Common use of EQUITY SECURITIES AND DEBT SECURITIES Clause in Contracts

EQUITY SECURITIES AND DEBT SECURITIES. Buying equity securities (the most common form of which are shares) will mean that the Investment Adviser will become a member of the issuer company and participate fully in its economic risk. Holding equity securities will generally entitle the Investment Adviser to receive any dividend distributed each year (if any) out of the issuer’s profits made during the reference period. On the other hand, buying debt securities (such as bonds and certificates of deposit) will mean that the Investment Adviser is, in effect, a lender to the company or entity that has issued the securities. Holding debt securities will entitle the Investment Adviser to receive specified periodic interest payments, as well as repayment of the principal at maturity. Generally, holdings in equity securities will expose the Investment Adviser to more risk than debt securities since remuneration is tied more closely to the profitability of the issuer. In the event of insolvency of the issuer, the Investment Adviser’s claims for recovery of the Investment Adviser’s equity investment in the issuer will generally be subordinated to the claims of both preferred or secured creditors and ordinary unsecured creditors of the issuer. There is an extra risk of losing money when shares are bought in some smaller companies, such as xxxxx shares. There is a usually big difference between the buying price and the selling price of these shares. If they have to be sold immediately, the Investment Adviser may get back much less than was paid for them. The price may change quickly and it may go down as well as up. Holdings in debt securities, on the other hand, generally risk not being remunerated only if the issuer is in a state of financial distress. Moreover, in the event of insolvency of the issuer, the Investment Adviser is likely to be able to participate with other creditors in the allotment of the proceeds from the sale of the company’s assets in priority to holders of equity securities. If the Investment Guidelines allow the Local Manager to buy equity or debt securities the Investment Adviser will be exposed to both the specific risks associated with individual securities held (and the financial soundness of their issuers), as well as the systemic risks of the equity and debt securities markets.

EQUITY SECURITIES AND DEBT SECURITIES. Buying equity securities (the most common form of which are shares) will mean that the Investment Adviser will become a member of the issuer company and participate fully in its economic risk. Holding equity securities will generally entitle the Investment Adviser to receive any dividend distributed each year (if any) out of the issuer’s profits made during the reference period. On the other hand, buying debt securities (such as bonds and certificates of deposit) will mean that the Investment Adviser is, in effect, a lender to the company or entity that has issued the securities. Holding debt securities will entitle the Investment Adviser to receive specified periodic interest payments, as well as repayment of the principal at maturity. Generally, holdings in equity securities will expose the Investment Adviser to more risk than debt securities since remuneration is tied more closely to the profitability of the issuer. In the event of insolvency of the issuer, the Investment Adviser’s claims for recovery of the Investment Adviser’s equity investment in the issuer will generally be subordinated to the claims of both preferred or secured creditors and ordinary unsecured creditors of the issuer. There is an extra risk of losing money when shares are bought in some smaller companies, such as xxxxx shares. There is a usually big difference between the buying price and the selling price of these shares. If they have to be sold immediately, the Investment Adviser may get back much less than was paid for them. The price may change quickly and it may go down as well as up. Holdings in debt securities, on the other hand, generally risk not being remunerated only if the issuer is in a state of financial distress. Moreover, in the event of insolvency of the issuer, the Investment Adviser is likely to be able to participate with other creditors in the allotment of the proceeds from the sale of the company’s assets in priority to holders of equity securities. If the Investment Guidelines allow the Local Manager to buy equity or debt securities the Investment Adviser will be exposed to both the specific risks associated with individual securities held (and the financial soundness of their issuers), as well as the systemic risks of the equity and debt securities markets.

