PRODUCT DISCLOSURE STATEMENT BINARY OPTIONS GO MARKETS. first choice for forex

PRODUCT DISCLOSURE STATEMENT BINARY OPTIONS GO MARKETS first choice for forex

TABLE OF CONTENTS 1. IMPORTANT INFORMATION... 1 NOTES AND DISCLAIMER... 1 HOW TO CONTACT US... 1 ELECTRONIC VERSION OF THE PDS... 1 UPDATED INFORMATION... 1 TREATMENT OF OVERSEAS APPLICANTS... 1 RESTRICTIONS ON THE DISTRIBUTION OF DOCUMENTATION... 1 APPLICATIONS... 1 PRODUCTS COVERED IN THIS PDS... 2 CALL RECORDINGS... 2 2. TERMS AND CONDITIONS... 2 3. ADVICE... 2 4. SUMMARY TABLE... 2 5. KEY FEATURES OF GO MARKETS BINARY OPTIONS... 4 BINARY OPTIONS... 4 CALCULATING PROFIT AND LOSS... 5 6. BENEFITS OF TRADING GO MARKETS BINARY OPTIONS...5 7. RISKS OF TRADING BINARY OPTIONS... 6 DERIVATIVES RISK... 6 MARKET VOLATILITY... 6 FOREIGN EXCHANGE RISK... 6 GO MARKETS RISK/COUNTERPARTY RISK... 7 DEPOSIT... 7 CLIENT S MONEY... 7 CREDIT RISK... 7 POSSIBLE ILLIQUIDITY OF THE MARKET... 8 TERMINATION OF BINARY OPTIONS BEFORE THE EXPIRY TIME... 8 OPERATIONAL RISKS... 8 CONSEQUENCES OF YOUR DEFAULT... 8 OUR RIGHT TO EXERCISE CERTAIN DISCRETIONS... 8 INFORMATION WE MAKE AVAILABLE... 8 EXECUTION RISK... 8 ELECTRONIC TRADING PLATFORM RISK... 9 REGULATORY RISK... 9 NO COOLING OFF... 9 SUPERANNUATION FUNDS... 9 8. BINARY OPTION S TRANSACTION EXAMPLES... 9 GO MARKETS PTY LTD ABN 85 081 864 039 AFSL 254963 i

CALL BINARY OPTIONS... 9 PUT BINARY OPTIONS... 9 9. ASIC REGULATORY GUIDE 227 DISCLOSURE BENCHMARKS... 10 10. OPENING AN ACCOUNT... 13 11. THE BINARY OPTION S ACCOUNT... 14 WHAT IS A BINARY OPTION S ACCOUNT?... 14 HOW ARE THE FUNDS YOU DEPOSIT WITH US HELD?... 14 HOW DO YOU GET FUNDS IN AND OUT OF YOUR BINARY OPTION S ACCOUNT?... 14 DO YOU GET INTEREST ON YOUR BINARY OPTION S ACCOUNT BALANCE?... 15 12. OPERATING AN ACCOUNT... 15 HOW DO YOU OPEN A BINARY OPTION S POSITION?... 15 ACCEPTANCE OF ORDERS... 15 HOW DO YOU CLOSE OUT A BINARY OPTION S POSITION?... 15 GO MARKETS TRADER PLATFORMS... 15 13. DEPOSIT REQUIREMENTS... 16 WHAT IS DEPOSIT?...16 INITIAL DEPOSIT...16 YOU ARE RESPONSIBLE FOR SATISFYING THE DEPOSIT REQUIREMENTS...16 14. FEES AND OTHER COSTS... 16 ASSOCIATED FEES...16 CURRENCY CONVERSION CALCULATION FEE...16 DEPOSIT... 17 INTEREST ON ACCOUNT BALANCES... 17 INTERNATIONAL TRANSFER FEES... 17 OTHER FEES AND COSTS... 17 15. TAXATION... 17 TAXATION ADVICE... 17 16. DISCLOSURE OF INTEREST... 18 17. PRIVACY POLICY... 18 18. DISPUTE RESOLUTION... 18 FINANCIAL OMBUDSMAN SERVICE CONTACT DETAILS ( FOS )...19 19. ANTI-MONEY LAUNDERING AND COUNTER-TERRORISM FINANCING... 19 20. CLIENT AGREEMENT... 19 GLOSSARY... 20 GO MARKETS PTY LTD ABN 85 081 864 039 AFSL 254963 ii

1. IMPORTANT INFORMATION NOTES AND DISCLAIMER Terms used in this Document have defined meanings and you should refer to Glossary in the last section of this document. This Product Disclosure Statement ( PDS ) is dated 15th of May of 2014 and was prepared by GO Markets Pty Ltd. All the financial services mentioned in this Document are provided by GO Markets Pty Ltd ABN 85 081 864 039 ( GO Markets, GO, we or us ) unless stated otherwise. The purpose of this Document is to help you decide whether Binary Options are appropriate for your financial objectives, situation and needs. It has not been prepared to take into consideration your current financial needs or objectives. This PDS does not constitute a recommendation, advice or opinion. It is general information only. Binary Option products are considered speculative products which carry significantly greater risks than non-geared investments, such as shares. You should not invest in Binary Option products unless you properly understand the nature of Binary Option products, and are comfortable with the attendant risks. You should obtain financial, legal, taxation and other professional advice prior to entering into a Binary Option transaction to ensure this is appropriate for your objectives, needs and circumstances. The taxation consequences of Binary Option transactions can be complex and will differ for each individual s financial circumstances, and your tax adviser should be consulted prior to entering into a Binary Option transaction. GO Markets also recommends that you seek independent advice to ensure this is appropriate for your particular financial objectives, needs and circumstances. No aspect of this product has been endorsed or approved by the Australian Securities and Investments Commission ( ASIC ) or any party or market referred to in this PDS. This PDS has not been lodged with ASIC and is not required by the Corporations Act to be lodged with ASIC. ASIC takes no responsibility for the contents of this PDS. Nothing in this PDS should be considered as a recommendation to trade in Binary Options or any other particular product in any way. GO Markets does not guarantee the investment performance of Binary Option products or the investment performance of the underlying markets or instruments. Note that past performance is no indication or guarantee of future performance. Use of examples in this PDS are provided for illustrative purposes only and do not necessarily reflect our actions or determinations or an investor s personal circumstances. HOW TO CONTACT US Name: GO Markets Pty Ltd AFSL/ABN: 254963/85 081 864 039 Address: Level 50 120 Collins Street Melbourne VIC 3000 Phone: +61 3 8566 7680 Fax: +61 3 9225 5067 E-mail: Website: support@gomarkets.com.au www.gomarketsaus.com ELECTRONIC VERSION OF THE PDS This PDS documentation is available on the internet at www.gomarketsaus.com in electronic format. Any person receiving this documentation electronically who requests a paper copy will be sent documentation to include account opening forms and the Financial Services Guide ( FSG ) from GO Markets. UPDATED INFORMATION All clients shall be bound by the contents of this PDS. Information which is not materially adverse to Investors may be subject to change from time to time and will be updated on GO Markets website at www.gomarketsaus.com. If you require a paper copy of any updated information, please contact GO Markets. GO Markets may issue a supplementary or replacement PDS as a result of certain changes, which shall be available on our website or shall be distributed in electronic form as required. TREATMENT OF OVERSEAS APPLICANTS This PDS does not constitute an offer or invitation in any place outside Australia where, or to any person to whom it would be unlawful to make such an offer or invitation. The distribution of this PDS (electronically or otherwise) in any jurisdiction outside Australia may be restricted by law and