INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSTITUTIONAL INVESTMENTS TRUST
AGREEMENT made this 11th day of October, 2000, between SEI Investments
Management Corporation, (the "Adviser") and Jardine ▇▇▇▇▇▇▇ International
Management Inc. (the "Sub-Adviser").
WHEREAS, SEI Institutional Investments Trust, a Massachusetts business
trust (the "Trust") is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated June 14, 1996, (the "Advisory Agreement") with the Trust, pursuant to
which the Adviser will act as investment adviser to the International Equity
Fund (the "Fund"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain the
Sub-Adviser to provide investment advisory services to the Adviser in connection
with the management of the Fund, and the Sub-Adviser is willing to render such
investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and the
Trust's Board of Trustees, the Sub-Adviser shall manage all of the
securities and other assets of the Fund entrusted to it hereunder (the
"Assets"), including the purchase, retention and disposition of the Assets,
in accordance with the Fund's investment objectives, policies and
restrictions as stated in the Fund's prospectus and statement of additional
information, as currently in effect and as amended or supplemented from
time to time (referred to collectively as the "Prospectus"), and subject to
the following:
(a) The Sub-Adviser shall, subject to the direction of the Adviser,
determine from time to time what Assets will be purchased, retained or
sold by the Fund, and what portion of the Assets will be invested or
held uninvested in cash. The foregoing is not intended to impose upon
the Sub-Adviser an obligation to consult with the Adviser in each
instance when effecting portfolio transactions involving the Assets.
(b) In the performance of its duties and obligations under this Agreement,
the Sub-Adviser shall act in conformity with the Trust's Declaration
of Trust (as defined herein) and the Prospectus and with the written
instructions and directions of the Adviser and of the Board of
Trustees of the Trust delivered to the Sub-Adviser and will conform to
and comply with the applicable requirements of the 1940 Act, and all
other applicable federal and state laws and regulations, as each is
amended from time to time. The Sub-Adviser agrees to use reasonable
efforts to manage the Assets forming part of the Fund so that the Fund
will qualify, and continue to quality, as a regulated investment
company under Subchapter M of the Internal
Revenue Code of 1986, as amended, and regulations issued thereunder,
except as may be authorized to the contrary by the Trust's Board of
Trustees. Schedule B, attached hereto, are included at the
Sub-Advisers request in order to facilitate the Sub-Adviser's
compliance with rules of the Hong Kong Securities and Future
Commission. Such provisions are not intended to modify or supersede
any other provisions of this Agreement.
(c) The Sub-Adviser shall determine the Assets to be purchased or sold by
the Fund as provided in subparagraph (a) and will place orders with or
through such persons, brokers or dealers to carry out the policy with
respect to brokerage set forth in the Fund's Prospectus delivered to
the Sub-Adviser or as the Board of Trustees or the Adviser may in
writing direct from time to time, in conformity with federal
securities laws. In executing Fund transactions and selecting brokers
or dealers, the Sub-Adviser will use its best efforts to seek on
behalf of the Fund the best overall terms available. In assessing the
best overall terms available for any transaction, the Sub-Adviser
shall consider all factors that it deems relevant, including the
breadth of the market in the security, the price of the security, the
financial condition and execution capability of the broker or dealer,
and the reasonableness of the commission, if any, both for the
specific transaction and on a continuing basis. In evaluating the best
overall terms available, and in selecting the broker-dealer to execute
a particular transaction, the Sub-Adviser may also consider the
brokerage and research services provided (as those terms are defined
in Section 28(e) of the Securities Exchange Act of 1934). Consistent
with the policies of the Trust, as disclosed in the Prospectus, the
Sub-Adviser is authorized to pay to a broker or dealer who provides
such brokerage and research services a commission for executing a Fund
transaction for the Fund which is in excess of the amount of
commission another broker or dealer would have charged for effecting
that transaction if, but only if, the Sub-Adviser determines in good
faith that such commission was reasonable in relation to the value of
the brokerage and research services provided by such broker or
dealer-- viewed in terms of that particular transaction or in terms of
the overall responsibilities of the Sub-Adviser to its discretionary
clients, including the Fund. In addition, the Sub-Adviser is
authorized to allocate purchase and sale orders for securities to
brokers or dealers (including brokers and dealers that are affiliated
with the Adviser, Sub-Adviser or the Trust's principal underwriter)
and to take into account the sale of shares of the Trust if the
Sub-Adviser believes that the quality of the transaction and the
commission are comparable to what they would be with other qualified
firms. In no instance, however, will the Fund's Assets be purchased
from or sold to the Adviser, Sub-Adviser, the Trust's principal
underwriter or any affiliated person of either the Trust, Adviser, the
Sub-Adviser or the principal underwriter, acting as principal in the
transaction, except to the extent permitted by the Securities and
Exchange Commission ("SEC"), the Investment Advisers Act of 1940, as
amended, and the 1940 Act, and the rules and regulations thereunder.
