RISK DISCLOSURE

INTRODUCTION

Trading Point of Financial Instruments Ltd, operating under the trading name XM.com, is a Cypriot
Investment Firm ("CIF") registered with the Registrar of Companies in Cyprus under number HE 251334,
and regulated by the Cyprus Securities and Exchange Commission ("CySEC") under license number
120/10 (hereinafter “XM”, the “Company”, “we”, “us” and “our“, as appropriate).

The Company is operating under the Cypriot Law L. 87(1)/2017 titled “Investment Services and Activities
and Regulated Markets Law of 2017” which transposed the European Directive 2014/65/EU of the
European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending
Directive 2002/92/EC and Directive 2011/61/EU, as the same may be in force from time to time and modified
or amended from time to time (hereinafter “MiFID II”). This Notice, or more specifically this Risk Disclosure,
is provided to you in accordance with the requirements of the above legislation because you consider the
use or you already use the services of the Company to enter into transactions in financial instruments
provided by the Company (hereinafter “supported financial instruments”, “financial instruments” or
“products”).

This Notice cannot and does not disclose or explain all of the risks and other significant aspects associated
with our services and Company’s financial instruments. Its purpose is to explain, in general terms, the
nature of the risks particular to entering into transactions (i.e. trade) in the Financial Instruments provided
by the Company and to help you to take investment decisions on an informed basis. For a detailed
explanation on how our services operate, you should read the following documents, which together with
this Notice, form our agreement with you:

• Terms and Conditions of Business/Client Agreement;

• Order Execution Policy;
• Summary of Conflicts of Interest Policy;
• Client Categorisation Policy; and
• Privacy Policy.

You should NOT commence trading with us until you have read and understood the documents referred to
above.

GENERAL CHARACTERISTICS OF COMPANY’S PRODUCTS

We offer trading services in Contracts For Differences (“CFDs”). CFDs fall under the asset class of
derivative financial instruments (hereinafter “derivatives”). A derivative is a financial instrument whose price
is dependent upon or derived from the price fluctuations of another underlying financial instrument.

What is a Contract for Difference?

A Contract for Difference (CFD) is an over-the-counter (“OTC”) derivative which enables investors to obtain
exposure and participate in the returns (which could end up being positive or negative) from price
movements in an underlying financial instrument, without the need to physically acquire that underlying
financial instrument.

Who is your Counterparty?

Like all derivatives, a CFD is a contract under which two parties agree to exchange the difference in value
between the opening value and the closing value of the contract. For the purposes of Client orders in

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Address: 12, Richard & Verengaria Street, Araouzos Castle Court, 3042, P.O.Box 50626, 3608 Limassol, Cyprus
 financial instruments provided by the Company, the Company is always the counterparty (or ‘principal’) to
all of your trades. Therefore, the Company is the sole execution venue for the execution of the Client’s
orders. Should you decide to open a position in a financial instrument with the Company, then that open
position may only be closed with the Company.

How is your profit or loss on a CFD trade calculated?

CFDs allow you to make a profit or loss from the price fluctuations in the underlying financial instrument
and the amount of any profit or loss on a CFD trade will be the total of the difference between the opening
value of the CFD (Quantity x our price) and the closing value of the CFD (Quantity x our price) less any
commissions and/or any other fees you incur and are required to pay to us in respect of the CFD.

Our trading service carries a high level of risk and is not suitable for everyone. You should not trade with
us unless you understand the nature of the transaction you are entering into and the extent of your
potential loss from a trade. You trade entirely at your own risk.

Our trading service is ‘execution-only’. This means that we carry out your trading instructions. We do
NOT provide you with any investment advice.

