Capital Series Multi Select

Transcription

1 Product Disclosure Statement Issue date 19 May 2008 Capital Series Multi Select A new dimension in structured Investments Issued by Commonwealth Bank of Australia ABN AFSL

2 Disclosures and important information Disclosures and important information Product Disclosure Statement: This Product Disclosure Statement ( PDS ) sets out general information relating to Capital Series Multi Select, the terms of sale and the terms and conditions of the Commonwealth Bank Capital Investment Loan and Interest in Advance Loan. You should read the entire PDS before deciding whether to invest in Capital Series Multi Select. This PDS has been prepared by Commonwealth Bank of Australia ( Commonwealth Bank ), the issuer of Capital Series Multi Select. This PDS does not constitute an offer for sale or issue of any securities by Commonwealth Bank that requires disclosure under Chapter 6D of the Corporations Act 2001 (Cth). Terms of Sale: Investments in Capital Series Multi Select are not bank deposits. They are contracts entered into between Investors and Commonwealth Bank on the terms set out in the Terms of Sale. It is important that Investors read the Terms of Sale in full which are contained in pages 74 to 89 of this PDS. Capitalised words and phrases which are used in this PDS have the meaning given to those words and phrases as set out in the Definitions in the Terms of Sale (and in the Schedule of Terms). Investment Decisions: It is impossible in a document of this type to take into account the investment objectives, financial situation and particular needs of each reader. Accordingly, nothing in this PDS should be construed as a recommendation by Commonwealth Bank, or any associate of it or any other person concerning investment in Capital Series Multi Select, the Delivery Asset or any other security. Readers should not rely on this PDS as the sole or principal basis of a decision to invest in Capital Series Multi Select, the Delivery Asset or any other security and should seek independent financial and taxation advice before making a decision whether to invest in Capital Series Multi Select. No person is authorised by Commonwealth Bank to give any information or to make any representation not contained in this PDS. Any information or representation not contained in this PDS must not be relied upon as having been authorised by or on behalf of Commonwealth Bank. Nothing in this PDS is, or may be relied upon as, a representation as to the future performance of Capital Series Multi Select or of any Index or the Delivery Asset. Preparation of this PDS: Commonwealth Bank has taken all reasonable care to ensure that the information contained in this PDS is true and accurate in all material respects and that, to the best of its knowledge and belief, such information does not omit anything likely to affect its scope. Commonwealth Bank has prepared this PDS only from publicly available information, which Commonwealth Bank has not verified. No Relevant Asset Provider has been a party to its preparation or furnished any information specifically to Commonwealth Bank for the purpose of its preparation. Changes to Information in the PDS: This PDS is current at the time of issue. Information in this PDS is subject to change from time to time. Where information is not materially adverse to Investors, Commonwealth Bank will update the information by posting a notice on its website at You can request a paper copy of updated information by telephoning Withdrawal of Applications: If you have lodged an application for Capital Series Multi Select, and you wish to withdraw your Application, you may withdraw your Application at any time prior to the Closing Date. After the Closing Date, if you withdraw your application for Capital Series Multi Select, the Early Termination provisions will apply. Jurisdiction and Selling Restrictions: This PDS is not an offer or invitation in relation to Capital Series Multi Select in any place outside Australia. Registration with the Australian Securities and Investments Commission: This PDS has not been lodged with the Australian Securities and Investments Commission ( ASIC ) and is not required by the Corporations Act 2001 (Cth) to be lodged with ASIC. ASIC takes no responsibility for the contents of this PDS. Capital Investment Loan and Interest in Advance Loan: A Capital Investment Loan is available from Commonwealth Bank to fund your Investment Amount. An Interest in Advance Loan is available from Commonwealth Bank to pay the yearly interest in advance due and owing under a Capital Investment Loan. The Capital Investment Loan and Interest in Advance Loan (each a Loan ) are products of Commonwealth Bank of Australia ABN AFSL administered by its wholly owned subsidiary Commonwealth Securities Limited ( CommSec ) ABN AFSL Applications for the Capital Investment Loan and Interest in Advance Loan are subject to Commonwealth Bank s credit approval process. You are not required to obtain a Capital Investment Loan to make an investment in Capital Series Multi Select. and can use your own funds or other loan funds. If you are considering a Capital Investment Loan from Commonwealth Bank to fund your investment in Capital Series Multi Select, then you should read Section 2(B) and you must ensure you understand your obligations under the Terms and Conditions of the Loan before deciding whether to apply for a Capital Investment Loan. Section 2(B) and the Terms and Conditions of the Loan are contained in this PDS. You are not required to obtain an Interest in Advance Loan to prepay in advance the yearly interest due and owing under a Capital Investment Loan and you can use your own funds or other loan funds. If you are considering an Interest in Advance Loan, you must obtain a Capital Investment Loan. You should read Section 2(B) and you must ensure you understand your obligations under the Terms and Conditions of the Loan before deciding whether to apply for an Interest in Advance Loan. Section 2(B) and the Terms and Conditions of the Loan are contained in this PDS. No cooling-off rights apply to an application for a Capital Investment Loan or an Interest in Advance Loan. This means that, in most circumstances, you cannot withdraw an application once it has been made. You should not rely on Section 2(B) of the PDS and the Terms and Conditions of the Loan as the sole or principal basis of a decision to apply for a Capital Investment Loan or Interest in Advance Loan and should seek independent financial and taxation advice before making a decision. No person is authorised by Commonwealth Bank to give any information or to make any representation not contained in Section 2(B) of the PDS and the Terms and Conditions of the Loan. Any information or representation not contained in Section 2(B) of the PDS and the Terms and Conditions of the Loan must not be relied upon as having been authorised by or on behalf of Commonwealth Bank. Nothing in Section 2(B) of the PDS and the Terms and Conditions of the Loan is, or may be relied upon as, a representation as to the future performance of the Capital Investment Loan or Interest in Advance Loan or Capital Series Multi Select. Associations and Relevant Interests: You should obtain professional advice as to whether by acquiring an interest in Capital Series Multi Select you will be subject to the relevant interest, substantial shareholding or takeover provisions of the Corporations Act 2001 (Cth). The acquisition and Completion of Capital Series Multi Select could also have implications for Investors under the Foreign Acquisitions and Takeovers Act 1975 (Cth) and other legislation that may affect shareholdings in certain types of companies. You should obtain your own advice in this regard. This PDS does not take into account the investment objectives, financial situation or particular needs of any particular investor. Investors should assess whether Capital Series Multi Select is appropriate to their own investment objectives, financial situation and needs, and should consider taking professional advice, before investing. Capital Series Multi Select is an index-linked product. As a result, Commonwealth Bank has not taken into account any labour standards or environmental, social or ethical considerations in the selection, retention or realisation of the investment. Any person receiving this PDS electronically should note that applications can only be accepted if the Issuer receives a completed, current Application Form which accompanied the electronic or paper copy of the PDS. We will send you paper copies of the PDS (with attached Application Form) free of charge upon request. Please call for a paper copy of the PDS. Examples: The assumed Reference Index values included in the examples in this PDS are for illustrative purposes only and do not reflect Commonwealth Bank s views on future events. Issued by Commonwealth Bank of Australia ABN , AFSL Administered by Commonwealth Securities Limited ( CommSec ) ABN , AFSL CommSec is a wholly owned but non-guaranteed subsidiary of Commonwealth Bank of Australia, and is a Participant of the ASX Group.

3 Contents 1 Inside front cover Disclosures and Important Information Section 1(A) 3 Key features of Capital Series Multi Select 9 Key features of the Capital Investment Loan 11 Key features of the Interest in Advance Loan Section 1(B) 12 Summary of Strategies 13 Key dates and information Section 2(A) 14 What is Capital Series Multi Select? 15 Who is Capital Series Multi Select suitable for? 16 What are your options at maturity? 18 What happens if I terminate the investment early? 19 What are the significant benefits? 20 What are the significant disadvantages? 21 What are the significant risks? 24 How does Capital Series Multi Select work? 26 Making an Application for Capital Series Multi Select 27 What are the Costs? 28 Frequently asked questions Section 2(B) 29 What is the Capital Investment Loan? 30 How does the Capital Investment Loan work? 32 What is the Interest in Advance Loan? 33 How does the Interest in Advance Loan work? 36 How do I apply for a Capital Investment Loan and/or Interest in Advance Loan?

4 2 Contents (cont.) Section 3(A) 37 Information on the Strategies Section 3(B) 46 Maturity Value calculations Section 4 55 Tax Considerations 56 Tax Opinion Section 5 64 Customer information and Privacy 66 Code of Banking Practice 67 What if I have a complaint? 68 Information about Commonwealth Bank 69 Disclosures 70 Schedule of Terms for Capital Series Multi Select Section 6 74 Terms of Sale Section 7 90 Terms and Conditions of the Loan Back of brochure Inside back cover Application Form Directory

5 Section 1(A): Key features of Capital Series Multi Select? 3 Section 1(A) Issuer Commonwealth Bank of Australia (Commonwealth Bank) Broker to the Issuer Commonwealth Securities Limited (CommSec) Capital Series Multi Select Capital Series Multi Select is a medium-term investment designed to provide investors with capital growth. Capital Series Multi Select offers investors the choice of up to three different Strategies. The capital growth of each Strategy is based on the price performance of one or more Reference Indices in an Underlying Portfolio. You can choose how much to invest in each Strategy, subject to the Minimum Investment Amount and minimum increments listed in the Schedule of Terms. Capital Series Multi Select also protects 100% of your Investment Amount if held to the Maturity Date. The capital protection applies to the amount you invest in each Strategy, which we refer to as the Strategy Investment Amount. The sum of each Strategy Investment Amount is your Investment Amount. Depending on which Strategy or Strategies you choose to invest in, Capital Series Multi Select may or may not distribute coupons. For information on coupon payments payable for each Strategy, please see Section 1(B). At the Start Date, you will have exposure to the Underlying Portfolios in the Strategy or Strategies you have chosen to invest in. At the Maturity Date, the Strategy Portfolio Return is calculated for each Strategy and is used to determine the Strategy Maturity Value. In relation to each Strategy you have chosen to invest in, the Strategy Maturity Value is equal to the greater of: (a) your Strategy Investment Amount + (your Strategy Investment Amount x Strategy Portfolio Return), and (b) your Strategy Investment Amount. The Maturity Value of your Investment is the sum of the Strategy Maturity Value for each Strategy you choose to invest in. Capital Series Multi Select is structured as a deferred purchase agreement between you, the Investor, and Commonwealth Bank. When you invest, you agree to purchase the Delivery Parcel from Commonwealth Bank. The Delivery Parcel is a number of Delivery Assets, equal in value to the Maturity Value. At the commencement of Capital Series Multi Select, the Delivery Asset at Maturity Date is one ordinary fully paid share in BHP Billiton Limited (BHP). Delivery of the Delivery Parcel is deferred for the Investment Term. The number of Delivery Assets you receive at the end of that time (that is, the Delivery Parcel) depends on the Maturity Value. We may substitute the Delivery Asset for another security quoted and trading on ASX at any time.

6 4 Section 1(A): Key features (cont.) Strategies offered under this PDS Investment Term Best of Asia Emerging Markets Next 11 Soft Commodities See Section 1(B) and Section 3(A) for a comprehensive guide to each of the Strategies. 3.5 years (subject to clause of the Terms of Sale) Minimum Investment Amount per Strategy Capital Protection Significant benefits A$10, per Strategy with increments of A$1, thereafter. The amount you invest in each Strategy offered under this PDS is 100% protected at maturity. This means that the Strategy Maturity Value cannot be less than the Strategy Investment Amount, unless an Early Termination Event occurs. As the sum of each Strategy Investment Amount is your Investment Amount, your Investment Amount is also 100% protected at maturity. Capital protection is provided by Commonwealth Bank and is only available on the Maturity Date. It may not apply in certain circumstances (Please see Section 2(A)). You have the potential to receive capital growth based on the price performance of the Reference Indices in the Underlying Portfolio of the Strategy or Strategies you choose to invest in. Each Reference Index in the Underlying Portfolios is diversified across a broad base of companies and other assets. This diversification reduces investment risk by moderating volatility compared to investing in individual stocks or assets. You receive 100% protection of your Investment Amount on the Maturity Date. The capital protection applies to the amount you invest in each Strategy, which we refer to as the Strategy Investment Amount. The sum of each Strategy Investment Amount is your Investment Amount. In respect of some Strategies in this PDS, coupons are distributed annually in arrears. For information on coupon payments payable for each Strategy, please see Section 1(B). Any return on your Strategy Investment Amount reflects the performance of the Underlying Portfolio, avoiding the need for analysing and monitoring the performance of any individual listed companies or other assets and helping to reduce volatility. Meanwhile, you have the security and convenience of dealing exclusively with Commonwealth Bank, one of Australia s leading financial institutions. There is no direct currency risk associated with your Investment, as Capital Series Multi Select is denominated in Australian Dollars. At maturity of Capital Series Multi Select you can choose to either: (i) accept physical delivery of the Delivery Parcel, or (ii) receive a cash payment using our Delivery Asset Sale Service. If you choose to accept delivery of the Delivery Parcel, you will then have an investment in the Delivery Asset, which will be an investment in BHP if at maturity the ordinary fully paid shares in BHP have not been substituted with another Delivery Asset. This may be a benefit to you.

