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Internet Trading Agreement - Terms And Conditions

1. Application and Definitions

1.1 In the Client Trading Agreement and these Terms and Conditions, the following words and expressions shall have the following meanings:

"Access Code " means together the Password, the PIN and the User ID;

"Account " means the meaning ascribed in Clause 5.2 of these Terms and Conditions;

"Agreement " means the Client Trading Agreement comprising the Account appointment letter, these Terms and Conditions and the Customer Registration Form, in each case as the same may be amended or supplemented from time to time;

"Associate " means a company or body corporate which is a member of the same "group of companies" (as defined in Section 2 of the Companies Ordinance;

"Authorised Person " means the meaning ascribed in Clause 5.2 of these Terms and Conditions;

"Business Day " means any day on which the relevant Exchange is open for trading other than Saturdays, Sundays, public holidays and such other days which are declared by the relevant Exchange to be non-business days;

"Clearing House " means HKSCC in relation to SEHK and, in relation to any other stock exchange, the relevant clearing house providing similar services to such other stock exchange;

"Companies Ordinance " means the Companies Ordinance (Cap. 32 of the laws of Hong Kong) as the same may be amended or re-enacted from time to time;

"Compensation Fund " means the Investor Compensation Fund established under Section 236 of the Ordinance;

"Customer " means holder(s) of the Custodian/Cash Account, whose information are set out in the Customer Registration Form;

"Customer Registration Form " means the Customer registration form on the Client Trading Agreement;

"DHS " means Dao Heng Securities Limited, a securities broker licensed by the SFC to conduct types 1 (dealing in securities), 4 (advising on securities) and 6 (advising on corporate finance) regulated activities and designated with CE No. AAC086;

"DHS Mail " means the secure messaging facility operated by DHS for the delivery and receipt of confirmations, statements and other notices;

"Exchange " means the meaning ascribed in Clause 3.1 of these Terms and Conditions;

"HKSCC " means the meaning ascribed in Clause 3.1 of these Terms and Conditions;

"Instruction " means any instruction, direction, notice or other communication for or related to the buying and selling of or otherwise dealing in and Securities given in accordance with and Clause 5 and Clause 6;

"Internet Trading Service " means the online trading service provided by DHS in form of trading through any electronic means under the Agreement comprising DHS Mail, any information contained in DHS' s web site and the software comprised in them;

"Ordinance " means the Securities and Futures Ordinance (Cap. 571 of the laws of Hong Kong) and any subsidiary legislation made hereunder as the same may be amended or re-enacted from time to time;

"Password " means the Customer's personal password used in conjunction with the User ID to gain access to the Internet Trading Service and DHS Mail;

"PIN " means my/our personal identification number used when instructing DHS in the Service;

"Securities " means any instruments commonly known as securities including, but not limited to, shares, stocks, debentures, loan stocks, unit trusts, mutual funds, warrants, options, bonds, notes and commercial papers of any description whatsoever and wheresoever issued;

"Securities Account Statement " means a written confirmation sent by mail or other electronic communications from time to time by DHS to the Customer in relation to the execution of Instructions;

"SEHK " means The Stock Exchange of Hong Kong;

"SFC " means the Securities and Futures Commission of Hong Kong;

"Transaction " means the meaning ascribed in Clause 3; and

"User ID " means the Customer's personal identification used in conjunction with the Password to gain access to the Internet Trading Service and DHS Mail.

1.2 For the purpose of interpretation of the following provisions:

  1. Words importing the singular shall include the plural and vice versa and words importing a gender shall include every other gender.
  2. Where any provision contains the expression "and/or" then this shall mean the relevant provision may apply to either or both of the parties or matters that such expression shall connect.
  3. Headings are inserted for ease of reference only, save where referred to otherwise, and shall not form of the terms of the Agreement.
  4. References to Clauses and Schedules are to clauses of and schedules to these Terms and Conditions.
  5. References to "writing" includes letter, facsimile, e-mail and other electronic transmission.

2. The Account

2.1 The Customer may access to the Account through the Internet Trading Service. Should the Customer experience any problems in reaching DHS through the Internet Trading Service, the Customer may attempt to communicate with DHS by telephone and inform the Customer of the difficulty the Customer is experiencing.

2.2 The Customer acknowledges and warrants that the information set out in the Customer Registration Form is complete, true and correct, and the Customer undertakes to inform DHS in writing of any changes thereto within 24 hours after the relevant change(s) has/have occurred.

2.3 DHS is hereby authorised at any time to conduct credit enquiries on the Customer and to contact anyone, including the Customer's bankers, brokers or any credit agency to verify the information provided.

3. Applicable Rules and Regulations

3.1 All transactions in Securities ("Transactions") made as a result of any Instructions shall be subject to the relevant provisions of the constitution, rules (including without limitation the option trading rules), regulations, by-laws, customs and usages of SEHK and any relevant stock exchange (the "Exchange") and the Hong Kong Securities Clearing Company Limited (the "HKSCC") and the Clearing House at which the transaction is conducted and to the applicable laws as amended from time to time. All actions taken by DHS in accordance with such laws, rules and directions shall be binding on the Customer.

3.2 In the event of any conflict between any provision in (i) the Agreement and (ii) any such constitution, rules, regulations and laws, the latter shall prevail. Such provision shall be deemed to be rescinded or modified in accordance with and to such extent required by any such law, rule or regulation. However, in all other respects, the Agreement shall continue and remain in full force and effect until termination in accordance with these Terms and Conditions. In addition, DHS may take or omit to take any action which it considers fit in order to ensure compliance with the same including, without limitation, disregarding any unexecuted order or rescinding any executed transaction.

