Investors should consider all of the risks associated with opening and transacting on a margin account and entering into CFDs with Nedbank Capital. Below is an outline of some of the more important risks; however, investors should carefully read the CFD Terms and Conditions, which gives a comprehensive explanation of the significant risks that should be considered.

Market risk

CFDs are highly leveraged and carry a high level of risk. Additionally, any profit or loss accruing to the investor will be adjusted to take into account any premiums due to Nedbank Capital. Investors should not invest in CFDs unless they are experienced in equity derivatives and understand and are comfortable with the risks of investing in CFDs. Investors should read the CFD Terms and Conditions for Nedbank Capital CFDs, and obtain their own financial advice as to whether CFDs are an appropriate investment for them.

This website contains a brief description only of certain features of the Nedbank Capital margin accounts and CFDs. Full details are set out in the CFD Terms and Conditions issued by Nedbank Capital. This general advice has been prepared by Nedbank Capital and does not take into account investors' personal objectives, financial situation or needs. Before acting on this advice, you should consider its appropriateness based on your personal circumstances. In deciding whether to open a margin account and engage in CFD trading, you should obtain the CFD Terms and Conditions by clicking here, and consider its content.

You should note that, in certain very limited circumstances, a reference instrument price may not match the prices on the underlying exchange. Please see the CFD Terms and Conditions for full details.

Nedbank Capital or its associates, officers or employees may have interests in CFDs or reference securities by acting in various roles and may receive fees, brokerage or commissions. Further, Nedbank Capital or its associates, officers or employees may buy or sell the reference instruments as principal or agent and may effect transactions which are not consistent with any recommendations above.

Investments in CFDs are subject to significant investment risk, including possible delays in repayment and loss of income and capital invested. Neither Nedbank Capital nor any member of the Nedbank Group guarantees the performance, return of capital from or any particular rate of return of a CFD or margin account. Investors may lose more than the amount of funds in their margin account.

The distribution of the information in jurisdictions outside South Africa may be restricted by law and persons into whose possession the information comes should inform themselves about, and observe, any such restrictions. Any failure to comply with these restrictions may constitute a violation of the laws of an applicable jurisdiction.

Counterparty risk (obligations of Nedbank Capital)

A CFD is an instrument directly between the investor and Nedbank Capital. As the value of a CFD depends on, among other things, the ability of Nedbank Capital to perform its obligations under the CFD Terms and Conditions, failure by Nedbank Capital to comply with such obligations may result in the investment being worth less than it otherwise would have been. Investors must make their own assessment of Nedbank Capital’s ability to perform its obligations under the CFDs, under the terms set out in the CFD Terms and Conditions. A description of Nedbank Capital, its ratings and its disclosure obligations is set out in the CFD Terms and Conditions to assist in making this assessment.

Any cash in the margin account represents a deposit liability of Nedbank Capital.

Investment decisions

Investors are responsible for the selection of the reference instrument relating to any CFD investors wish to buy from or sell to Nedbank Capital. As such, the performance of any CFD investment will depend on investment decisions made by the investor.

Leverage

CFDs offer exposure to an underlying security with a relatively small cash outlay for the margin. This can have the effect of magnifying potential gains or losses. Investors should note that losses can exceed the amount of margin laid out.

Involuntary closeout

Nedbank Capital may buy or sell a CFD previously bought or sold by the investor, and/or close the margin account, in a number of circumstances, including where an investor has insufficient funds in its margin account to meet the margin call; or, where Nedbank Capital is unable to borrow the reference instrument required to hedge its exposure to an investor who sold a CFD to Nedbank Capital. An investor should note that collateral requirements are calculated on a continuous basis and that it is its responsibility to ensure that amounts transferred into its margin account are cleared in sufficient time to meet collateral obligations.