Pep

Risk Disclosure Notice

Pepperstone Markets Limited

Date: December 2023

IBC No.: 177174 B
SIA Reg. No.: SIA-F217

Risk Warning: trading CFDs and FX is risky. It isn't suitable for everyone and, if you’re a Pepperstone
Pro, you could lose substantially more than your initial investment. You don't own or have rights in the
underlying assets. Past performance is no indication of future performance and tax laws are subject to
change. The information in this document is general in nature and doesn't take into account your or
your client's personal objectives, financial circumstances, or needs. Please read our legal documents
and ensure you fully understand the risks before you make any trading decisions. We encourage you to
seek independent advice.
 there’s no exchange market on which to close
1. Scope of this Notice out an open position. It may not be possible to
1.1 Pepperstone provides you with this Notice to liquidate an existing position, to assess the
help you understand the risks that might arise value of the position arising from an OTC
when trading CFDs. This Notice is non- derivative transaction or to assess the
exhaustive, and you need to bear in mind that it exposure to risk. Bid and offer prices don’t need
doesn’t contain all the risks and aspects to be quoted, and, even if they are, they’ll be
involved in trading CFDs or how the risks relate established by dealers in these instruments.
to your personal circumstances. You should Consequently, it may be difficult to establish
carefully read this Notice in conjunction with what a fair price is.
our Terms and Conditions, Order Execution
Policy and other documents and information 3.2 A CFD derives its value from the value of an
available to you through our website, in light of Underlying Asset – for example, the value of
your personal circumstances, before deciding one currency against another, the price of a
to open an Account and trade with us. We share, a market index or a particular
recommend that you seek independent advice commodity.
if you’re unsure.
3.3 We offer a number of different types of CFDs,
1.2 This notice is provided to Retail Clients and including Margin FX Contracts and CFDs based
Professional Clients. If you’re classified as a on indices, shares, precious metals, energy,
Professional Client, please be aware that you soft commodities and Cryptocurrencies. For
won’t receive the same protections that are full details of the CFDs that we offer, please
afforded to Retail Clients. visit our website.

3.4 CFDs can be traded in many currencies, so you

2. Appropriateness should check the CFD description within the
Platform before you trade.
Assessment
3.5 When you trade CFDs, you’re taking a position
2.1 As part of our Account-opening process we’ll
on the change in value of the relevant
carry out an assessment of your
Underlying Asset over time. In other words,
appropriateness to trade CFDs and determine,
you’re speculating on whether the value of the
based on information you provide to us, if you
Underlying Asset is going to rise or fall in the
have sufficient knowledge and experience to
future, compared to when you opened (or
understand the risks involved in trading CFDs.
executed) your Contract. You don’t own or have
We’ll inform you of the results of our
any rights in the Underlying Asset associated
assessment, but this doesn’t relieve you of the
with a particular CFD.
need to carefully consider whether trading
CFDs is right for you. If we warn you that
3.6 The amount of profit or loss that you
trading CFDs may not be appropriate for you,
experience when you trade a CFD will be the
then you should refrain from trading CFDs until
difference between the price when you open
you obtain sufficient knowledge and
the Contract and the price when it’s closed-out
experience and have acquainted yourself with
(adjusted to reflect holding costs, where these
the relevant trading risks. For example, you may
apply). If the value of the CFD has moved in
trade CFDs on a demo Account to build your
your favour, we’ll pay money into your Account.
knowledge and experience before trading CFDs
If it moves against you, we’ll deduct money
in a live environment.
from your Account.

3.7 While you have open Contracts, you may also

3. Nature of CFDs attract financing costs or Swap charges after
3.1 CFDs are over-the-counter (“OTC”), otherwise each server rollover (5pm New York (EST). The
known as “off-exchange”, derivative products. costs you’ll incur depends on the Underlying
While some OTC markets are highly liquid, Asset that you’re trading and are subject to
transactions in OTC or “non-transferable” change. We explain our fees and other costs in
derivatives may involve greater risk than more detail on our website.
investing in on-exchange derivatives because
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 repay the amount you borrowed plus any
4. Prices and Costs interest or other costs.
4.1 Our dealing costs are set out in writing on our
website.

