Risk Disclosure Statement

Airwallex Capital (Singapore) Pte. Ltd. 

SECURITIES AND FUTURES ACT 2001

SECURITIES AND FUTURES (LICENSING AND CONDUCT OF BUSINESS) REGULATIONS (Rg 10)

This statement does not purport to disclose every possible risk and other significant aspect of trading in money market funds. You should carefully consider whether such trading is appropriate for you in the light of your experience, objectives, financial resources, and other relevant circumstances. In considering whether to trade, you should be aware of the following:

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(i) Interest Rate Risk

Interest rate risk is the risk that changes in interest rates will negatively affect the value of an investment. Fixed-income securities, such as bonds and money market instruments, are particularly sensitive to changes in interest rates. While the prices of shorter-term securities generally have less sensitivity to interest rate changes than longer-term securities, money market funds are still subject to interest rate risk.

Changes in prevailing interest rates can affect the yield of money market funds. When interest rates decline, the yield of the fund will also tend to decline. Conversely, when interest rates rise, the yield of the fund will tend to rise.

(ii) Volatility Risk

Volatility risk refers to the potential for significant and unpredictable fluctuations in the value of investments or financial instruments over a given period. It is a measure of the degree of variation of a trading price series over time. Higher volatility implies that the value of an investment can potentially change dramatically over a short period.

Several factors can contribute to volatility risk, including, but not limited to:

• Market conditions: Broad market movements, economic news, and investor sentiment can cause rapid price swings.

• Economic factors: Changes in interest rates, inflation, or economic growth can increase market volatility.

• Political events: Political instability, elections, or changes in government policy can lead to market uncertainty and volatility.

• Company-specific news: Events such as earnings announcements, mergers, or regulatory changes can cause significant price volatility for individual securities.

• Leverage: The use of leverage amplifies both gains and losses, increasing the potential for significant losses due to volatility.

• Global events: International events, such as pandemics, geopolitical conflicts, or changes in global trade, can trigger widespread market volatility.

(iii) Liquidity Risk

Several factors can contribute to liquidity risk, including, but not limited to:

• Market conditions: Changes in market conditions, such as a sudden decrease in trading activity or market disruptions, can make it difficult to sell assets.

• Concentration of holdings: A significant portion of assets being concentrated in a few investments may make it difficult to liquidate those assets quickly.

• Counterparty risk: The inability of counterparties to meet their obligations can negatively impact the liquidity position.

• Operational issues: Disruptions to operational processes, such as settlement failures, can lead to liquidity shortfalls.

• Regulatory changes: Changes in regulations can impact our ability to manage our liquidity.

• Client redemptions/withdrawals: Unexpected or large client redemptions or withdrawals may strain the available liquidity.

While money market funds are generally considered highly liquid, there is a risk that during periods of market stress, the fund may experience increased redemption requests, which could force the fund to sell its holdings at unfavorable prices, impacting the fund's value and yield.

(iv) Principal risk

Although money market funds seek to preserve the value of your investment at S$1.00 per unit, it is possible to lose money by investing in a money market fund. An investment in a money market fund is not insured or guaranteed by the Monetary Authority of Singapore (MAS) or any government agency. The fund's sponsors are not required to reimburse the fund for losses, and you should not expect that the sponsors will provide financial support to the fund at any time, including during periods of market stress.

(v) Credit Risk

Money market funds invest in debt securities, which carry credit risk, the risk that the issuer may default on its obligations. While money market funds typically invest in high-quality, short-term debt securities, there is still a possibility of credit losses.

(vi) Currency Risk

The profit or loss in transactions in foreign currency-denominated futures and options contracts (whether they are traded in your own or another jurisdiction) will be affected by fluctuations in currency rates where there is a need to convert from the currency denomination of the contract to another currency.

(vii) Fees

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

(viii) Electronic Trading

Trading on an electronic trading system may differ not only from trading in an open-outcry market but also from trading on other electronic trading systems. If you undertake transactions on an electronic trading system, you will be exposed to risks associated with the system including the failure of hardware and software. The result of any system failure may be that your order is either not executed according to your instructions or not executed at all.

(ix) Counterparty Risk

When you enter into transactions with us or through us, you are exposed to the risk that the other party to the transaction, the 'counterparty, may fail to meet its obligations. This is known as counterparty risk. It is important that you understand the counterparty risks associated with each product you invest in. We encourage you to review the specific product terms and conditions and consult with your financial advisor.