7 5 Section 1(A) Significant benefits (cont.) Significant disadvantages If you choose to accept delivery of the Delivery Parcel, you will then have an investment in the Delivery Asset, which will be an investment in BHP if at maturity the ordinary fully paid shares in BHP have not been substituted with another Delivery Asset. This may be a benefit to you. If you choose to accept physical delivery of the Delivery Parcel there may be tax benefits for you, depending on your specific taxation circumstances and finalisation of the Australian Taxation Office s ( ATO s ) draft determinations on deferred purchase agreements. You should note that these benefits may not be available to you. Please see What are the significant risks? on page 21 of the PDS. For further information, please also see Tax Considerations and Tax Opinion on pages 55 and 56 of this PDS. You may withdraw your Application for Capital Series Multi Select at any time before the Closing Date. Any money that you have paid with the Application Form will be refunded to you, without interest. Your investment should not be subject to the Foreign Investment Fund regime. For further information on significant benefits associated with an investment in Capital Series Multi Select, please see What are the significant benefits? on page 19 of the PDS. At the Maturity Date you can choose to either: (a) accept physical delivery of the Delivery Parcel, or (b) receive a cash payment using our Delivery Asset Sale Service. You are warned that if you choose to accept physical delivery of the Delivery Parcel exposure to the performance of BHP (provided the Delivery Asset has not been substituted). This may not be advantageous to you. You are warned that if you choose to receive a cash payment using our Delivery Asset Sale Service at maturity, you will incur a Brokerage Fee of 0.55% (including GST) of the Maturity Value. You are warned that there may also be tax consequences. In particular, you may be treated as holding your investment on revenue account and may not be eligible for any Capital Gains Taxation (CGT) discount on any gain on your Investment. You should seek independent tax advice in this situation. For more information on taxation, see Tax Considerations and Tax Opinion on pages 55 and 56 of this PDS. Whether you accept physical delivery of the Delivery Parcel or receive a cash payment, you need to be aware that the ATO has draft views on deferred purchase agreements that may have tax disadvantages for you. Please see the Taxation risk part of What are the significant risks? section on page 21 of the PDS. For more information on this subject, please see Tax Considerations and Tax Opinion on pages 55 and 56 of this PDS. You are warned that if you terminate your Investment early, you will not receive the 100% protection of your Investment Amount, Break Costs may be significant and may result in the Early Termination Value of your investment being less than your Investment Amount. You will also have to pay an Early Termination Fee (being 1.50% of the Early Termination Value) and there may be different tax implications. Please see What Happens if I Terminate the Investment Early? on page 18 of this PDS. Please see also Tax Considerations and Tax Opinion on pages 55 and 56 of this PDS. For further information on significant disadvantages associated with an investment in Capital Series Multi Select, please see What are the significant disadvantages? on page 20 of the PDS.

8 6 Section 1(A): Key features (cont.) Significant risks Capital Series Multi Select may not be suitable for you. You need to make sure that you understand all of the risks of investing before applying. We recommend that you obtain independent financial advice before investing in Capital Series Multi Select. Apart from any coupon payments you may receive during the term of your Investment (depending on which Strategy or Strategies you choose to invest in), you will only receive a return on your investment on the Settlement Date if on the Maturity Date the final value of your Investment is higher than your Investment Amount. Commonwealth Bank cannot guarantee the performance of the Reference Indices in each Underlying Portfolio nor your Investment. Capital Series Multi Select is not a listed investment. It cannot be traded on a market. The capital protection feature will apply only if you hold your investment until maturity. If your Investment in Capital Series Multi Select is terminated before maturity, the Early Termination Value of your investment may be less than your Investment Amount. This is why Capital Series Multi Select is a hold to maturity investment. We recommend that you only invest funds which you will not require for other purposes during the life of your Investment. Please see Early Termination on page 18 of this PDS for more information. The performance of Capital Series Multi Select and the Strategy Portfolio Return of each Underlying Portfolio is not affected by the performance of the Delivery Asset over the Investment Term. However, if you elect to accept physical delivery of the Delivery Parcel at maturity you should be aware that following purchase by Commonwealth Bank of the Delivery Parcel on the Trade Date, the value of the Delivery Parcel will be affected by changes in the price of the Delivery Asset. The coupon payments listed in the Schedule of Terms are guaranteed by Commonwealth Bank. Capital Series Multi Select is capital protected by Commonwealth Bank. This means that for each Strategy you choose to invest in, the Strategy Maturity Value of your investment at maturity cannot be less than your Strategy Investment Amount. However, even though we use the word guaranteed in relation to the payment of coupons and the word protected in relation to the capital of your investment, you are reliant on us Commonwealth Bank to meet our obligations. You are warned that this obligation of Commonwealth Bank to ensure that coupon payments are distributed and the obligation of Commonwealth Bank to ensure the Strategy Maturity Value is not less than your Strategy Investment Amount are unsecured obligations of Commonwealth Bank which rank equally with other unsecured obligations of Commonwealth Bank. If, for example, in the unlikely event Commonwealth Bank were wound up, there would be a risk you may not receive your coupon payments and you may not receive your capital protection. Capital Series Multi Select is a deferred purchase agreement. The ATO has draft views on deferred purchase agreements and this may have taxation implications for you. Any changes to tax law, ATO interpretation of tax law or in the way your Investment affects your tax position could affect the value of your Investment. For more information on tax, please see Tax Considerations and Tax Opinion on pages 55 and 56 of this PDS.

9 7 Section 1(A) Significant risks (cont.) Whether at maturity you choose to accept physical delivery of the Delivery Parcel or to receive cash payment may have different tax consequences for you, depending on your specific taxation circumstances and finalisation of the ATO s draft determinations on deferred purchase agreements. If you intend to terminate early, there may be tax consequences which you should consider. For more information, please see Tax Considerations and Tax Opinion on pages 55 and 56 of this PDS. At the commencement of Capital Series Multi Select, the Delivery Asset is one ordinary fully paid share in BHP. Circumstances may arise where we consider it appropriate to substitute the Delivery Asset for another security. You are warned that we may substitute the Delivery Asset with any other security quoted and trading on ASX and deliver that substituted security as the Delivery Asset. You are warned of this and should take this into account when considering investing in Capital Series Multi Select. At the commencement of Capital Series Multi Select, the Reference Indices in each Underlying Portfolio are those listed in Section 1(B). Certain events may occur affecting the use or suitability of the Delivery Asset or the Reference Indices in each Underlying Portfolio for Capital Series Multi Select. You are warned that if these events occur we may substitute the Delivery Asset with another security, or substitute one or more of the Reference Indices in each Underlying Portfolio with another index or other indices. For more information on adjustments, see clause 9 of the Terms of Sale and the definition of Adjustment Event: in clause 14.1 of the Terms of Sale. You are warned of this and should take this into account when considering investing in Capital Series Multi Select. If we determine that any Early Termination provision in clause 8 of the Terms of Sale is not appropriate in any particular circumstances, or that any event which is not dealt with in clause 8 of the Terms of Sale should have been dealt with, we may make any alterations to these provisions or any other Term in the Terms of Sale that we consider appropriate. We may from time to time make any modification, variation, alteration or deletion of, or addition to, these Terms of Sale ( Amendment ) by sending you written notice describing the amendments where: (a) the Amendment is one determined by us as being required under either of clauses 8 or 9 of the Terms of Sale; (b) the Amendment is necessary or desirable in the reasonable opinion of us to comply with any statutory or other requirement of law, or (c) the Amendment is desirable to correct an inconsistency or error in these Terms of Sale (but only if such Amendment does not, in our opinion, prejudice your interests). Commonwealth Bank may, in its absolute discretion, change the Start Date and the Closing Date (and time) in which case you acknowledge that the Investment Term will be less than the term stated in the Schedule of Terms. For further information on significant risks associated with an investment in Capital Series Multi Select, please see What are the significant risks? on page 21 of the PDS.

10 8 Section 1(A): Key features (cont.) Speculative Financial Product Capital Series Multi Select is a speculative financial product and its return may be less than the return you could earn on other investments. Early Termination You are warned that Capital Series Multi Select is a hold to maturity investment and that if you terminate early the costs may be significant. You must pay the Early Termination Fee and you must pay the Break Costs if they are not in your favour. There may be adverse tax consequences for you. Defined terms Terms not defined elsewhere are defined in the Terms of Sale (including the Schedule of Terms). Taxation A general opinion on the significant tax implications of an investment in Capital Series Multi Select can be found in Section 4 of this PDS. You should, however, seek professional taxation advice to determine the tax treatment applicable in your particular circumstances. Costs Application Fee of 2.00% of your Investment Amount on application. Brokerage Fee on the sale of the Delivery Parcel of 0.55% (including GST) of the Maturity Value (if you choose to receive the Sale Proceeds and use our Delivery Asset Sale Service). An Early Termination Fee of 1.50% of the Early Termination Value on sale before maturity. Delivery Asset At the commencement of Capital Series Multi Select, the Delivery Asset at Maturity Date is one ordinary fully paid share in BHP Billiton Limited (BHP). We may substitute the Delivery Asset for another security quoted and trading on the Australian Securities Exchange (ASX) at any time. See clause 3.8 of the Terms of Sale. Coupon Payments Depending on which Strategy or Strategies you choose to invest in, Capital Series Multi Select may or may not pay coupons. To find the coupon payments payable for each Strategy please see Section 3(A). Further information and questions For further information on Capital Series Multi Select, copies of this PDS are obtainable free of charge by calling us on If you have any questions contact our team on: Phone: capitalseries@cba.com.au Internet:

11 Key features of the Capital Investment Loan 9 Section 1(A) The Commonwealth Bank Capital Investment Loan is an interest only, fixed rate loan designed for investors who wish to borrow to invest in Capital Series Multi Select (the Product ). You should read the Terms and Conditions of the Loan, and seek professional advice on your rights and obligations under the Terms and Conditions of the Loan. (Please see the back of the document to find the Terms and Conditions of the Loan.) Capitalised terms in this section are as defined in the Terms and Conditions of the Loan. Capital Investment Loan features Application Amount An amount equal to your Investment Amount for the Product. Loan Term The period of time from the Capital Investment Loan Start Date to the Capital Investment Loan Maturity Date. Capital Investment Loan Start Date The Capital Investment Loan is used to invest in the Product, therefore the Capital Investment Loan Start Date will be the Start Date of the Product. If the Start Date of the Product changes, the Capital Investment Loan Start Date will also change. The Start Date of the Product is determined by Commonwealth Bank. Capital Investment Loan Maturity Date The Capital Investment Loan Maturity Date is the Settlement Date as defined in this PDS. Any changes to the Settlement Date of the Product may result in changes to the Capital Investment Loan Maturity Date. Interest Rate The Interest Rate is either a fixed rate payable yearly in advance or a fixed rate payable monthly in arrears. Contact us on to obtain the indicative fixed interest rate. Interest Payment You can either pay interest each month in arrears or pay for a year s interest in advance. If you elect to pay interest monthly in arrears, your interest payment will be debited from your Nominated Account on the last Business Day of each month. If you elect to pay interest yearly in advance, your first yearly interest payment will be debited from your Nominated Account on the Capital Investment Loan Start Date (unless you have an Interest in Advance Loan, in which case, we will apply the proceeds of the Interest in Advance Loan to pay the interest yearly in advance due and owing under the Capital Investment Loan). For further information on Interest in Advance Loan, please see Section 2(B) of the PDS.