On occasions when the Sub-Adviser deems the purchase or sale of a
security to be in the best interest of the Fund as well as other
clients, the Sub-Adviser, to the
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extent permitted by applicable laws and regulations, may aggregate the
securities to be sold or purchased in order to obtain the best
execution and/or a lower brokerage commission, if any. In such event,
allocation of the securities so purchased or sold, as well as the
expenses incurred in the transaction, will be made by the Sub-Adviser
in the manner it considers to be the most equitable and consistent
with its fiduciary obligations to the Fund and to such clients.
(d) The Sub-Adviser shall maintain all books and records with respect to
transactions involving the Assets required by subparagraphs (b)(5),
(6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the
1940 Act. The Sub-Adviser shall provide to the Adviser or the Board of
Trustees such periodic and special reports, balance sheets or
financial information, and such other information with regard to its
affairs as the Adviser or Board of Trustees may reasonably request.
The Sub-Adviser shall keep the books and records relating to the
Assets required to be maintained by the Sub-Adviser under this
Agreement and shall timely furnish to the Adviser all information
relating to the Sub-Adviser's services under this Agreement needed by
the Adviser to keep the other books and records of a Fund required by
Rule 31a-1 under the 1940 Act. The Sub-Adviser shall also furnish to
the Adviser any other information within the possession or control of
the Sub-Adviser relating to the Assets that is required to be filed by
the Adviser or the Trust with the SEC or sent to shareholders under
the 1940 Act (including the rules adopted thereunder or any exemptive
or other relief that the Adviser or the Trust obtains from the SEC).
The Sub-Adviser agrees that all records that it maintains on behalf of
the Fund are property of the Fund and the Sub-Adviser will surrender
promptly to the Fund any of such records upon the Fund's request;
provided, however, that the Sub-Adviser may retain a copy of such
records. In addition, for the duration of this Agreement, the
Sub-Adviser shall preserve for the periods prescribed by Rule 31a-2
under the 1940 Act any such records as are required to be maintained
by it pursuant to this Agreement, and shall transfer said records to
any successor sub-adviser upon the termination of this Agreement (or,
if there is no successor sub-advisor, to the Adviser).
(e) The Sub-Adviser shall provide each Fund's custodian on each business
day with information relating to all transactions concerning the
Fund's Assets and shall provide the Adviser with such information upon
request of the Adviser.
(f) The investment management services provided by the Sub-Adviser under
this Agreement are not to be deemed exclusive and the Sub-Adviser
shall be free to render similar services to others, as long as such
services do not impair the services rendered to the Adviser or the
Trust. In addition, nothing in this agreement will in any way restrict
the Sub-Adviser, its officers, directors or employees from trading in
securities for its or their own accounts as permitted by the 1940 Act
and the Sub-Adviser's Code of Ethics, provided that the Sub-Adviser's
Code of Ethics materially complies with the then current Code of
Ethics recommendations of the Investment Company Institute.
3
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to
fulfill its commitments under this Agreement.
(h) The Sub-Adviser shall review all proxy solicitation materials and be
responsible for voting and handling all proxies in relation to the
Assets. The Adviser shall instruct the custodian and other parties
providing services to the Fund to forward promptly all such proxies to
the Sub-Adviser.
