SUPPLEMENTARY PRODUCT DISCLOSURE STATEMENT This is a Supplementary Product Disclosure Statement (SPDS) prepared by Citigroup Pty Limited ( Citi ) ABN 88 004 325 080 AFSL 238098 on 1 October 2016. This SPDS supplements the Dual Currency Account Product Disclosure Statement (PDS) dated 3 March 2014 and should be read together with that PDS (including any other SPDS we have given you or may give you). INVESTMENT PRODUCTS: NOT A DEPOSIT NO BANK GUARANTEE NO GOVERNMENT GUARANTEE MAY LOSE VALUE
The purpose of this SPDS is to advise you of some changes to the PDS listed above. Summary of changes 1. The minimum amount required in order to make investment in your Dual Currency Account will change from USD 25,000 to AUD 50,000 or its equivalent in another currency, effective 1 November 2016 2. The international contact number has been updated (+61 2 8225 0615) and details for finding Citi locations have been updated, directing you to the website address Findmyciti.com/au 3. The Privacy Consents and Notifications have been updated to reflect changes to policy, in particular: collection of information about other persons, sources and destinations where your information may be disclosed and overseas recipients What are the changes? 1. Update to the Minimum Amount for investment from USD 25,000 to AUD 50,000. These changes will be effective from 1 November 2016: a. On page 1, Investment Amount third bullet point, delete USD25,000.00 and replace with AUD50,000 b. On page 4, Selecting your Investment Amount first paragraph, delete USD25,000.00 and replace with AUD50,000 c. On page 15, What is the minimum investment amount for the Dual Currency Account? first paragraph, delete USD25,000.00 and replace with AUD50,000 d. On page 21, Minimum Amount definition item 24, delete USD25,000.00 and replace with AUD50,000 2. Updates to contact details and addresses: a. On the Contents page, under important information, delete +61 8225 0615 and replace with +61 2 8225 0615 b. On page 12, first paragraph, bullet point 3, delete +61 7 3310 6015 and replace with +61 2 8225 0615 c. On page 15, How can I make an investment? first paragraph, delete +61 7 3310 6015 and replace with +61 2 8225 0615 d. On page 19, below the final paragraph, add the following text: CITIBANK LOCATIONS You can find helpful, friendly advice and electronic access to our full banking and investment services, including our currency and treasury investment solutions, at any one of our locations. To find one of these locations, simply visit findmyciti.com/au e. Delete the final Page entitled Citibank Branches 3. Updates to the Privacy Consents and Notifications: a. Delete the following sections on pages 17 and 18: i. Purposes for which we collect, use and disclose your personal information ii. Disclosures of your personal information iii. Disclosures to overseas recipients iv. Our Privacy Policy (including how to access and correct information and make a complaint) v. Your marketing communications preferences and replace with the following: Privacy Consents and Notifications We/us means Citigroup Pty Limited ( Citi ) and our related companies that assist us to provide our services, and you/ your means all customers named and other individuals (such as guarantors, directors or shareholders) connected with those customers. Purposes for which we collect, use and disclose your personal information 1) We collect, use and disclose your personal information: to provide and manage your products, accounts and services and to manage your relationship and arrangements with us; to comply with applicable laws both in Australia and overseas (for more details about relevant Australian laws please see our Privacy Policy); and for other purposes as listed in our Privacy Policy. If you do not provide us with the information we may not be able to assess your application or provide or manage the products or services that you are (or if you are not the applicant, that the applicant is seeking. 2) We usually collect your personal information directly from you. However, we may need to collect personal information about you from third parties, for example, where we need information from a third party to assist us to process your application (such as to verify information you have provided or to assess your circumstances) or to locate or communicate with you. 3) Where you have provided information about another individual, you must make them aware of that fact and the contents of this Privacy Consent and Notification, and have obtained their consent to make this disclosure to us. Disclosures of your personal information 4) We may disclose to, and obtain personal information about you from: Our affiliates and sales agents and organisations that carry out functions on our behalf including card schemes, mailing houses, data processors, researchers and collection agents; reward providers including Airline partners and their service providers; any signatory to the product for which you are applying; any broker, financial, legal or other adviser acting in connection with your product or application; regulatory and tax authorities in Australia and overseas; any insurer relating to your product; organisations wishing to acquire an interest in any part of our business; and as further set out in our Privacy Policy.
Disclosures to overseas recipients 5) Some of the recipients to whom we disclose your personal information may be based overseas. It is not practicable to list every country in which such recipients are located but it is likely that such countries will include the United States of America, India, the Philippines, Malaysia, Hong Kong and Singapore. By consenting to us disclosing your personal information to overseas recipients, you agree that Australian Privacy Principle 8.1 shall not apply to the disclosure, meaning that Citi will not be obliged under the Privacy Act to ensure that an overseas recipient does not breach the Australian Privacy Principles and we will not be liable under the Privacy Act if the recipient does not act consistently with the Australian Privacy Principles. Our Privacy Policy (including how to access and correct information and make a complaint) 6) You can view our Privacy Policy on our website citi.com. au/privacy or obtain a copy by calling us. This policy includes information as to how you can access and/or seek correction of the personal information we hold about you. Our Privacy Policy also contains information as to how you can complain about a breach by us of the Privacy Act and how we will deal with such a complaint. Your marketing communications preferences 7) By completing an application you agree that we, our affiliate companies and their partners may use your personal information to keep you informed about offers relating to this product and other products, services and offers which may be of interest to you. They may do this by phone, mail, email and SMS or other electronic messages (without an unsubscribe facility). These consents operate indefinitely and shall remain in effect unless and until you notify us that you do not want to receive such communications. If you do not wish to receive these communications please notify us in writing or by calling us. Note: If you have not told us that you do not wish to receive these communications by phone, you may be contacted even if you have registered your phone number on the national Do Not Call Register. Your telephone calls and conversations with a Citi representative may be recorded and monitored for quality, training and verification purposes.