12 10 Key features of the Capital Investment Loan (cont.) Fees Personal investors do not have to pay establishment fees, however other fees and costs may include: Government charges and stamp duty Regulatory establishment fees for company and trust applicants Costs relating to early termination of your Capital Investment Loan Transaction fees on your Nominated Account (including direct debit dishonour fees) and your Loan Account

13 Key features of the Interest in Advance Loan 11 Section 1(A) The Commonwealth Bank Interest in Advance Loan is a principal and interest loan with a 12 month term designed for investors who wish to prepay in advance 100% of the yearly interest owing and due on the Capital Investment Loan. You should read the Terms and Conditions of the Loan, and seek professional advice on your rights and obligations under the Terms and Conditions of the Loan. (Please see the back of the document to find the Terms and Conditions of the Loan.) Capitalised terms in this section are as defined in the Terms and Conditions of the Loan. Interest in Advance Loan features Eligible applicants Applicants for a Capital Investment Loan or existing holders of a Capital Investment Loan. Loan Term The period of time from the Interest in Advance Loan Start Date to the Interest in Advance Loan Maturity Date which is 12 months (provided that if the Interest in Advance Loan is redrawn for the final 6 months of the Investment Term, the period will be 6 months). Interest in Advance Loan Start Date The date the Interest in Advance Loan is drawn down. Interest Rate The Interest Rate is a fixed rate payable monthly in arrears. Contact us on to obtain the indicative fixed interest rate. Interest Payment You must pay interest each month in arrears. Interest payments will be made by direct debit from your Nominated Account. Automatic Redraw Facility Upon repayment of the Interest in Advance Loan in full and subject to certain conditions, we may automatically redraw an amount equal to 100% of the yearly interest due and owing under the Capital Investment Loan for another Term commencing on the redraw date (provided that if the Interest in Advance Loan is redrawn for the final 6 months of the Investment Term, the amount redrawn will be 100% of the semi-annual interest due and owing under the Capital Investment Loan). You may notify us at least 10 Business Days prior to the Interest in Advance Loan Maturity Date that you do not want us to make an automatic redraw. Fees Personal investors do not have to pay establishment fees, however other fees and costs may include: Government charges and stamp duty Regulatory establishment fees for company and trust applicants Costs relating to early termination of your Interest in Advance Loan Transaction fees on your Nominated Account (including direct debit dishonour fees) and your Loan Account

14 12 Section 1(B): Summary of the Strategies Each Strategy offered under this PDS seeks to provide you with capital growth on your investment. The capital growth is based on the price performance of one or more Reference Indices in an Underlying Portfolio. You can choose how much to invest in each Strategy, subject to the Minimum Investment Amount and minimum increments listed in the Schedule of Terms. The amount you invest in each Strategy is referred to as the Strategy Investment Amount. The sum of each Strategy Investment Amount is your Investment Amount. The Strategies are: Best of Asia Emerging Markets Next 11 Soft Commodities You may choose to invest in one or more of the Strategies described below. Strategy Underlying Portfolio Investment Term Coupons Payments Strategy Portfolio Return calculation Best of Asia This offers exposure to a basket of the following indices across Asia: Hang Seng China Enterprises Index MSCI Taiwan Index KOSPI 200 Index S&P ASX 200 Index 3.5 years No coupons are payable See Section 3(B) Maturity Value Calculations on page 46 of the PDS Strategy Emerging Markets Next 11 Underlying Portfolio Investment Term Coupon Payments Strategy Portfolio Return calculation S-Box N-11 Price Index This offers exposure to the next 11 emerging stock markets around the world. Some of these countries include Egypt, Indonesia, Korea, Mexico, Pakistan, Philippines, Turkey, Vietnam 3.5 years 0.5% per annum guaranteed and payable at the end of Year 1, Year 2, Year 3 and on the Maturity Date (assuming no Early Termination) See Section 3(B) Maturity Value Calculations on page 46 of the PDS Strategy Underlying Portfolio Investment Term Coupon Payments Strategy Portfolio Return calculation Soft Commodities S&P GSCI Agriculture E28 Excess Return Strategy This offers exposure to agricultural commodities including wheat, corn, soybeans, cotton, sugar, coffee and cocoa 3.5 years 1.25% per annum guaranteed and payable at the end of Year 1, Year 2 and Year 3 (assuming no Early Termination)* See Section 3(B) Maturity Value Calculations on page 46 of the PDS * In respect of Soft Commodities, a coupon is not payable for the last 6 months of the Investment Term.

15 Key dates and information 13 Section 1(B) Opening Date 19 May 2008 Closing Date 20 June 2008 Start Date The Closing Levels of the Reference Indices in each Underlying Portfolio on this date are used as the Initial Reference Levels. 26 June 2008 Acceptance Notices mailed 10 July 2008 Maturity Date The date we calculate the Maturity Value. 28 December 2011 Trade Date The date we purchase the Delivery Parcel. 5 January 2012 Settlement Date The date we physically deliver the Delivery Parcel or Sale Proceeds to you. 10 January 2012 We (Commonwealth Bank) reserve the right to amend the Start Date and the Closing Date (and time) of this invitation or, if insufficient subscriptions are received to enable us to effectively manage the issue, to withdraw this invitation completely. This means that we may decide to change the Opening Date or Closing Date to lengthen or shorten the period of time this invitation is open. We are likely to exercise this right where there has been very high demand for Capital Series Multi Select or if a large number of customers ask us to extend the period of time that this invitation is open. When making this decision, we always act reasonably and in accordance with standard market practice. If we do change the Start Date or the Closing Date, the Investment Term will be less than what is specified in the Schedule of Terms.

16 14 Section 2(A): What is Capital Series Multi Select? Capital Series Multi Select is a medium-term investment designed to provide investors with capital growth. Capital Series Multi Select offers investors the choice of three different Strategies. The capital growth of each Strategy is based on the price performance of one or more Reference Indices in an Underlying Portfolio. The Strategies are: Best of Asia Emerging Markets Next 11 Soft Commodities The Underlying Portfolio for each Strategy is outlined in Section 1(B) of this PDS. Capital Series Multi Select also protects 100% of your Investment Amount if held to the Maturity Date. The capital protection applies to the amount you invest in each Strategy, which we refer to as the Strategy Investment Amount. The sum of each Strategy Investment Amount is your Investment Amount. Two of the Strategies of Capital Series Multi Select also distribute coupons annually in arrears. For information on coupon payments payable for each Series, please see Section 1(B). At the Start Date, you will have exposure to the Reference Indices in each Underlying Portfolio in the Strategy or Strategies you have chosen to invest in. At the Maturity Date, the Strategy Portfolio Return is calculated for each Strategy you choose to invest in and is used to determine the Strategy Maturity Value. The Strategy Portfolio Return calculations are detailed in Section 3 (B). In relation to each Strategy you have chosen to invest in, the Strategy Maturity Value is equal to the greater of: (a) your Strategy Investment Amount + (your Strategy Investment Amount x Strategy Portfolio Return), and (b) your Strategy Investment Amount. The Maturity Value of your Investment is the sum of the Strategy Maturity Value for each Strategy you choose to invest in. Capital Series Multi Select is structured as a deferred purchase agreement between you, the Investor, and Commonwealth Bank. When you invest, you agree to purchase the Delivery Parcel from Commonwealth Bank. The Delivery Parcel is a number of Delivery Assets, equal in value to the Maturity Value. At the commencement of Capital Series Multi Select, the Delivery Asset at Maturity Date is one ordinary fully paid share in BHP Billiton Limited (BHP). Delivery of the Delivery Parcel is deferred for the Investment Term. The number of Delivery Assets you receive at the end of that time (that is, the Delivery Parcel) depends on the Maturity Value. There is no direct currency risk associated with your investment, as Capital Series Multi Select is denominated in Australian dollars.

17 Who is Capital Series Multi Select suitable for? 15 Capital Series Multi Select is suitable for Australian individuals, companies, trusts and superannuation funds looking to: diversify their investment portfolio by gaining exposure to the Reference Indices in each Underlying Portfolio without needing to have the knowledge or resources to select individual listed stocks or other assets directly; Section 2(A) gain exposure to the Reference Indices in each Underlying Portfolio without the complications of direct investment on an international stock exchange or other financial market. Under Capital Series Multi Select, investors have the security and convenience of dealing exclusively with Commonwealth Bank, one of Australia s leading financial institutions; invest with the cash flow advantages of coupon payments (depending on which Strategy or Strategies you choose to invest in); invest with 100% gearing where a Capital Investment Loan is used (except for superannuation funds); and invest with 100% capital protection of your Investment Amount at maturity.

18 16 What are your options at maturity? At maturity, you can choose to either: (a) accept physical delivery of the Delivery Parcel, or (b) receive the Sale Proceeds as a cash payment using our Delivery Asset Sale Service. If you choose to accept physical delivery of the Delivery Parcel, you will have an investment in the Delivery Asset. You will then no longer have an investment linked to the Reference Indices in each Underlying Portfolio. You should consider whether or not this is suitable for you. If you choose to accept physical delivery of the Delivery Parcel and the Delivery Asset at the commencement of Capital Series Multi Select has been substituted, you will have an investment in the substituted asset. This asset must be quoted and trading on the ASX. If you do not consider that an investment in the Delivery Asset, at that time, is suitable for you, you may choose to receive a cash payment from us by using our Delivery Asset Sale Service. If you do so, you will incur a Brokerage Fee of 0.55% (including GST) of the Maturity Value. Choosing to accept physical delivery of the Delivery Parcel may have different tax consequences for you than receiving a cash payment. This depends on your specific circumstances and finalisation of the ATO s views on Deferred Purchase Agreements. Capital Series Multi Select is a deferred purchase agreement. You should seek independent tax advice on your investment in Capital Series Multi Select. Please also see Tax Considerations and Tax Opinion on pages 55 and 56 of this PDS. What happens on the Settlement Date? On the Trade Date, we will purchase the Delivery Parcel on your behalf. The Trade Date will be five Business Days after the Maturity Date. On the Settlement Date, we will either physically deliver the Delivery Parcel to you or, if you have elected to receive the Sale Proceeds using our Delivery Asset Sales Service, we will pay you the Sale Proceeds. The Settlement Date will be eight Business Days after the Maturity Date. If you are taking physical delivery of the Delivery Parcel, we will transfer the Delivery Parcel to your brokersponsored account and Holder Identification Number (HIN) nominated in your Completion Notice. If you have not nominated a broker-sponsored account and HIN, or they are invalid, we will transfer the Delivery Parcel to an issuer-sponsored account in the same name as your investment. If you are taking physical delivery of the Delivery Parcel and your holding includes any partial unit, you will receive the relevant dollar value of the partial unit in cash. For example, if the Maturity Value is $250, and the Delivery Asset is trading at $45.00, we will buy on your behalf 5,555 units for a value of $249, (5,555 X $45.00) and forward the residual amount of $25.00 to you ($250,000 - $249,975.00). Note that if the residual amount does not exceed $20.00, we are under no obligation to you to make any payment for the fractional security or unit (as applicable) that make up the Delivery Asset. If you are using our Delivery Asset Sale Service we will credit the Sale Proceeds to the account nominated in your Application Form. If you use the Delivery Asset Sale Service, there may be different tax implications so you should seek your own independent tax advice in this situation. For more information, see Tax Considerations and Tax Opinion on pages 55 and 56 of this PDS. Can the Delivery Asset change? If you elect to accept physical delivery of the Delivery Parcel, we may at our discretion, substitute an alternative Delivery Asset. Instead of the then current Delivery Asset, you may receive any other security quoted and trading on the ASX.

19 17 Circumstances may arise where we consider it appropriate to substitute the Delivery Asset for another security. We may substitute the Delivery Asset with any other security quoted and trading on ASX and deliver that substituted security as the Delivery Asset. At the commencement of Capital Series Multi Select, the Delivery Asset is one ordinary fully paid share in BHP. However if substitution occurs the Delivery Asset will change. When in this PDS we refer to one ordinary fully paid share in BHP as the Delivery Asset we are assuming that there will be no substitution. However, this may not be the case. You are warned of this and should take this into account when considering investing in Capital Series Multi Select. We will notify you if a substitution occurs. Section 2(A)

20 18 What happens if I terminate the investment early? Capital Series Multi Select is a hold to maturity investment. However, your Investment may be terminated before maturity by: (a) agreement between you and Commonwealth Bank, or (b) Commonwealth Bank, in accordance with the Terms of Sale. If your investment is terminated early, you will not receive the 100% protection of your Investment Amount. At the time of termination we will calculate the Early Termination Value. In doing so we will take into account the Break Costs associated with unwinding the hedge arrangements Commonwealth Bank established in connection with your Investment (which may be an addition (that is, in your favour) or a deduction (that is, not in your favour) in the calculation of the Early Termination Amount). Break Costs are defined in clause 14.1 of the Terms of Sale. They represent the costs to Commonwealth Bank of terminating your Investment before maturity. The Break Costs may be in your favour, which means they will be added in determining the Early Termination Value; or they may not be in your favour, which means they will be deducted in determining the Early Termination Value. Break Costs may be significant. They are only payable if your Investment is terminated prior to the Maturity Date. If your Investment is terminated prior to the Maturity Date, the Early Termination Value may be less than your Investment Amount. You will also have to pay an Early Termination Fee (being 1.50% of the Early Termination Value). It is not possible to accurately forecast the Break Costs on your Investment. You should therefore not invest in Capital Series Multi Select if you are likely to need your funds before the Maturity Date. The table below provides and indication of how changes in some variables can affect Break Costs. The table assumes all other variables remain constant. A downward pointing arrow means it is more favourable to you. An upward pointing arrow means it is less favourable to you. How changes in some variables affect Break Costs Variable Change in Variable Break Costs Underlying Portfolio h i Underlying Portfolio Volatility h i AUD Interest Rates h h There may also be different tax implications if you terminate your investment early. You will need independent tax advice in this situation. For more information, see Tax Considerations and Tax Opinion on pages 55 and 56 of this PDS. We may terminate the Investment early, following an Early Termination Event. In clause 14.1 of the Terms of Sale, an Early Termination Event is defined to mean: (a) you are or become insolvent, or (b) any actual or proposed Adjustment Event which, in our reasonable opinion, cannot be satisfactorily dealt with in accordance with clause 9 of the Terms of Sale, or (c) any actual or proposed event which may, in our reasonable opinion, be expected to lead to any of the events in (a) and (b) above occurring, or (d) if you have funded your investment with a Capital Investment Loan, a default by you under the terms of the Loan.

