Contracts for Difference (CFD) Target Market Determination
Issued by CTRL Investments Limited
5 October 2021
CONTENTS.
CONTENTS. ... 2
IMPORTANT INFORMATION. ... 3
About this TMD ... 3
Warning ... 3
CTRL does not give personal advice ... 3
Residents outside Australia ... 3
Changes to this TMD ... 4
Contact information ... 4
1. KEY INFORMATION. ... 5
What is this document? ... 5
What is a CFD? ... 5
2. Target Market. ... 5
Key Attributes of CFDs ... 5
Target Market ... 6
3. Distribution... 8
Distribution Channels ... 8
Distribution Conditions... 8
Marketing ... 8
4. Review. ... 9
Review Period and Triggers ... 9
Required Information ... 9
Review Methodology ... 10
5. OTHER IMPORTANT INFORMATION. ... 11
Discretion ... 11
Anti-money laundering laws ... 12
Jurisdiction ... 12
Insurance ... 12
Complaints ... 12
Privacy statement ... 13
Other information ... 13
IMPORTANT INFORMATION.
About this TMD
This Target Market Determination (TMD) was written by CTRL Investments Limited (ARBN 152 535 085, AFSL 414198) trading as “HFTrading” and “XBO” on 5 October 2021 (hereinafter, collectively known as CTRL, we, us, our). CTRL Investments Limited was formerly known as MahiFX Limited.
This TMD is issued in connection with the CFDs offered by CTRL. It provides important information about the CFDs we offer and should be read in conjunction with our terms and conditions (Terms of Use) Product Disclosure Statement (PDS) and our Financial Services Guide (FSG). These documents govern our relationship with our clients.
A glossary of defined terms is located in section 12 of our PDS.
Warning
Trading CFDs carries a high level of risk and are not suitable for all investors. Consumers should carefully consider their investment objectives, needs, risk appetite, financial situation and level of experience before deciding to trade in the products offered by us. Seek independent advice if necessary.
Consumers should read this TMD, our PDS, FSG and Terms of Use in full before making any decision to trade with us. Clients should not invest in CFDs unless they understand and are comfortable with the risks of investing in CFDs.
CTRL does not give personal advice
CTRL will not give personal financial product advice. This means that any advice we may give to a client does not take into account their objectives, financial situation and needs.
This TMD does not constitute a recommendation or opinion that CFDs are appropriate for a particular client. The information provided in this TMD is general information only and does not take into account personal circumstances.
The information in this TMD is designed to help consumers understand the key attributes of CFDs and assist them in determining as to whether they are part of the target market for CFDs as determined by CTRL. Consumers should consider their personal circumstances, and the significant risks which accompany the prospect of profit associated with CFDs before investing.
Residents outside Australia
This TMD is intended for Australian residents and citizens whom have signed up using the hftrading.com.au or au.XBO.com platform.
Changes to this TMD
The information in this TMD is up to date at the time it was prepared but is subject to change at any time. Where information is not materially adverse, we may update the information by posting a notice on our Website. A copy of this TMD, the PDS (including any supplementary disclosures), FSG and our Terms of Use can be downloaded from Our Website, or consumers can contact us directly to request a paper copy which we will provide free of charge.
Contact information
We are registered in New Zealand as a private limited company by shares and is registered in Australia as a registered foreign company. Consumers can contact us using the information below:
Accessing Our Website: www.hftrading.com.au or www.au.XBO.com
By email (Customer Service Team): [email protected] or [email protected] By telephone (Customer Service Team): +61 3911 39456
For more information about CTRL and the CFDs we offer, please visit our Website.
1. KEY INFORMATION.
What is this document?
This is a TMD for CFDs provided by CTRL. This document provides consumers with information regarding the target market as determined by CTRL in accordance with section 994B of the Corporations Act 2001, details of controls CTRL has in place to ensure the CFDs issued and distributed by CTRL are only distributed to the target market and details of periodic reviews of the target market determination.
CTRL is both the issuer and sole distributer of its CFD product.
What is a CFD?
A CFD is an agreement which allows a client to make a profit or loss by reference to the fluctuations in the value of an underlying Instrument such as shares, ETFs, indices, commodities, foreign exchange, or cryptocurrencies. The client does not own or have any rights to the underlying Instrument.