2016 Citigroup Pty Limited. All rights reserved. Citi, Citi and Arc Design and other marks used herein are service marks of Citigroup Inc. or its affiliates, used and registered throughout the world. MCG16138_(0916)
DUAL CURRENCY ACCOUNT PRODUCT DISCLOSURE STATEMENT 3 March 2014 Issued by Citigroup Pty Limited ABN 88 004 325 080 AFSL No. 238098 INVESTMENT PRODUCTS: NOT A DEPOSIT NO BANK GUARANTEE NO GOVERNMENT GUARANTEE MAY LOSE VALUE
Contents Key Features 1 How does the Dual Currency Account Work 2 Examples 8 Fees and Charges 12 Benefits and Risks 12 Taxation 14 Additional Information 15 IMPORTANT INFORMATION The Citibank Dual Currency Account will be issued to you by Citigroup Pty Limited ( Citibank ). The terms and conditions of the Dual Currency Account are set out in this PDS. It is important that you read the terms and conditions before making a decision to invest in a Dual Currency Account. If you have any questions about the Dual Currency Account, please contact a Treasury Conulstant or a Citibank Relationship Manager at one of the Citibank Branches set out in the directory on the back cover of the PDS or call CitiPhone Banking on 13 24 84 (within Australia) or +61 8225 0615 (from overseas). Citibank Relationship Managers, Treasury Consultants and staff at CitiPhone Banking are representatives of Citibank. About Citibank 19 Terms and Conditions 20 Directory PRODUCT DISCLOSURE STATEMENT (PDS) This document combined with the Non-Cash Payment Facilities Terms and Conditions and the Schedule of Fees and Charges, form the PDS for your Dual Currency Account. This PDS has been prepared by Citibank. This PDS has not been lodged with the Australian Securities and Investments Commission (ASIC) and is not required by the Corporations Act 2001 to be lodged with ASIC. Citibank will notify ASIC that this PDS is in use in accordance with section 1015D of the Corporations Act 2001. ASIC takes no responsibility for the contents of this PDS. GENERAL ADVICE AND INVESTMENT DECISIONS: Any advice provided in this PDS is general advice only. This PDS does not take into account the investment objectives, financial situation and particular needs of each reader. Accordingly, nothing in this PDS should be construed as a recommendation by Citibank, or any associate of Citibank or any other person, concerning an investment in the Dual Currency Account. Readers should seek their own independent financial and taxation advice before making a decision whether to invest in a Dual Currency Account. No person is authorised by Citibank to give any information or to make any representation not contained in this PDS. Any information or representation not contained in this PDS must not be relied upon as having been authorised by or on behalf of Citibank. JURISDICTION AND SELLING RESTRICTIONS: This PDS is not an offer or invitation in relation to the Dual Currency Account in any place in which, or to any person to whom, it would not be lawful to make that offer or invitation. The distribution of this PDS outside Australia may be restricted by the laws of places where it is distributed and therefore persons into whose possession this document comes should seek advice on and observe those restrictions. Failure to comply with relevant restrictions may violate those laws. Citibank's ability to provide to you a Dual Currency Account may be restricted by the laws of the country which you may be located in at any time. The DCA is not available to US Persons. DCA may not be offered or sold in the United States of America ("US") or to, or for the account of or benefit of, US persons. Accordingly, neither this PDS nor the Application Form may be sent to persons in the US or otherwise distributed in the US or provided to US Persons.
KEY FEATURES The Dual Currency Account is a flexible short-term investment linked to the currency market. As an investor you will receive interest in the currency of your investment. The interest rate you receive is fixed for the term of your investment and will depend on the Investment Parameters selected by you. What distinguishes the Dual Currency Account from other interest bearing investments is that the proceeds of your investment including your interest will be paid back to you on maturity in one of the two currencies that you nominate depending on how much the currency in which you made your investment has appreciated in relation to the Alternate Currency. Citibank, will decide which currency you are paid back at maturity. You can create your own tailor-made Dual Currency Account from a multitude of options. The combination of Investment Parameters you select for your Dual Currency Account will determine the interest rate offered by Citibank. You can choose the combination that reflects your views about the future performance of global currency markets. You may even invest in a number of Dual Currency Accounts at the same time and choose a different combination for each of them. The Dual Currency Account offers you the opportunity to create unique investment strategies to suit your personal needs and risk profile. The choice is yours! To construct your Dual Currency Account, you must select the following Investment Parameters: Currency Pair: Comprised of the currency in which you will make available your investment amount (Base Currency) and a second currency which you are prepared to receive on maturity (Alternate Currency) Buffer Value: Difference between the Spot Rate of your Currency Pair at the time of investment and the Strike Rate (Please refer to the terms and conditions for the definitions of the Spot Rate and Strike Rate.) Investment Amount: Minimum of USD25,000.00 or its equivalent in another currency; and Investment Term: one week, two weeks, one month, two months, three months or six months. You will receive interest at maturity of your Dual Currency Account. You can find out the reference interest rate that applies to each combination