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Risk Disclosure
Risk Disclosure
Risk Disclosure of Security Trading and Trading Stocks in GEM

The fluctuation of stock price can be very large. Stock price may rise or fall, or even fall to no value. Trading stock cannot ensure you profit; but also may bring you big loss. Putting your stock under the custody of licensed corporations, their representatives or their nominees may also incur risk. Before trading, you should understand the nature of the contract(and the provisions herein) and the level of risk you are going to bear.

The stocks in Growth Enterprise Market involve high level of risk, especially the past earning record and earning forecast are not required for listing in GEM. The price can be very volatile, and the liquidity can be very low. You should make a careful consideration before investment in this market. When you subscribe IPO shares through IPO financing, additional financing costs will be incurred even though no shares being allotted.

The potential profits derived from an IPO investment may not offset the transaction costs and interest expense incurred if subscribe on margin. You will incur a loss if allotted shares are unable to sell above the offer price anticipated.

The allotment basis is unknown at the time of subscription. In case of the shares are heavily over subscription, you may only be allotted part of the shares or even no shares at all. On the other hand, if the IPO turns out to be not as popular as it is anticipated to be, then you may get more shares than you would expect.

The risk of using collateral to finance trading or margin financing is very large. Investors may lose in excess of the money and other assets being pledged with the broker house or margin financier.

You may sustain losses in excess of your initial margin funds. Placing contingent orders, such as "stop-loss" or "stop-limit" orders, will not necessarily limit losses to the intended amounts. Market conditions may make it impossible to execute such orders. You may be called upon at short notice to deposit additional margin funds. If the required funds are not provided within the prescribed time, your position may be liquidated. You will remain liable for any resulting deficit in your account. You should therefore carefully consider whether such trading is suitable in light of your own financial position and investment objectives.

No one can always predict the direction of stock or stock market correctly, investors should assess the professionalism and psychological quality of their account executives, and track their performance records.

Before the trading, investors should understand all commission and transaction fee items with the corresponding explanations, for they would affect investment result.

Electronic trading facilities are supported by computer-based component systems for the order-routing, execution, matching, registration or clearing of trades. As with all facilities and systems, they are vulnerable to temporary disruption or failure. Your ability to recover certain losses may be subject to limits on liability imposed by the system provider, the market, the clearing house and/or participant firms. Such limits may vary: you should ask the firm with which you deal for details in this respect.