Risk

Trading on over-the-counter markets requires experience, knowledge and skill. Buying and selling physical commodities is speculative and contains a varying degree of risk. EBLN DMCC is not regulated by the Financial Conduct Authority (FCA) and means that you will not have access to any Statutory compensation schemes. The buying and selling of physical OTC commodities, such as Gold and Silver are not a regulated product. This means that you are not eligible to any recourse under the Financial Services Compensation Scheme (FSCS) or any compensation scheme.

Past performance of physical commodities provides no indication of future performance. You should consider before you make any decision to purchase and trade within the over the counter spot market’s your individual position financially.

The currency exchange rate fluctuations may also have an adverse effect on the value of transactions you may enter into with EBLN DMCC that may be traded in foreign currencies.

The reason spot commodity trading, and therefore spot gold and silver as well other precious metals are not regulated are because they do not fall under the definition of a “financial instrument” as defined by the Financial Conduct Authority glossary.

“Financial instruments”, which are regulated are defined as the below in the FCA glossary, which include.

(e) options, futures, swaps, forwards, and any other derivative contracts relating to commodities that must be settled in cash or may be settled in cash at the option of one of the parties other than by reason of a default or other termination event;

(f) options, futures, swaps, and any other derivative contract relating to commodities that can be physically settled provided that they are traded on a regulated market, an MTF, or an OTF, except for wholesale energy products (having regard to article 6 of the MiFID Org Regulation) traded on an OTP that must be physically settled where the conditions of article 5 of the MiFID Org Regulation are met;

(g) options, futures, swaps, forwards, and any other derivative contracts relating to commodities, that can be physically settled not otherwise mentioned in (f) and:

(i) not being for commercial purposes having regard to article 7(4) of the MiFID Org Regulation;
(ii) which have the characteristics of other derivatives financial instruments having regard to article 7(1) of the MiFID Org Regulation; and
(iii) not being spot contracts having regard to articles 7(1) and (2) of the MiFID Org Regulation.

Spot commodities, and in turn the trading of spot precious metals are not “financial instruments” and therefore not classed as a regulated activity.