Insurance Disclosure
Effective Date: September 4, 2025
IMPORTANT NOTICE
THIS DISCLOSURE PROVIDES IMPORTANT INFORMATION ABOUT INSURANCE COVERAGE FOR ASSETS AND ACTIVITIES. PLEASE READ THIS DISCLOSURE CAREFULLY AND KEEP IT FOR YOUR RECORDS.1. INTRODUCTION
This Insurance Disclosure (“Disclosure”) provides information about insurance coverage that may apply to assets held by QFEX Bermuda Ltd. (“QFEX,” “we,” “us,” or “our”) on behalf of customers when our trading platform launches. This Disclosure is provided for informational purposes only and does not constitute an insurance contract or guarantee of coverage. QFEX is subject to Bermuda law and regulation, including the Investment Business Act 2003, which may require certain insurance arrangements for licensed investment business activities. IMPORTANT: As a participant in our waitlist and referral program (the “Program”), you are not currently holding any assets with us, and therefore no insurance coverage applies to your participation in the Program.2. NO INSURANCE FOR WAITLIST PARTICIPANTS
2.1 Current Status
During your participation in the Program: (a) No Assets Held: We do not hold any securities, cash, or other assets on your behalf; (b) No Custody Services: We do not provide custody or safekeeping services; (c) No Insurance Coverage: There is no insurance coverage applicable to your participation in the Program; (d) No Financial Services: We do not provide any financial services that would be subject to insurance requirements.2.2 Future Platform Launch
When our trading platform launches and you become an active customer: (a) Separate Terms: You will be required to agree to separate terms and conditions; (b) Insurance Disclosure: You will receive a detailed insurance disclosure specific to our trading services; (c) Coverage Details: Specific insurance coverage details will be provided at that time; (d) Regulatory Compliance: Insurance arrangements will comply with applicable regulatory requirements under the Investment Business Act 2003.3. PLANNED INSURANCE COVERAGE FOR TRADING PLATFORM
3.1 Types of Coverage
When our trading platform launches, we plan to maintain the following types of insurance coverage:3.1.1 Professional Indemnity Insurance
Coverage: Protection against losses due to:- Errors and omissions in professional services
- Negligent acts or failure to act
- Breach of professional duty
- Misrepresentation or misleading statements
- Investment advice errors (if applicable)
- Coverage subject to policy terms, conditions, and exclusions
- Deductibles and coverage limits apply
- Intentional acts and criminal conduct excluded
3.1.2 Crime Insurance
Coverage: Protection against losses due to:- Employee theft and fraud
- Computer fraud and funds transfer fraud
- Forgery and alteration
- Money and securities theft
- Social engineering fraud
- Client account theft
- Coverage subject to policy terms, conditions, and exclusions
- Deductibles and coverage limits apply
- Not all types of losses may be covered
3.1.3 Cyber Liability Insurance
Coverage: Protection against losses due to:- Data breaches and privacy violations
- Cyber extortion and ransomware
- System failures and business interruption
- Regulatory fines and penalties
- Third-party liability claims
- Network security failures
- Coverage subject to policy terms and conditions
- Certain types of cyber incidents may be excluded
- Coverage limits and deductibles apply
3.1.4 Directors and Officers Insurance
Coverage: Protection for directors and officers against:- Management liability claims
- Employment practices liability
- Fiduciary liability
- Regulatory investigations and proceedings
- Securities claims
- Personal coverage for directors and officers
- Does not cover customer assets or losses
- Subject to policy terms and exclusions
3.1.5 General Liability Insurance
Coverage: Protection against:- Third-party bodily injury claims
- Property damage claims
- Personal and advertising injury claims
- Professional liability claims
- Standard exclusions apply
- Coverage limits and deductibles apply
- Does not cover investment losses
3.2 Client Asset Protection
3.2.1 Segregation of Client Assets
Planned Arrangements:- Segregation of client funds from company funds
- Holding client assets in designated client accounts