persons who come into possession of this PDS should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable law. The offer to which this PDS relates is available to persons receiving the PDS (electronically or otherwise) in Australia, who are Australian residents and who provide an Australian address for service when making their application. Application forms which do not specify an Australian address for service (or which are accompanied by payment drawn from a foreign bank account) may be rejected and returned. RESTRICTIONS ON THE DISTRIBUTION OF DOCUMENTATION Distribution of this PDS outside Australia may be restricted by law. This PDS is not intended to, and does not constitute an offer of securities or recommendation to trade in Binary Option products at any place which, or to any person to whom, the making of such offer would not be lawful under the laws of that jurisdiction. APPLICATIONS If you wish to apply for a Binary Option s account in paper form, you must complete and return the GO Markets application form agreeing to be bound by the contents of this PDS, the Client Agreement, the Terms and Conditions and the FSG. If an electronic Binary Option s application is completed, GO MARKETS PTY LTD ABN 85 081 864 039 AFSL 254963 PAGE 1

you will need to electronically agree that you have read and understood the Client Agreement, the Terms and Conditions, the FSG and this PDS. When applying for a Binary Option s account you agree to be bound by the contents within this PDS. PRODUCTS COVERED IN THIS PDS This is a PDS for derivatives and Binary Option products provided by GO Markets. These are over-the-counter ( OTC ) options that pay a pre-determined, fixed amount, depending on whether or not a financial event occurs by a certain time. Binary Options can have only one of two possible outcomes and allow you to take a simple Yes or No approach. For example, will the AUD/USD finish above the current price at the end of the hour? If the answer is Yes, the Binary Option settles in-the-money. If the answer is No, the Binary Option settles out-of-the-money. GO Markets products do not result in the physical delivery of the underlying instrument/market. All of the Binary Option products are cash adjusted or Closed Out by the client i.e. there is not a physical exchange of one product for another. CALL RECORDINGS Please note that your call may be recorded for training and monitoring purposes. Any advice provided to you by our representative is general advice only, and does not take into account your objectives, financial situation or needs. 2. TERMS AND CONDITIONS Information provided to you in our Financial Services Guide ( FSG ) and this PDS is important and is binding on you. Additional legal terms governing our relationship are detailed in the Client Agreement. If you are applying online you must complete the application in its entirety and then electronically submit the application to GO Markets for processing. If you complete a hardcopy application you must complete the application in its entirety, sign and return the application form via e-mail, fax or by post, and then have your Account approved by GO Markets. Please note that GO Markets reserves the right to refuse to open a Binary Option s Account for any person. We also reserve the right to suspend or terminate your binary trades at any point in time without notice. GO Markets may take any action we deem reasonable to recoup losses incurred as a result of toxic trading with the use of electronic algorithmic trading systems or any other means utilised to exploit technical deficiencies or palpable errors. GO Markets does not guarantee the performance, return of capital from, or any particular rate of return, of a Binary Option product or transaction. Clients should only invest in risk capital (that is, capital you can afford to lose). Please note that the historical financial performance of any Binary Option or underlying instrument/market is no guarantee or indicator of future performance. Please also note that the examples provided in this PDS are only provided for illustrative purposes only and do not necessarily reflect current or future market or product movements, the values that GO Markets will apply to a trade, nor how such trades impact your personal circumstances. The figures used in the examples do not necessarily reflect your personal circumstances and do not restrict in any manner the way in which GO Markets may exercise its powers or discretions. Those examples do not constitute general or personal financial product advice to any person reading this PDS. GO Markets only accepts Binary Options order instructions via the electronic trading platform and will not accept order instructions via any other means. You are required to access the electronic trading platform on a daily basis to confirm that any order instructions have in fact been received by us, re-confirm all orders that you place with us, review order confirmations we provide, to ensure their accuracy, and monitor your deposit obligations. Any order discrepancies identified must be reported to us immediately. GO Markets will provide all clients, via the electronic trading platform or the website, with access to both daily and historical account statements allowing you to check your open positions, deposit requirements and cash balances, and trading confirmations. Should you have any queries relating to your statements we encourage you to contact us. 3. ADVICE GO Markets is authorised to buy and sell Binary Option products and to give advice in relation thereto. It should also be noted that we only provide you with GENERAL ADVICE, which does not take into account your particular needs, objectives and circumstances. No personal advice will be provided to any client under any circumstances. This PDS does not take into account your investment objectives, financial situation or needs. Accordingly, nothing in this PDS should be construed as a recommendation by us or any other person to invest in Binary Options, or any other financial product. You are responsible for the selection of the Binary Option you transact with us. We make no representation about the performance of any Binary Option. The performance of the Binary Option will depend on the investment decisions made by you. 4. SUMMARY TABLE On the next page, you will find the summary of the key features and characteristics involved in dealing in our Binary Options. In addition to this summary, you should also ensure that you have read and understood the content of this PDS, the Client Agreement and our FSG. GO MARKETS PTY LTD ABN 85 081 864 039 AFSL 254963 PAGE 2

