Options and Warrants Trading







Full text


BKL0027 07/10

Macquarie Private Wealth

A world of opportunities

Options and

Warrants Trading

Issued by Macquarie Equities Limited ABN 41 002 574 923

Australian Financial Services Licence No. 237504 Participant of the Australian Securities Exchange Group Date of issue: July 2010

Application Booklet

For more information about

Macquarie Full Service Stockbroking

1800 789 789




Level 2, 151 Pirie Street Adelaide SA 5000 GPO Box 663 Adelaide SA 5001 Tel 08 8203 0200 Fax 08 8203 0392 Brisbane

Level 2, Waterfront Place 1 Eagle Street

Brisbane QLD 4000 GPO Box 1428 Brisbane QLD 4001 Tel 07 3233 5888 Fax 07 3233 5999 Canberra

Level 7, Canberra House 40 Marcus Clarke Street Canberra ACT 2600 GPO Box 358 Canberra ACT 2601 Tel 02 6103 3100 Fax 02 6103 3133

Gold Coast

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60 The Corso Manly NSW 2095 PO Box 400 Manly NSW 2095 Tel 02 9425 6000 Fax 02 9425 6066 Melbourne

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Level 4, 235 St Georges Terrace Perth WA 6000

GPO Box R1285 Perth WA 6844 Tel 08 9224 0888 Fax 08 9224 0895 Sunshine Coast 69 Mary Street Noosaville QLD 4566 PO Box 47

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1 Shelley Street Sydney NSW 2000 GPO Box 4294 Sydney NSW 1164 Tel 02 8232 1679 Fax 02 8232 4055




Trading Options and Warrants with Macquarie


Terms and Conditions

13 First


ASX – Risk Disclosure Statement for derivatives traded on ASX markets

15 Second


Warrant Statement


Anti-Money Laundering (AML)/Counter-Terrorism Financing (CTF) Act 2006


Application Form Checklist


Application Forms


IFSA/FPA AML/CTF Identification Forms (Australian and Foreign Companies,

Trusts and Trustees)

This advice has been prepared by Macquarie Equities Limited ABN 41 002 574 923 (Macquarie Equities) and is general advice

and does not take account of your objectives, financial situation or needs. Before acting on this general advice you should therefore

consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation

advice before making any financial investment decision.

Macquarie Equities is not an authorised deposit-taking institution for the purposes of the Banking Act (Cth) 1959 and Macquarie

Equities’ obligations do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542. Macquarie Bank

Limited does not guarantee or otherwise provide assurance in respect of the obligations of Macquarie Equities.


Trading Options and Warrants

with Macquarie

Thank you for your interest in trading Options and/or Warrants through Macquarie Private Wealth. Options and Warrants are useful trading tools which can assist you to diversify your investment portfolio.

Before you can start trading Options or Warrants, you must establish a Macquarie Full Service Stockbroking Account with a linked settlement account.

■ If you had a Full Service Stockbroking Account established as at 12 December 2007 (that is still active), you only need to fill in the Options and Warrants Application Form. You do not need to fill in the IFSA/FPA* Identification Forms.

■ If your Full Service Stockbroking Account was established after 12 December 2007, you will need to fill in the: — Options and Warrants Application Form; AND

— applicable IFSA/FPA* Identification Form; AND — provide the relevant Proof of Identification documents.

■ If you do not have a Full Service Stockbroking Account established, you will need to fill in the: — Full Service Stockbroking Application Form; AND

— Options and Warrants Application Form; AND — applicable IFSA/FPA* Identification Form; AND — provide the relevant Proof of Identification documents.

To obtain a copy of the Full Service Stockbroking Application Booklet, please speak to your adviser.

This booklet contains the terms and conditions that we are obligated to address under the Australian Securities Exchange Limited (ASX) and Australian Clearing House Pty Ltd (ACH) rules. It also contains other terms that are specific to Options or Warrants trading and contract registration with the ACH.

If you have any queries in relation to these terms, please do not hesitate to contact your adviser or call one of our offices listed on the back of this booklet.



Terms and Conditions

THIS AGREEMENT is made on the date specified on the Options and Warrants Trading Application Form

BETWEEN MACQUARIE EQUITIES LIMITED, ABN 41 002 574 923, a company incorporated in New South Wales and having its principal place of business in New South Wales at No. 1 Martin Place, Sydney (“Macquarie Equities”)

AND The party named on the Options and Warrants Trading Application Form (the “Client”). RECITALS

A. Macquarie Equities and the Client have agreed the terms and conditions on which Macquarie Equities will, at the request of the Client, enter into exchange traded option transactions and/or warrant transactions on ASX Markets on behalf of the Client and intend to set out the terms of that agreement in this Agreement.

B. In relation to the settlement of exchange traded option transactions and/or warrant transactions, the Client and Macquarie Equities have executed an agreement entitled “Macquarie Equities Limited Share Trading Terms and Conditions” the terms of which, where applicable govern the settlement of exchange traded option transactions and/or warrant transactions.


1. Defi nition and interpretation

1.1 Definitions

In this Agreement:

“Account” means an Option or Warrant trading account established by Macquarie Equities Limited on behalf of the Client;

“ACH” means Australian Clearing House Pty Limited, ABN 48 001 314 503;

“ACHRules” means the operating rules of ACH and related bodies corporate;

“Approved Clearing Facility” means a Clearing and Settlement Facility approved by ASX and specified as such in the ASX Procedures;

“Approved Exchange” means an exchange or other market in respect of which ACH has arranged or agreed to clear Contracts;

“ASIC” means Australian Securities and Investments Commission; “ASX” means Australian Securities Exchange Limited,

ABN 98 008 624 691

“ASX Markets” means the options and warrants markets conducted and administered by ASX in accordance with:

i. the Market Rules and the articles of association of ASX and related bodies corporate; and

ii. the customs, usage and practices of ASX and related bodies corporate;

“Australian dollars” means the lawful currency of Australia; “Authorised Person” means any person authorised in writing by the Client (either on the Client’s Macquarie Equities Limited Share Trading Account Application or otherwise by written notice provided to Macquarie Equities) to operate the Account on behalf of the Client;

“Business Day” means a day on which banks are generally open for business in Sydney and ASX is open for business;

“CHESS” means the Clearing House Electronic Subregister System;

“Clearing Participant” means a person admitted by ACH as a Clearing Participant in accordance with the ACH Rules;

“Client Agreement” means an agreement between a Clearing Participant (as defined in the Rules) and a client of the Market Participant, entered into under the Rules;

“Client’s Account” means an account with ACH opened in the name of Macquarie Equities in respect of the Client where Contracts cleared by Macquarie Equities are registered;

“Close-Out” means, in relation to a Contract, the act of entering into arrangements to reverse the effect of that Contract including, without limitation, the entry into an opposite Contract;

“Contract” means an Option or Warrant contract entered into on the ASX Markets;

“Corporations Act” means the Corporations Act (Cth) 2001; “Effective Date” means the date referred to in a Participant Change Notice on which the novation of a Client Agreement is deemed to have occurred.

