1.1. This risk disclosure and warning notice (the “Notice”) is provided to you (our Client and prospective Client) in compliance to the Provision of Investment Services which is applicable to Van Sterling Capital Ltd. (“the Company”).
1.2. All Clients and prospective Clients should read carefully the following Notice contained in this document, before applying to the Company for an account and before they begin to subscribe into STOs. However, it is noted that this document cannot and does not disclose or explain all of the risks and other significant aspects involved in dealing in Financial Instruments offered by the Company. The Notice was designed to explain in general terms the nature of the risks involved when dealing in Financial Instruments on a fair and non-misleading basis.
1.3. Van Sterling capital Ltd. (hereinafter called the "Company") holds a Firm License with the license number VANS-IF-9616, issued by the Malta Financial Services Authority (hereinafter “MFSA” or the “Regulator”) (www.mfsa.com.mt, Notabile Road, BKR3000, At-tard, Malta, Telephone: +356 2144 1155, Fax: +356 2144 1188), which was issued by the MFSA on the 26th of September 2014
2.1. The Provision of Services by the Company to the Client is subject to fees, available for each offered STO on the Company’s website https://intokia.com. Before the Client begins to subscribe into a STO, he should obtain details of all fees charged by Van Sterling Capital Ltd. as well as with the fees and commissions and charges of the broker the client has his account with. It is the Client’s responsibility to check for any changes in the charges.
2.2. If any charges are not expressed in monetary terms (but, for example, as a percentage formula), the Client should ensure that he understands what such charges are likely to amount to.
2.3. The Company may change its costs and associated charges at any time, according to the provisions of the Client Agreement found on the Company's website at www.intokia.com.
2.4. There is a risk that the Client’s will be involved in trading Security Tokens which may be or become subject to tax and/or any other duty for example because of changes in legislation or his personal circumstances. The Company does not warrant that no tax and/or any other stamp duty will be payable. The Company does not offer tax advice and recommends that the Client seek advice from a competent tax professional if the Client has any questions.
2.5. The Client is responsible for any taxes and/or any other duty which may accrue in respect of his trades.
2.6. It is noted that taxes are subject to change without notice.
2.7. If required by applicable Law, the Company shall deduct at source from any payments due to the Client such amounts as are required by the tax authorities to be deducted in accordance with applicable Law.
2.8. It is possible that other costs, including taxes, relating to Transactions carried out on the Trading Platform may arise for which the Client is liable, and which are neither paid via us nor imposed by the Company.
3.1. The company will never hold any client´s money as the client. It is understood that there are circumstances beyond the control of the Company and hence the Company does not accept any liability or responsibility for any resulting losses to the Client because of the insolvency or any other analogous proceedings or failure of the financial institution where Client money will be held.
3.2. The financial institutions where Client money will be held may be within or outside EU or the EEA. It is understood that the legal and regulatory regime applying to any such financial institution outside these areas will be different from that within these areas. Hence, in the event of the insolvency or any other equivalent failure or preceding of that person, the Client’s money may be treated differently from the treatment which would apply if the money was held in the EU or EEA. It is the sole responsibility of the client to check the related risks and the consequences.
3.3. The financial institution to which the client’s broker will pass Client money may hold it in an omnibus account. Hence, in the event of the insolvency or any other analogous proceedings in relation to that financial institution, the broker may only have an unsecured claim against the financial institution on behalf of the Client, and the Client will be exposed to the risk that the money received by the broker from the financial institution is insufficient to satisfy the claims of the Client. It is the sole responsibility of the client to check the related risks and the consequences.
4.1. The Company’s insolvency or default may lead to positions being liquidated or closed out without the Client’s consent and as a result the Client may suffer losses.
5.1. The Company participates in the Investor Compensation Scheme for clients of Investment Firms regulated in Malta, based on the EU Directive 97/9 on investor-compensation schemes. Claims of the covered Clients against the Company may be compensated by the Investor Compensation Scheme where the Company is unable, due to its financial circumstances. The Fund covers 90% of a firm’s net liability to an investor in respect of investments which qualify for compensation under the Investment Services Act subject to a maximum payment to any one person of €20,000. For more details, please refer to the website https://www.compensationschemes.org.mt.
