Common use of RISK DISCLOSURE STATEMENTS Clause in Contracts

RISK DISCLOSURE STATEMENTS. You acknowledge that due to the volatile nature of securities markets, the purchase and writing of options over securities involves a high degree of risk. Warning to Option Holders Some options may only be exercised on its expiry day (European-style Exercise) and other options may be exercised at any time before expiration (American-style Exercise). You understand that upon exercise some options require delivery and receipt of the underlying security and that other options require a cash payment. An option is a wasting asset and there is a possibility that, as an option holder, you may suffer the loss of the total premium paid for the option. You acknowledge that, as an option holder, in order to realize a profit it will be necessary to either exercise the option or close the long option position in the market. Under some circumstances, it may be difficult to trade the option due to lack of liquidity in the market. You acknowledge that we have no obligation either to exercise a valuable option in the absence of your instruction or to give to you prior notice of the expiration date of the option. Warning to Option Writers As a writer of an option, you may be required to pay additional margin at any time. You acknowledge that as an option writer, unlike an option holder, you may be liable for unlimited losses based on the rise or fall of the price of the underlying securities and your gains are limited to the option premium. Additionally, writers of American-style call (put) options may be required at any time before expiry to deliver (pay for) the underlying securities to the full value of the strike price multiplied by the number of underlying securities. You recognize that this obligation may be wholly disproportionate to the value of premium received at the time the options were written and may be required at short notice.

RISK DISCLOSURE STATEMENTS. You acknowledge that due to the volatile nature of securities commodities markets, the purchase and writing of options over securities commodities involves a high degree of risk. Warning to Option Holders Some options may only be exercised on its expiry day (European-style Exercise) and other options may be exercised at any time before expiration (American-style Exercise). You understand that upon exercise some options require delivery and receipt of the underlying security and that other options require a cash payment. An option is a wasting asset and there is a possibility that, as an option holder, you may suffer the loss of the total premium paid for the option. You acknowledge that, as an option holder, in order to realize a profit it will be necessary to either exercise the option or close the long option position in the market. Under some circumstances, circumstances it may be difficult to trade the option due to lack of liquidity in the market. You acknowledge that we have no obligation either to exercise a valuable option in the absence of your instruction or to give to you prior notice of the expiration date of the option. Warning to Option Writers As Writers 9.1 Risk of Trading Futures and Options (a) The risk of loss in trading futures contracts or options is substantial. In some circumstances, you may sustain losses in excess of your initial Margin funds. Placing contingent orders, such as “stop-loss” or “stop-limit” orders, will not necessarily avoid loss. Market conditions may make it impossible to execute such orders. You may be called upon at short notice to deposit additional Margin funds. If the required funds are not provided within the prescribed time, your position may be liquidated. You will remain liable for any resulting deficit in your account. You should therefore study and understand futures contracts and options before you trade and carefully consider whether such trading is suitable in the light of your own financial position and investment objectives. If you trade options you should inform yourselves of exercise and expiration procedures and your rights and obligations upon exercise of expiry. (b) This brief statement does not disclose all of the risks and other significant aspects of trading in futures and options. In light of the risks, you should undertake such Transactions only if you understand the nature of the contracts (and contractual relationships) into which you are entering and the extent of your exposure to risk. Trading in futures and options is not suitable for many members of the public. You should carefully consider whether trading is appropriate for you in light of your experience, objectives, financial resources and other relevant circumstances. 9.2 Effect of ‘Leverage’ or ‘Gearing’ of Futures Transactions in futures carry a writer high degree of an optionrisk. The amount of initial Margin is small relative to the value of the futures contract so that transactions are “leveraged” or “geared”. A relatively small market movement will have a proportionately larger impact on the funds you have deposited or will have to deposit. This may work against you as well as for you. You may sustain a total loss of initial Margin funds and any additional funds deposited with the firm to maintain your position. If the market moves against your position or Margin levels are increased, you may be required called upon to pay substantial additional margin funds on short notice to maintain your position. If you fail to comply with a request for additional funds within the time prescribed, your position may be liquidated at any time. You acknowledge that as an option writer, unlike an option holder, a loss and you may will be liable for unlimited any resulting deficit. 9.3 Risk-reducing Orders or Strategies of Futures The placing of certain orders (e.g. “stop-loss” orders, or “stop-limit” orders) which are intended to limit losses based on to certain amounts may not be effective because market conditions may make it impossible to execute such orders. Strategies using combinations of positions, such as “spread” and “straddle” positions may be as risky as taking simple “long” or “short” positions. 