ISSUE Who is the issuer of this PDS and the Binary Options? What financial products do we provide? What are Binary Options? What is a Position? A Binary Option is issued overthe-counter. What does this mean? What charges are payable when dealing in Binary Options? How do I open an Account? What is the minimum balance to open a live trading account? How do you deal in Binary Options with us? What are Call and Put Binary Options? How do I close-out a position? How do we deal with your money? What is my Total Equity? What is my Free Equity? What is Deposit? SUMMARY GO Markets is both the issuer of this PDS and the provider of Binary Options. Binary Options. Binary Options are over-the-counter ( OTC ) options that pay a pre-determined, fixed amount, depending on whether or not a financial event occurs by a certain time. Binary Options can only have one of two simple possible outcomes, Yes or No. A Binary Option (also known as a Digital Option or All-or-Nothing Option ) is termed a Derivative, which is a financial instrument whose value, or price, is derived from an Underlying Market. It is in effect a synthetic instrument completely constructed to obtain value from movements in a financial market. Binary Options give the Holder the right to profit from moves in the Underlying Market. A Position is a Binary Option entered into by you under the Client Agreement. Over-the-Counter ( OTC ) means that you do not trade in Binary Options through an exchange or market; rather, it is a transaction between you and us. This means you can only enter into transactions in relation to our products with us. You therefore do not have the protections normally associated with trading on a regulated market. It is not possible to close a Binary Option by giving instructions to another provider, broker or Australian financial services licensee. The fees associated with Binary Options are the price of the Binary Option itself. You will not be charged a fee or commission when you acquire any Binary Option product. GO Markets reserves the right to pass on, if any, administration charges such as (but not limited to) credit card merchant fees and bank wire transfer fees. You need to read this PDS, the Client Agreement and our FSG, and then complete an Application Form. You may obtain these documents by: telephoning us on +61 8566 7680, or going to our website at www.gomarketsaus.com. The minimum balance to open a Live Account is AUD$500 (or trading account currency equivalent). Unless otherwise specified, all dollar amounts referred to in this PDS are denominated in Australian Dollars. You may place orders to deal in Binary Options ONLY through GO Markets Trading Platform, from a computer connected to the internet or from your mobile telephone. It should be noted that GO Markets does not accept orders or instructions from you through any other means, such as e-mail or telephone, unless we have previously agreed with you to do so. It is possible for a third party to place orders on your behalf provided that a written Power of Attorney form or authority has been received and accepted by us. A Call Binary Option is a Binary Option that yields a profit for the buyer when the price of the Underlying Market (the Strike Price ) at the Expiry Time is HIGHER than the Expiry Price. Call Binary Options are for those clients who are bullish, and wish for the Underlying Market to up. A Put Binary Option is a Binary Option that yields a profit to the buyer when the price of the Underlying Market (the Strike Price ) at the Expiry Time is LOWER than the Expiry Price. Put Binary Options are for those clients who are bearish, and wish for the Underlying Market to go down. Binary Options are automatically closed out upon expiring. At no point during the duration of the trade can the Binary Option positions be closed manually. Money which you deposit with us will be regulated in accordance with the requirements of the Corporations Act. Your Total Equity is the aggregate of: the current cash balance in your Account; and your current unrealised profits and losses. Your Free Equity is your Total Equity LESS your current Total Deposit Requirement. The Free Equity is the amount that you may withdraw from your Account or use to cover additional deposit requirements. Deposit is initially the amount that you must have in your Account to enter into a Binary Option transaction with us. GO MARKETS PTY LTD ABN 85 081 864 039 AFSL 254963 PAGE 3

How are payments made in and out of my Account? Do I receive interest on moneys held in my Account or pay interest on moneys I owe to you? Are there any Financing or Swap Charges or Benefits? What are the key benefits of Binary Options? What are the risks of Binary Options? What procedures are in place to deal with your complaints or concerns? What are the taxation implications of entering into Binary Options? What are your trading and office hours? What if I need further information? What additional fees and charges are payable in respect of Binary Options? The level of deposit required to open and maintain a position is called the Initial Deposit Requirement. The sum of your deposit requirements for all of your open Positions is called the Total Deposit Requirement. You may deposit funds by PayPal, credit card, electronic transfer, B-Pay or by cheque. All funds must be Cleared Funds in your Account before they are made available for you to use in dealing in Binary Options. Payments using B-Pay are not Cleared Funds in your Account at the time of use of B-Pay. Generally, cleared funds are received in your Account 24 hours after the use of B-Pay. We will pay you through electronic transfer or cheque. GO Markets DOES NOT pay interest on credit balances in currency ledgers on your Account. However, we will charge interest on any debit balances in a currency ledger on your Account. Any amounts of interest payable to us will be deducted from any amounts payable by us to you. There are no charges or benefits associated with Binary Options. Some of the key benefits for Binary Options offered by us in this PDS are set out in Section 6. Binary Options are derivative products which are speculative, and carry significantly greater risks than non-geared investments, such as shares. You may incur losses to the extent of your total exposure to us and any additional fees and charges that apply. You should therefore obtain your own independent financial, legal, taxation and other professional advice as to whether Binary Options are an appropriate investment for