Combined Product Disclosure Statement Financial Services Guide for MahiFX Margin FX Trading

Transcription

1 Combined Product Disclosure Statement Financial Services Guide for MahiFX Margin FX Trading MahiFX Limited ARBN: AFSL: Date: 28 August 2013 Version: 3.1

2 1. About this combined Product Disclosure Statement and Financial Services Guide This combined Product Disclosure Statement (PDS) and Financial Services Guide (FSG) was prepared by MahiFX Limited ( MahiFX, we, us, our ), ARBN , AFSL on 28 August The information contained within this combined PDS and FSG is current at the time of preparation, but may be subject to change from time to time. If any new information is material, we will either issue a new combined PDS and FSG, or a Supplementary PDS or FSG as required, containing the new information. If the new information is not considered material, the information will be available on our website at and will be provided to you if you contact us directly. Changes will be notified to you within the periods required by the Corporations Act. This PDS is only for Australian residents and Australian citizens living abroad. 2. About MahiFX MahiFX Limited, the issuer of the products, is registered in New Zealand as a private company limited by shares under the New Zealand Companies Act MahiFX was incorporated on 30 March 2010 and was registered as a foreign company in Australia on 8 August MahiFX may be contacted in New Zealand or Australia at: New Zealand Registered Office: Australia Registered Office: 12A St Albans Street Christchurch 8014 New Zealand Suite 2, 185 Gloucester Street Sydney NSW 2000 Australia Phone: +44 (0) Fax: Website: [email protected] Communications Address: Communications Address: PO Box 401 Christchurch 8140 New Zealand 14 Cheryl Crescent Newport, NSW 2000 Australia For more information about MahiFX and the products covered in this PDS, please visit 3. Authorised Financial Services MahiFX is authorised by the Australian Securities and Investments Commission (ASIC) to provide the following services to retail and wholesale clients: Provide general financial product advice; Deal in a financial product by: - issuing, applying for, acquiring, varying or disposing of a financial product; and - applying for, acquiring, varying or disposing of a financial product on behalf of another person; and Make a market. MahiFX is authorised to provide these services in the following financial products: FX contracts; and Derivatives. MahiFX-PDS&FSG-Version August 2013 Page 2

3 Table of Contents 1. About this combined Product Disclosure Statement and Financial Services Guide About MahiFX Authorised Financial Services... 2 Table of Contents... 3 Part 1 Product Disclosure Statement Product Disclosure Statement - Summary Benchmark Disclosure About this Product Disclosure Statement About MahiFX Authorised Financial Services Product Information and Significant Features Market maker Product and transaction outline Why might you trade FX? Associated Risks Market Risk: Counterparty Risk: Liquidity Risk: Strategy Risk: Leverage: Margin Risk: Systems Risk: Unauthorised Access: Customer Monies: Customer Monies and currency conversion: Regulatory Risk: How to Trade with MahiFX The trading process Confirmation of transactions Trading Example Scenario One AUD appreciates against EUR and the exchange rate is now Scenario Two AUD appreciates against EUR and the exchange rate is now Scenario Three AUD depreciates against EUR and the exchange rate is now Scenario Four AUD depreciates against EUR and the exchange rate is now Calculation of FX Rates, and MahiFX as market maker Margins Margin Requirements Cross Margining on the MahiFX Platform Margining on the MT4 Platform (no Cross Margining on the MT4 Platform) Margin Calls Margin Closeouts Closeout of Positions Customer Funds Your Trading Account Deposits Credit cards and bank transfers Withdrawals Funds transferred to MahiFX: Currencies, conversions, risks Appropriation of funds by MahiFX Interest on your funds Fees and Charges FX Transactions - Spread Swap Credits and Charges Money Transfer Fees Example of Fees and Charges Funding your Trading Account Enter into a Trade MahiFX-PDS&FSG-Version August 2013 Page 3

4 14.3 Exit from a Trade Withdrawal of funds Taxation Implications Cooling Off If You Have a Complaint Compensating Clients for loss or damage Labour Standards and Environmental, Social and Ethical Considerations Taken Into Account Privacy Statement Terms and Conditions Financial information Other Information Part 2 Financial Services Guide About this Financial Services Guide Authorised Financial Services How MahiFX and Our Staff Are Remunerated Relevant Associations and Relationships If You Have a Complaint Other Information Compensating Clients for Loss or Damage How to Contact and Instruct Us Further Information Part 3 - Definitions Appendix MahiFX Terms of Use MahiFX-PDS&FSG-Version August 2013 Page 4

5 Part 1 Product Disclosure Statement 1. Product Disclosure Statement - Summary This summary outlines some key questions that are explained in this PDS. You should ensure that you read and understand this PDS in its entirety before investing in the Foreign Exchange (FX) Contracts that we offer. Issue Summary For more information, see: Who is the issuer of this PDS? What products are offered? Does this PDS include Benchmark Reporting? What is a Spot FX Contract? What are the costs involved with FX Contracts? How are FX Contracts priced? What are the risks involved in trading FX Contracts? The issuer of this PDS is MahiFX Ltd (MahiFX). MahiFX is a private company incorporated in New Zealand and which holds an Australia Financial Services License authorising it to deal in, make a market in, and provide general financial product advice in respect of FX contracts and derivatives. The products offered by MahiFX are over the counter, non-deliverable spot FX contracts on a margin or leveraged basis. Yes. The PDS includes disclosures in respect of disclosure benchmarks for over-the-counter (OTC) contracts for difference (CFD) as those benchmarks apply to the products issued by MahiFX. An agreement under which you agree today to buy one currency and simultaneously sell another currency at an agreed valuation for settlement in, generally, two Business Days. MahiFX does not charge fees or commissions to you to enter into an FX Contract. We earn our income from: the difference (the Spread) between the price paid to buy or sell one currency expressed against another currency; interest charges or credits (Swap Charges and Credits) for positions that have their settlement date Rolled Over to the next business day; interest on monies deposited with us; and money transfer fees. MahiFX is a market maker and, as such, determines and publishes the buy and sell prices of the currencies which apply to the FX Contracts that it offers. As with all margin or leveraged investments, trading in FX Contracts can be risky and is not appropriate for everyone. There are a number of types of risk that you should be aware of before beginning to trade, including the possibility of losing some or all of the money that you invest. Some of these types of risk include: Market risk; Counterparty risk; Liquidity risk; Strategy risk; Leverage; Margin risk; Systems risk; Unauthorised access; Customer monies; and Regulatory risk. Section 4 of the PDS (pg. 10) Section 6 of the PDS (pg. 11) Section 2 of the PDS (pg. 7) Section 6 of the PDS (pg. 11) Section 13 of the PDS (pg. 24) for costs and amounts payable and Section 8 of the PDS (pg. 15) on how to start trading with MahiFX Section 10 of the PDS (pg. 18) Section 7 of the PDS (pg. 13) Why might I trade Some of the reasons for or benefits from trading in Section 6.3 of the PDS (pg. 12) MahiFX-PDS&FSG-Version August 2013 Page 5

6 FX Contracts? What is Margin? What is a Margin Call? How do I open an account with MahiFX? How do I trade with MahiFX? What are the tax consequences of trading in our products? How can I contact MahiFX? What do I do if I have a complaint? FX Contracts include: the ability to hedge pre-existing FX exposures; the capacity to take long and short FX Positions, and thereby invest in currencies and attempt to profit from fluctuations in FX rates; the ability to leverage those hedging or investment positions; and the ability to trade in smaller increments and in markets otherwise not available to the retail investor. Margin is the amount of money that you must transfer from your Trading Account to MahiFX to maintain an open Position. A request and obligation to transfer additional Margin to us to support your open Positions. Margin Calls are processed automatically by the MahiFX Platform or the MT4 Platform and result in funds (variation Margin) being transferred from your Trading Account to MahiFX. For example, if the market moves to the detriment of your open Positions and the current value of your Margin falls below the amount required by us, then funds will be transferred from your Trading Account to top up your Margin balance. Prior to opening an account with MahiFX you should read this PDS, FSG and the MahiFX Terms of Use, and ensure you understand the products offered by us. After doing this, if you are satisfied that trading in these products is appropriate for you, you can open an account via Start Trading link on our website ( You may trade with MahiFX through MahiFX's online electronic trading system known as the MahiFX Platform and additionally, or alternatively, on the MetaTrader 4 platform known as the MT4 Platform. The tax consequences of trading in our products will vary depending on your individual circumstances. You should seek your own professional taxation advice before trading with MahiFX. Accessing our website: By [email protected] By telephone (Customer Service Department): +44 (0) By facsimile: By mail: PO Box 401, Christchurch, 8140, New Zealand or 14 Cheryl Crescent, Newport, NSW, 2000, Australia MahiFX has an internal complaint resolution process for use in the first instance and MahiFX is a member of the Financial Ombudsmen Service (FOS). Section 11 of the PDS (pg. 19) Section 11.4 of the PDS (pg. 21) Section 8 of the PDS (pg. 15) on how to start trading with MahiFX and Section 12 of the PDS (pg. 22) Section 8 of the PDS (pg.15) Section 14 of the PDS (pg. 24) Section 4 of the PDS (pg. 10) Section 17 of the PDS (pg. 25) MahiFX-PDS&FSG-Version August 2013 Page 6

7 2. Benchmark Disclosure Further to the summary set out above, this table sets out MahiFX's disclosures against 7 benchmarks as suggested by ASIC. MahiFX's approach to these disclosure benchmarks is that it: Discloses whether or not MahiFX meets the benchmark; and Explains, if MahiFX does not meet the benchmark, why it does not. Benchmark Summary of benchmark MahiFX disclosure Client qualification Opening collateral Counterparty risk hedging An issuer should maintain and apply a written client qualification policy that: sets minimum qualification criteria that prospective investors will need to demonstrate they meet before the issuer will agree to open a new account on their behalf; outlines the processes the issuer has in place to ensure that prospective investors who do not meet the qualification criteria are not able to open an account and trade in CFDs; requires the issuer to keep written records of client assessments. An issuer should generally only accept cash or cash equivalents from investors as opening collateral when establishing an account to trade CFDs. If credit cards are used to open accounts, an issuer should accept no more than $1,000 via credit card to fund the account. An issuer should maintain and apply a written policy to manage its exposure to MahiFX has a detailed account-opening policy and procedure for each new client. The policy and procedure focuses on confirming the identity of the client and availability of funds. The policy does not assess a client's capacity to understand and assess the complexity and risks inherent in FX Contracts. As explained in this PDS, each client must read this PDS and seek their own advice, about the suitability of FX Contracts for them. MahiFX does: make available to clients a free demonstration account so that clients can trial MahiFX's services, learn more about FX Contracts and the complexity and risks associated with them, and how to manage those risks through the MahiFX Platform or the MT4 Platform without putting any of the client's moneys at risk; reserve the right to introduce into its policy and procedure means by which clients may be assessed in relation to their capacity to assess the complexity and risks of FX Contracts. MahiFX operates an entirely online business and recognises that its clients will need to use credit cards to make payments. MahiFX therefore accepts credit card payments and does not set a limit on deposits. MahiFX does: require that, for 8 weeks following receipt of a credit card payment, clients may only withdraw to the same credit card; reserve the right to restrict minimum and maximum deposits (regardless of the means of payment). Clients must realise that the use of a credit card to fund their MahiFX account has the capacity to amplify their losses from FX trading by using debt (leverage) to make a further leveraged investment. This is explained in more detail in the Risks section (section 7.5 of the PDS on pg. 14). MahiFX: through its MahiFX Platform and MT4 MahiFX-PDS&FSG-Version August 2013 Page 7

8 market risk from client positions, which: includes the factors it takes into account when determining if hedging counterparties are of sufficient financial standing; and sets out the names of those hedging counterparties (as they stand from time to time). Policies should be displayed in an up-to-date form on the issuer's website. Platform, has developed a system by which MahiFX not only offers its services but also monitors and manages its ongoing exposure to market risks as a market-maker; and has made considered assessments about the counterparties to whom MahiFX is exposed and to whom, indirectly, its clients are exposed. Accordingly, MahiFX manages its exposure to market risk from client positions with a combination of a sophisticated online MahiFX Platform and MT4 Platform and careful selection of counterparties. MahiFX does not, however, have a written hedging policy. Counterparty risk financial resources Client money An issuer should maintain and apply a written policy to maintain adequate financial resources, which details how the issuer: monitors its compliance with its Australian financial services (AFS) licence financial requirements; and conducts stress testing to ensure it holds sufficient liquid funds to withstand significant adverse market movements. An issuer should maintain and apply a clear policy on its use of client money, including whether it uses money deposited by one investor to meet the margin or settlement requirements of another. MahiFX's direct counterparty is a related party, Mahi Capital Limited. Mahi Capital has a prime brokerage arrangement with a leading international bank, but is contractually restricted from disclosing that bank's identity. Through those prime brokerage arrangements, Mahi Capital in turn has additional potential counterparties each of whom are reputable international banks and financial services institutions. Any written policy which MahiFX develops will be posted on its website. MahiFX has detailed procedures by which it monitors compliance with its AFS licence requirements as to base level financial requirements, and Adjusted Surplus Liquid Funds (ASLF) (as required for foreign exchange dealer, AFS licensees holding client money and AFS licensees transacting with clients). MahiFX monitors these requirements on an ongoing basis and in real time. Further, monthly assessments are made to ensure the requirements were met at all times during the preceding month and scenario and stress tests are conducted to provide prospective analysis as to MahiFX s potential future position. MahiFX is required to procure an annual audit of its financial position, as well as an audit opinion confirming that MahiFX has complied with all financial requirements under its AFS licence. Any written policy which MahiFX develops will be posted on its website. The MahiFX balance sheet, drawn from the audited financial accounts, will be available on the MahiFX website at within 30 days after they are lodged with ASIC. MahiFX does pool client money in its Customer Funds Accounts and accordingly one client's funds may be used to meet margin or settlement requirements of another (albeit with no effect on the first client's account balance, margin requirements or settlement requirements). MahiFX-PDS&FSG-Version August 2013 Page 8

9 Suspended or halted underlying assets Margin calls An issuer should not allow new CFD positions to be opened when there is a trading halt over the underlying asset, or trading in the underlying asset has otherwise been suspended, in accordance with the rules of the relevant market. An issuer should maintain and apply a written policy about its margining practices, which details: how the issuer will monitor client accounts, to ensure that it receives early notice of accounts likely to enter into margin call; what rights the issuer may exercise in relation to client accounts, including the right to make a margin call or close out positions; and when the issuer will exercise these rights, and what factors it will take into account in deciding whether to do so. MahiFX has set out in detail (in section 12 of this PDS on pg. 22) the arrangements it has in place in respect of client money and transactions involving your Trading Account, Client Funds Accounts and MahiFX's own accounts. The risks associated with using your client money in this way is explained in section 7.2 and section 7.9 of this PDS (pgs. 13 and 15). MahiFX, as a market-maker, will not allow you to execute an order, and enter into a trade, if the currency markets are closed (e.g., over weekends) or there is an underlying issue which prevents MahiFX from offering a Currency Pair: essentially, these circumstances mean MahiFX is itself not able to trade in the underlying currency. In that case, you will not be able to open or close a Position in respect of that Currency Pair. MahiFX has comprehensive systems to monitor each client's Margin requirements. In relation to Margin: Clients must themselves monitor their Margin requirements and are responsible for ensuring Margin requirements are continually met; MahiFX provides clients with all necessary means by which they can monitor Margin requirements and status through the MahiFX Platform or the MT4 Platform; Additionally, MahiFX notifies its clients of their compliance with Margin requirements by and via the client's 'Notifications' service available on the MahiFX Platform or the MT4 Platform. Margin close-out will occur when margin is 50% of the required amount or where the client has been in breach of 100% of margin requirements for 5 Business Days The MahiFX Platform will close-out all of a client's positions where the client does not have sufficient Margin. In contrast, the MT4 Platform will first close out a client s least profitable position where the client does not have sufficient Margin, then the next least profitable position and so on, until Margin is sufficient in respect of the remaining open Positions. This treatment represents a critical difference between the MahiFX Platform and MT4 Platform and may influence your decision as to which Platform better suits your requirements. See section 11 of this PDS (on pg. 19) for further information. MahiFX-PDS&FSG-Version August 2013 Page 9

