for the conducting of conversion arbitrage transactions in foreign currencies and other trading assets on “Margin Trading” terms for Individuals
1. Terms and definitions
•1.1. The terms given below have the following meanings in these Regulations:
• “Customer" – a natural person, who conducts conversion operations through his/her margin account under these Regulations.
•«Offer» – an offer addressed to interested parties, which expresses the intent of its addresser to consider himself (herself) to have made a contract with the addressee by whom this offer will be accepted.
• «Conversion and Arbitrage Transactions» – transactions between Mugan FX LTD and a Customer to buy or sell a noncash foreign currency for another, as well as other trading assets for noncash foreign currency. Such operations consider conducting at least two opposite transactions to buy and sell a currency for the same amount of the trading currency, through Mugan FX Trading Station, a hardware and software package, with a view to get profit in case of changes in exchange rate or prices of trading assets in relevant markets.
•“Customer" – a natural person, who conducts conversion operations through his/her margin account under these Regulations.
• “Internet Site” – Mugan FX LTD’s site in Internet with the following address: www.muganfx.com
•“Mugan FX LTD Trading Station” - an electronic trading station (“ETS”), offered by Mugan FX LTD for the Customer‘s use under these Regulations and allowing the Customer to conduct arbitrage transactions and conversion operations through his/her account (it is necessary to download the distribution package of the software to the Customer’s computer from Mugan FX LTD ’s site ).
•“Margin Trading”– terms for the conducting of arbitrage operations conducted for the amount of open position that exceeds for several times the amount of the variable margin, through closing the Customer’s position as of the value date. Whereby, any possible loss on the arbitrage operations as of the value date in counter currency or price equivalency of the trading asset shall be covered by the current amount of the Customer’s variable margin.
•“Username and Password” – the Customer’s identification code,an alphanumeric or other combination, given to the Customer by Mugan FX LTD for the Customer’s identification. Username together with the password shall be used for authorized access to Mugan FX Trading Station.
• “Margin Account” – an account opened by Mugan FX LTD for the Customer within the hardware and software package Mugan FX Trading Station for settlements on the results of Arbitrage operations and conversion transactions provided for by these Regulations.
•“Necessary Margin” – an amount necessary for the opening and/or maintenance of an open position for any currency pair in a dollar equivalent as per the current market rate.
•“Nonmarket Quotation”– a quotation that meets at least one of the following conditions:
•Unreasonable considerable price gap;
•Return of the price to initial level within a small time interval with the forming of a price gap;
•No rapid price movement before appearance of this quotation:
•No macroeconomic developments and/or corporate news at that time which may have a significant effect on the rate of the instrument;
•The quotation at which it is impossible to make a transaction within specified time because of absence of any offsetting order in the market, which may have fulfilled the transaction at this quotation.
•“Pending Order” – an order of the Customer to conduct a transaction on the agreed terms transmitted to Mugan FX LTD through Mugan FX Trading Station.
• “Spread” – a difference between buying rate (BID) and selling rate (ASK), expressed in points (pips), i.e. in the minimum units of a change in the currency rate or price of other trading assets.
•“Current (market) quotation (rate)” – quotation (s) for the conducting of arbitrage transactions to buy or sell a relevant currency pair or trading asset in a currency or exchange market. A bilateral quotation includes ASK (a rate at which the Customer may agree conditions precedent for buying the trading currency for the counter currency) and BID (a rate at which the Custome may agree conditions precedent for selling the trading currency for the counter currency).
•“Main Currency – Trading (base) currency” – a currency that is bought or sold for another foreign currency. When indicating the currency pair, trading currency shall be indicated first.
•“Counter Currency” – (Currency of price) – a currency in the units of which price of the main currency is expressed.
•«Currency of Conversion» – a currency for calculating the equivalent of open positions on each trading instrument and the Customer’s total open position.
•“Open Position” – a total amount of the bought (or sold) trading currency or other trading asset that is not covered by the opposite sale (buying) of the same amount of the trading currency or other trading asset.
•“Close-out” – actions taken under these Regulations due to which total amount of the trading bought (or sold) currency or other trading asset becomes equal to zero.
•“Long Position” – a position that emerges at the buying of the main trading currency of the transaction (a buyer’s position) or other relevant trading asset.
•“Short Position” – a position that emerges at the sale of the main trading currency of the transaction (a seller’s position) or other relevant trading asset.
•“Currency Swap” – a transaction that consists of two opposite conversion transactions for the same amount of the trading currency with different value dates and exchange rates.
