Pre-Trading Information and Risk Disclosure for Fund Investment Clients

 

Eddid Securities and Futures Limited (“Eddid Securities and Futures” represents a number of different funds, and it is important that you must first understand (amongst others) before making an investment decision:

1. Investments involve risks, including the possibility of (significant) capital losses.

2. Your own investment objectives, risk tolerance level, investment experience, preferred investment tenor, financial condition and specific needs etc.

3. The Risk Profiling Questionnaire of Eddid Securities and Futures aims to help you understand your risk tolerance level and help you choose the investment product that is relatively suitable for you.

IMPORTANT 
If you are in doubt as to any aspect of this trading, you should consult a SFC licensed person,  solicitor, certified public accountant or other professional adviser.

 

Important Risk Warnings/Notes to Prospective Investors:

1. The investments of the fund are subject to, among other risks, counterparty and credit risks of the counterparties and/ or issuers of the underlying investments.

2. The insolvency of and/ or default in payment by a counterparty/ an issuer in a transaction with the fund would adversely affect the value of the fund’s assets and the fund’s ability to meet its payment obligations. Hence, the fund may suffer substantial losses.

3. Investors should avoid excessive investment in any single type of investments (in terms of its proportion in the overall investment portfolio) so as to avoid the investment portfolio before over-exposed to any particular investment risk.

4. Risks may change over time along with market conditions. Investors should review their portfolio regularly.

5. Investors should exercise caution in relation to fund(s) that are considered Complex Products as defined under the Guidelines of the Securities and Futures Commission in Hong Kong (“SFC”) on Online Distribution and Advisory Platforms. Investors should also pay special attention to Section 1.1 and 2.1 of this document.

 

Ø This document aims to set out the key points to note for investing in funds (including fund(s) that are considered Complex Products as defined under the SFC’s Guidelines on Online Distribution and Advisory Platforms). Please read through this document before investing.

Ø Before making an investment decision, Clients are reminded to read carefully the relevant fund’s offering documents in the language version(s) provided (including the risk factors stated therein), and to seek independent professional advice in case of doubt and/or where they consider necessary.

 

1 Investment objectives, relevant risks and other details of the fund

1.1 The authorization status of the fund, i.e., whether the fund has been authorized by SFC. (SFC authorization is not a recommendation or endorsement of a fund nor does it guarantee the commercial merits of a fund or its performance. It does not mean the fund is suitable for all investors nor is it an endorsement of its suitability for any particular investor or class of investors.)

1.2 Different funds have different investment objectives and policies and involve different risks/ level of risks. Even for funds investing in the same region or market, with differences in investment strategies and focuses, the risks/ level of risks and return may vary under different market situations. Before investing, Clients should consider whether the relevant fund suits their own investment objectives, financial condition and whether they can bear the risks involved in investing in the relevant fund etc.

1.3 Features of the fund include, but are not limited to, the underlying market, asset type or related index the fund invests in, the worst case scenarios, fees and charges, base currency, dealing days, dividend distribution policy (for income units) and investment tenor, etc.

1.4 Investors should read the description of investment tenor of a fund in the relevant fund’s offering documents (if any) in order to understand whether the relevant fund matches the investor’s own circumstances including but not limited to the investor’s investment objective, expected type of investment return, and financial situation; and investors should carefully consider the appropriateness of the transaction.

1.5 The general information on the key parties, including the fund manager, the trustee/ custodian, the issuer(s) of the underlying investments of the fund, for example, background, history, performance and financial conditions, investment philosophy, reputation, creditworthiness, licensing condition, place of incorporation/registration, regulatory status (such as subject to the supervision of which regulatory authority), etc. (as the case may be).1.6 The fund may be terminated early under certain circumstances, for example, if the size of the fund falls below a pre-determined amount; or for index fund, the Index is no longer available for benchmarking (including in circumstances where the Index license agreement is terminated). Investors may not be able to recover their investments and may suffer a loss when the fund is terminated.

1.7 The major risks associated with investment in the relevant fund, such as counterparty risk, credit risk of the issuer(s) of the underlying investments of the relevant fund, the risks of capital loss, market risks, interest rate risks, liquidity risks and exchange rate risks, as well as the risk that the relevant laws or tax rules may change (as the case may be).

