RISK DISCLOSURE FOR ART SHARE 002
Any investment in securities involves risks. These risks may include, among others, share market, commodities, market volatility, economic, political and regulatory risks and any combination of these and other risks. The securities issued by Issuers may not be suitable for all investors. Each potential investor must determine the suitability of that investment in light of its own circumstances.
The risks, alone or together with additional risks and uncertainties not currently known to the Issuer, or that the Issuer might currently deem immaterial, could have a material adverse effect on our future business, financial condition, cash flows, results of operations and prospects. The risk factors are further detailed in the Admission Document, or the Prospectus are limited to risks which are specific to the Issuer, and which are material for making an informed investment decision. The materiality of the risk factors has been assessed based on the probability of their occurrence and the expected magnitude of their negative impact. The risks mentioned may materialise individually or cumulatively.
Performance Not Guaranteed
Past performance is no guarantee of future results. This is the case for specific pieces of art, for the artist’s market, for the art market as a whole and for the Issuer. Any historical returns, expected returns, or probability projections are not guaranteed and may not reflect actual future performance. Any investment involves a risk of loss, and prospective investors are urged to consider whether an investment is suitable for them carefully. The value of an investment may go down as well as up, and investors may not get back their money originally invested. Investments in art, or in companies owning art can be illiquid, and Investors should seek professional advice if they are unsure about participating in any of the securities issued by an Issuer.
Risk of loss of capital
There can be no assurance that an investor will receive a return on its capital investment with respect to a purchased share or that the proceeds available for and allocated to the repayment of the shares issued by an Issuer will be sufficient to cover all amounts that would otherwise be due and payable in respect of those shares or generate returns for its investors.
An investment in a share issued by the Issuer should only be considered by persons who can afford a loss of their entire investment.
Regulation of the Issuer by any regulatory authority
The Issuer is a non-regulated securitisation Issuer within the meaning of the Securitisation Law. The Issuer is not a collective investment scheme or a fund subject to the European Alternative Investment Fund Managers (Directive 2011/61/EU) or the UCITS Directive (No 2009/65/EC, as amended). The Issuer is not required to be licensed, registered or authorised under any current securities, commodities or banking laws of its jurisdiction of incorporation and will operate without supervision by any authority in any jurisdiction. There is no assurance, however, that regulatory authorities in one or more jurisdictions would not take a contrary view regarding the applicability of any such laws to the Issuer. The taking of a contrary view by such regulatory authority could have an adverse impact on the Issuer or the holders of the Issuer’s Shares.
Any investment in the Issuer’s Shares does not have the status of a bank deposit and is not within the scope of any deposit protection scheme.
Servicing risks
The Issuer may rely on third parties and their affiliates and service providers to provide a variety of administrative, accounting, tax compliance, reporting, collection and other “servicing” functions with respect to the sale of the Offered Shares. The timeliness, accuracy and amount of payments to the Issuer arising could depend on the effectiveness and efficiency of these third parties or their agents’ collection, recordkeeping and processing activities, as well as their compliance with applicable laws. Those functions can be complex and require a significant investment by these third parties and their affiliates in systems and in ongoing diligence and maintenance. If any such third party were to fail to perform any of the foregoing services adequately and timely, the Issuer’s revenues would be adversely affected. The Issuer has limited or no ability to review or independently verify the performance of these services.
Secondary market
The shares issued by Issuers may have no effective trading market when offered and none may ever develop. If a market does develop, it may not be fully liquid. Any illiquidity may have a severely adverse effect on the market value of Offered Shares. Therefore, investors may not be able to sell their shares easily or at prices that will provide them with a yield comparable to similar investments that have a developed secondary market. This is particularly the case for shares that are especially sensitive to currency or market risks, are designed for specific investment objectives or strategies or have been structured to meet the investment requirements of limited categories of investors.
No Guarantee of Dividends
There is no guarantee that any Issuer you invest in will pay dividends or other form of income to you.
Inflation risk
Inflation risk is the risk of the future depreciation of money. The real yield from an investment in the shares issued by the Issuer is reduced by inflation. The higher the rate of inflation, the lower the real yield on a share. If the inflation rate is equal to or higher than the nominal yield, the real yield will be zero or even negative.
Historical appreciation of artworks
Appreciation rates are not comparable to, or intended to represent or be a proxy for, returns on an Issuer’s shares. Artist information is presented for illustrative purposes only and the Issuer does not own, securitise, purchase or sell works by all of such artists. Past performance is no guarantee of future results.
Substantial artwork sale through traditional auction houses could adversely affect an investment in the Issuer
The traditional auction houses organise the sale of artwork periodically. These could overlap or not with the artist and or period of the Artwork owned by the Issuer, and a sale could happen at a different valuation than the market value of the Issuer’s shares which could adversely affect an investment in an Issuer.
Not a Recommendation, Speculative, and High Risk
ART Shares, ARTEX MTF AG or ARTEX Services do not make investment recommendations and no communication, through this website or in any other medium should be construed as a recommendation for any security offered on or off this investment platform. Investments in shares are speculative and involve a high degree of risk and those prospective investors who cannot afford to lose their entire investment should not invest. You should carefully consider the risk warnings and disclosures for the respective Issuer set out therein. The value of an investment may go down as well as up, and you may not get back the money you originally invested. An investment in an Issuer is different from a deposit with a banking institution. Please refer to the respective Admission or Prospectus document for details about potential risks, charges and expenses.
Liquidity Not Guaranteed
Investments traded on ARTEX MTF may be illiquid and there is never any guarantee that you will be able to exit your investments on the Secondary Market or at what price an exit (if any) will be achieved. Although in the secondary market, you may have market makers providing liquidity, this is not a guarantee. In addition, the timeframes to liquidate the underlying asset and return capital may be extended beyond those anticipated by the Issuer due to many factors. You should not rely on any specific timeframes for a return of capital.
Underlying Asset Risk
The underlying artwork, or another speculative asset class may be illiquid, hard to value, and have a high risk of loss itself. Each asset in which you may invest will have risks that are specific to that asset class and, indeed, that asset itself. You should review all available material carefully before deciding to invest, and, if you are unsure about whether the investment is a good decision for you, you should consult with a regulated investment advisor who has experience with the asset class in question.