“Explanatory Booklets” means the following explanatory booklets issued by ASX:

i. “Understanding Options Trading, Explanatory Booklet”; and ii. “Understanding Trading and Investment Warrants, Explanatory


“GST” means any goods and services tax or similar value added tax levied or imposed in Australia.

“Financial Services Guide” means the disclosure document as required by Part 7.7 of the Corporations Act;

“I/We” means the person or entity recorded as the account owner/s; “Insolvency Provision” means any law relating to insolvency, sequestration, liquidation, unfair preferences, uncommercial transactions, unfair loans, invalid floating charges, insolvent transactions or bankruptcy, including any law under which transactions may be set aside or avoided and any provision of any agreement, arrangement or scheme, formal or informal, relating to the administration of any of the assets of a person; “ITS” means the Integrated Trading System operated by the ASX;


“Margin” means cash, bank guarantees or securities lodged by the Client with either ACH or Macquarie Equities, or other security that Macquarie Equities considers, in its absolute discretion, appropriate as security for the contingent obligations of the Client which arise from dealing in Contracts; “Market Rules” means the operating rules of ASX and related bodies corporate;

“Normal Trading Hours” means 10.00am to 4.15pm Sydney time; “Option” has the same meaning as given to that term in the Market Rules; “Participant” means a person admitted by ACH as a participant under ACH Rule 3.1;

“Participant Change Notice” means a notice sent to the Client in accordance with the ACH Rules, setting out details of a proposed change of participant and other relevant information about the reasons for the proposed change and the costs (if any) to the Client of the proposed change;

“Procedures” means any document, electronic file or other information (recorded by any mode of representing words or reproducing words) approved by ASX or ACH and circulated where applicable to Macquarie Equities in accordance with the Market Rules and ACH Rules and, without limitation, includes any guidance note, practice note, explanatory memoranda or other information issued by ASX or ACH to Macquarie Equities from time to time;

“Product Disclosure Statement” means the disclosure document required to be given in accordance with Part 7.9 of the Corporations Act; “Retail Client” means a retail client as defined in s. 761G of the Corporations Act;

“Risk Disclosure Statement” means the statement titled “Risk Disclosure Statement for Derivatives traded on ASX’s Markets” in the First Schedule of this Agreement;

“Rules” mean the ACH Rules and the Market Rules;

“Statement of Advice” means the document required to be given in accordance with Part 7.7 of the Corporations Act;

“Trading Day” has the same meaning as given to that term in the Market Rules;

“Terms of Issue” means rights, conditions and obligations of the Warrant-Issuer and the Warrant-Holder as documented by the Warrant-Warrant-Issuer and not objected to by ASX;

“Transaction” means, in respect of a Contract, a securities transaction which results from the exercise of the Contract;

“Warrant” has the same meaning as given to that term in the Market Rules;

“Warrant Holder” means the holder of the Warrant;

“Warrant Issuer” means the institution approved in accordance with section 10 of the Market Rules that issued the particular class of Warrants in which Macquarie Equities deals on behalf of the Client; and

1.2 Interpretation

In this Agreement unless the context indicates a contrary intention: 1. a reference to this Agreement or to any deed, agreement, document

or instrument includes respectively this Agreement or that deed, agreement, document or instrument as amended, novated, supplemented, varied or replaced from time to time;

2. a reference to any statute, rule or other law, or to any sections or provisions thereof includes any statutory modification or reenactment or any statutory provision substituted therefore and all ordinances, by-laws, regulations and other statutory documents issued thereunder;

3. the singular includes the plural and vice versa; 4. the word “person” includes a firm, a body corporate, an

unincorporated association and a statutory authority; 5. a reference to any party includes a reference to that party’s

executors, administrators, successors, substitutes and permitted assigns and any person taking by way of novation;

6. a reference to any thing (including, without limitation, any amount) is a reference to the whole or any part of it and a reference to a group of persons is a reference to any one or more of them;

7. where any word or phrase is given a defined meaning, any other part of speech or other grammatical form in respect of the word or phrase has a corresponding meaning;

8. headings are inserted for convenience only and do not affect the interpretation of this Agreement; and

9. a reference to a clause or a Schedule is, unless the context otherwise indicates, is a reference to a clause or a schedule in this Agreement.

2. Rules and regulations

These terms and conditions govern any transactions, financial or otherwise, executed on your Account by Macquarie Equities, and are subject to the Rules.

2.1 Market Rules, ACH Rules, Regulations and Procedures

You and Macquarie Equities agree that the terms of our relationship in respect of Contracts and any dealings between us regarding the Contracts are subject to and are bound by the Rules, the Corporations Act and Procedures, customs, usages and practices of ASIC, ASX, or other relevant Approved Exchange and ACH and their related bodies corporate, as amended from time to time, in so far as they apply to Contracts traded on ASX, or other relevant Approved Exchange for you and Contracts cleared and settled by ACH.



3. Discretions

1. You and any Authorised Person(s) may instruct Macquarie Equities to deal in Options and/or Warrants or provide you with Options and/or Warrants advice. Macquarie Equities may decline to act on your instructions where, for example:

(a) they are not clear and complete;

(b) they do not meet all trade requirements set by Macquarie Equities, ASIC and ASX from time to time;

(c) in the case of warrants, the original instruction is more than one (1) calendar month old;

(d) you do not have sufficient relevant securities or funds in the Account to settle the transaction, or you have monies outstanding in the Account;

(e) trading in the relevant Option and/or Warrant has been suspended or halted for any reason whatsoever and you have not reconfirmed instructions;

(f) in its reasonable opinion, Macquarie Equities is of the view that placement of your order or execution of your instruction is likely to: (i) contribute to a breach of the Corporations Act, the Rules

or other applicable legal or regulatory requirement; or (ii) be inappropriate, unethical or likely to negatively impact

on Macquarie Equities’ reputation and integrity within the market; or

(iii) create a disorderly market in the Options and/or Warrants; or

(iv) be outside the scope of an adviser’s authority; or (v) exceed a trading limit.

(g) we may reasonably need to protect our interest. 2. You agree that Macquarie Equities is not liable for any financial

consequence or inconvenience arising from circumstances where Macquarie Equities acts reasonably to cancel a transaction or refuses to accept an instruction from you, or where ASIC, ASX uses its power to amend or cancel a transaction.

3. Due to the nature of Macquarie Group’s business trading, advice and research restrictions may be imposed on members of the Macquarie Group due to statutory requirements and internal policies. Macquarie Equities is a related body corporate of Macquarie Group Limited and may be subject to these restrictions from time to time. You acknowledge that from time to time your adviser may be limited or restricted in the services that they are able to provide to you in relation to an investment that is impacted by such restrictions.

4. Your commitment

1. You represent to Macquarie Equities that you are, and at all times during your dealings with Macquarie Equities will be, in a position to meet all commitments (financial and otherwise) on your part arising out of dealings with Macquarie Equities or business conducted by Macquarie Equities on your behalf.