4.2 The prices of CFDs that you trade with us 5. Leverage and Required
include a mark-up; this means that the spreads
offered by us comprise of (i) the raw spreads
Margin
received from liquidity/ price provider(s) and (ii) 5.1 Trading CFDs enables you to use leverage to
a mark-up (where applicable). open a Contract by depositing a fraction of the
total Contract value. This means that a
4.3 We charge commission on certain types of relatively small market movement may lead to
Account. We’ll charge commissions as a a proportionately much larger movement in the
percentage, or basis points, of the total position value of your Contract. You can trade Margin
size trade - your costs aren’t relative to the FX Contracts and other CFDs with a high degree
deposit or margin you’ve used. We’ll charge you of leverage because of the small Margin
where indicated on a per transaction basis. requirements. Trading with leverage means
that even a slight change in the market could
4.4 Minimum charges can be relevant for smaller lead to a proportionately much larger
trade sizes and there are also charges movement in the value of your investment.
associated with overnight financing of
positions. We may include costs in the 5.2 If you’re a Professional Client and the market
transaction price of Margin FX Contracts. In moves against you, your use of leverage means
this situation, we’ll stipulate the size of the that you could incur losses that may be far
bid/offer spread quoted depending on the greater than the money you’ve deposited in
product(s) that you want to trade. your Account. Professional Clients may be
entitled to one-time negative balance
4.5 The costs associated with your transactions protection, as set out in our Terms and
will show up separately on your Contract notes Conditions.
and statements.
5.3 If you’re a Retail Client, we’ll provide you with
Negative Balance Protection which limits your
4.6 We use pricing that has been sourced from
maximum losses (including any costs that you
multiple, external, third party Liquidity
incur) to the value of your Account equity.
Providers, which is derived from the prices of
the relevant underlying instruments. The prices
5.4 You should note that any changes that you
of CFDs that you trade with us may include a
make to your leverage level on an already
fixed mark-up from those raw spreads but we
traded Account can immediately affect your
do not make any other alterations to the pricing.
open positions, and we may require you to
provide additional funding to support your open
4.7 If you have any queries about costs or our Contracts.
pricing, please contact us by email at
support@[Link]. 5.5 If you’re a Retail Client and your equity (Account
balance plus running profit/loss) falls below
the 50% Margin level required to maintain your
4.8 We offer several different trading accounts that
open Contracts, we will automatically close
feature different fees and costs.
them.

4.9 You shouldn’t fund your Account using money 5.6 If you’re a Professional Client and your equity
obtained from any credit facility (including bank (Account balance plus running profit/loss) falls
loan or otherwise). It’s important for you to note below the Margin required to maintain your
that your overall risks will be significantly open Contracts, we’ll automatically close them
increased if you do this. For instance, if you when your Margin reaches the following
incur a loss on your trades, you’ll still have to thresholds:
(a) 20% for MetaTrader Accounts;

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 (b) 50% for cTrader Accounts; And periods of particularly heavy volume, it’s
(c) 20% for Pepperstone Platform possible for a queue of Orders to form, and the
Accounts. increase in incoming Orders can sometimes
create a delay in confirming certain Orders.
5.7 It’s your responsibility to monitor the required
Margin for your open Contracts and in order to 6.7 There are times when Orders may be subject to
avoid a stop-out you may have to fund your what’s known as “slippage”, because of an
Account. You can monitor your Contracts (and increase in volatility or volume. This happens
Margin requirements) on your Platform. most often during fundamental news events or
“gapping” in the markets, which create
conditions where orders are difficult to execute
6. Volatility because of extreme price movements.

