Phillip Capital Limited

Transcription

1 Phillip Capital Limited Margin Foreign Exchange Contracts and Margin Bullion Contracts Product Disclosure Statement 28 March 2018 PHILLIP CAPITAL LIMITED (ABN ) (Australian Financial Services Licence Number )

2 IMPORTANT INFORMATION The complexity and risks inherent in Spot Margin Foreign Exchange Contracts (FX Contracts) and Spot Margin Bullion Contracts (Bullion Contracts) means that these types of products are unlikely to be appropriate for the investment objectives, needs and risk profiles of many retail investors. It is important that you obtain a copy of our Financial Services Guide ( FSG ) and read, understand and, if necessary, seek independent advice on the contents of this Product Disclosure Statement ( PDS ) which includes the Margin Foreign Exchange Contracts and Margin Bullion Contracts Terms and Conditions being part of our Client Agreement before opening an account with us. The Australian Securities and Investment Commission (ASIC) has developed disclosure benchmarks for over-the-counter (OTC) derivative products that can help retail investors understand the risks associated with OTC derivative products, assess their potential benefits and decide whether investment in such products is suitable for them. As to investors being qualified to trade in OTC derivative products, Benchmark 1 outlined in ASIC Regulatory Guide 227 (RG 227) says: Benchmark 1: Client qualification Benchmark 1 addresses the issuer s policy on investors qualification for FX Contracts and Bullion Contracts trading Accordingly, to comply with this benchmark, Phillip Capital Limited (PhillipCapital) will assess client suitability to trade FX Contracts and Bullion Contracts via an online assessment. Other benchmarks are discussed in Section 2 of this PDS. For applicants who pass the assessment and appropriate account information is completed and accepted by PhillipCapital, a trading account will be opened, however applicants who fail the assessment will not have an account opened. Applicants who fail the assessment will be given the opportunity to undertake further education and will be offered assistance from an experienced advisor with respect to their derivatives and FX Contracts and Bullion Contracts knowledge development. Additional FX Contracts and Bullion Contracts education information can be found at our website This PDS does not take into account your investment objectives, financial situation and particular needs. Neither Phillip Capital Limited nor any member of Phillip Capital Limited guarantees the performance of any FX Contract or Bullion Contract transaction entered into by you. Before entering into FX Contracts or Bullion Contracts transactions referred to in this PDS, we strongly recommend you seek independent advice to ensure this is appropriate for your particular financial objectives, needs and circumstances. FX Contracts and Bullion Contracts are speculative products. The geared nature of FX Contracts and Bullion Contracts means that there is a significantly greater risk compared with the risks associated with non-geared investment products. There exists the potential to incur losses in addition to any fees and costs that apply. Potential investors need to understand and accept the risks of investing in FX Contracts and Bullion Contracts and/or other derivative products. This PDS is available only to persons receiving the PDS in Australia. No action has been taken to register or obtain necessary approvals in other jurisdictions in respect of this PDS. The distribution of this PDS in jurisdictions outside Australia may be subject to legal restrictions. Any person who resides outside Australia who gains access to this PDS should comply with any such restrictions as failure to do so may constitute a violation of financial services laws. This PDS is not available to US persons or US investors. To the fullest extent permitted by law, Phillip Capital Limited does not accept any responsibility for errors or misstatements, negligent or otherwise, nor for any direct, indirect, consequential or other loss arising from any use of this PDS or any associated documents and/or further communication in relation to them.

3 CONTENTS

4 1. GENERAL INFORMATION 1.1 Introduction and Purpose Section Your Contract with PhillipCapital

5 1.3 Information Subject to Change Phillip Capital Limited Pty ltd 1.5 Anti-Money Laundering Laws 1.6 Contact Us 1.7 Restrictions of Offer 1.8 No Cooling Off

6 2. REGULATORY BENCHMARK DISCLOSURE 2.1 Benchmarks for FX Contracts and Bullion Contracts Disclosure Benchmark Meet Benchmark? Related Information Benchmark 1. Client qualification The Client assessment is included in the PhillipCapital Account Application accessed at Benchmark 2. Opening collateral

7 Disclosure Benchmark Meet Benchmark? Related Information Benchmark 3. Counterparty risk hedging

8 Disclosure Benchmark Meet Benchmark? Related Information Benchmark 4. Counterparty risk financial resources

9 Disclosure Benchmark Meet Benchmark? Related Information Benchmark 5. Client money

10 Disclosure Benchmark Meet Benchmark? Related Information Benchmark 6. Suspended or halted underlying assets Benchmark 7. Margin calls o o

