Leverage, Margin and Negative Balance Protection Policy

1. Purpose and Scope

Monolith Market is the trading platform operated by Monolith Private Wealth Limited (“MPW” or the “Company”), a company incorporated in the Republic of Mauritius and licensed by the Financial Services Commission (“FSC”). This Leverage, Margin and Negative Balance Protection Policy (the “Policy”) establishes a single, unified framework governing three interrelated subjects in respect of leveraged products offered to clients through the Monolith Market platform:

1. Leverage — the parameters, limits, and eligibility conditions under which clients may obtain market exposure greater than the funds they deposit;

2. Margin — the methodology by which margin requirements, margin calls, and stop-outs are calculated, monitored, and managed; and

3. Negative Balance Protection — the protection that limits a client's losses on leveraged positions, ensuring (for protected accounts) that a client cannot lose more than the funds in their account.

This Policy is designed to:

• Define the leverage and margin parameters applicable to each product category and client classification;

• Establish a clear and consistent methodology for the calculation of margin requirements, margin calls, and stop-outs;

• Set out the scope and operation of Negative Balance Protection;

• Ensure that clients are appropriately informed of the risks of leveraged trading before they may access leveraged products;

• Establish risk-management controls that protect both clients and MPW from the consequences of excessive leverage;

• Operationalise the risk-management principles set out in the Internal Operations Manual; and

2. Instruments Covered by This Policy

This Policy applies to the categories of financial instrument set out in the table below. These are the principal instruments in respect of which MPW makes leverage available to clients through the Monolith Market platform. MPW may, from time to time, add or withdraw specific instruments within each category; the current list of available instruments and their specific leverage parameters is published in the platform's product specifications and the Costs and Charges Schedule.

Note: Not all instrument categories listed above are necessarily always offered. The availability of any instrument or category, and the specific leverage parameters applicable, are determined by MPW from time to time and disclosed within the Monolith Market platform. Clients should refer to the platform's product specifications and the Costs and Charges Schedule for the current offering.

This Policy applies regardless of whether the client is classified as a retail investor or a sophisticated investor; differentiated treatment between the two categories is set out in subsequent sections.

3. Regulatory Framework

This Policy is adopted in compliance with, and shall be read in conjunction with, the following principal instruments:

• Securities Act 2005 — Licensing framework and conduct obligations of investment dealers; client money protection.

• Financial Services Act 2007 — FSC's regulatory mandate and licensee conduct standards.

• FSC Code of Business Conduct — Guiding Principle 4 (Communicating with Customers) and Guiding Principle 5 (Protection of Customer Assets).

• Securities (Licensing) Rules 2007 — Licensing conditions applicable to the Company's activities.

4. Key Definitions

5. Eligibility to Trade Leveraged Products

Access to leveraged products is gated behind a series of controls designed to ensure that only clients who understand and can bear the risks may trade these products.

5.1 Appropriateness Gating

Before a retail investor may access any leveraged or margin product, the client must have completed the appropriateness assessment described in the Suitability and Appropriateness Policy. Specifically:

• The client must demonstrate sufficient knowledge and experience of the relevant complex product category through the Client Investment Profile (CIP);

• Where the appropriateness assessment returns an "Inappropriate" or "Insufficient Information" outcome, the client shall receive a prominent written warning and must expressly acknowledge it before being permitted to proceed;

• The client's Suitability Profile must be consistent with leveraged trading — typically Growth or Aggressive.

5.2 Risk Acknowledgements

Before activating leveraged trading, the client must electronically acknowledge:

• The Risk Disclosure Statement, including the leverage-specific risk warnings;

• This Leverage, Margin and Negative Balance Protection Policy (or its client-facing summary);

• Clause 14 of the Brokerage Terms and Conditions, which sets out the contractual basis for the margin, margin call, stop-out, and Negative Balance Protection arrangements; and;

• A specific acknowledgement that leveraged trading can result in the rapid loss of capital, and (for products without Negative Balance Protection, where offered to sophisticated investors) that losses may exceed the deposited funds.

