Product Disclosure Statement 

OzForex Limited trading as “OFX” (ABN: 65 092 375 703) (“OFX”)

Revised as at: 1 June 2024

Version No: 2

CONTENTS

1 PURPOSE

1.1   Information

1.2   No Financial Advice

1.3   Client Agreement

1.4   Terms of Client Agreement

1.5   Entering into the Client Agreement

2 SERVICE DETAILS

2.1   Our Contact Details

2.2   Australian Financial Services Licence

2.3   Our Service

2.4   Accessing the Service

2.5   Deliverable Only

2.6   Information

3.  OVERVIEW

3.1   What is Foreign Exchange?

3.2   Exchange Rates

3.3  Quotation of Exchange Rates

3.4   Exchange Rate Fluctuation

3.5   Margin

3.6   Transaction Fees

3.7   Counterparty Risk

4. FOREIGN CURRENCY TRANSACTIONS

4.1   Exchange Rates

4.2   Spot and Forward Contracts

4.3   Options

4.4   Limit Orders

4.5   Regular Payments

4.6   Global Currency Account and OFX Global Account

4.7   Card Services

5. SPOT CONTRACTS

5.1  What is a Spot Contract?

5.2   Variable Components

5.3   Settlement

5.4   Spot Contract Exchange Rate

5.5   Fees

5.6   Significant Benefits

5.7   Significant Risks

6. FORWARD CONTRACTS

6.1   What is a Forward Contract?

6.2  Purpose of a Forward Contract

6.3   Variable Components

6.4   Forward Exchange Rate

6.5   Variation to the Maturity Date

6.6   Advance Payment

6.7  Terminating Transactions

6.8   Fees

6.9  Significant Benefits

6.10 Significant Risks

7. OPTIONS

7.1  What is an FX Option?

7.2   Vanilla Option

7.3   Purchasing an Option

7.4   Premium

7.5   Payment of Premium

7.6   Expiry Date

7.7   Decision to Exercise the Option

7.8   Method of Exercising the Option

7.9   Consequences of Exercising an Option

7.10 Fees

7.11 Significant Benefits

7.12 Significant Risks

8. LIMIT ORDERS

8.1   What is a Limit Order?

8.2   Terms of Limit Orders

9. GLOBAL CURRENCY ACCOUNT and OFX GLOBAL ACCOUNT

9.1   What is a Global Currency Account/OFX Global Account?

9.2   Terms and Features of a Global Currency Account/OFX Global Account

9.3   GCA and OFX Global Account holder rights

9.4   Fees

9.5   Significant Benefits

9.6   Significant Risks

10. THE OFX CARD

10.1   What is the OFX Card?

10.2   Withdrawing funds via the OFX Card

10.3   Fees

10.4   Significant Benefits

10.5   Significant Risks

11. SIGNIFICANT BENEFITS OF USING OFX’S SERVICE

12 OTHER SIGNIFICANT RISKS USING OFX’S SERVICE

12.1  Credit Risk

12.2  Operational Risk

12.3  Technology and Data Security Risk

12.4  Discretionary Powers of OFX

12.5  Foreign Exchange Risk

13.  APPLICABLE LAWS

13.1  Privacy

13.2  AML/CTF

14. TAX IMPLICATIONS

14.1 Independent Tax Advice

14.2 GST

15. COMPLAINTS

15.1 Internal Complaints Procedure

15.2 Australian Financial Complaints Authority

16. CHANGES TO PDS

16.1 Notification of Changes

17. DEFINITIONS

IMPORTANT INFORMATION: The issuer of this Product Disclosure Statement (“PDS”) is OzForex Limited trading as “OFX” (ABN: 65 092 375 703) (“OFX”). OFX is an online international payment services provider. It is a wholly owned subsidiary of OFX Group Limited (ACN: 165 602 273), a company listed on the Australian Securities Exchange (ASX Code: OFX). This PDS is effective as of 1 June 2024.

This PDS applies only to financial services provided in Australia. Financial services offered under this PDS may be restricted by law in certain other jurisdictions.

Capitalised words used in this PDS have defined meanings which appear in the Definitions section at the end of this PDS.

A copy of this PDS is available free of charge and can be viewed on our website at www.ofx.com. If you do not understand any part of this PDS, or require further information, please contact us by telephone on 1300 300 424 or +61 2 8667 8090 or by email at customerservice@ofx.com .

1  PURPOSE

1.1   Information

This PDS sets out important information designed to assist you in deciding whether to acquire the financial services described in this PDS. You should read it before engaging our services or acquiring our financial products.

1.2 No Financial Advice

We offer general advice about the mechanics of our financial products or services and provide currency data, but we do not provide any personal financial advice. We recommend that you carefully consider all the potential outcomes of any specific transaction before acquiring the products or services described in this PDS. The information contained in this PDS is general in nature and does not take into account your personal objectives, financial situation or needs.

Before acting on any information in this PDS, you should consider the appropriateness of it, having regard to your specific financial circumstances and requirements. In particular, you should consider obtaining independent financial, legal, taxation and accounting advice to ascertain whether you should acquire the financial products or services described in this PDS.

1.3 Client Agreement

OFX will ask you to enter into a master services agreement (“OFX Terms and Conditions”) setting out the terms and conditions relating to the provision of OFX’s services generally. You will need to read and agree to the terms set out in the OFX Terms and Conditions prior to the provision of any of our services. Each transaction you enter into will be a separate contract that is governed by the terms of the OFX Terms and Conditions. OFX will also provide you with confirmation of each transaction (“Deal Confirmation or Service Confirmation”) which will set out the details of individual transactions you book immediately after you have booked them. Deal Confirmations may be sent via email and are also available via your online account. Depending on your use of our services, you may be required to enter into additional terms and conditions, for example the Global Currency Account Service Agreement, the OFX Subscription Agreement (Business) or the OFX Card Agreement (Business), which are linked with and in addition to the OFX Terms and Conditions. See section 9 of this PDS for more information on the Global Currency Account Service. You will need to read and agree to the terms set out in the applicable Agreement before using any additional service.

