Key Information Document – FX Purpose This document provides you with key information about FX Option product. It is not marketing material. The 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 Product Name Foreign exchange option, option, FX Vanilla Option or FX Option. Product distributor Joint Stock company, investment brokerage firm Renesource Capital (hereinafter Renesource Capital). Renesource Capital is authorised and regulated by the Financial and Capital Market Commission of Latvia (Licence No. 06.06.04.114/118.2).

Further information You can find more information about Renesource Capital and our products on our corporate website. You are welcomed to contact us on +371 67 092 737 for more information. This document was last updated on June 1st, 2020. Alert You are about to purchase (make an investment in) a product that is not simple and may be difficult to understand. What is this product? Type FX Option is a financial instrument that gives rights but not the obligation to exchange money denominated in one currency into another currency at a pre – agreed on a specified date in the future. FX Option underlying asset is a Forex Spot derivative instrument such as EURUSD, EURGBP, GBPUSD etc. The most common is the traditional Call and Put FX Options. There are two types of traditional FX Options: • American-style – FX option can be exercised at any date until ; • European-style – FX option can be exercised only at the date of expiration. FX Options are attractive because of known and limited risk. But another attraction is their flexibility: clients can employ them in expectations of rising or falling currency market, of stable or volatile markets. You can visit our corporate website for more information in relation to the underlying currency pairs available to you as underlying asset and trading options FAQ with featured articles. Objectives The objective of trading an FX Option is to gain exposure to fluctuations related to the underlying without actually owning it. Your investment return depends on movements in the price of the underlying asset (currency pair) and the size of your position. FX Option is entered into for the two general purposes: speculation or commercial hedging and is commonly traded on . Margin is a small amount of capital required to support an investment of a larger exposure. Intended Retail Investor Trading FX Options will not be appropriate for everyone. We would normally expect FX Options to be traded by individuals who want to: • cash position; • have a high-risk tolerance; • are trading with money they can afford to lose; • have experience with, and are comfortable trading on, financial markets and, separately, understand the impact of and risks associated with margin trading; and • generally gain mid to long term exposures to financial instruments/markets, and have a diversified investment and savings portfolio. Not suitable for the following investors • who do not have sufficient knowledge, experience and understanding of risk management basics in margin trading; • who do not want to be subjected to volatile markets; • who do not have sufficient income/ savings therefore cannot afford to lose capital; • who expect capital protection. Term An FX Option is an execution-only product and generally therefore has no recommended holding period. It is up to the investor to decide what tenor to choose. FX Option has tradable tenors from 1 day to 5-years. You have the choice of the method that will apply the option end up in-the- money. FX Options can be cash settled or converted into a Rolling FX Spot position, from which point on, positions held at the end of a trading day are rolled/ swapped forward to the next available business day.

What are the risks and what could I get in return? Risk Indicator The summary risk indicator is a guide to the level of risk of these products compared to other products. It shows how likely it is that the product will lose money because of movements in the markets or because we are not able to pay you. We have classified these products as 7 out of 7, which is the highest risk class. This is because there is a very high chance that you could lose more than your initial investment. Trading result will depend on the exchange rate between you financial instrument account base currency and FX Option currency(currency risk). This risk is not considered in the indicator shown above. If your positions are leveraged, values may fluctuate significantly in times of high or market/economic uncertainty, as a result, margin calls may be made quickly or frequently. If you are not a hedger, FX Options does not include any protection from future market performance so you could lose your premium paid if you are a buyer of FX Option (long position) or you could lose some or even all of your investment if you are a selling FX Options (short position).

These FX Options are not listed on any exchange, and the prices and other conditions are set by Renesource Capital in accordance with our best execution policy. Open positions are not transferable to any other provider and can be closed only directly with Renesource Capital. If you have multiple positions opened with us, your risk may be cumulative and not limited to single position.