3.3 Every transaction executed on the Exchange shall be subject to any levies or charges that the Exchange may from time to time impose. DHS is authorised to collect any such levies in accordance with the relevant rules of the Exchange.

4. Internet Trading Service

4.1 The Customer agrees to abide by the provisions of these Terms and Conditions whenever the Customer uses the Internet Trading Service. Any additional services offered through the Internet Trading Service in the future will only be used by the Customer in accordance with the provisions of these Terms and Conditions and any additional provisions applicable thereto.

4.2 The Customer understands that the Internet Trading Service is a semi-automated facility, which enables the Customer to send electronic Instructions to buy, sell and otherwise deal with Securities and receive information services.

4.3 The Customer acknowledges that the Internet Trading Service and the software comprised in it are proprietary to DHS and/or third party provider(s). The Customer agrees and undertakes that the Customer shall not, and shall not attempt to, tamper with, modify, decompile, reverse engineer or otherwise alter in any way, and shall not attempt to gain unauthorised access to, any part of the Internet Trading Service and the software comprised in it. The Customer agrees that DHS may, at DHS's absolute discretion, suspend or terminate the Customer's Access Code and/or close the Account immediately without notice to the Customer, and take action against the Customer if the Customer at any time breach this or any other agreement or undertaking or if DHS at any time reasonably suspect that the Customer have breached the same. The Customer undertakes to notify DHS immediately if the Customer becomes aware that any other person is doing any of the above.

4.4 The Customer shall be the only user of the Internet Trading Service under the Account. The Customer shall be responsible for the confidentiality and use of the Access Code and agrees to undertake:

  1. not to disclose any Access Code to any third party;
  2. not to write down or record any Access Code in a way that could facilitate misuse or fraud; and
  3. to immediately report any loss, unauthorised disclosure or misuse of the Customer's Access Code to DHS by telephone (with written confirmation within 3 days).

The Customer acknowledges and agrees that the Customer shall be solely responsible for all Instructions entered through the Internet Trading Service using its Access Code.

4.5 The Customer further acknowledges and agrees that, as a condition of using the Internet Trading Service to give Instructions, the Customer shall immediately notify DHS if:

  1. immediately after an Instruction in respect of the Account has been placed through the Internet Trading Service, the Customer has not received:
    1. an order reference number; and
    2. an accurate acknowledgement of the Instruction or of its execution (whether by hard copy, electronic or verbal means);
  2. the Customer has received acknowledgement (whether by hard copy, electronic or verbal means) of a Transaction which the Customer did not instruct or if any similar conflict arises; or
  3. the Customer becomes aware of any unauthorised use of the User ID, Password or PIN.

4.6 The Customer agrees that if the Customer fails to notify DHS forthwith when any of the situations described in Clause 4.5 occurs, neither DHS nor any of DHS's directors, employees or representatives shall have any liability to the Customer, or to any other person for any obligations, claims or other liabilities with respect to the handling, mishandling or loss of any Instruction unless such loss results from the fraud, gross negligence or wilful default on the part of DHS.

4.7 The Customer understands, acknowledges and agrees that:

  1. the real-time quote service and other market information available at DHS's web site is provided by a third party service provider appointed by DHS from time to time;
  2. neither DHS nor any of DHS's directors, employees, representatives or third party service provider shall be responsible to the Customer's for any losses, costs, expenses, damages or claims which the Customer may suffer as a result of or in connection with any respect of the real-time quote service including the Customer's reliance on such service;
  3. the market data and information available through the Internet Trading Service is provided to DHS by each participating Securities exchange(s) or association(s) or agent(s) (which disseminate such data and information) with assertion of a proprietary interest in such data and information; and
  4. no party guarantees the timeliness, sequence, accuracy or completeness of market data or any other market information and neither DHS, DHS's directors, employees or representatives nor any disseminating party shall be liable in any way for any loss or damage arising from or caused by any inaccuracy, error or delay in or omission from any such data, information or message, or the transmission or delivery of the same, non-performance or interruption of any such data, message or information whether or not due to any negligent act of DHS or any disseminating party, or to any force majeure event as described under Clause 40, or any other cause beyond your control or the reasonable control of any disseminating party.

The Customer shall use all such data, information and real-time quotes for the Customer's personal use and reference only, and these must not to be reproduced, duplicated, sub-listed or transmitted or used for commercial purposes or framed on a third party web site, and the Customer shall not furnish such data to any other person or entity for any reason.

4.8 By applying for and using the Internet Trading Service, the Customer represents and warrants that:

  1. the Customer is legally entitled to open and use the Internet Trading Service; and
  2. no breach of any law, regulation or governmental or other requirement whether of the Customer's jurisdiction of residence or domicile, or any other relevant jurisdiction will arise as a result of any use by the Customer of the Internet Trading Service.

4.9 The Customer agrees to indemnify DHS on demand from any liability, claim, damages, costs and expenses DHS may suffer or incur as a result of the Customer's breach of this Clause 4.

5. Instructions

5.1 DHS will act as the Customer's agent in effecting Transactions unless DHS indicates (in the Securities account statement for the relevant Transaction or otherwise) that DHS is acting as principal.

5.2 DHS shall be entitled to buy and sell Securities for the Customer's Account described in the Account appointment letter and any other account(s) opened by the Customer with DHS (the "Account") upon receipt of instructions given or that purport to be given by any person(s) named in the Account appointment letter delivered to the Customer (or such other person(s) notified from time to time in accordance with these Terms and Conditions) (the "Authorised Person") but DHS may refuse to give effect to any instructions and need not give reasons for such refusal.

5.3 DHS shall be entitled to accept and rely on any instructions or communications, whether or not in writing, given or purported to be given by any Authorised Person which DHS believes to be genuine. The Customer shall be responsible for and bound by all such instructions or communications and DHS shall not be responsible for any loss, cost, claim, damage or expense incurred in respect of such instructions or communications. Without prejudice to the foregoing, the Customer undertakes to confirm all oral instructions in writing.