2. You represent that you, and any Authorised Person(s), are over the age of 18 years.

4.1 Authority

You acknowledge that you are either: 1. acting as principal; or

2. acting as an intermediary on another’s behalf and are specifically authorised to transact Contracts by the terms of:

(a) an Australian Financial Services Licence which authorises you to deal in the Contracts;

(b) a trust deed (if you are a trustee); or (c) an agency contract.

4.2 Representations

You represent, at the date of this Agreement and at each time of entry by you into any Contract, for the benefit of Macquarie Equities that, as at the time the representation is made:

1. (if a body corporate) you are duly incorporated and validly existing under the laws of the jurisdiction of its incorporation;

2. (if you are a trustee) you warrant that you have full power and authority to enter into these arrangements and to exercise the rights and perform the obligations under this Agreement;

3. you have the power to execute and deliver and to perform your obligations under this Agreement;

4. this Agreement constitutes valid and binding obligations on you, enforceable in accordance with its terms;

5. the execution, delivery and performance of this Agreement does not violate any existing law or regulation or any document or agreement to which you are a party or which is binding on you or any of your assets; 6. all authorisations required in order for you to conduct your business

and relevant to the execution, delivery, performance, validity or enforceability of this Agreement have been obtained or effected and are in full force and effect;

7. you have entered into this Agreement as principal and not otherwise; and 8. you are solvent.

4.3 Client to provide information

You agree that you will take all reasonable steps to deliver information or documentation to Macquarie Equities, or cause information or

documentation to be delivered to Macquarie Equities concerning Contracts which are requested by a person having a right to request such information or documentation. Macquarie Equities is authorised to produce the information or documentation to the person making the request.

4.4 Appointment of ACH and others as agent

You irrevocably appoint severally ACH, and every director, manager and assistant manager for the time being of ACH, at the option of ACH (as applicable) to do all acts and execute all documents on the Client’s behalf for the purpose of exercising the powers conferred on ACH under ACH Rule 15.


4.5 Commissions and fees

You must pay to Macquarie Equities commissions, fees, charges and taxes, including any applicable GST in connection with dealings in Contracts for you at the rates determined by Macquarie Equities from time to time and notified to you in writing.

4.6 Execution of Agreement

You acknowledge that Macquarie Equities shall not be required to provide a physically executed copy of this Agreement, unless expressly requested by you, and that your signature on the Options and Warrants Trading Application Form will constitute execution of this Agreement.

4.7 Cancellations

You acknowledge and agree that:

1. the ASX is entitled under the Market Rules to require Macquarie Equities to cancel or amend a dealing or an order;

2. where the ASX recommends, in accordance with the Market Rules that Macquarie Equities cancel, amend or Close-Out a dealing or order, Macquarie Equities will cancel, amend or Close-Out the dealing or order without further reference to you for market integrity reasons, where the ASX Market was operating in error or Close-Out is permitted under the Market Rules;

3. Macquarie Equities may cancel or amend any transaction executed via ITS where it reasonably believes that the transaction has been executed in error, breaches the Rules or that the transaction interferes with the integrity or orderly nature of the market in any way. You acknowledge that you are not able to claim any compensation from Macquarie Equities in relation to any circumstances described in this clause, even where you receive a contract note/confirmation relating to the cancelled transaction.

5. Joint account holders

1. If more than one person constitutes the Client then you are each jointly and severally liable under these terms and conditions. Until otherwise specified in writing, all persons constituting the Client agree that Macquarie Equities may act on the instructions of any one of the persons without the necessity to refer to or notify any other person in connection with those instructions.

2. You acknowledge that where an Account is established in the name of a company:

(a) any liabilities incurred on that Account will be deemed to be the responsibility of each of the directors and each director will be held personally liable for the purposes of this Agreement; and (b) Macquarie Equities or any external credit agency may

commence action against any or all of the directors to recover monies owed on that Account irrespective of whether the debts were incurred in that company name.

6. Client funds and property

1. Macquarie Equities must deal with money and property paid or given to Macquarie Equities in connection with the Macquarie Equities/ Client relationship in accordance with the Corporations Act and the Rules. The Client acknowledges that where Macquarie Equities operates a client omnibus account, the Client’s monies and the monies of other clients of Macquarie Equities may be combined and deposited by Macquarie Equities in a trust account.

2. You acknowledge that Macquarie Equities may pay money that we have received for you into a trust account.

7. Disclosure of fi nancial information and

investment objectives

1. You acknowledge you are obliged to fully and accurately disclose details of your investment objectives, financial situation and particular needs to your adviser prior to Macquarie Equities accepting any business from you or on your behalf. Macquarie Equities is only able to provide you with personal advice relating to Options and/or Warrants on a fully informed basis and where full and accurate disclosure has been made by you.

2. You acknowledge that Macquarie Equities’ representatives may only provide you with personal advice where they have a reasonable basis for doing so, having regard to your investment objectives, financial position and particular needs. However, you acknowledge that Macquarie Equities cannot and does not guarantee the performance or financial return on any investment made by you.

3. In the event you refuse to provide your investment objectives, financial situation and particular needs to Macquarie Equities, or you provide incorrect or false information, we will only be able to provide general advice or execution only services.

7.1 Risks & Financial Objectives

1. You acknowledge that:

(a) the risk of loss in trading in Options and/or Warrants can be substantial and that you have given consideration to your objectives (including investment objectives), financial situation and needs and have formed the opinion that the dealing in Contracts from time to time is suitable for its purposes; and (b) entry into Contracts incurs the risk of loss as well as the

prospect of profit.

8. Macquarie Equities non-discretionary

account policy

You acknowledge that Macquarie Equities will not act on a discretionary basis on your behalf, or for your benefit, under any circumstances.



10. Margin, settlement obligations and


10.1 Rights of Client

You acknowledge that any benefit or right obtained by Macquarie Equities upon registration of an option contract with ACH by novation of an option contract under the ACH Rules, or any other legal result of registration, is personal to Macquarie Equities and the benefit of that benefit, right or legal result does not pass to you. You have no rights, whether by way of subrogation or otherwise, against ASX or other relevant Approved Exchange or ACH in relation to any dealings by Macquarie Equities (or any other Market Participant or Clearing Participant) in option contracts. Macquarie Equities is not required to act in accordance with your instructions, where to do so would constitute a breach of the Rules, the operating rules of any relevant Approved Exchange or the Corporations Act.

10.2 Margin requirements

You agree to observe the Margin requirements established by ACH or other relevant Approved Clearing Facility.

10.3 Security obligations

Without limiting your obligations under clause 10.2, you acknowledge that Macquarie Equities may require the delivery of Margin to Macquarie Equities by you in a form and amount (which may be in excess of the requirements established by ACH) which Macquarie Equities reasonably considers necessary or desirable to protect itself from the obligations incurred by Macquarie Equities in respect of Contracts entered into for your account.