1.8 The additional and/ or higher risks and special considerations involved for investing in specialized funds (e.g. feeder funds, leveraged funds, index funds, structured funds and funds that invest in financial derivative instruments) and/ or for funds investing in emerging markets. For instance, the risks for funds which are index funds include, but are not limited to, tracking error risk, concentration risk and risks associated with passive investments, and there can be no assurance that the performance of an index fund will be identical to the performance of the relevant index.1.9 Funds that distribute income (if any) in the form of cash are not capital guaranteed funds. Past income distribution record is for information and reference only and there can be no guarantee in respect of the amount of income distribution and the distribution policy may change. Income distribution is subject to the fund manager’s discretion. Where the income generated by the fund is insufficient to pay a distribution as the fund declares, the fund manager may make distribution from capital including

realized and unrealized capital gains. Such distribution may reduce the capital available for investment in the future and capital growth. It may also result in an immediate decrease in the net asset value per unit.

1.10 The special features and risks of funds investing primarily in high-yield debt securities, including but not limited to:

· Higher credit risk - Since high-yield debt securities are typically rated below investment grade or are unrated and as such are often subject to a higher risk of issuer default.

· Vulnerability to economic cycles - During economic downturns, high-yield debt securities typically fall more in value than investment grade debt securities as investors become more risk averse and default risk rises.

· The net asset value of a high-yield bond fund may decline or be negatively affected if there is a default of any of the high yield debt securities that the fund invests in or if interest rate changes.

· Capital growth risk - A high-yield bond fund may have fees and/or dividends paid out of capital. As a result, the capital that the fund has available for investment in the future and capital growth may be reduced.

· Dividend distributions - A high-yield bond fund may not distribute dividends, but instead reinvest the dividends into the fund or alternatively, the investment manager may have discretion on whether or not to make any distribution out of income and/or capital of the fund. Also, a high distribution yield does not imply a positive or high return on the total investment.

· Concentration of investments – The investments of a high-yield bond fund may be concentrated in particular type(s) of specialized debt or a specific geographical region or sovereign securities.

1.11 The special features and risks of funds investing primarily in corporate loans, including but not limited to:

· General Risks of Corporate Loans - Corporate loans tend to have a higher liquidity risk as compared with corporate bonds due to a longer settlement period and a less liquid market. It may have higher credit risk and valuation risk compared to corporate bonds. It may operate as a covenant-lite structure (e.g. financing is given with limited restrictions on the debt-service capabilities of the borrower, collateral and payment terms), may also lack the anti-fraud protections of the federal securities laws which are available to stocks and bonds, and may be subject to higher fraud risk. A senior secured corporate loan may not be the first lien and so the fund that invests in the senior secured corporate loan may not have a superior claim to payment in case of a default by the borrower. The loan may not be fully secured by collateral and so the fund that invests in such loan may not be able to recover the full amount of the principal invested. Due to the differences in underlying risk profile, corporate loans should not be viewed as a substitute for high yield bonds.

· Higher Counterparty Risk - The issuers of corporate loans may assume large amounts of debt in order to achieve their business objectives and may enter into transactions such as refinancing, recapitalizations, mergers and acquisitions, and other financings for general corporate purposes. High indebtedness and restructurings can be the result of, or lead to, financial distress for the issuers, resulting in losses to the fund that invests in such loans.

1.12 The special features and risks for investing in alternative investment funds, including but not limited to:

· General risk for investing in Alternative Investment Funds - Alternative investment funds may use a variety of alternative investment strategies. Apart from traditional techniques like portfolio planning and diversification, alternative investment funds may also employ one or more of the following strategies, such as long / short, event driven, global macro, relative value, market neutral, etc. There is no guarantee that these strategies will succeed and their use may subject the fund to greater volatility and loss. Alternative investment strategies may involve investment in other asset PUBLIC classes (such as currency, interest rate, commodity, etc.) other than traditional equities, debt securities and money-market instruments. This involves risks in addition to those risks with direct investments in securities. The diversity of investment strategies and the use of different financial instruments by alternative investment funds mean that different alternative investment funds may vary enormously in terms of risks and returns. Because of their complexity, alternative investment funds are only suitable for those who are able to understand and bear the risks involved.

· Leverage risk - Fund managers may utilize derivatives such as futures/ contracts-for-difference etc. to facilitate application of certain alternative investment strategies, hedging and effective fund management. Derivatives could be sensitive to changes in economic/ market conditions that could result in significant loss to the fund. The amount of initial margin is generally small relative to the size of the derivative contract so that the transaction may be leveraged in terms of market exposure. The fund may have a net leveraged exposure of over 100% of its Net Asset Value that may result in a magnified loss.

