Common use of RISK OF PROVIDING AN AUTHORITY TO REPLEDGE CLIENTS SECURITIES COLLATERAL ETC Clause in Contracts

RISK OF PROVIDING AN AUTHORITY TO REPLEDGE CLIENTS SECURITIES COLLATERAL ETC. 4.1 There is risk if client provide The Broker with an authority that allows it to apply client’s securities or securities collateral pursuant to a securities borrowing and lending agreement, repledge client’s securities collateral for financial accommodation or deposit client’s securities collateral as collateral for the discharge and satisfaction of its settlement obligations and liabilities. 4.2 If client’s securities or securities collateral are received or held by The Broker in Hong Kong, the above arrangement is allowed only if client consent in writing. Moreover, unless client is a professional investor, client’s authority must specify the period for which it is current and be limited to not more than 12 months. If client is a professional investor, these restrictions do not apply. 4.3 Additionally, client’s authority may be deemed to be renewed (i.e. without client’s written consent) if The Broker issues client a reminder at least 14 days prior to the expiry of the authority, and client does not object to such deemed renewal before the expiry date of client’s then existing authority. 4.4 Client is not required by any law to sign these authorities. But an authority may be required by The Broker, for example, to facilitate margin lending to client or to allow client’s securities or securities collateral to be lent to or deposited as collateral with third parties. The Broker should explain to client the purposes for which one of these authorities is to be used. 4.5 If client sign one of these authorities and client’s securities or securities collateral are lent to or deposited with third parties, those third parties will have a lien or charge on client’s securities or securities collateral. Although The Broker