Common use of Contingent Liability Investments Clause in Contracts

Contingent Liability Investments. Contingent liability investments are derivatives under the terms of which the Client will or may be liable to make further payments (other than charges, and whether or not secured by margin) when the transaction falls to be completed or upon the earlier closing out of VKAM's position. Contingent liability investments which are margined require the Fund (or VKAM if there are insufficient assets in the Fund) to make a series of payments against the purchase price, instead of paying the whole purchase price immediately. If VKAM permits MSIM, as part of the Investment Guidelines, to trade for the Fund in futures, contracts for differences or write or otherwise deal on margin in options for the Fund, VKAM may sustain a total loss of the margin which MSIM, on VKAM's behalf, deposits with a broker to establish or maintain a position. If the market moves against VKAM, VKAM may be called upon to pay out of the Fund (or VKAM's other assets if there are insufficient assets in the Fund) substantial additional margin at short notice to maintain the position. If VKAM fails to do so within the time required, VKAM's position may be liquidated at a loss and VKAM will be liable for any resulting deficit. Even if a transaction is not margined, it may still carry an obligation to make further payments in certain circumstances over and above any amount paid when the contract was entered into. Contingent liability investments which are not traded on or under the rules of a regulated market may expose VKAM and the Fund to substantially greater risks.

Contingent Liability Investments. Contingent liability investments are derivatives under the terms of which the Client will or may be liable to make further payments (other than charges, and whether or not secured by margin) when the transaction falls to be completed or upon the earlier closing out of VKAM's position. Contingent liability investments which are margined require the Fund Funds (or VKAM if there are insufficient assets in the FundFunds) to make a series of payments against the purchase price, instead of paying the whole purchase price immediately. If VKAM permits MSIM, as part of the Investment Guidelines, to trade for the Fund Funds in futures, contracts for differences or write or otherwise deal on margin in options for the FundFunds, VKAM may sustain a total loss of the margin which MSIM, on VKAM's behalf, deposits with a broker to establish or maintain a position. If the market moves against VKAM, VKAM may be called upon to pay out of the Fund Funds (or VKAM's other assets if there are insufficient assets in the FundFunds) substantial additional margin at short notice to maintain the position. If VKAM fails to do so within the time required, VKAM's position may be liquidated at a loss and VKAM will be liable for any resulting deficit. Even if a transaction is not margined, it may still carry an obligation to make further payments in certain circumstances over and above any amount paid when the contract was entered into. Contingent liability investments which are not traded on or under the rules of a regulated market may expose VKAM and the Fund Funds to substantially greater risks.