Services to be furnished by the Sub-Adviser under this Agreement may
be furnished through the medium of any of the Sub-Adviser's associated
companies, directors, officers or employees of the Sub-Adviser or such
associated companies.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have responsibility
for all services to be provided to the Fund pursuant to the Advisory
Agreement and shall oversee and review the Sub-Adviser's performance of its
duties under this Agreement; provided, however, that in connection with its
management of the Assets, nothing herein shall be construed to relieve the
Sub-Adviser of responsibility for compliance with the Trust's Declaration
of Trust (as defined herein), the Prospectus, the written instructions and
directions of the Board of Trustees of the Trust, the requirements of the
1940 Act, and all other applicable federal and state laws and regulations,
as each is amended from time to time.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
(a) the Trust's Agreement and Declaration of Trust, as filed with the
Secretary of State of the Commonwealth of Massachusetts (such
Agreement and Declaration of Trust, as in effect on the date of this
Agreement and as amended from time to time, herein called the
"Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, herein called the
"By-Laws");
(c) the currently effective Prospectus and Statement of Additional
Information of the Fund;
(d) resolutions of the Board of Trustees of the Trust authorizing the
execution and deliver of the Advisory Agreement and this Agreement;
(e) the most recent amendments to the Trust's registration statement as
filed with the SEC under the Securities Act of 1933, as amended and
the most recent forms filed with the SEC for the Trust under the 1940
Act;
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(f) any order issued by the SEC or other regulatory authority applicable
to the Trust, the Fund or the Adviser; and
(g) any other written instructions, directions or policies of the Adviser
or the Trust's Board of Trustees applicable to the Sub-Adviser's
duties hereunder.
The Adviser will promptly furnish to the Sub-Adviser any and all
amendments or other changes to the documents specified in this Section
3, and the Sub-Adviser shall not be charged with complying with any
such document or amendment not so delivered to the Sub-Adviser, unless
the Sub-Adviser reasonably should have known the terms of such
document or amendment.
4. COMPENSATION TO THE SUB-ADVISER; EXPENSES. For the services to be provided
by the Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to and accepts as full compensation
therefor, a sub-advisory fee at the rate specified in the Schedule(s) which
is attached hereto and made part of this Agreement. The fee will be
calculated based on the average monthly market value of the Assets under
the Sub-Adviser's management and will be paid to the Sub-Adviser monthly.
Except as may otherwise be prohibited by law or regulation (including any
then current SEC staff interpretation), the Sub-Adviser may, in its
discretion and from time to time, waive a portion of its fee.
The Sub-Adviser shall be responsible for its own expenses in performing its
duties hereunder but shall not be responsible for the expenses of the Trust
or the Fund. Without limiting the generality of the foregoing, the
Sub-Adviser shall not be responsible for brokerage commissions, transfer
taxes or fees or custody fees of the Fund.
5. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser from and against any and all claims, losses, liabilities or damages
(including reasonable attorney's fees and other related reasonable
out-of-pocket expenses) howsoever arising from or in connection with the
performance of the Sub-Adviser's obligations under this Agreement to
the extent that such losses result from the Sub-Adviser's negligence,
willful misfeasance, breach, bad faith or reckless disregard of its duties
under this Agreement; provided, however, that the Sub-Adviser's
obligation under this Section 5 shall be reduced to the extent that the
claim against, or the loss, liability or damage experienced by the Adviser,
is caused by or is otherwise directly related to the Adviser's own willful
misfeasance, bad faith or negligence, or to the reckless disregard of its
duties under this Agreement.
The Adviser shall indemnify and hold harmless the Sub-Adviser from and
against any and all claims, losses, liabilities or damages (including
reasonable attorney's fees and other related reasonable out-of-pocket
expenses) howsoever arising from or in connection with the performance of
the Adviser's obligations under this Agreement to the extent that such
losses result from the Adviser's negligence, willful misfeasance, breach,
bad faith or reckless disregard of its duties under this Agreement;
provided, however, that the
5
Adviser's obligation under this Section 5 shall be reduced to the extent
that the claim against, or the loss, liability or damage experienced by the
Sub-Adviser, is caused by or is otherwise directly related to the
Sub-Adviser's own willful misfeasance, bad faith or negligence, or to the
reckless disregard of its duties under this Agreement.
