MARGIN FOREIGN EXCHANGE

PRODUCT DISCLOSURE STATEMENT MARGIN FOREIGN EXCHANGE Halifax Investment Services Limited Australian Financial Services Licence No. 225973 Date 7th May 2015 HALIFAX Product Disclosure Statement 1

IMPORTANT INFORMATION AND DISCLAIMER In addition to reading, understanding and acknowledging this PDS you must complete a Client Foreign Exchange (FX) Suitability Test. The client suitability test includes questions which both test the investor s knowledge and also act to reiterate some aspects of the disclosure requirements for OTC Derivatives. For example, a number of questions are designed so that the correct answer will ensure that the investor recognises or appreciates risks inherent in OTC Foreign Exchange. It should be remembered that testing client knowledge is the primary aim of the client suitability test reinforcing the disclosure requirements is merely a convenient way to enhance investor understanding. You can complete your Suitability Test prior to or after opening an Account with Halifax. To find out more, please contact Halifax Accounts on 1300 363 505 (overseas +61 2 9373 4300) after Account Opening. Decisions to invest in ( Margin FX ) and Foreign Exchange Options ( FX Options ) products carry significant risks and consequences. Margin FX products and FX Options are highly leveraged and carry a high degree of risk. Potential investors should be experienced in Margin FX and FX Option products and/or other derivative products, and understand and accept the risks of investing in such products. Refer to section 12 for more information about significant risks in trading Margin FX products. In preparing this Product Disclosure Statement ( PDS ), we have not considered your personal circumstances. This document provides features and risks of Margin FX and FX Option products. Before trading in Margin FX products, you need to be satisfied that these financial products are appropriate to your financial objectives, situation and needs. You must read and acknowledge that before opening an Account and beginning to trade you have read this PDS in its entirety and that you understand it. It is your responsibility to ensure that you fully understand the products, how they are traded and the risks involved. Halifax also recommends that you consider seeking financial, legal, taxation and other professional advice to ensure that you fully understand Margin FX and FX Option products and that they are appropriate for you before you begin trading in these products. To the extent permitted by law, neither Halifax nor its affiliates accepts any responsibility for errors or misstatements, negligent or otherwise, nor for any direct, indirect, consequential or other loss arising from any use of these documents and/or further communication in relation to them. DO YOU HAVE ALL THE RELEVANT DOCUMENTS? This PDS is subject to the detailed provisions of the Client Services Agreement (CSA) and Financial Services Guide ( FSG ). You must ensure you have read and fully understand the Client Services Agreement, the FSG and this PDS. BEFORE YOU TRADE IN MARGIN FX AND FX OPTIONS, YOU MUST CAREFULLY CONSIDER WHICH TRADING PLATFORM BEST SUITS YOUR NEEDS It is very important for you to understand our arrangements with our Platform Counterparties, as they can affect key terms of the Margin FX and FX Option Transactions you enter into and can fundamentally change the nature of your legal rights in respect of a Margin FX and FX Options and your Account in general. Your choice of Trading Platform for a Margin FX and FX Option Transaction can significantly impact: The way we deal with the funds in your Account, which, in turn, affects the credit risk you take on Halifax; The credit risk you take on the Platform Counterparty for your Trading Platform; The fees and costs you are charged for your Margin FX and FX Option Transactions; and The range of Margin FX and FX Option Transactions you are able to enter into. In order to enter into a Margin FX or FX Option Transaction, you must select a Trading Platform. 1 1. However, in some limited circumstances, we may allow you to enter into a Margin FX or FX Option Transaction without choosing an Underlying Platform. In this case your funds will be treated as Non Trust, please refer to page 6 What is the difference between a Trust Account Platform and a Non Trust Account Platform?. 2 HALIFAX Product Disclosure Statement

Index 1. Introduction... 4 2. Terms and Conditions... 4 3. The Purpose of this PDS.... 4 4. Changes to this PDS... 5 5. The Financial Products this PDS Covers... 5 6. About Halifax.... 7 7. Purpose of Margin FX products... 8 8. RG227 Disclosure Benchmarks... 8 9. Key Features of Margin FX................. 12 10. Key Features of FX Option Contracts... 15 11. Key Benefits... 21 12. Significant risks... 22 13. Margin obligations... 25 14. Opening and Closing Out a Margin FX Position. 28 15. Electronic Trading Platforms... 29 16. Trading Hours... 30 17. Trading Examples... 30 18. How we deal with your money.... 30 19. Charges, fees and other amounts payable for Margin FX.... 32 20. Charges, fees and other amounts payable for FX Option Contracts... 36 21. Confirmation of transactions... 37 22. Market Information... 38 23. Cooling Off Arrangements... 39 24. Taxation implications.... 39 25. Dispute Resolution... 39 26. Privacy.... 40 27. Glossary of terms... 40 Annexure A... 43 Schedule A... 47 Schedule B... 50 Schedule C... 57 Schedule D... 57 Schedule E... 58 Schedule F... 58 HALIFAX Product Disclosure Statement 3