1.4  Terms of Client Agreement

The following is an overview of the key contractual provisions in our OFX Terms and Conditions:

•   No Obligation to Accept Instructions or Process Transactions – While we will always endeavour to comply with your Instructions as quickly as possible, there may be circumstances in which we are unable to do so. Therefore, we always reserve the right to refuse to accept your Instructions and to do so without giving you any reasons and without incurring any liability to you.

•   Transaction Binding – If you wish to enter into a transaction, you may do so by giving us Instructions online, or when permitted by telephone or by email. The transaction will be legally binding on you after we receive your Instructions. For more information, please refer to the OFX Terms and Conditions.

•   Cancellation of a Transaction by you – Once a transaction has become legally binding, you may not terminate the transaction in any circumstances.

•   Cancellation of a Transaction by Us – If we believe there is a valid reason to do so, including but not limited to if you fail to make any payment when it is due, or you otherwise breach your obligations under the OFX Terms and Conditions (or any other applicable OFX legal document), we may cancel the transaction you have booked without prior notice. This could result in a loss to us which we will ask you to pay.

•   Funds Held by Us – You acknowledge and agree that we do not hold your funds on trust and will not put your funds into a separate or segregated bank account. Only those funds received under the Global Currency Account Service, or held within your OFX Global Account will be held in a separate account and subject to the applicable bank guarantee.

•   Payment of Full Amount on Settlement – You must always pay to us the full amount of the funds you are transmitting on the original due date (less any Advance Payments already made). We do not facilitate any form of margin or speculative foreign exchange trading, so we do not allow you to pay or receive only the amount of any loss or profit occasioned by exchange rate fluctuations. If you want to speculate on exchange rates, our service is not for you.

The OFX Terms and Conditions and Global Currency Account Terms of Service and the OFX Card Agreement (Business) are incorporated by reference into this PDS. The Agreements may be read on our website at www.ofx.com. A copy is available upon request to us at no charge. More detail on how you can apply for the products described in the PDS, is set out in section 2.4 of this PDS, below.

You must ensure that you fully understand the terms set out in the OFX Terms and Conditions before entering into any transactions.

1.5 Entering into the OFX Terms and Conditions

In order to transact with us you will need to register via our website or over the phone and sign or accept all applicable documents. When you register with us, you will be asked to agree to the terms of the OFX Terms and Conditions, and if applicable to you due to additional services to be provided, the Global Currency Account Terms of Service, and the OFX Card Agreement (Business) prior to the provision of any of our services.

We reserve the right at all times to refuse to accept your Instructions or process transactions, including after you have agreed to the OFX Terms and Conditions and to do so without giving you any reasons or incurring any liability. For the avoidance of doubt, if you book a transaction prior to your account being reviewed and approved by Us we may, in our sole discretion, refuse to process the transaction.

No cooling-off period applies to the products covered by this PDS.

2  SERVICE DETAILS

2.1   Our Contact Details

All of the services referred to in this PDS are provided by:

OzForex Limited (ABN 65 092 375 703)

Level 19, 60 Margaret Street Sydney, NSW, 2000, Australia. 

Telephone:	+61 2 8667 8090 (Personal) +61 2 8667 8091 (Business)
Facsimile:	+ 61 2 8667 8080
Email:	customer.service@ofx.com
Website:	www.ofx.com
Principal contact:	Senior Legal Counsel

2.2 Australian Financial Services Licence

OFX holds an Australian financial services licence (AFSL No. 226 484).

2.3 Our Service

We provide an international money transfer and payments service which is available 24-hours online (including via our mobile app) or where permitted, over the phone. You can instruct us to send your funds either immediately (i.e. within the next 2 Business Days) or at any time within the next 12 months depending on the product that you purchase. OFX also offers Options, Limit Orders and the Global Currency Account Service, the OFX Global Account, and in limited circumstances, an OFX Card which are explained in section 7, section 8 and section 9 of this PDS, below, respectively.

2.4  Accessing the Service

You can access the service directly online, by telephone or by email. Once we have verified your identity, completed Know Your Customer (“KYC”) and you have read and entered into the OFX Terms and Conditions, your registration will be complete. However, as noted in section 1.5, above, you can only transact once your account has been approved by Us. If you want to transact:

•   By phone, you will need to call us and speak to one of our representatives to book your deal.

•   Online (including our mobile app), you will need to log in using your username and password. You can then access our services including booking a transaction online by providing us with instructions in relation to the nominated recipient and accepting the displayed quote.

•   By Email, once you have included all the details of your recipients in your online recipient (payee) library, you can send us the transaction details by email and we enter them into our system for you. If you book a transaction by email, the transaction will be binding on you when we process your email. You acknowledge that, if you choose to book a transaction by email, it may not be processed immediately. We may also send you an email headed “Deal Confirmation” or “Service Confirmation” after we process your Instructions, otherwise a transaction will be booked once your Instructions have been entered into the system by an OFX representative.

You can book transactions with us 24 hours a day, 7 days a week. When you book your first deal, we may attempt to contact you by phone to confirm the transaction and discuss payment options. Subsequent payments can generally be managed completely online, including our mobile apps (or by phone if you prefer). Once your funds have been received by us, or where you have sufficient available balance in your GCA/OFX Global Account, we will send the applicable funds electronically to your nominated Recipient Account.