· Short selling risk - The fund may take short positions on a security (via derivatives) to take advantage in the expectation that the value of the security will fall. There is no assurance that the security will decline sufficiently in value to offset the costs associated with the short position. The potential loss to taking short position may be unlimited as there is no restriction on the price to which a security may rise. The short selling of investments may also be subject to changes in regulations, which could impose restrictions that could adversely impact returns to investors.

· Risk to fund that targets ‘Absolute Return’ - Funds which include ‘Absolute Return’ in investment objective/ policy target to achieve positive returns regardless of market conditions. These funds may apply traditional ‘long-only’ strategy coupled with other alternative investment strategies, and when determined appropriate from time to time, holding cash and cash equivalent instruments in order to create excess returns that do not depend on market movement. Funds employ alternative investment strategies may have relatively low correlations with traditional equity and debt securities markets, and may not go along with the market trends. This, however, may not imply that the target absolute return is guaranteed and there could be circumstances where negative returns are generated.

· Derivatives risk - Alternative investment funds may use derivatives to hedge market and currency risk and for the purposes of efficient portfolio management. Certain alternative investment funds may use more complex derivative strategies for investment purposes. The use of derivatives may expose funds to a higher degree of risk. These risks may include credit risk with regard to counterparties with whom the funds trade, the risk of settlement default, lack of liquidity of the derivatives, imperfect tracking between the change in value of the derivative and the change in value of the underlying asset that the relevant fund is seeking to track and greater transaction costs than investing in the underlying assets directly.

· Liquidity risk - Alternative investment funds may utilize trading derivatives or other alternative asset classes for the purposes of efficient portfolio management, liquidity risk may come from the inability to enter into a desired transaction or any offsetting position which might adversely affect the fund performance.

· Counterparty risk - Some funds may be exposed to the default risks from failure of the counterparty to fulfill liabilities for holding positions in derivatives, in particular to funds gaining exposure largely by derivatives (e.g., synthetic funds, alternative investment funds, etc.).

1.13 The category “Property Investment Fund” means Property Investment Funds that may invest wholly or substantially in physical real properties/ real estate directly or indirectly via other investment vehicles such as underlying funds. The special features and risks for investing in property investment funds, including but not limited to:

· General Risks of Real Estate Investments - The value and marketability of real estate investments are subject to many factors beyond the control of the fund(s) holding the real estate investments whether holding directly or indirectly, including adverse changes in economic conditions, adverse local market conditions and risks associated with the acquisition, financing, ownership, operation and disposal of real estate. Historically, real estate has been subject to fluctuations in its value as well as income derived therefrom. The investments targeted by the Property Investment Fund may also be subject to global trends and market conditions affecting corporate businesses at large. Such real estate investments may thus be adversely affected by: national and international economic conditions; local property market conditions; changes in the supply of, or relative popularity for, competing properties in a given area; the financial condition of tenants, buyers and sellers of properties; interest rate fluctuations, real estate tax rates, other operating expenses and the lack of availability of real estate financing; energy prices and other PUBLIC supply shortages; changes in local road or rail networks; changes in neighboring environment; natural disasters and other acts of God; various uninsured or uninsurable risks; government regulation (such as land use and zoning restrictions, environmental protection and occupational safety) and bureaucratic inertia; the quality of management; expiry of government lease for leasehold; and other factors which are beyond the control of the Property Investment Fund. Many of these factors could have a negative impact on the value of real estate and the income derived therefrom. The capital value of the real estate held by the Property Investment Fund may be significantly diminished in the event of a sudden downward turn in the real estate market.

· Liquidity Risk - Physical real estate investments held by the Property Investment Fund may be illiquid and there may be no public market for real estate investments of the nature of those contemplated by the Property Investment Fund. The eventual liquidity of all investments made by the Property Investment Fund will depend on the success of the realization strategy proposed for each investment and there is a significant risk that the Property Investment Fund may be unable to realize their stated investment objectives by sale or other disposition at attractive prices or at appropriate times or in response to changing market conditions, or may otherwise be unable to complete a favourable exit strategy. Since the underlying investments of the Property Investment Fund may consist wholly or substantially of direct/ indirect investments in real estate, it may also be difficult to realize such investments. The Property Investment Fund may impose limits on the number of redemptions and may provide for deferrals or suspension of dealings. For instance, the Property Investment Fund may not provide daily dealing and the redemption cycle may be longer.