you. More information about the risks of trading Binary Options is set out in Section 7. GO Markets Pty Ltd has an internal dispute resolution process in place for clients and we are also a member of the Financial Ombudsman Scheme ( FOS ), an external complaints resolution body. If you wish to make a complaint please see Section 18 for more detailed information. The taxation consequences of Binary Option transactions depend on your personal circumstances. Some general taxation consequences are set out in Section 15. The taxation consequences can be complex and will differ for each individual s financial circumstances. We recommend that you obtain independent taxation and accounting advice in relation to the impact of Binary Option transactions and products on your particular financial situation. GO Markets Trading Hours Trading hours for Binary Options will depend on the relevant Underlying Instrument Market s hours of operation, and are set out on our website. GO Markets Office Hours Our office hours are from Monday to Friday, 7:00am to 7:00pm AEST/AEDT, subject to public holidays. You should speak to your financial advisor, or, alternatively, you can contact us by: Phone: +61 3 8566 7680 Email: support@gomarkets.com.au Website: www.gomarketsaus.com Whilst we endeavour to include all fees and charges, in some circumstances you may incur fees and charges which are set out in this PDS. Please see Section 14 for more detailed information. 5. KEY FEATURES OF GO MARKETS BINARY OPTIONS BINARY OPTIONS Binary Options are over-the-counter ( OTC ) derivatives that pay a pre-determined, fixed amount, depending on whether or not a financial event occurs by a certain time. Binary Options can only have one of two possible outcomes and allow you to take a simple Yes or No approach. A Binary Option is termed a Derivative, which is a financial instrument whose value, or price, is derived from an Underlying Market. Examples of Underlying Markets are gold, silver, currencies, securities, indices, etc. It is fundamentally any instrument that is tradable. In effect, Binary Options are synthetic instruments completely constructed to obtain value from movements in a financial market. Binary Options give investors the right to profit from moves in the Underlying Market. A Call Binary Option enables investors to profit from an Underlying Market that is going up. It yields a profit for the investor when the price of the Underlying Market (the Strike Price ) at the Expiry Time is higher than the Expiry Price. GO MARKETS PTY LTD ABN 85 081 864 039 AFSL 254963 PAGE 4

A Put Binary Option, conversely, enables investors to profit from a downward movement of the Underlying Market. It yields a profit to the investor when the price of the Underlying Market (the Strike Price ) at the Expiry Time is lower than the Expiry Price. Binary Options do not require the physical exchange of one product for another. Binary Options will always be cash settled and the Binary Options Account will be credited or debited according to the profit or loss of the trade you place. Binary Options may be settled in either American style or European Style. American Options can be exercised at any time up to and including the Expiry Time. European Options can be exercised ONLY on the Expiry Time, not before. Investors who trade in Binary Options may do so for a variety of reasons, two of which are: Speculation An attempt to profit from fluctuations in the price or value of the Underlying Market; Hedging An attempt to hedge exposure of a current holding in an Underlying Market. GO Markets offers Binary Options to customers on individual shares, stock indices, currencies, commodities and other Binary Option products as may be notified from time to time. How Binary Option transaction works is illustrated in examples in Section 8. The Binary Option is a contract between you and GO Markets Pty Ltd, which means you and GO Markets Pty Ltd will act as principals to the transaction and have a direct credit exposure to each other. You do not trade through an exchange and are not afforded the protections normally associated with exchange-traded Derivatives, such as guarantee agreements. CALCULATING PROFIT AND LOSS The potential profit or return that a Binary Option offers is certain and known before the purchase is made. As the product is binary in nature, there can only be two possible outcomes, a Fixed amount or Nothing at All. When trading a Binary Option, your risk is limited to the value you place in the Investment tab. In essence, a Payout figure will be displayed after you have defined your initial investment. Payout means the total monetary profit return. This is a sum of your initial investment and the Specific Percentage, which is based on your initial investment and is pre-determined by GO Markets, and may differ according to the time to expiry. Below is the summary of GO Markets current payout rates in accordance with each time frame in normal market conditions. These rates may be reduced during periods of low volatility, but the rates will always be displayed before you enter your trade. Please also note that the payout rates are subject to change (with or without notice) at any time. TIME EXPIRY PAYOUT RATE 60 seconds 80% 5 minutes 75% 10 minutes 75% 15 minutes 75% 30 minutes 70% 45 minutes 70% 1 hour 70% 6. BENEFITS OF TRADING GO MARKETS BINARY OPTIONS Options and Derivatives in general can be complex and primarily geared towards professional and institutional investors. Binary Options are much more transparent and easy to understand than traditional options and derivatives since you are speculating on a simple probability of directional movement. There are significant benefits associated with trading GO Markets Binary Options including, but not limited to: 1. Limitation of Loss The maximum loss you may suffer from trading Binary Options is capped at the initial amount of money you invested. There is no possibility of you losing more than your initial investment in the purchase of a Binary Option. The level of risk associated with trading Binary Options is thus, always certain, in contrast to CFDs, Futures, other type of options or derivatives where losses can increase exponentially. In Binary Options, there are no margin calls therefore you will not need to worry about stop losses that are normally associated with when you re trading other leveraged financial products such as Margin FX or CFDs. 2. Hedging You can use Binary Options to hedge exposure of a current holding in the Underlying Market. 3. Speculation You may use Binary Options to speculate on the price of the Underlying Market Instrument, for example a currency or commodity, without the need to buy or sell the Underlying Market Instrument itself. Unlike buying an actual commodity or currency where you expect the price to rise, with Binary Options, you are allowed to make a speculation on whether the Underlying Market price will increase or decrease in value without actually buying or selling the underlying itself. For example, you can go Long or Short by buying a Call Binary Option if you think that the Underlying Market will go up or buying a Put Binary Option if you think that it will go down. 4. Trade in Small Amounts The GO Markets system enables you to make transactions in small amounts. You can start using GO Markets account even with an opening balance as little as AUD $50. GO MARKETS PTY LTD ABN 85 081 864 039 AFSL 254963 PAGE 5