of Investment Parameters by checking the Term Sheet. As the interest rates offered by Citibank change at least daily, Citibank releases a new Term Sheet every day. To obtain the current Term Sheet, please contact Citibank. To make an investment, you will need to place an investment order with a Citibank Relationship Manager. Once you have made an initial investment in the Dual Currency Account you may be able to place subsequent orders through your Citibank Relationship Manager or an allocated Treasury Consultant. Once Citibank has accepted your investment order and issued your Dual Currency Account, the interest rate and Investment Parameters will be fixed for the investment term. On maturity, Citibank will: Repay your investment amount and interest (Proceeds) in the Base Currency (where the Base Currency has appreciated no greater than the Strike Rate); or Convert the Proceeds into the Alternate Currency at the Strike Rate selected by you and repay you in the Alternate Currency (where the Base currency has appreciated greater than the Strike Rate). At the time of investment, you will know the exact amount you will receive at maturity in the Base Currency and in the Alternate Currency. What you will not know is in which of these two currencies you will be repaid. By investing in the Dual Currency Account, you accept an exchange rate risk. If at maturity you are repaid the Proceeds in the Alternate Currency and you choose to convert the Proceeds back into the Base Currency, you will be able to make this conversion only at the prevailing exchange rate. This rate may be less favourable than the Strike Rate at which Citibank converted your Proceeds into the Alternate Currency. After conversion into the Base Currency, the overall return on your Dual Currency Account may be less than the applicable interest rate. In some circumstances, you could even receive less than the amount you invested. An investment in the Dual Currency Account should be held to maturity. Citibank is only obliged to pay at maturity. If you request an early repayment of your investment Citibank will agree to do so if you agree to accept Citibank s early repayment settlement amount in lieu of the Proceeds. Citibank s early repayment settlement amount is usually less than the Proceeds. There is no additional application fee, establishment fee or any ongoing management fee charged to you in respect of your Dual Currency Account. These fees and charges are incorporated in the interest rates offered to you under the Dual Currency Account. Please refer to the Schedule of Fees and Charges for details of the separate general banking fees and charges that can be charged. The Dual Currency Account may appeal to investors who: Are indifferent to holding their money in either the Base Currency or Alternate Currency; Have a need for both these currencies; and/or Have a view on the currency market and want to benefit from exchange rate movements. 1
HOW DOES THE DUAL CURRENCY ACCOUNT WORK? 2 Generally, an investment in a Dual Currency Account will involve the following four steps: Step 1 - Selecting your Investment Parameters Step 2 - Ascertaining the applicable interest rate Step 3 - Placing an investment order Step 4 - Currency determination and maturity Each of these steps is explained in this section. Step 1 - Selecting your Investment Parameters Your investment strategy is reflected in your selection of the following Investment Parameters: Currency Pair, Base Currency and Alternate Currency. Buffer Value and Strike Rate. Investment amount. Investment term. Selecting your Currency Pair, Base Currency and Alternate Currency To construct your Dual Currency Account you must first select a Currency Pair from the Currency Pairs offered by Citibank at the time of investment. You must then nominate one of the currencies in your Currency Pair as the Base Currency and the other as the Alternate Currency: Base Currency: This is the currency in which you will deposit your investment amount with Citibank at the time of investment. Alternate Currency: This is the currency in which Citibank will repay you the Proceeds of your investment on maturity if the Base Currency has appreciated greater than the Strike Rate. Table 1 below lists the Currency Pairs regularly available from Citibank. You should contact your Citibank Relationship Manager or Treasury Consultant at the time of investment to check the availability of each Currency Pair. Citibank may offer other Currency Pairs upon request. Table 1 Currency Pair No Currency Pair * 1 AUD / USD 2 AUD / NZD 3 AUD / JPY 4 AUD / SGD 5 AUD / CAD 6 AUD / CHF 7 AUD / HKD 8 EUR / AUD 9 EUR / NZD 10 EUR / USD 11 EUR / GBP 12 EUR / JPY 13 GBP / AUD 14 GBP / USD 15 GBP / JPY 16 GBP / NZD 17 NZD / USD 18 NZD / CAD 19 USD / CHF 20 USD / CAD 21 USD / JPY * The three-character currency codes used are based on the ISO 4217 standard. Their meaning is: AUD: Australian Dollar CAD: Canadian Dollar HKD: Hong Kong Dollar CHF: Swiss Franc EUR: Euro GBP: British Pound JPY: Japanese Yen NZD: New Zealand Dollar SGD: Singapore Dollar USD: United States Dollar Exchange rate of your Currency Pair Citibank will always quote the exchange rate between the two currencies in a given Currency Pair as set out in Table 1. The exchange rate quoted will be the same regardless of which currency in your Currency Pair is selected as the Base Currency. This method is consistent with the convention for quoting exchange rates in the inter-bank foreign exchange market. Example 1 If you select AUD/USD (Currency Pair No.1), you will need to choose and make available either Australian Dollars or US Dollars as your Base Currency. Should you choose Australian Dollars as your Base Currency, then your Alternate Currency will be US Dollars. Regardless of which currency you choose as your Base Currency, the exchange rate quoted by Citibank for your Dual Currency Account will be the AUD/USD exchange rate.
