Grey Market Trading Risk Disclosure Statement
Before you invest, you should carefully read the Grey Market Trading Risk Disclosure Statement (“Risk Disclosure Statement”) provided by Tiger Brokers (NZ) Limited (“Tiger Brokers”).
Tiger Brokers enables clients to trade certain Hong Kong new shares in the pre-IPO market (the “Grey Market”). The objective of this Risk Disclosure Statement is to provide basic information concerning Grey Market trading and to assist you to make an informed assessment of the risks and uncertainties associated. In light of these risks, you should undertake such transactions only if you understand the nature of the transaction and the extent of your exposure to risk. Not all clients are suitable for Grey Market trading, therefore you should carefully consider whether it is appropriate in the light of your experience, objectives, financial resources, risk tolerance, and other relevant factors. You should carefully read the terms and conditions of contract and rules associated and relevant responsibilities before you decide to invest. If in any doubt, you should seek professional advice. You should also read the other risk disclosure statements with respect to stock trading.
- About Grey Market
Tiger Brokers enables clients to trade certain Hong Kong new shares in the Grey Market. Grey Market is an over-the-counter (“OTC”) market that new shares are traded one trading day prior to the listing date. Clients who get allotted with new shares may sell the shares in the Grey Market, and clients can buy the new shares in Grey Market before official listing date. The transactions in the Grey Market are matched by the system of certain licensed financial institutions instead of the trading system of Hong Kong Stock Exchange (“HKEX”).
- Stock Price
You may find different Grey Market stock prices of single one new share since the Grey Markets are organized by different financial institutions, and the new share is traded by different groups of buyers and sellers. During Grey Market trading hours, your position value will be calculated on Grey Market price. After Grey Market ends and before its official listing date, your position value will be calculated on the Grey Market closing price. At its official listing date, your position is calculated on offering price of the new share. After its official listing, your position will be calculated on market price of the stock.
- Liquidity and Volatility
Before trading on Grey Market, you must understand the nature of the OTC transaction, the trading facilities, and the level of risk you can afford. Grey Market trading is OTC transaction. OTC transaction is subject to risks, including the credit and default risks of transaction counterparties and the risk that the new shares would not be listed in HKEX.
Share traded in Grey Market may have lower liquidities and higher price volatility than shares traded on the HKEX. The Grey Market share price may differ materially from its market opening price or trading price during the regular trading session after the new share is officially listed.
- Trading Hours and Settlement Mechanism
Before you invest, you must know the trading hour and settlement mechanism of Grey Market. Trading hours of Grey Market are different from the regular trading session of HKEX. The trading hours of Grey Market last from 4:15 PM to 6:30 PM Hong Kong Time one trading day prior to the official listing date of the new shares. In case of a half trading day, the trading hours will last from 2:15 PM to 4:30 PM Hong Kong Time one trading day prior to the official listing date of the new shares.
T+0 trading mechanism is used for Grey Market. New shares that have been awarded and stocks purchased during the transaction can be sold during the trading day. The settlement date of Grey Market transactions is two trading days after the official listing day of the new shares.
- Order Execution and Costs
You must know that order execution in Grey Market is different from regular trading session in HKEX. You can only place limit order in Grey Market, other order types are not available in Grey Market trading hours. Your order cannot be modified unless you cancel it and place a new order, and executed orders will remain valid. All orders placed by clients will be void if a new share fails to list on the HKEX. When Grey Market trading session ends, outstanding orders will be cancelled. Alternation to terms and conditions of IPO will not affect Grey Market unless it leads to postponement or cancellation of the listing.
Fees and costs will be charged for your Grey Market orders. Fee schedules will be publicly disclosed in Tiger Brokers’ official website.
This Risk Disclosure Statement do not purport to disclose or discuss all of the risks and other significant aspects of Grey Market trading. In light of the risks, you should undertake such transaction only if you understand the nature of the above transactions and the contracts which you are entering into and the extent of your exposure to risk. You should therefore consult with your own legal, tax, and financial advisers before entering into any particular transaction.
This Risk Disclosure Statement shall be made in both English and Chinese. In case of any discrepancies between the Chinese version and English version, the English version shall prevail.