1. Introduction This PDS is dated 7th May 2015 and is issued by Halifax Investment Services Ltd ( Halifax ). Halifax is an unlisted Australian public company (ABN 52 096 980 522), an Australian Stock Exchange (ASX) market participant that holds an Australian financial services licence issued by the Australian Securities and Investments Commission ( ASIC ) (AFS Licence number 225973). Under the Corporations Act 2001 (Cth) ( Corporations Act ), Halifax is regarded as the issuer of financial products which are derivatives. This PDS has been prepared by Halifax as the issuer of the Margin FX and FX Option products referred to in this PDS. All of the Margin FX and FX Option products offered by Halifax under this PDS are over the counter ( OTC ) derivative products. The information in this PDS is general information only and does not take into account your personal objectives, financial situation and needs. We also refer you to the detailed provisions of the Client Services Agreement and the FSG. Before making a decision to acquire the financial products described in this PDS you should read this PDS, the FSG and Client Services Agreement and be satisfied that any trading you undertake in relation to the Margin FX and FX Option products described in this PDS is appropriate in view of your objectives, financial situation and needs. You can access the FSG and the Client Services Agreement from our website or, by calling Halifax and requesting that a paper copy be provided to you free of charge. Refer to the glossary of terms in section 27 for definitions we use in this PDS. 2. Terms and Conditions This PDS and the FSG set out important information about the financial products and services Halifax offers and about Halifax itself. Additional legal terms governing your dealing with us are set out in: your Client Services Agreement with us; any supplementary terms for particular financial products; any supplementary terms for any electronic Trading Platform which you use. You will need to enter into a Client Services Agreement by completing the application form. The Client Services Agreement sets out the general legal terms of your dealings with us for the products covered by this PDS and also for dealings not covered by this PDS (such as trading in other financial products we offer). By completing an application form you agree to the terms of the Client Services Agreement. 3. The Purpose of this PDS Under the Corporations Act, a retail client must receive a PDS before acquiring a financial product. The PDS is the document that sets out the significant features of a financial product, including its risks, benefits, costs and fees and other related information. The purpose of this PDS is to provide you with sufficient information to make an informed decision in relation to the acquisition of our financial products. You may also use this PDS to compare the financial products described with similar financial products offered by other issuers i.e. other Margin FX and FX Options providers. This PDS seeks to explain to you about our products in a clear, concise and effective manner. When we use the terms Halifax, we, our or us in this PDS, the reference is to Halifax, the issuer of the Margin FX and FX Option products described in this PDS. When we use the term you we mean you as the applicant for or holder of financial products issued by us. When we refer to client we mean you or another applicant for or holder of Margin FX or FX Option products issued by us. This PDS is an important document and provides you with key information about certain financial products that we offer. Margin FX and FX Option products can be highly leveraged and speculative with a high degree of risk. Potential investors should understand the risks of investing in Margin FX and FX Option before making any decision to invest. Before trading in the Margin FX and FX Option products referred to in this PDS you should give consideration to your objectives, financial situation and needs. We recommend that you take all reasonable steps to fully understand the possible outcomes of trades and strategies in relation to the Margin FX and FX Option products offered. You should also be aware of the risks involved and be satisfied that trading in these products is suitable for you in view of your financial circumstances. If you have any questions in relation to this PDS, please do not hesitate to contact us (our contact details are in section 6 of this PDS). We are required to give you this PDS because we are the issuer of the financial products described in this PDS. 4 HALIFAX Product Disclosure Statement

Other Jurisdictions The offer to which this PDS relates is available only to persons receiving the PDS in Australia. 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. The offer to which this PDS relates is not available to US investors. The Application of this PDS We have recently made a number of fundamental changes to the terms of the Margin FX and FX Option products which are reflected in this PDS. This PDS relates to Accounts opened after the date of this PDS. If you are one of our pre-existing clients and you have entered into a Client Services Agreement before the date of this PDS, your Transactions will continue to be governed by your existing Client Services Agreement and the PDS under which you invested. You can elect to transition to the terms of the Margin FX and FX Option products under this PDS by contacting us and agreeing to vary the terms of your Client Services Agreement. 4. Changes to this PDS This PDS is subject to change from time to time and may be updated on our website www.halifax.com.au. A copy can be downloaded from our website or, by calling us and requesting that a paper copy be provided to you free of charge. If any new information is materially adverse information, we will issue a new or supplementary PDS with the new information. If the new information is not materially adverse, we may not issue a new PDS or Supplementary PDS but you will be able to find the updated information on our website at www.halifax.com.au or by contacting us. Our contact details are set out in section 6 of this PDS. 5. The Financial Products this PDS Covers The Margin FX and FX Option products offered under this PDS are OTC derivative contracts. A derivative contract is a contract that derives its value by reference to one or more assets (called the Underlying Instrument ) and an OTC derivative is a derivative that is traded off-market rather than on an exchange such as a stock exchange or futures exchange. When you transact in Margin FX and FX Options, you will transact with Halifax (acting in a principal capacity). Margin FX Margin FX products are financial products which are agreements between you and Halifax to trade the difference arising from movements in the level of an Underlying Instrument that is an Exchange Rate for two currencies or for a limited number of precious metals (referred to as the Underlying Exchange Rate ). Margin FX products have no fixed expiry dates, are not standardised contracts and have no fixed contract size. As a party to a Margin FX Transaction, you can, on Closing Out the Transaction, be paid an amount (representing a gross profit) or be required to pay an amount (representing a gross loss) arising from movements in the Underlying Exchange Rate. The Underlying Instrument for a Margin FX Transaction is referred to as the Exchange Rate. The Exchange Rate can be either the price of one currency expressed in the terms of another currency ( FX Transactions ) or the price of a precious metal expressed in a specified currency or precious metal ( Metal Transactions ): For FX Transactions: the Exchange Rate is the price of one currency in terms of another currency (called a Currency Pair ). For example, the Exchange Rate might be the price of the Australian dollar (AUD) in terms of the United States dollar (USD). If the current Exchange Rate for the AUD against the USD (AUD/USD) is 0.9000, this means that one AUD dollar equates to, or can be exchanged for, USD 0.9000 or 90 US cents. For Metal Transactions: the Exchange Rate is the price of one precious metal (limited to either gold or silver) in terms of a specified currency or precious metal (called a Metal Pair ). For example, the Exchange Rate might be the price of the spot gold (XAU) in terms of USD. If the current Exchange Rate for gold as against the USD (XAU/USD) is 1300.00, this means that 1 ounce of spot gold equates to, or can be exchanged for, USD 1,300.00. All Margin FX Transactions remain open until they are Closed Out. This occurs where the client enters into an equal and opposite Transaction and the two positions are offset against each other. Importantly, trading Margin FX does not result in the ownership by you of any actual currency or precious metal to which the Margin FX Transaction relates. Margin FX Transactions do not result in the physical delivery of the relevant foreign currency or precious metal, but instead are cash settled. HALIFAX Product Disclosure Statement 5