6.1 Derivative markets generally can be highly 6.8 The execution of your Order always depends on
volatile (i.e. they move up and down in value the liquidity that’s available at all price levels.
quite quickly) so the risk that you’ll incur losses Although you may be looking to execute at a
when you trade in derivative Contracts can be certain price, even if that price appears on the
substantial. Platform, the market may have moved
significantly or liquidity may be exhausted, in
6.2 High volatility means the markets can be very which case your Order would be filled at the
difficult to predict. This means that you next best price or the fair market value.
shouldn’t consider any Contract offered by us
or any other financial services provider to be a 6.9 When you’re considering an Order, please be
“safe” trade. mindful that all Contracts that you have open at
4:59pm New York (EST) will be subject to a
6.3 In times of extreme volatility, pricing of server rollover. Your Contracts will be rolled
Contracts can be impacted as the source of over by debiting or crediting your Account with
that pricing (liquidity) dries up. This can mean, a Swap Charge or Swap Benefit. During the
for example: server rollover period, trading may be disabled
(a) the market “gaps” and jumps past the for 2 to 5 minutes and there may be widened
price that you want or expect; spreads as liquidity reduces, which could cause
(b) the underlying bid/ask spread widens you to experience losses or gains. We’re not
(i.e. the gap between the buy and sell liable for any losses that you incur during the
price is wider); and server rollover period.
(c) you could even find it difficult to obtain
a price for particular Contracts.

6.4 We pass on any pricing re-quotes from our 7. Stop losses not
Liquidity Providers directly to you, without any
bias towards the direction the pricing has
guaranteed
moved in. 7.1 You’re responsible for monitoring your Account
and taking steps to limit your losses. We
6.5 Highly volatile market conditions can make it encourage you to employ “stop-loss orders” to
difficult for us to execute Orders at the given minimise your risk, but it’s important for you to
price, due to an extremely high volume of note that stop-losses aren’t guaranteed. If there
Orders and/or available liquidity. By the time are instances of illiquidity, slippage or the
we’re able to execute Orders, the bid/offer price market gaps up or down, your exit price will be
may be reset. This may mean that certain the next available price, which could deviate
Orders at this time are rejected. significantly from your intended stop-loss
price.
6.6 “Hanging Orders” can also occur during periods
of high volume. A Hanging Order is when an
Order sits in the “orders” window of the
Platform after it’s been executed. Generally, the
Order has been executed, but it’s simply taking
a few moments for it to be confirmed. During
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 This happens most often during fundamental
8. Foreign Exchange news events or “gapping” in the markets, which

Risks create conditions where Orders are difficult to

execute because of extreme price movements.
8.1 If you’re trading in a product that is
denominated in a currency other than the 10.2 The execution of your Order always depends on
currency of your Account, you’ll be impacted by the liquidity that’s available at all price levels.
foreign exchange movements. Please refer to Although you may be looking to execute at a
our Terms and Conditions for more information certain price, the market may have moved
on how we treat different currencies. significantly or liquidity may be exhausted, in
which case your Order would be filled at the
next best price or the fair market value.
9. System Risks 10.3 When you’re considering executing an Order,
9.1 We run the Platform in an online environment please be mindful that all Contracts that you
(the internet). This means there may be issues have open at 23:59 (server time) will be subject
with you placing Orders or with your Contracts to a server rollover. Your Contracts will be rolled
being executed due to internet, system or over by debiting or crediting your Account with
network issues on your end. Because we can’t a Swap Charge or Swap Benefit. During the
promise that the internet will work error-free, we server rollover period, trading may be disabled
can’t accept liability for the risks associated for 2 to 5 minutes and there may be widened
with the operation of our Platform. For this spreads as liquidity reduces, which could cause
reason, you need to be mindful that Platform you to experience losses or gains. We’re not
risks are inherent in every Contract that you liable for any losses that you incur during the
trade with us. server rollover period.

