Kerford Investments Limited (Kerford) is authorised and regulated by The Financial Services Authority (FSA). This notice is provided to you in compliance with FSA requirements because you are proposing to undertake dealings in contracts for differences. This notice cannot and does not disclose or explain all of the risks and other significant aspects involved in dealing in contracts for differences. Engaging in these types of transactions can carry a high risk. You should not engage in this form of trading unless you understand the nature of the transaction you are entering into and the true extent of your exposure to the risk of loss. Your profit or loss will vary according to the extent of the fluctuations in the price of the "underlying markets".

For many members of the public, these transactions are not suitable; you should, therefore, consider carefully whether they are suitable for you in the light of your circumstances and financial resources. In considering whether to engage in this form of trading, you should be aware of the following:

1. The high degree of "gearing” or "leverage” is a particular feature of this type of transaction. This stems from the margining system applicable to such trades which generally involves a comparatively modest deposit or margin in terms of the overall contract value, so that a relatively small movement in the underlying market can have a disproportionately dramatic effect on your trade. If the underlying market movement is in your favour, you may achieve a good profit, but an equally small adverse market movement can not only quickly result in the loss of your entire deposit, but may also expose you to a large additional loss unless you enter a limited liability contract (place a guaranteed stop loss) with the firm.

2. Foreign markets will involve different risks from UK markets. In some cases risks will be greater. The potential for profit or loss from transactions on foreign markets or in foreign currency denominated markets will be affected by fluctuations in foreign exchange rates.

3. You may be called upon to deposit substantial additional margin, at short notice, to maintain your trade. If you do not provide such additional funds within the time required, your trade may be closed at a loss and you will be liable for any resulting deficit.

4. CFD transactions will not be undertaken on a recognised or designated investment exchange. During normal market hours, Kerford will execute CFD equity orders at the market price or better. Customer orders executed out of normal market hours will be executed at Kerford prices. Customer orders placed in CFD Indices will always be executed at Kerford price. Kerford act as an "agency broker" in these CFD Indices in and out of market hours, (see Terms and Conditions for market hours.) Closing trades will be traded at the price dictated by the spread quoted at the time of closing, irrespective of the spread at the time of the opening trade, which may be larger or smaller. No guarantee is given as to the spread at the time of closing. All CFD trades opened with Kerford must be closed with Kerford and cannot be closed with any other entity.

5. Where entering into such transactions, Kerford must do so under a two-way customer agreement (i.e. Kerford Terms and Conditions) pursuant to the FSA Conduct of Business rules unless exempted from doing so. You should satisfy yourself that dealing is conducted throughout in strict conformity with that customer agreement and report to the FSA if you have reason to believe it is not.

6. Prior to placing trades, you should ensure that you understand all charges for which you will be liable.

7. CFD’s are higher risk investments than ordinary share dealing, as gearing can lead to unlimited losses. However, to limit potential losses and bring peace of mind, clients trading through Kerford have access to both a simple stop loss facility and a guaranteed stop loss facility. Both simple and guaranteed stop loss facilities are only available at the absolute discretion of Kerford. For further details in relation to stop losses please refer to the Market Information Sheets. A stop loss order allows you to set a price which if breached will automatically trigger a sell order (for long positions) or buy order (for short positions) to close your current position. This facility is available at Kerford’s discretion when placing the deal either through the online platform or over the telephone.

With a simple stop loss if the share or index breaches your stop loss then your order will be executed when Kerford is reasonably able to do so. This may mean the order is executed at less than your stop loss price in the case of a long position or more than the stop loss price in the case of a short position.
However you can use a guaranteed stop loss on selected stocks and indices. As it suggests this is a stop loss order that is guaranteed to be executed at the price you specify, even if the price of the underlying share or index makes a sudden movement and never actually trades at the price that you specified, your position will still be closed at your chosen price. This may not be the case with a simple stop loss. The guaranteed stop loss facility is available on telephone dealing on many leading equities (usually the FTSE 100) and indices at the discretion of Kerford. You also pay a small premium for the guaranteed stop loss facility when placing the deal but many would consider this a small price to pay when compared to the cost of an unpredictable loss.

It is important to remember that Kerford allows you to trade index CFD’s outside of normal market hours. The prices quoted for Index CFD’s are house prices and are based on market movements. Outside of normal market hours the prices are based on the interpretation of how the market may move if it were open. This means simple stop losses and guaranteed stop losses could be triggered outside of normal market hours based on movements in the house price for the index. Individual stock CFD’s can only be traded whilst the underlying market is open. For specific information about the CI trading hours for each instrument, please refer to the Market Information Sheets, which form part of the Terms and Conditions.

8. Under certain trading conditions it may be difficult or impossible to liquidate a position. This may occur, for example at times of rapid price movement if the price rises or falls in one trading session to such an extent that trading is restricted or suspended.

9. Kerford is required to hold your money in segregated accounts in accordance with the regulations of FSA, but this may not afford complete protection.

10. If you deposit collateral as security with Kerford, you should ascertain from Kerford how your collateral will be dealt with.

11. Kerford insolvency or default may lead to positions being liquidated or closed out without your consent. In certain circumstances, you may not get back the actual assets which you lodged as collateral and you may have to accept any available payment in cash.

"If you have reason to believe that Kerford is not acting in accordance with representations that it has made to you, the terms of your customer agreement or the rules of the FSA, you should put your complaint in writing to The Compliance Officer of Kerford and if your complaint remains unresolved or you are unhappy with Kerford’s decision on your complaint you may report it to the Financial Services Authority Consumer Helpline."

We maintain our financial stability by hedging against large transactions. In the unlikely event that KI were to face liquidation, private customers are covered by the Financial Services Compensation Scheme to a ceiling of £50,000 (claimants would receive the first £30,000 in full and 90% of the balance, a total of £48,000).