10 3. About this Product Disclosure Statement This Product Disclosure Statement (PDS) was prepared by MahiFX Limited ( MahiFX, we, us, our ), ARBN , AFSL on 28 August The information contained within this PDS is designed to provide you with sufficient information so that you can make an informed decision about whether to purchase a product from us. It will assist you to: Decide if this product meets your needs; and Compare this product with other similar products. The information contained within this PDS is general in nature and has been prepared without taking into account any of your personal objectives, financial situation or needs. Because of that, before deciding whether this product is right for you, you should: consider the appropriateness of an investment pursuant to this PDS, and the general advice in this PDS, having regard to your personal objectives, financial situation and needs; and seek professional advice from a suitably qualified and independent financial advisor. The information contained within this PDS is current at the time of preparation, but may be subject to change from time to time. If any new information is material, we will either issue a new PDS or a Supplementary PDS containing the new information. If the new information is not considered material, the information will be available on our website at and will be provided to you if you contact us directly. Changes will be notified to you within the periods required by the Corporations Act. This PDS is only for Australian residents and Australian citizens living abroad. 4. About MahiFX MahiFX Limited, the issuer of the products, is registered in New Zealand as a private company limited by shares under the New Zealand Companies Act MahiFX was incorporated on 30 March 2010 and was registered as a foreign company in Australia on 8 August MahiFX is a FX dealer that provides its services either through a proprietary online platform (the MahiFX Platform), or the MetaTrader 4 Platform (the MT4 Platform) or through both platforms - for the trading of FX contracts on a Margin or Leveraged basis. It makes a market in the products that it offers and provides continuous, dealable FX rates to customers enabling them to buy and sell non-deliverable Spot FX Contracts 24 hours a day, 5 days a week (i.e., the times that the major FX markets are open for business). MahiFX is based in Christchurch, New Zealand, and was founded by a group of experienced currency traders, IT specialists, and financial services professionals with the aim of bringing big bank FX trading technology to the retail and wholesale FX market. MahiFX may be contacted in New Zealand or Australia at: New Zealand Registered Office: Australia Registered Office: 12A St Albans Street Christchurch 8014 New Zealand Suite 2, 185 Gloucester Street Sydney NSW 2000 Australia Phone: +44 (0) Communications Address: Communications Address: PO Box 401 Christchurch 8140 New Zealand 14 Cheryl Crescent Newport, NSW 2000 Australia MahiFX-PDS&FSG-Version August 2013 Page 10

11 Fax: Website: For more information about MahiFX and the products covered in this PDS, please visit 5. Authorised Financial Services MahiFX is authorised by the Australian Securities and Investments Commission (ASIC) to provide the following financial services to retail and wholesale clients: Provide general financial product advice; Deal in a financial product by: - issuing, applying for, acquiring, varying or disposing of a financial product; and - applying for, acquiring, varying or disposing of a financial product on behalf of another person; and Make a market. MahiFX is authorised to provide these services in the following financial products: FX contracts; and Derivatives. 6. Product Information and Significant Features This PDS relates to the FX contracts/derivatives offered by MahiFX as described in this PDS. The products offered by MahiFX are over the counter, non-deliverable Spot FX Contracts on a Margin or Leveraged basis. FX, also known as currency trading, forex and FX trading, is the simultaneous buying of one currency and selling of another at an agreed price. The exchange rate quoted is the price of one currency (the Base Currency) expressed in terms of another currency (the Terms Currency). For example, the price of the Australian dollar expressed in terms of the US dollar (AUDUSD). If the AUDUSD exchange rate was, say, 1.05, then AUD $1.00 (the Base Currency) could be exchanged for USD $1.05 (the Terms Currency). 6.1 Market maker MahiFX makes a market in its products and will regularly quote prices at which we are prepared to deal with customers. All transactions are entered into with MahiFX as principal and represent a binding agreement between MahiFX and you. We derive income from the difference (the Spread) between the prices we bid to buy and offer to sell FX products to our clients. Our Spreads may differ from time-to-time across currencies and FX products and can widen (without prior notice) due to volatile market conditions or around news events. The Spread is reflected in the price we quote for the FX products you can trade on the MahiFX Platform or the MT4 Platform. 6.2 Product and transaction outline MahiFX s products allow customers to buy and sell currencies on a Margin or Leveraged basis. The products offered by MahiFX are cash settled and do not allow for the physical delivery of currency. That is, there is no physical exchange of currencies on settlement of the Trade, including when it is closed out. If you wish to enter into a transaction with MahiFX, you must issue an Order online via either the MahiFX Platform or the MT4 Platform. An Order is the instruction to buy or sell one currency in exchange for the sale or purchase of another currency at a specified rate. The Order remains valid until executed or cancelled. A Trade is the execution of the Order and a Position is the total of all Trades for a specific market. MahiFX-PDS&FSG-Version August 2013 Page 11

12 In order to enter into a Trade, you must post an amount (called Margin) with MahiFX. We ask that you always have sufficient Margin in your Trading Account to cover any losses you might incur. The Margin available in your Trading Account with MahiFX will limit the size of the Positions you can open and will affect when you receive a Margin alert and possible Margin Closeout. A Margin Closeout is when either: the MahiFX Platform automatically closes all of your open Positions; or the MT4 Platform automatically and progressively closes out your least profitable Position(s), to significantly decrease the probability of you losing more than the combined amount of your Margin and the amount that is in your Trading Account. The term Leverage is often used to describe the Margin arrangements. It refers to the deposit required in order for you to open the Position. Broadly speaking, MahiFX permits Leverage of 100 to 1 on all majors, 50 to 1 on minors and 25 to 1 on metals (refer to section 11 Margin for more details on which Currency Pairs constitutes majors and minors, and available metals pairs). For example, if you wanted to Trade $100,000 of a major currency, we would require you to deposit Margin of $1,000. However, MahiFX reserves the right to reduce the amount of Leverage available due to market circumstances or change the classification of Currency Pairs from majors to minors and vice versa. FX Positions may be left open at the close of MahiFX s normal trading day, which it regards as 5:00 PM New York time (EST) on a Business Day. Such Positions are automatically Rolled Over by MahiFX and, depending on the Currency Pair, will either earn or pay a small premium or discount (a Swap Credit or Charge), reflecting the difference between market interest rates for each currency. MahiFX monitors the mark-to-market value of your Positions in real time and adjusts the Margin you are required to hold (called variation Margin). Variation Margin is settled between you and us every 15 minutes during the period where currency markets are open for trading and the day s trading result is determined at 5.30 pm New York time (EST) each Business Day. MahiFX settles any net amounts due to you as soon as practicable (generally, overnight AEST as the part of the normal daily transactional banking process). Broadly speaking, the variation Margin amounts paid or received represent the mark-to-market profit or loss from your Positions. When Positions are closed MahiFX will return your Margin, net of any profit and loss and Swap Credits or Charges that have not previously been settled. All amounts are settled net in the Native Currency that you have selected for your account. 6.3 Why might you trade FX? FX transactions are desirable for many reasons. Investment - Some customers may enter into FX products to generate an exposure to a particular currency or currencies for trading or speculative investment purposes. Persons may do so with the hope or expectation of generating a profit through speculating on the movement in the exchange rates. Hedging exposure - Our FX products might also be of interest to persons who have an exposure to foreign currencies in the following cases: They are an importer or exporter of goods and services and are required to pay or receive foreign currencies. They have invested in an asset denominated in a foreign currency or borrowed money in a foreign currency. They have business or personal cash flows in a foreign currency. Such persons bear the risks and rewards of fluctuations in the value of the foreign currency and may wish to protect themselves against adverse movements in the FX value of the currency, secure a specified FX rate, or preserve or lock-in the value of the foreign currency. MahiFX offers its customers a highly efficient mechanism to buy or sell FX products to help manage such risks. MahiFX-PDS&FSG-Version August 2013 Page 12

13 7. Associated Risks FX transactions involve risks: currency valuations and prices are inherently unpredictable and volatile in nature. The risks faced will depend upon your objectives at the time and the nature of the activities you undertake: you should carefully consider whether MahiFX s products are appropriate for you in light of your personal financial needs and objectives. The use of MahiFX s services can never be considered a safe investment and carries with it high risk of loss. In volatile market conditions, foreign currencies may fluctuate rapidly to reflect unforeseeable events that cannot be controlled either by us or by you. Under our Terms of Use, you agree that you use MahiFX's services at your own risk and that you along bear the loss of any money you have invested. The risks you face may include, but are not limited to, the following: 7.1 Market Risk: The risk that the value of an investment will decrease due to moves in market factors. FX rates and prices are unpredictable and volatile. Changes in FX rates and prices may cause the value of your Positions to lose value and you may suffer the loss of some or all of your investment, and/or be required to immediately deposit additional funds to maintain your Positions or cover your losses. In fast moving markets, there may not be sufficient time to warn you, for you to monitor the impacts of market movements on your Positions, or for you to take remedial actions: these effects may cause you loss or exacerbate your losses. Historical prices and relationships are no guide for future prices, movements and relationships. MahiFX offers you the ability to make Limit Orders, Stop Loss Orders or Take Profit Orders to help you manage your market risk. However, it is important to note that volatile or illiquid market conditions may still mean that any Stop Loss Order or Take Profit Order may be prevented from being executed at or even around the price you specified this means that you are exposed to FX fluctuations beyond the price at which you had intended to close your Position (if a Stop Loss Order cannot be executed) or you are prevented from realising a profit at the price at which you had intended to close your Position (if a Take Profit Order cannot be executed). Additionally, MahiFX is a market maker. This status means that MahiFX sets its own prices at which customers can enter into FX Contracts. In turn, this approach means that we may quote FX rates that differ from those available in other markets or from other market makers. 7.2 Counterparty Risk: The risk that an organisation does not pay out on a transaction when it is supposed to. MahiFX enters into each and every transaction with you as principal and is your counterparty. You will, therefore, have an exposure to MahiFX in respect of all your transactions with us and are reliant on us to perform our obligations to you in accordance with our Terms of Use. MahiFX also enters into transactions with a related party (Mahi Capital) to manage its FX risk. You have an indirect exposure to this entity because, if that party did not meet its obligations to MahiFX, it may render MahiFX unable to meet its obligations to you. If MahiFX breaches its obligations and becomes insolvent you may suffer loss. Additionally, you have an exposure to the counterparties with which Mahi Capital deals. If Mahi Capital is exposed to non-performance by the counterparties with whom it deals, then this may in turn affect the extent to which Mahi Capital performs its obligations to MahiFX. MahiFX requires as a condition of dealing with Mahi Capital that Mahi Capital selects only counterparties with whom MahiFX is comfortable being exposed to as an indirect counterparty. Accordingly, MahiFX has satisfied itself that Mahi Capital has chosen a prime broker for the purpose of hedging FX exposures in respect of whom MahiFX accepts the counterparty risk as commercially acceptable, and whom MahiFX accepts will in turn only transacts with counterparties of appropriate financial standing and experience. MahiFX-PDS&FSG-Version August 2013 Page 13

14 7.3 Liquidity Risk: The risk that a given security or asset cannot be traded quickly enough in the market to prevent a loss (or make the required profit). At any time, market conditions might render the execution of an Order or of a limit on an Order (including either Stop Loss Order or Take Profit Order), at a stipulated price impossible, including on the basis of market illiquidity. Accordingly, even though the extent of the losses could be subjected to an agreed-upon limit, the risk of incurring losses could be higher due to an inability to close out the Position at the agreed-upon price, and you could suffer the consequential loss in a relatively short period of time. 7.4 Strategy Risk: The exposure to loss resulting from a strategy that turns out to be defective or inappropriate. You acknowledge that MahiFX does not provide any advice, including financial product advice, and that you enter into transactions on the basis of your own research and opinions: you are a self-directed investor. Your views on a currency's movement may turn out to be incorrect and you may not achieve your desired outcome or may suffer loss. 7.5 Leverage: MahiFX enables you to obtain an FX exposure by depositing relatively modest amounts in relation to the scope of the contract. This outcome is known as Leverage: you can Leverage your investment up to 100 to 1 for major Currency Pairs, 50 to 1 for minors and 25 to 1 for metals (refer to section 11 Margin for more details on which Currency Pairs constitute majors and minors, and available metals pairs). Leverage means the performance of your investment is amplified and even a slight fluctuation of the market could mean substantial gains when these fluctuations are in your favour, but could also mean considerable losses if the fluctuations are to your detriment. Additionally, if you borrow to fund your Trading Account (including by funding your Trading Account using a credit card), then your Leverage is amplified, along with your risk. If you are speculating, you should not risk more than you are prepared to lose or that, if lost, would not alter your standard of living. 7.6 Margin Risk: You are required to post Margin to support your Trades and open Positions. If your Net Asset Value does not satisfy our Margin requirements, we may close out your Positions without reference back to you. Due to the volatility of markets, your Margin may be rapidly eroded and you may not have sufficient time to remedy a Margin shortfall before your Positions are closed out. Having a position closed out in this way means that you cannot participate in any subsequent improvements in your Position which may have eventuated had you posted additional Margin and kept the Position open. 7.7 Systems Risk: MahiFX operates a highly automated system and is reliant on its technology operating as desired. A disruption to either the MahiFX Platform or the MT4 Platform from hardware, software, or other system errors (commonly referred to as a crash ) may inhibit our ability to offer the MahiFX Platform or the MT4 Platform and restrict or eliminate your ability to Trade with us. Other adverse outcomes from a system failure may be that your Order is not executed according to your instructions, executed with errors and discrepancies, or not executed at all and you may suffer loss as a result. MahiFX has arrangements in respect of MT4, whereby it licences certain technology from a third party, which enable it to make the MT4 Platform available to you. Both MahiFX and the licensor must continually comply with all terms and conditions under that licence. In certain circumstances - such as if MahiFX breaches those terms and conditions, or if the licensor ceases trading, becomes insolvent or seeks to terminate the licence for an alleged breach MahiFX's capacity to make the MT4 Platform available to you may be disrupted, exposing you to the risks set out directly above. MahiFX-PDS&FSG-Version August 2013 Page 14

15 7.8 Unauthorised Access: We are entitled to treat anyone logging on to your MahiFX Account or MT4 Account and conducting trading activity as you. You are responsible for maintaining the secrecy of your login details. If someone accesses your MahiFX Account or MT4 Account and enters into unauthorised trading activity, you may suffer loss. 7.9 Customer Monies: You must fund your Trading Account prior to entering into transactions with us and once you have entered into transactions with us you are required to post Margin. Funds in your Trading Account are held in trust, but are not segregated from other customer funds. Holding your funds with other customer funds in this way does not afford you absolute protection and your funds might be at risk if another client defaults. Additionally, Margin funds may be held in MahiFX s own accounts (and not on trust for you) or be transferred to third parties to meet collateral requirements. You, therefore, have a counterparty exposure to MahiFX (and, indirectly, to its counterparties) and if MahiFX does not meet its obligations or becomes insolvent, you may suffer loss including because either: in the event of default by other customers - all the monies held on trust for customers are insufficient to meet MahiFX's obligations to all its customers; in the event MahiFX defaults in respect of payment obligations to you, or to other customers all monies available to meet MahiFX's obligations to all its customers are insufficient, which impacts on the capacity of all customers to recover from MahiFX Customer Monies and currency conversion: MahiFX may not maintain funds in the Customer Funds Accounts in currencies which directly correspond to the amounts due to each customer in their Native Currency. Should the customer request repayment of their funds in those circumstances, then any amounts held in currencies other than their Native Currency will need to be converted to their Native Currency for payment. If MahiFX were to become insolvent and needed to convert funds held in the Customer Funds Account into the customer's Native Currency to satisfy the customer's claim, then the customer could suffer the Spread charged for that conversion and might become an unsecured creditor of MahiFX in respect of the funds owed to the customer Regulatory Risk: MahiFX is licensed to provide certain financial services by ASIC. Should our license be withdrawn or a stop placed on the issuance of our PDS, we may be unable to transact with you. 8. How to Trade with MahiFX 8.1 The trading process MahiFX offers its products online via the MahiFX Platform or, alternatively, the MT4 Platform. Both the MahiFX Platform and the MT4 Platform provide a simple and intuitive interface for customers to enter into over the counter Spot FX Contracts. You can trial the products and services available by setting up demonstration accounts, which allow you to familiarise yourself with both the MahiFX Platform and the MT4 Platform and practise trading, without depositing any funds with MahiFX. To Trade with MahiFX, you will need to: a) Open a Trading Account: navigate to our website ( read the combined PDS and Financial Services Guide, Terms of Use, and risk warnings. You may then register by completing an application for a MahiFX Account and/or a MT4 Account online. b) Activate your Trading Account: after we receive your application and approve your MahiFX Account and/or your MT4 Account, we will send you a welcome with your account activation instructions. Once you click on the link to activate your account you MahiFX-PDS&FSG-Version August 2013 Page 15

