description
Risk Disclosure

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

Trading in margined foreign exchange involves a high degree of risk including the risk of loss of the Customer's entire Risk Capital deposited with GCM. Losses, in some cases, have the potential to extend beyond the Customer's Account Value. In consideration of GCM agreeing to enter into Foreign Exchange Contracts with its Customer(s) for this Account, GCM requires all the undersigned Customer(s) to analyze their financial objectives, financial status, investment constraints and tax situation to determine whether OTC Foreign Exchange trading is suitable. In addition, we require our Customers to carefully read and acknowledge the GCM Risk Disclosure Statement that outlines without limitation the risks associated with trading margined foreign exchange through GCM. By signing this Agreement the Customer understands and agrees that:

1. OTC Margined Foreign Exchange Trading involves a high amount of risk and is highly speculative. By signing the Risk Disclosure Statement, the Customer(s) agrees that they are in full understanding and willing to assume the legal, economic, and other risks associated with the trading in margined OTC Foreign Exchange, and are willing and able to assume the loss of their entire Risk Capital, defined as those funds, that if lost, would not change your lifestyle or your family's lifestyle. As such, they further agree that margined OTC Foreign Exchange trading is not suitable for Retirement Funds. GCM encourages Customers to closely manage outstanding open positions and to use prudent money management precautions such as, but not limited to, Stop Loss Orders.

2. Excessive leverage available with Margined OTC Foreign Exchange can lead to quick losses.

By signing the Risk Disclosure Statement, the Customer(s) aggress that using a high degree of leverage, defined as the use of a small amount of capital to control a larger amount of an Open Position, can result in large losses due to a price change(s) of open Foreign Currency Contract(s) with GCM. GCM provides leverage on most Currency Pairs for most customers of 100:1. With 100:1 leverage the Customer has the potential to control $1,000,000 position with $10,000 in an Account. GCM encourages its Customers to use only that portion of leverage that the Customer is most comfortable with and to use money management precautions such as, but not limited to, Stop Loss Orders for the purpose of limiting risk. GCM reserves, at its sole discretion, the right to reduce or increase the amount of leverage given on any Currency Pair at any time and without notice.

3. OTC Margined Foreign Exchange trading experience periods of liquidity risk:

By signing the GCM Risk Disclosure Statement, the Customer acknowledges that Liquidity Risk, resulting from decreased liquidity of a currency pair, is usually due to unanticipated changes in economic and/or political conditions. Customer also acknowledges that Liquidity Risk can affect the general market in that all participants experience the same lack of buyers and/or sellers. The Customer also understands that liquidity risk can be GCM specific due to changes in liquidity available to GCM from a GCM Custodian of funds interbank liquidity providers or specific to retail foreign exchange market makers due to a perception that the risks of the market segment has increased. When liquidity decreases, Customers can expect, at the minimum, to have wider bid to ask spreads as the supply of available bid/ask prices, outstrips the demand. Decreases in liquidity can also result in "Fast Market" conditions where the price of a currency pair moves sharply higher or lower or in a volatile up/down pattern without trading in an ordinary step-like fashion. In some instances, there may exist the possibility that a trading bid and/or ask price for a foreign exchange pair or pairs are not available (a situation where there is no liquidity). Although there may be instances when the aggregate OTC foreign exchange market enters a "Fast Market" situation or periods where liquidity is in short or no supply, it is important to note that, GCM Pro's prices, bid/ask spreads and liquidity will reflect the prevailing interbank market liquidity for GCM. GCM can Liquidate Positions of the Customer that do not have adequate margin: Because of the leverage available with OTC Margined Foreign Exchange Trading and the potential for extreme volatility, an GCM Custodian of funds reserves the sole discretionary right to liquidate Customer's Account(s) should the Margin in the Account not be sufficient to cover the potential risk of loss. GCM graphically shows the Customer's Liquidation Level on the Customers GCM Margin Monitor. Should the Customer's Account value go below the free of programming bugs that can cause trading, position keeping or any other required functionality of the GCM Internet Trading Platform and other relevant software applications associated with GCM including but limited to clearing, market making and escrow account software, from becoming inoperable or without errors.

4. There is a Communication Risk that the Customer assumes: Although GCM will have qualified representatives available on the telephone during business hours to accept and execute Customer Market Orders, there exists the risk that the Customer will not be able to contact or make contact with the GCM representative due to but not limited to, communication malfunction, an overabundance of telephone orders, or any other malfunction or negligence. The Customer acknowledges and agrees that they will hold harmless GCM for any loss or missed trading opportunity resulting from any communication problems the Customer may encounter.

5. GCM does not take responsibility for Third Party Account Managers:

Should a Customer grant a Third Party Account Manager trading discretionary trading authority or control over a Customer's Account, the Customer acknowledges that GCM does not take any responsibility for any action done by that Third Party on the Customer's behalf. The Customer grants Third Party trading authority for the Customers Account at it sole, and full risk. GCM reserves the right to correct any deals executed on misquoting errors: In the case when a quoting error occurs that results in a Customer deal done at an off-market price, GCM reserves the sole discretionary right to make the necessary corrections and adjustments to the Customer's Account whether it be in the favour of the Customer or not in the Customer's favour. Any change will be reported to the Customer either verbally or via an electronic method such as but not limited to email.

6. All Market Recommendations made by GCM or any representative of GCM are for informational purposes only:

Any decision by the Customer to buy or sell a Foreign Currency pair is an independent decision by the Customer. Market recommendations made by GCM or a representative of GCM do not constitute an offer to sell or buy any Foreign Currency pair from GCM or from any other source that may provide dealing prices to the Customer. GCM and its employees are not investment advisor(s) and have no fiduciary duty to Customer and therefore is not liable for any losses incurred by the Customer as a result of information or any recommendations made by GCM or representative of GCM. Customer is at Risk if GCM should go out of Business: There is no guarantee that GCM as a business will be profitable. Consequently, there exists a credit risk that GCM may be subject to losses, which could, in turn, jeopardize the capital that the Customers have in their Accounts. Customer acknowledges that in the event of insolvency, the Customer can only look to GCM for performance and return of all Collateral and Margin that the Customer may have at GCM.

7. GCM may decide to exit the OTC Margined Foreign Exchange Business:

There is no guarantee that GCM Custodian of funds may decide that they do not want to continue to participate as a market maker in OTC Margined Foreign Exchange Trading. As a result, the Customer agrees and acknowledges that GCM may liquidate all Customer positions, and return margined funds to the Customer at the sole discretion of GCM, at any time and for any reason. GCM Customers do not hold GCM liable for any loss as a result of liquidation of the Customers position either on an actual basis or as a result of missed profit opportunities.

8. Customers are responsible for any reporting errors:

Any reporting and confirmation errors of omission, and/or errors in details of transactions including but not limited to the price contracts were executed, the currency pair traded, the market direction (i.e."buy" or "sell") of order, the type of order and/or any errors in fees, charges or credits to the Customer's Account including but not limited to charges for executing a transaction, wiring funds, rolling over position, and sweeping foreign currency balances into the home currency, require that the customer notify GCM immediately upon discovery for review. In addition, the Customer is responsible to submit any errors in writing to GCM and send the complete details to Attn: Customer Objections, Gallant Capital Markets, Ltd., Nemours Chambers Road Town, Tortola British Virgin Islands VG1110. Notice shall be deemed received only if actually delivered or mailed by registered mail to, return receipt requested.

9. Risks from deals done over telephone:

GCM will only accept Market Orders for deals done over the telephone. Telephone deals are considered executed when the GCM representative says, "done" and relays the complete deal details. Any given price by a GCM representative over the telephone prior to execution is considered indicative. GCM reserves the right to change the indicative price given over the phone if the actual dealing price is different due to market conditions, misquote or volatility. GCM is not responsible for Customer telephone orders if the Customer cannot be heard or understood by the GCM representative due to, without limitation, accent, speech defect, faulty connection, or excessive background noise at the Customers location or at GCM. To better insure execution, GCM requires that Customers communicate in English when giving orders. GCM cannot guarantee that telephone orders given in a foreign language will be executed. For best results and fast execution, the following procedure will be used:

9.1. The Customer will first be asked by the GCM representative the following Account Information:
9.1.1. The Customer's GCM User Name,
9.1.2. Account Number and/or other identifying feature.