The Sub-Adviser shall not be liable for any loss or damage arising out of
the performance of its duties hereunder unless such loss or damage arose
out of or in connection with its breach of this Agreement or its
negligence, willful default, bad faith, or fraud in the performance of its
duties hereunder. The presence of any exculpatory language in this
Agreement shall not be deemed by the Adviser, the Fund, the Sub-Adviser,
any custodian or party appointed pursuant to this Agreement as in any way
limiting causes of action and remedies which may, notwithstanding such
language, be available either under common law or statutory law principles
applicable to fiduciary relationships or under U.S. federal securities
laws.
Without limitation, the Sub-Adviser shall not have breached any obligation
to the Adviser and shall incur no liability for losses resulting from force
majeure or other events beyond the control of the Sub-Adviser, including
without limitation any failure, default or delay in performance resulting
from a breakdown in communications not reasonably within the control of the
Sub-Adviser.
6. DURATION AND TERMINATION. This Agreement shall become effective upon its
approval by the Trust's Board of Trustees. This Agreement shall continue in
effect for a period of more than two years from the date hereof only so
long as continuance is specifically approved at least annually in
conformance with the 1940 Act; provided, however, that this Agreement may
be terminated with respect to the Fund: (a) by the Fund at any time,
without the payment of any penalty, on not more than 60 days' nor less than
30 days' written notice to the Sub-Adviser, by the vote of a majority of
Trustees of the Trust or by the vote of a majority of the outstanding
voting securities of the Fund; (b) by the Adviser at any time, without the
payment of any penalty, on no more than 60 days' nor less than 30 days'
written notice to the Sub-Adviser; or (c) by the Sub-Adviser at any time,
without the payment of any penalty, on 90 days' written notice to the
Adviser or immediately on notice to the Adviser prior to its approval by
the Trust's Board of Trustees. This Agreement shall terminate automatically
and immediately in the event of its assignment, or in the event of a
termination of the Adviser's agreement with the Trust. As used in this
Section 6, the terms "assignment" and "vote of a majority of the
outstanding voting securities" shall have the respective meanings set forth
in the 1940 Act and the rules and regulations thereunder, subject to such
exceptions as may be granted by the SEC under the 1940 Act.
7. GOVERNING LAW. This Agreement shall be governed by the internal laws of the
Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed as
being inconsistent with the 1940 Act.
8. SEVERABILITY. Should any part of this Agreement be held invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall
not be affected thereby.
6
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors.
9. NOTICE. Any notice, advice or report to be given pursuant to this Agreement
shall be deemed sufficient if delivered or mailed by registered, certified
or overnight mail, postage prepaid, addressed by the party giving notice to
the other party at the last address furnished by the other party:
To the Adviser at: SEI Investments Management Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Legal Department
To the Sub-Adviser at: Jardine ▇▇▇▇▇▇▇ International Management Inc.
▇▇/▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇
Attention: Client Liaison
10. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject matter.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
11. MISCELLANEOUS.
(a) A copy of the Declaration of Trust is on file with the Secretary of
State of the Commonwealth of Massachusetts, and notice is hereby given
that the obligations of this instrument are not binding personally
upon any of the Trustees, officers or shareholders of the Fund or the
Trust.
(b) Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order
of the SEC, whether of special or general application, such provision
shall be deemed to incorporate the effects of such rule, regulation or
order.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their officers designated below as of the day and year first above written.
SEI INVESTMENTS MANAGEMENT CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------------------
Title: Senior Vice President
--------------------------------------------
Attest: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------
JARDINE ▇▇▇▇▇▇▇ INTERNATIONAL MANAGEMENT INC.
By: /s/ M.B.E. White
--------------------------------------------
Name: M.B.E. White
--------------------------------------------
Title: C.E.O.
--------------------------------------------
Attest: /S/ [Signature appears here]
--------------------------------------------
8
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI INVESTMENTS MANAGEMENT CORPORATION
AND
JARDINE ▇▇▇▇▇▇▇ INTERNATIONAL MANAGEMENT INC.