- Trust arrangements for client asset protection
- Compliance with Investment Business Act requirements
- Segregation does not guarantee protection against all risks
- Market risks and investment losses not covered
- Regulatory requirements may change
3.2.2 Client Money Protection
Planned Coverage: Insurance for client money held by us against:- Theft by third parties
- Employee theft and fraud
- Unauthorized transfers
- System failures and errors
- Insolvency protection (where available)
- Coverage typically limited to specific amounts
- Certain types of losses may be excluded
- Coverage subject to regulatory requirements
3.3 Coverage Exclusions
Insurance coverage typically does not cover losses due to: (a) Market Risk: Losses due to market volatility or price fluctuations; (b) Investment Risk: Losses due to poor investment performance; (c) Regulatory Action: Losses due to regulatory action or changes in law; (d) Customer Error: Losses due to customer error or negligence; (e) Unauthorized Transactions: Transactions authorized by the customer (even if fraudulent); (f) Force Majeure: Losses due to acts of God, war, terrorism, or other force majeure events; (g) Intentional Acts: Losses due to intentional criminal acts by customers; (h) Uninsurable Risks: Risks that are generally uninsurable in the market; (i) Currency Risk: Losses due to currency fluctuations; (j) Counterparty Risk: Losses due to counterparty default.4. REGULATORY FRAMEWORK
4.1 Bermuda Requirements
Under Bermuda law and Investment Business Act 2003: (a) Insurance Requirements: Licensed investment businesses must maintain appropriate insurance coverage; (b) Minimum Coverage: Specific minimum coverage amounts may be required; (c) Approved Insurers: Insurance must be obtained from approved insurers; (d) Regular Review: Insurance arrangements are subject to regular regulatory review; (e) Client Asset Protection: Specific requirements for protection of client assets.4.2 International Standards
Our insurance arrangements will be designed to meet or exceed: (a) Industry Best Practices: International best practices for investment business; (b) Regulatory Standards: Standards set by relevant regulatory authorities; (c) Customer Expectations: Reasonable customer expectations for asset protection; (d) Risk Management: Comprehensive risk management requirements.5. INSURANCE LIMITATIONS AND DISCLAIMERS
5.1 No Guarantee of Coverage
IMPORTANT: Insurance coverage does not guarantee that you will be compensated for all losses. Insurance policies contain terms, conditions, exclusions, and limitations that may affect coverage.5.2 Claims Process
In the event of a covered loss: (a) Notification: We must notify insurers promptly of potential claims; (b) Investigation: Insurers will conduct their own investigation of claims; (c) Determination: Insurers make the final determination on coverage and compensation; (d) Timeline: Claims resolution may take significant time; (e) Customer Cooperation: Customers may be required to cooperate in the claims process; (f) Documentation: Extensive documentation may be required.5.3 Policy Changes
Insurance policies may be: (a) Modified: Terms and coverage may be modified at renewal; (b) Cancelled: Policies may be cancelled by insurers under certain circumstances; (c) Non-Renewed: Policies may not be renewed at expiration; (d) Replaced: We may change insurers or coverage arrangements.6. CUSTOMER RESPONSIBILITIES
6.1 Security Measures
To maintain insurance coverage, customers must: (a) Account Security: Maintain the security of their account credentials; (b) Two-Factor Authentication: Use two-factor authentication when required; (c) Prompt Reporting: Report suspicious activity or potential security breaches promptly; (d) Compliance: Comply with our security policies and procedures; (e) Information Updates: Keep account information current and accurate.6.2 Risk Understanding
Customers should understand that: (a) Investment Risks: Investments carry inherent risks that may not be covered by insurance; (b) Market Risks: Market volatility may result in significant losses; (c) Technology Risks: Technology failures may result in losses; (d) Regulatory Risks: Regulatory changes may affect investments; (e) Counterparty Risks: Third-party failures may result in losses.7. ADDITIONAL PROTECTIONS