EQUITY SECURITIES AND DEBT SECURITIES. Buying equity securities (the most common form of which are shares) will mean that the Investment Adviser VKAM will become a member of the issuer company and participate fully in its economic risk. Holding equity securities will generally entitle the Investment Adviser VKAM to receive any dividend distributed each year (if any) out of the issuer’s 's profits made during the reference period. On the other hand, buying debt securities (such as bonds and certificates of deposit) will mean that the Investment Adviser VKAM is, in effect, a lender to the company or entity that has issued the securities. Holding debt securities will entitle the Investment Adviser VKAM to receive specified periodic interest payments, as well as repayment of the principal at maturity. Generally, holdings in equity securities will expose the Investment Adviser VKAM to more risk than debt securities since remuneration is tied more closely to the profitability of the issuer. In the event of insolvency of the issuer, the Investment Adviser’s VKAM's claims for recovery of the Investment Adviser’s VKAM's equity investment in the issuer will generally be subordinated to the claims of both preferred or secured creditors and ordinary unsecured creditors of the issuer. There is an extra risk of losing money when shares are bought in some smaller companies, such as xxxxx shares. There is a usually big difference between the buying price and the selling price of these shares. If they have to be sold immediately, the Investment Adviser VKAM may get back much less than was paid for them. The price may change quickly and it may go down as well as up. Holdings in debt securities, on the other hand, generally risk not being remunerated only if the issuer is in a state of financial distress. Moreover, in the event of insolvency of the issuer, the Investment Adviser VKAM is likely to be able to participate with other creditors in the allotment of the proceeds from the sale of the company’s 's assets in priority to holders of equity securities. If the Investment Guidelines allow the Local Manager MSIM to buy equity or debt securities the Investment Adviser VKAM will be exposed to both the specific risks associated with individual securities held (and the financial soundness of their issuers), as well as the systemic risks of the equity and debt securities markets.

EQUITY SECURITIES AND DEBT SECURITIES. Buying equity securities (the most common form of which are shares) will mean that the Investment Adviser Manager will become a member of the issuer company and participate fully in its economic risk. Holding equity securities will generally entitle the Investment Adviser Manager to receive any dividend distributed each year (if any) out of the issuer’s profits made during the reference period. On the other hand, buying debt securities (such as bonds and certificates of deposit) will mean that the Investment Adviser Manager is, in effect, a lender to the company or entity that has issued the securities. Holding debt securities will entitle the Investment Adviser Manager to receive specified periodic interest payments, as well as repayment of the principal at maturity. Generally, holdings in equity securities will expose the Investment Adviser Manager to more risk than debt securities since remuneration is tied more closely to the profitability of the issuer. In the event of insolvency of the issuer, the Investment AdviserManager’s claims for recovery of the Investment AdviserManager’s equity investment in the issuer will generally be subordinated to the claims of both preferred or secured creditors and ordinary unsecured creditors of the issuer. There is an extra risk of losing money when shares are bought in some smaller companies, such as xxxxx shares. There is a usually big difference between the buying price and the selling price of these shares. If they have to be sold immediately, the Investment Adviser Manager may get back much less than was paid for them. The price may change quickly and it may go down as well as up. Holdings in debt securities, on the other hand, generally risk not being remunerated only if the issuer is in a state of financial distress. Moreover, in the event of insolvency of the issuer, the Investment Adviser Manager is likely to be able to participate with other creditors in the allotment of the proceeds from the sale of the company’s assets in priority to holders of equity securities. If the Investment Guidelines allow the Local Manager MSIM to buy equity or debt securities the Investment Adviser Manager will be exposed to both the specific risks associated with individual securities held (and the financial soundness of their issuers), as well as the systemic risks of the equity and debt securities markets.

