Get more out of your assets with Citibank Portfolio Finance

The risk of loss when investing/trading using a leveraged facility can be substantial. You may sustain losses in excess of your margin funds. Placing contingent orders, such as “stop loss” or “stop limit” orders, will not necessarily limit losses to the intended amounts. Market conditions may make it impossible to execute such orders. You may be called upon at short notice to deposit additional margin funds. If the required funds are not provided within the prescribed time, your investment/trading position may be liquidated. You will remain liable for any resulting deficit and any early termination costs. You should therefore carefully consider whether investing/trading using a leveraged facility is suitable in light of your own risk appetite, investment experience, financial position and investment objectives. The high degree of leverage due to small margin requirement that is often obtainable in currency trading or derivative transactions can work against you as well as for you. The use of leverage can lead to large losses as well as gains.

Leveraging on your existing deposits, Premium Accounts, Gold Accounts and/or securities (as the case may be) such as bonds, structured notes, mutual funds and equities are highly speculative and risky and is subject to the risk of market fluctuation which may reduce the value of your holdings.

• The use of leverage means that relatively small price movements will have a multiplying effect on your corresponding gains or losses.
• For FX and commodities: Establishing a stop loss level may help limit the amount of losses but the order may be executed at a worse-off price or may not be effected because market conditions may make it impossible to execute such orders.
• For Options: Options derive their values from the underlying asset and have risks similar to those affecting the underlying asset. The Option buyer risks losing some or all of the Option Premium paid for the option. The risk associated with selling an Option is generally greater than buying an Option and runs the risk of unlimited loss. Changes in volatility and time value also affect the value of the Options.

During adverse market conditions, you may not be able to liquidate all or any part of your holdings.

The approved facility/line amount granted is dependent on the loanable value allowed for each margin deposit and/or security.

• The loanable value is subject to change by the Bank without prior notice, and based on the Bank’s assessment of risk factors, including but not limited to, liquidity, collateral concentration at a security and security issuer level. In general, the less liquid and/or diversified your collateral portfolio is considered, the lower the loanable value may be.
• The loanable value for securities like bonds and notes is impacted by various factors, including but not limited to negative/downgrade ratings by credit rating agencies. Any security that falls below the Bank’s designated minimum rating by Moody’s and/or S&P may result in the security not being marginable and a margin call or force sell could be triggered as a consequence.

Your leveraged position is periodically marked-to-market and you may be called upon at short notice to deposit additional funds to avoid a forced sale of your leveraged positions.

• Losses may exceed the amount of initial deposits and/or securities that are pledged by you as margin/collateral.
• You will remain liable for any resulting deficit in your account(s).

The implications of margin call levels for the leveraged facility.

For Citibank Portfolio Finance, the margin call level is set at 25% erosion of the Initial Margin. If a margin call is triggered, you have 7 calendar days or such other period as may be determined by the Bank in its sole discretion (as may be communicated at the time of margin call notification) to regularize the position.

• Positions may be liquidated at the discretion of the Bank if margin call is not regularized within the stipulated time period.
• The margin call levels are subject to change by the Bank without prior notice. The Bank has no obligation to notify you of the aforesaid event and therefore it is your duty to monitor the same.

The implications of force sell levels for the leveraged facility.

For Citibank Portfolio Finance, the force sell level is set at 50% erosion of the initial margin.

• In the event the market deteriorates rapidly past the margin call level and reaches the force sell level, the Bank reserves the right to liquidate all outstanding positions without notice.
• The force sell level is subject to change by the Bank without prior notice.
• If the currency of the loan is different from the currency of the underlying investments, foreign exchange rate risk implications may affect the value of the underlying investments resulting in the possibility of margin call and force-sell call.
• If the leveraged credit facility includes time deposits, Premium Account, or other Deposits as pledged assets, parallel margin computations of both the leveraged credit facility and cross currency may apply.