Risk Disclosure Statement - OTC Securities Trading

Risk Disclosure Statement - OTC Securities Trading


Before you invest, you should read the OTC Securities Trading Risk Disclosure Statement (the "RDS") provided by Tiger Brokers (Singapore) Pte. Ltd. ("TBSPL") carefully.

TBSPL accepts orders to trade certain symbols from OTC Markets[1] (the "OTC Securities"). This RDS is to provide the necessary information concerning the OTC Securities trading and assist you in making an informed assessment of the risks and uncertainties associated. In light of these risks, you should undertake such transactions only if you understand the trading nature and the extent of your risk exposure. Not all clients are suitable for OTC Securities 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 OTC Securities and the associated rules and relevant responsibilities before you decide to invest. If in any doubt, you should seek professional advice. It would be best if you also read the other risk disclosure statements concerning stock trading.


1. About OTC Securities

TBSPL enables its clients to trade certain OTC Securities only, not all OTC Securities are available to trade. Before you invest, you should determine whether a symbol is available as it may influence your investment objectives.

Investment in OTC Securities is speculative and involves a high degree of risk, because some OTC Securities are not subject to the financial reporting standards or disclosure requirements. Reliable information regarding issuers of OTC Securities, their prospects, and risks associated with the business of any particular issuer or an investment in the issuer's stocks may not be available. As a result, it may not be easy to value an investment in OTC securities properly.

The OTC Securities are for professional and sophisticated investors with a high risk-tolerance for trading stocks with limited information available and limited regulatory oversight. Some OTC Securities are typically penny stocks, low-priced shares of small companies or shell companies, shares of distressed companies not willing or able to disclose information, delisted symbols, or foreign equity issues unqualified to list on New York Stock Exchange or Nasdaq.

You must know that you may lose all or part of your initial investment amount in OTC Securities. Given the OTC Securities disclosure requirements are less stringent, OTC Securities are frequent targets of market manipulation. Dealers may dominate the market and set prices that are not based on competitive forces. Individuals or groups may create fraudulent markets and control the sudden sharp increase or collapse in share price.


2. Market Liquidity

Many OTC Securities are relatively illiquid. Illiquid stocks are often difficult for investors to buy or sell without dramatically affecting the quoted price. Fewer market participants can lead to less liquidity and more volatile price fluctuations. In some cases, the liquidation of a position in OTC Securities may not be possible within a reasonable period of time. You may find it hard selling OTC Securities with little or no value in the open market.


3. Non-Advisory Nature of Relationship

You should note and accept that TBSPL does not provide any investment advisory services on any capital market products. TBSPL will act on an execution-only basis and will not be providing any financial advice to you. While the information may be shared with you from representatives and/or agents of TBSPL, it is to be used solely for educational purposes. You agree that you rely on your own judgment in making any investment decision and TBSPL nor its representative is liable for any of such investment decisions you made.


4. Fraud

OTC securities are frequent targets of fraud or market manipulation, not only because of their generally low price but also because the reporting requirements for these securities are less stringent than for listed or NASDAQ traded securities, and no exchange requirements are imposed. Dealers may dominate the market and set prices that are not based on competitive forces. Individuals or groups may create fraudulent markets and control the sudden, sharp increase of price and trading volume and the equally sudden collapse of the market price for a security. You should carefully review all of the information regarding the company you intend to invest in, prior to trading in OTC securities, or any other investment. 


5. Trading Hours and Trading Unit

You can only trade OTC Securities during regular trading hours that last from 9:30 AM to 16:00 PM US Eastern Standard Time. Pre-market and extended trading are not available. On half trading day, the trading hours will last from 9:30 AM to 14:00 PM US Eastern Standard Time.

The minimum trading unit of OTC Securities 1 share. You may place at tick size of US$ 0.01. Margin trading and short selling are available for some OTC Securities, and such availability may be modified by TBSPL from time to time without prior notice.


6. Available Order Types and Limitation

Due to the volatile nature of OTC Securities, currently you may only place limit price order and stop-loss limit order when trading OTC Securities. The available order types may be updated from time to time without prior notice to you. You must understand that your order may be delayed due to large order volume.


7. Market Quotation and Fees

You must understand that real-time quotation for OTC Securities is not available. The market price displayed is the market price 15 minutes before.

Before you begin to trade, you should obtain a clear explanation of all commissions, fees and other charges for which you will be liable. These charges will affect your net profit (if any) or increase your loss.


This RDS is for reference purposes only and is neither an offer nor a solicitation to purchase or sell any financial product or service. None of the information provided in this RDS constitutes a recommendation that any product or service is suitable for any person. This RDS does not purport to disclose or discuss all of the risks and other significant aspects of any transaction. In light of the risks, you should undertake such transaction only if you understand the nature of the above financial products 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.


[1] https://www.otcmarkets.com/



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