10.4 Nature of Margin

You acknowledge and represent and warrant for the benefit of Macquarie Equities that:

1. any Margin which is lodged by you with either ACH or Macquarie Equities is and will be free from any encumbrances (unless encumbered securities are provided in a form acceptable to ACH), security interests or rights of others;

2. you will not be entitled to the return of any Margin unless and until Macquarie Equities has no further contingent or actual liability in existence in connection with any Contract into which you have entered; and

3. you are legally entitled and authorised to make securities held by you at any time in CHESS holdings sponsored by Macquarie Equities available to ACH as security for Margin payable to ACH.

10.5 Time of the essence

You acknowledge that notwithstanding the terms of the Market Rules, the time for payment of any amounts or delivery of any Margin to Macquarie Equities, in connection with this Agreement or any Contract into which you have entered, is of the essence.

10.6 Payment and delivery - entry into Contract

You must pay any amount and deliver any relevant security which you are liable to pay or deliver in connection with the entry into a Contract within 24 hours of entry into the Contract, including pay any premium and deliver any Margin.

10.7 Payment and delivery – other

If a request is made by Macquarie Equities for payment of any amount or delivery of any relevant security owing under this Agreement and no other time is stipulated, you are required to comply within 24 hours of that request being made.

10.8 Auto Exercise of an Option Contract

You acknowledge that any Option contract entered into by or on your behalf which is “in the money” as determined by the ACH, on the night of that Option contract’s expiry, will be exercised unless you or an Authorised Person advises Macquarie Equities otherwise by 4.30pm on the day of the Option contract’s expiry.

10.9 Exercise of Option Contracts

Except as provided for in clause 10.8, you acknowledge that you are obliged to notify Macquarie Equities if you want an Option Contract to be exercised.

10.10 Exercise of an Option contract by Client

You must not exercise your rights under any Option contract without first providing to Macquarie Equities payment of the full amount or delivery of all securities which will become payable or deliverable by the Client under the Transaction to which the Contract relates. Macquarie Equities is not obliged to exercise any Option contract until that payment or delivery has been made.

10.11 Exercise of an Option contract against Client

In the event that an Option contract is exercised against you then: (a) by close of business on the day on which you are notified by

Macquarie Equities of the exercise of that Option contract, you must either notify Macquarie Equities that you intend to complete the Transaction to which the Option contract relates or instruct Macquarie Equities to take other steps to settle your obligations under the Option contract, including entering into and exercising another Option contract; (b) if you notify Macquarie Equities under subclause (a) that you intend

to complete the Transaction then you must pay all amounts payable or deliver all securities deliverable by you pursuant to the Transaction to Macquarie Equities at the time of notification; and

(c) if you fail to comply with either subclause (a) or subclause (b) above, Macquarie Equities may take such steps as it considers appropriate or necessary in relation to the obligations incurred by it or by you and in relation to the exercise of the Option contract, including without limitation, entering into and exercising another Option contract on your behalf.

10.12 Client liability

Your liability to pay any amounts or deliver any relevant security in connection with the entry into any Contract accrues as from the time of entry into the Contract.

10.13 Client acknowledgment

You acknowledge that the terms of sub-clauses 10.8 to 10.12 inclusive apply, notwithstanding the terms of any of the Rules or any other term of this Agreement.

10.14 CHESS holdings

You authorise the use of any securities held by you in CHESS holdings sponsored by Macquarie Equities to be lodged with the ACH or otherwise made available to ACH as security for deposits or margins payable to ACH in respect of the Client’s Account by signing the Addendum entitled “Collateral Cover” attached to this Agreement.

10.15 Other

1. You acknowledge that Macquarie Equities will not extend you credit for any reason whatsoever.

2. Macquarie Equities does not accept payment in cash. You must make payments due under this agreement by other means acceptable to us.

3. Any interest incurred or accrued by ACH on your funds will be passed on to you. Macquarie Equities may charge a reasonable administration fee of between 1 and 3%, in addition to the base interest rate charged by the ACH, for passing this interest on to you.


11. Failure to Settle and Close-Out


1. You are liable for any losses, costs and expenses incurred by Macquarie Equities as a result of your failure to provide funds by the due settlement date. However, Macquarie Equities remains liable for any losses, costs and expenses caused by its own neglect or default. 2. You are liable for any losses, costs and expenses incurred by

Macquarie Equities as a result of your failure to provide payment in full to Macquarie Equities in respect of either purchases by the due settlement date or Margin or other settlement obligations. However, Macquarie Equities remains liable for any losses, costs and expenses caused by its own neglect or default.

11.1 Close-Out of Contracts and Default


1. you fail to pay to Macquarie Equities any money or deliver any relevant security payable or deliverable to Macquarie Equities on any account on or before the due time for payment or delivery; 2. you fail to perform any obligations arising pursuant to the exercise or

settlement of an Option contract;

3. you become insolvent, or a manager, receiver, receiver and manager, controller, administrator, or similar officer is appointed;

4. you: (a) die;

(b) are declared incompetent and after reasonable enquiry Macquarie Equities has no knowledge of any person legally authorised to enter into or complete Contracts and Transactions on your behalf; or

(c) become bankrupt, assign your estate for the benefit of creditors or are generally unable to meet your debts as and when they fall due;

5. there are reasonable grounds for believing you will not honour your obligations under this Agreement or in respect of any Contract into which you have entered;

6. there has been a significant movement in either the value of any Contract entered into by you or securities prices generally;

7. any representation made or taken to be made by you is untrue at the time it was made or taken to be made; or

8. any guarantee or other security provided by you to Macquarie Equities is withdrawn or becomes ineffective;

then Macquarie Equities may, in addition to any other rights which it may have against you, without giving prior notice to you, take any action, or refrain from taking action, which it considers reasonable in the circumstances in connection with any Option contracts registered in the Client’s Account (including without limitation, Option contracts arising from

11.2 Consequences of Close-Out

Following Close-Out of any Option contract or Option contracts, Macquarie Equities will calculate the amount (if any) due to be paid by you to Macquarie Equities or by Macquarie Equities to you (as the case may be) in connection with those Closed-Out Option contracts and notify you of that amount. The amount calculated by Macquarie Equities will, in the absence of manifest error, be binding on you and be immediately due and payable.

11.3 Set off

Except for amounts genuinely in dispute or where genuine disputes exist over the adequacy of the performance of the contract, Macquarie Equities may set off any amount owing to Macquarie Equities by you (by virtue of this Agreement, any Contract or on any other account) against:

1. any Margin held by either ACH or Macquarie Equities, on your behalf; 2. any amounts due to you by Macquarie Equities or any of its related

corporate entities;

3. any amounts which are held to your credit in any account of the Macquarie Equities Cash Management Trust; or

4. any amounts held on your behalf by Macquarie Equities or any of its related corporate entities, and for the purposes of this clause you authorise Macquarie Equities to sell any securities which are held by either ACH or Macquarie Equities as Margin on the stock market of ASX and apply the proceeds of that sale to satisfy any obligations which the Client may have to Macquarie Equities on any Account.