9.2 For example, a technical issue with your

internet connection to our servers, may result in
a Hanging Order and a delay in executing your
11. Cryptocurrency Risk
Contract. A disturbance in the connection path 11.1 CFDs are high risk investment products, which
can sometimes interrupt the signal and disable are volatile, creating opportunity for high
the Platform, causing delays in transmission of financial returns or losses. Cryptocurrencies
data between the Platform and our servers. are also high risk instruments and their value
can fluctuate significantly. Cryptocurrencies
9.3 Disruptions to our operational processes such are also subject to technology risks. If you
as communications, computers, computer choose to invest in Cryptocurrency CFDs, you
networks, software or external events could do so acknowledging that these instruments
also lead to delays in the execution and are much more volatile than traditional
settlement of your Contract, meaning that you currencies, so sharp and sudden moves in the
might be unable to trade in a particular contract price could see you lose significant amounts of
that we offer and you could suffer a financial money very quickly.
loss or opportunity loss as a result.
11.2 We base the price of our Cryptocurrency
9.4 If you experience a disruption to our Platform, contracts on the Underlying Market, made
you can contact our Support team directly at available to us by the exchanges and Liquidity
support@[Link] to open\close your Providers that we trade with.
Contract.
11.3 When you trade CFDs on Cryptocurrencies, you
need to be aware of the risk of a “hard fork”
10. Execution Risk occurring. A hard fork is when a single
Cryptocurrency splits in two due to a split in the
10.1 We aim to provide you with the best pricing blockchain network (ledger of Cryptocurrency
available and to fill all Orders at the rate you’ve transactions) and occurs when a
requested. But there are times when Orders Cryptocurrency’s existing code is changed.
may be subject to what’s known as “slippage”, This can result in both an old and new version
because of an increase in volatility or volume. of the particular Cryptocurrency.

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 developing their tools and systems and we’re
11.4 In the event of a hard fork,: not responsible or liable for their operation in
(a) we’ll generally follow the blockchain connection with the Platform.
that has the majority consensus of
Cryptocurrency users. We reserve 12.3 We don’t endorse any third party provider and
Pepperstone reserves the right to you should take steps to ensure that any third
determine which blockchain) and party tools or systems that you use to trade
Cryptocurrency unit has the majority with us have been developed by reputable
consensus behind them and use this providers that, where relevant, are appropriately
as a basis for Cryptocurrency licensed or permitted to provide the relevant
Contracts; and services to you.
(b) there may be substantial price volatility
around the event. We may suspend 12.4 Your use of automated trading strategies such
trading throughout if we don’t have as EAs is solely at our discretion. We reserve
reliable prices from the Underlying the right to restrict access to your Account by
Market. such automated trading strategies where we
consider that the level of activity or server
messages generated are deemed
11.5 If the hard fork results in a variable second unreasonable, relative to your trading
Cryptocurrency becoming tradeable on activities.
exchanges we have access to, then, in our
absolute discretion, we may create an 12.5 This may require us to temporarily change the
equivalent contract or cash adjustment on your password to your Account until such time as
Account to reflect its value. When a hard fork the automated strategy or EA is modified or
occurs, there may be substantial price volatility deactivated. We’ll attempt to contact you
around the event, and we may suspend trading before taking this action prior, but we reserve
throughout if we do not have reliable prices the right to change your password immediately
from the Underlying Market. to support the proper functioning of our
servers.
11.6 We’ll attempt to notify you of potential hard
forks, but it’s however it is your responsibility to
make yourself aware of the hard forks that
could occur.
13. Client Money
13.1 We’ll keep any money that we hold on your
11.7 We may enforce a total limit on the total behalf in one or more segregated accounts with
amount of Cryptocurrency exposure that you’re an institution within or outside The Bahamas,
allowed each client is allowed to maintain. This separated from our own money.
information is available on our website or from
our Support team upon request. We reserve the
right to reduce your Cryptocurrency positions if 13.2 Your client money won’t be kept separate from
your notional exposure size exceeds this limit. other client’s money in this account, therefore
you won’t have a claim against a specific sum
in a specific account, in the unlikely event of our
12. Automated Trading or the bank’s insolvency. Instead, your claim
may be against the client money held in our
Risk segregated account.
12.1 While you’re able to connect to and use third
party trading tools and systems with the 13.3 In general, accounts held with institutions face
Platform (such as automated trading various risks, including the potential risk of
strategies/expert advisors, copy traders and being treated as one (1) account in case the
robot traders), using these tools and systems is institution defaults. Another risk might be that
high risk and could lead to you incurring the funds in the bank account may be exposed
significant financial losses. to our obligations to other Clients if we’re
unable to meet them. We’re not liable to you if
12.2 We don’t have any control over the logic or code the bank we use to hold client money becomes
that these third party providers use when
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 insolvent and you have no redress against us in policies may have a material adverse effect on
this situation. your dealings in OTC derivative products. We’ll
do our best to let you know whenever a change
in legislation will impact the way that you deal
14. No Advice with us.