The CFDs offered by CTRL are:
• over-the-counter (i.e., they are entered into between you and CTRL directly);
• non-deliverable (i.e., they are cash settled and do not allow for the physical delivery of the underlying Instrument);
• on shares, ETFs, indices, commodities, foreign exchange, or crypto-currencies.
2. Target Market.
Key Attributes of CFDs
Over The Counter (OTC) OTC means that the CFDs are entered into between CTRL and the client directly, without the supervision of an exchange.
Non-Deliverable Non-Deliverable means that each Trade is
cash settled and there is no physical delivery of the underlying Instrument.
Reference underlying Instruments The value of the CFD fluctuates by reference to the market value of the underlying Instrument. The client creating an exposure to and speculating on whether the value of a certain Instrument will fluctuate upwards or downwards.
No ownership of underlying Instrument As the CFD only references the value of the underlying Instrument, the client does not own or have any rights to that underlying Instrument.
Leveraged Leverage means that the client is required to
post a certain percentage of the value of the Trade, or a percentage of the sum of all of their open positions. The amount of Margin required depends on the rate of Leverage applied, and the rate of Leverage depends on the underlying Instrument and client profile.
Margin payments The client may be required you to make Margin
payments to secure and contribute towards their future obligations if the Market moves against them. These payments may be required at short notice and can be substantial.
Active investment CFDs are not suitable for passive investment.
Since CFDs are tied to an underlying Instrument, a sudden change in that Instrument will have the same effect on the CFD. Changes in the Markets can occur suddenly and may occur overnight where the underlying Instrument is traded on foreign markets.
High risk Trading CFDs carries a high level of risk and
are not suitable for all investors. As there is no ownership of the underlying Instrument clients can suffer losses with no tangible asset to show for it. Furthermore, Leveraged trading can magnify losses.
Target Market
CTRL has determined that consumers with disposable income or savings, some knowledge in financial markets, and that accept the risks associated with complex investment products are the target market for its CFD product.
Identifiers of this target market are:
• Employed (including self-employed) with a modest income and moderate savings or investments, and with moderate experience in financial markets/investing.
• Employed (including self-employed) with a high income, and with some experience in financial markets.
• Employed (including self-employed) with work experience within the financial markets or
directly related industries, and with a moderate income or savings/investments.
• Retired with a high level of savings or investments, and with moderate experience in financial markets/investing.
The likely objectives of this target market are:
• To make short-term gains.
• To invest in markets that would otherwise be unavailable to them.
• To gain experience with complex investment types with minimal up-front investment.
In reaching this determination, CTRL has considered:
• The key attributes of CFDs are likely to lead to positive outcomes for this target market, primarily because of their increased exposure to investment products in general and their higher disposable incomes limited the impact of any losses incurred, and because negative outcomes would disproportionately impact consumers with low or no disposable income.
• The key attributes and main benefits of CFDs objectives are most likely to the product meet the likely objectives of consumers who are employed, self-employed or retired with savings or discretionary income.
• The target market has identifiers that can be established during the onboarding process without onerous questions or documentary requirements, or potentially violating the client’s privacy.
Consumers are likely not in the target market if:
• They are unemployed with no savings or investments or are a student.
• They are retired and do not have sufficient savings to invest in higher risk products, or do not have disposable income.
• They do not have disposable income or discretionary funds. This could be indicated by an inability to contribute to regular savings or financial hardship.
• They have no understanding or knowledge of financial markets.
• They are wanting to invest in passive investment products that require little or no action on their part.
• They are looking for long-term investment products.
3. Distribution.
Distribution Channels
CTRL is both the issuer and distributor of its CFD products. CTRL is the sole distributor of its CFD products.
Distribution of the CFDs occurs via CTRL’s Trading Platform, based on the Meta Trader 4 service.
Access to the trading platform is restricted to approved clients.
Consumers can make an application to be onboarded as a client by completing the form located on CTRL’s website: www.HFTrading.com.au or au.XBO.com
Distribution Conditions
Access to the Trading Platform is restricted to approved customers. When assessing an application, CTRL considers whether the applicant:
• Has sufficient income, and whether they are likely to have disposable income. An income at or below minimum wage is not considered sufficient.