11.4 Rights additional

The rights conferred on Macquarie Equities under this Agreement are in addition to any rights conferred under the applicable Rules.

12. Trading as principal by Macquarie

Equities and its related corporate


You acknowledge that:

1. Macquarie Equities and related corporate entities of Macquarie Equities may trade on ASX Markets as principal;

2. in certain circumstances permitted under the Corporations Act and the Market Rules or operating rules of the relevant Approved Exchange, each of Macquarie Equities and its related corporate entities may (either acting for another client or on its own account) take an opposite position to the Client in a Contract, and

3. you acknowledge and consent to Macquarie Equities and its related corporate entities so trading.

4. Notwithstanding that Macquarie Equities may act in accordance with the instructions of, or for your benefit, you acknowledge that any Contract arising from any order submitted into the ASX Markets, is entered by Macquarie Equities as principal.



13. Assigned right

13.1 Your rights under this agreement are incapable of being assigned (whether at law, in equity or otherwise) or made the subject of any encumbrance, trust or fiduciary obligation without the prior written consent of Macquarie Equities, which consent may be withheld by Macquarie Equities acting reasonably. Any action which purports to do any of these things without Macquarie Equities’ prior written consent is void.

13.2 Where such assignment does not prejudice your rights under this agreement, Macquarie Equities may assign or otherwise deal with its rights under this agreement without your consent for legitimate business purposes including business reconstruction, amalgamation, sale or securitisation.

13.3 Where such assignment may prejudice your rights under this agreement, we may assign or otherwise deal with our rights under this agreement by providing you with 10 Business Days written notice.

14. In the event of a dispute

1. Any dispute between you and Macquarie Equities will be dealt with in accordance with Macquarie Equities’ complaints procedures. 2. All parties to this agreement may utilise the external complaints

scheme referred to in the Macquarie Equities Financial Services Guide to resolve any dispute.

15. Notices

Every notice or other communication of any nature whatsoever required to be given, served or made under or arising from this Agreement:

1. must be in writing in order to be valid;

2. will be deemed to have been duly given, served or made in relation to a party if it is delivered to the address of that party set out in this Agreement or sent by facsimile to the number notified in writing by that party to the other party from time to time; and

3. will be deemed to be given, served or made:

(a) (in the case of facsimile) on receipt of a transmission report confirming successful transmission at the conclusion of the transmission; and

(b) (in the case of delivery by hand) on delivery provided that if any notice is given, served or made outside of normal business hours it will not be deemed to be given, served or made until the commencement of business on the next Business Day.

16. Security

1. You represent that you will not instruct any unauthorised person to issue instructions on your Account.

2. You acknowledge that if you become aware of any unauthorised instructions on your Account you will contact Macquarie Equities or your adviser immediately.

3. You acknowledge Macquarie Equities is entitled to rely on and you will be liable for any order placed on your Account, which appears to have been duly authorised by you. However, Macquarie Equities will not be entitled to rely on an order placed on your account if: (a) Macquarie Equities’ security procedures have not been


(b) You have previously advised Macquarie Equities that there has been or you suspect unauthorised activity on your Account; (c) the order was fraudulently given by an employee of Macquarie


4. You agree to provide Macquarie Equities with current contact details including an email address, during your dealings with Macquarie Equities, and you acknowledge that all confirmations of executed orders will be sent via a hard copy contract note/confirmation or by electronic means. In the event that your contact details are not current, including postal address, email address or facsimile number, Macquarie Equities reserves the right to suspend all dealings on your Account and any cash facility linked to that Account.

17. Trading procedures

1. At the time of placing an order to deal in Options and/or Warrants through Macquarie Equities, you undertake to provide Macquarie Equities with all information it reasonably requires, such as any information needed to comply with the Rules.

2. You acknowledge that it is your responsibility to ensure that all details relating to instructions to deal in Options and/or Warrants are accurate at the time of placing the order, including but not limited to, the provision of your SRN or HIN, the name of the Option and/or Warrant, the volume of the Option and/or Warrant, the value of the total order and in relation to Options, the Option series, the Option exercise or strike price and the expiry month of the Option. 3. If you are uncertain that an order to deal in Options and/or Warrants

has been received, you will contact your Macquarie Equities representative to ascertain whether the order has been received, approved and executed prior to taking any further action in relation to the order. If you wish to cancel or amend an existing order, you will communicate that you wish to cancel or amend an existing order, rather than place a second or duplicate order with the Macquarie Equities representative. You will be liable for any duplicate instructions that you place.

4. You acknowledge that Macquarie Equities will use its best endeavours to place an order into ITS as soon as possible following communication of a properly authorised order placed by you. In the event that a delay is experienced in placing an order into ITS, Macquarie Equities accepts no liability for that delay, unless it has been caused by Macquarie Equities’ own negligence or default, and then only to the extent that the delay has been unavoidably caused by factors beyond Macquarie Equities’ control.


5. You acknowledge that an instruction to trade in Options and/or Warrants is not deemed to be accepted until such time as it has been placed into ITS. In the event that an order is rejected, for whatever reason, a representative of Macquarie Equities will use their best endeavours to contact you.

6. You must not issue instructions to Macquarie Equities, that will breach, or are likely to cause Macquarie Equities to breach, any Rules including:

(a) market manipulation Rules, wash trading or matching of orders; (b) insider trading or front running Rules;

(c) the creation of a disorderly market or otherwise prejudicing the integrity or efficiency of the market; or

(d) misleading or deceptive conduct concerning dealings in Options and/or Warrants.

7. You acknowledge that ITS may match your orders with orders entered through Macquarie Equities trading system by other clients of Macquarie Equities, and that in such case, Macquarie Equities may receive brokerage from both parties to the transaction.

8. You acknowledge that certain orders may be subject to the assessment and approval by management of Macquarie Equities, which may delay execution of orders.

9. You acknowledge that Warrants and Options orders will expire at the close of Normal Trading Hours on the Business Day that they are given, if it has not been executed or cancelled upon your request prior to that time.

10. You acknowledge that all orders given to Macquarie Equities outside the Normal Trading Hours of ASX will not be executed by Macquarie Equities until commencement of the next ASX Trading Day. 11. You acknowledge that any ‘market to limit’ instruction received or

accepted by Macquarie Equities will be placed into ITS as quickly as possible, however, Macquarie Equities does not guarantee that any quoted price will be achieved.

12. You acknowledge that any unfilled portion of an instruction that has been entered into the market will be removed from the market at 7.00 pm on that Trading Day.

13. You acknowledge that any instruction received or accepted by Macquarie Equities after the close of Normal Trading Hours will be entered into the market as a “day only” order on the next Trading Day. 14. You acknowledge that your order will be executed at the price

available on ASX (subject to any limit imposed by you), which may be different from the price at which the Option and/or Warrant is trading when your order was placed with Macquarie Equities.