16 will receive a welcome confirmation that your account is open and available for funding. c) Fund your Trading Account: once your Trading Account is activated you can fund your Trading Account through various methods including credit card payment or bank wire transfer. MahiFX does not impose any minimum amounts that must be deposited to fund your Trading Account. However, some daily (maximum) deposit limits are imposed when you fund your Trading Account using a credit card: you should refer to for further details. You should note that, although there are no funding minimums, the amount of funding in your Trading Account will determine the amount available to be transferred as Margin to support your Trades and open Positions and might constrain your ability to use the MahiFX services. d) Enter a Trade: log on to your Trading Account, select a Currency Pair you wish to Trade (e.g., AUDUSD) and whether you wish to buy or sell. The provides quotes for FX products: the Ask Price is the price at which you can buy the currency and the Bid Price is the price at which you can sell the currency. The price difference is known as the bid-ask-spread or Spread. You may place a Market Order (an Order for immediate execution at the best available price) or a Limit Order (an Order to transact at a specified price or better). MahiFX does not permit customers to enter into Trades over the telephone or via all transactions must be transacted through the MahiFX Platform or the MT4 Platform. MahiFX has no minimum Trade size (but your ability to Trade will be constrained by the funds in your Trading Account or Net Asset Value you have available to act as Margin). The maximum Trade size is generally 5 million units of the Base Currency, but this limit may vary depending on the Currency Pair and time zone applying. e) Post Margin: Margin is a percentage of the total value of a transaction that a customer is required to transfer to MahiFX to cover the FX risk arising from their Positions. Margin is transferred automatically by the MahiFX Platform or the MT4 Platform, provided you have sufficient funds in your Trading Account. If you have insufficient funds in your Trading Account, then the Order or transaction might be rejected, cancelled or fail. MahiFX will notify you of the execution of your Order, and you can review completed Orders, by accessing your Trading Account on the MahiFX Platform or the MT4 Platform. You can: f) Monitor Positions: as soon as a Trade is executed, your Trading Account will be updated on the MahiFX Platform or the MT4 Platform. You may review and manage your Positions via your Trading Account on the MahiFX Platform or the MT4 Platform. g) Manage your risk: You alone are responsible for managing the risks associated with your transactions with MahiFX. The MahiFX Platform and MT4 Platform offers three tools to help you manage your risk: (i) the Limit Order; (ii) the Stop Loss Order; and (iii) the Take Profit Order. A Limit Order places a restriction on the maximum price to be paid or the minimum price to be received for a FX transaction. A Stop Loss Order ensures that a particular Position is automatically closed out (liquidated) at a predetermined price in order to limit potential losses should the market move to the detriment of your Position. A Stop Loss Order remains in effect until cancelled by you or the Position is closed out. A Take Profit Order ensures that a particular Position is automatically closed out (liquidated) at a predetermined price in order to realise gains should the market move in your favour. A Take Profit Order remains in effect until cancelled by you or the Position is closed out. You should note, however, that market conditions might prevent the execution of an individual Stop Loss Order or Take Profit Order at or even around the specified price despite other dealing activity at that price level. h) Close Positions: you can close Positions; (i) manually when logged on to your Trading Account on the MahiFX Platform or the MT4 Platform, and (ii) automatically by operation of a Stop Loss Order or Take Profit Order. Again, however, you should note that market conditions might prevent the execution of an individual Stop Loss Order or Take MahiFX-PDS&FSG-Version August 2013 Page 16

17 Profit Order at or even around the specified price despite other dealing activity at that price level. As part of the process you follow to open an account with MahiFX and by virtue of using MahiFX s services, you agree and acknowledge that: i) You have read, understood and accepted our Terms of Use (see the Appendix to this PDS). j) You have downloaded, read and understood this combined PDS and Financial Services Guide and, where appropriate and as necessary, consulted with your financial advisor or obtained other independent advice on the use of MahiFX s services. k) You use MahiFX s services at your own risk: you alone bear the loss of any money you have invested. Trading in currencies is inherently risky (including as a result of the unpredictable and volatile nature of currency valuations and prices) and the use of MahiFX s services can never be considered a safe investment and carries with it a high risk of loss. l) MahiFX does not provide any advice, including financial product advice, which takes into account your personal objectives, financial situation or needs and because of that: i) you should consider the appropriateness of the general advice, having regard to your objectives, financial situation and needs; and ii) you should seek professional advice from a suitably qualified and independent financial advisor. m) The risk information presented here and elsewhere does not reflect all of the risks as well as other important aspects intrinsic to FX transactions and, before starting to Trade, we recommend that you seek appropriate financial, legal and/or taxation advice. n) You have read and understood our Privacy Policy and consented to the collection and use of your personal information as outlined in that Policy. 8.2 Confirmation of transactions All transactions which you enter into with MahiFX, whether it be the execution of a Trade or closing out a Position or otherwise, are confirmed by the MahiFX Platform or the MT4 Platform on a real time basis. The MahiFX Platform and the MT4 Platform also keep a record of all transactions entered into by you with MahiFX in respect of your Trading Account. 9. Trading Example MahiFX allows you to Trade non-deliverable Spot FX Contracts on a Margin or Leveraged basis. We provide below an example of a transaction on the MahiFX Platform. Please note that these examples are for illustrative purposes only and do not reflect current market rates. Suppose you believe that the Australian dollar (AUD) will appreciate against the Euro (EUR). You could enter into a Spot FX Contract to buy AUD and sell EUR. You chose to buy AUD $100,000 (the notional value of the contract) at the rate of , meaning that you have sold EUR 81,000. At the same time you could put in place a Stop Loss Order to automatically limit your losses should AUD depreciate against EUR (to, say, ) or a Take Profit Order to automatically close out the Position when a certain profit level is achieved (at, say, ). You might wish to put a Take Profit Order in place if you think the AUD will appreciate against the EUR in the short-term, but not sustain that higher value. This transaction will require you to post (initial) Margin of AUD $1,000. We outline below the consequences arising in a number of scenarios: 9.1 Scenario One AUD appreciates against EUR and the exchange rate is now In this case, you would have made a profit of approximately AUD $613, being the difference between AUD $100,000 at (EUR 81,000) and AUD $100,000 at (EUR MahiFX-PDS&FSG-Version August 2013 Page 17

18 81,500) of EUR 500 converted to AUD at the prevailing rate of Neither the Stop Loss Order nor the Take Profit Order would have been triggered and you can manually close out the Position by accessing your MahiFX Account and entering a Market Order to sell AUD $100,000 for EUR at the prevailing rate of Scenario Two AUD appreciates against EUR and the exchange rate is now In this case, the Take Profit Order at would have been triggered and the Position would have been closed out automatically at that rate. You would have made a profit of approximately AUD $1,219, being the difference between AUD $100,000 at (EUR 81,000) and AUD $100,000 at (EUR 82,000) of EUR 1,000 converted to AUD at the Take Profit Order rate of Note that, without the Take Profit Order, you would have made a profit of approximately AUD $1,818, being EUR 1,500 converted to AUD at the prevailing rate of Scenario Three AUD depreciates against EUR and the exchange rate is now In this case, you would have made a loss of approximately AUD $621, being the difference between AUD $100,000 at (EUR 81,000) and AUD $100,000 at (EUR 80,500) of EUR 500 converted to AUD at the prevailing rate of Neither the Stop Loss Order nor Take Profit Order would have been triggered and you can manually close out the Position by accessing your MahiFX Account and entering a Market Order to sell AUD $100,000 for EUR at the prevailing rate of Scenario Four AUD depreciates against EUR and the exchange rate is now In this case, the Stop Loss Order at will have been triggered and the Position will have been closed out automatically at that rate. You would have made a loss of approximately AUD $1,250, being the difference between AUD $100,000 at (EUR 81,000) and AUD $100,000 at (EUR 80,000) of EUR 1,000 converted to AUD at the Stop Loss Order rate of Trading example and Margin requirements Please note that in this example you are initially required to post (initial) Margin of AUD $1,000. The required Margin will be monitored by the MahiFX Platform in real-time and daily variances (called variation Margin) physically settled during MahiFX s normal banking processes (which occur following the conclusion of each Business Day in Australia, i.e., overnight AEST). The variation Margin might be a positive amount (in the case of profits) or negative amount (in the case of losses). As you are generally only required to post Margin of 1%, your exposure to the AUDEUR exchange rate is amplified or Leveraged by a factor of 100 times the Margin paid. Accordingly, even a slight fluctuation in the FX rates can mean substantial gains when these fluctuation are in your favour, but could also mean considerable losses if the fluctuations are to your detriment. 10. Calculation of FX Rates, and MahiFX as market maker It is important to note that the decision to enter into Trades with MahiFX is always your decision and you should understand the risks and benefits (as outlined in this PDS) of entering into transactions with MahiFX. MahiFX cannot predict what future FX rates might be. Our FX rate quotations are not a forecast or advice on where we believe FX rates will be at a future date. We do not guarantee that a contract or Trade you enter into will generate a return for you. As a market maker, MahiFX continuously publishes rates at which customers can buy or sell currencies on the MahiFX Platform and MT4 Platform. Our prices are formed from the information available to MahiFX and represent our best estimate of the market price. Currency prices are influenced by supply and demand factors (both internal and external to MahiFX) and a variety of economic and political conditions, including (but not limited to) interest rates, inflation, economic performance and political stability. Because the FX and derivatives products markets are decentralised, without a single central exchange where all MahiFX-PDS&FSG-Version August 2013 Page 18

19 transactions are conducted, each market maker (including MahiFX) may quote slightly different prices. Accordingly, we may quote FX rates that differ from those available in other markets or from other persons for the sale and purchase of FX products. All our quoted FX rates are indicative and no FX products will be entered into at that rate unless and until your Order is accepted and executed. The result of any system failure or communication errors or delays may result in your Order either not being executed according to your instructions, executed with errors and discrepancies, or not executed at all. Furthermore, if you seek to exploit such failures, errors or delays, then MahiFX may revoke any contract or Trade that relies on such failures, errors or delays and may make necessary corrections or adjustments to your Trading Account. As a market maker, all transactions are entered into with MahiFX as principal and represent a binding agreement between MahiFX and you. MahiFX derives income in the form of Spreads between the prices it bids to buy and offers to sell FX products. Spreads may differ from time-to-time across currencies and FX products and can widen (without prior notice) due to volatile market conditions or around news events. Our Spreads are reflected in the prices we quote for the FX products you can Trade on the MahiFX Platform and MT4 Platform. Overnight Positions, being Positions that are still open at the end of normal trading hours (5:00 PM New York time (EST) on a Business Day), are automatically Rolled Over to the next Business Day by MahiFX. Depending on the Currency Pair, Overnight Positions will either earn or pay a small premium or discount (a Swap Credit or Charge), depending on the difference between market interest rates for each currency. That is, the Swap Credit or Charge represents the net interest due to you or payable by you in respect of interest receivable on the bought (or long) side of a Position and interest payable on the sold (or short) side of a Position, in each case determined using LIBOR/LIBID interest rates, due to the settlement date being extended (Rolled Over). 11. Margins To ensure you can cover any losses you might incur on your Positions, we require you to transfer Margin to us. Although there is no minimum deposit required to open a MahiFX Account or a MT4 Account, the funds available in your Trading Account and size of your Net Asset Value will limit the size of the Positions you can open and will affect when you receive a Margin alert and possible Margin Closeout. A Margin Closeout is when the MahiFX Platform automatically closes all of your open Positions, or the MT4 Platform closes out your least profitable position(s), to significantly decrease the probability of losing more than the combined amount of your Margin and the amount that is in your Trading Account The term Leverage is often used to describe the Margin requirements. It refers to the deposit required in order for you to open the Position. MahiFX permits Leverage of 100 to 1 for all major currencies, 50 to 1 for minors and 25 to 1 for metals (refer to the table below at section 11.1 for details of which Currency Pairs constitute majors and minors, and available metals pairs) Margin Requirements The table below outlines MahiFX s Margin requirements as at the date of this PDS and FSG. Majors 100:1 (1% Margin) Minors 50:1 (2% Margin) Metals 25:1 (4% Margin) AUD, CAD, CHF, DKK, EUR, HKD, GBP, JPY, NOK, NZD, SEK, SGD and USD (Note: any combination or pair of the above currencies is possible with this level of Margin) AUD/HUF, AUD/MXN, AUD/PLN, AUD/ZAR CAD/MXN, CAD/PLN, CAD/TRY XAG/USD, XAG/AUD, XAG/EUR, XAG/HKD, XAG/JPY XAU/USD, XAU/AUD, XAU/EUR, XAU/HKD, MahiFX-PDS&FSG-Version August 2013 Page 19

20 XAU/JPY CHF/HUF, CHF/PLN, CHF/TRY, CHF/ZAR EUR/HUF, EUR/PLN, EUR/RON, EUR/TRY, EUR/ZAR GBP/HUF, GBP/MXN, GBP/PLN, GBP/TRY, GBP/ZAR HUF/JPY MXN/JPY NZD/HUF, NZD/MXN, NZD/PLN, NZD/TRY, NZD/ZAR TRY/JPY USD/HUF, USD/MXN, USD/PLN, USD/RON, USD/TRY, USD/ZAR ZAR/JPY As per section 1 of this PDS, any update to available Currency Pairs, or the required Margin, will be available on our website at Margin Calculation on the MahiFX Platform The MahiFX Platform considers both the Base Currency and Terms Currency of a Trade when calculating your Margin requirements. For example: if you traded USDJPY, we would require Margin of 0.5% of the USD amount and 0.5% of the JPY amount so the total Margin is 1% reflecting the fact that USDJPY is a major Currency Pair. Whereas, if you were to trade USDTRY, we would require Margin of 0.5% of the USD amount and 1.5% of the TRY amount so the total Margin would be 2% reflecting the fact that USDTRY is a minor Currency Pair Margin Calculation on the MT4 Platform The MT4 Platform calculates Margin only by reference to the Base Currency (i.e., the first mentioned currency on the left hand side of a Currency Pair) of a Trade. For example: if you traded USDJPY, we would require Margin of 1% of the USD amount (the Base Currency of the Currency Pair) reflecting the fact that USDJPY is a major Currency Pair. Whereas, if you were to trade USDTRY, we would require Margin of 2% of the USD amount (the Base Currency of the Currency Pair) reflecting the fact that USDTRY is a minor Currency Pair. MahiFX reserves the right to vary, from time-to-time and in its sole discretion, the Margin requirements offered to customers and which Currency Pairs are classified as major or minor Cross Margining on the MahiFX Platform It is your obligation to monitor your positions at all times and deposit additional funds into your Trading Account to maintain the Margin required for your Positions. MahiFX-PDS&FSG-Version August 2013 Page 20

21 The MahiFX Platform utilises Cross Margining to maximise the efficiency of your Margin utilisation. Cross Margining means we aggregate your bought (long) Positions and sold (short) Positions for each currency and only assess Margin on the net exposure. For example, let's say you buy 100,000 EURUSD at The Margin is converted to your Native Currency, AUD in this case, to arrive at your total Margin in your Native Currency. Your Margin information is available and can be viewed on the MahiFX Platform. If you then sold 100,000 EURCHF, your EUR balance nets to zero (you have both bought and sold 100,000 EUR) and the EUR Margin has reduced to zero. However, there is now a Margin required for the CHF balance Margining on the MT4 Platform (no Cross Margining on the MT4 Platform) Again, it is your obligation to monitor your positions at all times and deposit additional funds into your Trading Account to maintain the Margin required for your Positions. The MT4 Platform calculates margin on your net exposure under each Currency Pair. However, it does not net all currency exposures (in the way that the MahiFX Platform does) and only nets each Currency Pair exposure. For example, let's say you buy 100,000 EURUSD at The Margin is converted to your Native Currency, AUD in this case, to arrive at your total Margin in your Native Currency. Your Margin information is available and can be viewed on the MT4 Platform. If you then sold 100,000 EURCHF, your EUR balance is not netted to zero (even though you have effectively both bought and sold 100,000 EUR). Margin is required for both the EURUSD Trade and EURCHF Trade Margin Calls We ask that you always have sufficient Net Asset Value available to cover any losses you might incur. We mark all your Positions to market in real-time to monitor the impact of market price fluctuations. If market prices move to the detriment of your Positions, you will be required to top up your Margin with us (referred to as calling variation Margin). Both the MahiFX Platform and the MT4 Platform automatically monitors your Margin requirements in real-time and will transfer variation Margin from your Trading Account to MahiFX if required. Effectively, your Net Asset Value must exceed the Margin requirements noted below. You will only be allowed to Trade or maintain open Positions where you have satisfied our Margin requirements by either having sufficient Net Asset Value or providing further cleared funds. If you do not maintain sufficient Net Asset Value in your Trading Account to meet your required Margin, your Positions may be closed out MahiFX Platform In an attempt to ensure you have sufficient warning to manage your Trading Account and Margin requirements, we will alert you by and via notifications in the MahiFX Platform, at the following stages: 100% of the required Margin. 75% of the required Margin. 60% of the required Margin. 52.5% of the required Margin. Alerts are also sent at 5 p.m. New York time (EST) if your Net Asset Value is less than the required Margin MT4 Platform In an attempt to ensure you have sufficient warning to manage your Trading Account and Margin requirements, we will alert you by and via notifications in the MT4 Platform when your account reaches 75% of less of the required Margin. We will continue to send you alerts and notifications every 24-hours until you deposit additional cleared funds to meet your required Margin or your Position(s) is (are) closed out Margin Closeouts In order to prevent losses greater than the funds you have deposited (as represented by the combined amount of your Margin and the funds in your Trading Account), if you no longer MahiFX-PDS&FSG-Version August 2013 Page 21

