MARGIN ACCOUNT HELPING YOU REACH YOUR INVESTMENT GOALS. A margin account used responsibly and effectively can help accelerate wealth creation.

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MARGIN ACCOUNT

A margin account used responsibly and eff ecti vely can help accelerate wealth creati on.

Seize investment opportuniti es as they arise with quick and convenient access to additi onal funds.

Learn how the FirstMetroSec Margin Account can help you get more leverage on your investments today.

HELPING YOU REACH

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The FirstMetroSec Margin Account is not like your typical Cash Account where all purchases must be 100% paid in full. In the FirstMetroSec Margin Account, you are allowed to buy securiti es by only paying for half the cost and then borrowing the rest. It practi cally doubles your buying power and multi plies your earning potenti al.

Cash Account Stock XYZ ₱1M +30% Gain ₱0.3M

30

%

Return Profi t ₱0.3M vs. Cash ₱1M Stock Value = ₱1.3M Client A buys ₱1M of stock XYZ and pays 100% in cash

FirstMetroSec Margin Account

Stock XYZ ₱2M +30% Gain ₱0.6M -15% Interest ₱0.15M XYZ

Stock Certifi cate

XYZ

Stock Certifi cate

45

%

Return

Profi t ₱0.45M vs. Cash ₱1M

Stock Value = ₱2.45M Client B buys ₱2M of stock XYZ and

pays 50% cash and 50% debt

CASH

₱1M CASH₱1M

+

BORROW₱1M

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How does the

FirstMetroSec

Margin Account

work?

First, you need to open a FirstMetroSec Margin Account by signing the “Margin Trading Agreement” which you can download from our website.

The FirstMetroSec Margin Account requires at least ₱1 Million in initial equity. The equity may be in the form of cash and/or stocks eligible for margin.

To keep your credit line open, you must maintain a minimum equity level of 50%. Equity is the value of stocks you own minus what you owe. This means that if you have ₱2 Million worth of stocks in your account, your loan balance should not exceed ₱1 Million.

There is no repayment schedule. The loan can be kept as long as you want, but the stocks in your account are held as collateral and interest charges accrue over time. When a stock is sold, the proceeds are used to repay the loan first.

Initial Equity Requirement Equity Level Maintenance Requirement Repayment and Interest Rate

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Why should

you have the

FirstMetroSec

Margin Account?

The FirstMetroSec Margin Account can help you reach your investment goals faster if used wisely and prudently.

Amplify your potential returns by building an investment portfolio up to twice as big as what you normally can with your own money.

If your investment is concentrated in a few stocks, you can use the additional buying power to buy more stocks so you can diversify your portfolio.

With standby credit at your disposal, you have the flexibility to take advantage of timely market opportunities as they arise without re-allocating funds. 5 Accelerate Wealth Creation Reduce Risk Seize Opportunities

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What are the

risks of having

the FirstMetroSec

Margin Account?

Cash Account Stock XYZ ₱1M -10% Loss ₱0.1M XYZ

Stock Certifi cate

-10

%

Return

Loss ₱0.1M vs. Cash ₱1M Stock Value = ₱0.9M Client A loses on a ₱1M stock of XYZ

paid 100% in cash

CASH

₱1M

Margin Trading is a double-edged sword. While gains are amplifi ed in bull markets, substanti al losses can mount quickly in bear markets. If portf olio value falls considerably, additi onal equity might be demanded on short noti ce or else face a force sale. Once stocks are sold aft er prices have plummeted, you’ve lost out on the chance to recoup your losses.

Stock XYZ ₱2M -10% Loss ₱0.2M -15% Interest ₱0.15M XYZ

Stock Certifi cate

XYZ

Stock Certifi cate

-35

%

Return

Loss ₱0.35M vs. Cash ₱1M

Stock Value = ₱1.65M Client B loses on a ₱2M stock of XYZ

paid 50% in cash and 50% debt

CASH

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How do you protect

yourself from these

risks?

Buying on margin is a risky endeavor, especially for investors new to the concept. To protect yourself, here are the things you need to do:

• Understand what happens if the price of the securities purchased on margin declines. • Know that you are charged interest for

borrowing money and that will affect the total return on your investments.

• Be aware that not all stocks can be used as margin or security for the loan.

• Ensure that trading on margin is appropriate for you in light of your investment objectives, risk tolerance, and personal circumstances.

What stocks

may you use as

collateral?

Not all stocks are considered eligible for margin or collateral.

Only stocks that pass the minimum eligibility criteria may qualify as marginable.

Further, stocks that are currently listed as marginable may lose their status if they fail to meet the standards in the future. In these circumstances, clients with outstanding loans may be required to substitute eligible securities as replacement.

First Metro Securities has discretion to change its eligibility criteria at any time.

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These are the stocks which can be used as collateral in your FirstMetroSec Margin Account as of July 31, 2015.

TICKER STOCK NAME

TEL PLDT Co.

ALI Ayala Land, Inc.

BDO BDO Unibank

SM SM Investments Corporation URC Universal Robina Corporation

AGI Alliance Global Group, Inc.

MBT Metropolitan Bank and Trust Company

AC Ayala Corporation

SMPH SM Prime Holdings MEG Megaworld Corporation

BPI Bank of the Philippine Islands EDC Energy Development Corporation GTCAP GT Capital Holdings, Inc.

JGS JG Summit Holdings, Inc. ICT Int’l Container Terminal Services DMC DMCI Holdings, Inc.