FX Options Option contracts traded over Margin FX products are referred to as FX Option Contracts. The buyer of an FX Option Contract pays a Premium in exchange for the right, but not the obligation, to enter into a Margin FX Transaction with the seller at a predetermined Exchange Rate (called the Exercise Rate ) on the Expiry Date. From the seller s viewpoint, the seller has no right other than a right to the Premium. The seller will be under an obligation to enter into a Margin FX Transaction at the Exercise Rate of the FX Option Contract if the FX Option Contract is validly exercised by the buyer. If the FX Option Contract is exercised at the Expiry Date, this will result either in a Cash Settlement or the establishment of a Margin FX Transaction between the buyer and the seller. Refer to section 10 for further details on FX Options. You can terminate your exposure under an FX Option Contract before the Expiry Date by: where you are the buyer of the FX Option, selling to Halifax a corresponding FX Option; or where you are the seller of the FX Option, buying from Halifax a corresponding FX Option. What are the Trading Platforms and how do they affect my Margin FX and FX Options? We are a 100% straight through processor issuer, which means that we essentially hedge 100% of our exposure to you under each Margin FX and FX Option Transaction. This means that for each Transaction you enter into with us, we will hedge our exposure to you by entering into an equivalent matching transaction with a Platform Counterparty (referred to as the Hedge Transaction ). It is very important for you to understand the hedging arrangements we enter into with our Platform Counterparties as these arrangements can affect a number of features of your Transactions. For your Margin FX and FX Option Transactions, you can choose one or more of the approved Platform Counterparties we will contract with for our Hedging Transaction. You make this choice by choosing which Trading Platform to use we offer a separate Trading Platform for each underlying Platform Counterparty, with each platform having a separate online interface. That is, the online interface you use to enter into a Transaction or to manage your Account will differ depending on which Trading Platform (i.e. which Platform Counterparty) you select. You can change Trading Platforms from time to time by contacting us and/or choose to have one or more Trading Platforms at any one time, however an open position cannot be transferred from one Trading Platform to another. It is very important for you to understand our arrangements with our Platform Counterparties, as they can affect key terms of the Transactions you enter into and can fundamentally change the nature of your legal rights in respect of a Transaction and your Account in general. In particular, your choice of Trading Platform for a Transaction can impact: The way we deal with the funds in your Account. This, in turn, affects the credit risk you take on us. In particular, if you use a Non Trust Account Platform to trade Margin FX and FX Options, your rights against us in respect of the balance of your Account will be unsecured and your claims against us will rank equally with claims by our other unsecured creditors; The credit risk you take on the Platform Counterparty for your Trading Platform; The fees and costs you are charged for the relevant Transaction; and The range of Transactions you are able to enter into. Generally, you cannot enter into a Transaction without selecting a Trading Platform. For further details, refer to Schedule C. What is the difference between a Trust Account Platform and a Non Trust Account Platform? There is a fundamental difference in the way we treat the balance of your Account depending on whether you use a Trust Account Platform or a Non Trust Account Platform. The Trust Account Platforms are: Halifaxonline (for which, Saxo Capital Markets is our Platform Counterparty); and Trader Work Station (for which Interactive Brokers is our Platform Counterparty). The Non Trust Account Platforms are: FX2 Dealbook (for which Global Futures & Forex is our Platform Counterparty); GAIN MetaTrader (for which GAIN Capital is our Platform Counterparty); and ctrader, SuperTrader and FXPro MetaTrader (for which FXPro is our Platform Counterparty). How we treat your money under Trust Account Platforms For the Trust Account Platforms, amounts you pay to us are deposited into a client trust account maintained by us. This means that client funds (and property) transferred to us through Trust Account Platforms are segregated from our own funds (or property). 6 HALIFAX Product Disclosure Statement