9.4 Variable Degree of Risk of Options (a) Transactions in options carry a high degree of risk. Purchasers and sellers of options should familiarize themselves with the rise type of options (i.e. put or fall call) which they contemplate trading and the associated risks. You should calculate the extent to which the value of the price options must increase for your position to become profitable, taking into account the premium and all transaction costs. (b) The purchaser of options may offset or exercise the options or allow the options to expire. The exercise of an option results either in a cash settlement or in the purchaser acquiring or delivering the underlying interest. If the option is on a futures contract, the purchaser will acquire a futures position with associated liabilities for Margin. If the purchased options expire worthless, you will suffer a total loss of your investment which will consist of the option premium plus transaction costs. If you are contemplating purchasing deep-out-of-the-money options, you should be aware that the chance of such options becoming profitable ordinarily is remote. (c) Selling (‘writing’ or ‘granting’) an option generally entails considerably greater risk than purchasing options. Although the premium received by the seller is fixed, the seller may sustain a loss well in excess of that amount. The seller will be liable for additional Margin to maintain the position if the market moves unfavorably. The seller will also be exposed to the risk of the purchaser exercising the option and the seller will be obligated to either settle the option in cash or to acquire or deliver the underlying interest. If the option is on a futures contract, the seller will acquire a position in a futures contract with associated liabilities for Margin. If the option is ‘covered’ by the seller holding a corresponding position in the underlying interest or a futures or another option, the risk may be reduced. If the option is not covered, the risk of loss can be unlimited. (d) Certain exchanges in some jurisdictions permit deferred payment of the option premium, exposing the purchaser to liability for Margin payments not exceeding the amount of the premium. The purchaser is still subject to the risk of losing the premium and transaction cost. When the option is exercised or expires, the purchaser is responsible for any unpaid premium outstanding at that time. - 45 - ESD-001-E/07 10.1 Terms and Conditions of Contracts You should ask the firm with which you deal about the terms and conditions of the specific futures or options which you are trading and associated obligations (e.g. the circumstances under which you may become obliged to make or take delivery of the underlying securities interest of a futures contract and, in respect of options, expiration dates and your gains are limited restrictions on the time for exercise). Under certain circumstances the specifications of outstanding contracts (including the exercise price of an option) may be modified by the Exchange or Clearing House to reflect changes in the underlying interest. 10.2 Suspension or Restriction of Trading and Pricing Relationships (a) Market conditions (e.g. illiquidity) and / or the operation of the rules of certain markets (e.g. the suspension of trading in any contract or contract month because of price limits or ‘circuit breakers’) may increase the risk of loss by making it difficult or impossible to effect transactions or liquidate / offset positions. If you have sold options, this may increase the risk of loss. (b) Further, normal pricing relationships between the underlying interest and the futures, and the underlying interest and the option premiummay not exist. AdditionallyThis can occur when, writers for example, the futures contract underlying the option is subject to price limits while the option is not. The absence of American-style call (put) options an underlying reference price may be required at any time before expiry make it difficult to deliver (pay for) the underlying securities to the full value of the strike price multiplied by the number of underlying securities. You recognize that this obligation may be wholly disproportionate to the value of premium received at the time the options were written and may be required at short noticejudge ‘fair’ value.

RISK DISCLOSURE STATEMENTS. You acknowledge that due to the volatile nature of securities commodities markets, the purchase and writing of options over securities commodities involves a high degree of risk. Warning to Option Holders Some options may only be exercised on its expiry day (European-style Exercise) and other options may be exercised at any time before expiration (American-style Exercise). You understand that upon exercise some options require delivery and receipt of the underlying security and that other options require a cash payment. An option is a wasting asset and there is a possibility that, as an option holder, you may suffer the loss of the total premium paid for the option. You acknowledge that, as an option holder, in order to realize a profit it will be necessary to either exercise the option or close the long option position in the market. Under some circumstances, circumstances it may be difficult to trade the option due to lack of liquidity in the market. You acknowledge that we have no obligation either to exercise a valuable option in the absence of your instruction or to give to you prior notice of the expiration date of the option. Warning to Option Writers As Writers 9.1 Risk of Trading Futures and Options (a) The risk of loss in trading futures contracts or options is substantial. In some circumstances, you may sustain losses in excess of your initial Margin funds. Placing contingent orders, such as “stop-loss” or “stop-limit” orders, will not necessarily avoid loss. Market conditions may make it impossible to execute such orders. You may be called upon at short notice to deposit additional Margin funds. If the required funds are not provided within the prescribed time, your position may be liquidated. You will remain liable for any resulting deficit in your account. You should therefore study and understand futures contracts and options before you trade and carefully consider whether such trading is suitable in the light of your own financial position and investment objectives. If you trade options you should inform yourselves of exercise and expiration procedures and your rights and obligations upon exercise of expiry. (b) This brief statement does not disclose all of the risks and other significant aspects of trading in futures and options. In light of the risks, you should undertake such Transactions only if you understand the nature of the contracts (and contractual relationships) into which you are entering and the extent of your exposure to risk. Trading in futures and options is not suitable for many members of the public. You should carefully consider whether trading is appropriate for you in light of your experience, objectives, financial resources and other relevant circumstances. 