Example 2 If you select EUR/AUD (Currency Pair No.8), you will need to choose and make available either Euros or Australian Dollars as your Base Currency. Should you choose Euros as your Base Currency, the Alternate Currency will be Australian Dollars. The exchange rate quoted for your Dual Currency Account will be the EUR/AUD exchange rate regardless of which currency you choose as your Base Currency. Selecting your Buffer Value and Strike Rate Once you have selected your Currency Pair, Base Currency and Alternate Currency, you must select your Buffer Value and Strike Rate: Buffer Value: This is the difference between the Spot Rate of your Currency Pair at the time of investment and the Strike Rate. The Buffer Value also represents the maximum permissible appreciation of the Base Currency against the Alternate Currency from the time of investment to the Expiry Time. If the Base Currency appreciates by more than the Buffer Value at the Expiry Time, your investment Proceeds will be repaid in the Alternate Currency. Spot Rate: This is the prevailing inter-bank exchange rate for your Currency Pair as quoted by Citibank. Strike Rate: This is the exchange rate from which Citibank will, convert your investment amount and interest into the Alternate Currency on maturity. How to determine your Strike Rate The relationship between the Buffer Value, Spot Rate and Strike Rate can be expressed as Strike Rate = Spot Rate + or - Buffer Value at time of investment If you have selected your Buffer Value, you can work out your Strike Rate by using the above formula. Whether you add or subtract the Buffer Value to arrive at your Strike Rate will depend on which of the two currencies in your Currency Pair you select as your Base Currency. This simply reflects Citibank s method of quoting the exchange rate between the currencies. Table 2 sets out the basic rule. Table 2 If you select as the Base Currency: First currency in Currency Pair Second currency in Currency Pair You can work out your Strike Rate using the formula: Spot Rate + Buffer Value = Strike Rate Spot Rate - Buffer Value = Strike Rate As a result, the general rule is that: If you select the first currency in your Currency Pair as your Base Currency, then the Strike Rate selected by you must be greater than or equal to the Spot Rate. If you select the second currency in your Currency Pair as your Base Currency, then the Strike Rate selected by you must be less than or equal to the Spot Rate. You can select the Strike Rate that will apply to your Dual Currency Account. However, since the Spot Rate is fixed by Citibank only at the precise time of your investment, you will generally select the Buffer Value with which you are comfortable. The Strike Rate for your Dual Currency Account can then be calculated based on your selected Buffer Value once the Spot Rate is fixed. You must confirm acceptance of the final Strike Rate that will apply to your Dual Currency Account before it is issued to you. How to select the Buffer Value You may select from any of the Buffer Values offered by Citibank on the Term Sheet at the time you place an investment order with Citibank. The Buffer Value is measured in the points of the applicable exchange rate. For example, for AUD/USD (Currency Pair No 1 in Table 1), 1 point represents 0.0001 of the AUD/USD exchange rate whereas 100 points represents 0.0100 of the AUD/USD exchange rate. The higher the Buffer Value you select, the less risk there is of you being repaid in the Alternate Currency on maturity of your Dual Currency Account. A higher Buffer Value means the Base Currency can appreciate against the Alternate Currency by a greater amount without triggering Citibank s exercise of its right to repay the Proceeds in the Alternate Currency. Therefore the higher the Buffer Value, the more conservative your investment strategy. Conversely, a lower Buffer Value means that a smaller degree of appreciation of the Base Currency against the Alternate Currency will trigger Citibank s right to repay the Proceeds in the Alternate Currency. If you select a Buffer Value of zero, you will have adopted the most aggressive investment strategy, as any appreciation of the Base Currency will result in Citibank repaying your Proceeds in the Alternate Currency. This is explained in more detail in Step 4. Example 1 You have chosen AUD/USD (Currency Pair 1 in Table 1) with Australian Dollars as your Base Currency. Let s assume that the Spot Rate of the AUD/USD exchange rate is 0.9000 at the time of investment. You may only choose a Strike Rate greater than or equal to the Spot Rate of the AUD/USD exchange rate at the time of investment (See Table 2). If you select a Buffer Value of 0.0100 or 100 points, your Strike Rate will be 0.9100. Strike Rate = Spot Rate + Buffer Value Strike Rate = 0.9000 + 0.0100 = 0.9100 3
4 Example 2 You have chosen EUR/AUD (Currency Pair 8 in Table 1) and Australian Dollars as your Base Currency. Let s assume the Spot Rate of the EUR/AUD exchange rate is 1.5000 at the time of investment. You may only choose a Strike Rate less than or equal to the Spot Rate of the EUR/AUD exchange rate at the time of investment (See Table 2). If you select a Buffer Value of 0.0200 or 200 points, your Strike Rate will be 1.4800. Strike Rate = Spot Rate - Buffer Value Strike Rate = 1.5000-0.0200 = 1.4800 Selecting your Investment Amount The minimum amount you may invest in a Dual Currency Account is USD25,000.00 or its equivalent in another currency at the time of investment. You must make available your investment amount in cleared funds and in the Base Currency to Citibank on the Effective Date. Generally, this would mean that your investment amount is available in an account with Citibank at the time you place your investment order. Selecting Your Investment Term You may nominate an investment term of one week, two weeks, one month, two months, three months or six months. Each investment term is governed by three important dates: Effective Date: This is the date on which Citibank will accept the investment amount from you (usually by debiting your account with Citibank) and the date from which you will start earning interest. This date is normally two business days after your investment order has been accepted. Citibank may consider other arrangements upon request. Expiry Date: This is the date Citibank determines whether to pay the Proceeds of