15. You acknowledge that instructions placed by electronic means, including instructions to place, cancel or amend orders may experience delays being executed. Macquarie Equities is not liable for any losses caused by a delay unless it has been caused by

16. You acknowledge that any bulk orders received from you or your Authorised Representative will be allocated in accordance with Macquarie Equities standard allocation process (which is on a pro-rata basis) unless otherwise authorised by you or your Authorised Representative. You acknowledge that, in order to ensure fairness in execution, Macquarie Equities may bulk orders on the same basis received from several clients and that these will be allocated in accordance with Macquarie Equities standard allocation process. 17. You acknowledge that Macquarie Equities will use reasonable

endeavours to effect instructions to buy/sell, amend or cancel an order as quickly as possible. However, you acknowledge that there may be delays in processing an instruction, amendment or cancellation, and as such, an order may be wholly or partly filled before an instruction for its amendment or cancellation is processed and you will be liable to settle the partially filled order.

18. You acknowledge that Macquarie Equities may only be able to partially fill an order and that you are responsible for that transaction regardless of whether or not the remainder of the order is filled. 19. Macquarie Equities will in the case of Warrants, use its best

endeavours to complete partially filled orders. You will be charged brokerage only on the first transaction of a partially filled order that is ultimately completed.

20. You acknowledge that orders may be purged from ITS, subject to the provisions of the Market Rules, and ITS Procedures, without notice to you including, without limitation, where:

(a) an order expires;

(b) in the case of Warrants, the underlying security is quoted “Ex” (as defined by ASX) for the purpose of determining an entitlement to shares, an offer to shareholders, a distribution payment or for any other reason;

(c) the price at which an order is entered into ITS is deemed to be too far from the prevailing market price by ASX;

(d) the underlying security has been removed from Official Quotation on ASX; or

(e) ASX determines the order should be purged for any reason whatsoever.

21. You acknowledge that orders purged from ITS by ASX will not be re-entered into ITS without further instruction from you.

22. Macquarie Equities will confirm the execution of an order by hard copy contract note or an electronic confirmation, which will be dispatched at the end of the Trading Day on which the transaction was executed.

23. You agree and acknowledge that Macquarie Equities will, where a transaction forms part of a series of transactions made to complete an order placed by you with Macquarie Equities, give you in relation to that order or all orders, in lieu of a contract note/ confirmation in



25. Upon receipt of the contract note/confirmation, if you believe that the contract note/confirmation does not accurately reflect the transaction you entered into, you will immediately contact your adviser prior to settlement.

26. Macquarie Equities may, at any time, reissue a contract note/ confirmation in order to correct any errors or omissions, in which case the new contract note/confirmation will replace the original contract note/confirmation.

27. Macquarie Equities may cancel a contract note/confirmation at the direction of ASX or ACH.

28. You acknowledge that Macquarie Equities is not responsible for any delay experienced by you when placing an order due to an unforeseen backlog of callers or the unavailability of your adviser. 29. Pursuant to its powers in the ASX Market Rules, ASX at its sole discretion

may cancel or amend market transactions or crossings without prior approval from Macquarie Equities or the investor. You acknowledge that you are not able to claim compensation from Macquarie Equities in relation to the circumstances described in this clause.

17.1 Macquarie Equities may electronically record your telephone calls. You acknowledge that you:

(a) agree and consent to the electronic recording by Macquarie Equities (or by any other person on behalf of Macquarie Equities) of your telephone conversations with Macquarie Equities or with any of its agents or employees or the agents or employees of any of its related bodies corporate, with or without an automatic tone warning device; (b) agree that in the event of a dispute that a tape recording of the

matter to which the dispute relates (or a copy of that tape recording) will, in the absence of manifest error, be prima facie evidence of its contents;

(c) notwithstanding any other arrangement relating to the use of personal information by Macquarie Equities, where the tape recording collects “personal information” as that term is defined in the Privacy Act 1988 (Cth), you consent to the following use and disclosure of the personal information contained on the tapes by Macquarie Equities:

(i) use the tapes for its internal purposes including assisting it in resolving any dispute; and

(ii) disclosure of the tapes and any information contained on the tapes to regulatory and self regulatory bodies to assist in the resolution of any dispute; and

(d) will have the right to listen to any recording in the event of a dispute or anticipated dispute, provided you have paid Macquarie Equities our reasonable costs to comply with your request subject to availability.

17.2 Right to refuse to deal

You acknowledge that Macquarie Equities may at any time refuse to deal in, or may limit dealings in, Contracts for you and that Macquarie Equities will notify you of any refusal or limitation as soon as practicable. Macquarie Equities is not required to act in accordance with your instructions, where to do so would constitute a breach of the Market Rules, the ACH Rules, the ASX Procedures, the ACH Procedures or the Corporations Act. Nothing in this Agreement is to be construed as obliging either you or Macquarie Equities to enter into any Contract.

18. Trading limits

You agree not to violate, either alone or with others, the position or exercise limits established pursuant to the Market Rules.

19. Change of Participant

If you receive a Participant Change Notice from Macquarie Equities and the Participant Change Notice was received at least twenty (20) Business Days prior to the date proposed in the Participant Change Notice for the change of Participant, you are under no obligation to agree to the change of Participant, and may choose to do any of the things set out below. You may choose to terminate this Client Agreement in accordance with clause 21.7 or by giving instructions to the Participant, indicating that you wish to transfer your Option contracts to another Participant.

If you do not take any action to terminate this Client Agreement and do not give any other instructions to Macquarie Equities which would indicate that you do not agree to the change of Participant then, on the Effective Date, this Client Agreement will have been taken to be novated to the new Participant and will be binding on all parties as if, on the Effective Date: (a) the new Participant is a party to the Client Agreement in substitution

for the existing Participant;

(b) any rights of the existing Participant are transferred to the new Participant; and

(c) the existing Participant is released by you from any obligations arising on or after the Effective Date.

The novation does not take effect until you have received a notice from the new Participant confirming that the new Participant consents to acting as your Participant. The Effective Date may as a result be later than the date set out in the Participant Change Notice.

You will be taken to have consented to the events referred to above by the doing of any act which is consistent with the novation of the Client Agreement to the new Participant (for example by giving an instruction to the new Participant), on or after the Effective Date, and such consent will be taken to be given as of the Effective Date.

The Client Agreement continues for the benefit of Macquarie Equities in respect of any rights and obligations accruing before the Effective Date and, to the extent that any law or provision of any agreement makes the novation not binding or effective on the Effective Date, then the Client Agreement will continue for the benefit of Macquarie Equities until such time as the novation is effective, and Macquarie Equities will hold the benefit of the Client Agreement on trust for the new Participant. Nothing in this clause 19 will prevent the completion and registration of option contracts by Macquarie Equities where the obligation to complete those transactions arises before the Effective Date and the Client Agreement will continue to apply to the completion of those contracts, notwithstanding the novation of the Client Agreement to the new Participant under this clause 19.


