Information on Financial Instruments that are Subject to the Investment Services Provided by Financial House Ever Inc. and Associated Risks

I. Introduction

1. This Information on Financial Instruments That are Subject to the Investment Services Provided by Financial House Ever Inc. and Associated Risks (hereinafter referred to as “the Information”) has been developed on the basis and in accordance with the provisions of Article 48, in conjunction with Article 46 of Commission Delegated Regulation (EU) 2017/565 of 25 April 2016 supplementing Directive 2014/65 / EU of the European Parliament and of the Council as regards organizational requirements and operating conditions for investment firms and defined terms for the purposes of that Directive (Delegated Regulation 2017/565) and Article 71, Paragraph 2, item 2, Paragraphs 4 and 7 of the Markets in Financial Instruments Act (MFIA) and complies with the requirements of Directive 2014/65 / EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92 / EC and of Directive 2011/61 / EU (MiFID II) and in particular Article 24(4).

2. The information has been prepared in accordance with the nature, scale and complexity of the business activity of Financial House Ever Inc.

3. The information is applicable to the contracts between Financial House Ever Inc. and its clients that regulate trading in contracts for differences (CFDs) on an over-the-counter market (OTC market).

4. Financial House Ever Inc. offers its clients the opportunity to trade financial instruments (CFDs) against a guarantee amount provided.

The guarantee amount (margin) is the amount of cash that the client should provide to their trading account in order to open a Position. The guarantee amount is blocked in the client’s trading account from the total amount of its free funds and until closure of an open position, which it guarantees, the client may not use it for any other purposes. The guarantee amount is expressed as a percentage of the value of the open position value.

5. (amended with decision of the Board of directors from 09.10.2020)Financial House Ever Inc. offers its clients the opportunity to trade financial instruments (CFDs) through a trading account against a guarantee amount provided through the electronic trading platform www.fxmeridian.com.

6. When trading in CFDs, the client has the right to buy or sell the respective financial instrument.

When purchasing a financial instrument, the position formed by the client is called “debt”. Long positions are formed at ask price. Long positions are profitable when the current market price of the instrument is higher than the price at which the position is formed, and they are loss-making when the market price is lower, respectively.

When selling a financial instrument, the position formed by the client is called “short”. Short positions are formed at bid price. Short positions are profitable when the current market price of the instrument is lower than the price at which the position is formed, and they are loss-making when the market price is higher, respectively.

7. Financial House Ever Inc. does not offer its clients trading in financial instruments other than CFDs in a market other than the OTC market.

8. Financial House Ever Inc. does not offer its clients investment strategies.

9. Financial House Ever Inc. does not offer investment research, financial analyzes or other forms of recommendations related to the investment activities of its clients, nor in relation to regulatory, legal and/or tax issues.

10. In the cases where Financial House Ever Inc. provides current information to its clients about the current state of the different markets, the same should be perceived by the clients solely as disclosing information relevant to the respective instrument and/or underlying asset, and that the latter service is provided for convenience, it is for information purposes only and it shall not be considered as a recommendation to enter into or refrain from entering into a transaction.

11. In the process of opening a trading account, Financial House Ever Inc. assesses whether the service requested by the client is suitable for the same. The assessment is made on the basis of the information provided by the client regarding their knowledge and experience in trading in the financial markets. Regardless of the assessment of Financial House Ever Inc., the client should make for themselves a careful assessment of whether the services offered by Financial House Ever Inc. are suitable for them and whether to use them. If the assessment of Financial House Ever Inc. shows that the requested service is not suitable for the client, the investment intermediary shall inform the client and warn them of the risks thereof. The client should decide for themselves whether to use that service or not although it is considered inadequate for them and they shall explicitly state it to the intermediary.

(amended with decision of the Board of directors from 09.10.2020)Financial House Ever Inc. warns that if, despite the intermediary’s warning, the client determines that they will use a service that is deemed unsuitable for the client, the client, prior to conducting actual trading that would result in financial losses for them,  should obtain  some experience in this type of trading through a demo account, and familiarize themselves  with the specifics of trading against a guarantee amount (margin trading) in general, including through the training materials available on the website of Financial House Ever Inc. (www.ever.bg and/or www.fxmeridian.com).

II. INFORMATION ON FINANCIAL INSTRUMENTS THAT ARE SUBJECT TO THE INVESTMENT SERVICES PROVIDED BY FINANCIAL HOUSE EVER INC.

