Derivatives

Allowing investors access to more complex financial instruments

Members of the Private Client SIPP and Select SIPP may wish to hold Derivatives (eg Futures, Options and Contracts for Difference) within their portfolios.

Members must select a broker through which to trade such investments and any broker must be UK based, FSA regulated and be prepared to meet James Hay's terms and conditions for operating such accounts on behalf of a SIPP. A list of those currently acceptable can be found within the Investment section of the Literature Library. Should you wish to appoint a broker not shown on the James Hay list, please put your request in writing to our Investment Manager New Accounts Team.

Please note that James Hay will not record the individual transactions processed by the broker on such accounts. We will record a single portfolio value, which the broker will supply to us on a monthly basis. For a full portfolio breakdown the Member or Financial Adviser must contact the nominated broker directly, who will supply full statements of these holdings.

Points To Consider

• All investments can go down in value as well as up in value
• Some investments carry a higher degree of risk than others. Individuals should be sure that they fully understand the risks of such products before proceeding to invest in them and seek independent financial advice if necessary
• Some of these products may have limited or restricted liquidity and may not be readily realisable
• Some derivatives contain a degree of leveraging and losses could exceed the initial investment