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RISK WARNING NOTICE
This notice is intended to provide an overview of the characteristics and associated risks of financial instruments related to the investment and ancillary services offered exclusively via this website by DeepTech and Longevity Industry Financial Advisors Limited (also 'DeepTech') to its professional clients (in accordance with COBS 3.5) and eligible counterparties (in accordance with COBS 3.6).
Please note that this notice may not comprehensively cover all the risks associated with the various financial instruments presented on this website. Consequently, it is strongly advised that you refrain from engaging in any of the investments featured on this website unless you fully understand the nature, the extent of risk exposure and the risk of potential loss of your investment. These risk warnings should be taken into consideration when making decisions about whether to utilise the services provided by DeepTech in connection with the featured products and transactions on this website, which are collectively referred to in this notice as 'financial products,' 'financial instruments,' 'investments,' or 'products' interchangeably.
You should also read any relevant documentation (e.g. on the FCA website) which may highlight a non-exhaustive set of other risks that are specific to a particular financial instrument or service. You should not rely on the risks within this notice as being the only risks in relation to any particular financial instrument or service as has been advertised on this website.
I. APPROPRIATENESS
As a professional client (as defined by COBS 3.5) and/or an eligible counterparty (as defined by COBS 3.6) of DeepTech, you confirm that you possess the required levels of experience and knowledge to understand the risks associated with these investments or investment services offered by DeepTech.
II. LOSING ALL OF YOUR INVESTMENT
Investments in both new and existing businesses inherently involve a high degree of risk, which includes the potential loss of the invested capital, as well as the opportunity for substantial rewards. These investments constitute high-risk. Consequently, each client should evaluate the suitability of such investments, taking into account their personal circumstances, commitments, and available financial resources.
It's important to note that DeepTech does not provide any assurances of returns on investment capital, nor does it guarantee the maintenance of the value of any investment. Participation in investment activities carries a significant risk, including the potential loss of some or all of your investment.
III. WARNING
Prospective clients should note that past performance should not be seen as an indication of future performance. The value of an investment and the income from it can fall as well as rise and Clients may not get back the amount originally invested. Therefore, you should only make investments in unlisted companies if you can afford to lose your investment capital without having any significant impact on your overall financial position.
IV. GENERAL
Some risks apply generally to all investments. The value of investments and the income generated from such investments may fluctuate and go down or up. There is no guarantee that you will get back the capital initially invested. The value of your investments may be affected by a number of factors, including economic and political developments, interest rate changes, foreign exchange rates, and any issuer-specific events. Please note that past performance is not a reliable guide for future investment performance.
Investing in currencies other than your base currency introduces the potential for fluctuations in exchange rates, which can either positively or negatively impact your gains and losses.
Hedging strategies may not always be effective, depending on the prevailing market conditions during and after your investments.
Certain investments may be limited or lack liquidity in the market. At times, it may be challenging to buy or sell these investments or to obtain accurate information about their value and associated risks
The insolvency of any institution acting as a contracting party in the provision of a financial product or service may expose you to the risk of financial loss.
Certain investments require third parties to act in relation to the investments traded or held by yourself (e.g., custodians, settlement agents, exchanges). Your investments may be at risk in the event of any failure and/or fraud, in respect of these third parties.
V. FINANCIAL INSTRUMENTS AND PRODUCTS
Buying equity securities (the most common form of which are shares) means that you will become a member of the issuing company and you will participate fully in the economic risks the entity undertakes. Holding equity securities may entitle you to receive annual dividends (if the Issuing Company decides to distribute its profits during that tax year).
The risks associated with dealing in shares may involve, but are not limited to the following scenarios:
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in the event that the Issuing company becomes insolvent, your claim for recovery of your equity investment in the Issuing company will generally be subordinated by the claims of both secured and unsecured creditors of the Issuing company. If the issuer company becomes insolvent, the total investment capital may be lost;
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the dividend received per share will depend on the Issuing Company’s earnings and dividend policy. If the Issuer fails to make any profits or makes a loss, the dividend payments may accordingly be reduced or not made at all in that particular tax year;
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if you choose to invest in equity securities, you will be exposed to the specific risks related to the individual securities you hold, including risks associated with the financial stability of the respective issuers. Additionally, you will be exposed to the broader systemic risks inherent in the equity securities markets. This can result in potential fluctuations in share prices, which, in turn, can pose a risk of financial loss;
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at certain times, it might be challenging to find buyers for shares, leading to potential illiquidity; and
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there is a possibility that an issuer may increase the number of its shares, which could potentially decrease the value of your holdings and exert downward pressure on the dividend per share.
VI. EMERGING MARKETS
General
Please be aware that there are additional risks associated with investments in emerging markets.. Such investments should be considered as highly speculative, as they involve a high degree of risk and may result in the complete loss of the investment capital.