21 What are the significant benefits? 19 You have the potential to receive capital growth based on the price performance of the Reference Indices in the Underlying Portfolio of the Strategy or Strategies you choose to invest in. Each Reference Index in the Underlying Portfolios is diversified across a broad base of companies and other assets. This diversification reduces investment risk by moderating volatility compared to investing in individual stocks or assets. You receive 100% protection of your Investment Amount on the Maturity Date. The capital protection applies to the amount you invest in each Strategy, which we refer to as the Strategy Investment Amount. The sum of each Strategy Investment Amount is your Investment Amount. In respect of some Strategies in this PDS, coupons are distributed annually in arrears. For information on coupon payments payable for each Strategy, please see Section 1(B). Any return on your Strategy Investment Amount, apart from the coupon payments (depending on which Strategy or Strategies you choose to invest in), reflects the performance of the Underlying Portfolio, avoiding the need for analysing and monitoring the performance of any individual listed companies or other assets and helping to reduce volatility. You also gain exposure to listed stocks and other assets without the complication of direct investment in stock exchanges and other financial markets. Meanwhile, you have the security and convenience of dealing exclusively with Commonwealth Bank, one of Australia s leading financial institutions. There is no direct currency risk associated with your investment, as Capital Series Multi Select is denominated in Australian Dollars. At maturity of Capital Series Multi Select you can choose to either: (i) accept physical delivery of the Delivery Parcel, or (ii) receive a cash payment using our Delivery Asset Sale Service. If you choose to accept delivery of the Delivery Parcel, you will then have an investment in the Delivery Asset, which will be an investment in BHP if at maturity the ordinary fully paid shares in BHP have not been substituted with another Delivery Asset. If you choose to accept physical delivery of the Delivery Parcel there may be tax benefits for you, depending on your specific taxation circumstances and finalisation of the ATO s draft determinations on deferred purchase agreements. You should note that these benefits may not be available to you. Please see What are the significant risks? on page 21 of the PDS. For further information, please also see Tax Considerations and Tax Opinion on pages 55 and 56 of this PDS. You may withdraw your Application for Capital Series Multi Select at any time before the Closing Date. Any money that you have paid with the Application Form will be refunded to you, without interest. Your Investment should not be subject to the Foreign Investment Fund regime. An investment in the Delivery Asset gives you exposure to the performance of BHP or to the performance of the substituted asset, which may be of benefit to you. You can obtain information about BHP from the website Section 2(A)

22 20 What are the significant disadvantages? At Maturity Date you can choose to either: (a) accept physical delivery of the Delivery Parcel, or (b) receive a cash payment using our Delivery Asset Sale Service. If you choose to accept physical delivery of the Delivery Parcel at maturity, you will have an investment in the Delivery Asset, which will be an investment in BHP if the ordinary fully paid shares in BHP have not been substituted with another asset. This will give you exposure to the performance of BHP which may not be advantageous to you. If you choose to receive a cash payment using our Delivery Asset Sale Service at maturity, you will incur a Brokerage Fee of 0.55% (including GST) of the Maturity Value. There may also be tax consequences. In particular, you may be treated as holding your investment on revenue account and may not be eligible for any Capital Gains Taxation (CGT) discount on any gain on your Investment. You should seek independent tax advice in this situation. For more information on taxation, see Tax Considerations and Tax Opinion on pages 55 and 56 of this PDS. You need to be aware that the ATO has draft views on deferred purchase agreements. Receiving a cash payment at maturity may be more disadvantageous from a tax perspective than accepting physical delivery of the Delivery Parcel at maturity, depending on your specific circumstances. Please see the Taxation risk part of What are the significant risks? on page 21 of the PDS. For more information on this subject, please see Tax Considerations and Tax Opinion on pages 55 and 56 of this PDS. If you terminate your Investment early, you will not receive the 100% protection of your Investment Amount, Break Costs may be significant and may result in the Early Termination Value of your investment being less than your Investment Amount. You will also have to pay an Early Termination Fee (being 1.50% of the Early Termination Value) and there may be different tax implications. Please see What Happens if I Terminate the Investment Early? on page 18 of this PDS. Please see also Tax Considerations and Tax Opinion on pages 55 and 56 of this PDS.

23 What are the significant risks? 21 Capital Series Multi Select may not be suitable for you. You need to make sure that you understand all of the risks of investing before applying. We recommend that you obtain independent financial advice before investing in Capital Series Multi Select. Starting from the time at which you make your Investment, risk factors may lead to changes in the financial outcomes that are unfavourable to you. Monitoring of any risks associated with this product is your responsibility (subject to the responsibility of Commonwealth Bank for its own operational processes, please see Operational risk on page 22 of this PDS). Section 2(A) Market risk Apart from any coupon payments you may receive during the term of your Investment (depending on which Strategy or Strategies you choose to invest in), you will only receive a return on your investment on the Settlement Date if on the Maturity Date the final value of your Investment is higher than your Investment Amount. Commonwealth Bank cannot guarantee the performance of the Reference Indices in each Underlying Portfolio nor your Investment. During the Investment Term, Capital Series Multi Select may be affected by a number of market variables, including but not limited to, the performance of the Reference Indices in each Underlying Portfolio, interest rates, economic variables, time remaining to maturity, technological, legal or political conditions that may occur globally or at a country, industry or asset specific level. Investors should be familiar with stocks and with investments in the financial markets generally. In particular, Investors should be familiar with the financial market on which the Reference Indices in each Underlying Portfolio are traded. Capital Series Multi Select is not a listed investment. It cannot be traded on a market. The capital protection feature will apply only if you hold your investment until maturity. Capital Series Multi Select is a hold to maturity investment. If terminated before maturity, the Early Termination Value of your investment may be less than your Investment Amount. Break Costs payable by you could be a factor in this. Break Costs are defined in clause 14.1 of the Terms of Sale and can be significant. They represent the costs to Commonwealth Bank of terminating your Investment before maturity. The Break Costs could be in your favour, which means they will be added in when determining the Early Termination Value or they may not be in your favour, in which case they will be deducted. Break Costs may be significant. Break Costs are payable only if your Investment is terminated prior to the Maturity Date. This, together with the fact that an Early Termination Fee is payable on Early Termination, is why Capital Series Multi Select is a hold to maturity investment. We recommend that you only invest funds which you will not require for other purposes during the life of your Investment. Please see Early Termination on page 18 of this PDS for more information. The performance of Capital Series Multi Select and the Strategy Portfolio Return of each Underlying Portfolio are not affected by the performance of the Delivery Asset, which at the commencement of Capital Series Multi Select is one fully paid ordinary share in BHP, or any substituted alternative Delivery Asset, over the Investment Term. However, if you elect to accept physical delivery of the Delivery Parcel at maturity you should be aware that following purchase by Commonwealth Bank of the Delivery Parcel on the Trade Date, the value of the Delivery Parcel will be affected by changes in the price of the Delivery Asset. You can obtain more information about BHP from the website Capital Series Multi Select is a speculative financial product and its returns may be less than the return you could earn on other investments. Circumstances may arise where we consider it appropriate to substitute the Delivery Asset for another security. We may substitute the Delivery Asset with any other security quoted and trading on ASX and deliver that substituted

24 22 What are the Significant Risks? (cont.) security as the Delivery Asset. The substitute Delivery Asset must be a security quoted and trading on the ASX. At the commencement of Capital Series Multi Select, the Delivery Asset is one ordinary fully paid share in BHP. However if substitution occurs the Delivery Asset will change. When in this PDS we refer to one ordinary fully paid share in BHP as the Delivery Asset we are assuming that there will be no substitution. However, this may not be the case. You are warned of this and should take this into account when considering investing in Capital Series Multi Select. You will be notified if a substitution occurs. Taxation risk Capital Series Multi Select is a deferred purchase agreement. The ATO has draft views on deferred purchase agreements and this may have taxation implications for you. Any changes to tax law, ATO interpretation of tax law or in the way your Investment affects your tax position could affect the value of your Investment. For more information on tax, please see Tax Considerations and Tax Opinion on pages 55 and 56 of this PDS. Whether at maturity you choose to accept physical delivery of the Delivery Parcel or to receive cash payment may have different tax consequences for you, depending on your specific taxation circumstances and finalisation of the ATO s draft determinations on deferred purchase agreements. If you intend to terminate early, there may be tax consequences which you should consider. For more information, please see Tax Considerations and Tax Opinion on pages 55 and 56 of this PDS. Credit risk Credit risk is common to all investment products that you may hold with Commonwealth Bank. In all cases, you are reliant on the ability of Commonwealth Bank to meet its obligations to you under the terms of each transaction. This risk is sometimes described as counterparty risk. Depending on which Strategy or Strategies you choose to invest in, the coupon payments listed in the Schedule of Terms are guaranteed by Commonwealth Bank. Capital Series Multi Select is capital protected by Commonwealth Bank. This means that for each Strategy you choose to invest in, the Strategy Maturity Value of your investment at maturity cannot be less than your Strategy Investment Amount. However, even though we use the word guaranteed in relation to the payment of coupons (depending on which Strategy or Strategies you choose to invest in) and the word protected in relation to the capital of your investment, you are reliant on us Commonwealth Bank to meet our obligations. You are warned that this obligation of Commonwealth Bank to ensure that coupon payments are distributed (depending on which Strategy or Strategies you choose to invest in) and the obligation of Commonwealth Bank to ensure the Strategy Maturity Value is not less than your Strategy Investment Amount are unsecured obligations of Commonwealth Bank which rank equally with other unsecured obligations of Commonwealth Bank. If, for example, in the unlikely event Commonwealth Bank were wound up, there would be a risk you may not receive your coupon payments and you may not receive your capital protection. Operational risk Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems or external events. You are reliant on the ability of Commonwealth Bank to price and settle your investment in a timely and accurate manner. Commonwealth Bank in turn is dependent on the reliability of its own operational processes that include communications, computers and computer networks. Disruptions in Commonwealth Bank s processes may lead to delays in the execution and settlement of your investment. Such disruptions may result in outcomes that are less favourable to you. However, once you have made your Investment, the management of risks associated with its own operational processes is the responsibility of Commonwealth Bank.

25 23 Legal risk Australia, as a member state of the United Nations, is obliged to implement United Nations Security Council sanctions. Australia also may be required to implement other international sanctions and sometimes imposes unilateral sanctions. Sanctions can cover various subject matters including financial restrictions. Consequently, Commonwealth Bank may be prohibited from dealing with certain persons or entities. This means that if Commonwealth Bank is aware that you are a proscribed person or entity, then we may be required to suspend, cancel or refuse you services or close or terminate any account, facility, transaction, arrangement or agreement with you. We may also be required to freeze your assets. You could incur significant costs as a result of these actions. Section 2(A) Adjustment events and other changes to the Terms of Sale Certain events may occur affecting the use or suitability of the Delivery Asset or the Reference Indices in each Underlying Portfolio for Capital Series Multi Select. If these events occur we may substitute the Delivery Asset with another security, or substitute one or more of the Reference Indices in each Underlying Portfolio with another index or other indices. For more information on adjustments, see clause 9 of the Terms of Sale and the definition of Adjustment Event in clause 14.1 of the Terms of Sale. If adjustment occurs, the Delivery Asset and/or the Reference Indices in each Underlying Portfolio will change. When in this PDS we refer to one ordinary fully paid share in BHP as the Delivery Asset at maturity and Reference Indices in each Underlying Portfolios as the described in Section 1(B), we are assuming that there will be no adjustment. However, this may not be the case. You are warned of this and should take this into account when considering your investment. If we determine in our reasonable opinion that any adjustments we make are not appropriate to deal with the occurrence of an Adjustment Event we may make alterations to clause 9 of the Terms of Sale or any other term that we consider is reasonably appropriate. Alternatively, we can nominate the Adjustment Event as an Early Termination Event and deal with it accordingly. We may also adjust or amend any variable, formulae, amount or calculation set out or used in the Terms of Sale and/or the Schedule of Terms. You will be notified if an adjustment occurs. If we determine that any Early Termination provision in clause 8 of the Terms of Sale is not appropriate in any particular circumstances, or that any event which is not dealt with in clause 8 of the Terms of Sale should have been dealt with, we may make any alterations to these provisions or any other Term in the Terms of Sale that we consider appropriate. We may from time to time make any modification, variation, alteration or deletion of, or addition to, these Terms of Sale ( Amendment ) by sending you written notice describing the amendments where: (a) the Amendment is one determined by us as being required under either of clauses 8 or 9 of the Terms of Sale; (b) the Amendment is necessary or desirable in the reasonable opinion of us to comply with any statutory or other requirement of law, or (c) the Amendment is desirable to correct an inconsistency or error in these Terms of Sale (but only if such Amendment does not, in our opinion, prejudice your interests). The risks described here may not include all the risk considerations that may be relevant to you when making an investment. Please also see What are the significant disadvantages? on page 20 of this PDS. Before transacting in Capital Series Multi Select you should be satisfied that Capital Series Multi Select is suitable for you. We recommend that you consult your investment adviser or obtain other independent advice on your Investment. Changes of Dates and Times Commonwealth Bank may, in its absolute discretion, change the Start Date and the Closing Date (and time) in which case you acknowledge that the Investment Term will be less than the term stated in the Schedule of Terms.