· Valuation Risk - The Administrator of the Property Investment Fund values the underlying assets of fund in accordance with the relevant constitutive documents, policies and/ or principles described in the offering documents of the fund. However, where the underlying investments are consisted of indirect investments in real estate, the underlying funds that invest in real estate and other illiquid investment vehicles may not have a readily ascertainable value and, therefore, may be valued at their net asset value, if any, as reported by such underlying funds, at cost or at fair value as determined by the manager, administrator or auditors of the underlying funds or by the Administrator of the Property Investment Fund. In addition, by way of example, any quarterly valuations reported by such underlying funds generally will not be available until the end of the following calendar quarter. In such instances, the net asset value reported by the underlying fund at the end of any quarter would not reflect a change in value of such investments during the prior quarter. The Administrator of the Property Investment Fund may adjust the value of any investments if, having regard to currency, applicable rate of interest, maturity, marketability and/or such other considerations as it deems relevant, it considers that such adjustment is required to reflect the fair value thereof. An estimated valuation of an underlying fund may prove materially different from the final reported valuation and there can be no assurance that the underlying funds’ valuation will be calculated correctly and on an orderly basis. The Property Investment Fund will rely on its underlying funds in which it invests to provide accounts together with timely, accurate and sufficiently detailed valuation information upon which the Administrator of the Property Investment Fund may base the valuation of the assets and the calculations of the Net Asset Value of the Property Investment Fund. Delays may be experienced in receiving such valuations and the valuations themselves may be subject to margins of error or be incapable of precise calculation. The Property Investment Fund may issue shares after the calculation of its Net Asset Value instead of at subscription dealing days. Investors will be unsecured creditors of the Property Investment Fund and shall not be entitled to normal shareholder rights until such time as the shares have actually been issued.

· Leverage Risk - The Property Investment Fund may employ borrowing to achieve their investment objectives. Although the use of third party borrowing may increase the return on invested capital, it also creates greater potential for loss. This includes the risk that available funds will be insufficient to meet required payments and the risk that existing third party borrowing will not be able to be refinanced or that the terms of such refinancing will not be as favourable as the terms of existing borrowing. Borrowing cost are easily affected by the fluctuation of market interest rate. Generally speaking, if the interest rate rises, the cost of borrowing increases and the interest rate has a larger impact on the borrowing with longer period.

· Derivative Risk - The Property Investment Fund may use derivatives for hedging, effective fund management or leverage, which may expose the fund to additional risks such as counterparty risk.

· Counterparty Risk - The Property Investment Fund may be exposed to the default risks from failure of the counterparty to fulfill liabilities and may increase the potential for losses by the Property Investment Fund.

1.14 The special features and risks for investing in fixed term bond funds include, but not limited to, limited subscription risk, re-investment risk, early termination risk, limited duration risk, and risks associated with investments in debt securities. Fixed Term Bond Funds have a fixed maturity date and subscriptions may not be allowed after the respective initial offer period. Redemptions prior to the maturity date may be subject to a downward price adjustment and investors may be redeeming at a lower redemption price. Switching/ redemption of fixed term bond funds before their maturity date may undermine investors’ investment returns. The principal repaid before maturities of the underlying investments may be re-invested in shorter-dated debt securities or cash or cash equivalents, which may result in lower interest income and returns, if any, to the fund. Liquidation of the fund’s underlying investments prematurely to meet substantial redemptions may adversely affect the value and return, if any, of the fund. Substantial redemptions during the term of the fund may render the size of the fund to shrink significantly and trigger the fund to be terminated earlier. Neither the distributions nor the capital of the fund is guaranteed. Please read the relevant fund’s offering documents, including the full text of the risk factors stated therein, in detail before making any investment decision.

1.15 Specific risks for funds denominated in Renminbi (“RMB”): Clients should note that funds denominated in RMB involve RMB currency risk. Besides general exchange rate risks, RMB is subject to foreign exchange control by the PRC government. Furthermore, funds with underlying investments which are not denominated in RMB are subject to multiple currency conversion costs involved in making investments and liquidating investments, as well as the RMB exchange rate fluctuations and bid/offer spreads when assets are sold to meet redemption requests and other capital requirements (e.g. settling operation expenses). Apart from the RMB currency risk, Clients should also note the other risk disclosures stated in the offering documents of the relevant funds, including but not limited to limited availability of underling investments denominated in RMB, credit risk of counterparties, interest rate risk, liquidity risk, possibility of not receiving RMB upon redemption etc (if applicable). If the funds invest in offshore RMB debt securities, Clients should note that the quantity of debt securities issued outside Mainland China that are available to the funds is currently limited, which may adversely affect the performance and return of the funds. If Clients exchange RMB to subscribe for funds denominated in RMB through the Eddid Securities and Futures and will apply the offshore (CNH) rate to conduct the exchange transaction.

