Risk Warning Notice

This notice is provided to you, as a Private Customer, in compliance with the rules of the Financial Services Authority (“the FSA Rules”). Private Customers are afforded greater protections under the Rules than other customers are and you should ensure that your firm tells you, and that you understand what this will mean to you. You should not deal in the products described below unless you understand the nature of the security you are investing in and the extent of your exposure to risk. You should also be satisfied that the investment is suitable for you in the light of your circumstances and financial position. Different instruments involve different levels of exposure to risk and in deciding whether to trade in such instruments you should be aware of the following points:

PENNY SHARES
Penny shares are readily realisable securities to which the bid-offer spread is 10 percent or more of the offer price but not in relation to government or public securities, shares quoted on the Financial Times Stock Exchange 100 Index or securities issued by a company which, at the time of the recommendation of transaction, has a market capitalization of £100 million or more. There is the risk of losing money when investing in penny shares. There can be a big difference between the buying and the selling price of these shares. If they have to be sold immediately, you may get back much less than you paid for them. The price may change quickly and it may go down as well as up.

NON-READILY REALISABLE INVESTMENTS
We may recommend to you transactions in non-readily realisable investments. These are transactions in securities which are not admitted to, or traded under the rules of, an investment exchange recognised or designated in the United Kingdom or investments in newly issued securities which may be subject to large price fluctuations. The risks associated with private, unlisted companies may include, but are not limited to:

Recently established companies may have difficulty in obtaining market acceptance for their underlying products or services; There may be little or no liquidity in the securities and it may be difficult to establish a proper market price for them; The management teams of such companies may be inexperienced and the companies could therefore encounter management, financial or operational difficulties which they may not be able to address adequately;

Companies may underestimate their capital requirements and may have difficulty in raising subsequent capital when required; Companies that are established overseas or established in the United Kingdom but whose operations are substantially overseas carry additional risk including, but not limited to, currency fluctuations and those associated with the operation being carried out in a foreign jurisdiction and/with the operations being carried at a distance.

You should only make investments in non-readily realisable investments using funds that you are not going to need for another purpose in the foreseeable future as you may be unable to sell such securities at the time of your choosing due to a lack of or little liquidity in them from time to time. Investments in non-readily realisable investments and Penny Shares (please see above) should only be considered as part of a diversified portfolio. For the protection of our clients, Mansion House Securities Limited will only advise on or arrange such transactions to the value of 25% of any client’s disclosed portfolio or at the level as indicated on the Client Information Form, provided that the level requested is deemed suitable for that client in accordance with the FSA Rules.

STABILISATION
From time to time recommendations may be made in relation to transactions in securities where the price may have been influenced by measures taken to stabilise it. You should read the explanation below carefully. This is designed to help you judge whether you wish your funds to be invested at all in such securities. Stabilisation is an activity permitted by the Financial Services Authority that enables the market price of a security to be maintained artificially during the period when a new issue of securities is sold to the public. Stabilisation may affect not only the price of the new issue but also the price of other securities relating to it. The FSA allows stabilisation in order to help counter the fact that, when a new issue comes on to the market for the first time, the price can sometimes drop for a time before buyers are found. Stabilisation is carried out by a ‘stabilisation manager’. As long as the stabilisation manager follows a strict set of rules, he is entitled to buy back securities that were previously sold to investors or allotted to institutions which have decided not to keep them. The effect of this may be to keep the price at a higher level than it would otherwise be during the period of stabilisation. Should we be aware that stabilisation is, is going to, or is likely to take place on an issue on which we are advising, we will inform you of this fact.

SUSPENSIONS OF TRADING
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 under the rules of the relevant trading exchange trading it is suspended or restricted. Placing a stop-loss order will not necessarily limit your losses to the intended amounts, because market conditions may make it impossible to execute such an order at the stipulated price.

INSOLVENCY
Insolvency of any broker or party to the transaction may lead to positions being liquidated or closed out without your consent.