12. Financial House Ever Inc. offers for trading the following class of financial instruments according to the classification in Annex I of Commission Delegated Regulation (EU) 2017/576 of 8 June 2016 supplementing Directive 2014/65 / EU of the European Parliament and of the Council with regard to regulatory technical standards for the annual publication by investment firms of information on the identity of execution venues and on the quality of execution (Delegated Regulation 2017/576): Contracts for difference.

13. Financial House Ever Inc. does not offer for trading other classes of financial instruments according to the classification in Annex I of Delegated Regulation 2017/576.

14. Financial House Ever Inc. offers its clients the following types of CFDs:

a) CFDs on securities and exchange-traded funds;

b) CFDs on indices;

c) CFDs on futures;

d) CFDs on currency pairs and precious metals;

e) CFDs on exchange-traded options.

15. CFD is an agreement between the buyer and seller to exchange the difference between the current price of an underlying asset (shares, currency, commodities, indices, etc.) and its price when the contract is closed.

16. The main features of CFDs offered by Financial House Ever Inc. are:

a) the creator and distributor of CFDs that are offered for trading by Financial House Ever Inc. is the investment intermediary itself;

b) An CFD offered for trading by Financial House Ever Inc.is not a transferable security and is not held in a depositary institution but in an analytical account with the investment intermediary;

c) neither party physically acquires the CFD itself, nor the underlying asset on which it is based;

d) neither party is obliged to purchase, sell, deliver or physically receive the respective underlying asset of the CFD;

e) the rights and obligations of each of the parties to the CFD are solely to make or receive payments in accordance with the order submitted, as the results of the execution of the orders are reflected accordingly in its positions in assets and/or funds;

f) CFD transactions are not subject to centralized clearing.

17. A share is a freely transferable equity security issued by a public company that certifies a certain participation in the capital of that company. Depending on the class of shares, it may entitle its holder to different rights. The most common shares – ordinary ones – shall entitle to voting rights, dividend rights and a right to a liquidation share in the event of liquidation of the issuing company. Rights attached to shares are the same for all shares in the same class.

18. An exchange traded fund (or the so-called ETF) is a security that follows the presentation of a particular index fund, commodity, or basket of assets, but it is traded as a share on a regulated market.

19. An index is a virtual portfolio of financial instruments representing a specific market or a segment thereof. Each index has its own methodology for calculating the price dynamics of its components.

20. Futures are derivative financial instruments that express the right and obligation to buy or sell a number of securities or other financial instruments at a pre-fixed price at a specified future date. Futures are standard contracts that are traded on regulated markets.

21. Currency is generally accepted money, including banknotes and coins, issued by the government of a country, and circulated in the economy.

The quotation and price structure of currencies traded on currency markets (the so-called “forex markets”) are determined by comparing the value of a currency to another currency. The first currency of the currency pair is called base currency, and the second currency is called the quoted currency. The currency pair shows what amount of the quoted currency is required to buy a unit of the base currency. Currency trading involves both the purchase of one currency and the sale of the other currency of the currency pair.

22. The currency pair can also be seen as a standalone unit, an instrument that can be bought and sold.

23. When you buy it, you buy the base currency and sell the quoted currency at the same time. The bid price indicates what amount of the quoted currency is required to buy a unit of the base currency.

When selling a currency pair, the base currency is sold and the quoted currency is bought. Ask price shows the amount obtained from the quoted currency when selling a unit of the base currency.

23. CFDs on currency pairs are contracts the subject-matter of which covers the exchange rate difference in the purchase and sale of one currency (base currency) against another currency (quoted currency) on spot value date, and the ratio between them is determined based on the exchange rate quoted by Financial House Ever Inc. corresponding to the current state of these currencies on the international currency market.

24. CFDs on precious metals are contracts the subject-matter of which covers the exchange rate difference in the sale and purchase of gold and silver, quoted against the US dollar on spot value date, and the ratio between them is determined based on the exchange rate quoted by Financial House Ever Inc. corresponding to the current state of these metals on the international currency market.

25. CFDs on exchange-traded options are contracts the subject-matter of which covers exchange rate differences in the purchase and sale of exchange-traded options based on, for example, the price of gold or oil. CFDs on exchange traded options are usually quoted in US dollars.

26. (amended with decision of the Board of directors from 09.10.2020)Information about each financial instrument offered by Financial House Ever Inc. is available and freely available on the intermediary’s website (www.ever.bg and/or www.fxmeridian.com).