If Product Manufacturer is not able to pay you what is owed (cover its liabilities), you could lose your entire investment (counterparty risk). Performance Scenarios There are a number of types of trading risks, which you should be aware of before starting to trade FX Options. You should be aware of the following factors (including but not limited to) which affect the performance of this product: • Leverage risk; • Unregulated market risk; • Risk of unlimited loss; • Market disruption risk; • Margin risk; • Counterparty risk; • Foreign exchange risk; • Online trading and IT risk. • Market risk; A “long” position holder, who has bought FX Options contract, profits from a rising underlying currency pair price and thus contract value. A “short” position holder, who has sold FX Options contract, profits from a price decline, as it could buy in at a lower price to “offset” or liquidate the position. FX Option is a wasting asset. As the FX Option approaches its maturity, the time value declines to zero. At the expiration, the FX Option’s value is only its money amount. The risk is that the underlying currency pair price will fall below the exercise price of the FX by an amount exceeding the premium received for the sale of the FX Put Option. This key information document applies to a FX Option on any currency pair. You will be responsible for choosing the underlying currency pair, when you open your position; tenor, the size of your position and your leverage. These underlying options will have a material impact on the risk and return of your investment. Specific information on the underlying investment options and risks is available on our corporate website. Table below illustrates the money you could get back under different scenarios. Let’s assume that the current spot price in EURUSD is trading at 1.1200. You choose to buy a one month, 100,000 EURUSD with a at 1.1400, at a cost of 50 pips. This gives you the right, but not the obligation, to buy EUR at a specified price (Strike Price) on a specified date in the future (Expiry Date). When buying an option the maximum loss you can make is the premium paid. The below scenarios assume you deposit USD 1,000 into your account to start trading and premium for FX Option contract is 100,000*0.0050=500 USD. Notional exposure of EUR 100,000 | Investment amount USD 1,000 What you will lose or gain after costs Percentage return Scenarios 1 months later Stress scenario: The price falls by 152 pips (0.0152) from current market -$ 500.00 -50% price , spot rate is 1.1048 and you don’t use your rights Favourable scenario: The price increases 295 pips (0.0295) and you $450.00 45% converted your option into a Rolling FX Spot position and close it at 1.1495

The stress scenario above illustrates maximum amount you can lose in case of buying FX Call Option. The scenarios illustrate how your investment return could perform. You can compare them with the scenarios of other products. The scenarios presented are an estimate of future performance and are not exact indicators. What you get will vary depending on how the market performs, option tenor and how long you keep the investment.

The numbers illustrated include all the costs of the product itself. Numbers do not take into consideration your personal tax situation, which may also affect your net profit or income from the investment. Particular performance scenario assumes you only have one position open, and does not take into consideration the negative or positive cumulative balance you may have if you have multiple open positions with us. What happens if Product Manufacturer is unable to pay out? Renesource Capital is authorised and regulated European investment firm. Investor Protection Law in Latvia provides a system of protection for investors. In case when the provider of investment services (bank, investment management company and/or investment firm) is incapable of fulfilling its contractual obligations, investors have the right to receive compensation of up to EUR 20,000. Failure to meet obligations is compensated at 90% of the irrevocably lost value of financial instruments, or of losses incurred by the non-performance of investment services. In the unlikely event, that Renesource Capital is declared insolvent or bankrupt, financial instruments such as equities, , investment funds, futures and options held in custody/ clearing account will be returned to the owner. If Product Manufacturer (Counterparty of Renesource Capital) is unable to meet its financial obligations, this could cause you to lose the value of any over the counter market traded contract (such as OTC FX Options, FOREX FORWARD, foreign exchange (FX), contracts for difference (CFD) etc.) you have with Renesource Capital. Should the segregation fail, Renesource will claim funds return from Manufacturer/Counterparty, but it does not guarantee positive outcome. What are the costs? Information below illustrates the different types of costs involved when you trade FX Options: One-off costs Spread The spread is the difference between the buy (offer) and sell (bid) price that is quoted by Renesource Capital counterparty. Spread is dependent on many factors, including but not limited to, the underlying liquidity and volatility, trading hours and notional trade size. Mark up FX Option mark – up or mark – down is included into the price of the instrument quoted. The fee charged for FX Options is subject to individual rate card agreed based on trading volume. Currency A currency conversion rate is charged if dealing in a currency other than your account currency. conversion Other costs Account Maintenance Fees for deposit and withdrawal to/from Financial Instrument account. Please refer to our corporate website for fee detailed fee schedule Before you begin to trade FX Option, you should familiarise yourself with all charges, fees and other commissions for which you will be liable. These charges will reduce your net profit or income and increase your losses. How long should I hold it and can I take money out early? This product generally has no fixed term and will expire when you choose to exit the product or in the event you do not have available margin. You should monitor the product to determine when the appropriate time is to exit. You can close your FX Option position at any time. How can I complain? If you as a client or a prospective client of Renesource Capital have raised a question or an issue with Renesource Capital for example with your account manager or another employee of Renesource Capital without receiving a satisfactory answer you may file a complaint with Renesource Capital as per below. Attn: Complaints, Renesource Capital AS IBS, 15A Duntes street, Riga, Latvia, LV –1005 or by e-mail to: [email protected] If you are not satisfied with the response to your compliant, you may file a complaint directly with the Latvian Financial and Capital market commission, Kungu street 1, Riga, Latvia, LV-1050 or by e-mail: [email protected]

Other Relevant Information Please refer to our corporate website for any other information.