to require the Bank to issue warning statements (verbally or in writing) to the Client, and not to extend Northbound trading service to the Client. The SSE/ SZSE may be closed, or trading on the SSE/ SZSE may be suspended, whether temporarily or permanently. The Client may incur loss in the event that the Regulators determine that these arrangements are not permitted or in the event of any change to the Shanghai-Hong Kong Stock Connect/Shenzhen-Hong Kong Stock Connect, Requirements in respect of SSE Securities/ SZSE Securities, the SSE Securities/ SZSE Securities available for trading through the Shanghai-Hong Kong Stock Connect/ Shenzhen-Hong Kong Stock Connect, or the suspension or closure (whether temporary or permanent) of the Shanghai-Hong Kong Stock Connect/ Shenzhen-Hong Kong Stock Connect. For example, the Client may find it is not able to acquire, dispose of or hold certain SSE Securities/ SZSE Securities or its entitlements in the event of certain changes to the Stock Connect Rules, which may affect the investment portfolio or strategies of the Client or cause the Client to incur loss. The Bank is not liable to the Client in relation to such determination or change or the consequences of such determination or change. In addition, the Client may find that it is not able to execute certain type(s) or category(ies) of transactions contemplated under the Shanghai Stock Connect Terms and Conditions and Shenzhen Stock Connect Terms and Conditions, such as margin trading in SSE Securities via the Shanghai-Hong Kong Stock Connect/ SZSE Securities via the Shenzhen-Hong Kong Stock Connect or orders with prices beyond the price limits of SSE Securities/ SZSE Securities or in respect of SSE Securities/ SZSE Securities of which trading has been suspended due to price limits. The applicable laws and regulations of the PRC and may be different from the rules and regulations applicable to Securities listed on the SEHK. The Client may find that it is not able to exercise equivalent rights (e.g. right to vote by proxy) as holders of SSE Securities/ SZSE Securities as compared with PRC holders of the same SSE Securities/ SZSE Securities, or as compared with Securities listed on the SEHK. In addition, there is no assurance that the HKSCC will take action to enforce any rights in respect of any SSE Securities/ SZSE Securities, and the Client may have limited recourse in this regard. Further, all SSE Securities/ SZSE Securities may be subject to the same trading board lot size where buy orders are required to be in board lot and subject to a maximum order size. Odd lot trading may only be available for sell orders and it is common that a board lot buy order maybe matched with different odd lot sell orders, resulting in odd lot trades. Unlike Hong Kong, board lot and odd lot orders for SSE Securities/ SZSE Securities are both matched on the same platform on the SSE/ SZSE, and subject to the same share price. The Client may find that it is unable to acquire or dispose of SSE Securities/ SZSE Securities using the same processes or operational mechanisms as compared with those used in acquiring or disposing of Securities listed on the SEHK. The Client should read, understand and accept all relevant rules and any amendments thereof and seek independent professional advice if needed. The HKSCC, Hong Kong Exchanges and Clearing Limited, SEHK, SEHK Subsidiary, SSE, SZSE and their respective directors, employees and agents shall not be responsible or held liable for any loss or damage directly or indirectly suffered by the Bank, the Client, special participants and non-clearing participants of the Central Clearing and Settlement System (if applicable) or any third parties arising from or in connection with Northbound trading, the China Connect Clearing Services (as defined under the General Rules of the Central Clearing and Settlement System), the China Stock Connect System (as defined under the Rules and Regulations of The Stock Exchange of Hong Kong Limited), the SEHK/SSE/SZSE making, amending or enforcing the Stock Connect Rules/SSE Rules/SZSE Rules, or any action taken by the SEHK/SSE/SZSE in discharge of its supervisory or regulatory obligations or functions including any action taken to deal with abnormal trading conduct or activities. (i) Restrictions on instructions In respect of SSE Securities/ SZSE Securities, the Client will be subject to the restrictions under the Stock Connect Rules, SSE Rules/ SZSE Rules in addition to the rules of the SEHK. Instructions of the Client that are not in compliance with the Stock Connect Rules, SSE Rules or SZSE Rules may therefore be rejected or cancelled by the Bank, and part or all of the instruction may not be executed. The SSE/ SZSE may not accept amendments to instructions, and any modifications to an instruction in respect of SSE Securities/ SZSE Securities may therefore require cancellation of the outstanding instruction and input of a new instruction. The Client should read and understand the Stock Connect Rules carefully before placing instructions with the Bank to avoid rejection, cancellation, or non-execution of instructions. (j) Disclosure obligations The Client may be subject to Requirements of the PRC in respect of disclosures of interest in SSE Securities/ SZSE Securities, and may be restricted from acquiring or disposing of SSE Securities and SZSE Securities under the Requirements. For example, in the event the Client's interest in SSE Securities/ SZSE Securities crosses a stipulated threshold under the Requirements of the PRC, the Client may be required to disclose its details and interest holding positions to Regulators of the PRC, and may be restricted from further acquiring or disposing of, or from receiving proceeds or other returns from acquiring, holding or disposing of, such SSE Securities/ SZSE Securities within a stipulated time frame or as prescribed by Applicable Law from time to time. There is no guarantee that the Client may be exempt from the disclosure requirements and the relevant trading restrictions in respect of SSE Securities/ SZSE Securities and the Client is solely responsible for compliance with such Requirements. The Bank is not obliged to determine, advise or assist the Client in any way in respect of the disclosure obligations or trading restrictions applicable to the Client under any Requirements. (k) Risk of default by ChinaClear Although considered remote, trading under the Shanghai-Hong Kong Stock Connect/ Shenzhen-Hong Kong Stock Connect is subject to the risk of default by ChinaClear as the host central counterparty in the PRC. In an event of default by ChinaClear, the HKSCC will in good faith seek recovery of the outstanding stocks and monies from ChinaClear through available legal channels and through ChinaClear's liquidation process, if applicable. HKSCC will in turn distribute the stocks or monies recovered to Hong Kong clearing participants on a pro-rata basis. The Client may not be able to recover all or any part of its outstanding stocks and/monies in an event of default by ChinaClear. (l) Additional risks relating to ChiNext Shares Subject to the Stock Connect Rules, only investors who fulfill the qualification requirements as required by the Stock Connect Rules may trade in ChiNext Shares. The Client should be aware of the risks of dealing in ChiNext Shares. Listed companies in the ChiNext market are usually in their preliminary stage of development with smaller operating scale and shorter operating history and less mature business model and their businesses are usually subject to higher uncertainty and more fluctuations in their performance. Hence, they are subject to higher market volatility and risks and higher turnover ratios than companies listed on the main board of the SZSE. Their stock prices may experience a higher fluctuation as the performance of these companies changes. There are fewer circulating shares on the ChiNext market, hence stock prices may be relatively more easily manipulated and may experience higher fluctuation upon market speculation. The rules and regulations regarding securities in the ChiNext market are less stringent in terms of profitability and share capital than those applicable to the main board market and SME board market of the SZSE. The Client should familiarize itself with the rules and regulations regarding the ChiNext market before investing in ChiNext Shares. The Client should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of the ChiNext market mean that it is a market more suited to professional or other sophisticated investors. The Client should seek independent professional advice if the Client is uncertain of or has not understood any aspect of this risk disclosure statement or the nature and risks involved in trading of ChiNext Shares.