EQUITY SECURITIES AND DEBT SECURITIES. Buying equity securities (the most common form of which are shares) will mean that the Investment Adviser will become a member of the issuer company and participate fully in its economic risk. Holding equity securities will generally entitle the Investment Adviser to receive any dividend distributed each year (if any) out of the issuer’s profits made during the reference period. On the other hand, buying debt securities (such as bonds and certificates of deposit) will mean that the Investment Adviser is, in effect, a lender to the company or entity that has issued the securities. Holding debt securities will entitle the Investment Adviser to receive specified periodic interest payments, as well as repayment of the principal at maturity. Generally, holdings in equity securities will expose the Investment Adviser to more risk than debt securities since remuneration is tied more closely to the profitability of the issuer. In the event of insolvency of the issuer, the Investment Adviser’s claims for recovery of the Investment Adviser’s equity investment in the issuer will generally be subordinated to the claims of both preferred or secured creditors and ordinary unsecured creditors of the issuer. There is an extra risk of losing money when shares are bought in some smaller companies, such as xxxxx shares. There is a usually big difference between the buying price and the selling price of these shares. If they have to be sold immediately, the Investment Adviser may get back much less than was paid for them. The price may change quickly and it may go down as well as up. Holdings in debt securities, on the other hand, generally risk not being remunerated only if the issuer is in a state of financial distress. Moreover, in the event of insolvency of the issuer, the Investment Adviser is likely to be able to participate with other creditors in the allotment of the proceeds from the sale of the company’s assets in priority to holders of equity securities. If the Investment Guidelines allow the Local Manager MSIM to buy equity or debt securities the Investment Adviser will be exposed to both the specific risks associated with individual securities held (and the financial soundness of their issuers), as well as the systemic risks of the equity and debt securities markets.

EQUITY SECURITIES AND DEBT SECURITIES. Buying equity securities (the most common form of which are shares) will mean that the Investment Adviser will become a member of the issuer company and participate fully in its economic risk. Holding equity securities will generally entitle the Investment Adviser to receive any dividend distributed each year (if any) out of the issuer’s 's profits made during the reference period. On the other hand, buying debt securities (such as bonds and certificates of deposit) will mean that the Investment Adviser is, in effect, a lender to the company or entity that has issued the securities. Holding debt securities will entitle the Investment Adviser to receive specified periodic interest payments, as well as repayment of the principal at maturity. Generally, holdings in equity securities will expose the Investment Adviser to more risk than debt securities since remuneration is tied more closely to the profitability of the issuer. In the event of insolvency of the issuer, the Investment Adviser’s 's claims for recovery of the Investment Adviser’s 's equity investment in the issuer will generally be subordinated to the claims of both preferred or secured creditors and ordinary unsecured creditors of the issuer. There is an extra risk of losing money when shares are bought in some smaller companies, such as xxxxx shares. There is a usually big difference between the buying price and the selling price of these shares. If they have to be sold immediately, the Investment Adviser may get back much less than was paid for them. The price may change quickly and it may go down as well as up. Holdings in debt securities, on the other hand, generally risk not being remunerated only if the issuer is in a state of financial distress. Moreover, in the event of insolvency of the issuer, the Investment Adviser is likely to be able to participate with other creditors in the allotment of the proceeds from the sale of the company’s 's assets in priority to holders of equity securities. If the Investment Guidelines allow the Local Manager to buy equity or debt securities the Investment Adviser will be exposed to both the specific risks associated with individual securities held (and the financial soundness of their issuers), as well as the systemic risks of the equity and debt securities markets.. 3. DERIVATIVES 3.1 Futures Transactions in futures involve the obligation to make, or to take, delivery of the underlying asset of the contract at a future date, or in some cases to settle the Investment Adviser's position with cash from a Portfolio or elsewhere. Transactions in futures carry a high degree of risk. The "gearing" or "leverage" often obtainable in futures trading means that a small deposit or down payment can lead to large losses as well as gains. It also means that a relatively small market movement can lead to a proportionately much larger movement in the value of the Investment Adviser's investment, and this can work against the Investment Adviser as well as for the Investment Adviser. Futures transactions have a contingent liability, and the Investment Adviser should be aware of the implications of this, in particular the margining requirements, which are described in paragraph 7.2