• Has any savings or investments. If the client has a lower income, do they have sufficient savings or investments to invest in higher risk products. A client must have an income over AU$100,000 to be considered if they have little or no savings.
• Has experience in the financial markets and whether they have experience with CFD products. Clients with less than one year of experience are not considered to be suitable.
• Is wanting a passive or long-term investment product. An applicant seeking this type of product would be considered unsuitable.
• Have sufficient knowledge of financial products. Clients must pass a knowledge test to demonstrate their understanding.
CTRL considers that these conditions significantly reduce the likelihood that a consumer outside of the target market would acquire CTRL’s product. As noted above, consumers would be more likely to impacted by losses resulting from their investments in CFDs if they had little or no discretionary income or savings, placing them outside of the target market.
By controlling factors such as income, knowledge and experience, and purpose of investment, CTRL is able to filter out clients who’s likely objectives, financial situation and needs do not align with the target market as assessed by CTRL and key attributes of CFDs.
Marketing
All marketing issued by CTRL is done so in accordance with its obligations under the Financial Markets Conduct Act 2013 (in New Zealand) and the Corporations Act 2001.
Due to the broad nature of advertising, consumers outside of the target market may view or
consume marketing for CTRL’s product however CTRL will take all reasonable steps to limit this where possible, i.e., by using features of Google’s advertising products to only target consumers actively using or looking for investment products.
As part of CTRL’s marketing policies and compliance processes, all marketing must be reviewed by the compliance team and approved before it can be distributed by the marketing agent.
4. Review.
Review Period and Triggers
Under ordinary circumstances, the review of the product, target market, distribution and controls, and this TMD must take place no later than six months from the date the last review was begun.
The first review shall take place no later than six months from 5 October 2021 unless one of the below events occur.
A review must also be undertaken if one of the following occur, regardless of when the last review was undertaken:
• The nature of CTRL’s business or the key attributes of CTRL’s CFD product materially changes.
• The Design and Distribution obligations as defined in part 7.8A of the Corporations Act 2001, or any other body of legislation related to the product or its distribution, materially change.
• A major compliance breach occurs with regards to the product or its distribution, including distribution the product to clients outside of the target market.
• Systemic or repeated compliance breaches are uncovered with regards to the product or its distribution, including distribution the product to clients outside of the target market.
If one of these events noted above occurs, CTRL will temporarily cease distribution of its product until a review can be completed and the TMD is determined to be appropriate.
Required Information
As CTRL is both the issuer and sole distributer, it is able to source all information as and when required and is not reliant on a distribution agent to provide reporting on a periodic basis. When conducting a review, CTRL will require the following information for consideration:
• Client details:
o How many clients were onboarded during the period. This can be sourced directly from the CRM system.
o How many errors were made during the onboarding process and whether any clients were onboarded who did not meet the target market criteria. This can be sourced from internal audit records.
• Client results:
o Trade information for clients detailing their activity. This can be sourced from the Dealing Team.
o Profit and Loss information for clients. This can be sourced from the CRM system.
• Client complaints:
o Complaint records and the relevant resolution. This can be sourced from internal audit records.
Review Methodology
The purpose of the review is to ensure the CFD product is still suitable for clients and the target market remains the appropriate market for the product. When undertaking the review, CTRL will assess the following:
• Are all of the clients within the target market?
• Is the product still consistent with the likely objectives, financial situation and needs of the clients?
• Are the controls in place regarding the distribution to clients, including client vulnerability and marketing controls, sufficient and effective?
When assessing whether the product still consistent with the likely objectives, financial situation and needs of the clients, CTRL will consider the following:
• What losses or gains have been incurred by the clients?
• Are the losses or gains in line with reasonable expectations conveyed to the client before they were onboarded or traded in the product?
• What complaints, if any, have been raised in relation to the product or its distribution, and have these complaints been found to have merit?
The outcome of the review will establish one of the following outcomes:
• Continue – this means that no concerns or issues have been identified and the distribution of the product can continue.
• Change the design of the product – this means changing the product to further meet the likely objectives or needs of clients. This could be changing leverage ratios or introducing controls to prevent or reduce losses.