6.1. The Client and not the Company shall be responsible for the risks of financial losses caused by failure, malfunction, interruption, disconnection or malicious actions of information, communication, electricity, electronic or other systems, which are not the result of gross negligence or wilful default of the Company.
6.2. If the Client undertakes transactions on an electronic system, he will be exposed to risks associated with the system including the failure of hardware, software, servers, communication lines and internet failure. The result of any such failure may be that his order is either not executed according to his instructions or it is not executed at all. The Company does not accept any liability in the case of such a failure, not owed to the Company’s gross negligence or wilful default. The Company strives on a best effort basis to provide the Client with a secure and smooth online experience. However the Client acknowledges the risk that should third parties (hackers) launch a coordinated attack against the Company’s systems that there may be a disruption of services that may result in Client losses. The Company does not accept any liability resulting from such attacks to the extent that the Company has taken all reasonable measures on a best effort basis to fend off such malicious actions.
6.3. The Client acknowledges that the unencrypted information transmitted by e-mail is not protected from any unauthorized access.
6.4. The Client may have some difficulties to be connected to the Company’s Platform(s)/system(s).
6.5. The Client acknowledges that the internet may be subject to events which may affect his access to the Company’s Website and/or the Company’s Platform(s)/system(s), including but not limited to interruptions or transmission blackouts, software and hardware failure, internet disconnection, public electricity network failures or hacker attacks. The Company is not responsible for any damages or losses resulting from such events which are beyond its control or for any other losses, costs, liabilities, or expenses (including, without limitation, loss of profit) which may result from the Client’s inability to access the Company’s Website not owed to the Company’s gross negligence or wilful default.
6.6. In connection with the use of computer equipment and data and voice communication networks, the Client bears the following risks amongst other risks in which cases the Company has no liability of any resulting loss:
6.7. The Client may suffer financial losses caused by the materialization of the above risks, the Company accepting no responsibility or liability in the case of such a risk materializing and the Client shall be responsible for all related losses he may suffer, to the extent that these are not owed to the Company’s gross negligence or wilful default.
7.1. IF THE CLIENT MAKES INVESTMENT DECISIONS IN RELIANCE ON INFORMATION IN REALTION TO STO WHICH ARE AVAILABLE ON OUR WEBSITES THE CLIENT DOES SO AT HIS OWN RISK. VAN STERLING CAPITAL LTD. AND ITS AFFILIATES, THEIR EMPLOYEES AND ITS AGENTS WILL NOT BE LIABLE FOR ANY LOSSES THAT THE CLIENT MAY SUSTAIN.
THE CLIENT SHOULD NOT MAKE ANY INVESTMENT DECISION WITHOUT FIRST CONDUCTING OWN RESEARCH. THE CLIENT IS SOLELY AND EXCLUSIVELY RESPONSIBLE FOR DETERMINING WHETHER ANY INVESTMENT, OR STRATEGY, OR ANY OTHER PRODUCT OR SERVICE IS APPROPRIATE OR SUITABLE FOR HIM BASED ON HIS INVESTMENT OBJECTIVES AND PERSONAL AND FINANCIAL SITUATION.
8.1. In case of a Force Majeure Event the Company may not be in a position to arrange for the execution of Client Orders or fulfil its obligations under the Client Agreement or fulfil its obligation under the Client Agreement. As a result the Client may suffer financial loss.
8.2. According to the Client Agreement, the Company will not be liable or have any responsibility for any type of loss or damage arising out of any failure, interruption, or delay in performing its obligations under the Client Agreement where such failure, interruption or delay is due to a Force Majeure Event.
9.1. The Client shall accept the risk of any financial losses caused by the fact that the Client has received with delay or has not received at all any notice from the Company.
9.2. The Client acknowledges that the unencrypted information transmitted by e-mail is not protected from any unauthorised access.
9.3. The Company has no responsibility if unauthorized third persons have access to information, including electronic addresses, electronic communication and personal data, access data when the above are transmitted between the Company and the Client or when using the internet or other network communication facilities, telephone, or any other electronic means.
9.4. The Client is fully responsible for the risks in respect of any undelivered mail messages sent to the Client by the Company.
10.1. The Client acknowledges that under Abnormal Market Conditions the period during which the Orders are executed may be extended or it may be impossible for Orders to be executed at declared prices or may not be executed at all.