FUNCTIONING AND PERFORMANCE OF COMPANY’S PRODUCTS IN DIFFERENT MARKET

CONDITIONS

CFD products entail the use of “gearing” or “leverage” and are considered speculative products and, as
such, carry significantly greater risks than non-leveraged products. Leverage enables you to obtain a large
exposure to a financial instrument while only tying up a relatively small amount of your capital. However,
your profit or loss is based on the full position (exposure) and, as such, the amount you gain or lose might
seem very high in relation to the sum you have invested.

The performance of such products depends on different market conditions which can have positive or
negative effects on the performance of a product. Therefore, when trading in CFDs, the market can move
in your favour for a profit or against you for a loss.

For a better understanding as to how the market can have a positive or negative impact on your trades, a
number of examples is included in the Appendix of this document.

Trading in CFDs is not suitable for all investors. Thus, you should not invest in CFDs unless you
adequately understand the characteristics, and in particular the associated risks, of these products and
you are comfortable with these risks when trading on such products. You should seek independent
professional advice, if necessary, in order to ensure that investing in these products is suitable for your
objectives, needs and financial circumstances and resources.

RISKS ASSOCIATED WITH TRADING IN COMPANY’S PRODUCTS

In considering whether to engage in trading in CFDs, you should be aware of the following:

A. General Risks associated with the Financial Instruments offered by the Company

1. The Company does not and cannot guarantee the initial capital of the Clients’ portfolio or its value at
any time or any money invested in any financial instrument.

2. Transactions undertaken through the dealing services of the Company may be of a speculative nature.
Large losses may occur in a short period of time, equaling the total of funds deposited with the
Company.

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Address: 12, Richard & Verengaria Street, Araouzos Castle Court, 3042, P.O.Box 50626, 3608 Limassol, Cyprus
 3. You may be required to deposit additional funds into your account at short notice in order to support
your open trades. A failure to deposit additional funds when required to do so may result in your open
trades being closed out (‘stopped out’) at a loss and your pending orders cancelled by us without notice
to you.

4. Under certain market conditions, it may be difficult or impossible to execute your order.

5. You must understand that the price of the financial instruments being traded is determined by
fluctuations in markets outside our control.

6. We do not guarantee that an order you place to limit the loss on a trade (‘stop loss’) will be filled at the
price that you specify. In a fast-moving market, your order may be liable to ‘gap through’, with the result
that your trade is closed at an increased loss as compared with the level of the order that you placed.
In the event that a ‘gap through’ occurs there can be a markedly different price in the financial instrument
being traded with no opportunity to close your trade in-between. Therefore, an order you place to limit
the loss on a trade should not be treated as a guarantee to limit your loss on that trade to a specific
amount.

7. The Client’s attention is expressly drawn to CFDs on currencies traded irregularly or infrequently that it
cannot be certain that a price will be quoted at all times or that it may be difficult to effect transactions
at a price which may be quoted owing to the absence of a counterparty.

8. Some financial instruments are quoted and settled in currencies other than the base currency of your
account. Trading in these instruments carries additional risk as the currency exchange rate at the time
you close a trade and when your balance is converted to your base currency at the close of business
on the same day may have fluctuated against you. Therefore, if you trade in an instrument that is not
quoted in the base currency of your account, currency exchange fluctuations will have an impact upon
your profits and losses.

9. Any funds you deposit with us or is credited to your Account will be held in one or more segregated
client bank accounts. The client bank accounts will be pooled accounts holding funds of other clients
of ours and will not hold any of our own money. You shall have an ownership interest in your share of
the balance in the relevant client bank account. However, in the event that a bank at which the client
bank account is held has become insolvent or has otherwise failed and is unable to return the full
amount of funds held in the client bank account, you may not receive all the funds to which you have
an ownership interest.

10. In the event of insolvency of the Company, your positions may be closed out against your wishes.

11. Changes in, or the introduction of new, rules, regulations and laws or the way in which they are applied
or interpreted may impact your trading with us. You may be exposed to the risks arising under the
rules, laws and regulations of jurisdictions other than the jurisdiction in which you are located and/or
with which you are familiar.