22 have sufficient Margin we can close you out. Closeout will occur when: (a) your Net Asset Value is less than or equal to 50% of the required Margin to support your open Positions; or (b) after 5 Business Days of being in breach of your Margin requirements (i.e., your New Asset Value being less than 100% of the total Margin required) (Margin Closeout Event). Please note that in a fast moving market, there may be little time between Margin alerts or there may not be sufficient time to warn you at all. It is your responsibility to monitor your Positions at all times and deposit additional cleared funds to maintain your Margin requirements: you should proactively manage the status of your Trading Account MahiFX Platform On the MahiFX Platform, if you have a Margin Closeout Event, then we will close all your open Positions automatically using the market rate applicable at the time of closing MT4 Platform On the MT4 Platform, if you have a Margin Closeout Event, then we will close out your least profitable position(s) automatically using the market rate applicable at the time of closing, until you have sufficient Net Asset Value to support the Margin required on your open Positions (which could mean all your open Positions are closed) Closeout of Positions When you close out a Position, the MahiFX Platform and the MT4 Platform automatically recognises that you no longer need to post Margin to support that Position. Your Margin (net of any unsettled gains or losses on the Position) will be credited to your Trading Account in your Native Currency immediately and physically settled as soon as practicable (normally during MahiFX s normal banking process run, which occurs following the conclusion of each Business Day in Australia, i.e., overnight AEST). 12. Customer Funds Your Trading Account 12.1 Deposits Funds you deposit with us are credited to your Trading Account when we are satisfied that you are the person who sent the funds and when those funds have cleared. Only the account holder can deposit funds, and while there is no minimum or maximum amount you may deposit, funds must be deposited in your Native Currency. Any funds received in a currency other than your Native Currency will be automatically converted to your Native Currency when credited to your Trading Account. MahiFX does not accept funds unless we are satisfied the payment has come from you and you have complied with all anti-money laundering and counter terrorist financing requirements Credit cards and bank transfers MahiFX accepts Mastercard, Visa and Wire (bank) transfers. Credit card deposits will appear in your account instantly as MahiFX can receive instant bank verification. Bank wire transfers may take 2 to 5 days to be cleared depending on your bank and MahiFX will apply the funds to your account on the same day they are cleared Withdrawals You may withdraw funds from MahiFX at any time. You may withdraw any funds in your Trading Account (which excludes funds utilised as Margin). If you withdraw funds from your Trading Account, you should ensure your Trading Account continues to have sufficient funds to cover your Margin requirements should the market move to the detriment of your Positions. There is no maximum withdrawal limit. However, you cannot withdraw an amount less than the fees we charge. To comply with anti money laundering restrictions, for the first 14 days after funds are first deposited from a credit card, those funds may only be refunded to that same credit card. No other funds may be refunded to that credit card during the 14-day qualification period. Withdrawal requests are processed on the same business day. We will send you a MahiFX-PDS&FSG-Version August 2013 Page 22

23 confirmation when we have sent the instruction to our bank and when they confirm to us that the payment has been sent. This confirmation is sent by and can also be found in account notifications section on the MahiFX Platform MT4 Platform. Funds are only returned in your base currency. Credit card refunds will be made overnight. Wire transfers can take from 2 to 5 days to be credited to your account, depending on your bank Funds transferred to MahiFX: Currencies, conversions, risks Any funds that you transfer to us may, for a period, be held separate to the funds of MahiFX in a trust account. Such funds are held in an account and used and withdrawn in accordance with the Corporations Act 2001 (Cth) and our Terms of Use. The MahiFX Customer Funds Accounts are held with major banking institutions. MahiFX maintains Customer Funds Accounts in the following currencies: AUD, CAD, EUR, GBP, JPY, NZD, and USD. It is important to note that MahiFX may not maintain funds in the Customer Funds Accounts in currencies that directly correspond to the amounts due to each customer in their Native Currency. For instance, funds held in the Customer Funds Accounts on behalf of a customer with an AUD Native Currency may be held in currencies other than AUD. Should the customer request repayment of their funds, then any amounts held in currencies other than their Native Currency will need to be converted to their Native Currency for payment. If MahiFX were to become insolvent and needed to convert funds held in the Customer Funds Account into the customer s Native Currency to satisfy the customer s claims, then the customer could suffer the Spread charged for that conversion and might become an unsecured creditor of MahiFX in respect of that amount if a deficit arises. Your funds in our Customer Funds Accounts are not held separate from the funds of other customers. It is important to note that holding your money in one or more trust accounts may not afford you absolute protection. The establishment of separate Customer Funds Accounts and holding funds on trust is to segregate our customer s funds (including your funds) from our own funds. If the amount held in our Customer Funds Accounts does not satisfy or fully satisfy the amounts we owe to you and we become insolvent, then you will become an unsecured creditor of MahiFX in relation to the funds owing to you. A further consequence of pooling client funds is that your funds may be used to meet the payment obligations of our other customers and your balance may not be protected or you may suffer loss if there is a default by another client that causes a loss to the overall Customer Funds Accounts balances. To mitigate this risk, we have comprehensive Margin and Margin Closeout rules and will, in the short-term, use our own company funds to cover any customer balance shortfall while we pursue the defaulting customer for payment. However, if there is a shortfall in the Customer Funds Account and we become insolvent, then you will be an unsecured creditor of MahiFX in relation to the shortfall of any moneys owing to you from the Customer Funds Accounts Appropriation of funds by MahiFX You agree under our Terms of Use that when you instruct MahiFX in respect of a contract or Trade, then MahiFX may transfer from the Customer Funds Accounts all moneys required to execute the contract or Trade and the Margin required. The Margin amount may be transferred from Customer Funds Account immediately, be maintained in the Customer Funds Account for settlement purposes or pending transfer to MahiFX, or transferred or held for the benefit of another party or as collateral for another party or MahiFX. MahiFX then monitors your Margin requirements in real-time and has automated processes to transfer your funds held in Customer Funds Accounts into or out of MahiFX s beneficial ownership or own accounts on account of variation Margin. MahiFX may appropriate additional funds from your moneys held in the Customer Funds Accounts where additional variation Margin is required. You agree to such transfers and transactions under our Terms of Use. MahiFX will settle variation Margin payments at such intervals as it determines, but generally during MahiFX s next banking process run (which occurs following the conclusion of each Business Day in Australia, i.e., overnight AEST). MahiFX-PDS&FSG-Version August 2013 Page 23

24 12.6 Interest on your funds You will not receive interest on balances in your trading account or in the Customer Funds Accounts. MahiFX may earn interest on these funds and is entitled to retain this interest. 13. Fees and Charges 13.1 FX Transactions - Spread MahiFX does not charge you fees or commissions to enter into an FX transaction. We earn our revenue from the difference (the Spread) between the price paid to buy or sell the Base Currency expressed against the Terms Currency. The Spread is incorporated into the price of the currency quoted on the MahiFX Platform and MT4 Platform and is not an additional fee or charge payable by you. The Spread will vary depending upon the size of the transaction, currencies being bought and sold, the composition of MahiFX s currency exposures, and prevailing market conditions Swap Credits and Charges Where a Position is held at the close of the Business Day (5 pm New York Time (EST)) prior to its Value Date (i.e., its settlement date), that Position will be Rolled Over to a new Value Date on a Tom/Next basis and a Swap Credit or Charge will be made with respect to the Position. The Swap Credit or Charge is a premium or discount that represents the net interest due to you or payable by you in respect of interest receivable on the bought (long) side of a Position and interest payable on the sold (short) side of a Position, in each case determined using LIBOR/LIBID interest rates, due to the settlement date being extended (Rolled Over) Money Transfer Fees No fees are payable to MahiFX if you fund your Trading Account via a bank transfer/wire (although your bank may impose a charge). If you choose to fund your Trading Account via a credit card payment, MahiFX will charge a transaction fee equal to 2.5% of the value transferred. For example, if you transfer AUD $10,000 via a credit card payment, then you will be charged a transaction fee of AUD $250. For withdrawals via bank transfer/wire or credit cards, MahiFX imposes fixed transactional charges based on the currency involved. MahiFX s charges, as at the date of this PDS, are outlined below. However, MahiFX reserves the right to change these charges at any time and you should refer to the Fee Schedule at to review the current rates. Bank transfers Credit cards AUD AUD 5.00 CAD CAD 5.00 EUR EUR 4.50 GBP GBP 3.50 JPY 1,200 JPY 400 NZD NZD 7.50 USD USD Example of Fees and Charges 14.1 Funding your Trading Account Suppose you open an AUD Native Currency account on the MahiFX Platform and deposit AUD $5, into your Trading Account with a credit card payment. In this case, a transaction fee of 2.5% of the transferred amount (AUD $5,000.00) or AUD $ would be charged by MahiFX. The net amount available for investment or to act as Margin is, therefore, AUD $4,875.00: this amount is credited to your Trading Account and forms its opening balance (your Net Asset Value). MahiFX-PDS&FSG-Version August 2013 Page 24

25 14.2 Enter into a Trade You wish to trade the AUDUSD Currency Pair. The current MahiFX Bid Price is and the Ask Price is You decide to enter into a Trade to sell AUD $100, AUDUSD at the MahiFX Bid Price of : this Trade means you have a short exposure (a liability) of AUD $100, representing the AUD you have sold and a long exposure (an asset) of USD $105, representing the currency you have bought. You are required to post Margin of 0.5% of both legs of the transaction: i.e., 0.5% of AUD $100, (being AUD $500.00) and 0.5% of USD $105, (being USD $525) (please note that if you are using the MT4 Platform, then Margin of 1% of the AUD amount would be required). When converting your Margin to AUD the USD Margin amount is converted at the currency mid-rate of [( )/2] and equates to AUD $ The total Margin, therefore, required is AUD $ This amount will be deducted from your MahiFX Account, meaning that its balance is now $3, [current balance of AUD $4, less Margin of AUD $976.15], and transferred to MahiFX. At this point in time, MahiFX has not charged you anything for entering into the Trade Exit from a Trade Let s assume that in one day s time the currency rates have not moved and the current MahiFX Bid Price is still and the Ask Price is To exit from or close your Position, you must buy AUD $100, AUDUSD at the MahiFX Ask Price of : this Trade means you have acquired AUD $100,000 (an asset) for USD $105, (a liability). The AUD legs of AUD $100, each offset to AUD $nil and the USD asset of USD $105, offsets against the USD liability of USD $105,020.00, resulting in a net liability of USD $20.00: this liability represents your loss from the Trade and arises from the difference between the Bid Price and the Ask Price. This loss represents a gain or income to MahiFX. The loss is then converted to AUD using the Ask Rate of so that it may be credited to your MahiFX Account in your Native Currency. This conversion means that USD $20.00 equates to AUD $ This loss will be deducted from your MahiFX Account and paid to MahiFX. The closing of this Position also means that the Margin held by MahiFX can be returned, net of your trading loss. The net amount returned is AUD $ [initial Margin of AUD $ less your trading loss of AUD $19.04]. The balance of your MahiFX Account is now AUD $4, [current balance of AUD $3, plus Margin returned of AUD $957.11] Withdrawal of funds You now wish to withdraw the entire balance of your MahiFX Account (being $4,855.96) by repayment to your credit card. The credit card withdrawal fee for the in AUD is AUD $5.00. The net amount repaid to you by MahiFX is $4, Taxation Implications Taxation law is complex and its application will depend upon your individual circumstances. When determining if this product is right for you, you should consider the impact on your own taxation position and seek professional taxation advice. 16. Cooling Off There is no cooling off period in relation to foreign exchange transactions. 17. If You Have a Complaint We have an internal complaint resolution process that is there to assist in the resolution of any issues arising from a complaint about a product or service received from us. If you would like to use this process, please contact us: MahiFX-PDS&FSG-Version August 2013 Page 25

26 via the MahiFX Platform or MT4 Platform; by at or by phone on +44 (0) We will always acknowledge any complaint promptly and provide a substantive response within no more than 45 days. If your compliant is not resolved to your satisfaction, please contact our Complaints Officer at: Complaints Officer, MahiFX Limited, PO Box 401,Christchurch 8140, New Zealand. MahiFX is a member of the Financial Ombudsman Service Limited (FOS) in Australia. Our membership number is If you feel your complaint has not been dealt with satisfactorily by MahiFX in Australia, you are entitled to refer the complaint to the FOS. The FOS s contact details are as follows: Financial Ombudsman Service Limited GPO Box 3 Melbourne VIC 3001 Australia MahiFX is also a member of the Financial Dispute Resolution (FDR) service in New Zealand. Our membership number is FM1028. If you feel your complaint has not been dealt with satisfactorily by MahiFX in New Zealand, you are entitled to refer the complaint to the FDR. FDR s contact details are as follows: Financial Dispute Resolution Freepost PO Box 5730 Wellington 6145 New Zealand Please note the FOS and/or FDR will only investigate cases once MahiFX has been given the opportunity to discuss and resolve the complaint with customers. To allow us to do this, customers must have first lodged a formal complaint with us in writing and given us the opportunity to resolve it. 18. Compensating Clients for loss or damage MahiFX holds adequate Professional Indemnity insurance to compensate customers for the loss or damage attributed to breaches of any relevant legislative obligations by MahiFX or any of its representatives. These arrangements satisfy the requirements of section 912B of the Corporations Act Labour Standards and Environmental, Social and Ethical Considerations Taken Into Account No labour standards or environmental, social or ethical considerations are taken into account when making, holding, varying or ending foreign currency transactions. 20. Privacy Statement MahiFX only collects personal information to the extent necessary for one or more of MahiFX s functions or activities. If you do not provide any requested personal information to MahiFX, we may not be able to provide you with access to and use of the MahiFX and MT4 Platforms or the MahiFX services. MahiFX may disclose (and you are deemed to consent to MahiFX disclosing) your personal information for the purposes for which it is collected and for any related purposes; to its affiliated entities for the purpose of such affiliated entities contacting you about their products MahiFX-PDS&FSG-Version August 2013 Page 26

27 and services; to any person who acquires or expresses an interest in acquiring all or any part of MahiFX s business; to any person where necessary or desirable in connection with MahiFX investigating, preventing or taking action regarding any breach or suspected breach by you of our Terms of Use or any law; to any person as required or authorised by or under law; to any other person to whom you subsequently consent from time-to-time. MahiFX may place a cookie (a small text file) on any computer you use to access the website and MahiFX and MT4 Platforms. Cookies help MahiFX make the website and MahiFX and MT4 Platforms easy to use. When you revisit the website, the cookie will enable MahiFX to recognise you as a previous user. MahiFX may transfer (subject to certain conditions) your personal information outside of Australia. MahiFX takes reasonable steps to make sure that the personal information that MahiFX collects, uses or discloses is accurate, complete and up to date. MahiFX takes reasonable steps to protect the personal information that MahiFX holds from misuse and loss and from unauthorised access, modification or disclosure. MahiFX takes reasonable steps to destroy or permanently de-identify any Personal Information that is no longer needed for any purpose. MahiFX s Privacy Statement can be viewed in full on its website at Terms and Conditions MahiFX s Terms of Use set out the terms and conditions that apply to your use of the services provided or made available by MahiFX to you. Those services include your use of the MahiFX website, the MahiFX and MT4 Platforms, any of the specific services available from MahiFX which you use, and all dealings which you have with MahiFX in the course of or relating to MahiFX providing services to you: the terms and conditions therefore apply whether or not you are a registered customer of MahiFX. This PDS should be read in conjunction with those Terms of Use. MahiFX s Terms of Use are appended to this Combined PDS and FSG or may be obtained at Financial information MahiFX commenced trading in March The MahiFX balance sheet, drawn from the 31 March 2012 audited financial accounts, is available on the MahiFX website at within 30 days after they are lodged with ASIC. A summary of MahiFX's financial position as at 31 March 2012 is as follows: Shareholders funds: AUD $5.8m Total assets: AUD $6.3m Total liabilities: AUD $0.5m Please note, that the above figures are derived from MahiFX s audited financial statements that are denominated in NZD and then converted to AUD for informational purposes only. Accordingly, they represent approximate values only. 23. Other Information Other information about MahiFX and/or the products contained within this PDS may be found on the MahiFX website at If you have any questions in relation to us or the products covered by this PDS we may be contacted on +44 (0) MahiFX has a comprehensive list of frequently asked questions that can be reviewed at These include answers to 'Questions a potential investor should ask a CFD provider' as suggested by ASIC. MahiFX-PDS&FSG-Version August 2013 Page 27

28 The website also sets out information relating to the most up to date information concerning: fees and costs and other amounts, and payment conditions, for which you are liable when transacting with MahiFX; the Spread which applies to each contract or trade you enter into with MahiFX; Margin requirements; and may describe the regularity with which MahiFX will effect settlement in respect of your Margin Amount between your Trading Account and MahiFX. Any changes which will result in you having to pay a direct fee or charge will be notified to you within the periods required by the Corporations Act. MahiFX-PDS&FSG-Version August 2013 Page 28