10.2. Abnormal Market Conditions include but not limited to times of rapid price fluctuations of the price, rises or falls in one trading session to such an extent that, under the rules of the relevant exchange, trading is suspended or restricted, or there is lack of liquidity, or this may occur at the opening of trading sessions.
11.1. When a Financial Instrument is traded in a currency other than the currency of the Client’s country of residence, any changes in the exchange rates may have a negative effect on its value, price and performance and may lead to losses for the Client.
12.1. When the Company deals with the Client, the Company, an associate, a relevant person or some other person connected with the Company may have an interest, relationship or arrangement that is material in relation to the Transaction/Order concerned or that it conflicts with the Client’s interest.
12.2. The following includes the major circumstances which constitute or may give rise to a conflict of interest entailing a material risk of damage to the interests of one or more Clients, as a result of providing investment services:
12.3. For more information about the conflicts of interest and the procedures and controls that the Company follows to manage the identified conflicts of interest, please refer to the Company’s Summary of Conflicts of Interest Policy found on the Company's website at https://intokia.com.
13.1. The Company requires the Client to pass through an appropriateness test during the application process. Any decision whether or not to open an Account or to invest in security token, and or whether or not you understand the risks lies with the client.
VAN STERLING EXPRESSLY WARNS ISSUERS AND INVESTORS OF THE RISKS ASSOCIATED WITH THE USE, CUSTODY, TRADING, ISSUANCE OR INVESTMENT IN SECURITIES TOKENS. ISSUERS, INVESTORS AND INTERESTED PARTIES MUST READ AND UNDERSTAND THE FOLLOWING RISKS BEFORE INTERACTING WITH THE SERVICE AND WEBSITE PROVIDED BY VAN STERLING. THE FOLLOWING LIST DOES NOT PURPORT TO BE COMPLETE. ADDITIONAL RISKS RELATING TO THE ISSUANCE CAN BE FOUND ON THE WEBSITE OPERATED BY VAN STERLING, AS WELL AS IN THE ISSUER'S OFFERING DOCUMENTS. AN INVESTMENT IN TOKENIZED SECURITIES CARRIES THE RISK OF A TOTAL LOSS OF THE CAPITAL INVESTED.
14.1 Risks associated with the use of blockchain technology?
The Issuer uses blockchain technology for the issuance of the securities. Blockchain technology is at an early stage and standardized practices for its use have not yet been defined. Investors are exposed to the risk that this technology may be subject to technical difficulties or that its functionality may be impaired by external influences. Due to a partial or complete breakdown of the Ethereum / Polygon Blockchain relevant for the securities, investors might temporarily and permanently be unable to access their tokenized securities. There is a risk of attacks on the network or the Ethereum / Polygon Blockchain used. Various types of attacks are conceivable. These attacks may render the network or the Blockchain unusable, so that investors would not be able to transfer their tokenized securities. Should the network or blockchain become completely unusable, there is a risk that investors would no longer have access at all to the Tokenized Securities assigned to their wallet. In the worst case, this could lead to the irretrievable loss of the tokens and capital.
Control over the issuer's tokenized securities requires the use of a "private key," which is a code associated with the blockchain address where the digital tokens are stored. Loss or theft of the private key prevents the holder from identifying itself as the true owner of the digital tokens stored on the relevant blockchain address.
14.2 Risk of limited tradability
A liquid secondary market, in particular on the investment platform, for the tokenized securities cannot be guaranteed; in this respect, the tradability of the securities is limited. For this reason, the securities may either not be sold at all or only at a larger price discount.
14.3 No guarantee of a liquid market for tokenized securities
Many tokenized securities do not have a market because they are not registered on an exchange or admitted to trading on a multilateral trading facility (MTF).
14.4 Risk of transfer
The transfer procedure of the Tokenized Securities is intended to ensure that, in the event of a derivative acquisition, the acquirer of the securities is also entered in the register. Subject to any other provisions of the Conditions and unless a court of competent jurisdiction has decided otherwise or mandatory law requires otherwise, the Issuer and the Registrar shall treat the relevant creditor of the Securities recorded in the Register as the exclusive creditor of the right under the Securities. If a transfer process other than that provided for in the Terms and Conditions has taken place, there is a risk that the Register will be incorrect and the Issuer will make debt-discharging payments to the original holder. Tokenized securities are not recorded in a typical custodial system, and their transactions are susceptible to legal uncertainty.