EQUITY SECURITIES AND DEBT SECURITIES. Buying equity securities (the most common form of which are shares) will mean that the Investment Adviser will become a member of the issuer company and participate fully in its economic risk. Holding equity securities will generally entitle the Investment Adviser to receive any dividend distributed each year (if any) out of the issuer’s 's profits made during the reference period. On the other hand, buying debt securities (such as bonds and certificates of deposit) will mean that the Investment Adviser is, in effect, a lender to the company or entity that has issued the securities. Holding debt securities will entitle the Investment Adviser to receive specified periodic interest payments, as well as repayment of the principal at maturity. Generally, holdings in equity securities will expose the Investment Adviser to more risk than debt securities since remuneration is tied more closely to the profitability of the issuer. In the event of insolvency of the issuer, the Investment Adviser’s 's claims for recovery of the Investment Adviser’s 's equity investment in the issuer will generally be subordinated to the claims of both preferred or secured creditors and ordinary unsecured creditors of the issuer. There is an extra risk of losing money when shares are bought in some smaller companies, such as xxxxx shares. There is a usually big difference between the buying price and the selling price of these shares. If they have to be sold immediately, the Investment Adviser may get back much less than was paid for them. The price may change quickly and it may go down as well as up. Holdings in debt securities, on the other hand, generally risk not being remunerated only if the issuer is in a state of financial distress. Moreover, in the event of insolvency of the issuer, the Investment Adviser is likely to be able to participate with other creditors in the allotment of the proceeds from the sale of the company’s 's assets in priority to holders of equity securities. If the Investment Guidelines allow the Local Manager to buy equity or debt securities the Investment Adviser will be exposed to both the specific risks associated with individual securities held (and the financial soundness of their issuers), as well as the systemic risks of the equity and debt securities markets.. 3. DERIVATIVES 3.1 Futures Transactions in futures involve the obligation to make, or to take, delivery of the underlying asset of the contract at a future date, or in some cases to settle the Investment Adviser's position with cash from the Fund or elsewhere. Transactions in futures carry a high degree of risk. The "gearing" or "leverage" often obtainable in futures trading means that a small deposit or down payment can lead to large losses as well as gains. It also means that a relatively small market movement can lead to a proportionately much larger movement in the value of the Investment Adviser's investment, and this can work against the Investment Adviser as well as for the Investment Adviser. Futures transactions have a contingent liability, and the Investment Adviser should be aware of the implications of this, in particular the margining requirements, which are described in paragraph 7.2

EQUITY SECURITIES AND DEBT SECURITIES. Buying equity securities (the most common form of which are shares) will mean that the Investment Adviser Manager will become a member of the issuer company and participate fully in its economic risk. Holding equity securities will generally entitle the Investment Adviser Manager to receive any dividend distributed each year (if any) out of the issuer’s 's profits made during the reference period. On the other hand, buying debt securities (such as bonds and certificates of deposit) will mean that the Investment Adviser Manager is, in effect, a lender to the company or entity that has issued the securities. Holding debt securities will entitle the Investment Adviser Manager to receive specified periodic interest payments, as well as repayment of the principal at maturity. Generally, holdings in equity securities will expose the Investment Adviser Manager to more risk than debt securities since remuneration is tied more closely to the profitability of the issuer. In the event of insolvency of the issuer, the Investment Adviser’s Manager's claims for recovery of the Investment Adviser’s Manager's equity investment in the issuer will generally be subordinated to the claims of both preferred or secured creditors and ordinary unsecured creditors of the issuer. There is an extra risk of losing money when shares are bought in some smaller companies, such as xxxxx shares. There is a usually big difference between the buying price and the selling price of these shares. If they have to be sold immediately, the Investment Adviser Manager may get back much less than was paid for them. The price may change quickly and it may go down as well as up. Holdings in debt securities, on the other hand, generally risk not being remunerated only if the issuer is in a state of financial distress. Moreover, in the event of insolvency of the issuer, the Investment Adviser Manager is likely to be able to participate with other creditors in the allotment of the proceeds from the sale of the company’s 's assets in priority to holders of equity securities. If the Investment Guidelines allow the Local Manager MSIM to buy equity or debt securities the Investment Adviser Manager will be exposed to both the specific risks associated with individual securities held (and the financial soundness of their issuers), as well as the systemic risks of the equity and debt securities markets.