14.1 We provide you with our products and services

on an execution-only basis – which means that
you’re solely responsible for any decisions that
17. Past Performance
you make in relation to our products and 17.1 Past performance, simulation or prediction of
services. CFDs doesn’t guarantee future results. You
should note that the value of your investment
can decrease (as well as increase) as the
14.2 We’re not a financial advisor and we don’t market price of the Underlying Asset may
provide any regulatory, tax or legal advice. fluctuate downwards (or upwards).
Sometimes we’ll provide you with general
factual information about the market and how
our various products and services work. Any
information and analysis that we provide you is
18. Words that we use in
general in nature and doesn’t take into account
your or your client’s personal objectives,
this Notice
financial situation or needs. You shouldn’t “Account” means your trading account with
regard any of the information that we provide to us.
you as an investment recommendation or an “Agreements” means this notice, our Terms
offer to make a transaction. and Conditions, Application Form, and any
information on our Platform or website which
governs our relationship with you.
14.3 Tax benefits are subject to change and depend
“Application Form” means the online form
on your individual circumstances. We
that you complete on our website to open an
recommend that you seek specialist advice if
Account.
you’re unsure about any of these matters.
“CFD” means a contract-for-difference, a type
of OTC derivative product that we offer.
“Cryptocurrency” means a digital asset that’s
15. Corporate Actions subject to significant volatility and risks.
15.1 If your Contract is the subject of a corporate “Contract” means an OTC derivative Contract
action such as rights issues, takeovers, between you and us, which is an agreement
mergers, we’ll decide what adjustment, if any, to pay or receive the difference in value of an
will be made to your Contract or your order to: Underlying Asset.
(a) preserve the economic equivalent of “Hanging Order” has the meaning given to it
the rights and obligations of you and us in section 6.6 of this Notice.
in relation to the Contract immediately “Liquidity Provider” means a counterparty
before the corporate action took place; that we pass trades to, to manage our risk,
and/or also known as a hedging counterparty.
(b) replicate the same effect of the
“Margin” means the amount of money that
corporate action on your Contract that
you need to deposit into your Account to
it would have on someone with an
enter into or maintain a Contract with us
interest in the relevant Underlying
under the Agreements.
Asset. This may include closing-out a
“Margin FX Contract” means a leveraged
Contract or opening a new Contract.
foreign exchange Contract, a type of OTC
derivative product that we offer.

16. Regulatory and Legal “Order” means an offer that you make to
enter into a Contract with us under the
Risks Agreements.
“Pepperstone”, “we” “us” and “our” means
16.1 Changes in taxation and other laws, Pepperstone Markets Limited.
government, fiscal, monetary and regulatory
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 “Pepperstone Platform” means “Terms and Conditions” means the current
Pepperstone’s proprietary trading platform version of our Terms and Conditions, which
accessible via a mobile app or over the form part of our legal relationship with you,
internet. as available on our website.
“Platform” means any online software that “Underlying Asset” means the instrument or
we make available to you for entering into asset that underlies your Order or Contract
Margin FX Contracts and CFDs under the and determines the value of that Contract –
Agreements, including the Pepperstone for example ana stock market index,
Platform. commodity, currency pair, futures contract,
“Professional Client” has the same meaning equity, crypto currency or any other
as in our Terms and Conditions. instrument or asset.
“Retail Client” has the same meaning as in “Underlying Market” means the market in
our Terms and Conditions. which an Underlying Asset is traded. For
. example, the Australian Securities Exchange.

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[Link]
support@[Link]