9.2 Effect of ‘Leverage’ or ‘Gearing’ of Futures Transactions in futures carry a writer high degree of an optionrisk. The amount of initial Margin is small relative to the value of the futures contract so that transactions are “leveraged” or “geared”. A relatively small market movement will have a proportionately larger impact on the funds you have deposited or will have to deposit. This may work against you as well as for you. You may sustain a total loss of initial Margin funds and any additional funds deposited with the firm to maintain your position. If the market moves against your position or Margin levels are increased, you may be required called upon to pay substantial additional margin funds on short notice to maintain your position. If you fail to comply with a request for additional funds within the time prescribed, your position may be liquidated at any time. You acknowledge that as an option writer, unlike an option holder, a loss and you may will be liable for unlimited any resulting deficit. 9.3 Risk-reducing Orders or Strategies of Futures The placing of certain orders (e.g. “stop-loss” orders, or “stop-limit” orders) which are intended to limit losses based on to certain amounts may not be effective because market conditions may make it impossible to execute such orders. Strategies using combinations of positions, such as “spread” and “straddle” positions may be as risky as taking simple “long” or “short” positions. 9.4 Variable Degree of Risk of Options (a) Transactions in options carry a high degree of risk. Purchasers and sellers of options should familiarize themselves with the rise type of options (i.e. put or fall call) which they contemplate trading and the associated risks. You should calculate the extent to which the value of the price options must increase for your position to become profitable, taking into account the premium and all transaction costs. (b) The purchaser of options may offset or exercise the options or allow the options to expire. The exercise of an option results either in a cash settlement or in the purchaser acquiring or delivering the underlying interest. If the option is on a futures contract, the purchaser will acquire a futures position with associated liabilities for Margin. If the purchased options expire worthless, you will suffer a total loss of your investment which will consist of the option premium plus transaction costs. If you are contemplating purchasing deep-out-of-the-money options, you should be aware that the chance of such options becoming profitable ordinarily is remote. (c) Selling (‘writing’ or ‘granting’) an option generally entails considerably greater risk than purchasing options. Although the premium received by the seller is fixed, the seller may sustain a loss well in excess of that amount. The seller will be liable for additional Margin to maintain the position if the market moves unfavorably. The seller will also be exposed to the risk of the purchaser exercising the option and the seller will be obligated to either settle the option in cash or to acquire or deliver the underlying interest. If the option is on a futures contract, the seller will acquire a position in a futures contract with associated liabilities for Margin. If the option is ‘covered’ by the seller holding a corresponding position in the underlying interest or a futures or another option, the risk may be reduced. If the option is not covered, the risk of loss can be unlimited. (d) Certain exchanges in some jurisdictions permit deferred payment of the option premium, exposing the purchaser to liability for Margin payments not exceeding the amount of the premium. The purchaser is still subject to the risk of losing the premium and transaction cost. When the option is exercised or expires, the purchaser is responsible for any unpaid premium outstanding at that time. - 45 - ESD-001-E/06 10.1 Terms and Conditions of Contracts You should ask the firm with which you deal about the terms and conditions of the specific futures or options which you are trading and associated obligations (e.g. the circumstances under which you may become obliged to make or take delivery of the underlying securities interest of a futures contract and, in respect of options, expiration dates and your gains are limited restrictions on the time for exercise). Under certain circumstances the specifications of outstanding contracts (including the exercise price of an option) may be modified by the Exchange or Clearing House to reflect changes in the underlying interest. 10.2 Suspension or Restriction of Trading and Pricing Relationships (a) Market conditions (e.g. illiquidity) and / or the operation of the rules of certain markets (e.g. the suspension of trading in any contract or contract month because of price limits or ‘circuit breakers’) may increase the risk of loss by making it difficult or impossible to effect transactions or liquidate / offset positions. If you have sold options, this may increase the risk of loss. (b) Further, normal pricing relationships between the underlying interest and the futures, and the underlying interest and the option premiummay not exist. AdditionallyThis can occur when, writers for example, the futures contract underlying the option is subject to price limits while the option is not. The absence of American-style call (put) options an underlying reference price may be required at any time before expiry make it difficult to deliver (pay for) the underlying securities to the full value of the strike price multiplied by the number of underlying securities. You recognize that this obligation may be wholly disproportionate to the value of premium received at the time the options were written and may be required at short noticejudge ‘fair’ value.