27. The CFDs offered by Financial House Ever Inc., other than CFDs on futures and exchange traded options, are open-ended and have no maturity. This means that, all other things being equal, the client may open or close a position at time, within trading hours or extended trading hours (if any).

28. Financial House Ever Inc. has the right to unilaterally terminate the offering of a specific CFD by notifying clients holding open positions in the respective instruments. The reasons for that may be a lack of quality quotations or expected high volatility (sharp price changes), which would lead to an increased risk in trading a particular CFD.

29. Due to the nature of their underlying assets, the CFDs on futures and exchange traded options offered by Financial House Ever Inc. are term financial instruments, but clients holding positions in them may close them before their maturity date.

III. INFORMATION ON RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS THAT ARE SUBJECT TO THE INVESTMENT SERVICES PROVIDED BY FINANCIAL HOUSE EVER INC.

30. Trading in financial instruments, including CFDs, poses significant risks and is not suitable for each investor. Trading in financial markets is not suitable for investors seeking stable income, because the revenues from such activity are volatile and uncertain.

31. The financial instruments offered by Financial House Ever Inc. – CFDs – are complex financial instruments and, accordingly, their risk component is composite and complex, therefore the risk of loss of the funds invested by the client is significant.

32. In trading in financial instruments, including CFDs, there is no guarantee that the initially invested amount will not be lost and there is almost never a guarantee that the expected return will be realized. The losses may exceed the amounts of deposited funds, but they will be fully consistent with the client’s performance and their investment behavior. Clients should take into account that the profitability of CFD trading is also influenced by the fees and commissions that the investment intermediary charges as specified in the Tariff of Interest Rates, Fees and Commissions of Financial House Ever Inc. and from other expenses related to that type of derivative instruments.

33. The financial markets are highly volatile, i.e. they are characterized by price volatility and quotations of financial instruments. The prices and quotations of CFDs are directly dependent on the price of the respective underlying asset, which is influenced by many and various factors, including: changes in the supply and demand ratio; world trade; tax, monetary, regulatory and foreign policy of the parties; important economic and political news; changes in interest rates of central banks; transactions of central banks and major players; currency depreciation; actual presentation of business entities in their respective segment; market players’ anticipations and expectations, as well as many other factors.

34. The types of CFDs offered by Financial House Ever Inc. do not contain a mechanism for protection against market dynamics, which means that the client may lose all or part of their investment.

35. The execution venues may impose price restrictions on the financial instruments traded on them, assets that are underlying for the CFDs offered by Financial House Ever Inc., as well as suspend trading in individual instruments. Financial House Ever Inc. warns its clients that in specific cases the client may assume financial and other additional obligations as a result of transactions in financial instruments, including contingent liabilities in addition to the costs of acquiring CFD.

36. It should be taken into account that trading against a guarantee amount (margin), while allowing profit to be made on the whole open position, is a high risk form of investment and can also lead to significant losses or complete loss of invested client funds.

Financial House Ever Inc. warns that margin trading can increase both clients’ profits and losses, and relatively small market movements can have significant impact on client positions. As a result, the deposited funds constituting margin on open positions can be completely exhausted.

37. The risks inherent in the class of financial instruments – CFDs offered by Financial House Ever Inc. and the respective types of CFDs include both those related to the trading method and the risks inherent to the underlying assets. The risks set out below relate to both the proposed financial instrument – CFD and the underlying asset against it. Those risks are:

-> market risk;

-> interest rate risk;

-> foreign-exchange risk;

-> operational risk;

-> liquidity risk;

-> volatility risk;

-> credit risk;

-> risk of trading in emerging markets;

-> settlement risk;

-> legal risk;

-> political risk.

38. Market risk is the probability that the value of the investment will decrease due to movements in market factors – prices of financial instruments, interest rates, exchange rates, etc. Market prices of investments may vary due to changes in economic and market environment, monetary policy of central banks, business activity of issuers, supply and demand on the market of the respective CFDs, and of the underlying instrument in relation to it. The risk is inherent both to CFDs offered by Financial House Ever Inc. and to the underlying instruments in relation to them.

39. Interest rate risk is the risk that changes in market interest rates will adversely affect the instrument’s income or value. Changes in interest rates can pose a risk to holders of financial instruments to lose capital. The significance of the risk varies for the respective financial instruments. This risk is present in shares that are basic to CFDs offered by Financial House Ever Inc., insofar as changes in interest rates affect the yield of those shares in comparison with the yield of financial instruments directly dependent from interest rates, such as bonds. The risk affects both the value of shares, indexes, futures, exchange-traded funds, currencies and precious metals, as well as the value of the CFDs offered by Financial House Ever Inc.