29 Part 2 Financial Services Guide 1. About this Financial Services Guide This Financial Services Guide (FSG) was prepared by MahiFX Limited ( MahiFX, we, us, our ), ARBN , AFSL on 28 August The information contained within this FSG is designed to provide you with sufficient information so that you can make an informed decision about whether to utilise a financial service provided by us. The FSG details who we are, the services we offer, how you can contact us, how we get paid and what to do if you have a complaint. This FSG is only for Australian residents and Australian citizens living abroad. 2. Authorised Financial Services MahiFX is authorised by the Australian Securities and Investments Commission to provide the following services to retail and wholesale clients: Provide general financial product advice; Deal in a financial product by: - issuing, applying for, acquiring, varying or disposing of a financial product; and - applying for, acquiring, varying or disposing of a financial product on behalf of another person; and Make a market. MahiFX is authorised to provide these services in the following financial products: FX contracts; and Derivatives. MahiFX is responsible for the services provided under this FSG. MAHIFX DOES NOT PROVIDE, NOR ARE WE AUTHORISED TO PROVIDE, PERSONAL FINANCIAL PRODUCT ADVICE. THEREFORE, AT NO TIME DO WE TAKE INTO ACCOUNT YOUR PARTICULAR NEEDS, CIRCUMSTANCES OR OBJECTIVES WHEN PROVIDING THE SERVICES COVERED BY THIS FSG. 3. How MahiFX and Our Staff Are Remunerated MahiFX does not charge you fees or commissions to enter into an FX transaction. We earn our revenue from the difference (the Spread) between the price paid to buy or sell the Base Currency expressed against the Terms Currency. We also earn revenue from the Swap Credits and Charges on Positions held at the close of the Business Day (5 pm New York Time, EST) and are Rolled Over to a new Value Date on a Tom/Next basis. The Swap Credits and Charges represent interest revenue to MahiFX. MahiFX also earns transfer fees in respect of funds transferred into or out of your Trading Account. MahiFX reserves the right to change these charges at any time and you should refer to the Fee Schedule at to see the current rates. Refer to Section 13 Fees and Charges of the PDS in Part 1 of this document for more information. All MahiFX employees are paid a salary and may receive a bonus that may in part be related to achieving job-related performance targets. 4. Relevant Associations and Relationships MahiFX is the provider of the financial services contained within this FSG and is also the issuer of the products contained in the PDS section (Part 1) of this Combined PDS & FSG. MahiFX has relationships with affiliate companies for the provision of FX risk management and information technology services. MahiFX-PDS&FSG-Version August 2013 Page 29

30 MahiFX does pay referers or introducers for bringing clients to MahiFX. 5. If You Have a Complaint Information regarding our complaints handling process may be found on page 16 of this Combined PDS & FSG. 6. Other Information Other information about MahiFX and/or the services covered by this FSG may be found on the MahiFX website at If you have any questions in relation to us or the services covered by this FSG we may be contacted on +44 (0) Compensating Clients for Loss or Damage MahiFX holds adequate Professional Indemnity insurance to compensate customers for the loss or damage attributed to breaches of any relevant legislative obligations by MahiFX or any of its representatives. These arrangements satisfy the requirements of section 912B of the Corporations Act How to Contact and Instruct Us MahiFX may be contacted in New Zealand or Australia at: New Zealand Registered Office: Australia Registered Office: 12A St Albans Street Christchurch 8014 New Zealand Suite 2, 185 Gloucester Street, Sydney NSW 2000 Australia Phone: +44 (0) Fax: Website: [email protected] Communications Address: Communications Address: PO Box 401 Christchurch 8140 New Zealand 14 Cheryl Crescent Newport, NSW 2000 Australia For more information about MahiFX and the products covered in this PDS, please visit or [email protected]. All transactional instructions must be issued by logging on to your Trading Account at and using the secure, web-browser based FX trading applications (the MahiFX Platform or the MT4 Platform). 9. Further Information Other information about MahiFX and/or the products contained within this FSG may be found on the MahiFX website at If you have any questions in relation to us or the product covered by this PDS we may be contacted on +44 (0) MahiFX-PDS&FSG-Version August 2013 Page 30

31 Part 3 - Definitions Unless expressed or implied to the contrary, the following words have the meaning set out below in the PDS and FSG: AEST ASIC Ask Price Base Currency Bid Price Business Day CFD Cross Margin Customer Funds Accounts Currency Pairs EST FSG FOS FX Leverage LIBOR/LIBID Limit Order MahiFX Account MahiFX Platform Mahi Capital Australian Eastern Standard Time. Australian Securities and Investments Commission. The price at which you can buy the currency in question. Also referred to as the offer or buy price. Means the first currency of a Currency Pair. FX rates are quoted as the price of one currency (the Base Currency) expressed in terms of another currency (the Terms Currency). The price at which you can sell the currency in question. Also referred to as the sell price. Means either Monday to Friday, excluding public holidays, in New South Wales, Australia or Monday to Friday, excluding public holidays, in New York, USA (as the context requires). Contract for difference being, in the context of MahiFX and this Combined PDS and FSG, FX Contracts. Generally speaking, the term refers to derivative products which allow investors trading in them to take a position on the change in the value of an underlying asset. Cross Margining refers to the practice used on the MahiFX Platform of aggregating all your bought (long) Positions and sold (short) Positions for each currency and only assessing Margin on the net exposure. Bank accounts with Australian Authorised Deposit-taking Institutions that hold funds on trust for customers. Means a Base Currency and a Terms Currency. Eastern Standard Time in the United States of America. The Financial Services Guide issued by MahiFX Limited as contained in Part 2 of this document. Financial Ombudsman Service. Foreign exchange. The term Leverage is often used to describe the Margin arrangements. It refers to the deposit required in order for you to open the Position. Broadly speaking, MahiFX permits Leverage of 100 to 1 for major Currency Pairs, 50 to 1 for minor Currency Pairs and 25 to 1 for metals. London Interbank Offered Rate/London Interbank Bid Rate. An Order to buy or sell a Currency Pair at a specified price or better. Your Trading Account on the MahiFX Platform that you access with your login details and from which you conduct, monitor, and manage your FX trading activities. The "MahiFX" web-browser based FX trading applications that is provided by MahiFX. Mahi Capital Limited, a company which is related to MahiFX, which MahiFX-PDS&FSG-Version August 2013 Page 31

32 Margin Margin Call Margin Closeout Margin Closeout Event Market Order MT4 MT4 Account MT4 Platform Native Currency Net Asset Value Order OTC Overnight Positions PDS Position Rolls, Rollover or Rolled Over is incorporated in the British Virgin Islands. Amounts you are required to transfer to us to support your open Positions. Margin can be in the form of initial Margin, which is provided when a Trade is first executed or variation Margin that is transferred, paid or received each and every time your Positions are marked-to-market. See Section 11 Margins of the PDS (Part 1) for further explanation. A request and obligation to transfer additional Margin to us to support your Positions. The process whereby open Positions are closed out because you have insufficient Margin available to support those Positions. Occurs when: (a) your Net Asset Value is less than or equal to 50% of the required Margin to support your open Positions; or (b) after 5 Business Days of being in breach of your Margin requirements (i.e., your New Asset Value being less than 100% of the total Margin required) An Order for immediate execution to buy or sell a Currency Pair at the current price set by MahiFX. The software known as "MetaTrader 4" as licensed to MahiFX by MetaQuotes Software Corp. Your Trading Account on the MT4 Platform that you access with your login details and from which you conduct, monitor, and manage your FX trading activities. The "MT4" web-browser based FX trading applications that is provided by MahiFX. The functional currency of your Trading Account for payments and receipts to and from your Trading Account as selected by you when you establish your MahiFX Account and/or MT4 Account. Both the MahiFX Platform and the MT4 Platform refer to your Native Currency as your base currency. All profits and losses, and Margin adjustments, are converted to and transacted with your Trading Account in this currency. In relation to a customer, means the balance of the customer s Trading Account and Margin held by MahiFX net of the customer s unsettled gains and losses with respect to open Positions. An instruction to buy or sell a Currency Pair at a specified price. Over the counter, meaning that the relevant product is not traded on an exchange. In terms of Swap Credits and Charges and Rollovers, means Positions that are open at 5.00 pm New York time (EST). The Product Disclosure Statement, as issued by MahiFX Ltd as contained in Part 1 of this document. An exposure you have to a particular Currency Pair as a result of entering into a Trade. Extending the settlement Value Date on an open Position to the next trade date. When a Spot FX Contract position is held at the end of the Business Day prior to its Value Date, it will be Rolled Over to a new Value Date on a Tom/Next basis. As part of the Rollover, Positions are subject to a Swap Credit or Charge based on the MahiFX-PDS&FSG-Version August 2013 Page 32

33 Spot FX Contract Spread Stop Loss Order Swap Credits and Charges Take Profit Order Terms Currency Terms of Use Tom/Next Trade Trading Account Value Date interest rates of the Currency Pair. Means an agreement under which you agree today to buy and sell a particular Currency Pair at today s valuation for settlement in two Business Days. The difference between the buy and sell rates for a particular Currency Pair. An Order to buy or sell a Currency Pair at a specified price or worse. In respect of a Position that is rolled over at the end of MahiFX s Business Day (5.00 pm New York time (EST)), means credits or charges that represent the net interest due to you or payable by you in respect of interest receivable on the bought (long) side of a Position and interest payable on the sold (short) side of a Position, in each case determined using LIBOR/LIBID interest rates, due to the settlement date being extended (Rolled Over). An Order to buy or sell a Currency Pair at a specified price or better. Means the second currency of a Currency Pair. FX rates are quoted as the price of one currency (the Base Currency) expressed in terms of another currency (the Terms Currency). MahiFX s Terms of Use that apply to your use of the MahiFX services and that you accept when you make an application to become a customer of MahiFX. The Terms of Use are appended to this Combined PDS and FSG. Every Spot FX Contract involves selling (borrowing) one currency to buy (invest in) another. Interest is paid on the currency that is borrowed and earned on the one that is bought. The Tom/Next process pays/charges the net interest (Swap Credits and Charges) on your open Position as at 5 pm New York time (EST). For example, a spot transaction to buy and sell a Currency Pair is normally settled in two Business Days after entering into the Trade. If the Position is not settled, then it Rolls Over and the spot market price is adjusted for settlement the next day through the receipt or charge of Swap Credits or Charges. Also referred to as tomorrow next or T/N. See also Rolls and Rollovers. The act of entering into of a FX contract or derivative with MahiFX. When a Trade is executed, it becomes a Position. Your MahiFX Account and/or MT4 Account, as the context requires, that holds your funds in your selected Native Currency that you have deposited with MahiFX and from which Margin is deducted or returned. The settlement date for a Spot FX Contract, usually two Business Days, except for USDCAD where it is one Business Day. Also known as the maturity date. MahiFX-PDS&FSG-Version August 2013 Page 33

34 Appendix MahiFX Terms of Use MahiFX Limited ARBN AFSL no Client Terms of use Version 10 Effective Date 28 August 2013 Part 1 General and introduction 1. Terms of use - Introduction 1.1 These Terms of use (Terms) are the terms and conditions which apply to your use of the services provided or made available by MahiFX to you. Those MahiFX Services include your use of the MahiFX website and any of the specific services available from MahiFX which you use, and all dealings which you have with MahiFX in the course of or relating to MahiFX providing services to you: the terms and conditions therefore apply whether or not you are a registered client of MahiFX. 1.2 If you do not accept these Terms, then you cannot use the MahiFX Services. 1.3 If you use the MahiFX Services, then you accept these Terms, and you also accept these Terms if you have made an application to become a Client. You agree that these Terms form a valid and binding deed between you and MahiFX. 1.4 In consideration for the payment of all fees and costs which are payable by you in accordance with the Fee Schedule, MahiFX agrees to provide the MahiFX Services to you in accordance with these Terms. 1.5 Subject to any specific provision of these Terms, the version of the Terms published on the MahiFX website on any date is the version of the Terms which apply to your use of the MahiFX Services on that date. 1.6 MahiFX may vary these Terms at any time by providing 2 Business Days' notice on its website, or by notifying you directly. Accordingly, you must check the website and your Portal for any variation each time you use the MahiFX Services. If you use the MahiFX Services after the notice period has elapsed, then you agree to these Terms as varied. If you do not accept these Terms as varied, then you cannot use the MahiFX Services. 1.7 You agree that different provisions of the Terms may relate to different aspects of the MahiFX Services. Accordingly, if any provision of this document conflicts with either information published by MahiFX on its website from time to time, or statements in the nature of disclaimers or warnings published by MahiFX on its website from time to time, or documents published on or downloadable from the website from time to time which govern your use of the MahiFX Services, then those specific provisions of the Terms will prevail to the extent of any inconsistency in respect of the relevant aspect of the MahiFX Services. 1.8 Capitalised words in these Terms are defined in the clause 2 dictionary. MahiFX-PDS&FSG-Version August 2013 Page 34

35 2. Dictionary Unless expressed or implied to the contrary, the following words have the meaning set out below in these Terms: AML means anti-money laundering and counter-terrorism financing legislation in Australia or New Zealand, including the Anti-Money Laundering and Counter- Terrorism Financing Act 2006 (Cth) and the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (NZ). Base Currency means the base currency selected by a Client (or nominated by MahiFX if the Client does not select a base currency) to apply to that Client's Trading Account. Business Day means Monday to Friday excluding public holidays in New South Wales. Claims includes actions, proceedings, suits, causes of action, arbitrations, verdicts and judgments either at law or in equity or arising under a statute, debts, dues, demands, claims of any nature, costs and expenses. Client means a client of MahiFX, being a Client Applicant whose application to be a client of MahiFX has been accepted. Client Applicant means any person who is in the process of inquiring or applying to be a client of MahiFX. Client Associates means: (a) (b) any person associated with a Client or Client Applicant who is an 'Associate', 'Related Entity' or 'Relative', as those terms are defined in the Corporations Act 2001 (Cth) or a 'Relative' or 'Related' Company as those terms are defined in the Companies Act 1993 (NZ); and any person dealing with MahiFX on behalf of a Client or Client Applicant, including as contemplated by clause 3.5. Client Content means any information, statement, data or representation communicated by you in relation to the MahiFX Services, whether communicated to MahiFX or any third party, including: (a) (b) (c) through the MahiFX Community; as part of an application to become a Client; in telephone or conversations with us. Client NAV means the Client's net asset value position at any time represented by: (a) (b) the balance of the Client's Trading Account (excluding any 'Disputed Amount' as that term is defined in clause 8.3.4) and the Margin Amount held by MahiFX; and the Client's exposure under each open contract or trade. Fee Schedule means the fee schedule as published by MahiFX on the Website from time to time (and which may be incorporated in the Financial Services Guide) which: MahiFX-PDS&FSG-Version August 2013 Page 35

36 (a) (b) (c) (d) sets out the fees and costs and other amounts, and payment conditions, for which you are liable when using the MahiFX Services; may describe the transaction pricing spread which applies to each contract or trade you enter into using the MahiFX Services; may describe MahiFX's Margin requirements of Clients; and may describe the regularity with which MahiFX will effect settlement in respect of your Margin Amount between your Trading Account and the MahiFX Account. Financial Services Guide means the financial services guide which MahiFX is required by the Corporations Act 2001 to provide in respect of the financial services which it provides, as available from the Website from time to time. Insolvency Event means, in relation to a party, any of the following events: (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) the party assigns any of its property for the benefit of creditors or any class of them; the party's interest in or under these Terms or in the subject matter of these Terms becomes attached or taken in execution or under any legal process; an encumbrancee takes any step towards taking possession or takes possession of any assets of the party or exercises any power of sale; the party ceases, suspends or threatens to cease or suspend the conduct of a majority of its business, or disposes of or threatens to dispose of its assets, except for the purposes of a solvent reconstruction or amalgamation previously approved by MahiFX; any security interest becomes enforceable or is enforced against the party; a distress, attachment or other execution is levied or enforced against the party in excess of AUD$1, (or the equivalent in another currency); the party has a judgment or order given against it in an amount exceeding AUD$1,000 (or the equivalent in another currency) and that judgment or order is not satisfied or quashed or stayed within 20 Business Days after being given; the party takes any step to obtain protection or is granted protection from its creditors under any applicable legislation; a resolution is passed by the party to appoint an administrator or an administrator of the party is appointed; an order is made that the party be wound up; an order is made appointing a liquidator or a provisional liquidator of the party; the party resolves to wind itself up or otherwise dissolve itself, or gives notice of its intention to do so, except for the purposes of a solvent reconstruction or amalgamation previously approved by MahiFX, or is otherwise wound up or dissolved; MahiFX-PDS&FSG-Version August 2013 Page 36

37 (m) (n) (o) (p) (q) (r) an order is made or a resolution is passed for the party to enter into any arrangement, compromise or composition with, or assignment for the benefit of, its creditors or any class of them, except for the purposes of a solvent reconstruction or amalgamation previously approved by MahiFX; the party is, or states that it is, or under applicable legislation is taken to be, unable to pay its debts (other than as a result of a failure to pay a debt or claim the subject of a dispute in good faith) or stops or suspends or threatens to stop or suspend payment of all or a class of its debts; a receiver, receiver and manager, administrator, controller or similar officer of any of the assets or the whole or any part of the undertaking of the party is appointed; the party is or makes a statement from which it may be reasonably deduced by the other party that the party is the subject of an event described in section 459C(2) of the Corporations Act 2001 (Cth); any event that is analogous or having a substantially similar effect to any of the events specified in this definition; the party, being an individual, commits an act of bankruptcy or becomes insolvent. Intellectual Property means all Intellectual Property Rights (whether or not registered including all applications and the right to apply for registration) which are owned by or licensed to MahiFX including, without limitation: (a) (b) (c) (d) any trade marks, service marks, trade names, domain names, brands and company names, trade secrets and copyright works, URL's, drawings, discoveries, inventions, improvements, technical data, formulae, computer programs, software, know-how, logos, symbols and similar industrial or intellectual property rights; all patents, patent applications, registered designs and unregistered design rights; all client lists and other client related information generated by MahiFX; and all confidential information of MahiFX. Intellectual Property Rights means all and any patents, patent applications, trade marks, service marks, trade names, domain names, registered designs, unregistered design rights, copyrights, know how, trade secrets and rights in confidential information, URLs and all and any other intellectual property rights, whether registered or unregistered, and including all applications and rights to apply for any of the same. Legal disability includes that you are not of sound mind, are less than 18 years of age, or have any form of guardian or administrator appointed in respect of your estate or personal affairs. Liabilities include all liabilities (whether actual, contingent or prospective), losses, damages, costs and expenses of whatever description. Loss means loss or damage however caused whether based in tort, contract or otherwise and includes without limitation any direct, indirect, special or MahiFX-PDS&FSG-Version August 2013 Page 37