12. Trading online, no matter how convenient or efficient, does not necessarily reduce risks associated with
trading. In addition, by trading online, you face risks of slow or no internet connectivity and hardware
or software failures.

13. It is your responsibility to monitor your account at all times. It is important that you monitor your
positions closely due to the speed at which profits or losses can be incurred. If you have open trades
you should always be in a position to access and manage your account. You may do this on-line, 24
hours a day, 7 days a week.

B. Specific Risks associated with transactions in Financial Instruments of the Company

You should unreservedly acknowledge and accept that, regardless of any information which may be offered
by the Company, the value of the Supported Financial Instruments may fluctuate downwards or upwards
and it is even probable that the investment may become of no value.

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Address: 12, Richard & Verengaria Street, Araouzos Castle Court, 3042, P.O.Box 50626, 3608 Limassol, Cyprus
 You should also unreservedly acknowledge and accept that you run a great risk of incurring losses and
damages, up to all your invested capital, as a result of the dealing in Financial Instruments and accepts and
declares that you are willing to undertake this risk.

The main specific risks associated with transactions in Financial Instruments of the Company are the
following:

1. Leverage

As CFD products entail the use of leverage, you may deposit a relatively small proportion of the overall
contract value to open a trade. This can work for and against you as a relatively small movement in
the price of the underlying financial instrument being traded can have a disproportionate effect on your
trade. This may result in you achieving a good profit if the price of the underlying financial instrument
moves in your favour, but, equally, may result in you incurring significant losses as an equally small
adverse market movement may quickly result in the loss of your entire invested capital. Your losses will
never exceed the balance of your account as the Company offers a “negative balance protection”.

The Company offers to its Retail Clients fixed leverage ratios which vary from 1:5 to 1:30 according to
the volatility of the underlying financial instrument, as follows:

CFDs on the following financial instruments Margin rates (leverage levels)

Major FX – Currency pairs composed of any two (2) of the

3.33% (30:1 leverage)
following: USD, EUR, JPY, GBP, CAD and CHF

Other FX – All other currency pairs 5% (20:1 leverage)

Gold 5% (20:1 leverage)

Major indices – FRA40, GER30, JP225, UK100, US100,
US30, US500, AUS200Cash, FRA40Cash, GER30Cash,
5% (20:1 leverage)
JP225Cash, UK100Cash, UK100Cash, US100Cash,
US30Cash and US500Cash
Minor indices – All other indices (CHI50, EU50, SING,
SWI20, USDX, CHI50Cash, EU50Cash, GRE20Cash,
10% (10:1 leverage)
HK50Cash, IT40Cash, NETH25Cash, POL20Cash,
SINGCash, SPAIN35Cash and SWI20Cash)
Commodities (other than gold) 10% (10:1 leverage)

Shares and other reference values 20% (5:1 leverage)

For example, if a retail investor wants to open a position on EUR/USD worth of USD 30,000 and for
which the fixed leverage ratio offered is 1:30, then the investor would only need to use USD 1,000 (i.e.
USD 30,000 / 30) of his/her funds to do so.

2. Volatility of price and limitation on the available market

The products provided by the Company are derivative financial instruments, where their price is derived
from the price of the underlying financial instruments in which the financial instruments refer to.
Derivative financial instruments or markets can be highly volatile. The prices of derivative financial
instruments and the underlying instruments may fluctuate rapidly and over wide ranges and may reflect
unforeseeable events or changes in market conditions, none of which can be controlled by the Client
or the Company. Under certain market conditions, it can be impossible to execute any type of Clients
order at the declared price. Therefore, even an open trade with a ‘stop loss’ order cannot always
guarantee the limit of loss.

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Address: 12, Richard & Verengaria Street, Araouzos Castle Court, 3042, P.O.Box 50626, 3608 Limassol, Cyprus
 The prices of derivative financial instruments are influenced by, amongst others, changing supply and
demand relationships, governmental, agricultural, commercial and trade programs and policies,
national and international political and economic events and/or the behavioural characteristics in a
capital market.