2.5 Deliverable Only

In all cases, you must deliver to us the full amount of the funds you are transferring. We simply transmit money. We do not facilitate any type of margin or leveraged foreign exchange transaction (i.e. where you speculate on future exchange rate movements by putting down a deposit and trading a multiple of that deposit). We do not allow you to

pay us only the amount of any loss occasioned by an exchange rate movement and in no circumstances will we pay you any profit realised as the result of an exchange rate movement.

2.6  Information

We provide general information in relation to our products and services. You will find on our website some useful historical data and some charting and research tools. We can also provide you with general verbal advice about how transactions work. Please note however that none of the information we provide to you, either on our website or over the phone, will take into account your personal financial circumstances and needs. You will always need to exercise your own judgement and should obtain independent financial advice as to the amount, type and timing of any transaction you enter into with us.

3. OVERVIEW

3.1  What is Foreign Exchange?

The term foreign exchange refers to the simultaneous purchase of one currency and sale of another currency at a set exchange rate. The exchange rate is the price at which one currency can be bought or sold in exchange for another currency. When you are comparing exchange rates offered by different providers, you need to consider both the exchange rate that is quoted and any transaction fees that may be applicable. For example, a good exchange rate may be accompanied by high transaction fees, so you need to take both into account.

3.2  Exchange Rates

An exchange rate is the price of one currency expressed in terms of another currency. For example, if the current exchange rate for the Australian dollar against the US dollar is AUD/USD0.6500, this means that one Australian dollar is equal to, or can be exchanged for, approximately 65 US cents. Alternatively, USD$1.00 can be exchanged for AUD$1.54.

3.3  Quotation of Exchange Rates

The foreign currency market is an over-the-counter (“OTC”) market. Different service providers will quote different exchange rates. If you are intending to make a foreign exchange transaction or currency conversion, you may want to obtain the best available exchange rate at that time. This is often a matter of shopping around. We cannot guarantee to offer the best rate available on the day, but we endeavour to be very competitive and  transparent with our rates.

3.4 Exchange Rate Fluctuation

Exchange rates fluctuate constantly and thereby give rise to risk and uncertainty. The chart below shows the fluctuations in the AUD/USD exchange rate between April 2023 and March 2024.

Table 1 – AUD/USD exchange rate between April 2023 and March 2024.

Warning: the information in Table 1 is historical and is not intended to predict in any way future possible Australian Dollar / United States Dollar (AUD/USD) exchange rate movements. It is used only to illustrate the extent to which the rate can fluctuate.

3.5  Margin

The “Margin” (also referred to as Profit) refers to the difference between the rate we obtain from our own providers on the wholesale foreign exchange market (e.g.: the Interbank Rate or Market Rate) and the rate we quote you. The Margin will vary from currency to currency and from time to time. For more information about how the Margin works, see also sections 5.5(a) and (c), 6.8(b) and 7.4 of this PDS, below.

3.6  Transaction Fees

We do not normally charge a fee if your transfer or transaction requires a currency conversion, an OFX Margin is included in the exchange rate quoted to you. HOWEVER, for customers who are not transacting on the OFX Australia Business Platform we do charge a small fixed transaction fee on transactions under AUD$10,000 (or foreign currency equivalent). This is a separate fee, the amount of which is unrelated to the exchange rate. You must factor this fee into the cost of the transaction as well. If you are comparing rates, you should bear in mind that an attractive exchange rate may be offset by a high transaction fee (or vice versa).

For customers transacting on the OFX Australia Business Platform we do charge a payment fee of AUD$10 per payment when the payment goes out via SWIFT.

There is no cross-border transaction fee for a card payment.

When a same currency or domestic transaction is booked OFX may apply a Transfer Fee. The Transfer Fee will be notified to you prior to you confirming the transaction. For each transaction we will provide you with confirmation of the details (including the Transfer Fee charged, if applicable) via a Deal Confirmation or Service Confirmation.

For example, if you are transacting on the OFX Australia Business Platform you will have a set number of free domestic transactions per month, if you use your allocation and book further transactions, a Transfer of $1 per transaction will be charged thereafter. See the OFX Subscription Agreement (Business) at ofx.com for more information.

“Transfer Fee” means a flat fee per transaction or a percentage of the payment amount in the currency the payment is being sent in, whichever is confirmed in the Deal Confirmation or Service Confirmation.

See sections 5.5(b) and (c), 6.8(c) and (d), 7.10 and 9.4 of this PDS, below, as well as the Fee Schedule on ofx.com for more specific details on the fees we charge and the payments you may be required to make in the course of a transaction.

3.7 Counterparty Risk

When you enter into a transaction with us, you are reliant on the ability of OFX to meet its obligations to you. Any funds you place with us are not held in a separate account or on trust for you. While we are required under our financial services licence to maintain surplus liquid funds at all times, our liabilities are not guaranteed in any way, so you will always be assuming a risk in relation to OFX’s solvency. This risk is also sometimes referred to as “counterparty risk”. To manage our foreign exchange exposure, OFX enters into transactions with a panel of large, well-established financial institutions. This involves OFX taking on a limited amount of our own counterparty risk which is closely managed and monitored.

In order for you to assess our financial ability to meet our counterparty risk to you, you can obtain a copy of our most recent financial statements, free of charge, by going to the “Investors” page on our website at www.ofx.com.

4  TRANSACTIONS

4.1 Exchange Rates

We will quote you an exchange rate, which is either:

(i)     a spot rate (“Spot Rate”), for an immediate transaction which means that you must deliver your funds to us within 2 business days for immediate transaction; or

(ii)    a forward rate (“Forward Rate”), which means that you must deliver all outstanding funds to us at an agreed time between 2 business days  and 12 months in the future.

