Negative Balance
Protection

1Policy Statement

Royce Global Markets Limited and Royce Capitals Ltd. each provide negative balance protection to every Client on a per Account basis. If authorised leveraged trading leaves an eligible Account below zero after all Positions are closed and all Transactions, charges and adjustments are finally posted, the applicable Royce Entity restores that Account balance to zero. The Client is not required to pay the eligible negative amount.

This protection is designed for exceptional outcomes caused by adverse market movements, including extreme volatility, sudden price gaps and limited liquidity. It protects the Client from an eligible debt to the applicable Royce Entity. It does not prevent trading losses and does not reimburse money lost while the Account balance remains at or above zero.

2Purpose

Leveraged products can move faster than an Account can be closed. A stop-out instruction may be triggered at one price but executed at the next available price. Where that price is materially worse, the final loss can exceed the funds in the Account. This Policy explains how the applicable Royce Entity treats an eligible deficit and gives Clients a clear contractual protection against owing that amount.

3Scope

This Policy applies to every Client holding a trading Account with either Royce Global Markets Limited or Royce Capitals Ltd. and to each Account maintained for that Client by the applicable Royce Entity. Protection is determined separately for each Account in accordance with the Client Agreement governing that Account.

The applicable Royce Entity is the company identified in the Client Agreement and Account records. Each Royce Entity is responsible only for the Accounts contracted with it. An Account, authorisation, liability or regulatory responsibility of one Royce Entity is not an Account, authorisation, liability or regulatory responsibility of the other. This Policy does not extend to an account held with any other company unless expressly stated in writing.

This Policy forms part of the documents governing the Account and should be read with the applicable Client Agreement, Risk Disclosure Policy, Order Execution Policy, Contract Specifications and applicable Margin and leverage terms. It applies only to products and services that the relevant Royce Entity is authorised and contractually permitted to provide.

4Market Conditions Covered

Negative balance protection is intended to address an eligible deficit arising from genuine authorised trading, including where normal close-out controls cannot prevent the Account from falling below zero because of market conditions such as:

• a sharp adverse price movement or unusually high volatility
• a price gap over a weekend, market reopening or significant news event
• thin or unavailable liquidity at the requested or stop-out price
• a market closure, suspension or trading interruption
• slippage, partial execution or execution at the first available price
• the rapid close-out of several Positions during stressed market conditions

These examples explain when a negative balance may arise. They do not guarantee that an Order will be accepted or executed at a requested price and do not change the exclusions in this Policy.

5How Protection Works

• 1 Close-out — All Positions in the relevant Account must be closed or otherwise finally settled.
• 2 Final posting — The applicable Royce Entity posts all Transactions, charges, financing, conversions, corrections and other applicable adjustments.
• 3 Eligibility review — The applicable Royce Entity reconciles the Account and relevant execution records and checks whether an exclusion applies.
• 4 Balance restoration — If the final negative balance is eligible, the applicable Royce Entity applies an adjustment equal to that negative amount so the Account balance becomes zero.
• 5 Account status — The applicable Royce Entity may restrict trading or Account activity while the review and reconciliation are completed and will update the Account record when the review is concluded.

The restoration is an Account adjustment. It is not a cash payment, withdrawal, reimbursement of ordinary trading losses, bonus or trading profit, and it cannot create a positive Account balance.

6Eligibility

A negative balance is eligible for protection where all of the following conditions are satisfied:

• the balance relates to a trading Account held with Royce Global Markets Limited or Royce Capitals Ltd.
• all relevant Positions and Transactions have been closed or finally settled
• all charges and adjustments have been finally posted
• the negative balance arose from genuine authorised trading under the governing agreement
• none of the exclusions in this Policy applies

The applicable Royce Entity will determine the eligible amount from its Account, platform, execution and reconciliation records, subject to Applicable Law and the Client’s right to raise a complaint.

7Exclusions

Protection does not apply, and may be withheld or reversed to the extent permitted by Applicable Law, where the negative balance results from:

• fraud
• abusive trading
• a Manifest Error or pricing error
• unauthorised activity
• the Client’s material breach of the Client Agreement

If an exclusion applies, the Client remains liable for the valid debit balance. If protection was applied before an exclusion was established, the applicable Royce Entity may reverse the adjustment only on a ground stated above and only to the extent permitted by Applicable Law.

8Limits of Protection

Negative balance protection does not:

• guarantee that the Client will avoid losses or preserve any deposited funds
• guarantee that a Margin Call or warning will be issued before close-out
• guarantee close-out at the stop-out level or at any displayed or requested price
• eliminate slippage, widened spreads, delayed execution or limited liquidity
• provide compensation for lost profit, lost opportunity or a decline in a positive Account balance
• convert a promotional bonus or trading credit into cash or alter its separate terms

A Client may therefore lose all funds allocated to an Account even when negative balance protection applies. The protection begins only when the final eligible Account balance falls below zero.

9Client Responsibilities

Clients remain responsible for understanding leveraged trading, maintaining sufficient Margin, monitoring open Positions and using risk controls appropriate to their circumstances. Clients must protect their credentials, comply with the governing agreement and promptly report suspected errors or unauthorised activity.

A Client must not rely on negative balance protection as a trading strategy, use it to justify excessive risk or assume that stop-out controls will close every Position before the Account reaches zero.

10Review and Complaints

A Client who believes an eligible negative balance has not been restored may contact the applicable Royce Entity through the Client Portal or the support and complaints channels published on the Royce website. The Client should provide the Account number, relevant Transaction references, dates and a short explanation of the issue.

The applicable Royce Entity will review the Account and respond under its Complaints Handling Policy. Nothing in this Policy limits a Client’s rights under Applicable Law or access to the Financial Services Commission, Mauritius, the Labuan Financial Services Authority, a competent court or another mandatory external mechanism, as applicable to the Account.

11Relationship with the Client Agreement

This Policy explains and supports the negative balance protection and debit-balance provisions in the Client Agreement issued by the applicable Royce Entity. If this Policy conflicts with the applicable Client Agreement, that Client Agreement prevails unless mandatory law requires otherwise.

12Changes to this Policy

The Royce Entities may amend this Policy for legal, regulatory, product, market, security, technology or operational reasons. Material amendments will be communicated in accordance with the applicable Client Agreement and Applicable Law. The applicable version and date will be made available through an approved client communication channel.

13Governing Law

For each Account, this Policy and any non-contractual obligations arising from it are governed by the law specified in the Client Agreement issued by the applicable Royce Entity. Disputes are handled under the complaints, governing law and jurisdiction provisions of that Client Agreement.

14Definitions