As with all dealing in securities there are risks associated with broker default. But when you have open option positions, the contractual relationship remains open throughout the option’s life. In the event of a broker defaulting, the assets and open positions of clients, despite requirements that they be segregated from the broker’s own assets and open positions, may be frozen or be otherwise inaccessible as a result of the default procedures. This may happen for a long enough period to prevent those positions from being liquidated and losses or forgone profit opportunities may then arise. In the event of default by a broker which results in pecuniary loss to its client, the client has a right to claim under the Compensation Fund established under the Securities Ordinance, subject to the terms of the Compensation Fund from time to time. An Options Broker Exchange Participant who enters into transactions with clients, and effects matching transactions with an Options Trading Exchange Participant.