Risk Disclosure Statement
INTRODUCTION
The objective of our risk management framework is to ensure that we have a robust and consistent process for identifying, measuring, controlling, and reporting risks. This document outlines the primary risks associated with trading and the protective measures utilized by iOTA Prime.
IDENTIFICATION OF RISKS
iOTA Prime actively seeks to identify risks arising from its business activities. Risks can broadly be categorized into:
- Market Risks (including price volatility, liquidity, and execution risks)
- Credit Risks (counterparty exposure)
- Operational Risks (system failures, regulatory changes, or process breakdowns)
Marketing / Financial Promotion
The risk of an inappropriate financial promotion being issued by the Firm which brings the Firm into disrepute or breaches regulatory requirements. iOTA Prime mitigates this risk by ensuring all marketing materials are reviewed by the compliance department before publication.
Conflict of Interest
iOTA Prime operates a Conflicts of Interest Policy. The policy dictates that all reasonable steps must be taken to identify and manage any potential conflicts of interest that could adversely affect the interests of our clients.
Our policies are designed to ensure that:
- Client orders are executed independently and impartially.
- Remuneration structures do not create incentives that conflict with client interests.
- Information barriers (Chinese Walls) are maintained where appropriate to restrict the flow of sensitive information.
Market Exposure Risk
Trading on margin carries a high degree of risk. The leverage involved can work against you as well as for you. A relatively small market movement can have a proportionately larger impact on the funds you have deposited or will have to deposit: this may work against you as well as for you. You may sustain a total loss of initial margin funds.
Bad Debt Risk
There is a risk that clients may fail to meet their financial obligations to the Firm. iOTA Prime heavily monitors client accounts and employs automated margin calls and stop-out procedures to limit negative balance exposure.
Fraud
iOTA Prime takes the risk of fraud extremely seriously. We employ stringent Anti-Money Laundering (AML) and Know Your Customer (KYC) protocols to verify the identity of our clients and monitor transactions for suspicious activity.
Liquidity Risk
Under certain market conditions, it may be difficult or impossible to liquidate a position. This can occur, for example, at times of rapid price movement if the price rises or falls in one trading session to such an extent that trading is restricted or suspended.
Counterparty Exposure Risk - Banks and Liquidity Providers
The insolvency or default of a bank or liquidity provider could result in delays in executing trades or the loss of client funds. iOTA Prime mitigates this risk by diversifying its banking relationships and only partnering with highly rated, regulated financial institutions.
Business Interruption / Disaster Recovery Risks
The risk of a significant technological failure or natural disaster interrupting business operations. iOTA Prime maintains a comprehensive Disaster Recovery and Business Continuity Plan (BCP) utilizing redundant servers and secondary operational facilities.
Regulatory Risk
The risk of changes to laws and regulations that may adversely affect the Firm's ability to operate or require significant changes to its business model. iOTA Prime strictly monitors regulatory developments across all jurisdictions it operates within.
Risk Evaluation Procedures & Management Committee
iOTA Prime continuously monitors and evaluates risk through its dedicated Risk Management Committee. This committee is responsible for setting the risk appetite, reviewing ongoing exposure, and ensuring compliance with both internal policies and external regulations.
Risk Appetite
iOTA Prime operates with a conservatively defined risk appetite designed to protect client funds and ensure the long-term stability of the Firm. We do not engage in proprietary trading and strictly limit corporate exposure to market fluctuations.