4.2  Spot and Forward Contracts

We offer Spot and Forward Contracts. When you are comparing exchange rates, you need to ensure that you are comparing a Spot Rate with another Spot Rate and not with a Value Today (for same day delivery) or Value Tomorrow rate (for delivery on 1 business day after the transaction date), as Value Today or Value Tomorrow rates are calculated slightly differently and so are not valid comparisons. For a more detailed explanation of how Spot and Forward Contracts work, please refer to sections 5 and 6 of this PDS, below.

4.3  FX Options (“Options”)

We also offer foreign exchange Options that give you the right, but not the obligation, to buy or sell a certain currency at an agreed exchange rate on a specific date in the future. For a more detailed explanation of how the Options that we offer operate, please refer to section 7 of this PDS, below.

4.4  Limit Orders

We also offer an arrangement whereby you can enter into a Spot Contract when a target exchange rate nominated by you is reached, subject to market liquidity. For a more detailed explanation of how the Limit Orders that we offer operate, please go to section 8 of this PDS, below.

4.5  Regular Payments

You may ask us to make Regular Payments on a regular basis for up to 12 months in advance. You can do so either: (i) by allowing us to apply the Spot Rate applicable at the time of each transaction; or (ii) by setting the exchange rate for each payment in advance. If you choose the first option, you will be effectively entering into a series of Spot Contracts (see section 5, below) at the time of each payment and you may ask us to terminate the series of contracts without incurring any liability to pay a loss, provided that you give us at least 7 days’ notice.

If you choose the second option, you will effectively be entering into a series of Forward Contracts (see section 6, below) and will therefore be bound to settle the transactions in the same way as you would an ordinary Forward Contract. If you fail to settle or otherwise breach your obligations in relation to one or more contracts in that series, we will terminate the contracts and you will be liable for any loss arising.

In either case, you may be asked to pay an Advance Payment (see section 6.6, below) in the amount of each instalment which will be applied in settlement of the last payment in the series of payments.

4.6  Global Currency Account and OFX Global Account

We also offer a Global Currency Account (“GCA”) service that allows you to receive funds from approved Marketplaces, payment processors, and or third parties and vendors in the applicable local currency for conversion to another currency or same currency payment. All funds directed to your GCA and all payments in connection with your GCA are done so in connection with a transaction. See section 9 below for more details on the GCA.

The OFX Global Account allows you to receive, hold and send funds. You can receive funds from third parties or by transferring to your own OFX Global Account. Funds held within the OFX Global Account are an available balance to be withdrawn by you to make payments including Spot Contracts and Forward Contracts.

4.7  Card Services

The OFX Card is a reloadable prepaid debit card. When you are issued with an OFX Card you will receive a virtual version of the OFX Card which is linked to your OFX Global Account. You may request a physical version of the OFX Card which will also be linked to your OFX Global Account. You can use your OFX Card to make payments and draw down the available balance within your OFX Global Account.

5  SPOT CONTRACTS

5.1  What is a Spot Contract?

Whenever you exchange currencies (e.g. when you pay for a purchase overseas by credit card), you are effectively entering into a foreign exchange transaction of some kind.

If you want us to transmit your money immediately, then you will need to enter into a Spot Contract with us. A Spot Contract is an agreement to exchange one currency for another at an agreed exchange rate within 2 Business Days of the transaction being booked. For example, when you make a purchase overseas in a foreign currency, you may have to pay the purchase price straight away. In those circumstances, your only consideration will be the exchange rate at the time and we will quote you a Spot Rate (you should feel free to obtain quotes from other providers to ensure that our Spot Rate is competitive). When you have agreed to the Spot Rate by accepting the exchange rate quoted, you have entered into the Spot Contract with us, regardless of when payment is made. You will have up to 2 Business Days to pay the funds into our account and we will then send the funds immediately to your nominated Recipient Account.

If, on the other hand, you do not have to make the payment immediately (e.g. the purchase price payable under invoice is not payable for 4 months), you will need to consider whether to lock in the Spot Rate available now or wait for 4 months and hope that the exchange rate is equally, or more, favourable at the future time. If you do not want to take the risk that the exchange rate is less favourable in 4 months’ time, you can lock in the Spot Rate either by entering into a Spot Contract and sending the amount payable immediately or enter into a Forward Contract (explained in section 6 of this PDS, below), which will allow you to send the money in 4 months’ time at the Forward Rate (as explained in section 6.4 of this PDS, below).

5.2  Variable Components

In a Spot Contract, there are a number of variable components that need to be agreed upon, including:

(a)    the  currency and amount of the currency being bought;

(b)    the currency  and amount of the currency being sold;

(c)     the exchange rate; and

(d)    The Value Date (typically within 2 Business Days)

5.3  Settlement

A Spot Contract must be settled within 2 Business Days of the transaction being entered into. This means that you must pay us the money, or have a cleared available balance to the value you are exchanging within 2 Business Days. Actual receipt of the funds transferred by us into your nominated Recipient Account may take longer than 2 Business Days from when you enter into your Contract, as it depends on when we actually receive your funds, the destination of the funds and the intermediary banks involved.

5.4  Spot Contract Exchange Rate

The Spot Rate quoted by us will be calculated by taking into account the Interbank Spot Rate and the Margin. See also section 3.5 of this PDS, above. Please note that weekend trading rates are different than weekday trading rates.