40. Currency risk is related to changes in the exchange rate of currencies. Investments in foreign-denominated instruments may be adversely affected by a depreciation of that currency against other currency. Currency depreciation or appreciation may result in loss or gain for financial instruments in the currency in which they are denominated. The risk affects the value of all financial instruments offered by Financial House Ever Inc. and the value of the underlying instruments in relation to them as well. The risk also affects the client’s profitability when their account is in a currency other than their national currency, and if they trade in instruments that are denominated in a currency other than the currency of their account and/or currency other than their national one.

41. Operational risk is the risk of direct or indirect loss as a result of inadequate internal control, a human act, organization or an external event. This risk covers human errors, malicious acts by employees, information system crashes, problems related to human resources management, corporate affairs, as well as external events such as accidents, fires, floods and more. This risk is mainly applicable to shares, but it also affects to a different extent the value of indexes, futures and exchange-traded funds in the calculation of which these shares are involved, as well as the value of the CFDs offered by Financial House Ever Inc.

42. Liquidity risk arises in situations where a party interested in selling an asset cannot do so because no one on the market wants to trade in that asset. There is demand and there is no supply – or vice versa. The risk can be manifested for all underlying instruments. It may also apply to CFDs offered by Financial House Ever Inc. in the event of lack of liquidity at the execution venue at which the underlying instrument is traded.

43. The volatility risk is the risk associated with movements in the price of a financial instrument. Volatility is high if the price of the financial instrument is subject to large divergent movements over a period of time. The volatility risk is calculated as the difference between the lowest and highest prices of the financial instrument over the given period of time. The risk is inherent in both the CFDs offered by Financial House AD and the underlying instruments related to them, but it manifests itself differently in different classes of financial instruments.

44. Credit risk may be defined as the likelihood that counterparty will not knowingly perform or will be unable to fulfill its contractual commitment. Investors should evaluate the quality of the issuers of financial instruments as well as their ability to pay off their liabilities. This risk is mainly applicable to shares, but it also affects, to a different extent, the value of indices, futures, and exchange-traded funds involved in calculating these shares, as well as the value of the CFDs offered by Financial House Ever Inc. The risk of trading in emerging markets arises in relation to investments in emerging markets that pose risks that are not always found in developed markets. These risks also exist when a large part of the issuer’s business is conducted in these markets. Investments in emerging markets are often speculative. Investments should be carefully considered and the various risks present in these markets should be evaluated. This type of risk may be manifested in case of lack of liquidity at the execution venue where the underlying instrument is traded. This risk is mainly applicable to shares traded in emerging markets, but it also affects, to a different extent, the value of indices, futures, and exchange-traded funds, in the calculation of which these shares are involved, as well as the value of the CFDs offered by Financial House Ever Inc.

45. Settlement risk is the risk that the settlement of a transaction will not take place due to the inability of a party to the transaction to fulfill its obligations. This risk is equal to the difference between the price of an asset on the theoretical execution date and the price of the asset on the actual execution date. In some situations, settlement procedures may be affected by the number of transactions, and thus impeding their execution. The inability to carry out the settlement due to such problems may hinder investors from profitable investment opportunities and result in a loss. The risk can only occur with respect to specific transactions in underlying instruments. In respect of CFDs traded by the client, the risk could only occur if settlement risk arises in connection with a transaction used by Financial House Ever Inc. for the purposes of providing services to a client. In these cases, Financial House Ever Inc. has the right, at its discretion, to take appropriate actions in respect of the transactions concerned between Financial House Ever Inc. and the client. The actions that Financial House Ever Inc. would take in relation to specific transactions with the client may be less profitable or more restrictive than the actions that have been undertaken against Financial House Ever Inc.

46. Legal risk is the risk of uncertainty resulting from legal actions or uncertainty regarding the applicability of contracts, laws and regulations, such as legality of a contract, the party’s ability to conclude a contract. The risk is inherent in both CFDs offered by Financial House Ever Inc. and the underlying instruments in relation thereto.

47. The political risk is the ability of the relevant government to impose new taxes, regulatory or legal obligations or restrictions on financial instruments that an investor already holds. The risk is inherent in both the financial instruments offered by Financial House Ever Inc. and the underlying instruments in relation thereto.