7.1 Segregation of Assets
We plan to implement asset segregation measures including: (a) Client Funds: Segregating client funds from company funds; (b) Trust Arrangements: Holding client assets in trust arrangements where appropriate; (c) Bankruptcy Protection: Structuring arrangements to protect client assets in bankruptcy; (d) Regulatory Compliance: Complying with applicable asset segregation requirements; (e) Third-Party Custodians: Using reputable third-party custodians where appropriate.7.2 Risk Management
Our risk management framework includes: (a) Security Controls: Implementing comprehensive security controls; (b) Operational Procedures: Maintaining robust operational procedures; (c) Regular Audits: Conducting regular security and operational audits; (d) Incident Response: Maintaining incident response and business continuity plans; (e) Staff Training: Regular training on risk management and security.8. REGULATORY OVERSIGHT
8.1 BMA Supervision
Our insurance arrangements are subject to: (a) Regulatory Approval: BMA approval of insurance arrangements; (b) Ongoing Monitoring: Regular monitoring by the BMA; (c) Reporting Requirements: Regular reporting on insurance coverage; (d) Compliance Reviews: Periodic compliance reviews and examinations; (e) Capital Requirements: Meeting minimum capital and insurance requirements.8.2 International Cooperation
We cooperate with international regulatory authorities on: (a) Information Sharing: Sharing information about insurance arrangements; (b) Best Practices: Implementing international best practices; (c) Regulatory Coordination: Coordinating with multiple regulatory jurisdictions; (d) Cross-Border Issues: Addressing cross-border insurance and regulatory issues.9. COMPENSATION SCHEMES
9.1 Investor Protection Schemes
Depending on our licensing and the services we provide, we may participate in: (a) Investor Compensation Schemes: Government or industry-sponsored compensation schemes; (b) Deposit Protection: Deposit protection schemes for client money; (c) Professional Indemnity Schemes: Professional indemnity compensation schemes; (d) Industry Funds: Industry-sponsored protection funds.9.2 Limitations of Compensation Schemes
Please note that: (a) Coverage Limits: Compensation schemes typically have coverage limits; (b) Eligibility Requirements: Specific eligibility requirements may apply; (c) Claim Procedures: Specific procedures must be followed to make claims; (d) Time Limits: Time limits may apply to making claims.10. UPDATES AND CHANGES
10.1 Disclosure Updates
We will update this Disclosure: (a) Material Changes: When there are material changes to insurance coverage; (b) Regulatory Requirements: As required by regulatory authorities; (c) Annual Review: At least annually as part of our regular review process; (d) Platform Launch: When our trading platform launches with specific coverage details; (e) Policy Changes: When insurance policies are renewed or changed.10.2 Notification Process
We will notify you of material changes to insurance coverage: (a) Advance Notice: Providing advance notice where possible; (b) Multiple Channels: Using multiple communication channels; (c) Clear Explanation: Providing clear explanations of changes and their impact; (d) Customer Rights: Informing you of any rights you may have regarding changes.11. CONTACT INFORMATION
For questions about insurance coverage or this Disclosure, please contact us at: Customer Support: support@qfex.com12. IMPORTANT DISCLAIMERS
NO DEPOSIT INSURANCE: Client funds are not insured by any government deposit insurance scheme unless specifically stated. NO GUARANTEE: This Disclosure does not constitute a guarantee that insurance coverage will be available or that claims will be paid. INVESTMENT RISK: Investments are subject to significant risk, including the risk of total loss. REGULATORY RISK: Changes in regulation may affect the availability, value, or treatment of investments. MARKET RISK: Market conditions may result in significant losses that are not covered by insurance.This Disclosure should be read in conjunction with our Terms and Conditions, Privacy Policy, and other applicable policies and disclosures. Last Updated: September 4, 2025