Pursuant to Section 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
SEI INSTITUTIONAL INVESTMENTS TRUST
International Equity Fund 0.37%
9
SCHEDULE B
PROVISIONS REQUIRED BY THE HONG KONG SECURITIES AND FUTURES COMMISSION (THE
"SFC")
The following information and statements are to be contained in a client
agreement pursuant to SFC requirements:
1. DERIVATIVES
A Where the Sub-Adviser provides services to the Adviser in relation to
derivative products, including futures contracts and options, the
Sub-Adviser shall provide to the Adviser, upon request, product
specifications and any prospectus or offering documents.
B Where the Sub-Adviser is permitted to hedge, the Sub-Adviser may, but
shall not be obliged to hedge. If the Sub-Adviser ▇▇▇▇▇▇, it shall not
be obliged to carry out active or dynamic hedging. If currency hedging
is permitted, the Sub-Adviser's powers include hedging to the
reporting currency of the Fund, cross-currency hedging and proxy
hedging. Where the Sub-Adviser is permitted to hedge, the Sub-Adviser
shall be authorised to invest in a permitted class of derivative
notwithstanding any prohibition on investment in the underlying
security. If the Sub-Adviser is authorised to use derivatives for
investment and not hedging purposes, the Sub-Adviser shall only be
able to invest in a derivative in respect of a security, where the
Sub-Adviser is authorised to invest in the underlying security.
2. UNDERTAKINGS
The Adviser undertakes to advise the Sub-Adviser promptly of any change to
the information set out in this Agreement or any change in its
constitution.
The Sub-Adviser will inform the Adviser in writing within a reasonable time
of any changes in the directors of the Sub-Adviser, and of material changes
to the information provided to the Adviser under this Agreement.
3. MARGIN OR SHORT SELLING FACILITIES
For the purposes of this Agreement, margin means such amount (not being
less than the amount required under the relevant rules) in such currency
and such other security whatsoever as the Sub-Adviser may from time to time
demand in its absolute discretion from the Adviser by way of margins or
variation adjustments in relation to any short selling or other contracts
("Margin").
If the Assets are to be provided with any margin or shortselling
facilities, the terms and conditions applicable to the provision of such
facilities, including the circumstances in which positions may be closed
without consent, are set out in the provisions below. The Adviser confirms
that it has notice of these provisions and agree to be bound by the terms
thereof.
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A If the Adviser or the Sub-Adviser, at its discretion herein, wishes to
utilise margin or short selling facilities, the Sub-Adviser is hereby
specifically authorised to appoint or use the services of such other
party as the Sub-Adviser in its full discretion may deem fit.
B (a) In respect of these facilities, the Sub-Adviser shall utilise
such part of the Assets (whether in cash, guarantee or other
security in such form and amount and on such terms as the
Sub-Adviser may at its absolute discretion consider appropriate)
for the provision of Margin as may be required by the relevant
authorities. The Margin may at the discretion of the Sub-Adviser
exceed any margin requirements required by the relevant
authorities.
(b) The Sub-Adviser may require the Adviser to provide or may provide
from the Assets, such additional Margin as the Sub-Adviser shall
think fit in its absolute discretion whether to comply with any
requirement imposed by law or by the relevant authorities or
otherwise, whatsoever or howsoever.