Transactions in the products provided by the Company are not undertaken on a Trading Venue
(Regulated Market, Multilateral Trading Facility or Organised Trading Facility), rather they are executed
by the Company, through its Electronic Trading Platform and/or Mobile Application, which is not a
Trading Venue, and as such you may be exposed to greater risks than those of a Trading Venue. The
terms and conditions and trading rules are established solely by the Company. You must close an
open position of any given financial instrument during the opening hours of the Company’s Trading
Platform.

3. Impediments on closing an open trade

There may be circumstances where there is low liquidity in a financial instrument and/or where you
have a large position and, therefore, it is not possible to close your open trades immediately. During
that time, the value of your open trades could fall, possibly by a significant sum, and you will be liable
for the full amount of the losses that arise.
4. Margin requirements

You are required to deposit a margin with the Company in order to open a trade. The margin
requirement will depend on the underlying instrument of the derivative Financial Instrument, the level
of your leverage and the value of position to be established. When the margin level required to maintain
the open position(s) in your trading account falls below the minimum margin requirement, as specified
by the Company, we may, but shall have no obligation whatsoever, issue a ‘margin call’ and in this
case you will have to either increase the ‘equity’ in your trading account by depositing additional funds
and/or close your positions. If you do not perform any of the aforementioned and the trading account
reaches or falls below the ‘stop out level’, as this is specified by the Company, the automatic ‘stop out
mechanism’ will be initiated and will start closing the open positions at the current market prices, in
descending order on the basis of level of loss of each trade. The Company guarantees that there will
be no negative balance in your account when trading in financial instruments provided by the Company
due to the negative balance protection offered by the Company.

5. Additional obligations

Before you commence trading with us, you should ensure that you are aware of our charging system.
If any charges are not expressed in money terms, but for example as a spread, you may request and
obtain a clear written explanation, including appropriate examples, to establish what such charges are
likely to mean in specific money terms.

The value of open positions in certain financial instruments provided by the Company is subject to
‘financing fees’ (for example ‘swap rates’). The price of long positions in financial instruments is reduced
by a daily financing fee throughout their life. Conversely, the price of short positions in financial
instruments is increased by a daily financing fee throughout their life. Financing fees are based on
prevailing market interest rates, which may vary over time.

Details of our charging system (such as spreads, commissions and financing fees) may be found on
the Company’s website under the link: https://www.xm.com/spreads.

You should be aware that your trades in financial instruments may be or become subject to tax and/or
any other duty, for example, because of changes in legislation or in your personal circumstances. The
Company does not warrant that no tax and/or any other stamp duty will be payable. You are responsible
for any taxes and/or any other duties which may accrue in respect of your trades.

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Address: 12, Richard & Verengaria Street, Araouzos Castle Court, 3042, P.O.Box 50626, 3608 Limassol, Cyprus
 ONGOING REVIEW AND AMENDMENT OF RISK DISCLOSURE

The Company reserves the right to review and/or amend its Risk Disclosure, at its sole discretion, whenever
it deems fit or appropriate.

OTHER INFORMATION

1. The Risk Disclosure is not part of our Client Agreement/Terms and Conditions of Business and are not
intended to be contractually binding or impose or seek to impose any obligations on us which we would
not otherwise have, but for the Cyprus Investment Services and Activities and Regulated Markets Law
of 2017 (Law 87(I)/2017).

2. We are members of the Investor Compensation Fund (“ICF”). You may be entitled to compensation
from the ICF if we cannot meet our obligations. The maximum amount of compensation paid to a client,
who will be deemed as eligible for compensation is EUR 20.000 or 90% of the covered investor’s claim,
whichever is lower. The said coverage applies to the total amount of claims by a client against an ICF
member, irrespective of the number of accounts, the currency and the place of provision of the service.
Further information about compensation arrangements is available at the website of the Cyprus
Securities and Exchange Commission: https://www.cysec.gov.cy/en-GB/complaints/tae/

3. If there is anything in the Risk Disclosure you do not understand, please contact our Compliance
Department: [email protected].

