MQ Contracts For Difference

Transcription

1 MQ Contracts For Difference Product Disclosure Statement MQ PRIME 1 June 2007 Macquarie Bank Limited ABN AFSL

2 This PDS This Product Disclosure Statement is dated 1 June 2007 ( PDS ) and is issued by Macquarie Bank Limited ABN (referred to as Macquarie, we or us ). Macquarie holds Australian Financial Services Licence number Under this PDS Macquarie invites you to apply to open a CFD Trading Account, and, if Macquarie agrees to open a CFD Trading Account for you, to transact in Contracts For Difference ( CFDs ) from time to time. THERE ARE RISKS INVOLVED IN USING A CFD TRADING ACCOUNT Macquarie does not guarantee the performance, level of income or return of capital from any CFD position entered into using a CFD Trading Account. CFDs may be highly geared and can carry a high level of risk, including loss of more than the capital you invested. CFDs may be speculative. You should not invest in CFDs unless you are experienced in equity derivatives and understand and are comfortable with the risks of geared investing. You should obtain your own financial advice as to whether a CFD Trading Account is appropriate for you. Your potential liability will be affected by Reference Security Price movements on CFD positions that may be highly geared. This means that you may be liable for more money than you invest and you may lose more than the amount of funds in your Cash Account. Your liability is not limited to the funds in your Cash Account. Before placing an Order, please consider if a Stop-Loss Order or Guaranteed Stop-Loss Order would be appropriate to limit your potential loss. You are responsible for selecting the Reference Security for any CFD that you take out. As such, the performance of any CFD will depend mainly on your own investment decisions. Before making any investment decision, you should read and understand this PDS, in particular Section 6 for more detailed information about the significant risks of investing using a CFD Trading Account. Applications If you wish to apply for a CFD Trading Account, you must complete the online Application Form available through our website at Macquarie may reject an Application for any reason. More information on how to apply is set out in Section 12. Offers made in Australia This offer is open to persons receiving this PDS, whether in paper or electronic form, in Australia. This PDS is not an offer or invitation in any place outside Australia where, or to any person to whom, it would be unlawful to make such an offer or invitation. The distribution of this PDS (electronically or otherwise) in any jurisdiction outside Australia may be restricted by law and persons outside Australia who come into possession of this PDS should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable law. In particular, the CFD Trading Account has not been, nor will it be, registered under the United States Securities Act of 1933, as amended (the US Securities Act ), or the laws of any State of the United States and may not be offered or sold within the United States or to, or for the account or benefi t of, a US Person (as defi ned under Regulation S under the US Securities Act). Currency of information Information that is in this PDS may change from time to time. Where information changes that is not materially adverse to Investors, Macquarie may update the information by posting a notice online at com.au/cfd. You may access this information at any time. Alternatively, you can call the emg Client Service Team on Macquarie will provide on request, and without charge, a paper copy of this information to Investors. Representations This PDS has been prepared and issued by Macquarie. Potential Investors should only rely on information in this PDS. No person, including any distributor of this PDS, is authorised to give any information or to make any representation in connection with our invitation to apply for a CFD Trading Account or enter into CFDs that are not contained in this PDS. Any information or representation not in this PDS must not be relied on as having been authorised by Macquarie. No aspect of this product has been endorsed or approved by the ASX Limited or the Australian Securities & Investments Commission or any market referred to in this PDS. Listed Entities mentioned in this PDS References in this PDS to any Listed Entity are only included for the purposes of identifying the Reference Security to which a CFD may relate, and to the issuer of that Reference Security. Such references are not an express or implied endorsement by any Listed Entity of the CFD Trading Account. No Listed Entity accepts any responsibility for any statement in this PDS or assumes any liability in respect of the CFD Trading Account. Macquarie has prepared this PDS using only publicly available information. No Listed Entity has been involved in its preparation or given any information specifi cally to Macquarie for the purpose of its preparation. Nothing in this PDS can be relied on as implying that there has been no change in the affairs of any Listed Entity or Macquarie since the date of this PDS, or as a representation as to the future in relation to any Listed Entity or Macquarie. Information in this PDS about any Listed Entity has not been independently verifi ed. Accordingly, we do not accept any liability or responsibility for, and make no representation or warranty, express or implied, as to the accuracy or completeness of such information. You should make your own enquiries. Nothing in this PDS is an express or implied endorsement by us of an investment in any CFD or the securities of any Listed Entity. Consents Clayton Utz has given and not withdrawn its consent to be named in this PDS in the form and context in which it is named. Clayton Utz has not authorised or caused the issue of this PDS, does not make, or purport to make, any statement in this PDS (or any statement on which a statement in this PDS is based), and takes no responsibility for any part of this PDS other than Section 7. Glossary At the end of this PDS is a Glossary (Section 11) in which various words and phrases used in this PDS are defi ned. If you do not understand a word or phrase you should refer to the Glossary. Capitalised words that are used in this PDS have the meaning given to those words in the Glossary, unless the context requires otherwise. Unless stated otherwise: a) all dollar amounts in this PDS are quoted in Australian dollars; b) all dates are subject to a Business Day convention (see Condition 1.4 of the Terms and Conditions); and c) all references to time are to time in Sydney. Further advice recommendation The CFD Trading Account involves fi nancial and other risks. Before making an investment using a CFD Trading Account, you should: ❸ carefully read all of this PDS; ❸ seek professional legal, taxation and fi nancial advice to determine whether an investment is appropriate for you; and ❸ carefully consider the potential benefi ts and the risks involved in investing in CFDs using the CFD Trading Account, in light of your particular investment needs, objectives and fi nancial and taxation circumstances.