1.16 For funds with underlying investments denominated in currencies other than the base currencies of such funds, Clients should note that such funds are exposed to fluctuations in exchange rates between such currencies and the base currencies of such funds. In general, any depreciation in the rates of exchange of such currencies against the base currencies of such funds could have an adverse impact on the performance of such funds. For Clients whose base currencies are different from the base currencies of the funds in which they invest, they are exposed to fluctuations in exchange rates between such currencies and their base currencies. If Clients wish or intend to convert the redemption proceeds (in the base currencies of the funds) into different currencies, they are subject to the relevant foreign exchange risk and may incur substantial capital loss from such conversion. Furthermore, the currency of some assets of the relevant funds (e.g. the currency of an emerging market) may not be freely convertible and conversion of such currency may be subject to certain policies or restrictions. If such policies or restrictions change in the future, the position of the relevant fund and/ or its investors may be adversely affected.

1.17 Clients should note that risks associated with investments in the relevant fund may change over time along with market conditions, and not all the investment risks are predictable. There may exist significant additional risks in extreme market conditions which might not have been foreseen at the time of inception of the relevant fund/ at the time Clients started to invest in the relevant fund. During a global credit/ financial crisis and when the financial soundness of counterparties/ issuers are called to question, a higher credit or default risk of a counterparty/ an issuer would be involved. Investment fund is not equivalent to securities and futures contacts on the Hong Kong Stock Exchange, and therefore is not protected by the Deposit Protection Scheme in Hong Kong. There is no guarantee for payment of principal.

 

Ways to find out investment objectives, relevant risks and other details of the relevant fund: fund prospectuses (including Product Key Facts Statements), financial reports (if available) and the "Customer Frequently Asked Questions" (if any) as set out in the Fund Fact Sheet.

 

2. For funds which are available to Professional Investor Clients only

2.1 The funds available include investment funds which have not been authorized by the SFC, thus not available to the public in Hong Kong. Investing in unauthorized investment funds involves special risks. Unauthorized investment funds are not subject to the regulation of the SFC, the fund structures and operations may not be governed by any rules or regulations in Hong Kong and the offering documents may not have been vetted by any regulatory authorities in Hong Kong.

2.2 The funds documentation (e.g. prospectus and (if available) product key facts statement, financial reports and fund fact sheet) and fund information (e.g. unit price, fund performance information and cut-off time for subscription, switching and redemption applications) is available to Professional Investor Clients via designated channel(s) only.

2.3 Certain type(s) of fund transaction may only be conducted via designated channel(s).

 

3. Fund performance

3.1 Make reference to the past performance of the relevant fund, as well as the performances of other similar funds and performance of related indices. Clients should note that price of fund units may go up as well as down and past performance information presented is not indicative of future performance.

3.2 The latest unit prices will be published in the newspapers specified by the relevant funds. Please note that the funds are traded at unknown prices and the quoted prices are for information purposes only.

3.3 Clients can check for the funds they have invested in and their values in the monthly account statements sent to them by Eddid Securities and Futures for details.

 

Ways to obtain unit price and fund performance information: fund prospectus, regularly issued (e.g. monthly or quarterly) fund fact sheets.

 

4. Fund Trading

4.1 When considering investing in a fund, Clients should take into account their personal risk tolerance level as well as features of the fund, including but not limited to, the fund’s investment objective, investment tenor, market and asset type of the fund’s underlying investment, the fund’s relevant fees and charges and/or past performance and volatility etc.

4.2 The actual subscription price or redemption price may be significantly different from the reference prices quoted at the time Clients submit applications for subscription, switching or redemption.

4.3 There are charges and fees associated with fund trading, such as subscription fee, switching fee, redemption fee, monthly account fee, management fee, trustee fee, administrative fee and performance fee (if applicable), etc. Clients should take into account the charges and fees involved in relation to their fund trading.