your investment in the Base Currency or the Alternate Currency. This is normally two business days before the Maturity Date. Maturity Date: This is the date the Proceeds of your investment are repaid. These three important dates for each investment term are published daily in the Term Sheet. Example On 17 June 2013, you wish to invest in a Dual Currency Account with an investment term of one month. The Term Sheet published on 17 June 2013 will advise you that in relation to your investment: Effective Date is 19 June 2013. Expiry Date is 15 July 2013. Maturity Date is 17 July 2013. Step 2 - Ascertaining the Applicable Interest Rate To find out the interest rate that will apply to your Dual Currency Account, you will need to consult the Term Sheet on the date on which you wish to place an investment order, or you can contact your Citibank Relationship Manager or Treasury Consultant, or if you are an existing Dual Currency Account customer and have access to Citibank Online, you can find out online the applicable interest rate based on your investment parameter selection. The interest rate offered to you will depend on the Investment Parameters you select. You can select a combination of Investment Parameters to earn the interest rate you prefer from those on offer. Interest rates offered by Citibank will vary from day to day. Sometimes, the interest rates offered will vary during the course of a day. Your Citibank Relationship Manager or Treasury Consultant will confirm the applicable interest rate before accepting your investment order. You will earn interest from the Effective Date to the Maturity Date. Step 3 - Placing an Investment Order Once you have selected your Investment Parameters and are satisfied with the applicable interest rate, you are ready to place an investment order with your Citibank Relationship Manager or Treasury Consultant. Due to the dynamic nature of the foreign exchange market, the Spot Rate changes continuously. If you wish to keep the Buffer Value and hence the applicable interest rate constant, the Strike Rate that will apply to your Dual Currency Account will vary by reference to the Spot Rate at the time you place your investment order. Before accepting your investment order, your Citibank Relationship Manager or Treasury Consultant will confirm with you your Investment Amount and selected Investment Parameters and will offer an interest rate and Effective Date, Expiry Date and Maturity Date that will apply to your investment. Assuming that the Account Opening Procedures (see clause 3 of the Terms and Conditions) have been completed Citibank will be taken to have accepted your investment order immediately after you confirm your acceptance of these investment terms and your Dual Currency Account investment will be issued to you and operate as a contract between Citibank and you from that time. The terms of the contract will be the terms set out in the Terms and Conditions included in this PDS, as varied, and the details agreed when Citibank accepted your investment order. The issue of your Dual Currency Account investment and its key terms will be confirmed by letter to you (an Investment Confirmation ) within two business days after the Effective Date. Once you have made an initial investment in the Dual Currency Account you may be able to place subsequent orders through your Citibank Relationship Manager or an allocated Treasury Consultant Step 4 - Currency determination and Maturity Expiry Date On the Expiry Date, which is usually two business days before the Maturity Date, Citibank will determine whether you will be repaid the Proceeds in the Base Currency or the Alternate Currency. This determination will depend on a comparison between the Strike Rate you selected and the prevailing Spot Rate for your Currency Pair at Expiry Time (approximately 10.00am Australian Eastern Standard Time or 11.00am Australian Eastern Daylight Time), this is the Reference Rate. Table 3 explains how this determination is made.
Table 3 Strike Rate selected Reference Rate What you receive at maturity Where your Base Currency is the first currency in the Currency Pair (further detail in Table 4) Greater than Strike Rate Equal to Strike Rate Less than Strike Rate Alternate Currency Base Currency Base Currency Where your Base Currency is the second currency in the Currency Pair (further detail in Table 5) Greater than Strike Rate Equal to Strike Rate Less than Strike Rate Base Currency Base Currency Alternate Currency For a more detailed explanation, refer to Tables 4 and 5 below. Table 4 - Where your Base Currency is the first currency in your Currency Pair Investment Time Expiry Time Scenario 1 The Reference Rate is less than or equal to the Strike Rate at the Expiry Time Scenario 2 The Reference Rate is greater than the Strike Rate at the Expiry Time Reference Rate Greater than Strike Rate Base Currency appreciates against Alternate Currency by more than your Buffer Value (moves above Strike Rate) Strike Rate (Spot Rate at investment time + your Buffer Value) Spot Rate (at investment time) Your Buffer Value (A) Base Currency appreciates against Alternate Currency within your Buffer Value (B) Base Currency depreciates against Alternate Currency (outside your Buffer Value) Reference Rate Less than or equal to Strike Rate Currency in which Proceeds are repaid Base Proceeds Alternate Currency Scenario 1: If your Base Currency has appreciated against the Alternate Currency at Expiry Time, but the amount of the appreciation is less than or equal to the Buffer Value selected by you (the appreciation has not taken the Reference Rate above the Strike Rate), then you will be repaid the Proceeds in Base Currency. If your Base Currency has depreciated against the Alternate Currency at Expiry Time, then you will also be repaid the Proceeds in Base Currency. Scenario 2: If your Base Currency has appreciated against the Alternate Currency at the Expiry Time by more than the Buffer Value selected by you (the Reference Rate is above the Strike Rate), then you will be repaid the Proceeds in the Alternate Currency. 5