3 Product Disclosure Statement MQ CFDs Contents 02 At a Glance 07 Section 1 Investment Overview 09 Section 2 Details of the CFD Trading Account 16 Section 3 Cashflows and Collateral 19 Section 4 Fees and Other Costs 22 Section 5 Worked Examples 27 Section 6 Significant Risks You Should Consider 31 Section 7 Taxation Considerations 33 Section 8 Additional Information 34 Section 9 About the Issuer Macquarie Bank Limited 35 Section 10 Terms and Conditions 59 Section 11 Glossary 67 Section 12 How to Apply Due to recent rebranding of our products, we now use the term MQ in place of Macquarie in all marketing and informational material concerning our CFD, Prime and Cash Account products (except where we refer to a Macquarie company). For example, we now use MQ CFDs rather than Macquarie CFDs. Please note that this rebranding has not affected the substance of the products in any way and they remain issued by Macquarie Bank Limited. 1

4 At a Glance This Section of the PDS contains the highlights and key features of the CFD Trading Account and CFD positions. To fi nd information on the topics listed below, see the Section number listed. These highlights indicate the kind of information you can fi nd in this PDS, but are not intended to be a complete summary. You should read all of this PDS carefully and seek professional legal, taxation, and fi nancial advice to determine whether an investment in CFDs is appropriate for you. Topic Summary More information Who is the issuer of this PDS and the CFDs? This PDS, the CFD Trading Account and the CFDs are issued by Macquarie Bank Limited ( Macquarie ). Macquarie s contact details are: Macquarie Bank Limited No.1 Martin Place Sydney NSW 2000 Australia Phone: cfd@macquarie.com.au Internet: Macquarie s Australian Financial Services License number is Section 9: About the Issuer - Macquarie Bank Limited. What is offered? You are invited to apply for a CFD Trading Account offered by Macquarie on the terms outlined in this PDS and to transact in CFDs with Macquarie. Section 2: Details of the CFD Trading Account. Section 10: Terms and Conditions. What is the CFD Trading Account? The CFD Trading Account offered under this PDS enables you to transact CFDs with Macquarie by giving Orders, including GSL Orders. You do not hold any moneys in your CFD Trading Account. You must maintain a Cash Account in order to provide Collateral and otherwise support your obligations under your CFD Trading Account. Section 2: Details of the CFD Trading Account. Cash Account PDS. What is the Cash Account? The Cash Account is the deposit account which you must open with Macquarie to invest in CFDs. Funds fl ow into and out of this account as a result of your CFD investments. You need to apply under the separate Cash Account PDS to open a Cash Account. The terms and conditions of this account are set out in the Cash Account PDS. The latest Cash Account PDS can be found at You should note that the CFD Trading Account and Cash Accounts are interrelated. Your rights and obligations relating to the Cash Account will be affected by your rights and obligations under the CFD Trading Account. Cash Account PDS. 2 What is a CFD? A contract for difference, or CFD, is an agreement which allows you to make a profi t or loss from fl uctuations in the price of an underlying ASX listed security, referred to as a Reference Security, without actually owning that security. The amount of any profi t or loss made on a CFD will be equal to the difference between the price of the Reference Security when the CFD is opened and the price of the Reference Security when the CFD is closed multiplied by the number of Reference Securities to which the CFD relates (the CFD Quantity ). Any profi t or loss made will also be affected by certain other payments including interest, payments relating to dividends declared in relation to the underlying Reference Security, fees and other costs. Section 2: Details of the CFD Trading Account. Section 3: Cashfl ows and Collateral. Section 4: Fees and Other Costs. Section 10: Conditions 4 and 5 of the Terms and Conditions.

5 Topic Summary More information What do the terms to go long and to go short mean? What are Long CFD and Short CFD positions? What are Mark-to-Market Payments? To understand how a Long CFD or Short CFD work under a CFD Trading Account, you need to understand what the terms to go long and to go short mean in general fi nance. In general fi nance the term to go long describes the act of buying a security, such as a Reference Security, and holding that security. If you have a long position you will make a gain if the value of the security goes up, but you will make a loss if the value of the security goes down. In general fi nance the term to go short describes the act of borrowing a security, such as a Reference Security, and then selling the borrowed security. If you have a short position, you will make a gain if the value of the security goes down, but will make a loss if the value of the security goes up. You must eventually buy back the borrowed security and return it to the lender. A Long CFD position is akin to borrowing funds from Macquarie to buy Reference Securities, and posting an amount of cash collateral. In this situation you are identifi ed as the Long Party, being the party who has notionally purchased the Reference Securities and Macquarie is identifi ed as the Short Party. Where you are the Long Party, you will generally make a profi t if the Reference Security Price rises while your CFD position is open. Conversely, you will generally make a loss if the Reference Security Price falls while your CFD position is open. A Short CFD position is akin to borrowing the Reference Securities from Macquarie, selling them on the market with a view to repurchasing them at a future date, and in the meantime investing the proceeds of the initial sale in a bank account, with a proportion of these proceeds being held as cash collateral. In this situation you are identifi ed as the Short Party, being the party who has notionally sold the Reference Security and Macquarie is the Long Party. Where you are the Short Party, you will generally make a profi t if the Reference Security Price falls while your CFD position is open. Conversely, you will generally make a loss if the Reference Security Price rises while your CFD position is open. Although a CFD replicates the buying and selling of Reference Securities, you have no right or obligation to acquire or deliver the Reference Securities and no other rights of shareholders of the Reference Securities, such as voting rights. Mark-to-Market Payments are payments required to be made by you or Macquarie depending on how the Reference Security Price moves. If the Reference Security Price increases while the CFD is open, the Short Party must pay the amount of the corresponding increase in the CFD Value to the Long Party. Conversely if the Reference Security Price decreases while the CFD is open, the Long Party must pay the amount of the corresponding decrease in the CFD Value to the Short Party. Mark-to-Market Payments are either deducted from, or credited to, your Cash Account and are paid each Business Day. You will need to ensure that the funds in your Cash Account are suffi cient to meet your required Mark-to-Market Payments at all times, not just at the relevant Closing Time. Section 2: Details of the CFD Trading Account. Section 10: Conditions 3 and 4 of the Terms and Conditions. Section 3.2.1: Mark-to-Market Payments. Section 10: Condition 4.2 of the Terms and Conditions. 3

6 Topic Summary More information Do I receive dividends on CFD positions? Do I pay or receive interest? What are the interest rates? If you hold an Open Long CFD position at the close of business on the day prior to the ex-dividend date of the underlying Reference Security, you will receive an amount equal to the ordinary cash dividend on that Reference Security, excluding any franking credits. If you hold an Open Short CFD position on the close of business on the day prior to the ex-dividend date, you must pay an amount equal to the ordinary cash dividend to Macquarie. In limited circumstances you may also be required to pay the value of any franking credits applicable to the dividend. If you hold an Open Long CFD overnight, you will be charged interest on the CFD Value of that Open position at the Long Position Funding Rate. Conversely, if you hold an Open Short CFD overnight, you will receive interest on the CFD Value of that Open position at the Short Position Funding Rate. This interest is calculated and payable on each calendar day and is paid to (or deducted from) your Cash Account. If you fail to pay when due any amount payable, interest on the overdue amount may be payable and will be calculated at the Default Interest Rate. The Long Position Funding Rate and the Short Position Funding Rate will be either: as determined by Macquarie and displayed on the Macquarie CFD Website at that time; or if you agree rates with your adviser, payable at the agreed rates subject to our approval. These rates will change when the Benchmark Rate changes, and may differ from the rates initially agreed upon. The Long Position Funding Rate and the Short Position Funding Rate are variable. The rate of interest you must pay to Macquarie if you fail to pay any amount payable when due ( Default Interest Rate ) will be as determined by Macquarie and displayed on Macquarie CFD Website at that time. All interest rates are published on the Macquarie CFD Website and are subject to change. Section 3.2.2: Dividends. Section 10: Condition 4.3 of the Terms and Conditions. Section 3.2.3: Interest paid and received on Open CFD positions. Section 3.2.4: Default Interest. Section 10: Condition 5 of the Terms and Conditions. Section 3.2.3: Interest on Open CFD positions. Section 3.2.4: Default Interest. Section 10: Condition 5 of the Terms and Conditions. 4