11 3. SPOT MARGIN FOREIGN EXCHANGE CONTRACTS and SPOT MARGIN BULLION CONTRACTS 3.1 What are Spot Margin Foreign Exchange Contracts ( FX Contracts ) and Spot Margin Bullion Contracts ( Bullion Contracts )? FX Contracts Bullion Contracts 3.2 Key Features of FX Contracts and Bullion Contracts Contract Size Underlying Asset Leverage Short Position Long Position FX Swap/Interest

12 3.2.7 Bullion Interest Value Date/Expiry Date Rollover

13 Closing Positions Order 3.3 Client Money General Authorisation by Client Reg Guide and Reg A] When retail Client Money is not used [Corps Amendment (Client Money) Regs 2017 inserting Corporations Regulation A] 3.4 Key Risks of Trading FX Contracts and Bullion Contracts 3.5 Margin Requirements

14 3.5.1 Initial (Minimum) Margin and Maintenance Margin 1. Initial Margin (IM): 2. Maintenance Margin (MM): FX Contract Example Force Liquidation Margin 3.6 Settlement Currency 3.7 Profit and Loss

15 3.8 Placing Orders 3.9 Order Filling Order Order Order Order 3.10 Client Suitability 3.11 Advice 3.12 FX Contracts Available 3.13 Monitoring 3.14 Minimum Deposit 3.15 Funds Withdrawal

16 3.16 Modes of Payment Limited FX Trust Phillip Capital 3.17 Telegraphic Transfer Bank Details FX Trust Below is for US Dollars Only

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18 4. SIGNIFICANT RISKS 4.1 Segregated Account Risk 4.2 Leverage Risk 4.3 Liquidity Risk 4.4 Counterparty Risk 4.5 Limiting Losses Risks and Spread Positions Stop Loss orders, Stop Limit orders or Trailing Stop orders

19 Spread positions 4.6 Suspension or Restriction of Trading and Pricing Relationships 4.7 Deposited Cash and Property 4.8 Market Risk 4.9 Risks Involving Transactions in Other Jurisdictions 4.10 Currency Risks 4.11 Trading Facilities Risks 4.12 Commission and Other Charges

20 5. FEES AND CHARGES 5.1 Commission Rates 5.2 Rollover Charges and Swap Mark Up Fees 5.3 Multi- 5.4 Funds Transfer Methods Deposit or Top Up Withdrawal

21 5.5 Taxation Implications Goods and Services Tax

22 6. OTHER TERMS AND CONDITIONS 6.1 Client Agreement 6.2 Overview of Client Agreement Terms 6.3 Scope and Application 6.4 Trading Facility 6.5 General Conditions

23 6.6 Margin Requirements 6.7 Foreign Currency Transactions

24 6.8 Fees and Payments 6.9 Default A Default shall be deemed to occur if:

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26 7. ELECTRONIC BROKING FACILITIES 7.1 Authorised Use 7.2 Distribution and Intellectual Property 7.3 Transmission of Electronic Data 7.4 Disclaimer

27 7.5 Rights of Access Security 7.7 Risk Warning

28 8. OTC FACILITIES 8.1 Notification 8.2 Default

29 9. PRIVACY POLICY PhillipCapital has a Privacy Policy published on the Philip Capital website. Please refer to our website at

30 10. COMPLAINTS

31 11. COMPENSATION ARRANGEMENTS

32 12. DISCLAIMER

33 13. DEFINITIONS 13.1 General Account Application Form Applicable Laws Associate ASIC Business Day Bullion Contract Buy Client Client Agreement Client Money Section. Collateral Confirmation Contract Value Corporations Act Currency Currency Pair

34 Dealing Spread Default Electronic Broking Facilities Extraordinary Event Exchange Rate FX or Forex FX Contract GST Liquidity Loss Margin Market Matched off Minimum Size OTC Facilities OTC Transactions Officer Order PhillipCapital Product Disclosure Document or PDS PIN Person

35 Pip Products Relevant Currency Rollover Security Swap Swap Mark Up Fees Tick Size Transaction

36 PhillipCapital MELBOURNE SYDNEY QUEENSLAND