Table 5 - Where your Base Currency is the second currency in the Currency Pair Investment Time Expiry Time Scenario 1 The Reference Rate is greater than or equal to the Strike Rate at the Expiry Time Scenario 2 The Reference Rate is less than the Strike Rate at the Expiry Time Spot Rate (at investment time) Your Buffer Value (A) Base Currency depreciates against Alternate Currency (outside your Buffer Value) (B) Base Currency appreciates against Alternate Currency within your Buffer Value Reference Rate Greater than or equal to Strike Rate Strike Rate (Spot Rate at investment time - your Buffer Value) Reference Rate Less than Strike Rate Base Currency appreciates against Alternate Currency by more than your Buffer Value (moves below Strike Rate) Currency in which Proceeds are repaid Base Proceeds Alternate Currency Scenario 1: If your Base Currency has appreciated against the Alternate Currency at Expiry Date, but the amount of appreciation is less than the Buffer Value selected by you (the appreciation has not taken the Reference Rate below your Strike Rate), then you will be repaid the Proceeds in Base Currency. If your Base Currency has depreciated against the Alternate Currency at Expiry Time, then you will also be repaid the Proceeds in Base Currency. Scenario 2: If your Base Currency has appreciated against the Alternate Currency at the Expiry Time by more than the Buffer Value selected by you (the Reference Rate is below the Strike Rate), then you will be repaid the Proceeds in Alternate Currency. NOTE: If you have selected as your Base Currency the second currency in the Currency Pair, then when the Base Currency appreciates against the Alternate Currency, the quoted exchange rate of the Currency Pair will fall. The next section, EXAMPLES, may assist you to understand how Citibank determines the currency of repayment. Your Citibank Relationship Manager or Treasury Consultant will endeavour to contact you on the Expiry Date to inform you whether you will receive the Proceeds in Base Currency or Alternate Currency at maturity. Alternatively, you may contact your Citibank Relationship Manager or Treasury Consultant for this information. Maturity Date On the Maturity Date, you will be repaid the Proceeds of your investment according to the determination made on the Expiry Date. If Citibank determines to make the repayment in the Alternate Currency, then the Proceeds will be converted using the Strike Rate. As the Strike Rate is agreed with you at the time of investment, you will always know prior to maturity the precise amount you will receive in the Base Currency or in the Alternate Currency. Citibank will repay the Proceeds of your investment in accordance with your most recent instructions. You may instruct Citibank in writing: To deposit the Proceeds into another Citibank Account; or To reinvest the Proceeds in another Dual Currency Account; or To reinvest the Proceeds in any other Citibank product; or To remit the Proceeds to a third party. (Refer to the Schedule of Fees and Charges for details of the associated general banking fees and charges) You may change your instructions at any time. However, final instructions must be received at least two business days before the Maturity Date. If Citibank does not receive valid instructions from you, Citibank will deposit the Proceeds into your At Call Account held in your name. (Refer to the definition of At Call Account in clause 1 of the Terms and Conditions of this PDS for what is an At Call Account.) 6
If you do not hold an At Call Account at the time you apply for Dual Currency Account, your Relationship Manager or Treasury Consultant will provide you with a Product Disclosure Statement and/or terms and conditions and assist you with opening one. You will be able to access the Proceeds in accordance with the terms and conditions that apply to the At Call Account. Investment Process Summary Transaction Date Effective Date Confirmation Expiry Date Maturity Date Start earning interest End of interest period You contact Citibank and select Investment Parameters You ascertain the applicable interest rate You place an investment order with Citibank Citibank is satisfied that the investment amount is available for settlement on Effective Date Usually two business days after the Issue Date The investment amount is accepted Confirmation sent within two business days after the Effective Date Usually two business days before Maturity Date Citibank determines whether to repay you in the Base Currency or Alternate Currency Citibank endeavours to inform you of determination and obtain any new repayment or reinvestment instructions The Proceeds of your investment will be repaid in accordance with your latest instructions Your investment order is accepted by Citibank and a Dual Currency Account is issued Alternatively, you may contact Citibank to find out which currency your Proceeds will be paid in 7
EXAMPLES We have set out three examples of how a Dual Currency Account may work. Please note that the following are examples only and they should not be taken as an indication or representation as to the future performance of your Dual Currency Account. Example 1 Investor 1 has chosen the following Investment Parameters: The Investment Parameters, the Spot Rate, Reference Rate and applicable interest rate in the examples are hypothetical. Round numbers have been chosen for ease of calculation. Currency Pair: AUD/USD (Currency Pair No.1 in Table 1) Base Currency: Alternate Currency: Prescribed Exchange Rate: Australian dollars (AUD) US dollars (USD) AUD/USD Selection of Strike Rate Strike Rate Spot Rate at the time of investment (Strike Rate = Spot Rate + Buffer Value) Spot Rate: The Spot Rate at the time of investment is 0.9000 Buffer Value: Investor 1 has chosen a Buffer Value of 0.0100 (100 points) Strike Rate: Strike Rate = 0.9100 (0.9000 + 0.0100) Investment Amount: Term: Applicable Interest Rate: AUD100,000 1 month (30 days) 5% per annum On the Expiry Date, the Reference Rate is 0.9050 as determined by Citibank. Which currency will be repaid? Since the Reference Rate on the Expiry Date (0.9050) is less than the Strike Rate selected by Investor 1 (0.9100), Citibank will pay the Proceeds in the Base Currency (Australian Dollars) to Investor 1 on the Maturity Date. Here, the Base Currency (AUD) has appreciated no greater than the Strike Rate selected by Investor 1. Another way of looking at this example is to focus on the selected Buffer Value of 0.0100 or 100 points. In this example, the Australian Dollar (Base Currency) has appreciated against the US Dollar by 0.0050 or 50 points (0.9050-0.9000) at the Expiry Time. Since the Australian Dollar has appreciated by less than the Buffer Value selected by Investor 1 (appreciation of 0.0050 or 50 points compared with a Buffer Value of 0.0100 or 100 points), Citibank will pay the Proceeds in Australian Dollars to Investor 1 on the Maturity Date. What is the amount to be repaid? The Proceeds are equal to the investment amount plus the interest earned. i.e. The Proceeds = Investment Amount + Interest Earned = AUD100,000 + (AUD100,000 x 5% x 30 / 360) = AUD100,416.66 Investor 1 will receive AUD100,416.66.* * This does not include general banking services fees or government taxes and duties which may be applicable. Please refer to the Fees and Charges section in this PDS and the Schedule of Fees and Charges for more information. What is the overall return? In all cases where the investor receives the Proceeds in the Base Currency, the investment return will be equal to the interest rate of your Dual Currency Account, which in this case is 5% per annum. 8