7 Topic Summary More information At a Glance What fees and other costs are payable? What Collateral is required? Trading Fee: You will be charged a Trading Fee in respect of each new CFD position, payable in two instalments: the fi rst on the Opening, and the second on the Close Out of the CFD. For Orders which you place via the Macquarie Trading Platform, each instalment of this fee is a minimum of $10.00 and a maximum of 0.12% of the CFD Value at the time of payment, which is the Reference Security Price at that time multiplied by the number of Reference Securities to which the CFD relates. If you place your Orders by telephone the Trading Fee will be higher each instalment of the Trading Fee will be a minimum of $50.00 and a maximum of 0.50% of the CFD Value. If you agree rates with your adviser, the Trading Fee instalments will be payable at the agreed rates, subject to our approval. ASX Royalty (where applicable): You may be charged an ASX Royalty for using live ASX real-time information on the Macquarie Trading Platform. How much ASX Royalty you pay depends how long you use the Macquarie Trading Platform, and will vary according to which types of data you choose to subscribe to. Stock Lending Charge (Short CFD positions only): Where you are the Short Party, Macquarie may charge you a Stock Lending Charge refl ecting to the stock borrowing fees incurred by Macquarie in hedging its exposure to your CFD. GSL Premium (GSLs only): Where you have Guaranteed Stop-Loss protection over a CFD, you will be charged a GSL Premium. The GSL Premium will be quoted to you at the time you place your GSL Order and is payable immediately if the GSL Order is accepted. SMS Service Fee (where applicable): Where you have requested delivery of correspondence regarding your CFD Trading Account to your mobile phone via SMS, you must pay to Macquarie an SMS Service Fee for each message from Macquarie. Charge for News Service (where applicable): You may also be charged for the news service provided on the Macquarie Trading Platform. These fees and costs are published on the Macquarie CFD Website and are subject to change. Adviser commission: Your adviser may receive commission from us relating to your CFD Trading Account in respect of: a) Trading Fees charged to you; and b) Interest on your Open CFD positions. We will pay this commission to your adviser from our own funds. Your adviser should disclose any commission to you. Please refer to Section 4.8 for more information. You will need to ensure that the funds in your Cash Account are suffi cient to meet all required payments when due. Each Open CFD position and most Orders placed by you require the posting of an amount of cash Collateral. You will need to ensure that this Collateral amount is covered by the funds in your Cash Account prior to placing your Order. Sections 4: Fees and Other Costs. Section 10: Condition 4.4 of the CFD Terms and Conditions. Section 3.1: Collateral. Section 10: Condition 7 of the Terms and Conditions. 5

8 At a Glance Topic Summary More information How do I Close Out a CFD position? You may place an Order requesting the Close Out of an Open CFD position at any time. Section 2.4: How do I Close Out a CFD position? Section 10: Condition 8 of the Terms and Conditions. What are the significant risks? How do I operate my CFD Trading Account? What are the taxation consequences of investing in CFDs? How can I obtain further information? How do I apply for a CFD Trading Account? The signifi cant risks of investing using a CFD Trading Account include: CFDs are speculative and can be highly geared. They carry a signifi cantly higher level of risk than non-geared assets (eg. trading shares). You should not invest in CFDs unless you are experienced in equity derivatives and understand and are comfortable with the risks of investing in CFDs (including the risks associated with gearing). A CFD Trading Account allows you to enter into Short CFD positions, on which your potential losses may be unlimited. Your potential losses on a CFD position can be substantial and may exceed how much Collateral is designated to support a CFD position and even the total funds in your Cash Account. You should read and understand Section 6 of this PDS prior to applying for a CFD Trading Account. Your CFD Trading Account will be operated via the Macquarie Trading Platform. As such you will need to have the use of a computer with internet access 1. The taxation consequences of investing in Macquarie CFDs depend on your personal circumstances and you should obtain independent professional taxation advice. You should speak to your fi nancial adviser or alternatively, you can contact Macquarie via: Telephone: cfd@macquarie.com.au Internet: You must ensure that you have read and fully understood this PDS before deciding to apply for a CFD Trading Account. To apply, you must complete an Application Form online at as set out in Section 12 How to Apply. Section 6: Signifi cant Risks You Should Consider. Section 10: Terms and Conditions. Section 7: Taxation Considerations. Section 12: How to Apply. 6 1 Certain minimum system requirements to operate the Macquarie Trading Platform may apply from time to time. Please check our website for details.

9 Section 1 Investment Overview This PDS contains important terms and conditions for you to consider. Before completing the Application Form, you should read and ensure you understand this entire PDS. In particular, you should note the risks outlined in Section 6 of this PDS. The following is only a brief description of some of the key benefi ts and signifi cant risks involved in investing in CFDs and using the CFD Trading Account. 1.1 What are the key features and benefi ts of Contracts for Differences? Leverage / Gearing: Gain access to larger amounts of trading capital The CFD Trading Account allows you to open a CFD position with signifi cant exposure to a Reference Security while outlaying a relatively small amount of cash (in the form of Collateral). This is also known as gearing. CFDs offer a potentially large amount of gearing. This will have the effect of magnifying any profi ts or losses and so consequently carries signifi cant risk (see Section 6.1 for details). Trading any market direction: Ability to take short positions If you believe that the price of a Reference Security may fall, Macquarie CFDs enable you to open a short position in relation to the Reference Security. Compared to opening long positions, opening short positions in listed securities has traditionally been a diffi cult exercise and CFDs offer an effi cient means of taking such short positions. Optional Guaranteed Stop-Loss protection: Limit potential downside A large adverse movement in a Reference Security Price can give rise to large losses on Open CFDs. Placing Guaranteed Stop-Loss ( GSL ) protection on a CFD position allows you to limit your potential losses arising from sudden market movements by giving you a guaranteed Close Out Reference Security Price during the GSL Period on that CFD (see Section relating to GSL Orders for details). Highly flexible: Access real-time market prices and multiple order entry options The Macquarie Trading Platform gives you access to real-time pricing and market depth information. You have the ability to enter into CFDs in real-time over the internet, with the fl exibility of utilising Limit, Market-to-Limit, Trigger, Stop-Loss and Guaranteed Stop-Loss Orders. Take-Profi t and Market Orders may be made available from time to time. Dividends and interest Holders of Open Long CFD positions also receive the benefi t of any ordinary cash dividends paid to holders of the underlying Reference Securities, but are charged interest on the CFD Value of their Open position. Conversely, holders of Open Short CFD positions must pay cash equal to the value of any ordinary cash dividend 2 paid to holders of the underlying Reference Securities, but receive interest on the CFD Value of their Open position. 1.2 What are the key signifi cant risks of CFDs? Gearing magnifies losses CFD positions can be highly geared and can carry a high degree of risk. If you are considering opening a CFD Trading Account and entering into CFD positions, you should be experienced in equity derivatives and understand and be comfortable with the risks of gearing. Gearing can magnify your losses, just as it can also magnify your gains see (Section 6.1 for details). Short CFD positions A CFD Trading Account allows you to enter into Short CFD positions. If you do not take out Guaranteed Stop-Loss protection, your potential losses on a short position are unlimited. Gearing can magnify the level of losses on a short position (see Section 6.2 for details). 2 Plus, in limited circumstances, the value of any franking credits applicable to the dividend. Please refer to Condition 4.3(b) of the CFD Terms and Conditions for more information. 7

10 Section 1 Investment Overview You may lose more money than the amount in your Cash Account Your potential losses on a CFD position can be substantial and may exceed how much Collateral is designated to support a position and even the total funds in your Cash Account. Where your liability to us exceeds the funds in your Cash Account, we have recourse to you for any outstanding amount as a debt (see Section 6.3 for details). Providing Collateral is an ongoing and constant obligation You must meet Collateral requirements on your CFD positions at all times and may be required to deposit additional funds into your Cash Account at short notice. Failure to meet Collateral requirements may result in us Closing Out your Open positions (see Section 6.4 for details). Systems infrastructure may be disrupted Your ability to operate your CFD Trading Account depends on the continued operation of, among other things, the Macquarie CFD Website, the internet and your personal computer. A fault, delay or failure of any of these things could prevent you from making Orders and may result in losses on your Open positions (see Section 6.5 for details). Investment decisions You are responsible for the selection of the Reference Security for any CFD position that you take out. As such, the performance of any CFD position will depend mainly on investment decisions made by you. CFDs may be speculative (see Section 6.6 for details). Involuntary Close Out We may Close Out a CFD position in a number of circumstances, including where you have insuffi cient funds in your Cash Account to meet the Aggregate Required Collateral (see Section 6.7 for details). Macquarie s discretion, indemnities and limitations on liability We have discretions which can affect your Orders or CFD positions, including the power to accept or refuse any Order you place, close your CFD Trading Account or Close Out any CFD. You do not have the power to direct us about the exercise of any discretion (see Section 6.8 for details). These and other key risks relating to the CFD Trading Account and CFD positions are described in greater detail in Section 6 Signifi cant Risks You Should Consider which you should read carefully. 8

11 Section 2 Details of the CFD Trading Account This Section contains a brief summary only of certain material features relating to the CFD Trading Account. More detailed information relating to the CFD Trading Account can be found in Section 10 Terms and Conditions. 2.1 How do I open a CFD Trading Account? In order to open a CFD Trading Account and enter into CFDs with Macquarie, you must complete and submit online, the Application Form available at In addition, to provide the Collateral needed to support your CFDs, you will need to open a Cash Account in your name under the Cash Account PDS. Macquarie will then require that an initial amount of at least $5,000 be deposited in that Account or such lower amount that Macquarie may determine from time to time ( Initial Deposit Amount ). Once the Initial Deposit Amount is held, in cleared funds, in your Cash Account, you are able to place Orders and enter into CFDs with Macquarie. Please note that Macquarie retains the right to refuse any application for a CFD Trading Account or a Cash Account. Standard Accounts and Loss Limiter Accounts You must specify in your Application Form whether you would like a Standard Account or a Loss Limiter Account. If you have a Standard Account, we will place a limit on the total value of CFDs you are able to enter into ( Risk Limit ). Should you also have an existing Prime Facility, or open a Prime Facility in the future, this Risk Limit will be shared across both products. We retain the right to reject any Orders and/or Close Out CFDs in any circumstance where your Risk Limit Usage exceeds your Risk Limit. If you have a Loss Limiter Account, no Risk Limit is placed on your account, but you are required to use GSL protection on every CFD that you enter into (see Section below relating to Guaranteed Stop-Loss Orders). Regardless of which type of CFD Trading Account you use, you must maintain the Aggregate Required Collateral in your Cash Account (see Section 3.1 for details). 2.2 How will my Cash Account be affected by my CFD Trading Account? During the life of your CFD Trading Account, amounts within your Cash Account will be designated as either Available Funds or Collateral depending on your Orders, CFD positions and market movements. In addition to holding suffi cient funds in your Cash Account to meet any fees and charges associated with your CFD Trading Account as referred to in Section 4, you are required to make Collateral available to support each Order to Open a CFD position, as well as your existing CFD positions. Such Collateral represents security held by Macquarie for your Orders and CFD positions. You will be notifi ed of the Required Collateral Amount for each Order and you should ensure that you have suffi cient funds in your Cash Account to cover that amount. It is your responsibility to monitor at all times the level of funds in your Cash Account, as well as your Aggregate Required Collateral, and make any necessary deposits to ensure that you have sufficient funds in your Cash Account to cover that amount. Please refer to Section 3.1 for a further description as to how Collateral is calculated. 2.3 How do I open a CFD? You will need to place your Order through the Macquarie Trading Platform, electronically or by telephone. We will allow you access to this Platform if we accept your Application for a CFD Trading Account. When you place an Order to open a CFD, you will need to specify certain information including the Reference Security and the CFD Quantity. Your Order will become an Open CFD position only if and when Macquarie has accepted your Order in accordance with the Terms and Conditions. That is, when Macquarie enters into arrangements to buy or sell Reference Securities to hedge its exposure, or otherwise at the time it records the transaction concerning the CFD in its records. Note that if you have a Loss Limiter Account, you are required to place a GSL Order at the same time as you place an Order for a CFD. If you do not do this, your Order will not be accepted by Macquarie. 9