•“Transaction Report” – an electronic document generated in the trading station environment, which contains information on the Arbitrage operations conducted during the reporting period, and other information particularly on open positions and the status of the Customer’s margin account.
•“Application for withdrawal of funds from margin account” – an instruction by the Customer (to be given in the form enclosed by Mugan FX LTD for transfer of funds from the Customer’s margin account to his/her current account.
•«Netting» – a procedure for the netting of the Parties’ obligations /demands and determining of the net overall amount of the Parties’ obligations/demands.
•“Default”– a material breach by the Customer of his/her obligations. Events that are considered Default are defined by these Regulations.
2. Status of the Regulations
•2.1. These Regulations (hereinafter referred to as “the Regulations”) represent a standard form of the Contract which may be made between “Mugan FX LTD” and any natural person who satisfies the terms and conditions established by these Regulations for a potential Customer (hereinafter referred to as “the Parties” ).
•2.2. Subject of the Regulations is the general terms and conditions for the Parties to conduct arbitrage and conversion operations on “Margin Trading” terms. Terms and conditions of these Regulations shall not apply to transactions that are conducted for real delivery (conversion) of currencies, goods or securities, and no Party shall be entitled to demand from the other party real delivery of currency or other trading assets related with the operations/transactions made under these Regulations.
•2.3. Content of the Regulations shall be considered by all interested parties as an offer by Mugan FX LTD addressed to natural persons (a public offer) to make a Contract for conducting arbitrage and conversion operations on “Margin Trading” terms.
•2.4.Content of the Regulations shall be posted on Mugan FX LTD ’s internet site: www.muganfx.com
•2.5. Execution of the Contract shall be carried out merely through an acceptance of the terms and conditions of the Regulations read by the Customer.
• To make the Contract, any interested party shall read the Regulations and confirm their consent thereto by signing the Declaration in the enclosed form (Annex № 1 to the Regulations).
•The Regulations shall be deemed to have been accepted by the Customer from the time Mugan FX LTD receives the said Declaration.
•2.6. Obligations undertaken by the persons who entered into these Regulations as well as the obligations undertaken by Mugan FX LTD in respect of such persons shall be considered effective only within the limits set by international law.
3. Mugan FX Trading Station
•3.1. Mugan FX Trading Station, an electronic trading station (hereinafter referred to as “ETS”) enables the Customer to submit in a remote access mode via Internet an Order for approval and/or execution to open and close positions on his/her margin account.
•3.2. Procedure for producing and exchanging electronic documents and other information concerning the use of ETS shall be provided in User Manual within the ETS menu.
•3.3.The Customer shall independently and for his/her own account provide technical and communicational resources necessary for connecting to ETS, and shall independently get and install into his/her computer a software necessary for working in ETS. Distribution package of the necessary software with the recommendations on its installation and setting may be obtained from Mugan FX LTD’s internet site.
•3.4. Mugan FX LTD shall grant to the Customer access to ETS by providing the Customer with personal Username and Password.
•3.5. In order to ensure maximum security of the authorized access to ETS, the Customer should change the Password given by Mugan FX LTD, before conducting the first arbitrage operation. Otherwise, Mugan FX LTD shall be entitled to refuse for the Customer to allow his/her possible subsequent claims on the arbitrage operations conducted as a result of unauthorized access to ETS by using the Password.
•3.6. In the event that the password is lost or that it becomes available to third parties, the Customer shall notify Mugan FX LTD about such facts.
•3.7. Mugan FX LTD upon receipt of such notification from the Customer, shall disable the access to ETS and generate a new password for access to enable the Customer manage his/her margin account.
•4.2. To maintain records of operations and reflect the results of the transactions conducted by the Parties under these Regulations, Mugan FX LTD shall open margin accounts for the Customer on Mugan FX LTD Trading Station, where the amount transferred by the Customer into the bank account, specified by Mugan FX LTD shall be reflected.
•Credit of funds into margin accounts or transfer of funds between the Customer’s margin accounts shall be executed by Mugan FX LTD within one business day.
•Initial minimum amount of the Customer’s funds which can be reflected on the margin account is fixed by Mugan FX LTD and amounts to 300 (three hundred) US dollars for operations in the market.
•4.3. Information on the current status of the Customer’s Margin account and its history shall be reflected on Mugan FX Trading Station and may be confirmed by a relevant statement upon the Customer’s request.
5. Procedures for Arbitrage transactions
•5.1. Mugan FX LTD guided by common Mugan FX LTD practice and in accordance with the conditions and situation of the global foreign-exchange market, shall provide the Customer through ETS with current (market) quotations of foreign currencies and other trading assets. List of the currency pairs and other trading instruments, their available sizes for opening a position shall be established by Mugan FX LTD and displayed in the relevant settings of the ETS.
