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FCL Risk Disclosure Statement

PLEASE READ THIS RISK DISCLOSURE STATEMENT CAREFULLY. This Risk Disclosure Statement does not disclose all the risks and other significant aspects of the various types of transactions that you enter into under the Client Agreement with Finstreet Capital Limited. Before entering into any transaction, you should therefore be satisfied that you fully understand the precise nature of the transaction, how it works, the extent of your exposure to risks and the potential losses that you could incur. You should also read the relevant product specific terms. This Risk Disclosure Statement also does not deal with issues of taxation or other legal consequences pertaining to any transactions which you enter into. You should carefully consider whether any proposed transaction is suitable for you in the light of your financial resources, experience, objectives for engaging in the transaction, ability to bear risks and other relevant circumstances. Please note that the products and investments in the platform are not insured and you may lose your entire capital invested.   You should consult such professional advisers (including legal, tax, financial and accounting) as may be appropriate.

1.Introduction

1.1 Scope   

1.1.1. The Risk Disclosure Statement provides Clients with information about the risks associated with the services provided by Finstreet Capital Limited (‘FCL’ or ‘Company’). Since financial services are prone to risk it is important for FCL to clearly communicate to its Clients the various types of risk that they can face when dealing in the products that are offered by FCL.

1.1.2. All Clients and prospective Clients of FCL should read this Risk Disclosure Statement before engaging with FCL.  

1.1.3. FCL has kept this Risk Disclosure Statement as exhaustive as possible, but it may not be possible to cover all the risks that can arise for the Client. FCL shall on a regular basis update this document as and when it is needed to add to or modify it to cover any new form of risk identified that could potentially affect the Client.

1.1.4. By opening an account, a Client is deemed to have reviewed, understood and accepted the risks associated with the services provided by FCL.

1.1.5. All capitalized terms used herein and not defined have their respective meaning provided in the Financial Services Regulatory Authority (FSRA) Rulebooks.   

2. Risk Disclosures

2.1. No Endorsement  

Any details provided should not be interpreted as an attempt by the FCL to solicit or make an offer to participate in any opportunity or transaction. FCL does not give or provide any form of tax advice and/or legal advice to its Clients or anyone using FCL services.  

2.2. No Warranty

FCL provides no assurance that Clients will achieve their investment objectives and makes no representation, warranty, or guarantee as to the quality, accuracy, or completeness of any alert, article, view, information, advice, tool, calculator, analysis, report, data, content, news, price, statistic, comment, feedback, or advertisement provided by FCL. Clients are expected to conduct a thorough evaluation and research of such information and based on such evaluation make their own investment decision.  

2.3 Forward Looking Statements

Past performance is not indicative of future performance. Certain information provided may constitute “forward looking statements” which can be identified by the use of such terminology. Considering various risks and uncertain scenarios, actual results and performance may differ significantly from the results and performance contained in such forward-looking statements.  

2.4 Sole Discretion

Any use of the information and any decisions undertaken are at the sole discretion and risk of the Client themselves.  

2.5 Information Accuracy

2.5.1. Information provided by FCL is solely that, and provided without warranty;  the Client is expected to analyse this information thoroughly and establish an independent judgement.  

2.5.2. FCL may provide historical and/or real-time data, including pictorial representations such as graphs, and any other information, details, and documents. Such data or graphs or information is for reference purposes only, and any reliance the Client places on them is strictly at the Client’s own risk and discretion.  

2.6. Independent Advice

FCL expects Clients to seek independent financial, legal, tax and/or any other professional advice before entering into any transactions with FCL.   

2.7 Suitability Assessment

Clients must assess the suitability of any transaction before entering into it with FCL, in particular in light of their skills, knowledge, objectives, experience and financial resources, to make an informed decision that is suitable for their individual circumstances.  

2.8. Fees and Charges

FCL's fees and charges are set out on the website www.finstreet.ae under the ‘Fees’ section. The Client should make themselves aware of all applicable costs and charges, because such costs and charges will affect final -returns.

3. Risk Categories

3.1 Third Party Risk

FCL also uses services and products provided by its vendors, who can be third parties. Such products and services may have errors, or issues caused by oversight by the respective third party. It is also possible that such third party may become insolvent.  