12 Under the Terms and Conditions, Macquarie has sole discretion whether or not to accept an Order. If Macquarie in its discretion accepts an Order you should note that there is no guarantee that an Order (other than a Guaranteed Stop-Loss Order) will be accepted at a given price or time. You may cancel an Order at any time prior to that Order being accepted and fi lled by Macquarie. 2.4 How do I Close Out a CFD position? Your CFD position will continue to exist until it is Closed Out via any of a number of methods, including where: a Stop-Loss Order is accepted by Macquarie; a GSL Order is triggered; or you place a Market, Market-to-Limit or Limit Order that is an Opposite Position to an existing CFD position and that Order is accepted by Macquarie. Where this Order is for a smaller quantity than the existing CFD position the existing CFD position will be split into two CFDs, with one CFD equal in size to the Order being Closed Out and the other CFD remaining Open. 2.5 Can Macquarie close my CFDs or CFD Trading Account without my approval? In some circumstances, Macquarie may Close Out a CFD in its sole discretion, including where you exceed the Risk Limit (for a Standard Account) or fail to maintain the Aggregate Required Collateral. See Condition 8 of the Terms and Conditions for more details. 2.6 What types of CFD Orders are there? The basic types of Orders you can place when opening, altering or Closing Out a CFD position are set out below. If you hold a Loss Limiter Account, any Order that you make to Open a new CFD position will not be accepted by Macquarie unless it is accompanied by a corresponding GSL Order. This does not apply to an Order to Close Out a CFD Orders that can Open or Close Out a position You can open or Close Out CFD positions using a Limit Order, Market-to-Limit Order, Trigger Order or such other types of order that we make available from time to time (see Other Orders below). Limit Order This is an Order to enter into a new CFD or Close Out an existing CFD where the relevant Reference Security Price reaches a specifi ed level (the Limit Price ). If we accept this Order: where you are the Long Party under the new CFD (or requesting a Close Out to which you are the Short Party), the Order may be accepted at the prevailing Reference Security Price where that price is equal to, or less than the Limit Price; or where you are the Short Party under the new CFD (or requesting a Close Out to which you are the Long Party), the Order may be accepted at the prevailing Reference Security Price where that price is equal to, or greater than the Limit Price. Limit Orders expire at the end of the Limit Order Period that you select unless cancelled by either party. Market-to-Limit Order This is an Order to enter into a new CFD or Close Out an existing CFD position at the best prevailing price at which the Reference Security is being offered for sale or bought respectively on the ASX. If there is not a suffi cient quantity of the Reference Security at the best prevailing offer or bid price matching your Market-to-Limit Order, your Order for the remaining quantity will remain unaccepted and will be treated as a Limit Order at that original best prevailing offer or bid price. Market-to-Limit Orders are valid until accepted by us or cancelled by either party. For example, you decide to place a Market-to-Limit Order to Open 1,000 ABC Long CFDs. The best current offer price (ie. the lowest price at which someone is prepared to sell an ABC share on the ASX) is $10.00 per share. There are 600 ABC shares available on the ASX at this price. Your Order may be accepted for 600 ABC Long CFDs at $ The rest of your Order (ie. for the 400 ABC Long CFDs that have not been accepted) is only likely to be accepted if another offer is entered into the market at $10.00 or lower. 10

13 Trigger Order This is an Order requesting the placement of a Market, Market-to-Limit or Limit Order 3 if a particular event (a Trigger Event ) occurs. You specify the Reference Security, a specifi ed price at which you would like the Trigger Event to occur (the Trigger Level ), and whether the Reference Security Price must be above or below (or equal to) the Trigger Level for the Trigger Event to occur. If a Trigger Event occurs, the Market, Market-to-Limit or Limit Order is placed, as applicable and operates as a normal Order of that type. For example, ABC is currently trading at $9.80. You would like to Open a Long CFD at a Limit Price of $10.10, but only if ABC trades above $ In this example: the Trigger Level is set at $10.00; and if ABC trades at $10.00 or greater, a Trigger Event occurs and Limit Order to Open a Long CFD at $10.10 or less is placed Orders that can be used to limit losses Stop-Loss Order This is an Order requesting the Close Out of an existing Open CFD if the Reference Security reaches a price you specify in the Order (the Stop-Loss Level ). We may accept this Order by Closing Out your CFD at the prevailing Reference Security Price when: for a Long CFD, the Reference Security Price becomes equal to, or less than the Stop-Loss level; or for a Short CFD, the Reference Security Price becomes equal to, or greater than, the Stop-Loss Level. You should note that if the Reference Security Price moves suddenly, it is possible that Stop- Loss Orders may not be accepted, or may be accepted at a different price to that specified by you, and that you may suffer loss as a result. Stop-Loss Orders are valid until accepted by us or cancelled by either party. Guaranteed Stop-Loss ( GSL ) Order A Guaranteed Stop-Loss Order ( GSL ) is a request to enter into a binding commitment to Close Out a given CFD position at a specifi ed price (the GSL Level ) during the GSL Period if: for a Long CFD, the Reference Security Price is equal to or less than the GSL Level; or for a Short CFD, the Reference Security Price is equal to or greater than the GSL Level. A GSL Premium is payable should your GSL Order be accepted. For more information on GSL Premiums, see Section 4.4. When Opening or reviewing a CFD position, you should consider whether a Stop-Loss Order or GSL would be appropriate for that position. The following are important matters you should consider before placing a GSL Order: Guaranteed Worst-Case - Unlike a Stop-Loss Order, Close Out under a GSL will occur at exactly the GSL Level, thus guaranteeing your worst-case exit price during the GSL Period irrespective of market conditions. Macquarie will honour your GSL, even if a Market Disruption Event should occur up to and including the last Business Day of the GSL Period ( GSL Expiry ). For further information concerning how Market Disruption Events might affect your GSL, see Sections 2.9 and Finite Protection Period - GSL Periods are selected by you, generally from a list of available GSL Periods on the Macquarie CFD Website. GSL protection will cease on the fi rst to occur of the following: the CFD to which the GSL relates is Closed Out; we accept a subsequent GSL Order over the same CFD; or GSL Expiry. This means that, if you have not already Closed Out a CFD to which a GSL relates and wish to continue GSL protection over the CFD, you would need to purchase new GSL protection at least 30 minutes prior to Closing Time on the GSL Expiry Date. Section 2 Details of the CFD Trading Account 3 If these Order types are available. 11

