# Risk Disclosures Investing in DFMREIT involves significant risks. The following is not an exhaustive list. Prospective participants should review this page carefully and obtain independent financial and legal advice before investing. *** ### Tracking error The on-chain token price may diverge from the reference DFM index value due to fees, timing differences between subscription and share execution, rebalancing costs, FX conversion, and operational constraints. Tracking error is monitored daily and disclosed in reconciliation reports. *** ### Liquidity mismatch DFM-listed constituent shares trade only during exchange hours. DFMREIT secondary market trading is available 24/7 via the AMM pool. The AMM price may deviate from the indicative NAV when the underlying market is closed. Premium and discount information is displayed in real-time on the platform at all times. *** ### FX risk Users subscribe in USDC or CC. The underlying constituent shares are denominated in AED. FX conversion costs and AED/USD rate movements will affect the effective NAV of the token. The FX conversion margin is disclosed transparently at the time of subscription. *** ### Regulatory risk The product is designed to operate within the VARA virtual-asset regulatory framework. Regulatory requirements may change. Licensing conditions, restrictions on eligible investors, and permitted activities may be updated by authorities. The product may be suspended or restricted by regulatory authorities at any time. *** ### Custody risk The underlying shares are held in institutional custody by the appointed custodian and depository. Custody failures, depository access issues, or operational failures at the custodian could affect the ability to redeem tokens for their expected value. *** ### Concentration risk The DFMREI consists of a small number of listed companies. The index is heavily influenced by its largest constituents. Index constituent changes, delistings, or material corporate events may materially affect the NAV. Concentration in a single sector and a single market also means broader DFM or UAE market movements have a direct impact. *** ### Smart contract risk Canton-native DAML contracts governing DFMREIT may contain undiscovered vulnerabilities. Audits reduce but do not eliminate this risk. Smart contracts cannot be patched without a protocol upgrade. A vulnerability could result in partial or complete loss of funds in the protocol. *** ### Counterparty risk The product depends on a licensed broker, institutional custodian, securities depository, banking partner, and compliance vendor. Failure or operational disruption of any one counterparty could disrupt subscriptions, redemptions, or rebalancing operations. *** ### Market risk The value of DFMREIT reflects the performance of DFM-listed real estate companies. Share prices in this sector are influenced by global market sentiment, interest rate expectations, UAE economic conditions, property market cycles, and company-specific events. The index can fall significantly in value. Past performance does not indicate future results. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.fractit.com/resources/risk-disclosures.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.