This Risk Disclosure Statement is provided by Global Currency Exchange Limited ("GCE") to assist clients in fully understanding the risks associated with the use of GCE's cross-border payment services, FX conversion services and corporate cards. This statement is not exhaustive and does not constitute financial advice of any kind. Clients should read this statement carefully before using GCE services and consider seeking independent professional advice.
1. Purpose of This Disclosure
This Risk Disclosure Statement is provided by GCE as an informational document in accordance with applicable regulatory practice and industry standards in Hong Kong. The purpose of this Statement is to ensure that clients can make informed commercial decisions regarding cross-border payments, currency conversion and corporate card activities with a clear understanding of the associated risks.
This Statement does not constitute financial, investment or legal advice. The risks described herein are not exhaustive and may change over time. Clients should seek advice from independent professional advisers regarding risks relevant to their specific circumstances.
2. Foreign Exchange Risk
Currency exchange rates fluctuate continuously due to economic, political and market factors beyond GCE's control. Foreign exchange risk manifests in the following ways:
- Spot rate movements: Conversions at spot rates are subject to market movements between the time of the client's request and GCE's execution of the transaction. Rates can shift materially within seconds or minutes;
- Forward rate contracts: Forward rate contracts allow clients to lock in a rate for a future date, thereby reducing (but not eliminating) currency risk. Clients cannot benefit from favourable rate movements once a forward contract is locked; and
- Currency mismatch: Clients holding balances in currencies other than their functional currency are continuously exposed to exchange rate risk in respect of unrealised gains and losses.
GCE offers FX conversion at rates based on the interbank mid-rate, with a transparently disclosed fixed spread applied. GCE makes no predictions or recommendations regarding the direction of currency exchange rates.
3. Settlement & Counterparty Risk
Cross-border payments are processed through correspondent banks and payment network partners. Key risks arising from these arrangements include:
- Network failure: Technical outages in payment networks may result in payment delays or failures;
- Correspondent bank default: Default or insolvency of a correspondent bank could place funds in transit at risk and may result in payment delays;
- Regulatory action: Regulatory action against a correspondent bank may affect that bank's ability to process certain payments; and
- Currency controls: Exchange controls imposed by the destination jurisdiction may delay or prevent completion of a payment.
GCE's liability in such events is limited to taking reasonable endeavours to recover and reroute affected funds. GCE will notify clients promptly of any material delays and will assist in resolving the relevant issue.
4. Liquidity Risk
Under normal market conditions, GCE provides continuous FX conversion services for supported major currency pairs through its network of liquidity providers. However, liquidity may be restricted in the following circumstances:
- Periods of extreme market volatility, during which liquidity providers may widen spreads or suspend quotations;
- Specific currency pair restrictions, such as emerging market currencies outside local market trading hours;
- Public holidays or market disruptions beyond GCE's control; and
- Global market stress events such as geopolitical crises or major systemic financial shocks.
In periods of severely restricted liquidity, GCE may temporarily suspend or limit conversion services in affected currency pairs, with reasonable advance notice where practicable. GCE will advise affected clients on alternative arrangements as soon as possible.
5. Regulatory Risk
GCE's services are subject to the Hong Kong legal and regulatory framework, which is subject to change. Key regulatory risks include:
- Legislative changes: Amendments to Hong Kong law, AMLO or applicable regulatory rules may affect GCE's ability to provide certain services;
- International sanctions: Changes to international sanctions regimes (including OFAC, EU or UN sanctions) may immediately restrict certain payment corridors or currencies;
- Regulatory action: The Customs & Excise Department or other regulators may take regulatory action against GCE, including suspending or terminating GCE's operations without prior notice; and
- Client jurisdiction changes: Regulatory changes in the client's operating jurisdiction may affect the client's ability to use specific GCE services.
GCE will use reasonable endeavours to notify clients affected by regulatory changes, but in certain circumstances (such as sanctions orders), GCE may be required to act immediately without advance notice.
6. Operational & Technology Risk
GCE operates with a target platform uptime of 99.99% but cannot guarantee uninterrupted service. Sources of operational and technology risk include:
- Scheduled maintenance: GCE may conduct planned maintenance during low-traffic periods and will endeavour to provide advance notice to affected clients;
- Cyber events: Despite robust cybersecurity measures, cyberattacks may cause service disruptions or, in severe cases, data breaches;
- Third-party outages: Outages at cloud service providers, telecommunications providers or other critical third-party services on which GCE relies may affect platform availability;
- Human error: Operational errors, whether by GCE staff or clients, may result in erroneous payment instructions or delays; and
- System upgrades: GCE may need to temporarily suspend certain service features for system upgrades or regulatory requirements.
GCE maintains a business continuity plan to minimise the impact of major disruption events and to restore services as quickly as possible following any outage.
7. Card Programme Risk
Corporate cards issued by GCE are subject to the rules and terms of the card networks (Visa/Mastercard). Use of corporate cards is subject to the following risks:
- Network rule changes: Card networks may amend their operating rules, affecting card acceptance, transaction limits or usage conditions;
- Fraud risk: Corporate cards are subject to the risk of fraudulent use. Clients are responsible for implementing appropriate internal controls to prevent unauthorised card use;
- Suspension risk: GCE may be required to suspend card programmes or individual card accounts in response to fraud detection, regulatory direction or network policy changes; and
- Transaction declines: Cardholder transactions may be declined due to the acquiring merchant's security checks, suspicious activity detection or merchant category restrictions.
Clients should establish appropriate internal controls, usage policies and approval processes for corporate card management to reduce the risk of unauthorised use and fraud.
8. Not a Bank
GCE is not a licensed bank and is not regulated under the Banking Ordinance (Cap. 155) or subject to banking supervision by the Hong Kong Monetary Authority. GCE does not accept deposits within the meaning of the Banking Ordinance.
Client balances held in GCE accounts are not protected by the Hong Kong Deposit Protection Scheme established under the Deposit Protection Scheme Ordinance (Cap. 581). In the event of GCE's insolvency or liquidation, client funds held in GCE accounts do not benefit from the compensation protections afforded by a deposit protection authority.
Notwithstanding the above, GCE holds client funds in segregated custodian accounts separate from GCE's operating capital as a safeguard for client funds.
9. No Investment Advice
GCE does not provide investment advice, financial planning advice or foreign exchange speculative advice. Any statements made by GCE staff or representatives regarding currency movements, market conditions or economic factors are informational in nature and do not constitute investment advice, nor should they be construed as recommending any particular course of action.
Clients should seek advice from appropriately qualified independent professional advisers before making material commercial decisions involving currency conversion, asset allocation or cross-border funds management.
10. Client Responsibilities
Clients using GCE services are responsible for:
- Accuracy of payment instructions: Ensuring all payment instructions are accurate and properly authorised. GCE is not liable for losses resulting from inaccurate or unauthorised payment instructions;
- Account access security: Maintaining adequate controls to prevent unauthorised access to GCE accounts, including secure custody of API keys and administrator credentials;
- Legal compliance: Complying with all applicable laws and regulations in the client's operating jurisdiction, including those relating to cross-border payments, foreign exchange controls and taxation;
- Prompt notification: Notifying GCE immediately upon discovery of any suspicious activity, unauthorised transaction or security breach affecting the client's GCE account; and
- Account information updates: Promptly notifying GCE of any material changes to the client's business information (including corporate structure, business nature and responsible persons) relevant to the use of GCE services.
11. Contact
For queries regarding this Risk Disclosure Statement or the risks associated with GCE services, please contact:
- Email: compliance@gce.hk
- Post: Compliance Department, Global Currency Exchange Limited, Hong Kong SAR