• Change the target market – this means the target market may not be suitable anymore and
a new market needs to be targeted, or the definition of the market needs to be narrowed or made more specific.
• Change the distribution – this means changing the way that clients are onboarded to ensure only clients from the target market are onboarded or changing how the product is marketed.
• Cease offering – this means that the product has been found to not have an appropriate market. As per the requirements stated in RG274, if CTRL concludes that the product no longer meets, or is unlikely to meet, the likely objectives, financial situation and needs of clients then it must cease offering the product.
This TMD will be updated where relevant if there are any changes to the product, target market or distribution.
5. OTHER IMPORTANT INFORMATION.
Discretion
CTRL has discretions under the Terms of Use which can affect your Orders and positions. Clients do not have any power to direct how we exercise our discretions.
When exercising our discretions, we have a legal obligation under our Australian financial services licence to act efficiently, honestly and fairly. We may have regard to our policies and to managing all risks (including financial, credit and legal risks) for ourselves and all of our clients, our obligations to our counterparties, market conditions and our reputation. We will act reasonably in exercising our discretions, but we are not obliged to act in your best interests or to avoid or minimise a loss in your Trading Account.
Our significant discretions include:
• whether to accept an Order (including to close out a position) or to amend it;
• any suspensions, halts or limits we impose on a Trading Account or a client’s trading;
• determining Margin Requirements, especially the amount of initial Margin, further Margin and our Margin Call process; and
• determining values of CFDs (for opening and closing positions and for determining Margin).
Clients should consider the significant risks that arise from CTRL exercising its discretions.
Our other discretions include:
• setting our fees;
• setting foreign exchange conversion rates;
• opening and closing your Account;
• giving clients a grace period for full compliance in paying by cleared funds any amount a client owes; and
• interpretation, variation and application of our policies.
Anti-money laundering laws
CTRL is subject to anti-money laundering and counter-terrorism financing laws (AML laws) that can affect CFD trading. The AML laws require CTRL to collect and/ or verify information from a client. The AML laws may preclude us from executing transactions with a client. CTRL may disclose a client’s personal information or stop transactions on a Trading Account for the purposes of the AML laws or under our AML procedures, without liability to a client for any loss that arises due to that occurring.
Jurisdiction
The distribution of this TMD in jurisdictions outside Australia may be subject to legal restrictions.
Any person who resides outside Australia should access legal documentation found in the hftrading.com or XBO.co.nz website instead.
Insurance
CTRL has insurance in place to cover a variety of different risks, some of which may assist in the repayment of deficits arising if there is fraudulent activity by one of CTRL’s employees, directors or authorised representatives that results in your money being used in fraudulent activities.
Complaints
We have an internal complaint resolution process that is there to assist in the resolution of any issues arising from a complaint about a product or service received from us. Clients can make a complaint by completing and submitting the relevant form which can be found on our Website and sending it to [email protected]. Alternatively, a client may contact us as per our contact details as disclosed on page 4.
We will seek to acknowledge any complaint promptly and provide a substantive response within no more than 30 days.
If customer service fails to address your concerns, clients may write with details of their dispute to the management of CTRL Investments at [email protected].
If a client does not get a satisfactory outcome, they have the right to complain to the Australian Financial Complaints Authority (AFCA). CTRL is a member of AFCA (Member No. 28606).
AFCA provides fair and independent financial services complaint resolution that is free to consumers. The contact details for AFCA are as follows:
Website: www.afca.org.au Email: [email protected]
Telephone: 1800 931 678 (free call)
In writing to: Australian Financial Complaints Authority, GPO Box 3, Melbourne VIC 3001
Privacy statement
All of the information collected by CTRL, in the application form or otherwise, is used for maintaining the client’s Trading Account and for the purpose of assessing whether they would be suitable as a client. If a client does not provide any requested personal information to CTRL, we may not be able to provide them with access to use the Trading Platform or our services.
CTRL’s Privacy Statement can be viewed in full on our Website at www.hftrading.com.au/privacy or www.au.XBO.com/privacy.
Other information
Other information about CTRL and/or the products contained within this TMD may be found on Our Website. Please contact us if you have any questions in relation to us or the products covered by this TMD.