Client monies (Net Free Equity) are held, used and withdrawn in accordance with the Corporations Act, this PDS and our Client Services Agreement. In brief, this means that those funds are not available to pay general creditors in the event of our receivership or liquidation. Amounts used to meet Margin Requirements will be deducted from the Trust Account and paid to us or the relevant Platform Counterparty (if required). How we treat your money under Non Trust Account Platforms By contrast to the Trust Account Platforms, for the Non Trust Account Platforms, all amounts you pay to us will be absolutely owned by us from the time of receipt and will be paid into our account. There will be no segregation of this money or property. This means that those funds are available to pay general creditors in the event of our receivership or liquidation. How do I take credit risk on the Platform Counterparty for my Trading Platform? For each Margin FX or FX Option Transaction you enter into, we will hedge our exposure to you by entering into an equivalent Margin FX or FX Option product with a Platform Counterparty. However, when you enter into a Transaction, you transact with us in a principal capacity. That is, your contractual relationship is with us only, and you have no rights of recourse to the relevant Platform Counterparty, or to any other person. However, you still take credit exposure on the Platform Counterparty, because under the terms of your Transaction, our obligations to you are linked to the performance by the Platform Counterparty of its obligations under the Hedge Transaction. That is, to the extent the Platform Counterparty to the Hedge Transaction for your Transaction fails to perform its obligations under the Hedge Transaction, our obligations to you in respect of your Transaction will be reduced accordingly. This means that if an insolvency event occurs in respect of the Platform Counterparty for your Trading Platform, you might lose some or all of the balance of your Account in that Trading Platform (even though we might continue to be solvent). In addition, you might face considerable delays before you are able to access the amount (if any) that is able to be recovered from the Platform Counterparty. Do I also take credit risk on Halifax? Yes. Your rights against us in respect of your Account are unsecured contractual rights (with the exception of the amount held in the client trust account for you (i.e. your Net Free Equity) which is applicable only to the Trust Account Platforms). How does my choice of Trading Platform affect the fees and costs I am charged? The fees and costs you are charged will differ depending on your choice of Trading Platform. This is because the fees we charge you reflect the fees that we are charged under the Hedge Transaction (plus various spreads or margins we apply for our profit). The fees and costs charged in respect of each Trading Platform are described in section 19 and 20 and in the tables in Schedules A-B. There can be considerable differences in the fees charged in respect of each Trading Platform, so it is very important that you understand the various fee options so that you can choose which Trading Platform best suits your needs. 6. About Halifax We are the issuer of this PDS and the issuer of the Margin FX and FX Option products referred to in this PDS. In accordance with our AFS Licence, we are authorised by ASIC to advise, deal and make a market to both retail and wholesale clients in derivatives. Margin FX and FX Option products are derivatives. Pursuant to our AFS Licence, among other things, we are also authorised to provide general and/or personal financial product advice in relation to, and to deal in, the following products for both retail and wholesale clients: (i) deposit and payment products limited to basic deposits; (ii) interests in managed investment schemes excluding investor directed portfolio services; (iii) foreign exchange contracts (and make a market); (iv) securities; and (v) miscellaneous financial investment products (limited to managed investment warrants). All enquiries to us should be made during business hours to the Operations Manager. Our contact details are: Contact Details: The Operations Manager Halifax Investment Services Ltd Governor Phillip Tower Level 49, 1 Farrer Place Sydney, NSW 2000 Phone: 1300 363 505 (+61 2 9373 4300) Facsimile: 61 2 9241 4331 Email: operations@halifaxonline.com.au Website: www.halifax.com.au HALIFAX Product Disclosure Statement 7

7. Purpose of Margin FX and FX Option products Margin FX and FX Option products are generally used for one of two purposes hedging or speculating: Margin FX and FX Option products can provide people with a facility for managing the risks associated with changing prices for certain investments. This strategy is known as hedging. Margin FX and FX Option products are also traded by speculators, who trade in the anticipation of profiting purely from changing prices in the Underlying Instrument. Generally, trading Margin FX and FX Option products allows you to leverage your positions to take a much greater exposure than if you were to transact directly in the relevant currency or precious metal. Trading in Margin FX and FX Option products does, however, involve significant risk. Transactions should only be entered into by traders and investors who understand the nature and extent of their rights, obligations and risks (for more information on risks refer to section 11 of this PDS). 8. RG227 Disclosure Benchmarks ASIC Regulatory Guide 227 requires issuers of over-the-counter (OTC) derivatives to publish certain information addressing a range of disclosure benchmarks. These benchmarks are required to be addressed on an if not, why not basis, and are intended to assist retail investors to properly understand the complexity and risks of trading in OTC derivative products, particularly with regard to leverage. There are 7 disclosure benchmarks required to be addressed, all of which we are of the view, have been met by us. Our compliance with each benchmark is addressed in the following table: Benchmark description Client qualification How does Halifax meet this benchmark? We maintain and apply a written policy which sets out the minimum qualification criteria that you will need to demonstrate before we will open a trading Account for you. We also maintain a written policy/procedure to ensure such criteria are properly applied, and unsuitable investors are not accepted. You can request a copy of our policies by contacting our Compliance Officer at compliance@halifaxonline.com.au. We keep records of our assessments. Please note that we do not provide personal advice regarding the suitability of trading in Margin FX and FX Option products for your personal financial circumstances and objectives. However, we generally will not allow you to open an Account unless you are able to satisfactorily answer the questionnaire included in our application form which addresses the following criteria: Previous trading experience in financial products; Understanding of leverage, margins and volatility; Understanding of the key features of the product; Understanding the trading process and relevant technology; Ability to monitor and manage the risks of trading; and Understanding that only risk capital should be traded. Relevant sections of the PDS which may provide further relevant information Opening Collateral We only permit clients to open an Account and trade with cleared funds (i.e. transfer of cash from your bank account to your trading account). Please note that credit cards may not be used to open or trade an account at any time. We do not accept other financial products as collateral for opening or trading an account, due to the potential for double leverage in such circumstances. Section 13.5 8 HALIFAX Product Disclosure Statement