Only after the GCM representative confirms the Customer's identity, the Customer should relay the following order information:

9.2. The execution direction to Buy or Sell, the number of lots, and the desired currency pair.

9.3. The GCM representative will then repeat the order information for the Customer to confirm. For example the GCM Representative may say the following, "Buy 2 lots of EUR vs USD at the Market. Confirmed?" By saying, "Yes" the order will be executed at the Market and the details immediately given to the Customer after execution. The GCM representative will enter the deal into the Customer's Account. The details and effects of the deal will be reflected in the Customer's Online Reports. GCM does not warrant that deals done over the telephone will be done at prices that mirror the prices displayed electronically at that time over the GCM Internet Trading Platform. GCM reserves the right to charge a commission for deals done over the telephone. Should GCM charge a commission for telephone deals, it will be reported on the GCM Website and be reflected as a line item debit in your GCM Account Reports. All deals and charges done via the phone are final. GCM reserves the right to tape all telephone calls without knowledge of the Customer. GCM is not responsible or liable if the tapes of the telephone calls are erased or never recorded because of error, omission or any reason. GCM is also not liable should User Name and Account information be obtained knowingly or unknowingly by a Third Party and as a result, deals done in the name of the Customer without his or her knowledge or authorization.

9.4. Risks from deals done using chat communication devices:
GCM may utilize an electronic conversational application or other similar chat application for the communication and execution of some market orders. GCM Pro an independent third party application that gives the GCM Customer's the ability to contact and execute Market Orders over the public internet, using encrypted character-by-character electronically transmitted messages directly to the GCM Custodian of funds trade execution desk after Authorization via a User Name and Password procedure. Deals done using GCM Pro or the telephone should only be done if the Customer cannot execute using the GCM Internet Trading Platform. Benefits of using GCM Pro rather than the telephone, or other similar application, include but are not limited to, retrievable logs of all conversations (i.e. deal details), conversations are un-editable, character-bycharacter encrypted transmission. It also allows better coverage to an GCM (Custodian of funds) as a dealer for GCM can have multiple electronic conversations but only one telephone conversation. As a result, GCM Customers with access to GCM Pro can expect better direct service from GCM absent access to the GCM Internet Trading Platform. GCM and GCM Pro do not warrant that the GCM Pro application will be functional given the Customers network or hardware configuration or that the software is free of bugs. As with telephone orders, GCM will only accept Market Orders for deals done over GCM Pro. Deals are considered executed when the GCM representative types, "done" over the GCM Pro platform and types the complete deal details. Any given price by a GCM representative over GCM Pro prior to execution is considered indicative. GCM reserves the right to change the indicative price if the actual dealing price is different due to market conditions, misquote or volatility. GCM is not responsible nor will guarantee Customer orders given over GCM Pro that are not typed in English (i.e. in a foreign language). For best results and fast execution, the following procedure should be used when using GCM Pro. Once connection is made with GCM over GCM Pro, the GCM representative will ask the Customer for Account Number for which the Customer will be dealing. Once the GCM representative confirms the Customer's identity, the Customer should type the following order information: the execution direction to Buy or Sell, the number of lots, and the desired currency pair. For example the Customer should type, "I want to Buy 2 lots of EUR/USD". The GCM representative will execute the deal at the market price and type the deal details into the GCM Pro electronic conversation. The GCM representative will enter the details into the Customer's Account, and the effects of the deal will be reflected in the Customer's Online Reports. GCM does not warrant that deals done over GCM Pro will be done at prices that mirror the prices displayed electronically at that time over the GCM Internet Trading Platform. Although currently not planned, GCM reserves the right to charge a commission for deals done over GCM Pro. Should GCM charge a commission for GCM Pro deals, it will be reported on the GCM Website and be reflected as a line item debit in your GCM Account Reports. All deals and charges done via GCM Pro are final. Neither GCM nor GCM Pro is responsible or liable if the electronic logs of the electronic conversations are erased or never recorded because of error, omission or any reason. GCM is also not liable should User Name, Password and Account information be obtained knowingly or unknowingly by a Third Party and as a result, deals done in the name of the Customer without his or her knowledge or authorization.

9.5. GCM has limited liability:
The Customer agrees and acknowledges that GCM shall not be liable to the Customer for any claims, losses, damages, costs or expenses, including attorneys' fees caused directly or indirectly by any events, actions or omissions, without limitation, claims, losses, damages, costs and expenses, including attorney's fees, resulting from civil unrest, war, insurrection, international intervention, governmental action) including, without limits, exchange controls, forfeitures, devaluations and nationalizations), natural disasters, acts of God, market conditions, communication problems or any delay, disruption, failure of any transmission or communication system or computer hardware or software application whether supplied and belonging to GCM or from a third party vendor that the Customer and GCM relies on to conduct execution and reporting services.