When trading in a Binary Option offered by GO Markets, you may deposit the sum that suits you, or the amount which is in line with the amount you are willing to risk. With GO Markets, you are in full control of your funds. Fundamentally, the Deposit Requirement for a Binary Option is an amount equal to your maximum loss on that Binary Option. 5. Market Positions and Strategies You can use Binary Option s trading strategies to profit from both rising and falling markets. However, given the uncertainty of market movements, there is no guaranteed that the employment of the Binary Option s trading strategies will lead to profits and from time to time, the employment of trading strategies may lead to losses. It is important to note that some trading strategies are more complex than others and may have different levels of risk associated with them. 6. Profit Potential in Flat Markets Binary Options, by their nature, have a fixed payout. Therefore, there are always trading opportunities when the markets are trading flat. 7. Access to Markets in Real Time When using GO Markets, you gain access to a trading system which is active and provides you with the opportunity to trade in real time on any global financial market which is open for trading. This gives you a unique opportunity to react instantly to breaking news that is affecting the markets. 8. Real-time Streaming Quotes and Tradable Prices The GO Markets execution system uses the latest highly sophisticated technologies in order to offer you up-tothe-minute quotes. You may check your Accounts and Positions in real-time and you may do so 24 hours a day on any global market which is open for trading and make a trade based on realtime information. Subject to satisfying the execution limits, all orders are automatically accepted without intervention from GO Markets. The execution limits are set out on our website at www.gomarketsaus.com or are available by calling us. The execution limits are subject to change at any time. 7. RISKS OF TRADING BINARY OPTIONS This section DOES NOT detail ALL risks applicable to Binary Options but rather seeks to highlight the key significant risks involved in trading in Binary Options. Binary Options are speculative in their nature and involves a high degree of risk, including the risk of losing your entire Deposit Requirement. GO Markets therefore recommends that you obtain independent professional advice and carefully consider whether Binary Options are appropriate for you in light of your knowledge, experience and financial needs and circumstances. Trading in Binary Options should not be undertaken unless you understand and are comfortable with the risks of geared investments. Accordingly, you should not rely on this PDS or use it as the sole or principal basis for your investment decision in relation to GO Markets Binary Options. DERIVATIVES RISK The risk of loss in trading derivatives can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. In considering whether to trade in Binary Options, you should be aware that you have the potential to suffer a risk of losing your entire Deposit Requirement to establish or maintain a position. MARKET VOLATILITY The Global Financial Markets are subject to many influences which may result in rapid fluctuations and reflect unforeseen events or changes in conditions with the inevitable consequence being market volatility. External market forces including, but not limited to, changing supply and demand relationships, governmental, agricultural, commercial, or trade programs and policies, as well as national and international political and economic events and the prevailing psychological characteristics of the marketplace can influence the markets and prices to change very quickly. There is a risk that you may suffer a loss as a result of the price of the underlying market moving in a direction that is not anticipated or unfavourably. Furthermore, due to the All or Nothing payout, an investment in Binary Options involves the risk of the Binary Option expiring with no value at all. Given the potential levels of volatility in prices and the financial markets, it is recommended that you closely monitor your positions with GO Markets at all times. Financial markets are highly volatile and are very difficult to predict. Due to such volatility, no such Binary Option offered by GO Markets, or any other financial services provider, may be considered as a safe trade. The Financial Markets also enter periods of low volatility during which payouts may be reduced, terminated or temporarily suspended. All derivatives involve risk and there is no trading strategy that can eliminate it. You could lose all of the Initial Deposit that you make to establish or maintain a Binary Option s position. In cases where you are speculating, we suggest that you do not risk more capital than you can afford to lose. A good general rule is never to speculate with money which, if lost, would alter your standard of living. FOREIGN EXCHANGE RISK Your profits and losses may be affected by fluctuations in the relevant foreign exchange rate between the time the order is placed and the time the Binary Option is closed out. For example, what may appear as a profit from the Binary Option position may actually constitute as a loss in the GO MARKETS PTY LTD ABN 85 081 864 039 AFSL 254963 PAGE 6

