Financial Markets APAC – Sales/Trading Risk Disclaimers
This material has been prepared by personnel in the Sales and/or Trading of ING Bank N.V. (for this purpose being ING Financial Markets, ING Bank N.V. together with any of its affiliates to be referred to as “ING”). It is not a research report and is not intended as such. Click here for general ING Market Abuse Regulation disclosures/disclaimers in respect of Investment Recommendations. If you cannot access these links, please notify us by reply message and we will send the contents to you.
This material has been prepared solely for information and discussion purposes and is for distribution to institutional and professional clients in Asia Pacific region only (excluding South Korea and New Zealand).
Investment Recommendations expressed by Sales and/or Trading messages are those of the author or individual sender and may differ from the opinions expressed by other ING departments, including Research. For further information regarding the author of an Investment Recommendation please contact your local ING representative. All Investment Recommendations and information are based on the author’s opinion of the relevant market conditions as at the date and time the Investment Recommendation was disseminated, and Investment Recommendations may change at any time without prior notice.
This material is not investment advice. It does not constitute “investment research” as defined in article 24(1) of Commission Directive No. 2006/73/EC implementing the Markets in Financial Instruments Directive. It has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
Non-Reliance and Risk Disclosure
This material is for the general information of our clients. This material should not be construed as an offer to sell or the solicitation of an offer to buy any security. We are not soliciting any specific action based on this material. The price and value of the investments referred to in this material and the income from them may go down as well as up, and investors may realize losses on any investments. Past performance is not a guide to future performance. Future returns are not guaranteed, and a loss of original capital may occur. We do not provide tax, accounting, or legal advice to our clients, and all investors are advised to consult with their tax, accounting, or legal advisers regarding any potential investment. The material is based on information that we consider reliable, but we do not represent that it is accurate, complete and/or up to date, and it should not be relied on as such. ING do not act as an adviser or fiduciary and neither this message nor any communications from ING should be treated as constituting financial, investment or other advice of any kind, or as a recommendation to enter into any transaction.
Conflict of Interest Disclosure
Personnel in the Sales and/or Trading of ING who prepared this material are paid in part based on the profitability of ING, which includes earnings from the firm's trading and other business. They, along with other salespeople, traders, and other professionals may provide oral or written market commentary or trading strategies to our clients that reflect opinions that are contrary to the opinions expressed herein or the opinions expressed in research reports issued by our Research Department, and our market making, investing and lending businesses may make investment decisions that are inconsistent with the views expressed herein. This material is therefore not independent from our interests, which may conflict with your interests. We and our affiliates, officers, directors, and employees, including persons involved in the preparation or issuance of this material, may from time to time have "long" or "short" positions in, act as principal in, and buy or sell the securities or derivatives (including options) thereof in, and act as market maker or specialist in, and serve as a director of, companies mentioned in this material.
Target Audiences
This material is not for distribution to retail clients, as that term is defined under The European Union Markets in Financial Instruments Directive(2014/65/EU) (including as implemented in the United Kingdom), and any investments, including derivatives, mentioned in this material will not be made available by us to any such retail client.
Reproduction and Re-Distribution
Without our prior written consent, no part of this material may be (i) copied, photocopied or duplicated in any form by any means or (ii) redistributed.
Information Not for Further Dissemination
To the extent this communication contains ING’s pricing information, such pricing information is proprietary and/or confidential and is provided solely for the internal use of the intended recipient(s). You are notified that any unauthorized use, dissemination, distribution or copying of this communication or its contents, including pricing information, in whole or in part, is strictly prohibited. Further, unless prohibited by local law, any use, review or acceptance of this information is subject to and manifests your agreement with ING to use such information only in accordance with the terms set forth above. ING has caused its proprietary information to be delivered to you in reliance upon such agreement.
Not a Valuation
Values herein are not customer valuations and should not be used in lieu of a customer valuation statement or account statement. These values may not reflect the value of the positions carried on the books and records of ING and should not be relied upon for the maintenance of your books and records or for any tax, accounting, legal or other purposes. The information provided herein does not supersede any customer statements, confirmations or other similar notifications.