Benchmark description How does Halifax meet this benchmark? Relevant sections of the PDS which may provide further relevant information Counterparty risk hedging We maintain and apply a written policy to manage our exposure to market risk from client positions. This includes strict risk management controls to assess and monitor our Platform Counterparties (to ensure they are of sufficient financial standing, are licensed by a comparable regulator, and are of sound reputation). We are a 100% straight through processor, meaning that we essentially hedge 100% of our exposure to you in respect of all Transactions. We facilitate all Transactions through our Platform Counterparties. A summary of our policy, which notes our current approved Platform Counterparties, is available on our website (and may be updated from time to time as Platform Counterparties change). Section 18.2 Counterparty risk financial resources We maintain and apply a written policy to ensure the ongoing maintenance of adequate financial resources. Please note that we have a designated compliance officer who monitors our compliance with our licence conditions, including our capital requirements, as well as review and input from our independent external legal and accounting advisers. Further, our external independent auditor conducts an audit at the conclusion of every financial year, a copy of which can be provided to you upon written request. Please note we do not undertake stress testing in relation to un-hedged market exposures, as all Transactions with clients are fully hedged. While you have no rights of recourse against the Platform Counterparty for your Trading Platform in respect of any Transactions (we transact with each Platform Counterparty in respect of our Hedge Transactions solely as principal), you still take credit risk on the Platform Counterparty for your Trading Platform (in addition to taking credit risk on us). This is because under the terms of your Transaction, our obligations to you are linked to the performance by the Platform Counterparty of its obligations under the corresponding Hedge Transaction. That is, to the extent the Platform Counterparty for our Hedge Transaction for a Transaction fails to perform its obligations under the Hedge Transaction, our obligations to you in respect of your corresponding Transaction will be reduced accordingly. This means that if an insolvency event occurs in respect of the Platform Counterparty for your Trading Platform, you might lose some or all of the balance of your Account in that Trading Platform (even though we might continue to be solvent). In addition, you might face considerable delays before you are able to access the amount (if any) that is able to be recovered from the Platform Counterparty. Section 12.1 HALIFAX Product Disclosure Statement 9

Benchmark description Client money How does Halifax meet this benchmark? There is a fundamental difference in the way we treat the balance of your Account depending on whether you use a Trust Account Platform or a Non Trust Account Platform. Relevant sections of the PDS which may provide further relevant information Section 18 Suspended or halted underlying assets Trust Account Platforms For the Trust Account Platforms, we maintain and apply a clear policy with regard to the use of client money. You can request a copy of our policies by contacting our Compliance Officer at compliance@halifaxonline.com. au. Please note that money you transfer to us for your trading Account for a Trust Account Platform is co-mingled with other client money in our client trust account. Such monies are only applied to client trades/ settlement obligations and to pay agreed fees etc., in accordance with the Corporations Act. Monies paid to us in respect of your trading Account to meet margins, deposits, fees, transaction settlements, or other costs shall be immediately on-forwarded (where applicable) to our account or the relevant Platform Counterparty, and applied against your margin, exchange, fee and settlement obligations. Client monies which are held pending future transactions and payments are retained in our segregated account in accordance with the Corporations Act. It is important to note that holding your money in one or more segregated accounts may not afford you absolute protection. Non Trust Account Platforms By contrast to the Trust Account Platforms, for the Non Trust Account Platforms, amounts you pay to us will be treated as amounts paid to purchase a financial product from us (or an increased interest in the financial product) and will be paid into our account and will be absolutely owned by us from the time of receipt. There will be no segregation of your money or property. In brief, this means that those funds are available to pay general creditors in the event of our receivership or liquidation. Events may occur that disrupt or impair trading in the relevant Exchange Rate to which a Transaction relates. Where this occurs, we may, in our absolute discretion, cancel your order in respect of a Transaction which has not yet been opened, or close any open Transactions, where the market in the relevant Underlying Instrument is subject to significant disruptions (including through regulatory intervention). When you place an order to transact with us, we will place a corresponding order to enter into the corresponding Hedge Transaction to hedge our exposure to you. We have the discretion as to when and if we will accept an order. Without limiting this discretion, it is likely that we will elect not to accept an order in circumstances where our corresponding Hedge Transaction cannot be entered into. Accordingly, we may at any time determine, in our absolute discretion, that we will not permit the entry into Transactions over one or more Underlying Instruments. 10 HALIFAX Product Disclosure Statement