chosen base currency due to currency fluctuations. Until the foreign currency balance is converted to the base currency, fluctuations in the relevant foreign exchange rate may affect the Unrealised Profit/Loss made on the Binary Option transaction. Foreign currency markets can change rapidly. Exchange rates depend on a number of factors including, for example, interest rates, currency supply, and demand and actions of government. In some situations, exchanges of currency may be suspended. There is always operational risk associated with the currency conversion calculation process that is undertaken for Binary Options. For example, disruptions in our operational processes such as communications, computers and computer networks, or external events may lead to delays in the execution and settlement of a transaction. GO MARKETS RISK/COUNTERPARTY RISK As GO Markets is the Market Maker, i.e. the issuer of the Binary Option products described in this PDS, GO Markets Pty Ltd is the counterparty to every binary contract. You will have an exposure to GO Markets Pty Ltd in relation to each contract as is common to all OTC financial market products. You are therefore exposed to the financial and business risks, including credit risk, associated in dealing with GO Markets Pty Ltd and reliant on GO Markets ability to meet its counterparty obligations to you to settle the relevant contract. Our ability to fulfil our obligations is linked to our financial wellbeing, which is commonly referred to as Credit or Counterparty risk. You must make your own assessment of our ability to meet our obligations. GO Markets Pty Ltd has not been rated by an external credit rating agency. If we were to become insolvent, we may be unable to meet our obligations to you. GO Markets Pty Ltd may become unable to operate its Binary Options market as a result of a regulatory impediment (for example, GO Markets Pty Ltd ceasing to hold an Australian Financial Services Licence ( AFSL ) or because ASIC imposes a stop order on the PDS issued by GO Markets Pty Ltd). GO Markets Pty Ltd may also enter into arrangements with third party execution and clearing providers for the facilitation of transactions and settlements, and avail monies received for deposit requirements and settlements to such providers for this purpose. Accordingly, clients are indirectly exposed to the financial risks of our counterparties and organisations with which GO Markets Pty Ltd holds client s funds. If the financial condition of GO Markets Pty Ltd, or assets of our counterparties or the parties with which we hold client assets deteriorate, then clients could suffer loss because the return of the client capital could become difficult. In other words, in the event there is a deficit in the client money (trust) account and GO Markets Pty Ltd becomes insolvent or is otherwise unable to pay the deficiency, there is a risk that you may not receive all the money held by GO Markets Pty Ltd on your behalf in that account. You are reliant on GO Markets ability to meet its counterparty obligations to you to settle the relevant contract. GO Markets Pty Ltd may choose to limit this exposure by entering into opposite transactions as principal in the wholesale market in relation to its exposures with clients. In addition, GO Markets Pty Ltd must comply with the financial requirements imposed under its AFS Licence. If GO Markets Pty Ltd defaults on its obligations, investors may become unsecured creditors in an administration or liquidation and will not have recourse to any underlying assets in the event of GO Markets insolvency. Please contact us in writing at the address/e-mail provided herein, should you wish to obtain a free-of-charge copy of GO Markets Pty Ltd. s latest audited financial statements which may assist in your assessment of credit risk. DEPOSIT Each open Binary Option position will require you to maintain a certain amount of deposit with us. Under the Client Agreement, a failure to meet our deposit requirements is an event of default and we have the discretion to immediately refuse or to accept an order requested by you, or close out your Binary Option positions. You must therefore regularly monitor your own deposit requirements when trading Binary Options. Pease note that GO Markets reserves the sole discretion to determine how much deposit is required. CLIENT S MONEY Your funds are held in GO Markets client trust account and are comingled with the funds of all of our other clients. Subject to the Corporations Act, your funds kept in GO Markets client trust account can be used for the purposes of covering payments for other clients and meeting GO Markets margin requirements with its OTC Derivatives Providers. This means that you may potentially suffer losses as a result of default by another client where money from the client trust accounts is applied to cover that client s payment obligations. Moreover, you may not receive all the money held by GO Markets on your behalf in the client trust account if there is a deficit in the client trust account and GO Markets becomes insolvent or is otherwise unable to pay the deficiency. CREDIT RISK Binary Options are traded over-the-counter ( OTC ), which means that they are not traded via a regulated exchange or market and not covered by the protections for exchangetraded derivatives arising from any domestic or international exchange rules (such as guarantee or compensation funds). Binary Options are a transaction between you and GO Markets. Our obligations to make payments in respect of the Binary Option are considered unsecured obligations of GO Markets, which means that you are subjected to GO Markets credit risk. If we were to become insolvent, it is possible that a scenario may evolve that we would become unable to meet our financial obligations to you. Investors must do their own due diligence and make their own assessment of GO Markets ability to meet its obligations in respect to the above mentioned situation. GO MARKETS PTY LTD ABN 85 081 864 039 AFSL 254963 PAGE 7