5.5  Fees

The following Fees and or costs may apply to a Spot Contract and you will need to take them into account when deciding whether to enter into a Spot Contract with us:

(a) Margin

The Margin will vary from time to time, from currency to currency and may also take into consideration the amount of your transaction. See section 3.5 of this PDS, above. It is not a separate amount that you have to pay; rather, it is built into the exchange rate. It effectively represents our gross profit margin on each transaction. You can satisfy yourself that our Margin is reasonable by comparing the exchange rate we quote with the rates quoted by other providers. You will need to bear in mind that some providers might quote a good exchange rate, but supplement a narrow margin with high transaction fees.

(b) Transaction Fees

For customers who are not transacting on the OFX Australia Business Platform, we charge a transaction fee we charge a transaction fee (“Fee”) of AUD$15 (or foreign currency equivalent) for foreign exchange transactions under AUD$10,000 (or foreign currency equivalent) per recipient and no Fee for foreign exchange transactions over AUD$10,000 (or foreign currency equivalent) per recipient. Additional transaction fees may apply if there is more than one recipient (e.g. if a total amount of more than AUD$10,000 was being sent to more than one recipient, separate Fees would be charged in relation to each recipient who received less than AUD$10,000). For customers transacting on the OFX Australia Business Platform we do not charge the above mentioned fee but we do charge a payment fee of AUD$10 per payment when the payment goes via SWIFT.

For same currency payments a fee, being either a percentage of the total value of your transaction or a flat fee per transaction, may be charged. If a transaction fee is payable, it will be expressly shown as a fee within your quote and added to the total amount you are required to settle. It will also be confirmed in your Deal Confirmation or Service Confirmation.

For example, if you are transacting on the OFX Australia Business Platform you will have a set number of free domestic transactions per month, if you use your allocation and book further transactions, a Transfer of $1 per transaction will be charged. Or if you are using the GCA Service you may be charged 5% of the total value of your same currency transaction.

There is no cross-border transaction fee for a card payment.

(c) Third Party Transaction Fees

We generally do not charge you an additional amount for third party transaction fees and they are built into our Margin. However, where the payment is sent via SWIFT we may charge an AUD$10 fee per transaction. In addition, in some cases, the intermediary banks we use to process payments may deduct transaction fees that we have not anticipated. For example, in some jurisdictions, the receiving bank charges a receiving bank fee. We will try and notify you of these additional fees if we are aware of them, but we cannot always do so in advance. In our experience, receiving bank fees tend to be less than AUD$50 (or foreign currency equivalent), but this will depend on the relevant jurisdiction. You may therefore find, in some cases, that the total amount you expect to receive in your Recipient Account is slightly less because such fees have been deducted. You should bear this in mind if you are paying the precise amount of an invoice, for example. If you have any questions regarding the likelihood of third party transaction fees being levied by intermediary banks for your transaction, you should ask one of our staff.

5.6   Significant Benefits

The significant general benefits of entering into a Spot Contract and the other foreign exchange transactions offered under this PDS are outlined in section 10 of this PDS, below. The significant specific benefits of entering into a Spot Contract are as follows:

•  Speed and ease of transacting;

•  Certainty in relation to the exchange rate we offer you; and

•  Access to real time pricing.

5.7   Significant Risks

The significant general risks of entering into Spot Contracts and the other foreign exchange transactions offered under this PDS are outlined in section 11 of this PDS, below. The significant specific risks of entering into a Spot Contract are as follows:

•  The transaction is legally binding as soon as it is booked it and you may not cancel it;

•  You are liable for the full amount of the transaction plus any applicable Fees; and

•  Payment to Us must be made as soon as possible (and no later than 2 Business Days).

6  FORWARD CONTRACTS

6.1 What is a Forward Contract?

A Forward Contract is an arrangement that allows you to transfer money at some time (up to 12 months) in the future at an exchange rate that you agree now (i.e. when you book the Forward Contract), so that you know what the exchange rate will be on the agreed settlement date. This allows you to avoid the risks and uncertainties associated with adverse exchange rate movements.  It is important to note that locking in forward exchange rate also means that you may forego any future exchange rate movement that is in your favour. 

6.2  Purpose of a Forward Exchange Contract

The purpose of a Forward Contract is primarily to hedge the risk of exchange rate movements. A Forward Contract enables a future exchange rate to be locked-in upfront, .If you do   not settle the Forward Contract on or before the Maturity Date as you will be in breach of your obligations to Us and we may Terminate your Forward Contract. A Forward Contract may be useful in the following circumstances:

(a) importing and exporting goods where the invoice is in a foreign currency;

(b)    borrowing in foreign currencies;

(c)     investing in foreign currencies;

(d)    buying or selling property overseas;

(e)    receiving pension payments from an overseas jurisdiction;

(f)      sending or receiving funds to or from a family member; or

(g)    repatriating salary or interest payments received overseas.

Forward Exchange Contracts are generally used by importers, exporters and investors who seek to lock in exchange rates for settlement at a future date in order to have a level of certainty of their future cash flows. However, they can also be used by individuals who also need to lock in a forward exchange rate in advance when they are for example migrating or buying a property overseas.

6.3  Variable Components

The variable components in a Forward Contract are:

(a)    the currency and amount of the currency being bought;

(b)    the currency and amount of the currency being sold;

(c)     the exchange rate; and

(d)    the Maturity Date.

6.4  Forward Exchange Rate

In determining the rate of exchange for a Forward Contract, there are two components:

(a)     the current Spot Rate; and

(b)     the Forward Margin

The Forward Rate quoted by OFX will not be the same as the Spot Rate, because it will take into account the difference between the interest rates in the countries that each currency represents. It may be better or worse than the prevailing Spot Rate on the day depending on the difference in interest rates between the currency being sent and the currency being received.