Indicative Terms/Pricing Levels
This material may contain indicative terms only, including but not limited to pricing levels. There is no representation that any transaction can or could have been effected at such terms or prices. Proposed terms and conditions are for discussion purposes only. Finalized terms and conditions are subject to further discussion and negotiation.
OTC Derivatives Risk Disclosures
Terms of the Transaction
To understand clearly the terms and conditions of any OTC derivative transaction you may enter into, you should carefully review the relevant master agreement, including any related schedules, credit support documents, addenda and exhibits. You should not enter into OTC derivative transactions unless you understand the terms of the transaction you are entering into as well as the nature and extent of your risk exposure. You should also be satisfied that the OTC derivative transaction is appropriate for you in light of your circumstances and financial condition. You may be requested to post margin or collateral to support written OTC derivatives at levels consistent with the internal policies of ING.
Liquidity Risk
There is no public market for OTC derivative transactions and, therefore, it may be difficult or impossible to liquidate an existing position on favorable terms. These circumstances include, for example, suspension of trading, extreme market conditions, failure of telecommunications or electronic systems, and events commonly known as “force majeure”. Your ability in such circumstances to make a value or risk assessment, or to make a calculation of a fair price, would also be adversely affected. Even if you give a “stop-loss” or “stop-limit” order, these may be impossible to execute.
Conflict of Interests
ING may have material interests that conflict with the interests of the recipient of this message. For example, ING may be dealing as a principal in any investments which are the subject of the transaction referred to in it and may have a long or short position in connection with such dealing. ING may also be providing services to other persons in connection with these investments, may be acting as an underwriter in respect of them and/or may be acting as financial adviser or lending banker to the issuer of them. In connection with these activities, ING may hold material information but will be under no obligation to take it into account or make it available to any person.
Counterparty Credit Risk
You must evaluate the credit risk of doing business with ING, as you may be exposed to the credit risk of the counterparty in any OTC derivative transaction.
Pricing and Valuation
Because the prices and characteristics of over-the-counter transactions are individually negotiated and there is no central source for obtaining prices, there are inefficiencies in transaction pricing. We consequently cannot and do not warrant that our prices or the prices we secure for you are or will at any time be the best price available to you. We may make a profit from a transaction with you no matter what result the transaction has from your point of view. The value or quoted price of the product at any time, however, will reflect many factors and cannot be predicted.
Political Risk
An OTC derivative transaction may be related or linked to issuers and obligors incorporated, based or principally engaged in business in a country in which there are unanticipated political developments affecting government policy, including the regulation of industry, trade, financial markets and foreign and domestic investment. Any perceived, actual or expected disruptions or changes in government policies of a country, by elections or otherwise, can have a major impact on the value of such a transaction.
Currency Risk
You may be exposed to currency fluctuation risk where you effect an OTC derivative transaction involving different currencies, or in a base currency other than one in which you carry on your ordinary business or keep your accounts. Any loss incurred by you as a result of the relevant rates for the conversion of any monies from the base currency to the currency in which you keep your accounts (i) may be greater than the profits from the transaction when measured against the base currency of that transaction or (ii) may increase the amount of the loss you suffer in the transaction itself.
Commodity Risk
You may be exposed to commodity risk where you effect an OTC derivative transaction involving one or more commodities. Market prices of commodities may fluctuate rapidly based on many unpredictable factors, including (without limitation) changes in supply and demand relationships; weather; agriculture; trade; pestilence; changes in interest rates; and monetary and other governmental policies, action and inaction. Different factors may cause the value of the commodities, and the volatilities of their prices, to move in inconsistent directions at inconsistent rates. These factors may affect the value of the transaction in varying ways. Additionally, the value of a transaction involving only a single industry (e.g. energy) or a single commodity (e.g. gold) may be more volatile than a transaction involving a variety of commodities.