38 consequential loss or damage, loss of profits, loss of production, loss or corruption of data, loss of sales opportunity or business reputation, direct or indirect labour costs and overhead expense and damage to property, personal injury and death. MahiFX means MahiFX Limited ARBN ; 'we', 'our' or 'us' is also taken to be a reference to MahiFX. Where relevant, MahiFX also includes reference to those service providers to MahiFX with whom you deal in relation to the Services and, or alternatively, to our officers, employees and agents. MahiFX Bank Accounts means such operational banking accounts of MahiFX as it has from time to time which are: (a) (b) held in the name of and/or for the benefit of MahiFX; and each of which relate to a separate base currency to reflect those Base Currencies selected by Clients. MahiFX Community means that aspect of the MahiFX Services by which MahiFX allows its Clients to participate through the Website with MahiFX and other Clients, including through or by: (a) (b) (c) (d) blogs and Client forums; providing status updates; providing various analytical tools (such as market data, exchange rates, news, headlines and graphs), links to other websites, newsletters and third parties information; and providing features which enable Clients to search, interact with, follow, feature, rank and copy other Clients. MahiFX Content means any information, statements, data and representations made by or on behalf of MahiFX including analytical tools such as market data, exchange rates, news, headlines, graphs, links to other websites, newsletters and third parties information. MahiFX Privacy Policy means MahiFX's privacy policy, in the form which MahiFX publishes on the Website from time to time. MahiFX Services means all products and services MahiFX provides or makes available from time to time relating to: (a) (b) (c) (d) (e) making the Website available for use; products and services which MahiFX provides or makes available to Client Applicants; products and services which MahiFX provides or makes available to Clients; correspondence with MahiFX relating to the above; other dealings which you have with MahiFX relating to the above including data collection and storage, privacy and website content. Margin Amount means the amount which, in respect of every trade or contract you enter into, MahiFX requires in addition to the contract or trade price, in order to MahiFX-PDS&FSG-Version August 2013 Page 38

39 cover exposure which you have on all trades or contracts which are open at any time, as advised by MahiFX at any time. Portal means the online MahiFX Platform or MT4 Platform to which MahiFX provides you access with your username and password and which sets out the balance of your Trading Account, your Margin Amount, your open contracts and trades and, to the extent determined by MahiFX, your past trades, and your profit and other Client Content of yours provided through the MahiFX Community. Prohibited Territory means any jurisdiction, in addition to those stated in clause 18.1, to which MahiFX determines it does not wish to or cannot by law provide any or all of the MahiFX Services. Provider Contracts means the contracts which we have with third parties who provide services to MahiFX which relate to the MahiFX Services. Terms means all the terms and conditions which apply to your use of the MahiFX Services, including this document as varied from time to time, all information published by MahiFX on the website from time to time, all statements in the nature of disclaimers or warnings published by MahiFX on its website from time to time, all documents published on or downloadable from the website from time to time which govern your use of the MahiFX Services and which may include the Provider Contracts. Trading Account means the Client's MahiFX Account and/or MT4 Account, as the context requires, which: (a) (b) is in the name of MahiFX on trust for the Client; and holds the Client's funds in the Client's selected Base Currency. Website means the website from which MahiFX makes the MahiFX Services available, being mahifx.com, whether accessed via computer, phone, tablet device or other mobile device, and including any mobile device application offered by MahiFX. You means the Client, Client Applicant or visitor to the website, as the case may be. Where relevant, it includes all your Client Associates. Part 2 Client application & registration 3. Client Application and registration 3.1 MahiFX retains the discretion to accept or reject any person's application to become a Client and need not give its reasons for doing so. 3.2 You agree that you will provide us with all information which we request from you for the purposes of assessing any application you make to become a Client, including any documents which support or verify that information. 3.3 You agree that all data, statements, information or representations you provide or make to MahiFX, whether express or implied, are entirely true, complete and correct in every particular. You agree that: if any such data, statement, information or representation was true, complete and correct when provided or made prior to you being a Client, MahiFX-PDS&FSG-Version August 2013 Page 39

40 but changes in any way prior to you becoming a Client, then you will notify MahiFX immediately; if you become aware that MahiFX has misinterpreted or misconstrued any data, statement, information or representation you provided or made, then you will immediately notify MahiFX of the true and correct position. 3.4 You agree that if you apply to be, and are registered as, a single Client, then you cannot apply to be, or be registered as, more than one Client including through the use of any person acting as agent or trustee for you or by making your financial resources available directly or indirectly to any other Client or Client Applicant. For this reason, you agree to disclose any relationship which you have with any Client Associate where that Client Associate is a Client or Client Applicant. 3.5 You agree and warrant that all persons dealing with MahiFX on your behalf are duly authorised to do so: you agree and warrant that they are authorised to bind you to these Terms and that all relevant corporate or other authorisation necessary to bind you to these Terms has been taken. Each person dealing with MahiFX on behalf of a Client or Client Applicant personally agrees and warrants to MahiFX that these agreements and warranties are true and correct. 3.6 You agree that MahiFX may: require evidence of the appointment (and the continuing validity of that appointment) of any representative or power of attorney authorised by you; and elect to dismiss and/or reject any transactions performed by such representative or attorney. 3.7 You agree that MahiFX may require you at any time to provide additional information to personally identify you. 3.8 MahiFX agrees that it will deal with all information which you supply, and which is capable of identifying you, in accordance with the MahiFX Privacy Policy. 3.9 You acknowledge and agree that: you are solely responsible for keeping your user name and password confidential and secure, and that you will do so at all times; you must notify MahiFX immediately if the confidentiality or security of your user name or password is compromised; you indemnify MahiFX in respect of any Claim or Loss which may arise in consequence of any such compromise and release MahiFX in respect of any Claim or Loss the Client may suffer or incur; MahiFX is entitled to accept any instructions in respect of your Trading Account where those instructions follow the provision by that person of your username and password. 4. Client representations, warranties and acknowledgements 4.1 You acknowledge and agree that: In addition to our rights under clause 8.3, from time to time you may be requested to provide us with certain documents to verify the details of the MahiFX-PDS&FSG-Version August 2013 Page 40

41 credit card used by you to deposit monies to your Trading Account. Subject to our satisfaction from the above documentation checks, you may or may not be permitted to deposit further monies by recurring credit card or other means of payment; and MahiFX may elect to provide you with documentation, information and communications in languages other than English: if MahiFX does that, then you acknowledge and confirm that MahiFX s official language is English, and in the event of any discrepancy or inconsistency between any document, information or communication in another language, the English document, information or communication prevails. 4.2 You agree to comply in all respects with the terms and conditions of the Provider Contracts and that you will not, by any act or omission, cause MahiFX to breach its obligations under those contracts. Part 3 Accounts, and payments and instructions 5. Your Trading Accounts 5.1 You represent, warrant and agree that all the details that you gave us when opening a Trading Account and making a deposit are true, accurate, complete and match the name on the payment card and/or payment accounts in which you intend to deposit or receive monies from your account. 5.2 MahiFX will establish each Trading Account with an authorised Australian deposittaking institution. 6. MahiFX Bank Accounts MahiFX will ensure that the MahiFX Bank Accounts are held with an authorised Australian deposit-taking institution. 7. Payment, fees and trading limits MahiFX reserves the right to: 7.1 impose and vary limits on the amount which may be deposited into or maintained in a Trading Account; 7.2 impose and vary fees and costs which it may recover from or charge to Clients, as set out in the Fee Schedule; 7.3 impose and vary volume limits on contracts and trades which are or may be made using the MahiFX Services. 8. Payments generally 8.1 You may deposit funds into your Trading Account at any time. Deposits will only be accepted by a payment method (e.g. bank account, e-wallets etc.) in the same name as yours. Under no circumstances will MahiFX accept any payments from a third party. 8.2 If MahiFX is not satisfied that you are the sender of the funds, it reserves the right to reject the funds and return them to the remitter net of any transfer fees or other charges. You may be required to submit additional documentation as required by AML and any other similar regulations applicable to us. MahiFX-PDS&FSG-Version August 2013 Page 41

42 8.3 If you make a deposit into your Trading Account using a credit card, then you acknowledge and agree that: you may only use the amount of that deposit to enter into a contract or trade once payment has cleared; for 8 weeks following deposit of that amount, you may only withdraw the amount of that deposit by making a withdrawal request to return that money (net of fees or the contract or trade price, and Margin Amount, in relation to any contracts or trades you have entered into since the time of that deposit) to that credit card; only after that 8 week period elapses, and provided that MahiFX has received no notice of any issues in respect of the relevant credit card, will MahiFX treat that credit card as verified thereby enabling you to withdraw any funds from your Trading Account to that credit card; if MahiFX receives any notice of any issues in respect of the relevant credit card then, until the issue is resolved to MahiFX's satisfaction: (a) (b) you may not withdraw the amount of any deposit received from that credit card (Disputed Amount), nor use any part of such amount to enter into any contract or trade; MahiFX will not take any Disputed Amount into account in its calculation of a Client's NAV, and MahiFX may exercise any of its rights under these Terms which arise out of or relate to the Disputed Amount, including closing out any of your open contracts or trades on account of the Client's NAV being less than MahiFX requires. 8.4 MahiFX is not obliged to pay you interest on any funds held by us on your behalf: you waive any entitlement to interest on moneys you deposit with us. 8.5 If you instruct MahiFX to withdraw funds from your Trading Account, then we will reduce your Trading Account balance by the amount of the withdrawal amount immediately, and will process the specified request within 5 Business Days once we accept your instruction and provided that the following requirements are met: the instruction includes all necessary information; the instruction is to make a payment through a payment method in your name (e.g. bank account or e-wallet etc); and you have provided full identification documents to support your instruction. 8.6 If we accept any payments to be made by a debit card, credit card or any other payment method that may charge processing fees, we reserve the right to levy a transfer charge on you. You also indemnify MahiFX in respect of any Loss or Claim it may suffer or incur if any such payment is cancelled or rejected. 8.7 If you make a payment to your Trading Account, MahiFX will credit it with the amount of that payment less any relevant fee or charge (determined in accordance with the Fee Schedule), if MahiFX is satisfied that you (and no third party) sent the funds. Credit in your Trading Account will be denominated only in your Base Currency. 8.8 We reserve the right, without prior notice to you, to make any currency conversions which we consider necessary or desirable for the purposes of complying with our MahiFX-PDS&FSG-Version August 2013 Page 42

43 obligations or exercising our rights under these Terms or in respect of any transaction. We may effect these conversions in such manner and at such rates as we see fit, having regard to the prevailing rates for freely convertible currencies. 8.9 You acknowledge and agree that you bear all foreign currency exchange risk arising from any contract or trade or from the compliance by us with our obligations or the exercise by us of our rights under these Terms If a Client and its Client Associates have more than one Trading Account, then we reserve the right to treat all such Trading Accounts as if they were under one account (of such of those Clients as MahiFX determines) and to limit the number of Trading Accounts maintained by a Client and its Client Associates When a withdrawal is performed, MahiFX reserves the rights to refund Clients via any of the payment methods a Client used when it initially funded its Trading Account. MahiFX makes all withdrawal payments to the Client and not to any third party MahiFX reserves the right to impose withdrawal limits and withdrawal fees in its system Where possible, MahiFX pays withdrawal amounts through the original payment method that you used to deposit the money, subject to the terms of our Provider Contracts. If we are unable to send any or all of the funds back to you using the original payment method, then we reserve the right to pay the amount through an alternative payment method indicated by you in your Base Currency (regardless of the currency in which the deposit was made). MahiFX is not responsible for any transfer fees or charges charged by the receiver and/or any currency exchange rates resulting from the payment of such amount in your Base Currency Upon submitting a withdrawal request, MahiFX may at its discretion require you to submit documentation as required by AML. 9. Fees for dormant Trading Accounts 9.1 In the event that your Trading Account is not accessed for a period of at least six months, we will regard your account to be dormant. 9.2 MahiFX may deduct a monthly fee of up to the amount which is the lower of AUD$5 (or the equivalent in another currency) or 10% of the funds in your dormant Trading Account (Monthly Fee) on the date that it became dormant commencing from the last day of the sixth month in which the Trading Account was not accessed, and on the last day of every month, until the balance of the Trading Account has reached zero. In the event that you log on to your Trading Account during a ten-month period during which the Monthly Fee is being applied, and before the balance of the Trading Account reaches zero, MahiFX will cease to deduct the fee but will not refund any deducted fees. 9.3 MahiFX may close any dormant Trading Account with a zero balance. 10. No manual instructions You acknowledge and agree that: 10.1 MahiFX does not represent or warrant that the MahiFX Services include the capacity to take or execute instructions or orders manually or over the phone; MahiFX-PDS&FSG-Version August 2013 Page 43

44 10.2 If at any time MahiFX elects to make that facility available, then it may withdraw it at any time; and 10.3 All such instructions or orders must be made, and will be processed, through the electronic online MahiFX Platform or MT4 Platform which forms part of the MahiFX Services. 11. Accountability for financial transactions 11.1 By using MahiFX Services, you agree to be fully, solely and personally liable for each contract or trade and/or credit card transaction made using the MahiFX Services through your Trading Accounts You acknowledge and agree that you are fully, solely and personally liable for, and indemnify MahiFX in respect of, all fees, costs and Losses, including trading losses, associated with each contract or trade you enter into, and that your liability is unaffected by any Margin Amount MahiFX may hold in respect of contracts or trade You must make sure that you are the only person with access to your Trading Account at all times and that no minors have access to your Trading Account You acknowledge and agree that we are not liable for: Any unauthorised real money transactions associated with your Trading Account; or Any unauthorised real money transactions conducted by minors in respect of your Trading Account If you do not settle a contract or trade performed through your Trading Account, you are liable to MahiFX and you must indemnify us in the amount necessary to cover any Loss or Claim associated with the transaction If a contract or trade is entered to acquire or sell currency at a price that does not reflect the market price (such as an event where a technical error such as a bug or defect has caused a malfunction that has affected the price of the transaction), we may terminate and cancel any such contract or trade. We will notify you of our decision to cancel the contract or trade and explain our reasons to you You agree to inform us of any such malfunction should you experience such a malfunction whilst trading on our system. 12. Margins 12.1 When you instruct MahiFX in respect of a contract or trade, then MahiFX may transfer from your Trading Account to a MahiFX Bank Account: all moneys required to execute the contract or trade; and the Margin Amount Concerning the Margin Amount: MahiFX will be entitled to transfer the Margin Amount into the MahiFX Bank Account; MahiFX-PDS&FSG-Version August 2013 Page 44

45 If MahiFX does not transfer any or all of the Margin Amount from your Trading Account to the MahiFX Bank Account immediately after you instruct MahiFX in respect of a contract or trade, then: (a) (b) MahiFX will be beneficially entitled to that part of the Margin Amount which remains in the Trading Account until such time as it transfers that amount to the MahiFX Bank Account; and it may transfer any or all of the Margin Amount which is in the Trading Account at any relevant time afterwards (in any number of transfers); MahiFX may pledge, appropriate or use some or all of the Margin Amount which is in the MahiFX Bank Account, including by: (a) (b) transferring that Margin Amount from the MahiFX Bank Account to a third party; or using that Margin Amount as its own collateral, in respect of any trade or contract or arrangement which MahiFX enters or has entered into with a third party or counterparty which relates in any way to the trade or contract which you have entered into with MahiFX You acknowledge and agree that MahiFX may establish automated processes by which funds are deducted from your Trading Account, and deposited to the MahiFX Bank Account, to maintain the required margin in respect of your open positions, and in any event may appropriate additional funds from your Trading Account at any time to maintain your required Margin Amount in the MahiFX Bank Accounts If either: your Client NAV means that MahiFX holds 50% or less of the required Margin Amount at any time; or your Margin Amount is less than 100% of the required Margin Amount for 5 days or more, then MahiFX may close all or some contracts or trades which are open on your Trading Account as it sees fit, at market rates and to the extent it deems necessary You acknowledge and agree that MahiFX will settle the required Margin Amount between your Trading Account and the MahiFX Bank Account at such intervals as it determines. 13. Change of payment arrangements You acknowledge and agree that if you change any of your Trading Account details, including any associated credit card or bank account details, then MahiFX will require information from you to verify those changes, to satisfy its obligations under AML. MahiFX-PDS&FSG-Version August 2013 Page 45