26 24 How does Capital Series Multi Select work? Application You send us your completed Application Form, Investment Amount and Application Fee in cleared funds, prior to the Closing Date. Once your Application has been received we will debit your nominated account for your Investment Amount and Application Fee. Any interest on these funds in the period between the date we debit your nominated account and the Start Date will be retained by Commonwealth Bank. You should ensure that you have sufficient cleared funds in your nominated account when you submit your Application Form. If you do not have sufficient cleared funds in your nominated account, your application may not be accepted. If your application is not accepted, any money that you have paid to us will be returned to you. Any interest on these funds will be retained by Commonwealth Bank. What happens during the term of your Investment? You may receive coupon payments based on your Investment Amount paid annually in arrears, depending on which Strategy or Strategies you choose to invest in. Strategy Best of Asia Best of Asia does not distribute any coupons. Strategy - Emerging Markets Next 11 If you invest in Emerging Markets Next 11, you will receive coupon payments based on your Strategy Investment Amount for Emerging Markets Next 11 paid annually in arrears as set out below: Year 1 Year 2 Year 3 Year 4 (a semi-annual period) 0.50% pa guaranteed 0.50% pa guaranteed 0.50% pa guaranteed 0.50% pa guaranteed (paid for a semi-annual period) For example, if you invest $100,000 in Emerging Markets Next 11 you would receive coupon payments paid annually in arrears as follows: Year 1 $500 ($100,000 x 0.50%) Year 2 $500 ($100,000 x 0.50%) Year 3 $500 ($100,000 x 0.50%) Year 4 (a semi-annual period) $ ($100,000 x 0.50% x 185/365) Strategy Soft Commodities If you invest in Soft Commodities, you will receive coupon payments based on your Strategy Investment Amount for Soft Commodities paid annually in arrears as set out below: Year 1 Year 2 Year % pa guaranteed 1.25% pa guaranteed 1.25% pa guaranteed

27 25 For example, if you invest $100,000 in Soft Commodities you would receive coupon payments paid annually in arrears as follows: Year 1 $1,250 ($100,000 x 1.25%) Year 2 $1,250 ($100,000 x 1.25%) Section 2(A) Year 3 $1,250 ($100,000 x 1.25%) In respect of Soft Commodities, a coupon is not payable for the last 6 months of the Investment Term. Tracking your Investment Each year you will receive a letter from us that sets out how your investment is performing. You can also track the performance of the Underlying Portfolios by visiting the following websites Strategy Best of Asia Emerging Markets Next 11 Soft Commodities Website Hang Seng China Enterprises Index: MSCI Taiwan Index: KOSPI 200 Index: eng.krx.co.kr S&P ASX 200 Index: Not available Alternatively, please contact CommSec on , your investment adviser or your relationship manager. Completion Notice One month before your investment matures, we will send you a Completion Notice to fill out and return to us. In your Completion Notice you must indicate whether: 1. you wish to accept physical delivery of the Delivery Parcel, which will be described in the Completion Notice, or 2. you wish to receive a cash payment of the Delivery Parcel using our Delivery Asset Sale Service. There may be different tax implications for you depending on which option you choose. For more information, see Tax Considerations and Tax Opinion on pages 55 and 56 of this PDS. You should also specify your broker sponsored account and your Holder Identification Number (HIN). If we do not receive your Completion Notice by 5 pm, Sydney time, on the Maturity Date we will arrange for physical delivery of the Delivery Parcel to you. If you choose to receive a cash payment using the Delivery Asset Sale Service, you are instructing us or our nominee to sell the Delivery Parcel on your behalf and forward the Sales Proceeds to you. If your holding includes any partial unit, you will receive the relevant dollar value of the partial unit in cash. We charge a Brokerage Fee of 0.55% (including GST) of the Maturity Value for using the Delivery Asset Sale Service. If you are funding your investment in Capital Series Multi Select with a Capital Investment Loan, we will assume you have chosen to use the Delivery Asset Sale Service, unless, subject to clause 3.10 of the Terms of Sale, you inform us in writing that you will be repaying the Capital Investment Loan with your own capital or with other borrowed funds. You will not be offered the choice of repaying the Capital Investment Loan with your own capital or with other borrowed funds if you are in default under your Capital Investment Loan.

28 26 Making an application for Capital Series Multi Select How to apply Applications may be made only on the Application Form attached to the back of this PDS. All applications must be received by Commonwealth Bank no later than 12.00pm (noon) Sydney time on the Closing Date, as specified in this PDS. You should return completed Applications to us. You may apply for any amount in any Strategy or Strategies in Capital Series Multi Select, subject to a Minimum Investment Amount and minimum increments as specified in the Schedule of Terms. You should make payment with your Applications by cheque or direct debit. The sum you send us is called the Application Amount. We may deduct from this an Application Fee as shown in the Schedule of Terms. The amount invested by you is your Investment Amount. This is the Application Amount, less any Application Fee. No stamp duty is payable by you under Capital Series Multi Select. Acceptance of Applications We may, in our absolute discretion, refuse or reject any Application (wholly or in part) without giving you a reason. We also reserve the right at any time to close the invitation early. If an Application is rejected or accepted only in part, we will return the Application Amount to you, without interest. If we decide that we will accept an Application, acceptance of your offer will take place on the Start Date, as specified in the Terms of Sale. Within 10 Business Days of the Start Date, we will provide you with a notice acknowledging acceptance. Who may apply for Capital Series Multi Select? Application for Capital Series Multi Select is open to: Australian residents Companies registered in Australia Australian trust entities Australian superannuation funds You are bound by the Terms of Sale when you make an Application. Commonwealth Bank issues Capital Series Multi Select on the Terms of Sale set out in the section headed Terms of Sale. You should make sure that you read and understand the Terms of Sale. Signing and lodging an Application Form will bind you to the Terms of Sale, provided that, where you have signed and lodged an Application Form, you may withdraw your Application at any time prior to the Closing Date. The Terms of Sale include the Schedule of Terms. Additional information about Capital Series Multi Select Please contact your financial adviser or Commonwealth Bank if you have any questions about: (a) how to invest in Capital Series Multi Select, or (b) how to complete the attached Application Form.

29 What are the costs? 27 Application Fee An Application Fee of 2.00% of your Investment Amount is payable at the start of your Investment, reflecting the costs of establishing your investment in Capital Series Multi Select. Some or all of the Application Fee may be paid to your financial adviser. Section 2(A) Brokerage Fee Brokerage on the sale of the Delivery Asset of 0.55% (including GST) of the Maturity Value at maturity. Early Termination Fee An Early Termination Fee of 1.50% of the Early Termination Value on sale before maturity.

30 28 Frequently asked questions Can the Underlying Portfolio change? The Underlying Portfolio may change in certain situations, such as when an Adjustment Event occurs (See What are the significant risks? in Section 2(A)). The Underlying Portfolio is not otherwise actively managed and may remain unchanged until maturity. This means the Underlying Portfolios may not change due to poor performance. What is Capital Protection? The protection level for Capital Series Multi Select is 100% of your Investment Amount on the Maturity Date. The amount you invest in each Strategy offered under this PDS (your Strategy Investment Amount) is 100% protected at maturity. This means that the Strategy Maturity Value cannot be less than the Strategy Investment Amount, unless an Early Termination Event occurs. As the sum of each Strategy Investment Amount is your Investment Amount, your Investment Amount is also 100% protected at maturity. Capital protection is provided by Commonwealth Bank and is only available at maturity. However, you are reliant on us - Commonwealth Bank - to meet our obligations. Please see Section 2(A) for more information. Is there any foreign exchange risk? There is no direct currency risk associated with your Investment, as Capital Series Multi Select is denominated in Australian Dollars. Can the Delivery Asset Change? At the commencement of Capital Series Multi Select, the Delivery Asset is one ordinary fully paid share in BHP. Circumstances may arise, such as an Adjustment Event, where we consider it appropriate to substitute the Delivery Asset for another security. We may substitute the Delivery Asset with any other security quoted and trading on ASX and deliver that substituted security as the Delivery Asset. If you elect to accept physical delivery of the Delivery Parcel, we may at our discretion, substitute an alternative Delivery Asset. Instead of the then current Delivery Asset, you may receive any other security quoted and trading on the ASX. Can I withdraw my Application? You may withdraw your Application for Capital Series Multi Select any time before the Closing Date. Any money that you have paid will be refunded to you without interest. Under what circumstances can a change of Dates and Times occur? Commonwealth Bank may, in its absolute discretion, change the Start Date and the Closing Date (and time) in which case you acknowledge that the Investment Term will be less than the Investment Term specified in the Schedule of Terms.

31 Section 2(B): What is the Capital Investment Loan? 29 The Commonwealth Bank Capital Investment Loan is an interest only, fixed rate loan designed for investors who want to borrow to invest in Capital Series Multi Select (the Product ). You should read the Terms and Conditions of the Loan, and seek professional advice on your rights and obligations under the Terms and Conditions of the Loan. Capitalised terms in this section are as defined in the Terms and Conditions of the Loan. Section 2(B) Capital Investment Loan Features Application Amount Loan Term Capital Investment Loan Start Date Capital Investment Loan Maturity Date Interest Rate Interest Payment Fees An amount equal to your Investment Amount for the Product. The period of time from the Capital Investment Loan Start Date to the Capital Investment Loan Maturity Date. The Capital Investment Loan is used to invest in the Product, therefore the Capital Investment Loan Start Date will be the Start Date of the Product. If the Start Date of the Product changes, the Capital Investment Loan Start Date will also change. The Start Date of the Product is determined by Commonwealth Bank. The Capital Investment Loan Maturity Date is the Settlement Date as defined in this PDS. Any changes to the Settlement Date of the Product may result in changes to the Capital Investment Loan Maturity Date. The Interest Rate is either a fixed rate payable yearly in advance or a fixed rate payable monthly in arrears. Contact us on to obtain the indicative fixed interest rate. If you elect to pay interest monthly in arrears, your interest payment will be debited from your Nominated Account on the last Business Day of each month. If you elect to pay interest yearly in advance, your first yearly interest payment will be debited from your Nominated Account on the Capital Investment Loan Start Date (unless you have an Interest in Advance Loan, in which case, we will apply the proceeds of the Interest in Advance Loan to pay the interest yearly in advance due and owing under the Capital Investment Loan). For further information on Interest in Advance Loan, please see What is the Interest in Advance Loan? on page 32. Personal investors do not have to pay establishment fees, however other fees and costs may include: Government charges and stamp duty Regulatory establishment fees for company and trust applicants Costs relating to early termination of your Capital Investment Loan Transaction fees on your Nominated Account (including direct debit dishonour fees) and your Loan Account

32 30 How the Capital Investment Loan works Setting up the Capital Investment Loan It is important that you read the section What is the Capital Investment Loan? above and the attached Terms and Conditions of the Loan. You should also consult your investment adviser before making an application for a Capital Investment Loan. Once you have decided to invest in the Product, you need to complete all sections (including Section C) of the Application Form in this PDS. If Commonwealth Bank approves your Capital Investment Loan application, the funds will be used on your behalf to make an investment in the Product. You will receive a Loan Confirmation from Commonwealth Bank setting out the details of your Capital Investment Loan. During the term The Capital Investment Loan is an interest only loan, so you make no repayments of the Capital Investment Loan principal until your Capital Investment Loan matures on the Capital Investment Loan Maturity Date. You pay a fixed interest rate either monthly in arrears or one year s interest in advance. If you elect to pay fixed interest monthly in arrears, your interest payment will be debited from your Nominated Account on the last Business Day of each month. If you elect to pay fixed interest yearly in advance, your first yearly interest payment will be debited from your Nominated Account on the Capital Investment Loan Start Date (unless you have an Interest in Advance Loan, in which case, we will apply the proceeds of the Interest in Advance Loan to pay the yearly interest in advance due and owing under the Capital Investment Loan). For further information in Interest in Advance Loan, please see What is the Interest in Advance Loan on page 32. If the Capital Investment Loan Maturity Date does not coincide with the anniversary of the Capital Investment Loan Start Date, then the final interest payment of the Capital Investment Loan will cover the remaining period and may be payable on the Capital Investment Loan Maturity Date. Your Loan Confirmation will contain a full interest payment schedule. If you have elected to pay interest yearly in advance using your funds (i.e. without using an Interest in Advance Loan) you will also receive an interest payment notification two weeks before interest is due to be debited from your Nominated Account. At maturity Before your Capital Investment Loan matures, you can elect to repay the Capital Investment Loan with: the Sale Proceeds - any amount above the outstanding Loan Balance will be paid to your Nominated Account; or your own capital (and take possession of the Delivery Asset as specified in this PDS) or with other borrowed funds. We must receive your repayment election at least 10 Business Days prior to the Capital Investment Loan Maturity Date. The notification date will be specified on your Loan Confirmation. If we do not receive any notification we will be deemed to have elected to use the Delivery Asset Sale Service and to have authorised us to use the Sale Proceeds to repay all moneys you owe us in connection with the Capital Investment Loan. Prepayment and Early Termination The objective of the Capital Investment Loan is that you invest in the Product and continue that investment until maturity. However, if you wish to prepay your Capital Investment Loan before the Capital Investment Loan Maturity Date, you may do so provided you give us at least 5 Business Days prior notice. The Capital Investment Loan must be prepaid in full. If you prepay the Capital Investment Loan and you have an Interest in Advance Loan, you must prepay all Money Owing under the Capital Investment Loan and all Money Owing under the Interest in Advance Loan on the date of prepayment of the Capital Investment Loan.