The calculation of Forward Points is a complicated one. It will be influenced not just by interest rates in the two relevant currencies, but also by the duration of the Forward Contract and less tangible factors such as the market expectation of the interest rates in the two relevant currencies prior to the Maturity Date. You may find that the Forward Margin might change quite significantly over a short period of time as a result of developments impacting on expectations of future interest rate changes. Table 2, below, illustrates the calculation of a Forward Rate for a 3 month Forward Contract.

Table 2

The following is a hypothetical example that demonstrates how a Forward Margin is calculated

Currency OFX buys/ Client sells):	AUD
Amount:	273,822.56
Currency OFX sells/ (Client buys):	USD
Amount:	200,000.00
Maturity date of forward contract:	Booking Date + 3 calendar months
Spot Rate	0.73
Exchange Rate Agreed:	0.7304 (Spot Rate + 0.0004 forward points)

Warning: the information in this table is hypothetical and it is not intended to predict in any way future possible AUD/USD exchange rate movements. It is used only to demonstrate how Forward Rates are calculated. The exchange rate agreed is based on the wholesale exchange rate that OFX is able to get from one of our wholesale providers. Based on this we are then able to quote you a Forward Rate and you may then accept the rate quoted and enter the deal.

6.5  Variation to the Maturity Date

The Maturity Date is the date your Forward Contract expires; in other words, the date on which you are required to send us the funds you are selling. When you enter into a Forward Contract, the Maturity Date will be agreed and cannot be changed without our consent.

We may, at our discretion, agree to allow you to vary the Maturity Date you have booked. We may also allow you to pay some or all of the amount you are transferring early at some time before the Maturity Date (“Pre-Delivery”) or we may allow you to extend the Maturity Date (“Rollover”), but not for longer than 12 months from the date you entered into the Forward Contract. If we agree to such a variation, the Forward Margin may change.

6.6 Advance Payment

All Forward Contracts must be settled by delivery of the full amount being transferred on the Maturity Date (also referred to as the Settlement Date). This means that we must be able to sight the cleared funds in our bank account on or before the Maturity Date. When you enter into a transaction with us, we enter into a matching transaction with our own providers. If you do not settle your transaction, we still have to settle ours. In order to cover the risk that you do not settle your transaction, we ask you to pay some of the settlement payment in advance (“Advance Payment”).

The amount of any Advance Payment we request will be a fixed percentage of the value of the transaction and will normally be between 5% and 10% of the value of the transaction, but could be more depending on the duration and assessment of the Forward Contract. The amount of any Advance Payment is at our complete discretion and will be applied to the total amount owing at settlement. We will usually ask for an Advance Payment when you enter into a transaction, but the fact that we have not done so does not mean that we will not ask for one later if the exchange rate trends unfavourably. Equally, the fact that you have already made an Advance Payment does not mean that we will not ask for one or more additional Advance Payments if the exchange rate continues to move unfavourably.

If we have requested payment of an Advance Payment at any stage of the transaction, you must pay it promptly. We expect to receive the Advance Payment within 2 Business Days of the request, failing which we reserve the right to Terminate the transaction without notice and ask you to pay the full amount of any loss occasioned by us immediately and or use any prior Advance Payments to cover losses incurred by Us as a result of the Termination.

We do not pay interest on Advance Payments.

IMPORTANT: You should not enter into a Forward Contract if you are unable or unwilling to provide an Advance Payment of between 5% and 10% of the value of the transaction with the possibility of one or more further Advance Payments being requested at any time prior to the Maturity Date. If we ask you to pay an Advance Payment at any time and you fail to do so, we may Terminate your Forward Contract without prior notice.

6.7  Terminating Transactions

The liability for an adverse exchange rate movement is crystallised at the commencement of the Forward Contract and not upon settlement. If you want to calculate your liability to pay an Advance Payment at any point in time prior to the Maturity Date or your liability to pay a loss in the event that the contract is Terminated, you need to consider the

exchange rate and Forward Margin at the time of Termination, because Terminating requires Us to enter into the same transaction in reverse with our counterparty bank and selling previously bought currency back into the market. In the event that a Forward Contract is Terminated, we will calculate, as at the Termination Date, the value of the transaction using the prevailing market rates.

IMPORTANT: If there is a loss on a transaction that is Terminated, you will be liable to compensate OFX immediately upon demand for the full amount of that loss which could exceed the amount of any Advance Payment already held.

In the case of a Regular Payment, you should not fix the exchange rate in advance for each instalment (see section 4.5, above) unless you are confident that you will need to make every payment. If, for example, you cancel your Instructions after the third of twelve monthly payments, the other nine transactions will be Terminated and you will be required to pay any loss which will be deducted from the Advance Payment.

The following example explains the consequences of Terminating a Forward Contract.

6.8 Fees

Set out below are the payments that you will need to take into account when deciding whether to enter into a Forward Contract:

(a) Advance Payment – see section 6.6 of this PDS, above;

(b) Margin – see section 5.5(a) of this PDS, above;

(c) Transaction Fees – see section 5.5(b) of this PDS, above. Please note that more than one Transaction Fee may be incurred if you are transferring funds to multiple Recipient Accounts; and

(d) Third Party Transaction Fees – see section 5.5(c) of this PDS, above.

6.9  Significant Benefits

The significant general benefits of entering into Forward Contracts and the other foreign exchange transactions offered under this PDS are outlined in section 10 of this PDS, below. The significant specific benefits of entering into a Forward Contract are as follows:

6.10   Significant Risks

7  OPTIONS

7.1 What is an FX Option?

A foreign exchange Option is an agreement that gives you the right but not the obligation to enter into a foreign currency transaction at a pre-determined exchange rate on a pre-determined date in the future. You will have to pay a non-refundable fee (“Premium”) for the Option, but you will not have to settle the foreign currency transaction if you choose not to exercise the Option.

