RISK DISCLOSURE STATEMENT OVER THE COUNTER FOREIGN CURRENCY

This Risk Disclosure Statement describes some, but not all, of the risks of trading in the over the counter foreign currency market (“OTC foreign currency”) through Tempest Trading Technologies. Trading in the OTC foreign currency market on a cash, spot or forward basis 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.

Trading is Speculative and Involves a High Degree of Risk. Trading and investment in leveraged OTC foreign currency contracts is speculative and involves a high degree of risk. In particular, because of the low margin required by Tempest Trading Technologies for foreign currency trading, price changes in OTC foreign currency contracts may result in significant losses, which losses may substantially exceed the funds or other assets deposited as margin with Tempest Trading Technologies. Therefore, foreign currency contracts are appropriate only for persons that (a) understand and are willing to assume the economic, legal and other risks involved in such transactions, and (b) are financially able to withstand losses significantly in excess of their initial margin funds and any additional funds deposited with Tempest Trading Technologies to maintain their positions.

Currency Risks. Foreign currencies represent the legal tender of one or more foreign nations and normally are not linked to any intrinsically valuable commodity (such as precious metals). Any transaction involving foreign currencies, including OTC foreign currency contracts, involves risks not common to investments denominated entirely in a person’s domestic currency. Such enhanced risks include the risks of political or economic policy changes in a foreign nation, which may substantially and permanently alter the conditions, terms, marketability or price of a foreign currency. The profit or loss in transactions in foreign currency-denominated contracts (whether they are traded in a customer’s own or another jurisdiction) will also be affected by fluctuations in currency rates where there is a need to convert from the currency denomination of the contract to another currency.

Risk Reducing Orders or Strategies. The placing of certain orders (e.g., ‘stop-loss’ or ‘stop-limit’ orders) that are intended to limit losses to certain amounts may not always be effective because market conditions or technological limitations may make it impossible to execute such orders. Strategies using combinations of positions, such as ‘spread’ and ‘straddle’ positions, may be as risky or even riskier than simple ‘long’ or ‘short’ positions.

Suspension or Restriction of Trading and Pricing Relationships. Market conditions (e.g. illiquidity, changes in government regulation or trading restrictions with respect to certain markets) may increase the risk of loss by making it difficult or impossible to effect transactions or liquidate/offset positions.