POSSIBLE ILLIQUIDITY OF THE MARKET A Liquid market is one which generally has sufficient trading activity to satisfy both buyers and sellers. An Illiquid market, on the other hand, is generally one in which it is difficult to find bids and offers. Some commodity markets are extremely illiquid. GO Markets thus reserves the right to postpone in offering a price for a Binary Option until a more liquid market develops. TERMINATION OF BINARY OPTIONS BEFORE THE EXPIRY TIME GO Markets Binary Options are European Style Binary Options which cannot be closed out or sold prior to the Expiry Time. Therefore, you may not be allowed the flexibility to take advantage of movements in the Underlying Market and thus, take advantage of a profitable situation and close out, realising a profit prior to expiry. OPERATIONAL RISKS There are operational risks in Binary Option transactions. The operation of your Binary Option s account and the transaction of Binary Options is reliant on the continuing operation of, among other things, the GO Markets Trader platforms, our computers, the Internet, and your personal computer. Disruptions, failures or delays in any of these may lead to delays in execution and settlement of Binary Option transactions. While we will endeavour to provide you with access to trade on the GO Markets Trader platforms generally 24 hours a day, from 7:00 AM AEST, Monday, to 7:00 AM AEST, Saturday, there may be disruptions in the availability of the platforms. To the maximum extent permitted by law, no responsibility is taken for any liability incurred in connection with any disruption, failure or delay of the GO Markets Trader platforms or any related infrastructure. We have outsourced the operation of the GO Markets Trader platforms to a third party and we rely on this third party to ensure the systems are updated and maintained. CONSEQUENCES OF YOUR DEFAULT If you fail to perform any obligation under your Binary Options, we have extensive powers under our Client Agreement with you to take necessary steps to protect our position including, for example, the power to close out your Binary Option s position. Under the Client Agreement, you also indemnify us from certain losses and liabilities, including, for example, any default by you under the Client Agreement. Further, our liability to you is expressly limited. You should read the Client Agreement carefully and obtain advice to make sure you understand these matters. OUR RIGHT TO EXERCISE CERTAIN DISCRETIONS You should note that there are a number of provisions in the Client Agreement that confer discretion to us which could affect your Binary Options. These discretions include: To set the minimum deposit requirement to open a Binary Option position; and To close your Binary Option positions, limit the total value of the Binary Options that you can open, refuse an order or terminate the agreement between us if certain circumstances arise, including where we: > decide in our absolute discretion and provided that we have given you prior written notice of such decision; or > reasonably consider it necessary for the protection of our rights under the Client Agreement. You should further note that clients do not have the power to direct us in the exercise of our discretions. INFORMATION WE MAKE AVAILABLE GO Markets may make information available to you that is generated by us or obtained from third parties. This includes, but is not limited to, market information such as financial market data, quotes, news, analyst opinions and research reports, graphs or data. This market information: is not intended to be advice; is not endorsed or approved by GO Markets and we do not guarantee the accuracy, timeliness, completeness or correct sequencing of the market information; is available as a service for your own convenience only; may quickly become unreliable for various reasons including, for example, changes in market conditions or economic circumstances; and is not necessarily up to date. Except as required by law, we do not warrant any results from your use or reliance on the market information. We may discontinue offering this market information at any time without notice. EXECUTION RISK A delay in execution may occur for various reasons, such as technical issues with your internet connection to our trading servers. The GO Markets Trader Platforms may not be maintaining a constant connection with our trading servers. In those circumstances, the price offered by us may change before we receive your order. If you place an order and the price changes before the order is received, the order will be accepted by us at the new price. This means the price at which your order is accepted may be different from the price you were quoted. We cannot predict future price movements and our quotations are not a forecast of where we believe currency prices will be at a future time. GO MARKETS PTY LTD ABN 85 081 864 039 AFSL 254963 PAGE 8

ELECTRONIC TRADING PLATFORM RISK You shall be responsible for providing and maintaining the means by which to access the electronic trading platform, which may include without limitation a personal computer, a modem and telephone, or other access line. While the internet and the World Wide Web are generally reliable, technical problems or other conditions may delay or prevent access thereto. If you are unable to access the internet and thus, the electronic trading platform, it will mean you may be unable to trade in a Binary Option product offered by GO Markets when desired and you may suffer a loss as a result. Should the system be unavailable, clients may place their closing orders via telephone with a representative of GO Markets. Furthermore, in unforeseen and extreme market situations, such as an event like September 11, or a global catastrophe, GO Markets reserves the right to suspend the operation of the electronic trading platform or any part or sections of it. In such an event, GO Markets may at its sole discretion (with or without notice), close out your open contracts at prices it considers fair and reasonable at such a time. GO Markets may impose volume limits on client accounts, at its sole discretion. You should note that you do not have the power to direct us in the exercise of our discretions. Please also note that such measures would only be implemented in extreme market conditions, and such discretion only reasonably exercised in the best interests of the client. REGULATORY RISK Changes in taxation and other laws, government, fiscal, monetary and regulatory policies may have a material adverse effect on your dealings in Binary Option transactions, as may any regulatory action taken against GO Markets Pty Ltd. NO COOLING OFF There are no cooling-off arrangements for Binary Option transactions. This means that when GO Markets arranges for the execution of a Binary Option position, you do not have the right to return the product, nor request a refund of the money paid to acquire the product. SUPERANNUATION FUNDS It should be noted that complying superannuation funds are subject to numerous guidelines and restrictions in relation to their investment activities which are contained in the Superannuation Industry Supervision Act 1993, and associated regulations and regulatory guidance material. Without being an exhaustive list, following are some of the issues that should be considered by a Trustee of a complying superannuation fund: Restrictions on borrowing and charging assets and whether dealing in over-the-counter Derivative products would breach those borrowing and charging restrictions; The purpose of dealing in over-the-counter Derivative products in the context of a complying superannuation fund s investment strategy as well as the fiduciary duties and other obligations owed by Trustees of those funds; The necessity for a Trustee of a complying superannuation fund to be familiar with the risk involved in dealing in over-the-counter Derivative products and the need to have in place adequate risk management procedures to manage the risks associated in dealing in those products; and The consequences of including adverse taxation consequences if a superannuation fund fails to meet the requirements for it to continue to hold complying status. 