46 Part 4 Intellectual property 14. Licence from MahiFX to Client 14.1 MahiFX grants each Client a personal licence that is non-transferable, nonexclusive and fully revocable to use the MahiFX Services (including the use of the website and any associated downloadable software), subject in all instances to the provisions of these Terms You agree and acknowledge that the document entitled 'End User License Agreement' of MahiFX Limited, which governs downloading any software from the Website and is available from the Website, forms part of these Terms. 15. Intellectual Property - General 15.1 You acknowledge that all Intellectual Property of MahiFX associated with the MahiFX Services is the sole property of MahiFX You agree that: you will not use our downloadable software which is beyond the scope of the limited licence granted under clause 14, nor in any manner not absolutely required to enable you to use the MahiFX Services; nothing contained on the Website may be construed as granting, by implication or otherwise, any licence or right to use our Intellectual Property without our written permission Except as expressly provided by these Terms, you may not without our prior written permission, alter, modify, reproduce, distribute or commercially exploit our Intellectual Property. 16. Copyright 16.1 Copyright in the Website (including text, graphics, logos, icons, sound recordings and software), and in any way relating to the MahiFX Services, is owned or licensed by us. Other than for the purposes of, and subject to the conditions prescribed under, the Copyright Act 1968 (Cth), the Copyright Act 1994 (NZ) and similar legislation which applies in your location, and except as expressly authorised by these Terms, you may not in any form or by any means without our prior written permission: adapt, reproduce, store, distribute, print, display, perform, publish or create derivative works from any part of the Website or any other copyright material; or commercialise any information, products or services obtained from any part of the Website or other copyright material. 17. Trade marks 17.1 Except where otherwise specified, any word or device to which is attached the or symbol is a registered trade mark If you use any of our trade marks in reference to our activities, products or services, you must include a statement attributing that trade mark to us. You must not use any of our trademarks: MahiFX-PDS&FSG-Version August 2013 Page 46

47 in or as the whole or part of your own trademarks; in connection with activities, products or services which are not ours; in a manner which may be confusing, misleading or deceptive; or in a manner that disparages us or the MahiFX Services (including the Website). Part 5 - Service availability, website and data 18. Restrictions on availability of MahiFX Services 18.1 You cannot use the MahiFX Services if: you are a resident of the United States of America or any other Prohibited Territory; you are less than 18 years old; you are under a legal disability; or you have suffered an Insolvency Event From when you first access the MahiFX Services, and at all times thereafter, you represent and warrant that you are not prevented from using the MahiFX Services on any of the grounds stated in clause In the event of your death, MahiFX agrees only to deal with your legal personal representative on being satisfied that he or she has been duly appointed to administer your estate Without limiting any other provision of these Terms, you agree that MahiFX operates solely in Australia and New Zealand and not in any other jurisdiction. If you access the MahiFX Services from other jurisdictions then you do so entirely at your own risk and are responsible for ensuring any use you make of the MahiFX Services is legal in your own jurisdiction. You represent and warrant that you have verified and determined that your use of the MahiFX Services does not violate any laws of your jurisdiction and you indemnify MahiFX in respect of your use of the MahiFX Services. 19. Suspension and Termination of MahiFX Services 19.1 MahiFX may suspend access to or terminate access to the MahiFX Services if you breach these Terms, including on the basis that you do not provide information to MahiFX which MahiFX requested from you MahiFX may suspend access to the MahiFX Services if it suspects that you have breached or intend to breach these Terms for such time as it considers appropriate (acting reasonably) while it investigates all circumstances concerning your compliance or non-compliance with these Terms. 20. Linked web sites 20.1 The Website may contain links to other websites (linked websites). Those links are provided for convenience only and may not remain current or be maintained. MahiFX-PDS&FSG-Version August 2013 Page 47

48 20.2 We are not responsible for the content or privacy practices associated with linked websites Our links with linked websites should not be construed as an endorsement, approval or recommendation by us of the owners or operators of those linked websites, or of any information, graphics, materials, products or services referred to or contained on those linked websites, unless and to the extent stipulated to the contrary. 21. Client Content and Personal Data 21.1 You acknowledge and agree that your Client Content, other than information which is capable of identifying you (not including any online pseudonym you use): is non-confidential and non-proprietary information; and is licensed by you to MahiFX to use in its discretion, and that licence is non-exclusive, irrevocable, transferable, sub-licensable, royalty-free and worldwide, to use, copy, duplicate store, present and/or publish without any attribution or royalties or other compensation to you You acknowledge and agree that your Client Content is stored by us, including with third parties in some cases on remote servers which are not controlled by us You acknowledge and agree that telephone conversations, /chat communications with us may be recorded and maintained by us. Any recordings are the sole property of MahiFX and will be accepted by you as conclusive evidence of their content as recorded by us By entering into these Terms, you consent to the transmission of your personal data (i.e. your personally identifiable information and your payment details) to other companies in the MahiFX group and to external companies to help us to process and/or analyse it as part of the provision of the MahiFX Services to you. Such personal data may also be used for marketing purposes, or to conduct market research for us or other companies in our group that may use the personal data to bring to your attention products and services that may be of interest to you and also to assist in the efficient provision of the MahiFX Services. 22. Client Content and third party content 22.1 Any Client Content or other third party content placed on the Website reflects solely and exclusively the views, and are the responsibility of, those who post such content: you acknowledge and agree that they do not represent MahiFX's views You acknowledge and agree that you are solely responsible for your Client Content, including your responsibility as to its legality, reliability, appropriateness, originality and copyright You will not post any Client Content which contains viruses or other computer codes, files or programs which are designed to limit or destroy the functionality of, or spy or track, other computer software or hardware or its processes You release MahiFX from, and indemnify MahiFX in respect of, any Loss or Claim which may arise or relate to your use or reliance upon Client Content or any other third party content Concerning your Client Content, and any other person's Client Content, you acknowledge and agree that we: MahiFX-PDS&FSG-Version August 2013 Page 48

49 do not undertake to review or monitor Client Content; do not in any manner endorse, support, sanction, encourage, verify or agree with any Client Content; may review, monitor, revise and/or remove any Client Content; may report to government authorities any Content which may be considered or signal illegal activity, or which may be required by such authorities; when requested, may cooperate with government authorities in any investigation of alleged illegal activity; and may maintain records of all Client Content. Part 6 - MahiFX Content and the MahiFX Community 23. MahiFX Content 23.1 You acknowledge and agree that: we do not endorse, represent, warrant, guarantee or sponsor the accuracy, correctness, timeliness, completeness or suitability of MahiFX Content, whether provided as part of the MahiFX Community or generally as part of the MahiFX Services; no MahiFX Content is intended to constitute, or should be construed as, a solicitation or any offer to buy an interest in any security or financial product and is not financial advice or a recommendation or promotion of any transaction, other financial product, investment manager, or trading or investment strategy; you may use the MahiFX Content as you see fit, but you acknowledge and agree that you are solely responsible for how you use it; and MahiFX does not, by providing the MahiFX Content or any other aspect of the MahiFX Services, provide any advice that is personal to you and MahiFX refers you to the general financial advice warning in clauses 28.1 and You agree not to enable deep linking or any other form of redistribution or reuse of the MahiFX Content to any other person You release MahiFX from, and indemnify MahiFX in respect of, any Loss or Claim which may arise or relate to your use or reliance upon MahiFX Content. 24. Withdrawal and variation of MahiFX Content You acknowledge and agree that MahiFX: 24.1 is not obligated to continue to provide the MahiFX Content or MahiFX Community to you; 24.2 is not obliged to update the MahiFX Content; MahiFX-PDS&FSG-Version August 2013 Page 49

50 24.3 is not liable to you for the termination, interruption, delay or inaccuracy of any MahiFX Content. 25. Availability of the MahiFX Community MahiFX may make the MahiFX Community available to you, subject to these Terms. 26. Participation in the MahiFX Community 26.1 You agree as follows concerning the MahiFX Community and, to the extent relevant, the MahiFX Services generally: you acknowledge that your Client Content is and will be treated by us as non-confidential and non-proprietary and we may use such material without restriction; you assign all copyright which subsists in your Client Content to us; you will not post or transmit any material or information which is offensive, defamatory, obscene, unlawful, vulgar, harmful, threatening, discriminatory, abusive, harassing or ethnically objectionable; you agree not to disrupt the flow of dialogue or otherwise act in a manner which negatively affects or disparages MahiFX or other Clients in the MahiFX Community; you agree not to impersonate any other person; you agree to provide current, accurate and up-to-date information about yourself as required under these Terms; you agree not to post or transmit any unsolicited advertising, commercial, competitive or promotional materials; any material which you post may be removed by us from the MahiFX Community without notice at any time; you will not post or transmit any Client Content in which the copyright is owned by another person or entity and you warrant that all material posted is your original work and not sourced from any third party and any such Client Content will not violate the privacy rights, publicity rights, copyright, contract rights or any other rights of any person; you accept that any Client Content may be posted in the MahiFX Community for any other Client to read; MahiFX Content is provided in good faith; we do not warrant that we will respond to questions or comments submitted by you on the MahiFX Community; if you download any material from the Website, you acknowledge that we are not liable to you for any Loss, however caused, arising from the downloading or subsequent use of the downloaded material; you may not adapt, reproduce, store, distribute, transmit, print, display, publish or create derivative works from any downloaded material. In MahiFX-PDS&FSG-Version August 2013 Page 50

51 addition, you may not commercialise any information, products or services from the downloaded material; you will not make any statement as to your eligibility to provide financial product advice or any other financial service or other service which may require a licence or registration in any jurisdiction; you will not collect or solicit any other person's Client Content (including account details) by any method including automated means such as harvesting bots, robots, spiders, or scrapers; you will not engage in unlawful multi-level marketing, such as a pyramid scheme, using the MahiFX Community or through the MahiFX Services; and you will not do anything that could disable, overburden, or impair the proper working of the MahiFX Services. 27. Masters and leading traders MahiFX may classify you as a 'master' or 'leading trader', in which case it may impose additional Terms in relation to you. These may be specific, or part of specified promotions, and will take effect when those additional Terms are notified to you. Part 7 - General financial product advice warning 28. No advice 28.1 You acknowledge that MahiFX does not provide any advice, including financial product advice, which takes into account your objectives, financial situation or needs Any financial advice on the Website or provided by MahiFX including through the MahiFX Content, the MahiFX Community or otherwise through providing the MahiFX Services, is general only. In relation to this, you acknowledge and agree that: the advice is general and is prepared without taking into account your objectives, financial situation or needs; because of that, you should, before acting on any general advice, consider the appropriateness of the general advice, having regard to your objectives, financial situation and needs; and where relevant, you should obtain a copy of any relevant product disclosure statement (PDS) which relates to any financial product you intend to obtain and consider that PDS before making any decision about whether to acquire the financial product. Part 8 - Risk and liability 29. General Risk Statement You acknowledge and agree that: MahiFX-PDS&FSG-Version August 2013 Page 51

52 29.1 you use the MahiFX Services at your own risk; 29.2 you alone bear the loss of any money you have invested; 29.3 trading in currencies is inherently risky, including as a result of the unpredictable and volatile nature of currency valuations and prices; and 29.4 use of MahiFX Services can never be considered a safe investment, and carries with it a high risk of loss. 30. Restrictions on Financial Transactions 30.1 By using the MahiFX Services, you declare that all the funds that you use and invest through the MahiFX Services do not originate in any way from drug trafficking, abduction, terrorist activity or any other criminal activity that is unlawful or could be considered unlawful in any jurisdiction If we terminate, suspend or block your use of the MahiFX Services as a consequence of a breach or suspected breach of this clause, then you acknowledge and agree that: MahiFX is under no obligation to refund any funds that may be in your Trading Account until directed by a relevant regulatory authority. In those circumstances we may also prevent you from accessing any of the MahiFX Services; and MahiFX may inform the relevant authorities, other online service providers and banks, credit card companies, electronic payment providers or other financial institutions of your identity and of any suspected unlawful, fraudulent or improper activity and you will cooperate fully with us to investigate any such activity. 31. Additional Risk Disclosures 31.1 You acknowledge and agree that: MahiFX reserves the right to close part, or all, of a Client's open positions, in order to facilitate the charge of any fees, costs or amounts due by you. Notwithstanding, you remain liable to pay, in accordance with our Fee Schedule, all fees, costs, Losses (including trading losses) and other amounts to MahiFX even if you have had full loss of all margins deposited by you; MahiFX does not guarantee any order. Placing stops, regardless of the entry or closing designation, does not guarantee that the trade will be filled at the order price. All entry stops and stops will be filled, upon activation, at the first/best available market price that may or may not match the requested order price; In the event liquidity providers are unable to provide liquidity to us, your order may experience delays in execution or you may not be able to place orders entirely. The size of the order may also impede the speed at which the order is executed. You acknowledge and agree that it is only necessary to enter any order once and that multiple entries for the same order may inadvertently open unwanted positions; While trading through the MahiFX Services, you may encounter system errors that result from hardware and/or software failures. The result of any MahiFX-PDS&FSG-Version August 2013 Page 52

53 system failure may be that your order is either not executed according to your instructions, executed with Trading Account balance errors and discrepancies, or not executed at all. MahiFX will not be liable for, and you release MahiFX in respect of, any Claim or Loss associated with the resulting errors in Trading Account balances. MahiFX may make the necessary corrections or adjustments on the Trading Account involved; Concerning margin based contracts or trades: (a) the high level of leverage possible when conducting those transactions with respect to foreign currencies is because it is only necessary to pay relatively modest margins or guarantees in relation to the scope of the contract; and (b) accordingly, even a slight fluctuation of the market could mean substantial gains when these fluctuations are in your favour, but could also mean considerable losses if the fluctuations are to your detriment; We do not guarantee that a contract or trade you enter into will generate a return for you; At any time, market conditions might render the execution of an order, or of a limit on an order (either stop loss or take profit), at a stipulated price impossible, including on the basis of market illiquidity. Accordingly, even though the extent of the losses could be subjected to an agreed-upon limit, the risk of incurring losses could be higher, and that loss could occur in a relatively short period of time; Since MahiFX does not require you to deposit an additional guarantee with us, MahiFX may close the outstanding balances without your consent in accordance with these Terms; In volatile market conditions, foreign currencies may fluctuate rapidly to reflect unforeseeable events that cannot be controlled either by us or by you; There is a distinction between indicative prices which are displayed on charts and dealable prices which are displayed on the Website; Indicative quotes only give an indication of where the market is; Because the foreign exchange and derivatives products markets are decentralised, without a single central exchange where all transactions are conducted, each market maker may quote slightly different prices. Accordingly, any prices displayed on any chart made available by us or by a third party will only reflect "indicative" prices and not necessarily actual "dealing" prices at which trades can be executed The risk information presented here and elsewhere in these Terms does not reflect all of the risks as well as other important aspects intrinsic to foreign currency transactions. Accordingly, before starting to trade, you agree to seek appropriate financial, legal and/or taxation advice There are a series of inherent risks with the use of the mobile trading technology such as the duplication of order instructions, latency in the prices provided, and MahiFX-PDS&FSG-Version August 2013 Page 53

54 other issues that are a result of mobile connectivity. Any prices displayed on a mobile platform are solely an indication of the executable rates and may not reflect the actual executed price of the order To the extent that your use of the MahiFX Services relies upon using a public communication network, we will not be liable for any Claim or Loss you suffer or incur in consequence of a delay in price quotation or an inability to trade caused by the availability of transmission quality of that network, software or hardware problems, or any other problems outside our direct control, which include but are not limited to the strength of the mobile signal, latency, or any other issues that may arise between you and any internet service provider, phone service provider, or any other service provider You acknowledge and agree that some of the features available on our Website or on the MahiFX Community may not be available on any mobile device application we offer. 32. Risks Associated with the MahiFX Community and social trading 32.1 You acknowledge and agree that there are risks specific to the MahiFX Community, and the trading features which it contains referred to in this clause as Social Trading Features You acknowledge and agree that: MahiFX provides Social Trading Features for information purposes only; and If you make investment decisions in reliance on information which is available on the Website, or as a result of the use of the Social Trading Features, then you do so at your own risk, and you release and indemnify MahiFX in respect of any such use of the Social Trading Features Concerning any process by which you use the MahiFX Services to copy another Client's position, you acknowledge and agree that: the copied position will be copied with the same proportional amounts and with the same leverage, to the maximum extent possible; all such positions will be closed automatically if and when closed by the copied Client and/or if the copied Client's positions were automatically closed by us, for whatsoever reason, without providing any further notice and without any action on your part; you acknowledge and agree that you may bear the loss of the entire investment you made in such a copied trade and you are fully responsible for any Loss or Claim you may suffer or incur as a result of our automatic execution of instructions generated as a result of using any of the Social Trading Features; If you place additional trades in your Trading Account or you modify or cancel an order generated by a Social Trading Feature, you may achieve a materially different result than the Client that you copied Any past performance of our Clients' indicated on the Website is not indicative of future results and should be considered as hypothetical performance results. MahiFX-PDS&FSG-Version August 2013 Page 54