EQUITY SECURITIES AND DEBT SECURITIES. Buying equity securities (the most common form of which are shares) will mean that the Investment Adviser VKAM will become a member of the issuer company and participate fully in its economic risk. Holding equity securities will generally entitle the Investment Adviser VKAM to receive any dividend distributed each year (if any) out of the issuer’s 's profits made during the reference period. On the other hand, buying debt securities (such as bonds and certificates of deposit) will mean that the Investment Adviser VKAM is, in effect, a lender to the company or entity that has issued the securities. Holding debt securities will entitle the Investment Adviser VKAM to receive specified periodic interest payments, as well as repayment of the principal at maturity. Generally, holdings in equity securities will expose the Investment Adviser VKAM to more risk than debt securities since remuneration is tied more closely to the profitability of the issuer. In the event of insolvency of the issuer, the Investment Adviser’s VKAM's claims for recovery of the Investment Adviser’s VKAM's equity investment in the issuer will generally be subordinated to the claims of both preferred or secured creditors and ordinary unsecured creditors of the issuer. There is an extra risk of losing money when shares are bought in some smaller companies, such as xxxxx penny shares. There is a usually big difference between the buying price xxxxx and the selling price of these shares. If they have to be sold immediately, the Investment Adviser VKAM may get back much less than was paid for them. The price may change quickly and it may go down as well as up. Holdings in debt securities, on the other hand, generally risk not being remunerated only if the issuer is in a state of financial distress. Moreover, in the event of insolvency of the issuer, the Investment Adviser VKAM is likely to be able to participate with other creditors in the allotment of the proceeds from the sale of the company’s 's assets in priority to holders of equity securities. If the Investment Guidelines allow the Local Manager MSIM to buy equity or debt securities the Investment Adviser VKAM will be exposed to both the specific risks associated with individual securities held (and the financial soundness of their issuers), as well as the systemic risks of the equity and debt securities markets.

EQUITY SECURITIES AND DEBT SECURITIES. Buying equity securities (the most common form of which are shares) will mean that the Investment Adviser will become a member of the issuer company and participate fully in its economic risk. Holding equity securities will generally entitle the Investment Adviser to receive any dividend distributed each year (if any) out of the issuer’s profits made during the reference period. On the other hand, buying debt securities (such as bonds and certificates of deposit) will mean that the Investment Adviser is, in effect, a lender to the company or entity that has issued the securities. Holding debt securities will entitle the Investment Adviser to receive specified periodic interest payments, as well as repayment of the principal at maturity. Generally, holdings in equity securities will expose the Investment Adviser to more risk than debt securities since remuneration is tied more closely to the profitability of the issuer. In the event of insolvency of the issuer, the Investment Adviser’s claims for recovery of the Investment Adviser’s equity investment in the issuer will generally be subordinated to the claims of both preferred or secured creditors and ordinary unsecured creditors of the issuer. There is an extra risk of losing money when shares are bought in some smaller companies, such as xxxxx pxxxx shares. There is a usually big difference between the buying price and the selling price of these shares. If they have to be sold immediately, the Investment Adviser may get back much less than was paid for them. The price may change quickly and it may go down as well as up. Holdings in debt securities, on the other hand, generally risk not being remunerated only if the issuer is in a state of financial distress. Moreover, in the event of insolvency of the issuer, the Investment Adviser is likely to be able to participate with other creditors in the allotment of the proceeds from the sale of the company’s assets in priority to holders of equity securities. If the Investment Guidelines allow the Local Manager to buy equity or debt securities the Investment Adviser will be exposed to both the specific risks associated with individual securities held (and the financial soundness of their issuers), as well as the systemic risks of the equity and debt securities markets.