14.5 Cost of Transfer
Tokenized securities can be transferred digitally using the blockchain. This is associated with costs on the Ethereum / Polygon Blockchain (referred to as "gas"), which must be paid by the investor themselves in the respective cryptocurrency. These costs fluctuate depending on the network and the transaction volume, sometimes significantly by the minute. There may be high costs for the investor in this regard.
14.6 Risk of register entry
Only investors who are registered in the register on a distribution date or on the termination date are entitled to payment. If someone has transferred his securities beforehand and is no longer entered in the register, he is accordingly not entitled to a partial payout.
14.7 The market price of tokenized securities may fall as a result of the sale of a large number of units
The market price of tokenized securities may fall as a result of future market sales of such tokenized shares by members of the issuer's board of directors or management after the expiration of their lock-up period or as a result of the perception that such sales may occur. A shareholder resolution to convert voting shares into tokenized shares may be interpreted as a willingness by holders of voting shares to sell their shares in the market, which may adversely affect the market price of the issuer's tokenized shares. A decline in the market price of uncertificated securities may make it more difficult for the issuer to issue equity securities in the future at a time and price it deems appropriate.
14.8 Pricing Uncertainty
The issue price of tokenized securities is determined solely by the issuer. Therefore, there is no guarantee that the price of tokenized securities will reflect the actual financial performance of the issuer or the status of its business, results of operations and/or prospects.
14.9 Legal and regulatory issues
Blockchain technology is still fairly new. The legal and regulatory framework for the use of this technology in the financial sector is still being debated in many countries, and it cannot be ruled out that regulatory measures will restrict the ability to use the technology in the manner intended by the issuer. Depending on the content of the court ruling, the issuer may be required to cancel the digital tokens associated with tokenized securities and issue tokenized securities in another form (e.g., paper certificates). This may affect the ability of holders of tokenized securities to transfer those securities.
14.10 Holders of non-voting shares cannot influence the issuer's decisions
Holders of tokenized securities cannot exercise significant influence over the company in the case of non-voting shares (e.g., participation certificates/participation rights) because they do not have voting rights. Therefore, the holders of the issuer's voting shares can still exercise voting control and determine the future of the company.
14.11 Risk that an offer is not fully satisfied
The ability of the issuer to properly place tokenized securities depends on a variety of circumstances, many of which are beyond the control of the issuer. Accordingly, there can be no assurance that any offering will be completed or that all tokenized securities offered will be successfully placed.
15.1. The Company will not advise the Client about the merits of a particular Transaction or give him any form of investment advice and the Client acknowledges that the Services do not include the provision of investment advice in Security Tokens. The Client alone will enter into Transactions and take relevant decisions based on his own judgement by choosing Security Tokens to get executed. In asking the Company to enter into these subscriptions, the Client represents that he has been solely responsible for making his own independent appraisal and investigation into the risks of the Transaction. He represents that he has sufficient knowledge, market sophistication, professional advice and experience to make his own evaluation of the merits and risks of any Transaction. The Company gives no warranty as to the suitability of the products executed under this Agreement and assumes no fiduciary duty in its relations with the Client.
15.2. The Company will not be under any duty to provide the Client with any legal, tax or other advice relating to any Transaction. The Client should seek independent expert advice if he is in any doubt as to whether he may incur any tax liabilities. The Client is hereby warned that tax laws are subject to change from time to time.
15.3. The Company may, from time to time and at its discretion, provide the Client (or in newsletters which it may post on its website or provide to subscribers via its Website or the Trading Platform or otherwise) with information, news, market commentary or other information but not as a service or by way of advice, but rather purely to relay existing information available in the public domain. Where it does so:
15.4. It is understood that market commentary, news, or other information provided or made available by the Company are subject to change and may be withdrawn at any time without notice.
16.1. The Company provides no guarantees of profit nor of avoiding losses when trading in Financial Instruments through subscribing into Security Tokens. The Company cannot guarantee the future performance of the Client’s investments, promise any specific level of performance or promise that Client’s investment decisions, will be successful/profitable. Customer has received no such guarantees from the Company or from any of its representatives. Customer is aware of the risks inherent in trading in Financial Instruments and is financially able to bear such risks and withstand any losses incurred. The Client acknowledges and accepts that there may be other additional risks apart from those mentioned above.