3.2 Risk of News and Announcements

News and other such announcements can impact the services provided by FCL. Depending on different scenarios and types of news and announcements, and types of services, the impact on returns  could be substantial. In some cases, the impact of such news and announcements can be severe, resulting in unexpected negative outcomes.

3.3 Macro-economic Risks

Overall economic slowdown, unanticipated corporate performance, environmental or political problems, changes to government policies and regulations pertaining to financial services may have direct or indirect impact on the services provided by FCL.

3.4 System / Network / Cyber Risks  

3.4.1. FCL is a fully automated platform providing Clients access by electronic means and internetbased communication with various technologies and computer systems. Due to the intricate nature of systems and software, it may happen that the communication network fails, or system problems occur, or the system’s performance slows down with delayed response. Any such other technical or operational issues may result in difficulty in accessing the system. Such issues many times are beyond the control of FCL and may result in delays in activities or services being performed in the desired manner and time, which may result in losses for Clients. The online platform is exposed to internet related risks such as interruption, delay, failure, corruption or loss of data, or loss of confidentiality in the transmission of data.   

3.4.2. Online systems can be targeted by hackers to disrupt operations, steal data or assets. This can be done by various means such as Distributed Denial of Service (DDoS), Sybil attack, Phishing, hacking, malware, or spoofing. Similar attacks can be directed towards the Client which may result in unauthorized access of the Client account resulting in losses.

3.5 Communication Risk

FCL offers the opportunity to communicate with Clients by electronic means, specifically via email, if and when required. Clients should be aware that electronic communications may fail, may be delayed, may not be secure, and/or may not reach the intended destination.

3.6 Legal & Tax Risk

Clients may be subject to tax due to their activities with FCL. Based on their country of residence, Clients should assess their tax obligations. It is the responsibility of the Client to comply with all the applicable laws, rules and regulations and they are solely responsible for reporting and paying any taxes.

3.7 Loss of Capital Risk

3.7.1. Provision of financial services involves a certain degree of risk, including the risk of the loss of all or a significant portion of the capital, or losing the entire investment. FCL’s financial services are suitable and offered only to Professional Clients who are aware of, completely understand, and are willing to accept risks. Clients should also read and understand various rules and regulations published by FCL and FSRA.

3.7.2. Due to the nature of PFP activities, there is an observed generally high failure rate due to the possibility of no or very little established track record for start-ups and SMEs.  

3.8 Liquidity Risk

3.8.1. There may be difficulty in entering and exiting a transaction or investment, caused by various factors, including, but not limited to, inadequate liquidity, insolvency, adverse market conditions, new regulations, and others. In these circumstances the Client may not be able to enter and/or exit a transaction or investments in a timely manner, which may result in losses.

3.8.2. In the absence of a ready secondary market for PFP transactions, Clients may face the risk of not being able to exit their PFP transactions or having to transfer them at a significant discount.  

3.9 Lack of Information

There may not be sufficient information on the start-ups and SMEs seeking financing through the PFP to enable Clients to conduct proper due diligence and make fully informed investment decisions.

3.10 Conflicts of Interest Risk

3.10.1 Circumstances where conflicts of interest could arise in the course of FCL carrying out activities include, but are not limited to, the following:

  • (a) Under its investment advisory permission, where FCL provides advice in relation to a securities offering and advises other Clients as to the advantages and disadvantages of investing in that security;
  • (b) Where FCL provides the platform to the Issuers to raise capital, advises them, and lists them on the PFP there might be circumstances where FCL includes it into its own funds on the PFP;
  • (c) Where FCL provides advisory services to one Client in respect of a transaction and seeks to provide financial services to another Issuer in respect of the same transaction;
  • (d) Where FCL acts as a Fund Manager for more than one Client or Fund, in particular in respect of issues relating to allocation;
  • (e) Where FCL provides research in relation to a Issuer (or any of its affiliates) to which it also provides PFP services to raise capital;
  • (f) Where an employee of FCL engages in personal account dealing in respect of financial instruments that potentially conflicts with an interest of an FCL Client; or
  • (g) Where an employee of FCL serves as a director, advisory board member, or in some other oversight capacity for a public or private company that FCL is advising.

3.10.2. The remuneration of a PFP Operator is typically linked to the amount of funds raised so the interests of a PFP Operator may be more aligned with those of the PFP Prospect than those of its Client providing financing.