(c) Without prejudice and in addition to any other rights and
remedies of the Sub-Adviser, the Adviser hereby irrevocably
authorises the Sub-Adviser, without prior notice to the Adviser,
to apply all or any part of any cash deposit or other property
held for the Fund by the Sub-Adviser on any account whatsoever:-
(i) in or towards the provision of any Margin or additional
Margin demanded by the Sub-Adviser pursuant to Part (a) and
(b) above; and/or
(ii) in payment to any relevant authorities or exchanges in or
towards satisfaction of any liability to provide margin
demanded or required by such exchange, in respect of any
transactions entered into by the Sub-Adviser on behalf of
the Adviser, or towards provision of security (whether in
the form of mortgage, deposit, charge, pledge or otherwise)
in favour or to the order of the authorities or exchange,
without prior notice to the Adviser and free of any
beneficial interest of the Adviser or of any other person in
the Margin, as security for the Sub-Adviser's obligations to
(and upon terms specified by) the authorities or exchanges
in respect of transactions undertaken by the Sub-Adviser on
behalf of the Adviser, with power to such authority or
exchange to enforce the security in satisfaction of any
obligations of the Sub-Adviser provided that the Adviser's
deposit or property shall not be applied to finance or act
as security for any margin requirements or trading
liabilities in respect of transactions undertaken by the
Sub-Adviser on behalf of any other client (and in either
event, such deposit or property will be dealt with according
to the rules of the relevant exchanges); and/or
11
(iii) in satisfaction of any other obligations of the Sub-Adviser
to any party insofar as such obligations arise in connection
with or incidental to any transactions entered into by the
Sub-Adviser on behalf of the Adviser; and/or
(iv) in or towards payment of money properly required to meet
commissions, brokerage, levies or other proper charges
directly relating to any transactions undertaken by the
Sub-Adviser on behalf of the Adviser;
notwithstanding that any such application may result in the
Adviser being required by the Sub-Adviser to provide additional
Margin.
(d) Margin calls must be met within 24 hours (or such other time
limit as may be specified by the Sub-Adviser from time to time).
(e) The Adviser shall not be entitled to receive any interest on any
Margins held by the Sub-Adviser for and on behalf of the Adviser.
C At any time after the expiration of the time limit specified in Part
B(d) above, the Sub-Adviser shall forthwith be entitled, without
demand for additional Margin, without notice to the Adviser and
notwithstanding any prior Margin call has been made, to close out,
perform, maintain or otherwise deal with at the absolute discretion of
the Sub-Adviser, any futures contract or option contract in the
account and, for this purpose, make or take delivery of the underlying
product in respect of any such contracts.
4. RISK DISCLOSURE
The Adviser confirms that it has notice of the risk disclosure statement as
set out below and agree to be bound by the terms thereof.
A In respect of transactions in securities, please note that:--
The price of securities can and does fluctuate, and any individual
security may experience upward or downward movements, and may even
become valueless. There is an inherent risk that losses may be
incurred rather than profit made as a result of buying and selling
securities.
B In respect of transactions involving futures contracts or options,
please note that:--
The risk of loss in trading futures contracts or options can be
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 achieve the desired
results. 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 will be liquidated. You will remain
liable for any resulting deficit in your
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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.
C In respect of transactions in securities traded on the Growth
Enterprise Market of The Stock Exchange of Hong Kong Limited, please
note that:--
(a) The Growth Enterprise Market has been established as a market
designed to accommodate companies to which a high investment risk
may be attached. In particular, companies may list on the Growth
Enterprise Market with neither a track record of profitability
nor any obligation to forecast future profitability. There may be
risks arising out of the emerging nature of companies listed on
the Growth Enterprise Market and the business sectors or
countries in which the companies operate.
(b) There are potential risks of investing in such companies and you
should make the decision to invest only after due and careful
consideration. The greater risk profile and other characteristics
of the Growth Enterprise Market mean that it is a market more
suited to professional and other sophisticated investors.
(c) Given the emerging nature of companies listed on the Growth
Enterprise Market, there is a risk that securities traded on the
Growth Enterprise Market may be susceptible to higher market
volatility compared to securities traded on the Main Board and no
assurance is given that there will be a liquid market in the
securities traded on the Growth Enterprise Market.
(d) The principal means of information dissemination on the Growth
Enterprise Market is publication on the internet website operated
by the Exchange. Companies listed on the Growth Enterprise Market
are not generally required to issue paid announcements in
gazetted newspapers. Accordingly, you need to have access to
up-to-date information on the Growth Enterprise Market-listed
companies as published on the Growth Enterprise Market website.
(e) This risk disclosure statement does not purport to disclose all
the risks and other significant aspects of the Growth Enterprise
Market. You should undertake your own research and study on the
trading of securities on the Growth Enterprise Market before
commencing any trading activities.
(f) You should seek independent professional advice if you are
uncertain of or have not understood any aspect of this risk
disclosure statement or the nature and risks involved in trading
of securities on the Growth Enterprise Market.
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