EQUITY SECURITIES AND DEBT SECURITIES. Buying equity securities (the most common form of which are shares) will mean that the Investment Adviser Manager will become a member of the issuer company and participate fully in its economic risk. Holding equity securities will generally entitle the Investment Adviser Manager to receive any dividend distributed each year (if any) out of the issuer’s 's profits made during the reference period. On the other hand, buying debt securities (such as bonds and certificates of deposit) will mean that the Investment Adviser Manager is, in effect, a lender to the company or entity that has issued the securities. Holding debt securities will entitle the Investment Adviser Manager to receive specified periodic interest payments, as well as repayment of the principal at maturity. Generally, holdings in equity securities will expose the Investment Adviser Manager to more risk than debt securities since remuneration is tied more closely to the profitability of the issuer. In the event of insolvency of the issuer, the Investment Adviser’s Manager's claims for recovery of the Investment Adviser’s Manager's equity investment in the issuer will generally be subordinated to the claims of both preferred or secured creditors and ordinary unsecured creditors of the issuer. There is an extra risk of losing money when shares are bought in some smaller companies, such as xxxxx pxxxx shares. There is a usually big difference between the buying price and the selling price of these shares. If they have to be sold immediately, the Investment Adviser Manager may get back much less than was paid for them. The price may change quickly and it may go down as well as up. Holdings in debt securities, on the other hand, generally risk not being remunerated only if the issuer is in a state of financial distress. Moreover, in the event of insolvency of the issuer, the Investment Adviser Manager is likely to be able to participate with other creditors in the allotment of the proceeds from the sale of the company’s 's assets in priority to holders of equity securities. If the Investment Guidelines allow the Local Manager MSIM to buy equity or debt securities the Investment Adviser Manager will be exposed to both the specific risks associated with individual securities held (and the financial soundness of their issuers), as well as the systemic risks of the equity and debt securities markets.

EQUITY SECURITIES AND DEBT SECURITIES. Buying equity securities (the most common form of which are shares) will mean that the Investment Adviser will become a member of the issuer company and participate fully in its economic risk. Holding equity securities will generally entitle the Investment Adviser to receive Sch. 3-1 any dividend distributed each year (if any) out of the issuer’s 's profits made during the reference period. On the other hand, buying debt securities (such as bonds and certificates of deposit) will mean that the Investment Adviser is, in effect, a lender to the company or entity that has issued the securities. Holding debt securities will entitle the Investment Adviser to receive specified periodic interest payments, as well as repayment of the principal at maturity. Generally, holdings in equity securities will expose the Investment Adviser to more risk than debt securities since remuneration is tied more closely to the profitability of the issuer. In the event of insolvency of the issuer, the Investment Adviser’s 's claims for recovery of the Investment Adviser’s 's equity investment in the issuer will generally be subordinated to the claims of both preferred or secured creditors and ordinary unsecured creditors of the issuer. There is an extra risk of losing money when shares are bought in some smaller companies, such as xxxxx shares. There is a usually big difference between the buying price and the selling price of these shares. If they have to be sold immediately, the Investment Adviser may get back much less than was paid for them. The price may change quickly and it may go down as well as up. Holdings in debt securities, on the other hand, generally risk not being remunerated only if the issuer is in a state of financial distress. Moreover, in the event of insolvency of the issuer, the Investment Adviser is likely to be able to participate with other creditors in the allotment of the proceeds from the sale of the company’s 's assets in priority to holders of equity securities. If the Investment Guidelines allow the Local Manager to buy equity or debt securities the Investment Adviser will be exposed to both the specific risks associated with individual securities held (and the financial soundness of their issuers), as well as the systemic risks of the equity and debt securities markets.