5.4 DHS may, in DHS's discretion and without giving any reason, refuse to accept an order for any Transaction.

5.5 DHS may at DHS's discretion aggregate the Customer's orders on the Customer's behalf with similar orders for DHS's other clients, and the Customer acknowledges that this may lead to higher or lower prices being achieved.

6. Instructions - dealings through the Internet Trading Service

6.1 DHS shall be entitled to accept and rely on all Instructions, directions, notices or other communications, whether given by telephone, through the Internet or in writing which are given in accordance with the Access Code arrangements for access to and use the Internet Trading Service or which DHS believes to be genuine and the Customer shall be responsible for and bound by all such instructions or communications. Without prejudice to the foregoing, the Customer undertakes to confirm all such instructions in writing.

6.2 Once given, an Instruction, may not be amended, cancelled or withdrawn, unless, at DHS's discretion, DHS agrees any specific confirmation (by electronic means or in writing) is given by DHS. All Instructions (as understood and acted on by DHS in good faith), shall be irrevocable and binding on the Customer whether given by the Customer or by any other person. You shall have no obligations or duty to verify authenticity of any Instruction or the identity or authority of any person giving any Instruction, other than to verify the Access Code used to gain access to the Internet Trading Service.

6.3 The Customer agrees that DHS may (but shall not be obliged to) monitor electronically or record all or any Instructions. Any relevant electronic record or recording (or a transcript thereof) shall be conclusive evidence as between DHS and the Customer of the contents and nature of such Instructions.

6.4 DHS shall not be responsible for delays in the transmission, receipt or execution of Instructions due to either a breakdown or failure of transmission of communication facilities or unreliable medium of communication or due to any other cause or causes beyond DHS's reasonable control.

7. Deposits to the Account

7.1 The Customer shall pay to DHS in such manner as specified by DHS the amount of the initial deposit of funds as stated in the Customer's account application. The Access Code shall not be notified to the Customer until such initial deposit (in cleared funds) has been received by DHS.

7.2 In respect of all subsequent deposits of funds into the Account, the Customer shall:

  1. arrange for the deposit of funds to DHS; and
  2. deliver, mail or fax to DHS the relevant bank deposit receipt or advice stating clearly the Customer's name and Account number.

The Customer acknowledges that the Account shall not be credited with funds until the receipt by DHS of cleared funds.

7.3 In respect of deposits or transfers of Securities into the Account, the Customer shall:

  1. complete the Securities deposit form available from DHS's office;
  2. arrange for the delivery or transfer to DHS of the Securities described on the Securities deposit form.

    The Customer acknowledges that:

    1. the Securities shall not be credited to the Account until DHS has received the Securities;
    2. where Securities are to be transferred to DHS, the Customer shall be responsible for processing the transfer from the transferring party to DHS;
    3. all transfer, handling and custodian fees and charges incurred in relation to the deposit or transfer of Securities into the Account, for which the Customer hereby undertakes to be responsible and which DHS is authorised to deduct from the Account.

8. Withdrawals from the Account

8.1 For all withdrawals of funds from the Account, the Customer may make a verbal request which the Customer understands will be recorded under DHS's telephone recording system or in writing, signed and sent to DHS. DHS shall only comply with such withdrawal Instruction if there is sufficient available funds in the Account, less all amounts which DHS is entitled to deduct therefrom under any provision of the Agreement. If the Customer accesses the Internet Trading Service, the Customer could also complete on-line funds withdrawal form accessible through DHS Mail. DHS shall either issue a cheque payable to the Customer or transfer the funds to the Customer's bank account specified by the Customer on the Customer Registration Form or in such manner as may be agreed from time to time. The Customer shall be responsible for any bank charges incurred. As a security measure, unless otherwise instructed by the Customer and agreed with DHS, DHS will not accept any Instruction for issue of a cheque, or for transfer of funds to a bank account, in the name of a third party. The Customer acknowledges the risk associated with verbal Instruction given under this Clause and agrees to provide indemnity to DHS under Clause 27.

8.2 For all withdrawals or transfers of Securities from the Account, the Customer shall complete the Securities withdrawal form. Upon receipt of such form, DHS shall arrange for the delivery to the Customer or the transfer to another participant of HKSCC (as the Customer shall request) of the Securities described on that form. The Customer shall be solely responsible for instructing any relevant participant of HKSCC to receive Securities transferred from DHS and all handling and transfer fees and charges incurred shall be the Customer's responsibility and DHS is authorised to deduct them from the Account. The Customer further acknowledges that a Securities withdrawal form received by DHS after 3:00 p.m. (Hong Kong time) on any Business Day shall not be acted upon until the next Business Day.

9. Documentation

9.1 In respect of each Transaction for Securities entered into by DHS on the Customer's behalf, DHS will send the Customer by mail or by other electronic communication a Securities account statement specifying all relevant information required under Section 5 of the Securities and Futures (Contract Notes, Statements of Account and Receipts) Rules under the Ordinance.

9.2 Every Transaction indicated or referred to in any notice, statement, confirmation or other electronic communication and every statement of account shall be deemed and treated as authorised and correct and as ratified and confirmed by the Customer unless DHS shall receive from the Customer written notice to the contrary within three Business Days after the date after such notice, statement, confirmation or other communication is deemed to have been received by the Customer. The Customer agrees to settle the Account with DHS on the terms set out in the Securities account statement from time to time. The Customer further acknowledges not to treat DHS's confirmation telephone call as final notification or confirmation.