Example 2 Investor 2 has chosen the same Investment Parameters as Investor 1 Currency Pair: AUD/USD (Currency Pair No.1 in Table 1) Base Currency: Australian dollars (AUD) Alternate Currency: US dollars (USD) Prescribed Exchange Rate: AUD/USD Selection of Strike Rate: Strike Rate Spot Rate at the time of investment (Strike Rate = Spot Rate + Buffer Value) Spot Rate: The Spot Rate at the time of investment is 0.9000 Buffer Value: Investor 2 has chosen a Buffer Value of 0.0100 (100 points) Strike Rate: Strike Rate = 0.91000 (0.9000 + 0.0100) Investment Amount: AUD100,000 Term: 1 month (30 days) Applicable Interest Rate: 5% per annum On the Expiry Date, the Reference Rate is 0.9120 as determined by Citibank. Which currency will be repaid? Since the Reference Rate on the Expiry Date (0.9120) is greater than the Strike Rate selected by Investor 2 (0.9100), Citibank will pay the Proceeds in the Alternate Currency (US Dollars) to Investor 2 on the Maturity Date. Here, the Base Currency (AUD) has appreciated (from 0.9000 to 0.9120 ) greater than the Strike Rate selected by Investor 2. Another way of looking at this example is to focus on the selected Buffer Value of 0.0100 or 100 points. In this example, the Australian Dollar (Base Currency) has appreciated against the US Dollar by 0.0120 or 120 points (0.9120-0.9000) at the Expiry Time. Since the Australian Dollar has appreciated by more than the Buffer Value selected by Investor 2 (appreciation of 0.0120 or 120 points compared with a Buffer Value of 0.0100 or 100 points), Citibank will pay the Proceeds in US Dollars to Investor 2 on the Maturity Date. What is the amount to be repaid? The Proceeds will be converted to US Dollars at the Strike Rate of 0.9100. i.e. The Proceeds Earned = Investment Amount + Interest = AUD100,000 + (AUD100,000 x 5% x 30 / 360) = AUD100,416.66 Converted to the Alternate Currency at the Strike Rate = AUD100,416.66 x 0.9100 = USD91,379.16 Investor 2 will receive USD91,379.16* on the Maturity Date. * This does not include general banking services fees or government taxes and duties which may be applicable. Please refer to the Fees and Charges section of this PDS and the Schedule of Fees and Charges for more information. What is the overall return? If Investor 2 had exchanged the Proceeds of AUD100,461.66 at the prevailing exchange rate on the Maturity Date (assuming it to be 0.9120) instead of the Strike Rate, Investor 2 would have received USD91,579.99 which is USD200.18 more than he received (assuming there is no transaction cost payable in relation to the conversion). This difference represents the exchange rate loss suffered by Investor 2. Taking this exchange rate loss into account, the net per annum return of Investor 2 will be less than the applicable interest rate of 5%. In all cases where the investor receives the Proceeds in the Alternate Currency, the investment return will be less than the applicable interest rate. The investment return may even be negative, which represents a loss of part of the initial investment amount as measured in terms of the Base Currency. You can work out the investment return of Investor 2 by taking the following steps: (1) Find out the equivalent value of your Proceeds in Base Currency (Base Currency Equivalent) by converting the Proceeds in the Alternate Currency of USD91,379.16 back into the Base Currency at the Spot Rate prevailing on the Maturity Date. The Spot Rate on the Maturity Date is assumed to be 0.9120. 9
Base Currency Equivalent = USD91,379.16 / 0.9120 = AUD100,196.45 (2) Find out your actual return in the Base Currency by subtracting your investment amount from the Base Currency Equivalent. Actual Return = Base Currency Equivalent - Investment Amount = AUD100,196.45 - AUD100,000 = AUD196.45 (3) Finally, convert your actual return to a percentage return per annum. Percentage Return = (AUD196.45 / AUD100,000) x (360 / 30) = 2.36% The net per annum return of Investor 2 s investment in Dual Currency Account taking the exchange rate loss into account is 2.36%. It is important to note that there may be a difference between the prevailing exchange rate at which investors may convert their proceeds on maturity and the Spot Rate quoted by Citibank at the time of conversion. There may also be transaction costs involved in exchanging the proceeds. 10
Example 3 Investor 3 has chosen the following Investment Parameters: Currency Pair: EUR/USD (Currency Pair No.10 in Table 1) Base Currency: US dollars (USD) Alternate Currency: Euro (EUR) Prescribed Exchange Rate: EUR/USD Selection of Strike Rate: Strike Rate Spot Rate at the time of investment (Strike Rate = Spot Rate - Buffer Value) Spot Rate: The Spot Rate at the time of investment is 1.3750 Buffer Value: Investor 3 has chosen a Buffer Value of 0.0000 (0 points) Strike Rate: Strike Rate = 1.3750 (1.3750-0) Investment Amount: USD100,000 Term: one month (30 days) Applicable Interest Rate: 5.5% per annum On the Expiry Date, the Reference Rate is 1.3650 as determined by Citibank. Which currency will be repaid? Since the Reference Rate on the Expiry Date (1.3650) is lower than the Strike Rate selected by Investor 3 (1.3750), Citibank will pay the Proceeds in the Alternate Currency (Euros) to Investor 3 on the Maturity Date. Here, the Base Currency (USD) has appreciated (from 1.3750 to 1.3650) below the Strike Rate selected by Investor 3. Another way of looking at this example is to focus on the selected