Stock Risk Disclosure

1. Trading

In accordance with applicable law, neither this agreement, the website nor the Xapo App should be regarded as a solicitation, promotion or advertisement of the services that we will provide under this agreement. Xapo only provides services to Members when such services are initiated at the Member’s own exclusive initiative.

2. Risk Disclosure

3. Introduction

This notice is provided by Xapo Bank (“we”, “us” or “Xapo”) and provides you with important information about the risks associated with the services we provide to you. Xapo is authorised and regulated by the Gibraltar Financial Services Commission (“GFSC”). Unless otherwise defined here, capitalised terms have the same meaning as in the Xapo Terms of Business detailing how we will provide our dealing services to you.

Xapo provides its Members with the ability to buy and sell various Instruments on a non-advised (i.e., execution only) basis, and transmits those orders placed on the Xapo app to a Third Party Broker in order to carry out execution of the same in accordance with Xapo’s Member Order Transmission Policy. Before using the Xapo App to submit orders in relation to Instruments, you should consider whether you have understood the risks detailed in this notice. If you have any questions or are in any doubt about the content of this notice, you should seek independent professional advice. Trading financial instruments involves an element of risk. The value of your investment may fall as well as rise and you may get back less than your initial investment, and in some cases, you may lose your entire initial investment. Past performance of an instrument is not an indication of its future performance.

4. No Advice

Xapo offers a non-advised (execution only) order transmission service in shares and fractions of shares (“fractional shares”) and therefore we do not offer any advice or provide you with any recommendations regarding the appropriateness of any particular Instrument. In this Risk Warning Statement, we use the word “shares” to refer to whole shares. In the provision of our services to you, we are not required to assess the appropriateness of the |nstrument or service offered to you, and as a result you do not benefit from the protections of the GFSC’s rules on assessing appropriateness. Whilst we may from time to time provide you with factual information about Instruments, this information is not, and should not be interpreted as advice, and any decision to submit orders is made solely by you. If you are uncertain as to whether any particular Instrument is suitable and/or appropriate for your individual circumstances or needs, you should seek independent professional advice.

5. Insolvency Risk

Where the instrument in which you decide to invest is a share in a company, you own a portion of the issuing company’s share capital, with your ownership interest determined by the number of shares you own as a percentage of the total issued share capital of that company. You should be aware that the insolvency of a company may drastically reduce the value of its shares, potentially risking the loss of your entire investment. Typically ordinary shareholders rank lowest in the order of priority of repayment in the event of a company’s insolvency, meaning the company may have exhausted the value of its available assets in paying other creditors by the time it comes to paying its shareholders, increasing the risk that shareholders will not receive any money from the company for their shares.

In the event of an insolvency of the Third Party Broker or any other brokers involved in executing your orders, this may result in your positions being liquidated without your consent or transferred to another broker. In such circumstances, we will seek to provide you with as much additional information as we can relating to the treatment of your existing positions as and when we obtain it, but please be aware, you could lose the value of your investment.

6. Currency Risk

Where your instruments are denominated in currencies other than the default currency of your primary Xapo account (e.g., USD), fluctuations in foreign exchange rates may impact your profits and losses connected to your trading in such instruments.

7. Volatility Risk, Market Fluctuations and Monitoring your Positions

We do not provide, nor can we control, the prices for the Instruments you may buy or sell via the Xapo App. The market price of Instruments is influenced by a broad array of factors and can change rapidly and unexpectedly, meaning the value of those Instruments, and your related profits and losses on your positions, can also change rapidly and unexpectedly. Amongst other things, prices of Instruments can be subject to gapping (where the price of the Instrument opens significantly above or below the previous day’s closing price) and slippage (where the price an Instrument is executed at is different from the price to that which was quoted at the time the order was submitted), especially in periods of market volatility.

You have the sole responsibility of monitoring the value of the positions you hold, and you should ensure that you can access the Xapo App on an ongoing basis in order to do this.

8. Liquidity Risk

The Instruments, which are shares, made available via the Xapo App are all admitted to trading on a regulated market, and in the event that you wish to sell your Instruments, a corresponding buyer of those Instruments must be found in the underlying market. Whilst certain Instruments can be very liquid, you should be aware that others, such as the shares of smaller companies or of companies located in other geographies or territories, can be less liquid and it is not guaranteed that there will be a buyer for your Instruments. Therefore, you may not be able to realise your investment or realise it at its actual market value. In some circumstances, such as instances of market volatility or where trading in a particular Instrument or on a particular underlying market has been suspended or otherwise restricted, it may not be possible to find a buyer for your Instruments, meaning you will not be able to liquidate your positions.

The Instruments, which are fractional shares, cannot be traded on regulated markets (such as public exchanges) and as such may be subject to greater liquidity risk than full shares.

If you close your trading account, all positions in Instruments will need to be sold via the Xapo App to or through the Third Party Broker, potentially resulting in commission charges (depending on the type of Account you have, as set out in our Terms of Business). Positions in fractional shares cannot be transferred to another broker (except in the event of the Third Party Broker’s insolvency) and must be sold via the Third Party Broker.

9. Technical Risks

Whilst we try to make the Xapo App available to you without interruption, we cannot guarantee that the Xapo App will always be available to you. In these circumstances, your Orders may not be able to be submitted and you may not be able to monitor your positions via the Xapo App.

10. Tax

You should be aware that various tax regimes may apply to your trading in Instruments depending on your personal tax status and the rules and regulations in force from time to time. You have the sole responsibility of determining the relevant tax impact to your trading and you should consult an appropriate professional adviser if you have questions or doubts in this regard. Xapo does not provide tax advice.

11. Financial Resources

You should ensure that you have appropriate financial resources to engage in the buying and selling of Instruments, and that you have the ability to bear any losses that may arise from your trading activity. You should not rely on being able to generate profits in order to pay down or pay off any credit or financing you have arranged for the purpose of buying and selling Instruments. You should not enter into any borrowing agreements in order to fund your purchase of Instruments via the Xapo App.

12. No Guarantee of Rights

Whilst Instruments can often have rights to dividends and, in certain instances, the right to vote on certain matters at general meetings of the issuing company, you should not assume that you will be able to exercise these rights. The payment of dividends by a company is not guaranteed and you may not have the opportunity to exercise any voting rights attaching to those Instruments.

13. Provision of Data

We may provide financial and market data, news, analyst opinions, research reports, graphs or any other data or information (“Information”) to you via the Xapo App under licence from third party providers. Any Information we display via the Xapo App is for informational purposes without regard to your individual financial circumstances, objectives or particular needs. It is provided solely to enable you to make your own investment decisions and it is not intended to be and does not constitute a personal investment recommendation or personalised advice.

14. Legal and Regulatory Changes

Changes to current legislation and regulations could give rise to changes in the price of Instruments, which could impact your profits or losses. The impact of such legal and regulatory changes can be material and unexpected, and may impact certain companies, markets and jurisdictions more than others.