10. Constraints on Transactions

The Customer recognises that in addition to delays due to Internet related factors, including those referred to in Clause 6.4, due to rapid market price changes and other market factors, there can sometimes be delays in dealing at particular quoted prices or "at best" or "at market". The Customer accepts these constraints and agrees to accept and be bound by Transactions which take place pursuant to the Agreement and agrees that DHS shall not be under any liability for any loss incurred as a result of such Transactions unless due to the wilful default of any of DHS's employees or agents.

11. Duration of Orders and Requests

Unless the Customer gives specific Instructions to DHS to the contrary, the Customer acknowledges that all Instructions are good for the day only and that they will lapse at the end of the official trading day of the Exchange in respect of which they are given.

12. Right of Disposal Upon Default

12.1 DHS may without notice to the Customer, in such manner as DHS sees fit, sells or realises any or all Securities or other property held in the Account, cancel any open orders for the purchase or sale of Securities or other property or realise any collateral deposited with DHS at any time if upon the occurrence of any of the following:

  1. failure by the Customer to deliver scrip or to pay for or accept delivery of Securities purchased;
  2. failure by the Customer to pay DHS any amounts due or owing, on demand or to comply with any other of the Customer's obligations under the Agreement;
  3. breach by the Customer of any by-law, rule or regulation of the Exchange or any other stock exchange on which DHS conducts dealings on the Customer's behalf at that time;
  4. bankruptcy or winding-up petition is presented against the Customer or a receiver appointed of the Customer's property or business or the Customer makes any arrangement or composition with the Customer's creditors generally;
  5. any consent, authorisation or board resolution required of the Customer to enter into the Agreement being wholly or partly revoked, suspended, terminated or ceasing to remain in full force and effect; or
  6. in the case of individuals, the Customer's death.

12.2 Unless otherwise agreed, when DHS has executed a purchase or sale Transaction on the Customer's behalf, the Customer agrees that the Customer will by the due settlement date pay DHS against delivery of or credit to the Account for purchased Securities, or make good delivery of sold Securities to DHS against payment, as the case may be. Unless otherwise agreed, should the Customer fail to make such payment or delivery of Securities by the due date as mentioned above, DHS may in its absolute discretion and for the purpose of satisfying the Customer's obligations to DHS: -

  1. in the case of a purchase Transaction, transfer or sell such purchased Securities; and
  2. in the case of a sale Transaction, borrow and/or purchase Securities in order to settle the Transaction.

12.3 The Customer acknowledges and agrees that the Customer will be responsible to DHS for any losses, costs, fees and expenses resulting from the Customer's settlement failure.

12.4 If DHS exercises the above rights in Clause 12, any sales proceeds may be applied:

  1. first in payment of all DHS's costs and expenses in connection therewith;
  2. second in settlement of any liabilities the Customer may have to DHS; and
  3. third the balance (if any) shall be returned to the Customer.

If such proceeds are insufficient to meet such liabilities, the Customer shall on demand and (notwithstanding that the payment date or other date originally stipulated for settlement may not then have arrived) pay DHS and indemnify and hold DHS harmless against any shortfall arising therefrom or in the Account together with interest thereon and all professional costs and expenses (including legal and other professional advisers fees) incurred by DHS in connection therewith.

13. Commissions and Charges

13.1 On all Transactions, the Customer agrees to pay DHS's commissions at such rate or rates as DHS may from time to time has notified the Customer, orally or in writing, as being the rate or rates applicable to the Account, as well as applicable levies imposed by the Exchange, and all applicable stamp duties, charges, transfer fees, interest and other expenses in respect of the Account or any Transaction. DHS is authorised to deduct such commissions, charges, levies and duties from the Account. The customer will reimburse DHS on demand in respect of any deficiency arising therefrom, such commission brokerage, levies, taxes and all other charges and all fees and expenses of any brokers, agents and nominees engaged by DHS in connection with transactions conducted on behalf of and services rendered to the Customer.

13.2 Information on rates of commission, brokerage, fees and charges can be obtained in hard copy at DHS's registered office and available at its website www.dhsec.com. The Customer acknowledges that it has been supplied with a copy of the current schedule of rates.

13.3 The Customer hereby expressly agrees that DHS, any of DHS's nominees, any of DHS's agents and/or any third party may receive and retain for DHS's benefit, their own benefit and/or any person's benefit and/or pay out to any party all or part of the commission, rebate or other fees arising out of DHS or them acting for the Customer in effecting any transaction or otherwise howsoever dealing with the Securities pursuant to the terms of the Agreement.

14. Payments

14.1 All payments by the Customer for settlement of Transactions or otherwise in connection with the Agreement shall be made in cleared funds in the currency and at the place specified by DHS:

  1. free of any restrictions, conditions or equities;
  2. free and clear and without any deduction or withholding on account of any taxes; and
  3. without deduction or withholding on account of any other amount, whether by way of set-off, counterclaim or otherwise.

14.2 The Customer acknowledges that DHS may at any time require the Customer to deposit sufficient cleared funds in the Account before carrying out any Transactions in respect of any Securities on the Customer's behalf.

14.3 The Customer acknowledges and understands it is the Customer's primary responsibility to ensure that DHS has been notified of the payment made and that payment must be received (for value) by DHS by such date as DHS is notified of the payment through either the receipt of deposit slip, fund transfer remittance receipt etc.

15. Dealings by DHS

Nothing herein contained shall restrict and prevent DHS or DHS's Associates from acting in any capacity for DHS or on behalf of any other person:

  1. from buying, holding or dealing in any Securities for DHS or DHS's Associates account or for the account of DHS's other clients notwithstanding that similar Securities may be comprised in the Account;
  2. from purchasing for the Account Securities held by DHS or DHS's Associates for DHS or DHS's Associates account or for the account of DHS's other clients; or
  3. from purchasing for DHS or DHS's Associates account or for the account of DHS's other clients Securities forming part of the Account.