5.3 Sophisticated vs Retail Investors

Retail investors are subject to the full suite of investor protections in this Policy, including the conservative leverage limits in Section 6 and mandatory Negative Balance Protection (Section 9). Sophisticated investors may, at MPW's discretion and upon request, be granted higher leverage limits and may (where lawful and clearly disclosed) trade products that do not carry Negative Balance Protection — subject to a specific written acknowledgement of the increased risk.

6. Maximum Leverage Limits

MPW applies leverage limits by product category and client classification. The limits in the table below are indicative baseline levels — the standard minimum leverage MPW will make available in normal market conditions. The actual limits applicable to your Account at any given time are published in the platform’s product specifications and the Costs and Charges Schedule and may be higher than the baselines shown here. MPW may, at its discretion, offer higher leverage to individual clients, instruments, or product categories (see Section 8). The limits are expressed both as a leverage ratio and as the equivalent initial-margin percentage.

Baseline limits — platform publishes operative figures: The figures in the table above are indicative baseline levels only. The leverage limits that actually apply to your Account are those published in the platform’s product specifications and the Costs and Charges Schedule, which are updated from time to time by the Board of Directors on the recommendation of the Risk Management functions. Actual limits may be higher than the baselines shown. Higher leverage for Sophisticated Investors is available at MPW’s discretion, subject to documented eligibility assessment and written acknowledgement of the increased risk.

7. Margin: Calculation, Margin Call and Stop-Out

7.1 Initial Margin

The Initial Margin required to open a position is calculated as:

Initial Margin = Notional Value of Position ÷ Leverage Ratio

(equivalently: Initial Margin = Notional Value × Margin Percentage)

Example: A retail client opens a position with a notional value of USD 30,000 in a major FX pair at the maximum retail leverage of 30:1. The Initial Margin required is USD 30,000 ÷ 30 = USD 1,000 (equivalent to 3.33% of the notional value).

7.2 Margin Level

The Margin Level is monitored continuously by MPW's systems and is calculated as:

Margin Level (%) = (Equity ÷ Used Margin) × 100

Where Equity is the account balance adjusted for the unrealised profit or loss on all open positions, and Used Margin is the total margin allocated to those positions. A Margin Level of 100% means the client's equity exactly equals the margin required to hold the open positions.

7.3 Margin Call

When the Margin Level falls to or below the Margin Call threshold, MPW will notify the client through the Monolith Market platform (in-app alert, push notification, and email) that the account is approaching the level at which positions may be automatically closed. The Margin Call is a warning and an invitation to act; it does not by itself close positions. Upon a Margin Call, the client may deposit additional funds, close one or more positions, or take no action (in which case positions will be closed automatically if the Stop-Out threshold is reached).

7.4 Stop-Out

When the Margin Level falls to or below the Stop-Out threshold, MPW's systems will automatically begin closing the client's open positions — typically starting with the position carrying the largest unrealised loss — until the Margin Level is restored above the Stop-Out threshold or all positions are closed. This automated control operates without further notice to the client.

7.5 Thresholds

Important: Thresholds are indicative and shall be published in the platform product specifications and the Costs and Charges Schedule. The Stop-Out mechanism does not guarantee closure at the Stop-Out level — in fast-moving or gapping markets, positions may close at materially worse prices and a Negative Balance may result. For protected accounts, Negative Balance Protection (Section 9) then applies.

7.6 Client Responsibility for Monitoring

While MPW provides Margin Call notifications and operates the Stop-Out mechanism, the client remains responsible for monitoring their own account and open positions. MPW does not guarantee that a Margin Call notification will be received by the client (for example, due to connectivity issues, notification settings, or platform downtime). The client should not rely solely on receiving a Margin Call to manage their risk.

8. Dynamic and Discretionary Adjustments

MPW reserves the right to adjust leverage and margin parameters in response to market conditions and risk considerations. Such adjustments may be applied to all clients, to categories of clients, to specific instruments, or to individual accounts. Circumstances include:

• Periods of heightened market volatility or reduced liquidity;

• Around scheduled market events (e.g., central bank announcements, economic data releases, elections, earnings announcements);

• In the lead-up to weekends or market closures, where gapping risk is elevated;

• For instruments subject to unusual conditions (e.g., trading halts, corporate actions, low liquidity);

• Where an individual client's trading behaviour or account profile warrants a more conservative approach; and

• Where required by the FSC or other applicable regulation.