14 12 If you place your GSL Order in respect of a Market, Market-to-Limit or Limit Order that has not yet been accepted, the GSL Period commences when the underlying Market, Market-to-Limit or Limit Order is accepted, and the relevant GSL Premium has been paid. GSL Replacement Throughout the GSL Period, you are able to replace your GSL at a new GSL Level. If you replace your GSL Level, you will incur no additional GSL Premium provided that: the GSL Percentage in absolute terms, is no less than that specifi ed in the Order for the GSL you are replacing; and the GSL Expiry Date does not change. Otherwise, you will be charged a GSL Premium equal to what we calculate to be the incremental difference between the remaining value of the original GSL, and the cost of the new GSL. GSL Orders are available over a limited number of Reference Securities GSLs can only be placed over Reference Securities approved by us. A list of approved Reference Securities is listed on the Macquarie CFD Website. Additional Cost A GSL Premium will be charged to your Cash Account when your GSL Order is accepted by us. The size of the GSL Premium will depend on a number of factors including the Reference Security itself, the GSL Percentage and the length of the GSL Period (see Section 4.4 for more information on GSL Premiums). GSL Order Acceptance We will only accept GSL Orders while the ASX is open, but you are able to submit GSL Orders to the Macquarie Trading Platform at any time. If the market is not open at the time the GSL Order is submitted, it will not be processed until the market next opens for business. This also applies for any amendments to existing GSLs. Minimum GSL Percentage We retain the right to set a minimum GSL Percentage for all GSL Orders in absolute terms. This minimum GSL Percentage may be altered from time to time, with any changes published on our website. Adjustment for the amount of any cash dividend If GSL protection is effective on the relevant Reference Security s ex-dividend date we will reduce the GSL Level by an amount equal to the relevant ordinary cash dividend. When opening or reviewing a CFD position, you should consider whether a Stop-Loss Order or GSL would be appropriate for that position Other Orders Macquarie may also make other types of Orders available from time to time. Please refer to the Macquarie CFD Website for the current list of available Order types. Macquarie expects to make available a Take-Profit Order. This is an Order requesting the Close Out of an existing CFD if the Reference Security reaches a price you specify in the Order (the Take-Profit Level ). We may accept this Order by Closing Out your CFD at the prevailing Reference Security Price when: for a Long CFD, the Reference Security Price becomes equal to, or greater than the Take-Profi t Level; or for a Short CFD, the Reference Security Price becomes equal to, or less than, the Take-Profi t Level. If they become available, Take-Profi t Orders will be valid until accepted by us or cancelled by either party. Macquarie may also make available a Market Order. This is an Order to Open a new CFD or Close Out an existing CFD at whichever Reference Security Price is necessary to allow the Order to be accepted, having regard to the relevant quantities bid and offered on the ASX at that time. If they become available, Market Orders will be valid until accepted in accordance with the Terms and Conditions, or cancelled by you. 2.7 Macquarie operates a Direct Market Access model for CFDs. What does this mean? When you place an Order in relation to a Reference Security, it is likely that Macquarie will place a corresponding order on the ASX to purchase or sell that Reference Security to hedge its market risk. Macquarie has discretion as to when and if it will accept an Order. Without limiting this discretion, it is likely that Macquarie will elect not to accept an Order in circumstances where its corresponding order on the ASX has not been fi lled.

15 As such, ASX market procedures (including the procedures relating to the Integrated Trading System, ITS ), are likely to be highly determinative of how Macquarie may exercise its discretion with regard to your CFD trading. Macquarie may be unable to purchase or sell the Reference Security corresponding to your CFD Order on the ASX under certain circumstances, as set out below. Also, there are a number of circumstances outlined below where ASX orders may be cancelled, and you should understand that Macquarie is likely to cancel any related CFD Orders at the same time. These circumstances are not exhaustive and are subject to change. Market trading periods Normal trading on the ASX generally occurs between the hours of 10am and 4pm on Business Days. Where you place a CFD Order outside these market hours, your CFD Order is unlikely to be accepted by Macquarie until normal trading commences or Macquarie is otherwise able to purchase or sell the security corresponding to the Reference Security on the ASX. Orders by Macquarie on the ASX Macquarie s orders to purchase a Reference Security at a specifi ed price (a bid ) during normal market hours will generally be matched off against any order to sell that Reference Security at or below that specifi ed price (an offer ) and vice versa. Bids and offers at the same specifi ed price are generally fi lled in the sequence they were placed. According to ASX Rules, a limit order to buy (or sell) a Reference Security will be fi lled to the extent that there are offers in the market at or below the limit price (or above in the case of a limit order to sell). This means that a limit order to buy a Reference Security may not be immediately fi lled if there are not suffi cient offers to satisfy the volume of the limit order at or below the limit price. A market order to buy (or sell) a Reference Security is treated as a limit order to buy (or sell) that Reference Security at the best available offer (or bid) price at the time the order is entered into ITS. Again this means that, where the volume of the market order exceeds the volume of the best available offer (or bid), a portion of that order will not be fi lled immediately and will remain in the market as a bid (or offer) at that same price. Macquarie is unlikely to accept your CFD Order where Macquarie s corresponding bid or offer is not fi lled on the ASX. Trading halts, suspensions and delisting An ASX listed security may be placed in trading halt in circumstances that include the existence of price sensitive information (including a takeover bid) relating to that security. Additionally, a security may be suspended or delisted in circumstances including a failure by the Listed Entity to abide by the ASX listing requirements. Orders in relation to suspended or delisted securities are generally removed from ITS (a process described as purging ). Macquarie may cancel your CFD Order where the Reference Security is the subject of a trading halt, a suspension or a delisting. Dividends The ex-dividend date for an ASX listed security is the fi rst day that security is traded without the holder being entitled to a previously declared dividend. Orders placed on the ASX in relation to a Reference Security that will trade on an ex-dividend basis on the following Business Day are generally purged by the ASX. In this event, Macquarie is likely to cancel any Orders (other than Stop-Loss Orders) placed by an Investor for CFDs in relation to that Reference Security that have not been accepted. In addition to this, any GSL protection that is in effect on the relevant Reference Security s ex-dividend date may have its GSL Level reduced by Macquarie by an amount equal to the Dividend Amount. Refer to Condition 11.2 of the Terms and Conditions for more detail on adjustments to Guaranteed Stop-Loss protection relating to dividends. Corporate actions When a corporate event affecting a Listed Entity is imminent (including a bonus issue, rights issue or stock split), orders in relation to that security are generally purged by the ASX. Accordingly, Macquarie may cancel an Investor s Orders in respect of the Reference Securities of that Listed Entity under these circumstances (see Condition 3.15 of the Terms and Conditions). Section 2 Details of the CFD Trading Account 13