(provided that in any such case the terms of purchase are not less favourable to the Customer than they would have been had the Transactions been entered into at arms length on the day in question). Neither DHS nor DHS's Associates shall be liable to account to the Customer for any emoluments, commission, profits or any other benefits whatsoever resulting from DHS or DHS's Associates doing any of the aforementioned things.

16. Dealing with the Account

16.1 The Customer agrees not to charge, pledge, allow to subsist any charge or pledge over, sell, grant an option over, or otherwise deal in any way with, or purport to sell, grant an option over to deal with, any Securities or cash forming part of the Account.

16.2 DHS may effect all Transactions directly on any Exchange where DHS is authorised to transact business and DHS may, at its option, deal on any Exchange indirectly through any other brokers or agents.

16.3 The Customer hereby represents and warrants to DHS that the Customer has good and unencumbered title to all Securities which the Customer instructs DHS to sell for the Account and undertakes to deliver scrip for such Securities in time for DHS to comply with the relevant rules of the relevant Exchange applicable thereto.

17. Confirmation

The Customer agrees at DHS's request to take such actions as are necessary or in DHS's opinion desirable to ratify or confirm anything done by DHS (or on DHS's behalf) as the Customer's agent or on the Customer's behalf in the proper exercise of DHS's rights and powers in relation to the Account.

18. Telephone Recording

DHS may record communications with the Customer or any Authorised Person(s) and any such recording will constitute conclusive evidence of such communications.

19. Safekeeping of Securities

19.1 Where Securities are not registered in the Customer's name, any dividends or other benefits arising in respect of such Securities shall, when received by DHS, be credited to the Customer's Account or paid or transferred to the Customer, as agreed with DHS. Where Securities form part of a larger holding of identical Securities held for DHS's clients, the Customer shall be entitled to the same share of the benefits arising on the holding as the Customer's share of the total holding.

19.2 Any Securities which are held by DHS for safekeeping may, at DHS's discretion:

  1. (in the case of registrable Securities) be registered in the Customer's name or in the name of DHS's nominee; or
  2. be deposited in a safe custody in a designated account with your bankers or with any other institution which provides facilities for the safe custody of documents. In the case of Securities in Hong Kong, such institution shall be acceptable to the SFC as a provider of safe custody services.

19.3 In the case of a purchase Transaction, if the selling broker fails to deliver on the settlement date and DHS has to purchase Securities to settle the Transaction, DHS shall not be responsible to the Customer for the costs of such purchase.

19.4 DHS and DHS's nominee may hold any Securities on behalf of the Customer and are not bound to redeliver to the Customer the identical Securities received from or purchased for the Customer but may redeliver to the Customer, at the office at which the Account is kept, Securities of like quantity, type and description.

19.5 DHS does not have the Customer's written authority under Section 7 of the Securities and Futures (Client Securities) Rules under the Ordinance to:

  1. deposit any of the Customer's Securities with a banking institution as collateral for an advance or loan made to DHS, or with the Clearing House as collateral for the discharge of DHS's obligations under the clearing system;
  2. borrow or lend any of the Customer's Securities (unless prior written agreement has been entered between DHS and the Customer); and
  3. otherwise part with possession (except to the Customer or on the Customer's instructions) of any of the Customer's Securities for any purpose.

19.6 DHS may at any time require the Customer to collect the Securities and documents of title thereto by 30 days notice in writing. If the Customer fails to collect the Securities and documents of title thereto from DHS within such period, DHS may, at DHS's discretion, sell all or any part of the Securities at such price and on such terms as DHS will determine whether by public auction, private treaty or tender without incurring any liability to the Customer for any losses which may thereby arise. DHS's liability for such Securities shall be fully discharged upon payment to the Customer from the proceeds of sale net of all expenses incurred in connection with the sale and other liabilities of the Customer to DHS whether pursuant to the Agreement or otherwise to any of the Customer's Account(s) with DHS.

19.7 Where the Customer has appointed a person as the Customer's agent to collect on the Customer's behalf Securities and documents of title thereto from DHS delivery of Securities and documents of title thereto by DHS into the possession of such agent shall discharge in full DHS's responsibilities regarding such Securities. An acknowledgement of receipt signed by the Customer's agent shall, in the absence of manifest error, constitute conclusive evidence against the Customer that the Securities listed or referred to in the acknowledgement have been delivered into the possession of the Customer notwithstanding that such agents may at the same time be DHS's employees or agents.

19.8 In relation to benefits accrued or losses incurred in respect of Securities in a pooled account, DHS shall credit or debit the Account with the proportion of such benefit or loss equal to the proportion of the total number or amount of Securities which shall comprise Securities held on the Customer's behalf. Where a fractional interest arises in respect of any security held in a pooled account, the Customer hereby agrees that the benefit of and such entitlement to such fractional interest shall accrue absolutely to DHS instead of the Customer.

20. Interest

The Customer agrees to pay interest on all overdue amounts owing by the Customer to DHS, after as well as before any judgment, at such rate not exceeding five per cent above the annual rate of the HongKong and Shanghai Banking Corporation Limited best lending rate as demanded by DHS. Such interest shall accrue on a daily basis and be payable on the last day of each calendar month or upon demand by DHS. Overdue interest shall be compounded monthly.

21. Interest on Credit Balance

DHS shall pay interest on money held by DHS to the Customer's credit at such rate as DHS may notify the Customer from time to time. The Customer agrees that DHS shall be entitled to retain for your account any difference between the interest earned by DHS in respect of such money and the interest paid by DHS to the Customer at the interest determined by DHS.