Where MPW makes a general adjustment to leverage or margin parameters affecting open positions, MPW shall give clients reasonable advance notice through the platform where practicable. In urgent circumstances (e.g., extreme volatility), adjustments may be applied immediately to protect both clients and MPW, with notice given as soon as reasonably practicable thereafter.

9. Negative Balance Protection

Negative Balance Protection (“NBP”) is a core pillar of this Policy. It addresses the situation where, despite the operation of the Margin Call and Stop-Out mechanisms, a client's losses on leveraged positions exceed the funds in their account — for example, due to severe market gapping when no trade can be executed at the Stop-Out level.

9.1 Scope — Retail Investors

MPW provides Negative Balance Protection to all retail investors trading leveraged products through Monolith Market. This means that:

• A retail investor's aggregate losses on leveraged positions cannot exceed the total funds deposited in their trading account;

• Where a retail investor's account equity falls below zero, MPW will reset the account balance to zero and absorb the negative amount;

• The protection applies on a per-account basis;

• The retail investor will not be required to make any additional payment to MPW to cover losses in excess of the deposited funds on a protected account.

Retail Protection: Negative Balance Protection ensures that a retail investor can never lose more than the money they have placed in their trading account, no matter how severe the market movement. This protection reflects international best practice and is applied by MPW as a standard for all retail investors.

9.2 Operation of NBP

Where a Negative Balance arises on a protected account:

• MPW's systems flag the negative equity event at the point at which it occurs;

• The Risk Management function reviews the event to confirm that it resulted from genuine market conditions and not from abuse (see Section 9.4);

• Upon confirmation, MPW resets the account balance to zero, absorbing the negative amount, ordinarily within 3 Business Days of the event; and

• The event is recorded in the Negative Balance Register maintained by the Risk Management function.

9.3 Scope — Sophisticated Investors

Sophisticated investors may, at their request and at MPW's discretion, opt to trade certain products without Negative Balance Protection in exchange for higher leverage or other features. Where a sophisticated investor trades without NBP:

• The sophisticated investor must give a specific, informed, written acknowledgement that they may lose more than the funds deposited and may be required to deposit additional funds to cover losses;

• MPW retains the right to pursue the sophisticated investor for any negative balance arising on a non-protected account; and

• The arrangement is recorded in the client file and is subject to periodic review.

9.4 Exclusions and Abuse

Negative Balance Protection does not apply, and MPW reserves the right to pursue a client for a negative balance, where the negative balance results from:

• Deliberate or reckless abuse of the protection, including coordinated exploitation across linked or related accounts;

• Manipulative trading or trading strategies designed to engineer a negative balance and transfer the loss to MPW;

• Fraud, market abuse, or any unlawful conduct by the client;

• Trading in breach of the Client Agreement or this Policy; or

• Any arrangement where the client has expressly contracted out of NBP (sophisticated investors, per Section 9.3).

9.5 Interaction with Margin and Stop-Out

Negative Balance Protection is a backstop, not a substitute for the Margin Call and Stop-Out mechanisms. The Margin Call and Stop-Out framework (Section 7) is the primary line of defence designed to close positions before a Negative Balance arises. NBP operates only in the residual cases where, despite that framework, equity nonetheless falls below zero. Clients should not regard NBP as a licence to trade without regard to risk, since NBP protects only against losses exceeding the deposited funds — it does not protect against the loss of the deposited funds themselves.

10. Overnight Financing and Associated Costs

Leveraged positions held open beyond the end of the trading day may be subject to an overnight financing charge (also known as a swap or rollover), reflecting the cost of the leverage provided. The financing charge may be a debit or, in certain cases, a credit, depending on the instrument, the direction of the position, and prevailing interest rates.

MPW discloses all financing rates, the calculation method, the time at which they are applied, and any triple-charge days (e.g., to account for weekends) in the Costs and Charges Schedule and within the platform's product specifications. Clients should review these costs carefully, as overnight financing can materially affect the profitability of leveraged positions held over time.

