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Key Information Document
Purpose of the "Key Information Document" (KID): This KID provides you with key information about the investment product described in the following section. It is not marketing material. This information is required by Law to help you understand the nature, risks, costs, potential gains and losses of this Product and to help you compare it with other products.
Product - Contract for Differences (CFDs) on ABB
This Product can be traded "Over The Counter" (OTC).
PRIIP manufacturer:
- Name: Trading Point of Financial Instruments UK Limited (the "Company")
- Website: xm.com
- Telephone number for additional information: +44 (0) 203 150 1500
- Supervisory Authority: Financial Conduct Authority (FCA)
This Key Information Document was created on 03.01.2018.
You are about to purchase a Product that is not simple and may be difficult to understand.
What is this Product?
Type
This Product is a financial instrument of the following category: CFD on stocks.
Objectives
This Product creates a leveraged exposure to the movement of the value of the underlying asset (i.e. ABB stocks).
Its return is mainly affected by the price and volatility of the underlying asset, the extent of leverage used by the investor and the associated costs of the trade. The price of the underlying asset is driven by demand and supply which is greatly affected by various factors such as important political events (e.g. elections, referendums, etc), central bank announcements, economic and geopolitical developments and investors’ behaviour.
Positions on this Product can be opened and closed 24 hours a day from Sunday 22:05 GMT to Friday 21:50 GMT.
This Product does NOT have a minimum holding period.Intended retail investor
Trading in this product will not be appropriate for everyone. This product would commonly be used by persons who want to generally gain short term exposures to financial instruments/markets; are using (trading with) money which they can afford to lose; have a diversified investment and savings portfolio; have a high risk tolerance; and understand the impact of and risks associated with margin trading.
Term
This product does not have any maturity or termination date.
What are the risks and what could I get in return?
Summary Risk Indicator (SRI):
The SRI is a guide to the level of risk of this Product compared to other products. It shows how likely it is that the Product will incur losses because of movements in the markets. We have classified this Product as 7 out of 7, which is the highest risk class.
It is possible to lose all of your investment, unless you set a limit to the financial loss resulting (‘Stop Loss’) from your investment. In addition, the investment may be lost if the Company is unable to pay out. However, you may benefit from a consumer protection scheme (see the section "what happens if we are unable to pay you"). It is possible that additional investment payments to your initial investment may be required in order to avoid your open positions being stopped out.
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Low risk High riskThis product is highly liquid and the Company does not prescribe a holding period for any position, whether this is a buy or a sell position. Clients are free to open/close a trade whenever they believe that it best suits them, given that the markets are open.
Performance Scenarios
The scenarios shown in table 2 indicate how your investment could perform based on historical data. The performance scenarios are estimations of future performance based on past data of the product. This is NOT an exact indicator, performance may vary depending on how the market performs and how long you hold the CFD. The stress scenario illustrates an extreme unfavourable scenario based on historical data. Maximum loss would be the loss of the entire investment. Performance results are net of all product costs, yet it does not account for personal taxation costs.
The performance and risks associated with this product depend on a number of factors some of which are determined by the client such as account leverage, utilization leverage and holding period.
The assumptions used in the performance analysis are described below:
CFD on ABB
Table 1
Investment
€1,000
Holding Period
1 Day
Notional Trade Value
€5,000
Leverage
5
Margin Requirement
€1,000
Margin Used
€1,000
Client fully utilizes available margin on trading platform
Scenarios
Table 2
Long Performance Scenario
Favourable
| Balance | €1,068.64 |
| Return | + 7% |
| Profit / Loss | + €68.64 |
Moderate
| Balance | €990.30 |
| Return | - 1% |
| Profit / Loss | - €9.70 |
Unfavourable
| Balance | €916.16 |
| Return | - 8% |
| Profit / Loss | - €83.84 |
Stress
| Balance | €896.88 |
| Return | - 10% |
| Profit / Loss | - €103.12 |
Short Performance Scenario
Favourable
| Balance | €1,059.72 |
| Return | + 6% |
| Profit / Loss | + €59.72 |
Moderate
| Balance | €988.02 |
| Return | - 1% |
| Profit / Loss | - €11.98 |
Unfavourable
| Balance | €927.11 |
| Return | - 7% |
| Profit / Loss | - €72.89 |
Stress
| Balance | €891.78 |
| Return | - 11% |
| Profit / Loss | - €108.22 |
The above performance scenarios have been calculated using the methodology provided by ESMA.
What happens if Trading Point of Financial Instruments UK Limited is unable to pay out?
All client money held by the Company are segregated from the Company’s own funds and safeguarded with highly-rated credit institutions in Europe. The Company performs, on a daily basis, internal and external reconciliations as required by the FCA and prescribed by the rules of CASS 7 for the Company to ensure that it maintains adequate amounts in its client money accounts to cover all client funds.
In the unlikely event that the Company will be unable to pay you out, the client can contact the Financial Services Compensation Scheme (FSCS). The FSCS is the UK's statutory fund of last resort for customers of financial services firms. This means that FSCS can pay compensation to consumers, up to £50,000 per person per firm, if a financial services firm is unable, or likely to be unable, to pay claims against it. The actual level of compensation that will be paid out by FSCS will be based on your claim. The FSCS is an independent body, set up under the Financial Services & Markets Act 2000 (FSMA) which the Company is part of, as it is authorised and regulated by the FCA (FRN: 705428).
What are the costs?
This table shows the different types of cost categories
Cash and Futures
One-off entry or exit costs
One-off entry or exit costs
| Commission | Not applicable |
| Spread | The difference between the buy price and the sell price is called the spread. This cost is realised each time you open and close a trade. Information about spreads can be found on the Company's website |
Cash only
Ongoing costs
Ongoing costs
| Daily holding costs (Swaps) | A fee is charged to your account for every night that your position is held. This means the longer you hold a position, the more it costs. Information about swaps can be found on the Company's website |
How long should I hold it and can I take my money out early?
Trading in CFD Products involves significant risk with frequent market movements and price changes. Clients are free to open/close a trade whenever they believe that it best fits, given that the markets are open. The Company does not prescribe a holding period for any position whether this is a buy or sell position. The client may choose to set a ‘Stop Loss’ or ‘Take Profit’ on his/her trade to minimise the risk of large unexpected movements.
Clients can withdraw their total balance whenever they choose to do so, if there are no open positions on their trading account. In case there are open positions, the client can withdraw any amount in excess of the margin required for that particular trade, i.e. their ‘free margin’. All withdrawal requests can be made from the ‘Members’ Area’ section on the Company’s website.
How can I complain?
- Steps for lodging a complaint: Clients who wish to file a complaint must do so by submitting the relevant complaint form to the email address below, along with any relevant information.
- Email address: complaints@xm.com
The complaint form can be found in the "Members’ Area" section on the Company’s website.
Other relevant information
It is a legal requirement for the Company to provide its clients with the following documents and policies:
