Risk Warning Notice

Important Information and risk warnings about investing in funds through Nomo

General summary

All investments involve a degree of risk of some kind. The below risk warning describes some of the risks which could be relevant to the services we provide to you. We may provide further risk information during the course of our services to you, as appropriate.

This risk notice is intended to disclose the key risks associated with investment products, in which you may invest, through services provided to you. It does not intend to be an exhaustive list and cannot explain all of the risks nor how such risks relate to your personal circumstances.

We aim to provide investors with information to help them make their own investment decisions although this should not be construed as investment advice or an investment recommendation to buy, hold or sell a particular investment. No view is given as to the present or future value or price of any investment, and investors should form their own view in relation to any proposed investment. If you are unsure about the suitability of an investment or if you need advice on your specific requirements, we strongly suggest that you consider professional financial advice.

Our services relate to certain investments whose prices are dependent on fluctuations in the financial markets outside our control. Investments and the income from them may go down as well as up and you may get back less than the amount you invested.

Past performance is not a guide to future performance.

The value of any investment may go down as well as up, and you may not get back the full (or any of the) amount invested.

Where general performance data is provided, such data shows gross performance and excludes the effect of commissions, fees or other charges. Data displayed in price charts are indicative only. Actual execution prices may vary.

You should not invest in or deal in any financial product unless you understand its nature and the extent of your exposure to risk. You should also be satisfied that it is suitable for you in the light of your circumstances and financial position. Different investment products have varied levels of exposure to risks and to different combinations of risks.

In the event that an opinion about whether to buy or sell a specific investment is included in the content of the app or via any links provided, it is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives.

Your return may increase or decrease as a result of currency fluctuations. Investments denominated in a currency other than your base currency (the currency of the country in which you live and/or the currency of your financial liabilities) or ones that undertake transactions on foreign markets may expose you to greater risks caused by fluctuations in foreign exchange rates. This can adversely affect the value of your return and the value of your investment.

Risk Warning Notice

Prior to engaging in any investment services offered by Nomo you should consider whether you have understood the risks detailed below. If you have any questions or are in any doubt about the content of this notice, you should seek independent professional advice.

This list is not intended to be fully inclusive of all relevant risks; we would strongly encourage you to ensure that you have read all relevant fund literature, and that you are comfortable that you understand all of the associated risks relating to an investment, before you decide whether or not to purchase it.

Can you afford the risks?

Past performance is not a reliable indicator of future performance.

It is important that you consider that you have adequate financial resources to bear the relevant risks and that you monitor your investment carefully. You should not invest money that you cannot afford to lose.

Investment products involve risk to your capital and the value of investments can go down as well as up. However, when investing in funds available through the Nomo App you cannot lose more than the amount you have invested (subject to Nomo fees).

Self-directed investment

The Nomo App provides for you to make self-directed investments. This is where investors make their own investment decisions and transactions are made on an execution-only (non-advised) basis. Investing this way is not for everybody and you should consider whether you need professional advice.

Investors who choose to direct their own investments should regularly review their portfolio, or seek professional advice, to ensure that the underlying assets remain in line with their investment objectives. This can be particularly important for those investing towards a defined time horizon – for example, those investing for retirement.

Market Risk, Price Risk and Volatility

The prices of fund investments are influenced by a broad array of factors and can change rapidly and unexpectedly. The price of units goes up and down depending on the prices of the underlying assets, which in turn are determined by various factors including investor perception and political and economic factors. These can be unpredictable.

The fluctuations in the financial markets and individual stocks are outside of Nomo’s (or its thirdparty broker or delegate’s) control. Any such changes will affect the value of the funds available through Nomo and your related profits and losses of your holdings may change rapidly and unexpectedly.

Currency risk

In respect of any transactions in investments that are denominated in a currency other than that in which your account with Nomo is denominated, the fluctuations in foreign exchange rates may impact your profits and losses connected to your trading in such investments.

Operational and Technology risk

Breakdowns or malfunctioning of essential systems and controls, including IT systems, can affect an investor's access to the market, preventing dealing or even viewing of your portfolio. Technical interruptions in using the Nomo App may result in your orders not being submitted and you may not be able to monitor your holdings via the Nomo App. Whilst we try to make the Nomo App available to you at all times, we cannot guarantee that the Nomo App will always be available to you.

Nomo has put in place arrangements with a third-party bank which supports us with services that we need to provide the Nomo App to you. While we are responsible for our delegates, we cannot always control the provision of the services which enable you to trade on the Nomo App.

Tax impact

Depending on your personal tax status and the rules and regulations in force from time to time there may be tax implications for your holdings and your trading. You have the sole responsibility for determining the relevant tax impact on your trading and you should consult an appropriate professional advisor if you have any questions or doubts in this regard. Nomo does not provide tax advice.

Insolvency risk

The insolvency or default of Nomo’s owner (BLME), or of any third-party brokers or delegate involved with your transaction, may lead to your holdings being liquidated or closed out without your consent or investments not being returned to you. In such circumstances, we will seek to provide you with as much additional information as we can relating to the treatment of your existing holdings as and when we obtain it.

Regulatory and Legal Risk

All investments could be exposed to regulatory or legal risk. Returns on all investments are at risk from regulatory or legal actions and changes which can, amongst other issues, alter its profit or loss potential. Legal changes could even have the effect that a previously acceptable investment becomes illegal (see also the section below on Sharia investing). The impact of such regulatory and legal changes can be material and unexpected, and may impact certain companies, markets and jurisdictions more than others.

Investing in funds

Funds available through Nomo are typically Undertakings for the Collective Investment in Transferable Securities (UCITS) funds which are suitable for retail investors. They may be UK funds or non-UK funds recognised for sale in the UK. As described in the section on risks of Shariacompliant investing below all funds offered via the Nomo App are intended to be Sharia-compliant.

The performance of a fund is dependent on its investment policy and strategy, the skills and expertise of those responsible for managing its investments, and the market(s) in which it invests.

Before investing in funds please check the specific risk factors in the Key Investor Information Document (KIID), including risks relating to the geographical area, industry sector and/or underlying assets in which they invest.

You will generally not be given a choice as to the structure of a particular fund, as each fund will already have its own preferred structure. Nomo does not currently offer a stocks or shares ISA or other tax efficient product wrappers for the UK market. If you are a UK resident and eligible for an ISA, you may wish to consider the effect of tax on your investment.

Funds are arrangements that enable a number of investors to 'pool' their money, in order to gain access to professional fund managers. The value of a fund, and the income derived from it, can decrease as well as increase and you may not necessarily get back the amount you originally invested. You should ensure that you understand the nature of any fund before you invest in it. You can do this by making sure you read the Key Investor Information Document (which is made available to you for each fund) for a summary of the main risks. Some of the more common risk factors are detailed below:

• Different funds carry varying levels of risk depending on the geographical region and industry sector in which they invest. You should make yourself aware of these specific risks prior to investing.
• Smaller funds shares can be more volatile and less liquid than larger funds shares, so smaller funds can carry more risk.
• Investment in funds should be considered a medium to long term investment.

Underlying investments in emerging markets are generally less well-regulated than the UK. There is an increased chance of political and economic instability with less reliable custody, dealing and settlement arrangements. The market(s) can be less liquid. If a fund investing in markets is affected by currency exchange rates, the investment’s value could either increase or decrease in response to changes in those exchange rates. These investments therefore carry more risk.

Funds which invest in a specific sector may carry more risk than those spread across a number of different sectors. In particular, gold, commodity, technology and other similarly-focused funds can suffer as the underlying stocks can be more volatile and less liquid.

A fund may be subject to suspensions in valuation, during which time dealing in the fund will not be possible. Such suspensions generally occur in exceptional circumstances, for instance where the investments of the Fund cannot be accurately valued or during periods of significant market turmoil.

Risk of Sharia-compliant investing

The funds selected for investment through the Nomo App have been selected as Sharia-compliant by not investing in businesses that are prohibited by Sharia law such as alcohol, tobacco, conventional finance businesses, weapons and defence, biotech for human cloning, adult entertainment and pork related products.

Different funds may have different Sharia boards and different policies according to the beliefs and interpretations of the relevant board so you should consult the fund’s prospectus before investing to ensure that you are happy the fund profile is aligned with your own investing approach from a Sharia perspective.

The need to comply with Sharia law restricts fund managers from certain areas which could enhance returns over time (e.g., financial investments such as banks are excluded). Sharia-compliant investors may be more sensitive to risk exposures depending on the sectors funds are invested in/may not invest in.

Nomo will keep the funds it makes available via the Nomo App under review from time to time to ensure that investors are not exposed to Sharia reclassification risk. This is the risk of the fund being reclassified as Sharia non-compliant upon review by the Sharia board of the fund. It may be necessary for the fund to dispose of non-compliant investments as required by Sharia law and this may result in loss to the fund if there has been a negative price movement or the fund. If the sale results in a capital gain this may need to be channelled to approved charities.

The funds will be exposed to Sharia compliance risk. This is the risk that the restriction to only invest in Sharia-compliant securities may place the fund at a comparative disadvantage as compared to funds that do not invest with this restriction.

Returns to shareholders may also be reduced due to payments to Sharia-approved charities to purify dividends.

Third Party information relating to investments

Information provided by Nomo from third parties and/or hypertext links to third-party websites are provided for convenience only. Although Nomo considers such third-party information to be reliable, Nomo has not verified this information and does not guarantee its accuracy, completeness, fairness or timelines, and it should not be relied upon as such. Nomo does not express any opinion on the content of any third-party information and expressly disclaims any liability for all such third-party information and the use of it.

All third-party information displayed by Nomo is provided “as is” without any express or implied warranties or representation and no liability is accepted by Nomo in relation to the accuracy, completeness, fairness or timeliness of such content.

Before acting on any third-party information that may be displayed by Nomo from time to time, you should consider whether it is suitable for your particular circumstances and, if appropriate, seek professional advice, including tax advice.