4.4 The dealing frequency of different funds may vary, e.g. each day is a dealing day, only one dealing day each week or only one dealing day each month. The dealing day and the dealing session of different funds may also vary. Clients should be aware that dealing orders placed after the cut-off time on a dealing day/for a dealing session for the relevant fund or placed on a day /at a time which is not a dealing day/ dealing session for the relevant fund will be processed in the next dealing day/ dealing session for that fund. For details of the dealing day/ dealing session of an individual fund, please refer to the relevant fund’s offering documents or contact Eddid Securities and Futures staff.

4.5 Concerning applications for switching between funds provided by the same fund house (which is effected by redeeming units of the existing fund and subscribing for units of a new fund), Clients should be aware that the dealing days of different funds may vary. As such, even though switching applications are received by the Eddid Securities and Futures before the relevant cut-off time, the relevant subscription order and redemption order may not be executed by the relevant fund house on the same day. Clients are therefore exposed to market fluctuations during the relevant period.

4.6 The cut-off times for subscription, switching and redemption applications for the relevant funds set by Eddid Securities and Futures may be earlier than those set out in the offering documents of the relevant funds and may be changed from time to time. For the cut-off times set by Eddid Securities and Futures for individual funds, please contact Eddid Securities and Futures staff.

4.7 Please refer to the information on Eddid ONE or the official website of Eddid Securities and Futures for the channels to buy and sell funds, the minimum amount of each subscription/ redemption conversion transaction of the relevant funds and the minimum unit holding requirement of Eddid Securities and Futures.

*Please refer to the fund offering documents and fund information for the minimum amount/ unit holding requirements specific to a particular fund and details.

For details of other charges set by Eddid Securities and Futures, please refer to the information on Eddid ONE or the official website of Eddid Securities and Futures.
*Please refer to the fund offering documents and fund information for additional fees and details specific to a particular fund.

4.8 Applications for partial redemption should fulfill the minimum amount and minimum unitholding requirements (subject to change by Eddid Securities and Futures at any time without any notice) or full redemption will be required. Please contact the Eddid Securities and Futures’ staff for details.

4.9 Clients should note that fund units will need to be held in the name of a nominee appointed by Eddid Securities and Futures on their behalf. As such, even though Clients hold the beneficial interest in the fund units, they are not in law regarded as the “holders” of the fund units. The fund manager has no direct legal responsibilities towards them. Eddid Securities and Future’s Clients should also note that Eddid Securities and Future will not accept any investment fund transfer application(s) with other fund company(ies) and/ or financial institution(s) which involve(s) a change of beneficial ownership.

4.10 Cancel or change dealing order within the same day that a dealing order is given: Clients may make changes to the dealing order already given prior to the cut-off time set by Eddid Securities and Futures in respect of the relevant fund, including changing the fund to be invested and the subscription amount, or may even cancel the order for subscription, switching or redemption and such changes or cancellation can be made through Eddid ONE or contact Eddid Securities and Futures’ staff. Eddid Securities and futures will not charge any handing fee for such changes or cancellation. However, Clients cannot cancel or make any changes to the dealing orders after the relevant cut-off time.

4.11 Proceeds from the redemption of units will be credited to the client's account within approximately 10 working days after the relevant transaction date. The actual processing time is subject to the operating conditions of individual funds and will normally not exceed one calendar month. If the client has provided a designated settlement account to Eddid Securities and Futures at the time of submitting the redemption request, the funds will be credited to the client’s designated account. Otherwise, the redemption proceeds of the fund will be credited to the client’s securities trading account with Eddid Securities and Futures.

4.12 Cash distributions from funds, if any, will be credited to the client account within approximately 7 working days after Eddid Securities and Futures receive the credit from the fund company. The actual processing time will depend on the operation of individual funds. If the client has provided a designated settlement account to Eddid Securities and Futures, the funds will be credited to the client’s designated account. Otherwise, the proceeds from the cash distribution of the fund will be credited to the client’s securities trading account with Eddid Securities and Futures.

4.13 The fund manager and/ or Eddid Securities and Futures have an absolute discretion to reject, in whole or in part, any application for subscription and/ or switching of units in a fund which the fund manager and/or Eddid Securities and Futures reasonably suspect to be associated with market timing and/or active trading practices, money laundering activities or which will breach any dealing restriction of the fund, without disclosing the reason for the relevant suspicion.