33 31 Prepayment or early termination will result in additional costs, including: A prepayment fee of a month s interest (if applicable) Break Costs Any government fees, charges or taxes, including stamp duty Any accrued but unpaid interest and bank fees This PDS contains an explanation of how the capital protection works. Capital protection will only apply if you hold the Product for the full Investment Term (as defined in this PDS). If you terminate your investment in the Product early, you will be required to repay the full Capital Investment Loan principal and all other Money Owing under your Capital Investment Loan (including the additional costs referred to above) to Commonwealth Bank when you terminate your investment in the Product. Provided you are not in default under the Terms and Conditions of the Loan, we will assume you have chosen to use the Delivery Asset Sale Service under this PDS (as that term is defined in this PDS), so that, on completion, you will receive the sale proceeds ( Sale Proceeds ) in respect of the Delivery Assets (as that term is defined in this PDS), rather than the Delivery Assets themselves. The Terms and Conditions of the Loan provide that Commonwealth Bank is authorised to apply the Sale Proceeds against amounts you owe to Commonwealth Bank under the Capital Investment Loan and all other Money Owing under the Capital Investment Loan. If you terminate early and use the Sale Proceeds to repay the Capital Investment Loan and all other Money Owing under the Capital Investment Loan, it may be possible for the Sale Proceeds to be less than the principal of the Capital Investment Loan and other Money Owing to Commonwealth Bank in connection with the Capital Investment Loan. You will still be liable for the full Capital Investment Loan principal and Break Costs and any other costs associated with early termination, whether or not you are in default under the Capital Investment Loan. If you are in default under the Capital Investment Loan, then under the Terms of Sale in this PDS, Commonwealth Bank can require you to terminate your investment in the Product early. You will not be entitled to receive the Delivery Assets or the Sale Proceeds if you are in default under the Capital Investment Loan. Instead, you may be entitled to receive an amount ( Early Termination Payment ) equal to the Early Termination Value, less the Early Termination Fee (as those terms are defined in this PDS). The Terms and Conditions of the Loan provide that Commonwealth Bank is authorised to apply the Early Termination Payment against amounts you owe to Commonwealth Bank under the Capital Investment Loan and all other Money Owing under the Capital Investment Loan. If you are in default and are required by Commonwealth Bank to terminate your investment in the Product early and you use the Early Termination Payment to repay the Capital Investment Loan, it may be possible that the Early Termination Payment is less than the principal of the Capital Investment Loan and other Money Owing (if any) that you owe to Commonwealth Bank in connection with the Capital Investment Loan. Section 2(B) Taxation implications You need to be aware that the interest you pay on the Capital Investment Loan may not always be allowable as a tax deduction. This depends on your specific circumstances and you should seek your own independent tax advice. Should the interest not be deductible in your specific circumstances, the interest should form part of the cost base of your Investment. For more information, please see Tax Considerations and Tax Opinion on pages 55 and 56 of this PDS.

34 32 What is the Interest in Advance Loan? The Commonwealth Bank Interest in Advance Loan is a principal and interest loan with a 12 month term designed for investors who wish to prepay in advance 100% of the yearly interest owing and due on the Capital Investment Loan. You should read the Terms and Conditions of the Loan, and seek professional advice on your rights and obligations under the Terms and Conditions of the Loan. (Please see the back of the document to find the Terms and Conditions of the Loan.) Capitalised terms in this section are as defined in the Terms and Conditions of the Loan. Interest in Advance Loan Features Eligible applicants Applicants for a Capital Investment Loan or existing holders of a Capital Investment Loan. Loan Term The period of time from the Interest in Advance Loan Start Date to the Interest in Advance Loan Maturity Date which is 12 months (provided that if the Interest in Advance Loan is redrawn for the final 6 months of the Investment Term, the period will be 6 months). Interest in Advance Loan Start Date The date the Interest in Advance Loan is drawn down. Interest Rate The Interest Rate is a fixed rate payable monthly in arrears. Contact us on to obtain the indicative fixed interest rate. Interest Payment You must pay interest each month in arrears. Interest payments will be made by direct debit from your Nominated Account. Automatic Redraw Facility Upon repayment of the Interest in Advance Loan in full and subject to certain conditions, we may automatically redraw an amount equal to 100% of the yearly interest due and owing under the Capital Investment Loan for another Term commencing on the redraw date (provided that if the Interest in Advance Loan is redrawn for the final 6 months of the Investment Term, the amount redrawn will be 100% of the semi-annual interest due and owing under the Capital Investment Loan). You may notify us at least 10 Business Days prior to the Interest in Advance Loan Maturity Date that you do not want us to make an automatic redraw. Fees Personal investors do not have to pay establishment fees, however other fees and costs may include: Government charges and stamp duty Regulatory establishment fees for company and trust applicants Costs relating to early termination of your Interest in Advance Loan Transaction fees on your Nominated Account (including direct debit dishonour fees) and your Loan Account

35 How the Interest in Advance Loan works 33 Setting up the Interest in Advance Loan It is important that you read the section What is the Interest in Advance Loan? above and the attached Terms and Conditions of the Loan. You should also consult your investment adviser before making an application for an Interest in Advance Loan. Once you have decided to apply for an Interest in Advance Loan, you need to complete all sections (including Section C) of the Application Form in this PDS. If Commonwealth Bank approves your Interest in Advance Loan application, the funds will be used on your behalf to prepay in advance 100% of the yearly interest owing and due under the Capital Investment Loan. You will receive a Loan Confirmation from Commonwealth Bank setting out the details of your Interest in Advance Loan. Section 2(B) During the term The Interest in Advance Loan is a principal and interest loan with a term of 12 months (provided that if the Interest in Advance Loan is redrawn for the final 6 months of the Investment Term, the period will be 6 months). You will be required to pay back your Interest in Advance Loan in equal monthly instalments (comprising principal and interest) over the period beginning immediately after the Interest in Advance Loan is used to pay the interest yearly in advance on your Capital Investment Loan (Interest in Advance Loan Start Date) until your Interest in Advance Loan matures on the Interest in Advance Loan Maturity Date (provided that if the Interest in Advance Loan is redrawn for the final 6 months of the Investment Term, the amount redrawn will be 100% of the semi-annual interest due and owing under the Capital Investment Loan). You pay a fixed interest rate monthly in arrears and your interest payment will be debited from your Nominated Account on the last Business Day of each month. Your Loan Confirmation will contain a full interest payment schedule. At maturity By the Interest in Advance Loan Maturity Date, you must repay any outstanding Interest in Advance Loan and all other Money Owing under the Interest in Advance Loan. Automatic redraw of your Interest in Advance Loan Provided that no Default Event has occurred and we have agreed that you can continue to prepay in advance the yearly interest on the Capital Investment Loan and in our absolute discretion, we may notify you at least 1 month prior to the Interest in Advance Loan Maturity Date that, upon repayment of the Interest in Advance Loan in full, we will automatically redraw an amount equal to 100% of the yearly interest on the Capital investment Loan due and owing under the Capital Investment Loan for another Term commencing on the redraw date ( New Interest in Advance Loan ). The indicative interest rate on the New Interest in Advance Loan will be stated in the notice. The interest on the New Interest in Advance Loan must be paid monthly in arrears at a fixed rate. The proceeds of the New Interest in Advance Loan will be used to prepay in advance the yearly interest on the Capital Investment Loan due and payable by you under the Capital Investment Loan for another Term commencing on the redraw date. Upon automatic redraw, we will send to you the details of your New Interest in Advance Loan in a Loan Confirmation (including the Interest Rate applicable to your New Interest in Advance Loan). If you notify us at least 10 Business Days prior to the Interest in Advance Loan Maturity Date that you do not want us to make an automatic redraw, then we will not redraw any amounts and the yearly interest on the Capital Investment Loan will be direct debited to your Nominated Account.

36 34 How the Interest in Advance Loan works (cont.) Prepayment and Early Termination If you may wish to prepay your Interest in Advance Loan before the Interest in Advance Loan Maturity Date, you may do so, provided you give us at least 5 Business Days prior notice. The Interest in Advance Loan must be prepaid in full. If you prepay the Capital Investment Loan, you must prepay all other Money Owing under the Capital Investment Loan and all Money Owing under the Interest in Advance Loan on the date of prepayment of the Capital Investment Loan. Prepayment or early termination will result in additional costs, including: A prepayment fee of a month s interest (if applicable) Break Costs Any government fees, charges or taxes, including stamp duty Any accrued but unpaid interest and bank fees If you terminate your investment in the Product early, you will be required to repay the Capital Investment Loan, all other Money Owing under the Capital Investment Loan and all Money Owing under the Interest in Advance Loan to Commonwealth Bank. Provided you are not in default under the Terms and Conditions of the Loan, we will assume you have chosen to use the Delivery Asset Sale Service under this PDS (as that term is defined in this PDS), so that, on completion, you will receive the sale proceeds ( Sale Proceeds ) in respect of the Delivery Assets (as that term is defined in this PDS), rather than the Delivery Assets themselves. The Terms and Conditions of the Loan provide that Commonwealth Bank is authorised to apply the Sale Proceeds against amounts you owe to Commonwealth Bank under the Capital Investment Loan and any outstanding Interest in Advance Loan and all other Money Owing (if any) under the Capital Investment Loan and all Money Owing under the Interest in Advance Loan. If you terminate early and use the Sale Proceeds to repay the Capital Investment Loan, all other Money Owing under the Capital Investment Loan and all Money Owing under the Interest in Advance Loan, it may be possible for the Sale Proceeds to be less than the principal of the Capital Investment Loan, all other Money Owing under the Capital Investment Loan and all Money Owing under the Interest in Advance Loan. You will still be liable for the full Capital Investment Loan principal, all other Money Owing under the Capital Investment Loan and all Money Owing under the Interest in Advance Loan and Break Costs and any other costs associated with early termination, whether or not you are in default under the Capital Investment Loan or the Interest in Advance Loan. If you are in default under the Capital Investment Loan or the Interest in Advance Loan, then under the Terms of Sale in this PDS, Commonwealth Bank can require you to terminate your investment in the Product early. You will not be entitled to receive the Delivery Assets or the Sale Proceeds if you are in default under the Capital Investment Loan or the Interest in Advance Loan. Instead, you may be entitled to receive an amount ( Early Termination Payment ) equal to the Early Termination Value, less the Early Termination Fee (as those terms are defined in this PDS). The Terms and Conditions of the Loan provide that Commonwealth Bank is authorised to apply the Early Termination Payment against amounts you owe to Commonwealth Bank under the Capital Investment Loan, all other Money Owing under the Capital Investment Loan and all Money Owing under the Interest in Advance Loan.

37 35 If you are in default and are required by Commonwealth Bank to terminate your investment in the Product early and you use the Early Termination Payment to repay the Capital Investment Loan, all other Money Owing under the Capital Investment Loan and all Money Owing under the Interest in Advance Loan, it may be possible that the Early Termination Payment is less than the principal of the Capital Investment Loan, all other Money Owing under the Capital Investment Loan and all Money Owing under the Interest in Advance Loan. Section 2(B) Taxation Implications You need to be aware that the interest you pay on the Interest in Advance Loan may not always be allowable as a tax deduction. This depends on your specific circumstances and you should seek your own independent tax advice. Should the interest not be deductible in your specific circumstances, the interest should form part of the cost base of your Investment. For more information, please see Tax Considerations and Tax Opinion on pages 55 and 56 of this PDS.

38 36 How do I apply for a Capital Investment Loan and/or Interest in Advance Loan? 1 Read Section 2(B) of the PDS and the Terms and Conditions of the Loan carefully. 2 Complete Section C of the Application Form and sign the Application Form in this PDS. Attach supporting documentation as required. 3 Forward your completed Application Form to: Capital Series Multi Select Commonwealth Securities Locked Bag 34 Australia Square NSW Contact our Client Service team on or call your investment adviser if you require further assistance.