22. Monies in the Account Unless otherwise instructed by the Customer, DHS shall pay within the time frame as stipulated in the Ordinance money received from or received on behalf of the Customer into one or more designated trust accounts. Such trust accounts shall be maintained with licensed banks as required by applicable laws and regulations from time to time

23. Set-Off

Notwithstanding anything else in the Agreement, DHS shall be entitled to set off against any amount payable to the Customer by DHS pursuant to the Agreement or on any other account whatsoever, any amounts owing by the Customer to DHS or to Dao Heng Commodities Limited or any other company which is their subsidiary or holding company or a subsidiary of any such holding company (as each of those terms are defined in the Companies Ordinance) ("Debts") whether pursuant to these Terms and Conditions or on any other account whatsoever (whether or not such amounts are due and payable and irrespective of the currency in which such amounts are denominated) and shall also be entitled to use any monies held in the Account in the discharge of such Debts. If the Customer fails to pay any Debts within two Business Days of demand, DHS may sell any Securities held in the Account and deduct from the sale proceeds such amount as is necessary to discharge such Debt.

24. Lien

24.1 Any and all Securities, the dividends and other rights attached thereto and/or all other properties belonging to the Customer or in which the Customer may have an interest, held or carried in the Account shall be subject to a general lien in DHS's favour, for the performance of the Customer's obligations to DHS arising in respect of DHS's dealing in Securities for the Customer.

24.2 DHS may sell such Securities or other properties, take all necessary actions in connection with such sale and utilise the proceeds to set-off and discharge all the Customer's obligations to DHS regardless of whether any other person is interested therein or DHS has made advances in connection with such property.

25. Currency Exposure

For dealing in Securities and for cash settlement in currencies other than the Customer's base currency, the Customer acknowledges there may be profits or losses arising as a result of a fluctuation in exchange rates, which shall be entirely for the Customer's account and risk.

26. Disclosure

26.1 DHS will keep information relating to the Customer's Account confidential, but may disclose any of such information to the extent required by any applicable legal or regulatory requirement or if requested by the Exchange or any other stock exchange; the SFC or other regulatory or governmental authority (whether in Hong Kong or elsewhere), and may provide to such persons as are entitled, details of the Account and dealings in relation to the Account and the identity of any other person(s) beneficially interested therein including the name of the ultimate beneficiary/beneficiaries of the Account. The Customer confirms that DHS will not be liable in any way to the Customer (whether or not DHS is legally obliged to respond to such a request) for providing such information.

26.2 Nothing herein shall require DHS to disclose to the Customer any fact or matter which comes to DHS's notice in the course of acting in any capacity for any other person.

26.3 The Customer understands that DHS is subject to the Personal Data (Privacy) Ordinance of Hong Kong, which regulates the use of personal data concerning individuals. Further information on DHS's policies and practices relating to personal data is set out in the Policy on Personal Data in force from time to time, the current version of which is attached, and which the Customer agrees will apply to me/us.

27. Liability and Indemnity

27.1 Neither DHS's nor any of DHS's officers, employees or agents shall be liable to the Customer for any loss suffered by the Customer arising out of or in connection with any act or omission in relation to the Account unless such loss results from the fraud, gross negligence or wilful default of DHS or any of DHS's officers, employees or agents. The Customer agrees to indemnify on demand DHS and DHS's officers, employees and agents against all costs, claims, liabilities and expenses arising out of or in connection with the lawful performance of DHS's or their duties or discretion in relation to the Account or arising out of or in connection with any such act or omission. For avoidance of doubt, the Customer agrees to indemnify DHS against any loss, damage, cost expense or claim arising out of DHS's compliance with the Customer's instructions whether verbal or written.

27.2 If in relation to any Securities deposited with DHS which are not registered in the Customer's name, any loss is suffered by DHS therefrom, the Account may be debited (or payment made by the Customer as may be agreed) with the proportion of such loss equal to the proportion of the total number or amount of Securities which shall comprise Securities held on the Customer's behalf.

28. Survivorship

The terms and conditions herein shall survive any changes or succession in the Customer's/DHS's business, including the Customer's/DHS's bankruptcy or death and shall be binding on the Customer's/DHS's successor(s), heirs, executors, administrators and personal representative(s).

29. No Waiver

29.1 No provision of the Agreement shall be waived, altered, modified or amended in any respect unless it is in writing and signed by any one of the authorised officers of DHS.

29.2 DHS's failure to insist at any time upon strict compliance with any provision in the Agreement or any continued course of conduct on the Customer's part shall not constitute or be considered a waiver generally or specifically of any of DHS's rights or privileges, unless such waiver is granted by DHS in writing.

30. Termination

The Agreement may be terminated by DHS or by the Customer at any time and without giving any reason by notice in writing to the other, which shall take effect once the recipient has had reasonable opportunity to act on and implement such notice. Upon termination, all amount due or owing by the Customer to DHS will become immediately due and payable and DHS is authorised to deliver as soon as reasonably practicable Securities held in DHS's or DHS's agent's or nominee's name to the Customer after repayment of any debit balance and other Debts in accordance with Clause 23 and after deduction of the Customer's outstanding fees and expenses.

31. Joint Accounts

If the Account is opened in two or more names:

  1. the Customers' liabilities hereunder shall be joint and several and each of the Customers shall have authority to exercise all the Customers' rights, powers and discretion hereunder and generally to deal with DHS as if each of the Customers alone were the sole Account holder, without notice to the other;
  2. DHS may follow the instructions of either/any of the Customers concerning the Account and make deliveries of Securities or payments of monies hereunder in accordance with the directions of either/any of the Customers. DHS shall be under no obligation to inquire into or to see to the application or disposition of such Securities or monies;
  3. The Customers enter into the Agreement as joint tenants with right of survivorship and not as tenants-in-common. Upon the death of either/any of the Customers, the Customers' entire interest in the Account shall be vested in the survivor (who shall have full authority to give Instructions) but without releasing any liabilities of the deceased, which shall be enforceable against the Customer's estate; and
  4. upon the death of either/any of the Customers, the estate of the deceased and any survivor shall be liable, jointly and severally, to DHS for any debt or loss in the Account arising from completion of Transactions instructed prior to DHS's receipt of a written notice of such death.