AP Aboitiz Power Corporation PGOLD Puregold Price Club, Inc.

GLO Globe Telecom, Inc.

BLOOM Bloomberry Resorts Corporation JFC Jollibee Foods Corporation SECB Security Bank Corporation

MPI Metro Pacific Investments Corporation NIKL Nickel Asia Corporation

Marginable Securities

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How much can you

borrow?

You may borrow up to 50% of the purchase price of stocks that can be bought on margin. This eff ecti vely multi plies your buying power by two.

9

Cash Account

Client A buys ₱2M of Stock XYZ by paying ₱2M in cash

CASH

₱2M

Stock XYZ

Client B buys ₱2M of Stock XYZ by paying ₱1M cash and borrowing the rest

₱2M

Stock XYZ CASH

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What happens if

the price of the

securities purchased

on margin declines?

Aft er you buy stocks on margin, make sure you maintain at least 50% level of equity on your margin account at all ti mes.

The equity in your margin account is the value of your marginable stocks you own less how much you owe.

Equity Percentage is the value of equity divided by the value of marginable stocks in your account.

Minimum Equity Requirement

Margin Requirement Met

Stock XYZ ₱2M

+30% Gain ₱0.6M

XYZ

Stock Certifi cate

62

%

Equity

Equity ₱1.6M Loan ₱1.0M Portf olio ₱2.6M

Portf olio Value = ₱2.6M Client buys ₱2M of stock XYZ and pays 50% cash, 50% debt

CASH

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If your account falls below the minimum maintenance requirement, no need to worry yet. A 10% ‘buff er’ is in place to assist you in managing small market movements.

At this point, you will only receive a Margin Alert which is a noti fi cati on that your equity has fallen below the required minimum.

Margin Alert 11 Margin Alert Stock XYZ ₱2M -10% Loss ₱0.2M

44

%

Equity Equity ₱0.8M Loan ₱1.0M Portf olio ₱1.8M

Portf olio Value = ₱1.8M

Client buys ₱2M of stock XYZ and pays 50% cash, 50% debt

CASH

₱1M

+

BORROW

₱1M

XYZ Stock Certifi cate

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Your equity level needs to fall below the 40% threshold before you get a Margin Call. At this instant, you will be required to bring your equity back above minimum within 5 trading days, or else suﬃ cient securiti es in your account will be sold to cover the defi ciency. If your stocks are sold off aft er prices have plunged, then your losses are locked in and you lose your chance to parti cipate in any future rebounds that may take place.

Margin Call

In the event of a Margin Call, you can bring your equity back to an acceptable level by:

Margin Call Stock XYZ ₱2M -20% Loss ₱0.4M

38

%

CASH

₱1M

+

BORROW

₱1M

What to do in case of a

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Make sure your equity level does not fall below 30%, because at this instant, your margin trading privileges shall automati cally be suspended.

If your margin account is suspended, suﬃ cient amount of stocks will be sold to pay off your loan and your account is then converted into a regular Cash Account.

In case the proceeds from the sale of the securiti es in your account are not suﬃ cient to fully cover the loan, you remain personally liable for the loan balance, as well as for any cost incurred in collecti ng that amount.

13 Margin Suspension Margin Suspension Stock XYZ ₱2M -30% Loss ₱0.6M

29

%

CASH

₱1M

+

BORROW

₱1M

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What is the interest

rate and how will

it affect the total

return on your

investments?

As with most loans, you are required to pay interest on the amount you owe in your margin account until the loan is repaid.

The interest rate is 1.25% per month + 12% VAT, which is subject to change without prior notice.

The amount of interest charged to your account is accrued daily based on the debit balance in your margin account and billed at the end of each month.

You should review your billing statements carefully to stay informed of the amount of interest you are paying for your margin loan. Interest expense on a margin loan can materially reduce the rate of return on your investment.

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Tips to manage risk

Here are some ti ps to help you manage your FirstMetroSec Margin Account wisely.

Diversify your portf olio to reduce your exposure to the price movements of any single security.

Diversify Check Your Suitability Don’t Be Fully Leveraged Monitor Your Loan

Monitor your portf olio regularly to make sure you don’t fall below the required equity level.

Make sure your investments and your current level of borrowing is appropriate for your risk profi le, fi nancial resources and investment objecti ve.

Borrow less than the maximum amount allowable in your account to avoid the risk of a margin call.

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www.fi rstmetrosec.com.ph

www.fi rstmetrosec.ph

Online Trading. Revoluti onized.

Let us help you

Whether you are new to the margin trading concept or already an experienced investor, there are probably a few questi ons you’d like to ask us about FirstMetroSec Margin Account. It would be our pleasure to help you.

customerservice@fi rstmetrosec.com.ph (02) 859 0600

18th Floor PSBank Center

777 Paseo de Roxas corner Sedeño Street Makati City 1226

@fi rstmetrosec /fi rstmetrosec

MARGIN ACCOUNT HELPING YOU REACH YOUR INVESTMENT GOALS. A margin account used responsibly and effectively can help accelerate wealth creation.

MARGIN ACCOUNT

Contents

Contents

Return

How does the

Why should

What are the

Return

Return

How do you protect

What stocks

TICKER STOCK NAME

How much can you

What happens if

Stock XYZ ₱2M

BORROW

BORROW

BORROW

Tips to manage risk

www.fi rstmetrosec.com.ph

Let us help you