16 2.8 How are Reference Security Prices determined? If your Order is accepted, we will determine the Reference Security Price used to calculate the relevant CFD Value, having regard to the relevant quantities that are bid and offered at various prices on the ASX in respect of the Reference Security. While a CFD position is Open, the Reference Security Price will be equal to the last traded price of the Reference Security on the ASX. However, you should note that there are a number of cases where we will determine Reference Security Prices in our sole discretion, including when: the Reference Security is undergoing an Adjustment Event (see Section 2.11); or the Reference Security is subject to a Market Disruption Event (see Section 2.9). 2.9 What is a Market Disruption Event? A Market Disruption Event in relation to a Reference Security means the occurrence or existence of: a) an Exchange Disruption, where we in our sole discretion determine that: i. the ability of market participants, in general, has been disrupted or impaired to effect transactions in, or obtain market values for, the Reference Security on the ASX; or ii. the market for the Reference Security is illiquid, with reference to volume of Reference Securities bid or offered in the market at that time; b) a Trading Disruption, where: i. any suspension, delisting or material limitation of trading in the Reference Security on the ASX occurs, the existence of which will be determined in good faith by us; or ii. the ASX closes before its regularly scheduled Closing Time. An example of a Market Disruption Event is where a Reference Security is subject to an extended trading halt, and the Listed Entity makes an announcement that an external administrator has been appointed. In this case, it is likely that the true value of the Reference Security is lower than the last traded price on the ASX, and we may determine that the Reference Security Price is less than the last traded price (and potentially zero). Your GSL will be triggered if a Market Disruption Event occurs and the Reference Security Price we determine is less than or equal to the GSL Level in the case of an Open Long CFD, or greater than or equal to the GSL Level for an Open Short CFD How do Market Disruption Events affect GSLs when they expire? If a GSL reaches GSL Expiry when the relevant Reference Security is subject to a Market Disruption Event, the Reference Security Price is determined by us in our sole discretion, and may have the effect of causing a GSL to be triggered. In determining the Reference Security Price, where: a) a Reference Security is subject to a Market Disruption Event; b) during that Market Disruption Event, GSL Expiry is reached on a GSL over a CFD position in respect of that Reference Security; and c) during that Market Disruption Event the relevant Listed Entity is subject to an Insolvency Event and the Reference Security is delisted, we will deem the Reference Security Price at the time of GSL Expiry to be zero, and honour any such GSLs on that basis. 14

17 2.11 How do Adjustment Events affect CFD positions? What is an Adjustment Event? An Adjustment Event occurs in relation to a Reference Security where: a) the Reference Security is cancelled, delisted or otherwise ceases to be calculated or announced by the ASX; b) a corporate action that we determine may have a diluting or concentrative effect on the theoretical value of the Reference Security occurs or is proposed. For example, this includes: i. an ordinary dividend; ii. a special or abnormal dividend; iii. a capital reconstruction (eg. subdivision, reclassifi cation or consolidation of a Listed Entity s capital); iv. a cancellation or repurchase of any of the Reference Securities; v. a rights or bonus issue; or vi. a takeover or buy-back; c) the relevant Listed Entity becomes subject to an Insolvency Event; or d) any event occurs or is proposed which may, in our opinion, either have an analogous effect to, or lead to the occurrence of, any of the events set out in paragraphs (a) to (c), or materially affects the determination of the market price of the Reference Security. Section 2 Details of the CFD Trading Account Where an Adjustment Event occurs, we may adjust the terms of any CFDs, Orders or GSL protection associated with that Reference Security or make a payment to or from the Cash Account to aim to preserve the economic equivalence of the rights and obligations of the parties immediately prior to such an event. 15

18 Section 3 Cashfl ows and Collateral Before opening a CFD Trading Account, or placing an Order, you should make sure you understand how the cashfl ows and Collateral associated with your CFD Trading Account work - especially in what circumstances you will need to pay us. You should consult with your stockbroker or fi nancial adviser if you are uncertain as to how Collateral or cashfl ows work. Failure to have suffi cient funds available to cover your obligations may give rise to an Event of Default giving us certain rights including the right to Close Out your CFDs or close your CFD Trading Account. Your potential liability for payments is not limited to the balance in your Cash Account and we may ask you to pay amounts in excess of any balance to cover outstanding amounts. Please advise us promptly if you are in fi nancial diffi culty. 3.1 Collateral What is Collateral? We take security from you to cover our fi nancial exposure under the CFD positions you have Open from time to time (ie. security for any potential obligations you may have to make such as Mark-to- Market Payments, as explained in Section 3.2.1). This is known as Collateral and comprises some or all of the cash held in your Cash Account. It is not a cost as such but will affect how you deal with the funds in your Cash Account (see the Cash Account PDS). Collateral secures our position, not yours. If you would like to limit your risk of losing money, you should consider a GSL when placing an Order. How much Collateral do I need? The Aggregate Required Collateral for your CFD Trading Account will fl uctuate depending on market movements, as well as your CFD positions or Orders placed by you. It is your responsibility to monitor at all times the amounts of Available Funds and Aggregate Required Collateral for your CFD Trading Account and make additional deposits to your Cash Account where necessary. While Mark-to-Market Payments will generally only occur at the end of each Business Day, they may occur more frequently and calculations of Required Collateral Amounts and designation of funds between Available Funds and Collateral in your Cash Account are made continuously during each Business Day. If at any time there are insuffi cient funds in your Cash Account to meet the Aggregate Required Collateral obligations after allowing for Mark-to- Market Payments based on prevailing intra-day Reference Security Prices, one or more of the following may occur in respect of your CFD Trading Account: your Orders may be cancelled; open CFD positions may be Closed Out; and your CFD Trading Account may be closed. The formula for determining the Required Collateral Amount in respect of any CFD or Order is set out in the defi nition of Required Collateral Amount in the Glossary in Section 11 of this PDS. The formula refers to the applicable Collateral Rate, and differs depending on whether you have a Standard Account or Loss Limiter Account. We may require less Collateral than that amount indicated by the formula. Note that the Required Collateral Amount for a CFD may be reduced by purchasing GSL protection over that CFD. Please refer to Section 5 for worked examples of the calculation and maintenance of Collateral. What are the Collateral Rates? This PDS does not specify Collateral Rates. This is because the Collateral Rate applicable to each Reference Security is determined by reference to a number of variable factors including the liquidity and volatility of the Reference Security. These rates may change for each Reference Security and will be published by Macquarie from time to time on the Macquarie CFD Website. A note on Loss Limiter Accounts When using a Loss Limiter Account you should note that it is still possible to lose amounts up to and exceeding the amount of Collateral in your Cash Account. If you are using a Loss Limiter Account you should also note that if at any time you hold a CFD position that is not subject to GSL protection, including where the GSL Period for that protection has expired, your CFD position may be Closed Out. Therefore, if you want to continue holding your CFD position past the end of the GSL Period it is important that you purchase new GSL protection prior to the expiry of your existing GSL. Please refer to Section 5 or worked examples of the calculation and maintenance of Collateral. 16