48. In cases where the risks associated with certain derivative financial instruments, consisting of two or more different financial instruments or services, may be higher than the risks associated with any of their individual components. Financial House Ever Inc. provides, upon request, a description of the components of the financial instruments and how their interaction increases the risks.

49. In cases where the client’s account is in a currency other than its local, as well as if it trades instruments that are denominated in a currency other than its currency and/or other than the local one for the client, there is an additional risk of loss as a result to change the exchange rate between the respective currencies.

50. In addition to the highest level of overall risk of the offered class of instrument – CFD and its individual components described above, each client should be aware of the risks associated with the following circumstances:

a) obtaining quotations of CFDs the underlying asset of which constitutes stocks, indices, futures and exchange-traded funds may sometimes not be possible within the first 15 (fifteen) minutes of the opening session of the stock exchange or in case of high volatility and lack of sufficient liquidity, the spread between bid and ask price may be relatively broader than the normally quoted one;

b) Financial House Ever Inc. has the right, at its sole discretion, to change the size of the minimum margin required, both for certain financial instruments and/or clients, as well as for individual orders and/or investor positions or accounts in the cases specified in the Contract and the General Terms and Conditions applicable thereto, including and in case of: large and sharp fluctuations in the market of these assets; important economic and/or political events; other circumstances affecting the trading of these assets;

c) when there are sharp fluctuations in market quotations, lack of liquidity including when opening or closing the relevant markets (including the so-called “gaps”) submitted by the investor in a limited, conditionally, or stop orders may be executed at prices significantly different from those specified in them (incl. “slippage”) – or it may not be possible to close a position;

d) in case of shortage of available funds to cover the required guarantee amount on open positions, Financial House Ever AD closes on its  own initiative the positions open by the investor. The client must independently monitor compliance with the requirements for the amount of the required margin;

e) Financial House Ever Inc. may not provide quotations if has temporary technical difficulties or if there exist circumstances in which transactions in the relevant markets cannot be conducted;

f) due to the specificity of the electronic trading platforms offered by Financial House Ever Inc., access to which requires Internet access and other communication services and channels, technical malfunctions may occur, both in the hardware and software products and systems used by Financial House Ever Inc. and those used by the investor. Communication crashes may also occur, leading to delays or non-receipt of orders, or to non-execution, respectively, non-execution of orders already submitted and inability to access trading platforms and more.

51. The Client should take into account that when entering into transactions with the offered CFDs Financial House Ever Inc. acts as a party to each transaction. The instruments are not transferable, with all transactions being entered into on the OTC market at prices quoted by Financial House Ever Inc., which could increase the levels of some of the risks described herein compared to transactions entered into on regulated markets.

52. The client should take into account that that transactions in offered CFDs are not subject to centralized clearing, which could increase the levels of some of the risks described herein compared to transactions subject to centralized clearing.

53. The client should take into account that regardless of the specific financial instrument, trading against provided margin poses a higher risk than trading against paying the full value of the financial instrument.

54. The Client should take into account that Financial House Ever Inc. is a licensed investment intermediary, which allows the client, in the event of the bankruptcy of the intermediary, to receive compensation for the losses suffered as a result of the consumer protection scheme. In this case, the compensation is guaranteed by the Investor Compensation Fund, with the maximum compensation payable in the event of bankruptcy of Financial House Ever Inc. amounting to 90 per cent of the value of the claim, but not exceeding BGN 40,000.

55. The Client should take into account that in the Information the descriptions of the different types of risks are not exhaustive, but contain the most typical types of risks and their main characteristics related to the instrument offered by Financial House Ever Inc. – CFD. There may also exist other risks, risk manifestations, or characteristics not listed in the Information that may result from unanticipated market conditions or investing behavior of the client. Where there is a need of clarification of other aspects of the general or specific risk characteristics of financial instruments offered by Financial House Ever Inc., the investment intermediary is ready to provide additional information upon request.

III. FINAL PART

56. (amended with decision of the Board of directors from 09.10.2020)The latest version of this Information is available to clients in the offices of Financial House Ever Inc., as well as on its website (www.ever.bg and/or www.fxmeridian.com). Financial House Ever Inc. informs its clients through its website about any significant changes in the Information or about the adoption of a new one.

57. This document was approved by the Board of Directors of Financial House Ever Inc. at a meeting held on 5 June 2018 and is effective from the same date. This document is amended with a decision of the Board of directors from 09.10.2020.

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