7.2  Vanilla Option

OFX offers only European-style Vanilla Options. A Europeanstyle Vanilla Option means that you can only exercise the Option on the Expiry Date (and not before) . When you enter into

a Vanilla Option, you nominate the currencies you want to exchange (“Currency Pair”), the Option type, I.e. Call / Put, the Strike Rate and the Expiry Date. The currencies that you wish to exchange must be acceptable to OFX. Further, you are not permitted to sell the Option to a third party.

7.3  Purchasing an Option

We offer Options only by telephone. Clients who wish to purchase an Option must first sign an Option Agreement form which can be requested by contacting us by telephone or email. When you ring us to book an Option, we will quote you a Premium  for the Option, after we agree an Expiry Date, Strike Rate, the Currency you buy and sell for the Option. If you agree to our terms, the Option agreement becomes legally binding in that telephone conversation. After the telephone conversation, we will send you an Option Confirmation by email. This is an error correction mechanism only which confirms the details of the Option you have entered into on the phone. You do not have to do anything after receiving the Option Confirmation other than checking  the details. If any of the details are incorrect, you must tell us within 1 Business Day of receiving the Confirmation otherwise the details set out in the Confirmation will be deemed to be correct.

7.4  Premium

When you contact us to purchase an Option, OFX will quote you a Premium on a transaction by transaction basis. In calculating the Premium, the following factors could be relevant: the currencies involved, the Option type (i.e. a Call or Put Option), the Strike Rate, the Expiry Date, the amount involved, current market exchange rates, current market Forward Points of the currency pair and implied market volatility for the currency pair. The amount of the Premium will also take into account the premium offered to us by our own provider, so our Margin on the Option will be the difference between the retail Premium we quote you and the wholesale premium we obtain from our provider.

While the Premium charged will vary on a transaction by transaction basis, purely as an indication, the amount of the Premium is likely to be in the range of 3% to 10% of the total value of the transaction, but the amount could vary outside of this range.

For more information about how the Premium is calculated, please contact us.

7.5  Payment of Premium

The Premium is payable within 2 Business Days of the date you agree to purchase the Option and is not refundable. If you fail to pay the Premium, we reserve the right to Terminate the transaction to purchase the Option on 24 hours written or oral notice, in which case you will remain liable to pay us the Premium and we will seek to recover it as a debt if it remains unpaid.

7.6  Expiry Date

You will be able to choose from a range of Expiry Dates that OFX will offer you, up to 12 months. When choosing the Expiry Date, you should keep in mind that you cannot Exercise the Option other than on the Expiry Date.

7.7  Decision to Exercise the Option

In deciding whether or not you should Exercise an Option on the Expiry Date, you should consider the Spot Rate and the Strike Rate. As a general principle, you may decide to Exercise an Option if the Spot Rate is less favourable than the Strike Rate on the Expiry Date. If this is not the case, you may decide to allow the Option to lapse. In other words, if the Spot Rate gives you a better exchange rate on the day, you should decide not to Exercise the Option. In all cases the Premium has already been paid is non-refundable.

7.8  Method of Exercising the Option

If you choose to Exercise the Option, you will have to notify us of your intention to do so by telephone at about 3pm Tokyo time on the Expiry Date. That is, about 5pm AEDT and 4pm AEST. If you do not notify us of your intention to Exercise the Option, it will expire worthless.

7.9  Consequences of Exercising an Option

If you decide to Exercise an Option, you will automatically enter into the Spot Contract set out in the Option Confirmation that we send you after you decide to purchase the Option. At the time you Exercise the Option you will be bound by the OFX Terms and Conditions. In particular, you will be required to provide to us details of your Recipient Account immediately and to deliver to us the full amount of the funds you are exchanging within 2 Business Days  of Exercising the Option.

7.10  Fees

The only fee payable in relation to the Option is the Premium. If you elect to Exercise the Option, the fees set out in section 5.5(b), above, will apply in the same way as they apply to ordinary Spot Contracts, including both our Transaction Fees and third party transaction fees.

7.11  Significant Benefits

7.12  Significant Risks

8  LIMIT ORDERS

8.1 What is a Limit Order?

You may enter into an agreement with OFX whereby your Spot Contract  becomes binding only when a certain exchange rate (“Target Rate”) nominated by you is reached. You are able to amend or cancel your Instructions by telephone at any time before the Target Rate is reached. However, once the Target Rate is reached and the Limit Order is filled by OFX, you are bound to settle the transaction in accordance with the terms of the relevant Spot Contract  you wish to enter into at the Target Rate (Please see sections 5 of this PDS for a discussion of Spot Contracts).

8.2  Terms of Limit Orders

The key terms of a Limit Order may be summarised as follows:

9  GLOBAL CURRENCY ACCOUNT and THE OFX GLOBAL ACCOUNT

9.1   What is a Global Currency Account (“GCA”) Service and the OFX Global Account?

The GCA service allows you to set up multiple virtual currency accounts to receive electronic transfers of funds from approved Marketplaces, payment processors, and or third parties and vendors. You can hold funds and make transfers using the funds in your GCA. You must be an OFX Business Client and have a legitimate need to use the service.

The OFX Global Account allows you to set up multiple virtual currency accounts to receive electronic transfers of funds from yourself, third parties and vendors. You can hold funds and make transfers using the funds in your OFX Global Account. You must be an OFX Business Client and have a legitimate need to use the service.