19 3.2 What are the basic cashfl ows resulting from the CFD Trading Account? Certain payments, fees and charges will be due and payable during the life of your CFD Trading Account. Such amounts may be due daily, monthly, when you place an Order, or when that Order is accepted by Macquarie. In addition to Collateral requirements, you are required to ensure that you have suffi cient funds in your Cash Account to facilitate such payments when they fall due. Failure to make these funds available is an Event of Default under the Terms and Conditions and gives Macquarie certain rights including the right to cancel your Orders, Close Out your CFD positions or close your CFD Trading Account Mark-to-Market Payments At the end of each Business Day, the CFD Value of the CFD is calculated and compared to the Previous CFD Value. Where the CFD Value is higher than the Previous CFD Value, the Short Party must pay the difference to the Long Party. Conversely, where the CFD Value is lower than the Previous CFD Value, the Long Party must pay this difference to the Short Party. These Mark-to-Market Payments will be effected by Macquarie as set out in Condition 4.2 of the Terms and Conditions. Please refer to Section 5 for a worked example of how a Mark-to-Market Payment is calculated. Please note that while Mark-to-Market Payments are made only at the end of each Business Day, CFD Values are in fact recalculated continuously to ensure that suffi cient funds are available to cover such payments. If at any time during a Business Day it is determined that funds held are not suffi cient to cover the required Mark-to-Market Payments based on an intra-day valuation, Macquarie may at its discretion, Close Out your CFD positions or cancel your Orders Dividends If you hold an Open Long CFD in respect of a Reference Security at the Closing Time on the day prior to the day the Reference Security is fi rst quoted on an ex-dividend basis you will receive an amount equal to the Dividend Amount multiplied by the CFD Quantity. This amount will be credited to your Cash Account. Conversely, if you hold an Open Short CFD in respect of a Reference Security at the Closing Time on the day prior to the day the Reference Security is fi rst quoted on an ex-dividend basis, you will be charged an amount equal to the Dividend Amount multiplied by the CFD Quantity. This amount will be debited to your Cash Account. You should be aware that in certain limited circumstances where you hold an Open Short CFD, you may also be charged for franking credits applicable to a dividend paid to holders of the Reference Security 4. The maximum amount so charged will be: FC = D x ( where: t 1 t FC = amount included in the Dividend Amount referable to franking credits on the dividend D t = the franked portion of the dividend ) = the corporate tax rate at that time (currently, 30%) Please refer to Condition 4.3 of the Terms and Conditions for more information on the payment of dividends, and Section for a worked example of how dividend payments are calculated. 4 Where you hold a Short CFD, Macquarie will seek on a reasonable endeavours basis to borrow securities offshore to hedge Macquarie s exposure to that Short CFD. In ordinary circumstances, Macquarie will be able to borrow the securities offshore. However, if offshore borrowing is unavailable and a dividend is paid on the security, the relevant Dividend Amount debited from your Cash Account may include the value of any related franking credit, as well as the value of the cash dividend. 17

20 Section 3 Cashfl ows and Collateral Interest paid and received on Open CFD positions Whether we pay you, or you need to pay us, interest on an overnight position depends on your CFD position. The following table explains how interest works: Position Description Interest Rate You hold a Long CFD overnight You hold a Short CFD overnight You will be charged interest on the CFD Value of your Long CFD position. This interest will be debited from your Cash Account. You will receive interest on the CFD Value of your Short CFD position. This interest will be credited to your Cash Account. The Long Position Funding Rate is the Benchmark Rate plus a maximum of 2.50% per annum (or a maximum of 3.50% per annum if you have agreed a rate with your adviser). The Short Position Funding Rate is the Benchmark Rate minus a maximum of 2.50% per annum (or a maximum of 3.50% per annum if you have agreed a rate with your adviser). The Long Position and Short Position Funding Rates will be either: (a) as determined by us and displayed on the Macquarie CFD Website at that time; or (b) otherwise, if you agree rates with your adviser, charged based on the agreed rates (rather than the rates published on the Macquarie CFD Website), subject to our approval. These rates are subject to change when the Benchmark Rate changes, and may differ from the rates initially agreed upon. For each CFD you hold overnight, interest will be calculated based on that position s CFD Value. This interest will be debited from, or credited to, your Cash Account on each calendar day. The daily interest amount for each CFD is calculated as follows: I = V x where: I V R R 365 = the daily interest amount. If you are the Long Party, this number represents the amount of interest you have to pay us. If you are the Short Party, this represents the amount of interest we are required to pay to you = the CFD Value of the position. = the Long Position Funding Rate where you are the Long Party, or the Short Position Funding Rate where you are the Short Party. Please refer to Section 5 for some worked examples of interest on Open CFD positions Default interest If you fail to pay when due any amount payable under any of the Transaction Documents, you must pay interest on the amount, from and including the due date to the date of actual payment (after, as well as before, judgment). All such interest due shall be calculated using the Default Interest Rate, and paid in arrears on each Business Day by Macquarie debiting the funds in your Cash Account. You must advise Macquarie promptly if you are in fi nancial diffi culty. For example, if you failed to make a Mark-to-Market Payment to Macquarie of $10,000 and the Default Interest Rate was 13.00%, Default Interest of $ for each calendar day would be debited from your Cash Account $10,000 x 13% 365 = $3.56