8. BINARY OPTION S TRANSACTION EXAMPLES The examples below are for illustrative purposes only. The rates and figures quoted are hypothetical and do not represent actual rates or figures. CALL BINARY OPTIONS You are of the opinion that AUD/USD will be above 1.4060 in 60 seconds. You will attempt to benefit from this speculation by entering into an Up Binary Option with a 60 seconds Expiry Time. Assuming that your Initial Deposit investment is USD $25, you would be required to have USD $25 in equity in your Account in order to enter into this Binary Option s transaction. If you do not have the Initial Deposit Requirement, the order will not be accepted by GO Markets. Upon conclusion of the Binary Option s position, if the AUD/USD bid price (as shown in the Binary Option s ticket window) is above the opening price of 1.4060, you then make a profit. For example, if the AUD/USD rises and the AUD/USD is now quoted at 1.4065, you will make the following profit: USD $43.75 ($25 plus (75% of $25)). If, at the conclusion of the trade, the AUD/USD bid price is equivalent to the opening price of the trade, the trade is considered a draw, and the original deposit of $25 will be returned to you. However, if, at the conclusion of the trade, the AUD/USD bid price is lower than the opening price, you then lose the entire USD $25 investment. Please note that once a Binary Option s position is closed out, no further deposit is required. PUT BINARY OPTIONS You are of the opinion that AUD/USD will be below 1.4060 in 60 seconds. You will attempt to benefit from this speculation by entering into a Down Binary Option with a 60 seconds Expiry Time. Assuming that your Initial Deposit investment is USD $25, you would be required to have USD $25 in equity in your Account in order to enter into this Binary Option s transaction. If you do not have the Initial Deposit Requirement, the order will not be accepted by GO Markets. GO MARKETS PTY LTD ABN 85 081 864 039 AFSL 254963 PAGE 9

Upon conclusion of the Binary Option s position, if the AUD/USD bid price (as shown in the Binary Option s ticket window) is below the opening price of 1.4060, you then make a profit. For example, if the AUD/USD falls and the AUD/USD is now quoted at 1.3358, you will make the following profit: USD $43.75 ($25 plus (75% of $25)). If, at the conclusion of the trade, the AUD/USD bid price is equivalent to the opening price of the trade, the trade is considered a draw, and the original deposit of $25 will be returned to you. However, if, at the conclusion of the trade, the AUD/USD bid price is greater than the opening price, you then lose the entire USD $25 investment. Please note that once a Binary Option s position is closed out, no further deposit is required. 9. ASIC REGULATORY GUIDE 227 DISCLOSURE BENCHMARKS ASIC Regulatory Guide 227 requires issuers of OTC derivative products to retails investors to publish certain information addressing a range of disclosure benchmarks. These benchmarks are required to be addressed on an if not, why not basis, and are intended to assist retail investors to properly understand the complexity and risks of trading in OTC derivative products, particularly with regards to leverage (this does not apply in Binary Option s transactions). There are 7 (seven) disclosure benchmarks that GO Markets are required to address, all of which we are of the view, have been met by GO Markets compliance team, with each benchmark is addressed in the following table: BENCHMARK DESCRIPTION Client Qualification Opening Collateral HOW DOES GO MARKETS MEET THIS BENCHMARK? Due to the significant risks involved, trading in Binary Options is not suitable for all investors. GO Markets operates a client qualification policy that is intended to ensure that new Australian resident clients are adequately qualified to trade in any product offered through us. GO Markets is required to ensure a minimum level of understanding before providing any trading account to potential clients. To qualify that a potential client does understand the nature and risks of trading OTC derivative products, GO Markets requires that a client meet the following criteria: The client completes an online test and obtains a pass score of 70% or more; or Can successfully demonstrate that: 1. Has previous trading experience in financial products; 2. Has an understanding of leverage, margins and volatility; 3. Has an understanding of the trading process and relevant technology; 4. Has an ability to monitor and manage the risks of trading; and 5. Has an understanding that only risk capital should be traded GO Markets only permits clients to open an Account and trade with Cleared Funds (i.e. transfer of cash from your banking account to your trading account). Please note that an Account may be opened with a cash transfer from your bank account by PayPal, EFTPOS, BPAY, SWIFT wire, cheque or with a credit card (but only to a maximum amount of $1,000 for initial deposit from credit cards, effective from March 2012). Funds deposited with us may take up to 3 (three) business days or more to clear. It is your responsibility to ensure that the amounts transferred to our trust fund account are cleared in sufficient time to meet all the payment obligations that you have under the Client Agreement. A failure to do so could result in your orders being cancelled, your Binary Option transactions being closed out, and your Account being charged default interest. If you are not sure RELEVANT SECTIONS IN THE PDS Section 2 Terms and Conditions Section 3 Advice Section 5 Key Features of GO Markets Binary Options Section 20 Client Agreement Section 2 Terms and Conditions Section 11 The Binary Option s Account Section 12 Operating an Account Section 13 Deposit Requirements GO MARKETS PTY LTD ABN 85 081 864 039 AFSL 254963 PAGE 10