20. Governing law and submission to


20.1 Governing law

This Agreement will be governed by and construed in accordance with the laws of New South Wales.

20.2 Jurisdiction

Each party hereby irrevocably submits to and accepts, generally and unconditionally, the non-exclusive jurisdiction of the courts and appellate courts of New South Wales with respect to any legal action or proceedings which may be brought at any time relating in any way to this Agreement. Each party irrevocably waives any objection it may now or in the future have to the venue of any such action or proceedings and any claim it may now or in the future have that any such action or proceeding has been brought in an inconvenient forum.

21. Miscellaneous

21.1 Certificate of Macquarie Equities

A certificate in writing signed by an officer of Macquarie Equities certifying the amount payable by you under this Agreement or any Contract to Macquarie Equities or stating any other act, matter or thing relating to this Agreement will be conclusive and binding on you in the absence of manifest error.

21.2 Continuing obligation

This Agreement will be a continuing obligation notwithstanding any settlement of account, intervening payment, express or implied revocation or any other matter or thing whatsoever until a final discharge thereof has been given to you by Macquarie Equities.

21.3 Severability

If any term or part of this Agreement is invalid or not enforceable in accordance with its terms, all other terms or parts which are self-sustaining and capable of separate enforcement without regard to the invalid or unenforceable term or part will be and continue to be valid and enforceable in accordance with their terms.

21.4 Waiver

A failure to exercise or enforce or a delay in exercising or enforcing or the partial exercise or enforcement of any right, remedy, power or privilege under this Agreement by Macquarie Equities will not in any way preclude or operate as a waiver of any further exercise or enforcement of this Agreement or the exercise or enforcement of any other right, remedy, power or privilege hereunder or provided by law.

21.5 Counterparts

21.7 Termination of this Agreement

You may terminate this Agreement by giving Macquarie Equities not less than seven (7) Business Days notice, in writing, subject to all outstanding obligations under these terms and conditions and any relevant Option and/ or Warrant dealings, including any dealings relating to the underlying securities being duly discharged. Macquarie Equities can terminate these terms and conditions by giving you seven (7) Business Days notice in writing. Termination will be effective upon receipt of that notice by the other party.

21.8 Effect of termination

Termination of this Agreement under clause 21.7 does not affect your or Macquarie Equities existing rights and obligations as at or prior to termination. Upon termination of this Agreement, Macquarie Equities will, where applicable, Close-Out all option contracts entered into by Macquarie Equities and registered in the Client’s Account unless in accordance with a written direction from you, the registration of those option contracts will be transferred to another Participant in accordance with the Rules or the operating rules of ASX or other relevant Approved Exchange.

21.9 Variation

Macquarie Equities may vary these terms and conditions by giving you notice of the variation in the following manner:

(a) where the variation would cause you detriment, by giving you at least 21 days written notice;

(b) where the variation would not cause you detriment, by giving you at least 14 days notice, such notice to be given by:

(i) posting notice of the changes on our website; or (ii) any other form of written notice; and

(c) subject to (a), where the variation is required in order to: (i) meet regulatory requirements;

(ii) reflect new industry guidance and codes of practice which in our reasonable opinion are likely to raise standards of consumer protection (whether mandatory or voluntary); or (iii) comply with any legal requirement, or any decision, code, recommendation, guidance or standard of any regulatory authority, court or tribunal;

by giving you at least 14 days’ notice, such notice to be given by: (i) posting notice of the changes on our website; or

(ii) any other form of written notice.

Hard copy versions of the revised terms and conditions will be sent to you on request.

If, following a variation to these terms and conditions, you no longer wish to maintain your account with Macquarie Equities, you may terminate it in accordance with clause 21.7. We will not charge you any exit or termination fees but you will be required to satisfy any current obligations or liabilities



22. Your privacy

By completing the Options and Warrants Trading Terms and Conditions application attached, as well as the Investment profile, you agree to Macquarie Equities collecting, holding and using personal information about you to provide products and services to you, to carry out administration and in order for Macquarie Equities to comply with its legal obligations, including but not limited to its obligations under AML/CTF Laws (as defined in clause 24). Administration includes monitoring, auditing and evaluating, modelling data, dealing with complaints, answering queries and providing services in relation to this product.

You also agree to our use of information (including personal information) we hold relating to you, including information which you provide to us in the application form and in related administrative services, to:

■ streamline future applications you make for Macquarie Group products or services;

■ provide you and us with an integrated view of and access to the products and services you have with the Macquarie Group; and

■ enable us to deliver a more comprehensive service in relation to your Macquarie Group products and services;

and you agree to our disclosing that information to other members of the Macquarie Group for those same uses.

This information may also be used by other companies in the Macquarie Group so that products and services which we consider may be of interest to you can be marketed to you, unless you tell us not to. If you do not provide the information requested in the application form we may not be able to process or accept your application. By completing this form you agree that we may provide access to this information to our agents, contractors or third parties who provide services in connection with our product.

Under the Privacy Act 1988, you may request access to your personal information held by the Macquarie Group of companies. To make such a request, or for any other reason relating to the privacy of your personal information – simply contact our Client Service Centre on

1800 181 883.

22.1 Use and Disclosure of your Personal Information

You acknowledge that certain consents have been made to Macquarie Equities to use your personal information in accordance with the Full Service Stockbroking “Macquarie Equities Limited Share Trading Terms and Conditions”. In addition you consent to Macquarie Equities using and disclosing your Personal Information in accordance with clause 24 in connection with AML/CTF Laws and to effect the purchase and sale of Options and/or Warrants in your name and providing related facilities and services, including any requirement to facilitate settlement.

23. Provision of Tax File Number

Our collection of your tax file number (TFN) is authorised, and its use and disclosure strictly regulated by, tax laws and the Privacy Act. You do not have to provide us with your TFN, and declining to do so is not an offence. If you do provide us with your TFN, we are required to disclose your TFN to any investment body where you invest in their products/services through us. We are required to do this until you revoke your quotation of your TFN. However, if you do not provide us with your TFN (including both TFNs for joint accounts) or claim an exemption, tax may be withheld by the investment bodies from your income paid to you at the highest marginal rate (plus Medicare levy) before it is paid to you. For more information about the use of TFNs please phone your nearest Tax Office.

24. Anti-Money Laundering and

Counter-Terrorism Financing Act 2006

(a) If requested, you agree to provide additional information and assistance and comply with all reasonable requests to facilitate Macquarie Equities’ compliance with AML/CTF Laws in Australia or an equivalent overseas jurisdiction.

(b) You represent and warrant that you are not aware and have no reason to suspect that:

– the money used to fund the investment is derived from or related to money laundering, terrorism financing or similar activities (Illegal Activities); and

– proceeds of investment made in connection with this product will fund illegal activities.