32. Corporate Accounts

If the Account is opened by a body corporate the Customer certifies, represents and warrants that:

  1. it is duly incorporated and validly existing under the laws of its place of incorporation and has full power to execute and perform its obligations under the Agreement and to incur any indebtedness hereunder; and
  2. the certified copy resolutions were duly passed at a meeting of its directors duly convened and held on or prior to the date hereof in accordance with its constitutional documents and were entered in its minute book and are in full force and effect.

33. Individual Account

If the account is opened by an individual, the Customer represents and warrants that the Customer is legally capable of validly entering into and performing the Agreement and that the Customer has attained the age of 18 years and is of sound mind and legal competence and is not bankrupt.

34. Amendment

To the extent permitted by the law, DHS may from time to time amend any of the terms and conditions of the Agreement by notifying the Customer in accordance with Clause 35. The Customer acknowledges and agrees that if the Customer does not accept any amendments as notified by DHS from time to time, the Customer shall have the right to terminate the Agreement in accordance with Clause 30 by notifying DHS in writing within four Business Days from the date of the Customer's deemed receipt of the notice in accordance with Clause 35.

35. Notices and Communications

The Customer agrees that all notices and other communications and documents required or permitted to be given in relation to the Account may be sent by personal delivery, by post, facsimile, e-mail or other electronic communications (including posting on DHS's web site), or by prepaid post to the address, and marked for the attention of the person and otherwise in accordance with the details indicated in the Customer Registration Form. All communications and documents so sent shall be deemed to have been received by the Customer within 1 Business Day in the case of posting, upon delivery if personally delivered and upon a successful transmission message being obtained, if sent by facsimile, e-mail or other electronic transmission.

36. Short Selling

The Customer confirms and undertakes that all of the Customer's sell orders will be long sales and the Customer undertakes to notify DHS when placing a "covered" sale order. The Customer acknowledges that short selling is strictly prohibited under the Ordinance.

37. Governing Law

The Agreement and all Instructions given shall be deemed to have been made in Hong Kong and shall be governed by and shall be enforced in accordance with the laws of the Hong Kong Special Administrative Region and the Customer submits to the non-exclusive jurisdiction of the Hong Kong courts in respect of any dispute arising from or related to the Agreement, provided that DHS shall have the right to proceed against the Customer in any other court which has jurisdiction over the Customer or any of the Customer's assets.

38. Assignment

The Agreement shall not be assigned by the Customer. DHS may, without the Customer's consent, assign or transfer any or all of its rights, title or interest under the Agreement and in the Account to any person, firm or corporation which may carry on business in succession to DHS or to any of DHS's Associates.

39. New Issue Application

39.1 Whenever the Customer asks DHS to apply for new issues on the Customer's behalf, the Customer represents and warrants to and agrees with DHS that:

  1. (if the application is made for the Customer's own Account) no other application is being made for the Customer's Account by the Customer or by anyone applying as the Customer's agent or by any other person;
  2. (if the application is made by the Customer as agent for the account of another person) no other application is being made by the Customer as agent for or for the account of that person or by that person or by any other person as agent for that person;
  3. the applicants under such application are fully entitled to make such application and hold the Securities applied for and no breach of any law, regulation or other requirement in any part of the world will arise or result from the making or approval of any such application;
  4. The Customer shall read the prospectus and the application form in respect of the new issue and comply with all the terms and conditions se tout therein before giving instructions for the application; and
  5. DHS shall be given due authority to sign an application on the Customer's behalf.

39.2 The Customer acknowledges that, if an application is made by an unlisted company that does not carry any business other than dealing in shares and in respect of which the Customer exercises control, such an application shall be deemed one made for the Customer's benefit.

39.3 The Customer declares that the Customer's application through DHS will be the only application made and the only application intended by the Customer to be made, for the Customer's Account or for the persons for whose account the Customer is applying. The Customer understands that the foregoing declaration/representation will be relied upon by DHS in making the application, and by the issuer in deciding whether to make allotment to such application.

40. Force Majeure

The Customer agrees that DHS and DHS's directors, officers, employees and agents shall not be liable for any delay or failure to perform any of DHS's obligations hereunder or for any losses caused directly or indirectly by any condition or circumstances over which DHS, DHS's directors, officers, employees or agents do not have control, including but not limited to government restriction, exchange or market rulings, suspension of trading, failure of electronic or mechanical equipment or communication lines, telephone or other interconnect problems, unauthorised access, theft, war (whether declared or not), severe weather, earthquakes and strikes.

41. Own Judgment

The Customer agrees that the Customer, independently and without reliance on DHS or any statements made by DHS or DHS's behalf, make the Customer's judgments and decisions with respect to each Transaction. DHS shall be under no liability whatsoever in respect of any views, opinions, information or suggestions given by any of DHS's directors, officers, employees or agents irrespective of whether or not such views, opinions, information or suggestions were given at the Customer's request.

42. Material Changes

The Customer will notify DHS of material changes in respect of the Customer's information provided or personal circumstances or business, which may affect the services DHS provides to the Customer, in accordance with Clause 35. DHS will notify the Customer in respect of material changes of the company's information such as the full name, address, licensing status and the CE number with the SFC, nature of services to be provided or available to the Customer and significant revision of fees and charges.