Benchmark description How does Halifax meet this benchmark? Relevant sections of the PDS which may provide further relevant information Margin calls We maintain and apply a written policy detailing our margining practices. This details our rights regarding the levying of Margin Calls and closing out of positions when such calls are not met in a timely manner, and what factors we consider when exercising such close-out rights. Clients are required to monitor all open positions themselves on a real-time basis intraday, to ensure changing Margin Requirements are identified and actioned in a timely manner. We will not notify you of Margin Calls it is your responsibility to monitor your trading Account and fund Margin Calls accordingly. Please note that certain market conditions or events may trigger extreme volatility, requiring urgent funds to be applied to retain your open positions. We reserve our full rights to immediately close positions in relation to which Margin Calls have not been met, in order to protect against exposure to losses in the positions. Trading in OTC derivative products carries a high level of risk and returns are volatile. The risk of loss in trading can be substantial, and you can incur losses in excess of the capital you have invested. Accordingly, you should only trade with risk capital i.e. money you can afford to lose, and which is excess to your financial needs/ obligations. Section 13 HALIFAX Product Disclosure Statement 11

9. Key Features of Margin FX Margin FX products are a speculative investment and involves a high degree of risk. It is not suitable for all investors. You should not transact in Margin FX unless you are experienced in derivatives, leveraged products and foreign exchange contracts, and you understand the risks of transacting in Margin FX. You are responsible for the selection of the Currency Pair or Metal Pair for each Transaction. The performance of a Margin FX Transaction will depend on movements in the Underlying Instrument for the Currency Pair or Metal Pair you select and on your trading strategy. The value of an investment in Margin FX can change rapidly and by significant amounts at any time. 9.1. Differences between FX Transactions and Metal Transactions As noted in section 5 above, Margin FX Transactions can be either FX Transactions or Metal Transactions. FX Transactions The key features of FX Transactions are that: FX Transactions are derivative products on which you can make a profit or incur a loss if the value of one currency appreciates or depreciates (depending on the direction of the trade) when compared against another currency, without having to transact in the actual currencies itself. FX Transactions are available in most widely traded currencies. In order to enter into an FX Transaction, you must select two currencies (called a Currency Pair). The Underlying Instrument for an FX Transaction is the Exchange Rate of the Currency Pair (called the Underlying Exchange Rate). For example, AUD/USD is the Exchange Rate of the AUD in terms of the USD. If the AUD/USD is 0.9500, this means that one Australian dollar can be exchanged for 95 US cents. All FX quotations are made up of two currencies: the Base Currency and the Terms Currency. The Base Currency can be identified as being the first currency in the Currency Pair. The second currency in your Currency Pair is referred to as your Terms Currency. So, for an FX Transaction where the Underlying Exchange Rate is AUD/USD, AUD will be the Base Currency and USD will be the Terms Currency. Unlike contracts traded on an exchange, OTC products are not standardised. The terms of an FX Transaction are individually tailored to the particular requirements of the parties involved in the contract i.e. us and the client. The terms involved in the negotiation of FX Transactions are: (a) the Currency Pair; (b) the amount of the Base Currency to which the Transaction relates (called the Notional Value ); (c) the Exchange Rate at which such currencies are to be exchanged; and (d) the Value Date for the Transaction (see section 9.7 below). FX Transactions are OTC derivative products with Halifax acting as counterparty (and principal) in its dealings with you. It is a transaction between you and us and can only be entered into with us and Closed Out with us. It is not possible to Close Out the FX Transactions with any other party. FX Transactions are subject to Margin Requirements and marked to market on at least a daily basis (for more information refer to section 13 of this PDS). Metal Transactions Metal Transactions are the same as FX Transactions, except that: Under Metal Transactions you make a profit or incur a loss if the value of a precious metal (limited to gold or silver) appreciates or depreciates (depending on the direction of the trade) when compared against a currency or precious metal (as compared to two currencies under FX Transactions). In order to enter into a Metal Transaction, you must select the relevant precious metals or precious metal and currency (called a Metal Pair). The only precious metals that are available to form part of the Metal Pair are gold and silver and are always considered the Base Currency. However, most widely traded currencies are available to make up the Terms Currency of the Metal Pair along with either gold or silver. For example, if the Underlying Exchange Rate for a Metal Transaction is XAU/USD which is spot gold in terms of US dollar, then gold will be the Base Currency and USD will be the Terms Currency. The Underlying Exchange Rate for Metal Transactions is the price of the precious metal in your Metal Pair in terms of the specified currency in your Metal Pair. For example, XAU/USD is the Exchange Rate of the gold in terms of the USD. If the XAU/USD is 1300.00, this means that one ounce of gold can be exchanged for 1,300 US dollars. 12 HALIFAX Product Disclosure Statement