SCHEDULE 2:

RISK WARNING STATEMENT FOR OVERSEAS-LISTED INVESTMENT PRODUCTS

1. This statement is provided to you in accordance with paragraph 29D of the Notice on the Sale of Investment Products [SFA04-N12].

2. This statement does not disclose all the risks and other significant aspects of trading in an overseas-listed investment product. You should undertake such transactions only if you understand and are comfortable with the extent of your exposure to the risks.

3. You should carefully consider whether such trading is suitable for you in light of your experience, objectives, risk appetite, financial resources and other relevant circumstances. In considering whether to trade or to authorise someone else to trade for you, you should be aware of the following:

Differences in Regulatory Regimes

(a) Overseas markets may be subject to different regulations, and may operate differently from approved exchanges in Singapore. For example, there may be different rules providing for the safekeeping of securities and monies held by custodian banks or depositories. This may affect the level of safeguards in place to ensure proper segregation and safekeeping of your investment products or monies held overseas. There is also the risk of your investment products or monies not being protected if the custodian has credit problems or fails. Overseas markets may also have different periods for clearing and settling transactions. These may affect the information available to you regarding transaction prices and the time you have to settle your trade on such overseas markets.

(b) Overseas markets may be subject to rules which may offer different investor protection as compared to Singapore. Before you start to trade, you should be fully aware of the types of redress available to you in Singapore and other relevant jurisdictions, if any.

(c) Overseas-listed investment products may not be subject to the same disclosure standards that apply to investment products listed for quotation or quoted on an approved exchange in Singapore. Where disclosure is made, differences in accounting, auditing and financial reporting standards may also affect the quality and comparability of information provided. It may also be more difficult to locate up-to-date information, and the information published may only be available in a foreign language.

Differences in Legal Systems

(a) In some countries, legal concepts which are practiced in mature legal systems may not be in place or may have yet to be tested in courts. This would make it more difficult to predict with a degree of certainty the outcome of judicial proceedings or even the quantum of damages which may be awarded following a successful claim.

(b) The Monetary Authority of Singapore will be unable to compel the enforcement of the rules of the regulatory authorities or markets in other jurisdictions where your transactions will be effected.

(c) The laws of some jurisdictions may prohibit or restrict the repatriation of funds from such jurisdictions including capital, divestment proceeds, profits, dividends and interest arising from investment in such countries. Therefore, there is no guarantee that the funds you have invested and the funds arising from your investment will be capable of being remitted.

(d) Some jurisdictions may also restrict the amount or type of investment products that foreign investors may trade. This can affect the liquidity and prices of the overseas-listed investment products that you invest in.

Different Costs Involved

(a) There may be tax implications of investing in an overseas-listed investment product. For example, sale proceeds or the receipt of any dividends and other income may be subject to tax levies, duties or charges in the foreign country, in Singapore, or in both countries.

(b) Your investment return on foreign currency-denominated investment products will be affected by exchange rate fluctuations where there is a need to convert from the currency of denomination of the investment products to another currency, or may be affected by exchange controls.

(c) You may have to pay additional costs such as fees and broker’s commissions for transactions in overseas exchanges. In some jurisdictions, you may also have to pay a premium to trade certain listed investment products. Therefore, 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.

Counterparty and Correspondent Broker Risks

(a) Transactions on overseas exchanges or overseas markets are generally effected by your Singapore broker through the use of foreign brokers who have trading and/or clearing rights on those exchanges. All transactions that are executed upon your instructions with such counterparties and correspondent brokers are dependent on their respective due performance of their obligations. The insolvency or default of such counterparties and correspondent brokers may lead to positions being liquidated or closed out without your consent and/or may result in difficulties in recovering your monies and assets held overseas.

Political, Economic and Social Developments

Overseas markets are influenced by the political, economic and social developments in the foreign jurisdiction, which may be uncertain and may increase the risk of investing in overseas-listed investment products.

SCHEDULE 3:

Fair Dealing Notice

Airwallex is committed to implementing the Monetary Authority of Singapore Fair Dealing Guidelines.  Our Board and Senior Management lead a corporate culture where fair dealing drives every decision. We rigorously test products to ensure suitability for target customer segments, with enhanced safeguards for vulnerable individuals. Representatives receive continuous training on regulatory requirements and ethical practices, with balanced incentives prioritizing customer outcomes over sales targets. Complaints are resolved independently within 21 working days. We continually enhance services through customer feedback analysis, market reviews, and Board-monitored improvement initiatives.  For more information about the applicable guidelines, please see MAS Guidelines on Fair Dealing (FSG-G04).