43. General

43.1 If DHS fails to meet obligations to the Customer pursuant to the Client Trading Agreement and these Terms and Conditions, the Customer shall have a right to claim under the Compensation Fund established under the Ordinance, subject to the terms of the Compensation Fund from time to time.

43.2 Where any written Instruction or any other written communication from the Customer is given by e-mail or facsimile, the Customer hereby irrevocably authorises DHS to accept such e-mail or facsimile message from the Customer as the original instruction or communication from the Customer and the Customer shall fully indemnify DHS on demand against all losses, damages, interest, costs, expenses, actions, demands, claims, proceedings whatsoever which DHS may incur, suffer or sustain as a result of or arising from DHS's acceptance, reliance on or acting upon those instructions or communication. The Customer acknowledges that any notices and communications to DHS shall be sent or delivered or communicated (as the case may be) to an address or location as notified by DHS from time to time in accordance with Clause 35.

43.3 In the event that there is inconsistency or conflict between the English version and the Chinese version, the English version shall prevail.

44. Risk Disclosure Statement

The Customer understands, acknowledges and accepts that: -

44.1 Risk Of Securities Trading

The price of securities can and does fluctuate, and any individual security may experience upward and downward movements, and may under some circumstances become valueless. The Customer appreciates that there is an inherent risk that losses may be incurred rather than profit made as a result of buying and selling securities.

44.2 Risk Of Leaving Securities With DHS

There may be risks in leaving Securities in DHS's safekeeping. For example, if DHS is holding the Customer's Securities and DHS becomes insolvent, the Customer may experience significant delay in recovering the Securities. This is a risk that the Customer is prepared to accept.

44.3 Risk Of Providing An Authority To Hold Mail Or To Direct Mail To Third Parties

If the Customer provides DHS with an authority to hold mail or to direct mail to third parities, it is important for the Customer to promptly collect in person all contract notes and statements of the Account and review them in detail to ensure that any anomalies or mistakes can be detected in a timely fashion.

44.4 Risks Of Client Assets Received Or Held Outside Hong Kong

The Customer's assets received or held by DHS outside Hong Kong are subject to the applicable laws and regulations of the relevant overseas jurisdiction which may be different from the Ordinance and the rules made thereunder. Consequently, such assets may not enjoy the same protection as that conferred on the Customer's assets received or held in Hong Kong.

44.5 Risk Of Trading Growth Enterprise Market ("GEM") Stocks

GEM stocks involve a high investment risk. In particular, companies may list on GEM with neither a track record of profitability nor any obligation to forecast future profitability. GEM stocks may be very volatile and illiquid.

The Customer should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and other sophisticated investors.

Current information on GEM stocks may only be found on the Internet website operated by the SEHK. GEM companies are usually not required to issue paid announcements in gazetted newspapers.

The Customer should seek independent professional advice if the Customer is uncertain of or has not understood any aspect of this risk disclosure statement or the nature and risks involved in trading of GEM stocks.

44.6 Risk Of Trading Nasdaq-Amex Securities At The SEHK

The Securities under the NASDAQ-Amex Pilot Program (PP) are aimed at sophisticated investors. The Customer should consult the Customer's dealer and become familiarised with the PP before trading in the PP Securities. The Customer should be aware that the PP Securities are not regulated as a primary or secondary listing on the Main Board or the Growth Enterprise Market of the SEHK.

44.7 Risk Of Trading Equity-Linked Instrument

The risk of loss in an equity-linked instrument may be substantial in certain circumstances. The Customer should not deal in them unless the Customer understands the nature of the transactions the Customer is entering into and the extent of the Customer's exposure to risk. The Customer should carefully consider whether the transactions are suitable for the Customer in the light of the Customer's circumstances and financial position.

The interest which may become payable on an equity-linked instrument is generally higher than the interest on an ordinary time deposit. However, this carries with equity risk. The Customer accepts a legal obligation to take the underlying instrument at the pre-agreed conversion price instead of receiving the principal of the equity-linked instrument, if the price of the underlying instrument falls below the conversion price. The Customer shall therefore receive an instrument that has fallen in value. The Customer shall lose the entire principal or deposit if the underlying instrument becomes worthless.

Equity-linked instrument may be "non transferable" and it may be impossible for the Customer to close out or liquidate them.

Any recommendation or information given by DHS to the Customer is for the Customer's reference only. Reliance on such recommendation or information is at the Customer's own risk. The Customer makes no representations regarding the performance of the Customer's investment or regarding any recommendation or information given by DHS to the Customer.

The Customer confirms to DHS that the Customer has sufficient knowledge and experience to be able to evaluate the merits and risks of entering into each equity-linked instrument, is acting in reliance solely upon the Customer's own judgment or upon professional advice obtained independently of DHS as to those merits and risks (including, where relevant, the tax and accounting treatment of each equity-linked instrument) and are not relying upon DHS's views or advice.

44.8 TRADING AND TRANSMISSION OF DATA THROUGH ELECTRONIC MEANS

All electronic channel and Internet is, due to unpredictable traffic congestion and other reasons, an inherently unreliable medium of communication and such unreliability is beyond your control. The Customer acknowledges that, as a result of such unreliability, there are security risks and risks of failure or delay in the transmission and receipt of instructions and other information and that may result in an influence on integrity and privacy of data, failure or delay in the execution of instructions and/or the execution of instructions at prices different from those prevailing at the time the instructions were given.

The Customer further acknowledges and agrees that there are risks of interception of instructions as well as of misunderstanding or errors in any communications and such risks shall be absolutely borne by the Customer.

The Customer acknowledges and agrees that it is not usually possible to cancel an Instruction after it has been given.

The Customer understands and agrees to bear all risks involved in trade and transaction entered through electronic means.