EQUITY SECURITIES AND DEBT SECURITIES. Buying equity securities (the most common form of which are shares) will mean that the Investment Adviser Manager will become a member of the issuer company and participate fully in its economic risk. Holding equity securities will generally entitle the Investment Adviser Manager to receive any dividend distributed each year (if any) out of the issuer’s profits made during the reference period. On the other hand, buying debt securities (such as bonds and certificates of deposit) will mean that the Investment Adviser Manager is, in effect, a lender to the company or entity that has issued the securities. Holding debt securities will entitle the Investment Adviser Manager to receive specified periodic interest payments, as well as repayment of the principal at maturity. Generally, holdings in equity securities will expose the Investment Adviser Manager to more risk than debt securities since remuneration is tied more closely to the profitability of the issuer. In the event of insolvency of the issuer, the Investment AdviserManager’s claims for recovery of the Investment AdviserManager’s equity investment in the issuer will generally be subordinated to the claims of both preferred or secured creditors and ordinary unsecured creditors of the issuer. There is an extra risk of losing money when shares are bought in some smaller companies, such as xxxxx shares. There is a usually big difference between the buying price and the selling price of these shares. If they have to be sold immediately, the Investment Adviser Manager may get back much less than was paid for them. The price may change quickly and it may go down as well as up. Holdings in debt securities, on the other hand, generally risk not being remunerated only if the issuer is in a state of financial distress. Moreover, in the event of insolvency of the issuer, the Investment Adviser Manager is likely to be able to participate with other creditors in the allotment of the proceeds from the sale of the company’s assets in priority to holders of equity securities. If the Investment Guidelines allow the Local Manager to buy equity or debt securities the Investment Adviser Manager will be exposed to both the specific risks associated with individual securities held (and the financial soundness of their issuers), as well as the systemic risks of the equity and debt securities markets.

EQUITY SECURITIES AND DEBT SECURITIES. Buying equity securities (the most common form of which are shares) will mean that the Investment Adviser will become a member of the issuer company and participate fully in its economic risk. Holding equity securities will generally entitle the Investment Adviser to receive any dividend distributed each year (if any) out of the issuer’s 's profits made during the reference period. On the other hand, buying debt securities (such as bonds and certificates of deposit) will mean that the Investment Adviser is, in effect, a lender to the company or entity that has issued the securities. Holding debt securities will entitle the Investment Adviser to receive specified periodic interest payments, as well as repayment of the principal at maturity. Generally, holdings in equity securities will expose the Investment Adviser to more risk than debt securities since remuneration is tied more closely to the profitability of the issuer. In the event of insolvency of the issuer, the Investment Adviser’s 's claims for recovery of the Investment Adviser’s 's equity investment in the issuer will generally be subordinated to the claims of both preferred or secured creditors and ordinary unsecured creditors of the issuer. There is an extra risk of losing money when shares are bought in some smaller companies, such as xxxxx shares. There is a usually big difference between the buying price and the selling price of these shares. If they have to be sold immediately, the Investment Adviser may get back much less than was paid for them. The price may change quickly and it may go down as well as up. Holdings in debt securities, on the other hand, generally risk not being remunerated only if the issuer is in a state of financial distress. Moreover, in the event of insolvency of the issuer, the Investment Adviser is likely to be able to participate with other creditors in the allotment of the proceeds from the sale of the company’s 's assets in priority to holders of equity securities. If the Investment Guidelines allow the Local Manager to buy equity or debt securities the Investment Adviser will be exposed to both the specific risks associated with individual securities held (and the financial soundness of their issuers), as well as the systemic risks of the equity and debt securities markets.. 3. DERIVATIVES 3.1 Futures Transactions in futures involve the obligation to make, or to take, delivery of the underlying asset of the contract at a future date, or in some cases to settle the Adviser's position with cash from a Fund or elsewhere. Transactions in futures carry a high degree of risk. The "gearing" or "leverage" often obtainable in futures trading means that a small deposit or down payment can lead to large losses as well as gains. It also means that a relatively small market movement can lead to a proportionately much larger movement in the value of the Adviser's investment, and this can work against the Adviser as well as for the Adviser. Futures transactions have a contingent liability, and the Adviser should be aware of the implications of this, in particular the margining requirements, which are described in paragraph 7.2