Buffer Value of zero. In this example, the US Dollar (Base Currency) has appreciated against the Euro by 0.0100 or 100 points (1.3650-1.3750) at the Expiry Time. Since the US Dollar has appreciated by more than the Buffer Value selected by Investor 3 (appreciation of 0.0100 or 100 points compared with a Buffer Value of zero), Citibank will repay the Proceeds in Euro to Investor 3 on the Maturity Date. What is the amount to be repaid? The Proceeds will be converted to Euro at the Strike Rate of 1.3750. i.e. The Proceeds Earned = Investment Amount + Interest = USD100,000 + (USD100,000 x 5.5% x 30 / 360) = USD100,458.33 Converted to Alternate Currency at the Strike Rate = USD100,458.33 / 1.3750 = EUR73,060.60 Investor 3 will receive EUR73,060.60* at Maturity Date. * This does not include general banking services fees or government taxes and duties which may be applicable. Please refer to the Schedule of Fees and Charges for more information. What is the overall return? If Investor 3 had exchanged the Proceeds of USD100,458.33 at the prevailing exchange rate on the Maturity Date (assuming 1.3650 was the Spot Rate at the time of conversion) instead of the Strike Rate, Investor 3 would have received EUR73,595.85 which is EUR535.24 more than the Proceeds he received (assuming there is no transaction cost payable in relation to the conversion). This difference represents the exchange rate loss suffered by Investor 3. Taking this exchange rate loss into account the net per annum return of Investor 3 will be less than the applicable interest rate of 5.5%. You can work out the investment return of Investor 3 by taking the following steps: (1) Find out the Base Currency Equivalent of the Proceeds by converting the EUR73,060.60 back into the Base Currency at the Spot Rate prevailing on the Maturity Date, which in this case we assumed to be 1.3650. Base Currency Equivalent = EUR73,060.60 x 1.3650 = USD99,727.73 (2) Find out your actual return in the Base Currency by subtracting your investment amount from the Base Currency Equivalent. Actual Return = USD99,727.73 - USD100,000.00 = -USD272.27 (3) Finally, convert your actual return to a percentage return per annum. Percentage Return = (-USD272.27 /USD100,000.00) x (360 / 30) = -3.27% The net per annum return of Investor 3 s investment in Dual Currency Account taking the exchange rate loss into account is a negative rate of -3.27%. 11
FEES AND CHARGES This section should be read in conjunction with the Schedule of Fees and Charges which forms a part of this PDS. If you do not have a copy of this schedule, it is available: At www.citibank.com.au. At any Citibank Branch. By calling CitiPhone Banking on 13 24 84 (within Australia) or +61 7 3310 6015 (from overseas). General Banking Services Citibank provides its customers with general banking services such as bank cheques, telegraphic transfers and audit certificates. A complete list of the available banking services and the fees and charges payable for these is set out in the Schedule of Fees and Charges. Fees and charges apply to international transactions and services. These include: International telegraphic transfers. Bank drafts in foreign currency. Deposits of foreign currency cheques. A complete list of these international services and their fees and charges is set out in the Schedule of Fees and Charges. Early withdrawal fee If you decide to terminate your Dual Currency Account prior to maturity by requesting an early withdrawal, Citibank will deduct from your proceeds any costs, losses or expenses that it incurs in relation to your early withdrawal. Interest spread We earn our income from the interest spread that we apply to our products. This is the difference between the rate at which we lend and borrow funds, and will depend on factors such as prevailing market rates. Our margin is incorporated into the Applicable Interest Rate quoted to you, and is not a direct additional charge or fee payable by you. Government Taxes and Duties Any applicable Government taxes and duties will be debited to your Dual Currency Account. Please refer to the Schedule of Fees and Charges for further information. Incentive fees An incentive fee may, where permissible, be payable to any firm or individual who successfully refers any business to Citibank. This fee will be paid by Citibank and is not an additional fee or charge payable by you BENEFITS AND RISKS Benefits The benefits of investing with Citibank in the Dual Currency Account include: Higher Interest Rates - If you are comfortable with accepting the exchange rate risk, you may receive interest at a rate that is generally higher than the interest rates offered on other short-term cash investment or other investments. Benefit from your view on exchange rate movements - You may earn higher interest rates by selecting Investment Parameters that reflect your expectation of how exchange rates will move during the investment term. Flexibility - You may tailor your Investment Parameters for each Dual Currency Account to suit your changing expectations and requirements. Diversification - You gain exposure to foreign exchange markets. If you do not already invest in foreign currencies, you may achieve diversification in your existing investment portfolio. You can manage any existing exchange rate risk in your portfolio by choosing different combinations of Currency Pair, Base Currency and Alternate Currency as your Investment Parameters. Risks The Dual Currency Account carries currency risk and by investing, you are taking a view on the future movement of the exchange rate of your selected Currency Pair. It is important you understand all of the risks associated with investing in currencies prior to investing in the Dual Currency Account. You should be aware that the return on the Dual Currency Account: May be less than the return you could earn on other investments. May be less than the return you could earn if you traded directly in the currencies chosen in your Currency Pair. May be paid in the Alternate Currency and not the currency deposited. May be less than the applicable interest rate, if you are repaid with Proceeds in the Alternate Currency and you choose to convert the Proceeds back into the Base Currency. May be less than the amount you invested, if you are repaid with Proceeds in the Alternate Currency and you choose to convert the Proceeds back into the Base Currency. 12