39 Section 3(A): Information on the Strategies 37 Introduction The return you receive at maturity from your Investment is dependent on the performance of the Underlying Portfolio related to each Strategy or Strategies you choose to invest in. Except in the case of an Adjustment Event, the Underlying Portfolios are not actively managed and may remain unchanged until the Maturity Date. This means the Underlying Portfolios may not change due to poor performance. Commonwealth Bank does not make any representation as to how the Underlying Portfolios will perform in the future. In considering the following information you should remember: Past performance is not a reliable indicator of future performance. The historical returns achieved by the Underlying Portfolios are not reliable indicators of future performance for the Underlying Portfolio or your Investment. Generally the higher the potential return for an investment, the higher the corresponding volatility or risk and the greater the chance of substantial fluctuations in returns over time. The Underlying Portfolio itself has no actual performance history, however the Reference Indices in each Underlying Portfolio do have performance history. Section 3(A) Reference Index Disclaimers Capital Series Multi Select is not sponsored, endorsed, sold or promoted by any Reference Index Provider and no Reference Index Provider makes any representation, condition or warranty, express or implied, to investors in Capital Series Multi Select or any member of the public regarding advisability of investing in securities generally or in Capital Series Multi Select particularly, or the ability of any Reference Index to track general share market performance. Each Reference Index is determined, composed, calculated, compiled, published and managed, as the case may be, by the relevant Reference Index Provider without regard to Commonwealth Bank or Capital Series Multi Select. No Reference Index Provider has any obligation to take the needs of Commonwealth Bank or investors in Capital Series Multi Select into consideration in determining, composing, calculating, compiling, publishing or managing, as the case may be, any Reference Index. No Reference Index Provider is responsible for or has participated in the determination of the timing of, prices at, or quantities of Capital Series Multi Select to be issued or in the determination or calculation of the equation by which Capital Series Multi Select is to be converted into cash. No Reference Index Provider has any obligation or liability in connection with the administration or marketing of Capital Series Multi Select.

40 38 Information on the Strategies (cont.) Strategy - Best of Asia Underlying Portfolio Investment Term Strategy Investment Amount Protected at Maturity Coupon Payment Hang Seng China Enterprises Index (HSCEI) MSCI Taiwan Index KOSPI 200 Index S&P/ASX 200 Index 3.5 years 100% Nil Information about the Strategy Best of Asia aims to provide Investors with exposure to the performance of a basket of stock market indices within Asia. This Underlying Portfolio offers exposures to the Reference Indices on pages

41 39 Hang Seng China Enterprises Index The Hang Seng China Enterprises Index (HSCEI) is a free float-adjusted market capitalisation weighted index made up of H-shares listed on the Stock Exchange of Hong Kong. The companies in the HSCEI cover a wide variety of market sectors and represent a broad cross-section of the mainland Chinese market. The historical values of the HSCEI since 2003 are shown in the following graph Section 3(A) Mar 2003 Oct 2003 Apr 2004 Nov 2004 May 2005 Dec 2005 Jul 2006 Jan 2007 Aug 2007 Feb Source: Bloomberg Note that past performance is not a reliable indicator of future performance. Top Ten Constituents as at May 2008 Security Name Weight% China Construction Bank Corp 12.48% Industrial and Commercial Bank of China 10.82% Insurance Co Ltd 9.50% PetroChina Co Ltd China Life 8.93% Bank of Communications Co Ltd 5.76% China Petroleum and Chemical Corp 4.85% Bank of China Ltd 4.75% China Shenhua Energy Co Ltd 4.38% Ping An Insurance Group Co of China Ltd 3.83% China Merchants Bank Co Ltd 3.21% Source: Bloomberg

42 40 Information on the Strategies (cont.) MSCI Taiwan Index The MSCI Taiwan Index is a free float-adjusted market capitalisation index and aims to measure the performance of the Taiwanese equity market. Component companies are adjusted for available float and must meet objective criteria in order to be included in the index, which is rebalanced quarterly. The historical values of the MSCI Taiwan Index since 2003 are shown in the following graph Mar 2003 Oct 2003 Apr 2004 Nov 2004 May 2005 Dec 2005 Jul 2006 Jan 2007 Aug 2007 Feb Source: Bloomberg Note that past performance is not a reliable indicator of future performance. Top Ten Constituents as at May 2008 Security Name Weight% Taiwan Semiconductor Mfg 11.79% Hon Hai Precision Ind Co 7.26% Cathay Financials Hlds 3.68% China Steel Corp Common 3.66% Au Optronics Corp 3.11% High Tech Computer Corp 3.10% Chunghwa Telecom Co 3.02% Nan Ya Plastic 2.95% Formosa Plastic Corp 2.90% Mediatek Inc 2.76% Source: MSCI.com

43 41 KOSPI 200 Index The Kospi 200 Index is a capitalisation weighted index of 200 Korean stocks which make up 93% of the total market value of the Korea Stock Exchange. The index is seen as a barometer of the overall movements of the Korean stock market and is used as the benchmark for the performance of investors and funds in the Korean market. The historical values of the KOSPI 200 Index since 2003 are shown in the following graph. 300 Section 3(A) Mar 2003 Oct 2003 Apr 2004 Nov 2004 May 2005 Dec 2005 Jul 2006 Jan 2007 Aug 2007 Feb Source: Bloomberg Note that past performance is not a reliable indicator of future performance. Top Ten Constituents as at May 2008 Security Name Weight% Samsung Electrical 15.50% POSCO 7.86% KookMinBk 4.08% ShinhanGroup 3.60% HHI 3.30% LG Electronics 2.78% Hyundai MTR 2.60% SKTelecom 2.30% LG Display 2.20% KEPCO 2.03% Source: Bloomberg

44 42 Information on the Strategies (cont.) S&P/ASX 200 (XJO) Index The S&P/ASX 200 is a free float index representing the top 200 companies on the Australian Securities Exchange. It is the primary representation of the Australian equity market and covers approximately 78% of Australian equity market capitalisation. The historical values of the S&P/ASX 200 Index since 2003 are shown in the following graph Mar 2003 Oct 2003 Apr 2004 Nov 2004 May 2005 Dec 2005 Jul 2006 Jan 2007 Aug 2007 Feb Source: Bloomberg Note that past performance is not a reliable indicator of future performance. Top Ten Constituents as at May 2008 Security Name Weight% BHP Billiton Limited 13.93% Commonwealth Bank of Australia 5.13% National Australia Bank Limited 4.73% Westpac Banking Corporation 4.02% ANZ Banking Group Ltd 3.74% RIO Tinto Limited 3.68% Woolworths Limited 3.02% Wesfarmers Limited 2.69% Westfield Group 2.66% Woodside Petroleum Limited 2.40% Source: Bloomberg

45 43 Strategy - Emerging Markets Next 11 Underlying Portfolio Investment Term Strategy Investment Amount Protected at Maturity Coupon Payment S-BOX N-11 Price Index 3.5 years 100% 0.5% per annum guaranteed and payable at the end of Year 1, Year 2, Year 3 and on the Maturity Date. Section 3(A) Information about the Strategy Emerging Markets Next 11 aims to provide Investors with exposure to the performances of 11 stock markets that make up next group of emerging countries after the BRIC (Brazil, Russia, India, China) economies. The investment will offer exposure to the S-BOX N-11 Price Index. The S-BOX N-11 Price Index began trading in February The constituents of this index include major companies trading on the local exchanges from the list of 11 countries. Within each country, five of the major companies are equally weighted to make up the country weighting. From time to time, foreign ownership restrictions or lack of liquidity may require adjustments to this rule. This means not all 11 countries may be included in the S-BOX N-11 Price Index at a particular point in time. The countries are weighted semi-annually according to the World Economic Outlook report issued by the International Monetary Fund. The historical values of the S-BOX N-11 Price Index since February 2007 are shown in the following graph Feb 2007 Apr 2007 Jun 2007 Jul 2007 Sep 2007 Oct 2007 Dec 2007 Feb 2008 Mar Source: Bloomberg Note that past performance is not a reliable indicator of future performance.

46 44 Information on the Strategies (cont.) Constituents as at May 2008 Country Weight% Egypt 20.60% Indonesia 14.03% South Korea 9.51% Mexico 7.76% Pakistan 16.53% Philippines 10.83% Turkey 8.96% Vietnam 11.79% Source: Strategy - Soft Commodities Underlying Portfolio Investment Term Strategy Investment Amount Protected at Maturity Coupon Payment S&P GSCI Agriculture E28 Excess Return Strategy 3.5 years 100% 1.25% per annum guaranteed and payable at the end of Year 1, Year 2 and Year 3. A coupon is not payable for the last 6 months of the Investment Term. Information about the Strategy Soft Commodities aims to provide investors with exposure to the performance of certain soft commodities through the S&P GSCI Agriculture E28 Excess Return Strategy. The S&P GSCI Agriculture E28 Excess Return Strategy reflects the returns that are potentially available through an unleveraged investment solely in the S&P GSCI Agriculture Excess Return Index. The S&P GSCI Agriculture Excess Return Index comprises only those futures contracts on the agricultural commodities currently included in the S&P GSCI Index, including Chicago wheat, Kansas wheat, corn, soybeans, coffee, sugar, cocoa and cotton. The S&P GSCI Agriculture E28 Excess Return Strategy is calculated on a similar basis to the S&P GSCI Agriculture Excess Return Index, but with certain modifications made to the rolling of the agricultural contracts. These rolling modifications are incorporated in the S&P GSCI Agriculture E28 Excess Return Strategy in an attempt to generate a return that is superior to that of the S&P GSCI Agriculture Excess Return Index by taking advantage of seasonality. For example, in the S&P GSCI Agriculture Excess Return Index the Chicago wheat contract is rolled in the months of March, May, September and December each year, whereas in the S&P GSCI Agriculture E28 Excess Return Strategy the Chicago wheat contract is rolled only in the months of September and December each year, which in the northern hemisphere is the new crop season when inventories are expected to be at their lowest.

47 45 The historical values of the S&P GSCI Agriculture E28 Excess Return Strategy since April 2003 are shown in the following graph Section 3(A) Apr 03 Jun 03 Aug 03 Oct 03 Dec 03 Feb 04 Apr 04 Jun 04 Aug 04 Oct 04 Dec 04 Feb 05 Apr 05 Jun 05 Aug 05 Oct 05 Dec 05 Feb 06 Apr 06 Jun 06 Aug 06 Oct 06 Dec 06 Feb 07 Apr 07 Jun 07 Aug 07 Oct 07 Dec 07 Feb 08 Apr 08 0 Source: Bloomberg Constituents as at May 2008 Commodity Weight% Corn 29.35% Wheat 27.04% Soybeans 17.91% Sugar 6.92% Red wheat 6.51% Cotton 6.14% Coffee 4.38% Cocoa 1.76% Source:

48 46 Section 3(B): Maturity Value Calculations The Maturity Value of your Investment is the sum of the Strategy Maturity Value for each Strategy you choose to invest in. The Strategy Maturity Value is determined using the Strategy Portfolio Return that is calculated for each Strategy you choose to invest in. The Strategy Portfolio Return is calculated differently depending on the Strategy. The examples below demonstrate how the Strategy Portfolio Return is calculated. Calculating the Strategy Portfolio Return The levels used in these examples are for illustrative purposes only and do not represent, and should not be taken to represent, our view of what the levels on those days might be, or what you should expect the levels to be on those days, or the manner in which the levels might move between those days. Strategy - Best of Asia On the Maturity Date, the Strategy Portfolio Return is calculated in accordance with the steps set out below in Table A: Table A Best of Asia Reference Index HSCEI MSCI Taiwan Index KOSPI 200 Index S&P/ASX 200 Index Initial Reference Level 14, ,700 Reference Index HSCEI MSCI Taiwan Index KOSPI 200 Index S&P/ASX 200 Index Observation Date Determined Level of Reference Index 26 September , , December , , March , , June , , September , , December , , March , , June , , September , , December , , March , , June , , September , , December , ,819 Final Reference Level 23, ,840 Reference Index Return 66.30% 15.00% 51.25% 20.00%