Generally, any investment in an emerging market is only suitable for Professional Clients who fully understand and appreciate the risks involved with making such investments. Accordingly, you should exercise particular care in evaluating the risks involved and must decide for yourself whether, in the light of those risks, the intended investment is appropriate for yourself.
These risks set out are not intended to be exhaustive in nature and there may be other risk factors which you should take into account in relation to any particular investment. The information contained in this notice may become out-dated relatively quickly.
Whilst the risks outlined below could arise in any jurisdiction, there is a greater risk that they could arise in an emerging market.
Political Risks
Factors such as external or internal conflicts, coups and racial and national tensions create political instability in emerging markets. Accordingly, political instability may significantly influence the price of investments. Furthermore, political changes may also have an impact on the ability to repatriate capital, dividends and profits earned and generally on investment and investment ownership rights. In many emerging markets it is not possible to say whether political reforms aimed at creating a multi-party democracy, with plans for transitioning from a centrally planned economy to a market economy will be successful. There is also the possibility that these goals could be disrupted or even reversed due to political, social, economic, ethnic or religious instability.
Emerging markets are frequently criticised for the lack of transparency and fairness in their electoral processes and the results of such processes may not always be acceptable to the international community. Emerging markets may also be faced with corruption within governmental, administrative and financial systems.
Emerging markets may face adverse international relations or international economic sanctions or international attention to their practices with respect to their governmental, administrative, economic and fiscal systems, their practices with respect to the prevention of money laundering and financial crime and their practices on the international effort to combat terrorism. Sanctions may apply to higher risk countries as a whole or to natural or legal persons from or affiliated with such emerging markets.
A particular risk in emerging markets is that it may not always honour investor protection guarantees, which may have a negative impact on foreign investments, and as a result such foreign investments may be abandoned, interrupted or reversed. There can be no assurances that any securities or assets of the Issuing company will not be subject to nationalisation, requisition or confiscation, or compulsory re-organisation by any authority or body. Your attention is drawn to the fact that certain constitutions within emerging markets may allow respective national governments to undertake such actions without fairly compensating the original investors.
Economic Risks
The economic infrastructure in many emerging markets is significantly less developed compared to developed economies, Many emerging markets suffer from major macro-economic problems, including hyperinflation, public deficits, high levels of unemployment, over-dependence on the performance of one or more particular sector(s) (such as in commodity markets), volatile interest rates, shortages of basic raw materials and increased levels of poverty. Short term economic policies and reforms may be taken for reasons other than long term macro-economic development and market stability. Economic policies and reforms may fail, creating a challenging macro-economic environment for Issuing Companies and prolonged periods of severe economic disruption, potentially leading to economic failure. Poor infrastructure including, without limitation, telecommunications and transport systems, and an inefficient banking sector, may also hinder business development. The limited supply of domestic savings, coupled with the absence of mechanisms and institutions through which new capital can easily be raised, may give rise to problems in obtaining funding (i.e., equity raise). There may also be high levels of external debts which, if maintained, could weaken the economic situation of countries operating in emerging markets. Government policies within emerging markets may be of an interventionist nature which may impact the operation of the respective capital market including the banking sector and the stock market. Government interest rate policies (aimed for example at controlling inflation or boosting economic growth) will also impact the performance of the respective stock market as higher interest rates may make investments in equities less attractive and vice versa. Often, emerging markets borrow and transact in foreign currencies and the exchange rate with the domestic currency may fluctuate affecting the ability to pay their foreign exchange denominated obligations.
Legal and Regulatory EnvironmentThere does not yet exist in many emerging markets the legal and regulatory systems necessary for the proper and efficient functioning of a modern, efficient and transparent capital market. This may include the non-existence or limited functioning of market regulators, incomplete legislation and regulations pertaining to the capital markets with no or limited investor compensation schemes. There is therefore a high degree of legal uncertainty as to the nature and extent of clients' rights and the ability to enforce those rights. Legal concepts and practices which form significant elements of a mature legal system are not yet in place or, if they are in place, have yet to be tested in the local courts. It is therefore difficult to predict with a degree of certainty the outcome of any judicial proceedings or calculate the quantum of damages which may be awarded following any successful claims being made by Deep Tech’s clientele.
In emerging markets, courts, arbitration tribunals and agencies may not consider themselves bound by precedents (like in the UK), so you may find it difficult to pursue any legal remedies or enforce judgments order by foreign courts. Furthermore, some regulations are unclear in their scope, which increases the risk that transactions entered into in good faith and with professional advice, could later be seen to be in breach of such regulations and subject to challenge. There is likely to be rapid changes made in many emerging markets due to new legislation being implemented.
Before making any investments in emerging markets you should understand the particular legal and regulatory environment and seek appropriate independent legal advice on the regulatory and legal requirements and risks associated with such investments in that country or region. DeepTech does not provide legal advice. The rules and regulations in emerging markets may change or may be reinterpreted without notice and DeepTech assumes no responsibility for advising Clients of any such changes or re-interpretations.