EFFECTIVE DATE
The effective date is 3 January 2018.

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Address: 12, Richard & Verengaria Street, Araouzos Castle Court, 3042, P.O.Box 50626, 3608 Limassol, Cyprus
 APPENDIX
EXAMPLES

The below examples illustrate how the market can move in your favor or against a Client when trading in
CFDs. Please note that the examples provided herein below are only provided for illustrative purposes and
do not necessarily reflect current or future market or product movements, the values that the Company will
apply to a trade, nor how such trades impact your personal circumstances. Also, the figures used in the
examples do not necessarily reflect your personal circumstances and do not restrict in any manner the way
in which the Company may exercise its powers or discretions. These examples do not constitute general
or personal advice to any person reading this document:

1. CFD on a Currency Pair (Forex)

Example 1 – Buy Order (profitable trade)

Currency Pair: EUR/USD

Base currency: USD
Contract size: 1 Standard Lot (100,000 units)
Current Bid/Ask price: 1.28380/1.28390
Selected Leverage: 1:30 (or 3.33% margin)
Commission/Fees: No

You believe that signals in the market are indicating that the EUR will go up against the USD (“$”). You
decide to enter into a CFD on EUR/USD and place a ‘buy order’.

Therefore, you open one standard lot (100,000 units of EUR/USD), buying the EUR at the offered leverage
of 1:30 (or 3.33% margin) and wait for the exchange rate of EUR/USD to climb. When you buy one lot
(100,000 units) of EUR/USD at a price of 1.28390, you are effectively buying 100,000 EUR, which is worth
$128.390 (100,000 units of EUR x 1.28390). As the margin requirement is 3.33%, then approximately
US$4,275 (US$128,390 x 3.33%) would be set aside in your account to open up the trade. You now
‘control’ 100,000 EUR with just US$4,275.

Your predictions come true and you decide to close your trade. The Euro strengthens to 1.28420/1.28430.
Now, to realise the profits, you close your order, i.e sell one lot (100,000 units) of EUR/USD at the current
rate of 1.28420 and you receive $128,420 for that trade (100,000 units x 1.28420).

Result of your closed trade

You bought one lot (100,000 units) of EUR/USD at a price of 1.28390, paying $128,390. Then, you sold
one lot (100,000 units) of EUR/USD at a price of 1.28420, receiving $128,420. That is a positive difference
of $30 ($128,420 – $128,390 = +$30).

Total profit = $30 on a deposit of US$4,275.

Example 2 – Buy Order (loss-making trade)

Currency Pair: EUR/USD

Base currency: USD
Contract size: 1 Standard Lot (100,000 units)
Current Bid/Ask price: 1.28380/1.28390
Selected Leverage: 1:30 (or 3.33% margin)
Commission/Fees: No

You believe that signals in the market are indicating that the EUR will go up against the USD (“$”). You
decide to enter into a CFD on EUR/USD and place a ‘buy order’.

Therefore, you open one standard lot (100,000 units EUR/USD), buying EUR at 3.33% margin and wait for
the exchange rate of EUR/USD to climb. When you buy one lot (100,000 units) of EUR/USD at a price of
1.28390, you are effectively buying 100,000 EUR, which is worth $128.390 (100,000 units of EUR x

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Address: 12, Richard & Verengaria Street, Araouzos Castle Court, 3042, P.O.Box 50626, 3608 Limassol, Cyprus
 1.28390). If the margin requirement was 3.33%, then approximately US$4,275 would be set aside in your
account to open up the trade (US$128,390 x 3.33%). You now ‘control’ 100,000 EUR with just US$4,275.
Your predictions do not come true and the Euro weakens to 1.28360/1.28370. Now, you decide to close
your order to avoid further losses, you close your trade, i.e. sell one lot (100,000 units) of EUR/USD at the
current rate of 1.28360, and you receive $128,360 for that trade (100,000 units x 1.28360).