MPW shall ensure that all leverage-related costs are presented to clients clearly and in a manner that is not unfair in their incidence or unreasonable in their amount, consistent with the IOM and the FSC Code of Business Conduct.

11. Risk Disclosure

Leveraged trading is high-risk and is not suitable for all investors. Before a client may access leveraged products, MPW presents a prominent leverage-specific risk warning covering at least the following:

• Leverage magnifies both gains and losses — a small adverse market movement can result in a large loss relative to the funds deposited;

• A client may lose their entire deposited capital rapidly;

• Positions may be closed automatically through the Stop-Out mechanism, potentially at a loss and at a time not of the client's choosing;

• In fast-moving or gapping markets, positions may be closed at prices materially worse than the Stop-Out level;

• Negative Balance Protection (for protected accounts) limits losses to the deposited funds but does not protect against the loss of those funds;

• Overnight financing charges reduce the profitability of positions held over time;

• Past performance is not a guide to future performance;

• For sophisticated investors trading without Negative Balance Protection, losses may exceed the funds deposited; and

• The client should not trade with funds they cannot afford to lose.

Standard Risk Warning: MPW shall display a standardised summary risk warning at the point of access to leveraged products, in a form consistent with international best practice — for example: "Leveraged products are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how these products work and whether you can afford to take the high risk of losing your money." Where MPW is required or chooses to disclose the percentage of retail accounts that lose money, that figure shall be calculated and updated periodically.

12. Client Money

Client funds used as margin are held in segregated client accounts separate from MPW's own funds, in accordance with the Securities Act 2005, the IOM, and MPW's client money arrangements. Margin held by MPW remains the client's money and is recorded as such until applied against a realised loss or returned to the client.

13. Monitoring and Risk Management

MPW's Risk Management function monitors leverage, margin, and negative-balance exposure on an ongoing basis. Controls include:

• Real-time monitoring of aggregate client exposure by instrument and by client;

• Concentration limits to prevent excessive exposure to any single instrument or client;

• Stress-testing of the margin, Stop-Out, and Negative Balance Protection framework against extreme market scenarios;

• Daily reconciliation of margin balances and client money;

• Monitoring and recording of Negative Balance events in the Negative Balance Register;

• Escalation to senior management and the Board where exposure exceeds defined thresholds; and

• Periodic review of the adequacy of leverage limits, Margin Call thresholds, Stop-Out thresholds, and the NBP framework considering market conditions and loss experience.

14. Governance, Review and Updates

This Policy is owned jointly by the Compliance Department and the Risk Management function and is approved by the Board of Directors. It shall be reviewed at least annually, and earlier upon:

• Any material changes in Mauritian law or FSC regulation affecting leveraged products, including the introduction of any FSC leverage limits or product-intervention measures;

• Issuance of any relevant circular, or guidance note by the FSC;

• Material changes in MPW's product offering, client base, or business model;

• Material findings from internal audit, risk review, compliance review, or FSC inspection;

• Significant loss events, negative-balance events, or stress-test findings indicating that limits or thresholds require adjustment; and

• Material changes in market conditions affecting the appropriateness of the framework.

Material amendments shall be approved by the Board. Where an amendment materially affects clients (for example, changes to leverage limits, Stop-Out thresholds, or the NBP framework affecting open positions), it shall be communicated to clients with reasonable advance notice through the Monolith Market platform, except where urgent action is required to protect clients or MPW.

17. Legal Disclaimer

Disclaimer: This Policy has been prepared to support MPW's compliance with applicable Mauritius law, FSC regulation, and contractual obligations to clients. It does not constitute legal or investment advice and does not purport to be an exhaustive statement of MPW's obligations or clients' rights. The leverage limits, margin thresholds, NBP parameters, and other figures in this Policy are indicative and subject to publication in the platform specifications and Costs and Charges Schedule. Where any conflict arises between this Policy and applicable law, FSC rules, or the Client Agreement, the law, rules, or agreement (as applicable) shall prevail. Where the FSC issues binding leverage limits or product-intervention measures, the stricter of those limits and MPW's internal limits shall apply. MPW reserves all of its rights under applicable law and the Client Agreement.