9.2. Quotes A quote for a Margin FX product represents the bid/ask spread for the Underlying Exchange Rate. For example, for a Margin FX Transaction where the Underlying Exchange Rate is the Exchange Rate for AUD/USD, the Margin FX may be quoted as 0.9200/0.9203. This quote means that you can: (a) buy the Margin FX (i.e. enter into a long Margin FX position) at 0.9203; and/or (b) sell the Margin FX (i.e. enter into a short Margin FX position) at 0.9200. Depending on your Trading Platform, the spread incorporated in the quote may include the Halifax commissions, as described in section 19. There are a number of additional costs incurred when Margin FX are entered into or Closed Out. These additional costs as described in section 19 and Schedule A-B. 9.3. You can take both long and short positions Of the two currencies that make up the Currency Pair (for FX Transactions) or the precious metal(s) and/ or the currency that make up the Metal Pair (for Metal Transactions), you must select the currency or precious metal that you think will appreciate relative to the other (this is always referred to as the Long Currency ) and the currency or metal you think will depreciate relative to the other (this is always referred to as the Short Currency ). If the value of the Long Currency appreciates relative to the value of the Short Currency then the value of that Transaction will increase and you may profit. If the value of the Short Currency appreciates relative to the value of the Long Currency then the value of the Transaction will decrease and you will make a loss. 9.4 Points or pips As noted in section 9.2, FX Transactions are quoted in terms of the bid/ask spread for the Underlying Exchange Rate. It is arbitrary how many significant figures are used in an Exchange Rate quotation. The last decimal place to which a particular Exchange Rate is usually quoted is referred to as a point or pip. For example: In the quotation USD 1=AUD 0.7050, one point or one pip means AUD 0.0001. In the quotation USD 1=JPY 102.50, one point or one pip means JPY 0.01. Of note, all points (or pips) are not of equal value. 9.5. Calculating profits and/or losses The gross profits or losses on a Margin FX Transaction are calculated by: calculating the Notional Value of the Transaction in the Base Currency multiplied by the Exchange Rate at which the Transaction is entered into. This will give you an amount expressed in the Terms Currency (Opening Value); calculating the Notional Value of the Transaction in the Base Currency multiplied by the Exchange Rate at which the Transaction is Closed Out. This will give you an amount expressed in the Terms Currency (Closing Value); then calculating the difference between the Closing Value and the Opening Value in the Terms Currency). The difference between the two amounts will either be the gross profit (if your Long Currency appreciates relative to your Short Currency) or loss (if your Long Currency depreciates relative to your Short Currency) on the trade. The gross profit or loss will then be converted by Halifax from the Terms Currency into the Account Currency (unless the Terms Currency is your Account Currency). The Account Currency is the currency in which your Margin FX Trading Account is denominated, as nominated by you. If the Underlying Exchange Rate moves in your favour (i.e. your Long Currency appreciates relative to your Short Currency) the amount determined by this formula will be greater than zero and Halifax will credit this amount (less any fees, charges and spreads as explained in section 19) to your Account. By contrast, if the Underlying Exchange Rate moves against you (i.e. your Short Currency appreciated relative to your Long Currency) the amount determined by this formula will be less than zero and Halifax will debit that amount (as well as any fees, charges and spreads as explained in section 19) from your Account. The calculation of profit or loss is also affected by other adjustments, including: commissions deducted from your Account (as explained in section 19, commissions are only deducted for the Trader Work Station and FXPro Trading Platforms). All other Trading Platforms have commission built into the Exchange Rate spread); rollover charges where the Margin FX Transaction remains open overnight; conversion fees; and any other costs or charges applied to your Account as set out in section 19. For more information on costs and charges refer to section 19 of this PDS and the tables in Schedules A-B. HALIFAX Product Disclosure Statement 13

Example 1: Assume: your Account Currency is AUD. You enter into a Margin FX Transaction by purchasing 100,000 AUD/ USD (i.e. you enter into a long FX Transaction, where AUD is your Long Currency and USD is your Short Currency) and the Exchange Rate at which you enter into the FX Transaction is 0.9200; and later that day you Close Out the Margin FX Transaction by selling (or entering into a short FX Transaction, i.e. where AUD is your Short Currency) at a higher exchange rate of 0.9250. The resulting gross profit on the Transaction would be US$500 being sale price (0.9250) less buy price (0.9200) x 100,000. The net profit is determined after deducting commission (where applicable), Rollover charges, transaction costs and any other charges and is converted back to your Account Currency (for more information on costs and charges refer to section 19 of this PDS and we also refer you to the various trading examples which can be found on our website at www.halifax.com.au). Example 2: Assume: your Account Currency is AUD. You enter into a Margin FX Transaction by purchasing 100,000 AUD/ USD (i.e. you enter into a long FX Transaction, where AUD is your Long Currency and USD is your Short Currency) and the exchange rate at which you enter into the FX Transaction is 0.9200; and later that day you Close Out the Margin FX Transaction by selling (or entering into a short FX Transaction, i.e. where AUD is your Short Currency) at a lower exchange rate of 0.9150. The resulting gross loss would be US$500 being sale price (0.9150) less buy price (0.9200) x 100,000. The total loss is determined after deducting commissions (where applicable), Rollover charges, transaction costs and any other charges and is converted back to your Account Currency (for more information on costs and charges refer to section 19 of this PDS and we also refer you to the various trading examples which can be found on our website at www.halifax.com.au). Example 3: Assume: your Account Currency is AUD. You enter into a Margin FX Transaction where the Base Currency is gold and the Terms Currency is USD (i.e. XAU/USD) and you choose a notional value for your Transaction of 10 ounces of gold. This means that you enter into a long Metal Transaction (i.e. gold is your Long Currency) and the price at which you enter into the Metal Transaction is 1350.00; and later that day you Close Out the Margin FX Transaction by selling (or entering into a short Metal Transaction, i.e. where gold is your Short Currency) at a lower price of 1300.00. The resulting gross loss would be US$500 being sale price (1350.00) less buy price (1300) x 10. The total loss is determined after deducting commissions (where applicable), Rollover charges, transaction costs and any other charges and is converted back to your Account Currency (for more information on costs and charges refer to section 19 of this PDS and we also refer you to the various trading examples which can be found on our website at www.halifax.com.au). The examples above are included for illustrative purposes only. They should not be considered to be indicative of the actual rates or prices which might be offered. 9.6. Realised and unrealised profits and losses Profits and/or losses are realised if both the buy and the sell side of the Transaction have been completed and have been matched against each other or Closed Out. Profits and/or losses are unrealised if only one side of the Transaction has been completed (i.e. it remains an open position) and will only be realised when the other side of the Transaction has reached completion. If you do not instruct us (through your Trading Platform) to match selected trades against previous opposite trades then your Trading Platform will default to matching trades on a First In First Out ( FIFO ) basis. This may result in additional interest being generated whilst awaiting settlement (as opposed to being matched and Closed Out immediately where no additional interest will be incurred). For a worked example of how an open position is Closed Out we refer you to the trading examples on our website at www.halifax.com.au. Alternatively, please contact one of our representatives to assist you in understanding the importance of and how to match and Close Out trades. 9.7. Value Dates The Value Date for a foreign exchange transaction is the date on which parties agree to settle their respective obligations. It can affect the exchange rate at which a foreign exchange transaction is entered into. When you enter into a Margin FX Transaction with Halifax, by default the Transaction will be a Spot Contract however, you have the option to select that the Transaction be a FX Forward. The fundamental difference between Spot Contracts and FX Forwards is that in determining the exchange rate at which an 14 HALIFAX Product Disclosure Statement