(c) Macquarie Equities is subject to AML/CTF Laws. In making an application pursuant to these terms and conditions, you consent to us disclosing in connection with AML/CTF Laws any of your Personal Information (as defined in the Privacy Act 1988 (Cth)) we have. (d) In certain circumstances we may be obliged to freeze or block an

account where it is used in connection with Illegal Activities or suspected Illegal Activities. Freezing or blocking can arise as a result of the account monitoring that is required by AML/CTF Laws. If Macquarie Equities freezes or blocks your account because it believes on a reasonable basis that it is required to do so in order to comply with AML/CTF Laws, we are not liable to you for any consequences or losses whatsoever and you agree to indemnify us if we are found liable to a third party in connection with the freezing or blocking of your account.

(e) Macquarie Equities retains the right not to provide services/ issue products to any applicant that Macquarie Equities decides, in its sole discretion, that it does not wish to supply.

(f) You agree that Macquarie Equities is not liable for any loss incurred as a result of any action taken which either delays an account being opened or results in an application being declined, when these actions are necessary for Macquarie Equities to comply with its obligations under AML/CTF Laws.


Risk Disclosure Statement for derivatives

traded on ASX markets

This Risk Disclosure Statement must be signed by all investors who are specified as “Retail Clients” by Macquarie Equities.

ASX operates a market in Exchange Traded Options (ETOs). In this Risk Disclosure Statement, these products are referred to as “ASX Derivative Products”.

This document does not disclose all aspects of risk associated with the trading of ASX Derivative Products. Trading in derivatives is not suitable for some retail investors. In light of the risks associated with trading ASX Derivative Products, you should invest in them only if you understand the nature of the products (specifically your rights and obligations) and the extent of your exposure to risk. Before you invest, you should carefully assess your experience, investment objectives, financial resources and all other relevant considerations and discuss these with your broker. You should not rely on this Risk Disclosure Statement as a complete explanation of the risks of investing in ASX Derivative Products. Macquarie Equities also recommends that you carefully read the “Significant Risks” section of the Product Disclosure Statement issued by them entitled “Exchange Traded Options” for additional information regarding risks associated with these products.

Effect of “leverage” or “gearing”

Transactions in all ASX Derivative Products carry a degree of risk. The initial outlay of capital may be small relative to the total contract value so that transactions are “leveraged” or “geared”. A relatively small market movement may have a proportionately larger impact on the value of the contract. This may work against you as well as for you. You may sustain a total loss of margin funds deposited with your broker in relation to our positions. If the market moves against your position or margin levels are increased, you may be called upon to pay substantial additional funds on short notice to maintain your position, or upon settlement of contracts. If you fail to comply with a request from your broker for additional funds within the time prescribed, your broker may close out your position and you will be liable to your broker for any loss that might result.

Specifi c product risks

Exchange Traded Options (ETOs) (Options)

Exchange Traded Options (ETOs) are Options over underlying securities or an underlying index. Purchasers of options (also known as “takers”) and sellers of options (also known as “writers”) should be familiar with the mechanics of the two different types of options, call and put options, and the nature and extent of the risks, the rights and obligations associated with each. The value of an Option will depend on a range of factors, such as the exercise price, the price of the underlying shares or the level of the underlying index, the volatility of the underlying shares or the underlying index the time remaining to the expiry date, interest rates, dividends and other factors and general risks applicable to markets.

The purchaser of an Option, whether it is a call option or a put option, has a known and limited potential loss. If a purchased option expires worthless, the purchaser will lose the total value paid for the option (known as the premium), plus transaction costs.

Selling (“writing”) options may entail considerably greater risk than purchasing Options. The premium received by the seller of an Option is fixed and limited, however, the seller may incur losses greater than that amount.

For more information on Options, you should talk with your adviser and read the ASX publication, “Understanding Options Trading” available from your adviser.



Risks relevant to all derivative products

Risk-Reducing Orders or Strategies

The placing of certain orders (for example “stop-loss” orders) which are intended to limit losses to certain amounts may not be effective because market conditions may make it impossible to execute such orders. Strategies using combinations of positions, such as “spread” and “straddle” positions may be as risky as taking simple “long” or “short” positions.

Terms and Conditions of Contracts

You should ask your adviser about the terms and conditions of all ASX Derivative Products contracts in which you are considering investing. Under certain circumstances the specifications of outstanding contracts may be modified by ASX or by Australian Clearing House (ACH).

Suspension or Restriction of Trading and Pricing Relationships

Market conditions (for example, illiquidity) or actions by ASX or ACH (for example, the suspension of trading in an ASX Derivative Product) may increase the risk of loss by making it difficult or impossible to effect transactions or close out existing positions.

Normal pricing relationships may not exist in certain circumstances, for example, in periods of high buying or selling pressure, high market volatility or illiquidity in the market for a particular ASX Derivative Product.

ASX and ACH have broad powers under the Rules to take action in the interests of maintaining fair and orderly markets and, in some circumstances, this may affect your positions.

Margins, Cash and Property

Your adviser may be required to pay margins or provide property as collateral to ACH in connection with their dealings in ASX Derivatives Products for you. Under your client agreement with your adviser, your adviser will require you to provide them with money or some form of security to enable them to manage the risks associated with their dealings in ASX Derivatives Products for you.

You should familiarise yourself with the protections for money or other property you deposit for transactions, particularly in the event of a adviser’s insolvency or bankruptcy. The extent to which you may recover money or property which you provide to your adviser is governed by the Corporations Act and other legislation and rules. In certain circumstances you may have a claim against the National Guarantee Fund.

Commission and Other Charges

Before you give instructions to your adviser to deal in any ASX Derivative Product, you should obtain a clear explanation of all commissions, fees and other charges for which you may be liable.

Trading Facilities

As with all trading facilities and systems, the systems used in the market are vulnerable to temporary disruption or failure which may result in your order not being executed according to your instructions or not executed at all. Your ability to recover certain losses may be subject to limits on liability imposed by the system provider, ASX, ACH or your adviser.


Warrant statement

The Client has received and read a copy of the Explanatory Booklet issued by the Australian Securities Exchange Limited (ASX) in respect of Warrants. The Client understands that neither ASX nor Australian Clearing House Pty Limited have an involvement whatsoever with Warrants.

The Client is aware that a Warrant has a limited life and cannot be traded after its expiry date.

The Client is aware that Warrants do not have standardised Terms of Issue and acknowledge that it is the Client’s responsibility to become aware of the Terms of Issue of any Warrant in which it chooses to invest.

The Client is aware that Warrants may be subject to adjustments after their initial issue. The Client acknowledges that it is the Client’s responsibility to become aware of any adjustments which may have been made to any warrant in which it chooses to invest.

The Client is aware that admission to Trading Status of a Warrant does not imply that ASX or the Securities Exchanges Guarantee Corporation Limited gives any guarantee or warranty as to the viability of the Warrant Issuer or Guarantor.

The Client acknowledges that failure of the Warrant Issuer or the Guarantor (if applicable) to fulfill their obligations does not give rise to a claim against ASX, handling Market Participants or the Securities Exchanges Guarantee Corporation Limited.