Regulatory/Legal Risk
The level of government supervision and regulation of business and industry practices, stock exchanges, over-the-counter markets, brokers, dealers and issuers in the country to which the transaction is linked may not be the same as that in the local market which you may be familiar with.
Operational Risk
You may be subject to operational risks in the event that you do not have in place appropriate internal systems and controls to monitor the various risks, funding and other requirements to which you may be subject by virtue of the transaction.
Options
Option transactions carry a high degree of risk. You should pay particular attention to the terms governing an option, especially to the terms on which an option may be exercised and terms dealing with the expiration of an option. Option transactions can be extensively customised. An American option may generally be exercised on any day in accordance with its terms. However, a European option will generally only be exercisable on the day of its expiration, and you may not realise any value it might have at an earlier date. Some options may require you to exercise them if a certain price is reached and some options may terminate before the stated expiration date when certain price is reached.
If an option is exercised by you, you may receive cash, or if the option is physically settled, you would obtain a corresponding position in the underlying subject matter of such option. You should familiarise yourself with the obligations (delivery, payment, etc.) associated with obtaining such a position. If you fail to exercise an option purchase by you, you will not realise any value it may have for you.
The risk of selling (writing) options is considerably greater than the risk involved in buying options. If you buy an option, you cannot lose more than the premium. If you sell (write) an option, the risk may be unlimited.
Transaction costs and Hedging costs
Your net returns from an OTC derivative transaction have also been affected by the transaction costs (i.e. commission, fees and other charges) charged by us. In addition, we may incur costs in hedging our market risk with respect to the underlying assets. (e.g., if we issue an index-linked Note, we will hedge our market risk by making investments relating to the index; if we issue a commodity-linked note, we will hedge our market risk by making investments relating to the relevant commodities.) Those hedging costs include the expected cost of undertaking this hedge. They are also included in the profit that we expect to realize in consideration for assuming the risks inherent in providing such hedge.
Leverage/Gearing Risks
While geared/leveraged products/strategies amplify the potential gain from an investment, they also increase the potential loss thereof. Should you engage in margin buying, a means of applying leverage in investing, you should note that any potential loss may exceed the margin, and/or a substantial portion or the entire initial cash outlay.
Margin/Collateral
We may require that you provide margin or collateral to support your obligations under OTC derivative transactions you trade with or through us.
Where an OTC derivative transaction is leveraged, you should note that a small market movement in the underlying market will have a multiplying effect on your corresponding loss, and may exceed the amount of margin deposited with us. You will be required to top-up any such shortfall by depositing additional margin with us.
Generally, we are entitled to liquidate your positions to meet any shortfall in margin or collateral requirements.
Non-Transferability and Non-Marketability
An OTC derivative transaction generally cannot be assigned or transferred without the consent of the other party. Unless otherwise agreed upon, we are not obliged to repurchase a transaction from you. Accordingly, once you have entered into a transaction, you may not able to unwind the transaction to stop any further losses you may be incurring on that transaction.
Because OTC derivative transactions are customised and not fungible, engaging in a transaction with another dealer to offset a transaction you have entered into with us will not automatically close out those positions (as would be true in the case of equivalent exchange-traded futures and options) and will not necessarily function as a perfect hedge.
Structured Transaction with Multiple Instruments
Where an OTC derivative transaction is made up of several instruments, you should be aware that there is risk associated with each instrument evaluated separately and the risk of the transaction evaluated as a whole.
Market Making, Investing and Lending
ING engages in market making, investing and lending businesses for its own account and the accounts of its affiliates in the same or similar instruments underlying OTC derivative transactions (including such trading as ING deems appropriate in its sole discretion to hedge its market risk in any OTC derivative transaction whether between ING and you or with third parties) and such trading may affect the value of an OTC derivative transaction.
Early Termination Payments
The provisions of an OTC derivative transaction may allow for early termination and, in such cases, either you or ING may be required to make a potentially significant termination payment depending upon whether the OTC Derivative Transaction is in-the-money to ING or you at the time of termination.