55 32.5 You acknowledge and agree that historical performance is not a guarantee or reliable indicator of future performance. When reviewing the Client Content, portfolio, financial performance information, opinions or advice of another Client, you should not assume that the Client is unbiased, independent or qualified to provide financial product advice or provide any other financial service. MahiFX does not endorse, support, sanction, encourage, verify or agree with any Client position you may copy Any hypothetical performance results indicated on the Website have many inherent limitations. No representation or guarantee is being made that any Client or Trading Account will or is likely to achieve profits or losses similar to those shown and may not take into account fees, spreads and/or trading commissions that may be charged. The actual percentage gains/ losses which Clients' experience will vary depending on many factors, including but not limited to: starting Trading Account balances (deposits and withdrawals); market behaviour; your Trading Account settings; and the performance of the copied Client, and, accordingly, actual percentage gains/losses experienced by Clients may be materially different from the percentage gains/ losses as presented on the Website You acknowledge that there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program You acknowledge and agree that: hypothetical performance results are generally prepared with the benefit of hindsight; and hypothetical trading does not involve financial risk, and no hypothetical trading performance can completely or accurately account for the impact of financial risk in actual trading. You acknowledge that the ability to withstand losses or to adhere to a particular trading program in spite of trading losses, are material points which can also adversely affect actual trading results. 33. Indemnification and limitation of liability 33.1 Indemnity To the full extent permissible by applicable law: (a) (b) MahiFX makes no, and hereby disclaims all, representations or warranties of any kind, express or implied, as to the availability, operation and use of the MahiFX Services, including but not limited to warranties of performance, functionality, merchantability, fitness for a particular purpose, title, non-infringement, and implied warranties arising from course of dealing or course of performance; and You release and indemnify MahiFX in respect of any Claim or Loss which may arise in consequence of your use of the MahiFX MahiFX-PDS&FSG-Version August 2013 Page 55

56 Services, including in consequence of any breach of these Terms by you The above indemnity: (a) (b) extends to Claims incurred or suffered by MahiFX's officers, employees, agents or sub-contractors; and extends to and includes all Losses incurred in defending and/or settling any Claims, including legal costs on a full indemnity (solicitor/own-client) basis Limitation of liability Nothing in these Terms is to be read as excluding, restricting or modifying the application of any legislation which by law cannot be excluded, restricted or modified Any representation, warranty, condition or undertaking which (but for this clause) would be implied in this document by law, is excluded to the fullest extent permitted by law MahiFX is not liable to you for any Claims (arising in contract, tort, statute or otherwise, or as a result of a force majeure) which may arise in consequence of, or in connection with, your use of the MahiFX Services and these Terms You indemnify and hold harmless MahiFX for all Claims (arising under contract, tort, statute or otherwise, or as a result of force majeure), which may be made against MahiFX or arise as a consequence of, or in connection with, your use of the MahiFX Services and these Terms Notwithstanding any other provision of these Terms and to the fullest extent permitted by law, MahiFX will not be liable to you for consequential, indirect or special losses or damages of any kind (including, without limitation, loss of profit, loss or corruption of data, business interruption or indirect costs) suffered by you as a result of any act or omission whatsoever of MahiFX, its officers, employees, agents or sub-contractors Where MahiFX elects to make good any Loss suffered by you, or is obliged by law to do so, then the maximum amount that will be made good for any reason is the lesser of: (a) (b) the actual sum of money that you deposited in your Trading Account for the purpose of trading that may have been the basis for any accumulated liability that you incur; and to the extent that the Loss is attributable to any act or omission on the part of our third parties under our Provider Contracts, to the amount which we recover from that service provider. 34. Set-off If you have any liability to MahiFX under these Terms, then MahiFX may set-off that liability against any liability we have to you. MahiFX-PDS&FSG-Version August 2013 Page 56

57 Part 9 - Technical requirements 35. Technical Requirements to use the MahiFX Services You acknowledge and agree that: (a) (b) you must provide and maintain adequate technical equipment and resources on which you install our software and access the MahiFX Services; and you are solely liable for the integrity and proper storage of any data associated with the MahiFX Services You represent and warrant to us that you have installed and implemented appropriate means of protection relating to the security and integrity of your technical equipment and resources and that you have taken appropriate action to protect them from computer viruses or other similar harmful or inappropriate materials, devices, information or data You acknowledge and agree that we are not liable to you, and you indemnify us in respect of: (a) (b) (c) any event by which your technical equipment and resources fail, are damaged or destroyed, or by which your records and data are deleted, changed or corrupted; any delays or Loss you suffer as a result of the configuration, use, performance or management of your technical equipment and resources; and any wrongful transmissions of computer virus or other similarly harmful or inappropriate material or device to our system from your personal computer. 36. Technical Problems and Difficulties 36.1 You acknowledge and agree that the use of the internet can at times be unreliable and at times you may experience trouble connecting You acknowledge and agree that we are not liable to you, and you indemnify us in respect of and delays or Loss arising in consequence of, any technical problems, system failures and malfunctions, communication line failures, equipment or software failures or malfunctions, system access issues, system capacity issues, high internet traffic demand, security breaches and unauthorised access, and other similar computer problems and defects You acknowledge and agree that we provide no representation, warranty or guarantee or that: you will be able to access or use the MahiFX Services at all times and from any location; or the MahiFX Services will be uninterrupted and error-free at all times. MahiFX-PDS&FSG-Version August 2013 Page 57

58 37. Disconnection Policy If you are suddenly disconnected from the MahiFX Services whilst actively trading online, we will keep your positions open until you can re-establish your connection or trading ceases. Part 10 - Trading requirements and restrictions 38. Circumvention & Reverse Engineering You must not access or attempt to gain access, reverse engineer or otherwise circumvent any security measures that we have applied in respect of the MahiFX Services. 39. Artificial Intelligence Software You must not use any software which applies any kind of artificial intelligence analysis of our system relating to the MahiFX Services. 40. Abusive trading technique 40.1 You acknowledge that internet connectivity delays and price feed errors sometimes create a situation where the prices displayed on the Website will not actually reflect the market rates You must not seek to, in any way, take advantage of any arbitrage caused by internet delays MahiFX may revoke any contract or trade that relies on price latency arbitrage opportunities, and may make necessary corrections or adjustments on the Trading Account involved If any of your Trading Accounts rely on arbitrage strategies then MahiFX may intervene in respect of that Trading Account including by making transactions on that Trading Account subject to MahiFX approval You acknowledge and agree MahiFX may resolve any dispute arising from such quoting or execution errors and its resolution will be final. 41. Measures in respect of Prohibited Trading Techniques If you breach this clause, then MahiFX may: 41.1 terminate, or suspend access to, the provision of the MahiFX Services to you including by blocking access to your Trading Accounts; 41.2 notify relevant third parties; 41.3 take such other take action as we see fit, including seizing all profits and revenues generated directly or indirectly from such technique in any affected Client accounts. Part 11 - Conflicts of Interest 41.4 You acknowledge and agree that a conflict of interests may arise when the interest of MahiFX and its associates competes or may appear to compete with your interests under these Terms. MahiFX-PDS&FSG-Version August 2013 Page 58

59 41.5 You acknowledge and agree that: we may assign or transfer the execution of your orders to another member of the MahiFX group of companies; we may execute at the same time, orders by different Clients that are opposite to one another; we may establish business, including without limitation, trading relationships with other issuers of financial products and we may have a financial interest in such products; in addition to entering into contracts and trades with Clients, MahiFX will enter into contracts, trades and arrangements with third parties and counterparties, including to manage its position, exposure and risk related to all its Clients' open contracts or trades, and in this context there may be inherent conflicts of interest; and we may compensate and/or share our revenues from your activity with our associates and/or other similar parties performing marketing activities on our behalf, as described in our Financial Services Guide. You hereby further acknowledge that we also may compensate other Clients who you have elected to follow and/or copy. Part 12 - GST and taxation 42. GST 42.1 In this clause: words and expressions that are not defined in these Terms but which have a defined meaning in the GST Law have the same meaning as in the GST Law; and GST Law has the meaning given to that term in the A New Tax System (Goods and Services Tax) Act 1999 (Cth) or the Goods and Services Tax Act 1985 (NZ), depending on where the goods and services are deemed to be supplied Except as otherwise provided by this clause, all consideration payable under these Terms in relation to any supply is exclusive of GST If GST is payable in respect of any supply made by a supplier under these Terms (GST Amount), the recipient will pay to the supplier an amount equal to the GST Amount payable on the supply Subject to clause 42.5, the recipient will pay the GST Amount at the same time and in the same manner as the consideration for the supply is to be provided under these Terms The supplier must provide a tax invoice to the recipient before the supplier will be entitled to payment of the GST Amount under clause If these Terms require a party to reimburse an expense or outgoing of another party, the amount to be paid or reimbursed by the first party will be the sum of: MahiFX-PDS&FSG-Version August 2013 Page 59

60 the amount of the expense or outgoing less any input tax credits in respect of the expense or outgoing to which the other party is entitled; and if the payment or reimbursement is subject to GST, an amount equal to that GST If an adjustment event occurs in relation to a taxable supply under these Terms: 43. Taxation the supplier must provide an adjustment note to the recipient within 7 days of becoming aware of the adjustment; and any payment necessary to give effect to the adjustment must be made within 7 days after the date of receipt of the adjustment note You acknowledge and agree that: we do not collect any taxes for any government authority in any form or manner; it is your own responsibility to calculate and pay all taxes applicable in your country of residence arising as a result of your trading activity using the MahiFX Services; and notwithstanding the above, and without derogating in any way from your sole, exclusive and personal obligation to pay taxes in your local jurisdiction, you unequivocally agree that we may deduct any taxes if we are required to do so by law, and in that event, you release and indemnify MahiFX in respect of any Claim or Loss which may arise in consequence of MahiFX acting in that way. Part 13 - Termination, General, Force Majeure, Notices & Interpretation 44. Termination 44.1 We reserve the right to terminate these Terms and all your Trading Accounts and registration (including your username and password) in the following cases: if for any reason we decide to discontinue to provide the MahiFX Services, by providing at least a 5 Business Days' notice; if we believe that you have breached these Terms, immediately without notice; if your use of the MahiFX Services has been in any way improper or breaches the spirit of these Terms immediately without notice; an Insolvency Event happens in relation to you immediately without notice; or the death of the Client, immediately without notice You may terminate these Terms and your Trading Account and registration (including your username and password) at any time by serving a written notice on MahiFX. In that case, MahiFX will terminate your Trading Account and registration within 5 Business Days, provided that you remain responsible for any activity on your MahiFX-PDS&FSG-Version August 2013 Page 60

61 Trading Account between serving your notice and the termination of your Trading Account by us If these Terms are terminated for any reason due to suspected misconduct on your part, then MahiFX reserves the right to withhold any funds in the Trading Account until the matter is resolved. Any decision made by MahiFX regarding the matter will be final. 45. General 45.1 These Terms contain the entire understanding between the parties as to the subject matter contained in it: they operate as a deed binding upon the parties. All previous agreements, representations, warranties, explanations and commitments, expressed or implied, affecting this subject matter are superseded by this document and have no effect Any reference to discretion on the part of MahiFX in these Terms is to be read as, unless stated expressly to the contrary, a reference to MahiFX's sole, absolute and unfettered discretion A single or partial exercise or waiver of a right relating to these Terms does not prevent any other exercise of that right or the exercise of any other right No party will be liable for any loss or expenses incurred by another party caused or contributed to by the waiver, exercise, attempted exercise, failure to exercise or delay in the exercise of a right A Client must not: sell, transfer, novate, delegate, assign, licence; or mortgage, charge or otherwise encumber, any right or obligation under these Terms to any person without the prior written consent of MahiFX Nothing in these Terms will be construed or deemed to constitute a partnership, joint venture or employee, employer or representative relationship between any of the parties Each indemnity in these Terms is a continuing obligation, separate and independent from the other obligations of the parties and survives termination of these Terms It is not necessary for a party to incur expense or make payment before enforcing a right of indemnity conferred by these Terms In the interpretation of these Terms, no rule of construction applies to the disadvantage of the party preparing this document on the basis that it prepared or put forward this document or any part of it. 46. Force majeure To the extent that any of the events of the force majeure specified in this clause cause a delay in the availability of the MahiFX Services, or the ability of MahiFX to provide the MahiFX Services in full, MahiFX will notify you as soon as practicable concerning: MahiFX-PDS&FSG-Version August 2013 Page 61

62 (a) (b) (c) the nature and extent of the event causing the delay; the nature and extent of the delay; and as far as possible, the likely duration of the delay This clause relates to the following events of force majeure: (a) (b) (c) (d) (e) (f) (g) (h) (i) loss or damage by fire, storm, tempest, explosion, lightning, earthquake or other act of God or civil commotion or other similar cause; war, terrorism, revolution, insurrection, riot or invasion; any other matter, cause or thing beyond the reasonable control of MahiFX; weather sufficiently inclement to prevent MahiFX from proceeding with any of its obligations; any prohibition or embargo imposed by any Act of Parliament or rule, regulation or order; the delay of any authority in giving any necessary approval or permit, beyond the control of MahiFX; any combination of workmen disputes between employers and employees or strikes or a strike or lockout affecting any of the trades employed by MahiFX in performing its obligations under these Terms; any temporary or permanent unavailability of any required material or service caused by circumstances beyond the control of MahiFX; or any proceedings taken or threatened by or any disputes with adjacent or neighbouring occupiers. 47. Notices We will use reasonable endeavours to avoid any unnecessary interruption to the MahiFX Service under these Terms in consequence of any force majeure event A notice or other communication required or permitted, under these Terms, to be served on a person must be in writing and may be served: personally on the person; by to the person's current address for service; or to the Client by notice posted on the Client's Portal Additionally, MahiFX reserves the right to communicate with you by telephone, facsimile, , through the Portal, post, newsletters issued by us and/or any other means of communication, whether such communication is personally addressed to you or generally addressed to all Clients. You acknowledge and agree that we may communicate in this way, and any information or notice provided in that way will be MahiFX-PDS&FSG-Version August 2013 Page 62

63 deemed to have been received by you and/or any transaction so executed will be deemed final and binding on your part The particulars for service of MahiFX are those set out on the website from time to time The particulars for service of a Client or Client Applicant are those set out on the relevant application form, as updated by the Client or Client Applicant by notice to MahiFX in accordance with these Terms Additionally, if the person to be served is a company, the notice or other communication may be served on it at the company s registered office Subject to clause 47.2, a notice or other communication is deemed served: if served personally or left at the person s address, upon service; if served by , subject to clause , at the time the containing the notice left the sender's system, unless the sender receives notification that the containing the notice was not received by the recipient; if served by notice posted on the Portal, at the time that notice was posted; if received after 5.00pm in the place of receipt or on a day which is not a Business Day, at 9.00am on the next Business Day. 48. Interpretation 48.1 These Terms are governed by and are to be construed in accordance with the laws of New South Wales, Australia. Each party irrevocably and unconditionally submits to the non-exclusive jurisdiction of the courts of New South Wales and waives any right to object to proceedings being brought in those courts In these Terms, a reference to: a person includes a firm, partnership, joint venture, association, corporation or other corporate body; a person includes the legal personal representatives, successors and permitted assigns of that person; and any body which no longer exists or has been reconstituted, renamed, replaced or whose powers or functions have been removed or transferred to another body or agency, is a reference to the body which most closely serves the purposes or objects of the first-mentioned body If a party consists of more than one person, these Terms bind them jointly and each of them severally In these Terms, a reference to a statute includes regulations under it and consolidations, amendments, re-enactments or replacements of any of them In these Terms: a reference to this or other document includes the document as varied or replaced regardless of any change in the identity of the parties; MahiFX-PDS&FSG-Version August 2013 Page 63

64 a reference to a clause, schedule, appendix or annexure is a reference to a clause, schedule, appendix or annexure in, or to, these Terms all of which are deemed part of these Terms; a reference to writing includes all modes of representing or reproducing words in a legible, permanent and visible form; headings and sub-headings are inserted for ease of reference only and do not affect the interpretation of these Terms; where an expression is defined, another part of speech or grammatical form of that expression has a corresponding meaning; and where the expression including or includes is used, it means 'including but not limited to' or 'including without limitation' If a provision in these Terms is held to be illegal, invalid, void, voidable or unenforceable, that provision must be read down to the extent necessary to ensure that it is not illegal, invalid, void, voidable or unenforceable If it is not possible to read down a provision as required in this clause, that provision is severable without affecting the validity or enforceability of the remaining part of that provision or the other provisions in these Terms In these Terms, a reference to '$' or 'dollars' is a reference to Australian dollars, unless expressly stated otherwise If a payment or other act is required by these Terms to be made or done on a day which is not a Business Day, the payment or act must be made or done on the next following Business Day In these Terms, a reference to: the singular includes the plural and vice versa; and a gender includes the other genders In these Terms, a reference to any property or assets of a person includes the legal and beneficial interest of that person in those assets or property, whether as owner, lessee or lessor, licensee or licensor, trustee or beneficiary or otherwise A reference to a matter being to the knowledge of a person means the matter is to the best of the knowledge and belief of the person after making proper enquiry including enquiry which a reasonable person would be prompted to make by reason of knowledge of a fact Where a party is a trustee and the party makes a covenant, agreement, undertaking representation or warranty, it will be construed to be a covenant, agreement, undertaking, representation or warranty made in its own capacity and as trustee of the relevant trust. MahiFX-PDS&FSG-Version August 2013 Page 64