Result of your closed trade

You bought one lot (100,000 units) of EUR/USD at a price of 1.28390, paying $128,390. Then, you sold
one lot (100,000 units) of EUR/USD at a price of 1.28360, receiving $128,360. That is a negative difference
of $30 ($128,360 – $128,390 = -$30).

Total loss = -$30 on a deposit of US$4,275.

2. CFD on Gold

Example 1 – Sell Order (profitable trade)

Precious Metal: Gold

Base currency: USD
Contract size: 1 Standard Lot (100 ounces of Gold)
Current Bid/Ask price: 1248.20/1248.60
Selected Leverage: 1:20 (margin of 5%)
Commission/Fees: No

Imagine the current Bid/Ask price for Gold is: 1248.20/1248.60, meaning that you can enter into a Gold
CFD to buy (‘go long’) at 1248.60 or sell (‘go short’) at 1248.20. Suppose that you believe that the value of
Gold will fall and, as such, you decide to enter into a CFD on Gold and place a ‘sell order’, i.e. to sell (‘go
short’) Gold.

Therefore, with a 5% margin, the amount of US$6,241 (100 ounces x 1248.20 x 5%) would be set aside in
your account for selling (going short) 100 ounces (one lot) of Gold. As you expected, the value of Gold
drops to 1245.80/1246.20. Now, to realize the profits, you close the order and buy 100 ounces (one lot) of
Gold at the current price of 1246.20.

Result of your closed trade

You went short one lot (100 ounces) of Gold at 1248.20 for $124,820. Then, you closed your trade, i.e.
bought one lot (100 ounces) of Gold at 1246.20 for $124,620. That is a positive difference of $200 ($124,820
- $124,620 = $200).

Total profit = $200 on a deposit of US$6,241.

Example 2 – Sell Order (loss-making trade)

Precious Metal: Gold

Base currency: USD
Contract size: 100 ounces
Current Bid/Ask price: 1248.20/1248.60
Selected Leverage: 1:20 (margin of 5%)
Commission/Fees: No

Imagine the current Bid/Ask price for Gold is: 1248.20/1248.60, meaning that you can can enter into a Gold
CFD to buy (‘go long’) at 1248.60 or sell (‘go short’) at 1248.20. Suppose that you believe that the value of
Gold will fall and, as such, you decide to enter into a CFD on Gold and place a ‘sell order’, i.e. to to sell (‘go
short’) Gold.

Therefore, with a 5% margin, the amount of US$6,241 (100 ounces x 1248.20 x 5%) would be set aside in
your account for selling (going short) 100 ounces (one lot) of Gold. Your predictions do not come true and
the value of Gold rises to 1249.80/1250.20. Now, to minimise your losses, you close the order and buy 100
ounces (one lot) of Gold at the current price of 1250.20.

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Address: 12, Richard & Verengaria Street, Araouzos Castle Court, 3042, P.O.Box 50626, 3608 Limassol, Cyprus
 Result of your closed trade
You went short one lot (100 ounces) of Gold at 1248.20 for $124,820. Then, you closed your trade, i.e.
bought one lot (100 ounces) of Gold at 1250.20 for $125,020. That is a negative difference of $200
($124,820 - $125,020 = -$200).

Total loss = -$200 on a deposit of US$6,241.

Risk Warning:

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.

Click here for the percentage (%) of retail investor accounts lose money when trading CFDs
with this provider.

You should consider whether you can afford to take the high risk of losing your money.

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Address: 12, Richard & Verengaria Street, Araouzos Castle Court, 3042, P.O.Box 50626, 3608 Limassol, Cyprus