49 47 Reference Index Performance Reference Index Return Weighting Weighted Return HSCEI Best Performer 66.30% 50% % KOSPI 200 Index S&P/ASX 200 Index Second Best Performer Third Best Performer 51.25% 30% % 20.00% 10% % Section 3(B) MSCI Taiwan Index Worst Performer 15.00% 10% % Strategy Portfolio Return 52.03% Example setting out the steps Refer Table A above Step 1: Step 2: Step 3: Step 4: The Initial Reference Level for each Reference Index is determined on the Start Date. The Final Reference Level for each Reference Index is determined on the Maturity Date. On each Observation Date, the Determined Level of the Reference Index is calculated. The Determined Level is the higher of the Closing Level of the Reference Index and the Initial Reference Level. The Final Reference Level is calculated as the average of the Determined Levels on each Observation Date, as determined by the Calculation Agent in its discretion. The Reference Index Return for each Reference Index is calculated. The Reference Index Return is the percentage change from the Initial Reference Level to the Final Reference Level. This can also be expressed by the formula: (Final Reference Level Initial Reference Level) / Initial Reference Level, expressed as a percentage. In this example, the Reference Index Return for the HSCEI is 66.30% ((23,282 14,000) / 14,000. The Reference Index Return for the MSCI Taiwan Index is 15.00% (( ) / 350. The Reference Index Return for the KOSPI 200 Index is 51.25% (( ) / 240. The Reference Index Return for the S&P/ASX 200 Index is 20.00% ((6,840 5,700) / 5,700. The Reference Index Returns are ordered from highest to lowest. The Reference Index with the highest Reference Index Return is the Best Performer, the Reference Index with the second highest Reference Index Return is the Second Best Performer, and the Reference Index with the third highest Reference Index Return is the Third Best Performer. The Reference Index with the lowest Reference Index Return is the Worst Performer. Step 5: The weighting as set out in the table below is then applied to each Reference Index Return: Weighting Best performer 50% Second Best Performer 30% Third Best Performer 10% Worst Performer 10%

50 48 Maturity Value Calculations (cont.) Step 6: The weighted Reference Index Returns are added together to derive the Strategy Portfolio Return. In this example, the HSCEI is the Best Performer with a Reference Index Return of 66.30%, and accordingly we assign a weight of 50%. The KOSPI 200 Index is the Second Best Performer with a Reference Index Return of 51.25%, and accordingly we assign a weight of 30%. The S&P/ASX 200 Index is the Third Best Performer with a Reference Index Return of 20.00%, and accordingly we assign a weight of 10%. The MSCI Taiwan Index is the Worst Performer with a Reference Index Return of 15.00%, and accordingly we assign a weight of 10%. Therefore the Strategy Portfolio Return is 52.03% ((66.30% x 50%) + (51.25% x 30%) + (20.00% x 10%) + (15.00% x 10%)) Strategy Emerging Markets Next 11 On the Maturity Date, the Strategy Portfolio Return is calculated in accordance with the steps set out below Table B: Table B Emerging Markets Next 11 S-BOX N-11 Price Index Initial Reference Level 80 Observation Date Determined Level of Reference Index 26 September December March June September December March June September December March June September December Final Reference Level Strategy Portfolio Return 23.04%

51 49 Example setting out the steps Refer Table B on previous page Step 1: Step 2: Step 3: The Initial Reference Level for each Reference Index is determined on the Start Date. The Final Reference Level for each Reference Index is calculated. On each Observation Date, the Determined Level of the Reference Index is calculated. The Determined Level is the higher of the Closing Level of the Reference Index and the Initial Reference Level. The Final Reference Level is calculated as the average of the Determined Levels on each Observation Date, as determined by the Calculation Agent in its discretion. The Strategy Portfolio Return is calculated, which is the percentage change from the Initial Reference Level to the Final Reference Level. This can be expressed by the formula: (Final Reference Level Initial Reference Level) / Initial Reference Level, expressed as a percentage. In this example, the Strategy Portfolio Return is 23.04% (( ) / 80)). Section 3(B) Strategy Soft Commodities On the Maturity Date, the Strategy Portfolio Return is calculated in accordance with the steps set out below Table C: Table C Soft Commodities S&P GSCI Agriculture E28 Excess Return Strategy Initial Reference Level 85 Observation Date Determined Level of Reference Index 26 September December March June September December March June September December March June September December Final Reference Level Strategy Portfolio Return 28.57%

52 50 Maturity Value Calculations (cont.) Example setting out the steps Refer Table C on previous page Step 1: Step 2: Step 3: The Initial Reference Level for each Reference Index is determined on the Start Date. The Final Reference Level for each Reference Index is calculated. On each Observation Date, the Determined Level of the Reference Index is calculated. The Determined Level is the higher of the Closing Level of the Reference Index and the Initial Reference Level. The Final Reference Level is calculated as the average of the Determined Levels on each Observation Date, as determined by the Calculation Agent in its discretion. The Strategy Portfolio Return is calculated, which is the percentage change from the Initial Reference Level to the Final Reference Level. This can be expressed by the formula: (Final Reference Level Initial Reference Level) / Initial Reference Level, expressed as a percentage. In this example, the Strategy Portfolio Return is 28.57% (( ) / 85)). Calculating the Maturity Value The Strategy Maturity Value is calculated using the Strategy Portfolio Return. If you choose to invest in more than one Strategy, each Strategy Maturity Value is summed to determine the Maturity Value. In the examples below, we assume you have chosen to invest in three Strategies for the amounts below: Strategy Investment Amount (Best of Asia) $20, Strategy Investment Amount (Emerging Markets Next 11) $50, Strategy Investment Amount (Soft Commodities) $30, Investment Amount $100,000.00

53 51 Example 1 (assumes an Investment in all three Strategies and assumes a positive return for each Strategy) The Strategy Portfolio Returns are: Best of Asia: 52.03% Emerging Markets Next 11: 23.04% Soft Commodities: 28.57% The Strategy Maturity Values are below: Best of Asia is the greater of: (a) your Strategy Investment Amount + (your Strategy Investment Amount x Strategy Portfolio Return) and (b) your Strategy Investment Amount Where (a) = $20, ($20, x 52.03%) = $20, ($10,406.00) = $30, Assuming the Strategy Investment Amounts above and the Strategy Returns above, If you invested $20,000 in Best of Asia and the return for Best of Asia is 52.03%, the Strategy Maturity Value would be $30, Emerging Markets Next 11 is the greater of: (a) your Strategy Investment Amount + (your Strategy Investment Amount x Strategy Portfolio Return) and (b) your Strategy Investment Amount Where (a) = $50, ($50, x 23.04%) = $50, ($11,520.00) = $61, Assuming the Strategy Investment Amounts above and the Strategy Returns above, If you invested $50,000 in Emerging Markets Next 11 and the return for Emerging Markets Next 11 is 23.04%, the Strategy Maturity Value would be $61, Soft Commodities is the greater of: (a) your Strategy Investment Amount + (your Strategy Investment Amount x Strategy Portfolio Return) and (b) your Strategy Investment Amount Where (a) = $30, ($30, x 28.57%) = $30, ($8,571.00) = $38, Assuming the Strategy Investment Amounts above and the Strategy Returns above, If you invested $30,000 in Soft Commodities and the return for Soft Commodities is 28.57%, the Strategy Maturity Value would be $38, The Maturity Value of your Investment is the sum of each Strategy Maturity Value. Maturity Value = $30, $61, $38, = $130, Therefore, the Maturity Value will be $130, Result: There would be capital growth in your investment. Depending on your choice, you will receive either physical delivery of the Delivery Parcel to the value of $130,497.00, or a cash payment (the Sale Proceeds) of $130, If you choose to receive Sale Proceeds, the Brokerage Fee will be charged to you separately. Section 3(B)

54 52 Maturity Value Calculations (cont.) Example 2 (assumes an Investment in all three Strategies and assumes a 0.00% return for each Strategy) The Strategy Portfolio Returns are: Best of Asia: 0.00% Emerging Markets Next 11: 0.00% Soft Commodities: 0.00% The Strategy Maturity Values are below: Best of Asia is the greater of: (a) your Strategy Investment Amount + (your Strategy Investment Amount x Strategy Portfolio Return) and (b) your Strategy Investment Amount Where (a) = $20, ($20, x 0.00%) = $20, ($0.00) = $20, Assuming the Strategy Investment Amounts above and the Strategy Returns above, if you invested $20,000 in Best of Asia and the return for Best of Asia is 0.00%, the Strategy Maturity Value would be $20, Emerging Markets Next 11 is the greater of: (a) your Strategy Investment Amount + (your Strategy Investment Amount x Strategy Portfolio Return) and (b) your Strategy Investment Amount Where (a) = $50, ($50, x 0.00%) = $50, ($0.00) = $50, Assuming the Strategy Investment Amounts above and the Strategy Returns above, if you invested $50,000 in Emerging Markets Next 11 and the return for Emerging Markets Next 11 is 0.00%, the Strategy Maturity Value would be $50, Soft Commodities is the greater of: (a) your Strategy Investment Amount + (your Strategy Investment Amount x Strategy Portfolio Return) and (b) your Strategy Investment Amount Where (a) = $30, ($30, x 0.00%) = $30, ($0.00) = $30, Assuming the Strategy Investment Amounts above and the Strategy Returns above, if you invested $30,000 in Soft Commodities and the return for Soft Commodities is 0.00%, the Strategy Maturity Value would be $30, The Maturity Value of your Investment is the sum of each Strategy Maturity Value. Maturity Value = $20, $50, $30, = $100, Therefore, the Maturity Value will be $100, Result: There would not be any capital growth in your investment. However, because of the capital protection feature of Capital Series Multi Select, you receive 100% protection of your Investment Amount if held to maturity. Depending on your choice, you will receive either physical delivery of the Delivery Parcel to the value of $100,000.00, or a cash payment (the Sale Proceeds) of $100, If you choose to receive Sale Proceeds, the Brokerage Fee will be charged to you separately.

55 53 Example 3 (assumes an Investment in all three Strategies and assumes a negative return for each Strategy) The Strategy Portfolio Returns are: Best of Asia: -5.63% Emerging Markets Next 11: % Soft Commodities: -2.03% The Strategy Maturity Values are below: Best of Asia is the greater of: (a) your Strategy Investment Amount + (your Strategy Investment Amount x Strategy Portfolio Return) and (b) your Strategy Investment Amount Where (a) = $20, ($20, x -5.63%) = $20, (-$1,126.00) = $18, Assuming the Strategy Investment Amounts above and the Strategy Returns above, if you invested $20,000 in Best of Asia and the return for Best of Asia is -5.63%, the Strategy Maturity Value would be $20, Emerging Markets Next 11 is the greater of: (a) your Strategy Investment Amount + (your Strategy Investment Amount x Strategy Portfolio Return) and (b) your Strategy Investment Amount Where (a) = $50, ($50, x %) = $50, (-$5,000.00) = $45, Assuming the Strategy Investment Amounts above and the Strategy Returns above, if you invested $50,000 in Emerging Markets Next 11 and the return for Emerging Markets Next 11 is %, the Strategy Maturity Value would be $50, Soft Commodities is the greater of: (a) your Strategy Investment Amount + (your Strategy Investment Amount x Strategy Portfolio Return) and (b) your Strategy Investment Amount Where (a) = $30, ($30, x -2.03%) = $30, (-$609) = $29, Assuming the Strategy Investment Amounts above and the Strategy Returns above, if you invested $30,000 in Soft Commodities and the return for Soft Commodities is -2.03%, the Strategy Maturity Value would be $30, The Maturity Value of your Investment is the sum of each Strategy Maturity Value. Maturity Value = $20, $50, $30, = $100, Therefore, the Maturity Value will be $100, Result: There would not be any capital growth in your investment. However, because of the capital protection feature of Capital Series Multi Select, you receive 100% protection of your Investment Amount if held to maturity. Depending on your choice, you will receive either physical delivery of the Delivery Parcel to the value of $100,000.00, or a cash payment (the Sale Proceeds) of $100, If you choose to receive Sale Proceeds, the Brokerage Fee will be charged to you separately. Section 3(B)

56 54 Maturity Value Calculations (cont.) Each of the examples above show similar performance for each Strategy, i.e. in Example 1 all Strategy Portfolio Returns are positive, in Example 2 all Strategy Portfolio Returns are 0.00%, and in Example 3 all Strategy Portfolio Returns are negative. However, if you choose to invest in more than one Strategy, the actual Strategy Portfolio Returns may not be similar. For your Investment, some Strategy Portfolio Returns may be positive and some Strategy Portfolio Returns may be negative. The Maturity Value of your Investment will be calculated in accordance with the above examples and the actual Strategy Portfolio Returns will be reflected in the Maturity Value. The examples above also assume an Investment in all three Strategies. However, you are not required to invest in all three Strategies. You may choose to invest in one, two or three Strategies. The Maturity Value of your Investment will be calculated based on the Strategy Portfolio Returns for the Strategy or Strategies you choose to invest in.

57 Section 4: Tax Considerations 55 Commonwealth Bank does not provide taxation advice. Taxation law is complex and its application will depend on your circumstances. Commonwealth Bank has obtained an opinion from Greenwoods and Freehills, which discusses the indicative tax treatment for Capital Series Multi Select investors, including the ATO s draft determinations on deferred purchase agreements. You should read the Tax Opinion carefully and seek independent taxation advice when determining whether an investment in Capital Series Multi Select is suitable for you. You should also visit the ATO website to view any changes to the tax law and the ATO s interpretation of the tax law. You should then consider the tax consequences and whether these make Capital Series Multi Select suitable for you in light of any possible changes. Section 4

58 56 Tax Opinion

59 57 Section 4

60 58

61 Tax Opinion (cont.) 59 Section 4

62 60

63 Tax Opinion (cont.) 61 Section 4

64 62