•5.2. The Customer may issue the following types of order through ETS:
1.Market order for an immediate arbitrage operation at a rate coinciding with Mugan FX LTD’s current quotation.
2.Pending order for an arbitrage operation aimed for the opening or closing of a position at a rate different from Mugan FX LTD’s current quotation as of the time of issuing such order.
3.Pending orders in their turn are distinguished by the following types:
4.Buy Limit and Buy Stop - pending orders aimed for opening a position through buying the trading currency when the market quotations reach the value specified in such pending order. These types of pending orders are issued in reliance on that the rate of the trading currency in relation to counter currency will grow.
5.Sell Limit and Sell Stop - pending orders aimed for opening a position through selling the trading currency when the market quotations reach the value specified in such pending order. These types of pending orders are issued in reliance on that the rate of the trading currency in relation to counter currency will drop.
6.Take Profit and Stop Loss - pending orders aimed for closing a position at a rate different from Mugan FX LTD’s current quotations. These types of pending orders are issued either for fixing a profit when the market quotations reach the projected level or for minimizing the loss in the event that the market quotations have started to move in the direction unprofitable for the Customer’s open positions.
•5.3.Order for a transaction shall include the following significant terms and details:
1.Date and time of submission by the Customer to Mugan FX LTD of the order for arbitrage transaction;
2.Trading currency (other trading asset) and Counter currency;
3.Amount of the trading currency;
4.Rate, or relevant quotation for the trading asset;
5.Type of the order;
6.Time until which the pending order is valid;
7.Orders for Arbitrage transaction submitted by the Customer through ETS shall include by default all the above-mentioned significant terms.
•5.4. Market orders shall be executed in a real time mode at a rate coinciding with Mugan FX LTD’s current quotation.
•5.5. The rate at which a pending order like Buy Stop, Sell Stop and Stop Loss is executed may differ from the rate of such pending order issued by the Customer, subject to the movement rate of the market. Execution of a pending order like Buy Stop, Sell Stop and Stop Loss may occur when the market quotations reach the rate specified by the Customer in such order, also at the rate of the first transaction in such market that may prove to be a bad condition for the execution of the transaction.
• 5.6. Mugan FX LTD has the right to cancel the execution of the Customer’s order, if it has happened at a Nonmarket quotation.
•5.7. The Customer may revoke his/her pending order any time before the quotations reach the rate specified by the Customer in such order.
•5.8. If the Customer’s open position remains open before a new trading day comes, it shall be considered that the Customer agrees to the switching of such position over to the next day on such terms of transaction as currency swap.
•5.9. Should there occur a rate in the currency market at which the level of the planned balance of funds drops up to 100 (one hundred) percent of the necessary margin (margin call level), the Customer shall at his/her earliest convenience increase his/her account or close a part of his/her open positions.
•5.10. Should there occur a rate in the market at which the level of the planned balance of funds drops up to 50 (fifty) percent of the necessary margin (stop-out level), in order to prevent greater loss, ETS settings will automatically close the Customer’s relevant open positions at the current market rate. The Parties recognize that the Customer expresses hereunder his/her unconditional consent for the execution of such Arbitrage transactions.
•5.11. Open similar positions equal in amount, but different in terms of direction, with zero collateral level may be automatically closed by the market expansion of ASK rate and BID rate. The Parties recognize that the Customer expresses hereunder his/her unconditional consent for the execution of such Arbitrage transactions.
•5.12. When any of the Parties chooses to terminate the Regulations, Mugan FX LTD has a right to close the Customer’s all open positions on a unilateral basis.
6. Procedures for Conversion Transactions
•6.1. Basis for the execution of Conversion transactions is the register of conducted Arbitrage operations established on Mugan FX LTD Trading Station with the list of all significant terms and conditions on which each Arbitrage operation on the list has been conducted.
•6.2. In case of claims by the Customer to Mugan FX LTD in respect of conducted Conversion transactions and/or made Netting, Mugan FX LTD shall make a decision as to satisfaction of such claims within 10 business days from the receipt of such claims in Mugan FX LTD. Within the said period, Mugan FX LTD shall inform the Customer by phone about the made decision, and in case of refusal to satisfy the claims, shall further send an email to the Customer specifying the rationale for the refusal.
7. Procedures for Settlements
•7.1. The Customer has a right to any time transfer funds from the margin account to his/her current currency account, for which the Customer shall submit to Mugan FX LTD an Application for withdrawal of funds in the amount of the actual balance (or part of the balance) of this account as of the time of submission of the Application.
