1. This statement is provided to you in accordance with Rules 7.18(4)(d)* of Rules of Bursa Malaysia Securities Berhad.
2. The purpose of this statement is to inform you that the risk of loss in borrowing and lending securities for the purposes permitted under these Rules can be substantial. You should assess if borrowing or lending securities is suitable for you in light of your financial circumstances. In deciding whether to borrow securities you should be aware of the following:
- where the redelivery of securities to the lender, which securities is equivalent to the securities borrowed, is by way of purchase on the market, the buy price of the securities may be substantially higher than the price of the securities at the time of borrowing;
- under certain conditions, it may be difficult to buy back securities equivalent to the securities borrowed;
- the lender may recall the securities borrowed or, upon occurrence of certain trigger events at any time which necessitates the buying back of securities equivalent to the securities borrowed; and
- the securities borrowed may no longer be eligible for borrowing in the future and as such the lender may recall on all of that securities borrowed by all borrowers which may necessitate the buying back of the securities equivalent to those securities borrowed, by all borrowers. This ‘buying back’ may result in the buy price of those securities going up significantly.
3. Meanwhile, in deciding whether to lending securities you should be aware of the following:
- A lender of securities faces the risk of a borrower defaulting on its obligations. This risk is heightened if such transaction is not collateralised. There is also a risk that the borrower may not settle an obligation for full value on the due date.
- Lending of the securities means that the client loses ownership rights to the said securities. In its place, the client will only have a right, to claim for equivalent securities from the borrower.
- Market risk is the risk of loss from adverse movements in the level or volatility of the market prices of assets. In the case of a collateralised transaction, market risk may still occur from movements in the market price of the borrowed securities relative to the collateral. If the borrower does not or cannot top up the collateral, part of the transaction may become unsecured.
- There are operational and settlement risks, or risk that deficiencies in a party's systems or internal controls could result in an unexpected loss including a contract cannot be enforced, or because of the unexpected application of, or changes in, laws or regulations. Securities borrowing and lending can involve a variety of complex administrative, trading, operational and accounting activities, and proper procedures and controls need to be in place to ensure timely settlements.
4. This brief statement cannot disclose all the risks and other aspects of borrowing or lending of securities. You should therefore carefully study the terms, conditions, the rules and regulations pertaining to borrowing and lending of securities before engaging in this activity. If you are in doubt in relation to any aspect of this statement, you should consult Moomoo Securities Malaysia Sdn. Bhd. (Formerly known as Futu Malaysia Sdn. Bhd.) (“The Firm”) as the Participating Organisation. The Firm owes no fiduciary duty to its clients and The Firm’s legal duties and obligations to you are as expressly set out herein.
5. For avoidance of doubt, all other terms and conditions and risk disclosure statement(s) applicable to general trading in respect of your trading account with The Firm and/or any respective other account(s)’ terms and conditions and risk disclosure statement(s) shall continue to apply. Nothing herein shall affect the general terms and conditions and risk disclosure statement(s) in respect of your said trading account and/or any respective other account(s)’ terms and conditions and risk disclosure statement(s) to which you have agreed to.
Info Note:
* Under Rules 7.18(4)(d) of Rules of Bursa Malaysia Securities Berhad (The Exchange), a copy of the risk disclosure statement as prescribed by the Exchange is given to and acknowledged by its Client prior to the execution of any written agreement for borrowing by the Client of Eligible Securities.