Indexes
ING does not warrant, and takes no responsibility for, the structure, method of computation or publication of any currency exchange rates, interest rates, indexes of such rates, or credit, equity or other indexes, unless ING specifically advises you otherwise.
Notice to Investors
Notice to Australian Investors
This message does not take into account the investment objectives, financial situation or needs of any particular person. It does not constitute financial product advice. Accordingly, before making any investment decision in relation to this document, you should assess whether the investment is appropriate in light of your own financial circumstances or seek professional advice.
ING Bank N.V. (ARBN 080 178 196 AFSL 234557) is incorporated in the Netherlands with limited liability. When this document is disseminated in Australia by ING, this document, and any access to it, is intended only for a person that has first satisfied the ING that the person is a wholesale client for the purpose of section 761G of the Corporations Act of Australia. Please inform your usual ING contact if you are not a wholesale client now or if you cease to be a wholesale client at any time in the future.
Notice to Mainland Chinese Investors
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This message does not constitute an offer to sell or the solicitation of an offer to buy any security in China to any person to whom it is unlawful to make the offer or solicitation in China.
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Notice to Hong Kong SAR Recipients
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Notice to Indian Investors
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Prospective investors must seek legal advice regarding any investment and must comply with all relevant Indian laws in this respect. Each investor is deemed to have acknowledged and agreed that it is eligible to invest under applicable laws and regulations and that it is not prohibited under any law or regulation in India from acquiring, owning or selling the securities.
The information contained herein only contains general comments made in good faith on trends in the financial or securities market. ING make no comments in relation to particular securities or investment products listed on a stock exchange in India.
These materials are for the purpose of marketing only. The information contained herein does not constitute investment advice or solicitation in relation to any Indian securities or investment products.
Notice to Indonesian Investors
This message is provided to the Indonesian client (wherever located) from ING’s office located outside the territory of Indonesia.
Notice to Japanese Investors
WARNING: The contents of this document have not been reviewed by any regulatory authority in Japan. You must make investment at your own risk and based on your own investment decision.
Notice to Philippine Investors
This message is for general information purposes and is for distribution to institutional and professional clients only. It does not constitute an advertisement, recommendation, solicitation, offering, or marketing of any kind of financial products or services including financial investment advice or products. None of the information should be interpreted as an offer to sell securities or as investment advice of any kind. This message may not be distributed or used for the purpose of providing any referenced products or services or making any offers or solicitations in any jurisdiction or in any circumstances in which such products, services, offers or solicitations are unlawful or not authorized, or where there would be, by virtue of such distribution, new or additional licensing or registration requirements. No warranty or representation, express or implied, is given as to the accuracy or completeness of the information. Neither ING nor any of its officers or employees accepts any duty of care to the recipient or any liability for any direct or consequential loss arising from any use of this document or its contents. The contents of this document have not been reviewed by any regulatory authority in the Philippines.
Notice to Taiwanese Investors
This message is provided for your information only and you should not rely solely on the information provided when making your investment decisions. When considering any investment, you should endeavour to make your own independent assessment and determination on whether the investment is suitable for your needs.
We have taken all reasonable care in producing the information and trust that the information is reliable and suitable for your situation at the date of publication or delivery, but no representation or warranty of accuracy or completeness is given. To the extent that we have exercised the due care of a good administrator, we accept no responsibility for any errors, omissions, or misstatements in the information. We do not guarantee any investment results and do not guarantee that the strategies employed will improve investment performance or achieve your investment objectives.
Notice to Thai Investors
The information in this message in relation to any products or services are not intended to constitute marketing, offering or sale of such products or services to customers or potential customers in Thailand unless the applicable regulations of Thailand have been complied with.
Notice to Vietnamese Investors
The contents of this marketing material do not constitute an offer to invest in securities whether by way of sale or subscription. The contents of this marketing material contain information of the company that may be sensitive, proprietary or otherwise protected from disclosure and is intended only for informational purposes. The document should not be disclosed, disseminated, or redistributed and may not be used for any commercial purposes.