•The funds shall be transferred from the Margin account to the same current currency account of the Customer from which a payment has been previously made in support of the cooperation under these Regulations.
•7.2. Upon the Customer’s request, Mugan FX LTD shall furnish a Report on all the transactions made with Customer by sending an email to the Customer’s email address.
•7.3. In case of claims as to the content of the information provided in the Report on the conducted transactions, the Customer shall promptly so notify Mugan FX LTD and clarify the grounds of his/her claims. The Customer may send such notice to Mugan FX LTD’s email address. In case of nonreceipt by Mugan FX LTD of a notice on the Customer’s any claims as to the content of the Report on the conducted transactions within 3 (three) business days from the time of submission by Mugan FX LTD to the Customer of such Report, it shall be considered that the Customer has confirmed the accuracy of the information provided in the received Report about the conducted transactions and cannot further make any claim to Mugan FX LTD as to the content of that document.
8. Amendments and additions to the Regulations
•8.1. Mugan FX LTD has a right to introduce any amendments and additions to these Regulations on a unilateral basis. Any amendments and additions introduced by Mugan FX LTD to these Regulations in connection with the modification of legislation or normative acts of regulatory authorities shall come into force simultaneously with such modification becoming effective.
•8.2. For the amendments and additions to the Regulations made by Mugan FX LTD on its own initiative and not connected with the modification of legislation or normative acts of regulatory authorities become effective, Mugan FX LTD shall follow the compulsory procedure of prior disclosure of information. Such disclosure shall be made by Mugan FX LTD no later than 10 (ten) calendar days prior to the entry of the amendments and additions into force, by sending a notice to the Customer about the planned amendments.
•8.3. Any amendments and additions in these Regulations shall apply pari passu to all the parties directly related to the performance of these Regulations, from the time they become effective in accordance with the procedure of this section. In case of the Customer’s disagreement with the amendments and additions introduced by Mugan FX LTD to the Regulations, the Customer may refuse to perform the Regulations before such amendments and additions become effective.
9. Responsibility of the Parties
•9.1. The Parties bear responsibility for the non-performance or undue performance of their mutual obligations in accordance with the applicable international law with regard to the provisions of these Regulations.
•9.2. Mugan FX LTD shall bear no responsibility for any losses incurred by the Customer as a result of unauthorized access to the management of the margin account of the Customer by third parties.
•9.3. Mugan FX LTD shall bear no responsibility for nonexecution of any instructions of the Customer sent to Mugan FX LTD in violation of the terms and procedures stipulated in these Regulations.
•9.4. Mugan FX LTD shall bear no responsibility for nonexecution of any instructions of the Customer, if such nonexecution has been caused by failure in computer networks, power networks and communication systems directly used for receipt of the Customer’s instructions and/or the provision of other procedures for the conducting of Arbitrage operations and Conversion transactions, as well as illegal actions of third parties.
•9.5. The Parties shall be released from the responsibility for the nonperformance or undue performance of their obligations under these Regulations, if such nonperformance is due solely to the occurrence and/or effect of force majeure.
•9.6 Mugan FX LTD undertakes to keep the information concerning the Customer’s business confidential. Such information may be provided only to authorized persons, or the authorities entitled to receive such information under the applicable legislation. The confidentiality requirements are valid for an unlimited term.
•9.7. The Customer guarantees that during the term of these Regulations the Customer shall be responsible for the performance of his/her obligations under these Regulations and for the payment of fees, taxes, commissions and any other charges related to the Regulations and stipulated in his/her country of registration, citizenship and/or location.
•9.8. The Customer shall hold Mugan FX LTD harmless from any responsibility, costs and expenses related to these Regulations and the Customer’s operations.
•10. Settlement of Disputes
•10.1. In case of failure by the Parties to settle the dispute by negotiations, they shall refer the matter to the judicial authorities in customer’s or Mugan FX’s jurisdiction for settlement in accordance with the legislation.
•10.2. Any documents provided under these Regulations through Mugan FX Trading Station, email or telecommunication are received by the Parties as an evidence in case of any conflicts arising in relation with the performance of these Regulations.
•10.3. The Customer may any time refuse the Regulations by giving a written notice to Mugan FX LTD. The Customer’s refusal of the Regulations shall become effective provided the Customer have no unperformed obligations before Mugan FX LTD as of that time.
•10.4. Termination of these Regulations on the initiative of either Party shall be an absolute reason for Mugan FX LTD to close the margin account opened for the Customer under these Regulations.