FX Forward will be entered into or Closed Out, Halifax will make an adjustment for Forward Points to reflect a deferred settlement for a corresponding foreign exchange transaction (no Forward Points adjustment is made in determining the exchange rates for Spot Contracts). Spot Contracts The Value Date for spot foreign exchange contracts is standardised and non-negotiable. For most spot foreign exchange contracts, the Value Date will be two business days from the trade date (T+2). There are some exceptions to this general rule, the most notable exception to this rule is where the Underlying Exchange Rate is US dollar against Canadian dollar (i.e. USD/ CAD) which has a Value Date of one business day from the trade date (T+1). The Value Date will generally be two business days from the day on which the spot foreign exchange contract is entered into. FX Forwards The Value Date for a forward foreign exchange contract is not standardised and is negotiable. The Value Date for a forward foreign exchange contracts is typically somewhere between three business days and two years. The exchange rate for forward foreign exchange contracts (and, by extension, the Exchange Rate Halifax will offer on an FX Forward contract) is adjusted by adding or subtracting Forward Points to the spot exchange rate. For example, if Halifax offers 92.00/92.03 for an AUD/USD Spot Transaction, it might offer 91.25/91.31 for an FX Forward with a Value Date that is one year after the date the transaction is entered into. This example is included for illustrative purposes only, and is not indicative of actual exchange rates that will be offered or Forward Points adjustments. The adjustment of Forward Points may result in the Exchange Rate for the Transaction being either more favourable or less favourable to you than the Exchange Rate that would be offered for a corresponding Spot Contract. The primary factor that affects the Forward Points adjustment on a forward foreign exchange contract is the difference between the interest rates applicable to the relevant Currency Pair (referred to as the interest rate differential ). Generally: if the interest rate for the Terms Currency is lower than the interest rate for the Base Currency, the Forward Points adjustment will result in the Exchange Rate being lower than the Exchange Rate that would be offered for a corresponding foreign exchange spot contract. This is otherwise known as a points discount. if the interest rate for the Terms Currency is higher than the interest rate for the Base Currency, the Forward Points adjustment will result in the Exchange Rate being higher than the Exchange Rate that would be offered for a corresponding foreign exchange spot contract. This is otherwise known as a points premium. Other factors that may affect the Forward Points adjustment are market exchange rates, volatility in the exchange rate, the amount and currency of the Transaction and the profit margin charged by Halifax and the Hedge Counterparty. The Forward Points adjustment will often change over the course of an FX Forward (eg with changes to interest rates, or as the time to the Value Date decreases). All other factors being equal, the Forward Points adjustment will generally decrease as the time to the Value Date decreases. 10. Key Features of FX Option Contracts FX Option Contracts are a speculative investment and involves a high degree of risk. They are not suitable for all investors. You should not transact in FX Option Contracts unless you are experienced in derivatives, leveraged products and foreign exchange contracts, and you understand the risks of transacting in FX Option Contracts. You are responsible for the selection of the Currency Pair or Metal Pair for each Transaction. The performance of any particular Transaction will depend on movements in the Exchange Rate of the Currency Pair or Metal Pair you select and on your trading strategy. The value of any particular Transaction can change rapidly and by significant amounts at any time. 10.1. What is an FX Option Contract? The buyer of an FX Option Contract pays a Premium in exchange for the right, but not the obligation, to enter into a Margin FX Transaction with the seller at a predetermined Exchange Rate (called the Exercise Rate) on the Expiry Date. From the seller s viewpoint, the seller has no right other than a right to the Premium. The seller will be under an obligation to enter into a Margin FX Transaction at the Exercise Rate of the FX Option Contract if the FX Option Contract is validly exercised by the buyer. If the FX Option Contract is exercised at the Expiry Date, this will result either in a Cash Settlement or the establishment of a Margin FX Transaction between the buyer and the seller, in this case between you and Halifax. HALIFAX Product Disclosure Statement 15