4.14 The funds which are distributed by Eddid Securities and Futures may change at any time without notice. Eddid Securities and Futures may suspend its intermediary service regarding a fund/ certain fund units at any time without giving any notice and reason in certain circumstances (including where Eddid Securities and Futures has reasonable grounds for doing so). In that case, no applications for subscription and/or switching-in of the relevant fund/ fund units will be accepted. For the latest “List of Funds not available for Subscription”, please contact Eddid Securities and Futures’ staff. In general, the funds/ fund units included in the “List of Funds not available for Subscription” would still be available for redemption and/or switching-out.

4.15 Under normal circumstances, Eddid Securities and Futures will update client’s account record immediately upon receipt of the notification of confirmation of the client’s subscription/ switching application from the fund manager or other distributor. However, it is only after the clearing and settlement of such subscription/  switching application has been completed can a customer redeem the relevant fund units. Otherwise, the client’s redemption application may, at the fund manager’s discretion, be considered void and cancelled.

 

Ways to obtain unit price and fund performance information: fund prospectus, regularly issued (e.g. monthly or quarterly) fund fact sheets.

 

5. Others

5.1 Eddid Securities and Futures is NOT an independent intermediary because:

I) Eddid Securities and Futures receives fees, commissions, or other monetary benefits from other parties (which may include product issuers) in relation to Eddid Securities and Futures’ distribution of investment funds to you. For details, you should refer to Eddid Securities and Futures’ disclosure on monetary benefits which Eddid Securities and Futures is required to deliver to you prior to or at the point of entering into any transaction in investment funds; and/ or

II) Eddid Securities and Futures receives non-monetary benefits from other parties, or have close links or other legal or economic relationships with issuers of products that Eddid Securities and Futures may distribute to you.

5.2 Eddid Securities and Futures will not make any express or implied guarantee or promise for the return individual Clients may get from their investment.

5.3 Eddid Securities and Futures, its employees and/ or its agents may receive or enjoy rebates, discounts, commissions, sales incentives, fees, benefits and/ or other advantages in different forms and at varying rates arising out of or in connection with Clients’ investment in any fund made through Eddid Securities and Futures. The current remuneration system that Eddid Securities and Futures adopts for sales staff is a measurement of the staff’s overall performance and not just based on sales amount.

5.4 Eddid Securities and Futures encourages Clients to read the investor publications published by the Investor Education Centre (the “IEC”). Clients may also download the relevant booklets from the IEC website (www.hkiec.hk).

5.5 In respect of an eligible dispute (as defined in the Terms of Reference for the Financial Dispute Resolution Centre in relation to the Financial Dispute Resolution Scheme) arising between Eddid Securities and Futures and you out of the selling process or processing of a fund transaction, Eddid Securities and Futures will enter into a Financial Dispute Resolution Scheme process with you; however any dispute over the contractual terms of the fund should be resolved between directly the relevant fund house and you.

5.6 No person other than you and Eddid Securities and Futures will have any right under the Contracts (Rights of Third Parties) Ordinance to enforce or enjoy the benefit of any of the provisions of your investment funds subscription, switching/ redemption applications.

5.7 You may contact us through any of the following ways if you have any feedback or complaint in relation to fund trading and/or fund investment services:

l Mail: 21/F, CITIC Tower, 1 Tim Mei Avenue, Central, Hong Kong.

l Tel: +852 2655 0300/ Fax: +852 3572 0052

l Email: cshk@eddidsec.com / cs@eddidsec.com

5.8 The registered address of Eddid Securities and Futures is 21/F, CITIC Tower, 1 Tim Mei Avenue, Central, Hong Kong.
5.9 In connection with the securities proposed to be acquired and which are not listed or quoted on any stock market (whether a recognized stock market or any other stock market outside of Hong Kong), certain information in relation to the number and nominal value (if any) of those securities that have been sold in Hong Kong during the period of 6 months immediately preceding the date of the offer and the prices yielded by those sales, is required to be provided under the Securities and Futures Ordinance (Cap. 571) (“SFO”) Schedule 7, Part 1, Section 2(a), and set out in the offer. The information in the above paragraph has not been included in the offer because such information in relation to the SFC authorized fund is not available to Eddid Securities and Futures.

5.10 This document is issued by Eddid Securities and Futures for information and reference only. Clients should consider whether the relevant fund is suitable for them and, depending on their own investment objectives, risk tolerance level, investment experience, preferred investment tenor, financial condition and specific needs etc., consider whether they should seek independent and professional financial advices before making any investment decision.