Neither the GCA or the OFX Global Account is a bank account, it is a non-cash payment facility. You will not earn interest on any Balance. OFX is entitled to keep any interest it earns with respect to your Balances at its absolute discretion.

The electronic funds in your GCA or OFX Global Account are protected by a Bank Guarantee. Your Balance is not regulated client monies under the Corporations Act 2001 (Cth).

9.2  Terms and Features of a Global Currency Account and the OFX Global Account

The following terms and features are in relation to the GCA and OFX Global Account service and are in addition to the other services and transactions set out in this PDS.

9.3 GCA and OFX Global Account holder rights

•  All virtual accounts are issued by us in reliance of the Reserve Bank of Australia Exemption Notice. As a condition of our reliance on the Exemption Notice, our obligations in respect of the virtual accounts we issue are guaranteed by the NAB up to the amount specified in the Bank Guarantee (and subject to the terms of the Bank Guarantee) and held on trust by Global Loan Agency Services Australia Nominees Pty Ltd as independent trustee (“Trustee”). The Trustee holds the Bank Guarantee on trust for each GC Account and OFX Global Account holder. We will maintain all applicable arrangements for as long as we need to rely on the Exemption Notice.

•  In accordance with the Exemption Notice, We are required to ensure the amount that can be demanded under the Bank Guarantee is equal to or exceeds the balance of all GCAs plus OFX Global Accounts at all times (i.e. the balance of the Pooled Account).

•  The Trustee must make a demand on NAB for payment under the Bank Guarantee in the following circumstances:

i. where OFX is found by any court or tribunal in Australia or the Australian Financial Complaints Authority (“AFCA”) to be in breach of any obligation to any GC Account holder in respect of the GCA Service which breach is not remedied within 10 Business Days following receipt of a final non-appealable judgement or determination of the court, tribunal or the Australian Financial Complaints Authority (“AFCA”); or

ii. the insolvency of OFX.

•  If a GC Account or OFX Global Account holder contacts the Trustee alleging a breach by OFX of its obligations to the GC Account or OFX Global Account holder in respect of the services, the Trustee will:

i. notify OFX;

ii: advise you to make a complaint using our Complaints Policy; and

iii. advise you of your right to make a complaint with AFCA.

•  Where a demand and payment is made to you in accordance with the terms of the Bank Guarantee, We will debit that amount to your Balance.

•  In consideration of receiving the Bank Guarantee, we have granted NAB security over certain deposits we hold with the NAB (“Security”). This Security may, from time to time, include a right of set off over funds held in the Pooled Account only if and to the extent it is lawful for us to grant a security interest over those deposits.

•  We may from time to time, in our sole discretion, replace the Bank Guarantee with an alternative equivalent bank guarantee issued by another bank.

•  OFX reserves the right to impose limitations and or restrictions on your use of a virtual account via imposing Additional Terms on you that OFX reasonably considers necessary for the prudential management of its services, including but not limited to, a funds held balance maximum; transaction value maximum, and or a specific time limitation on funds held in a virtual account.

9.4 Fees

There are no fees for you to set up a GCA, however set out below are the payments that you will need to take into account when deciding whether to enter into a transaction, fund the account or receive funds:

(a) Margin – see section 5.5(a) of this PDS, above;

(b) Transaction Fees – see section 5.5(b) of this PDS, above. Please note that more than one Transaction Fee may be incurred if you are transferring funds to multiple Recipient Accounts;

(c) Third Party Transaction Fees – see section 5.5(c) of this PDS, above.

(d) Funding the OFX Global Account Fees – You can choose a permitted method to fund your own OFX Global Account. Depending on the method you choose, a transaction fee may be incurred. The following table provides an example of the additional fees charged for funding your OFX Global Account via card. These may be updated from time to time, please see the Fee Schedule at ofx.com for the most up to date fees.

Domestic Cards (Visa, Mastercard, and American Express Cards)	1.4% VISA & MasterCard and 1.95% AMEX (per transaction)
International Cards (includes Visa, intraregional Mastercard, AMEX)	1.65% VISA & MasterCard and 2.1% AMEX/Diners (per transaction)
Other International Cards	3.4% (per transaction)

(e) Receiving funds into your GCA is free. However, if you receive funds into your OFX Global Account via Wire or Swift you will be charged a transaction fee of AUD$5 per receipt.

9.5 Significant Benefits

The significant general benefits of entering into a GCA and OFX Global Account, and the other foreign exchange transactions offered under this PDS are outlined in section 10, below. The significant specific benefits of entering into a GCA and opening an OFX Global Account are as follows:

•  You are able to receive funds in local and a foreign currency;

•  You can pay suppliers, vendors, and taxes in multiple currencies; and

•  OFX’s GCA and OFX Global Account holders have the benefit of the Bank Guarantee as described in section 9.3, above. This means that in the event of our insolvency you will be able to make a written demand to the Trustee for the payment of the Balance held in your GCA or OFX Global Account.

•  You can top up your Balance and initiate a transaction to transfer funds between your accounts.

9.6  Significant Risks

The general risks of entering into a GCA and OFX Global Account, and any other transaction referred to in this PDS are set out in section 11, below. The significant specific risks involved in using the GCA service and opening an OFX Global Account are:

•  We will have sole discretion as to the maintenance and establishment of the Pooled Account and you will not have any right to or be entitled to draw funds from any Pooled Account;

•  OFX does not accept liability for returns or recalls initiated by you or by a any merchant (including a Marketplace). You are solely responsible for returns or recalls initiated by you, by any merchant (including a Marketplace); and

•  OFX does not accept liability for direct debits made by an authorised third party. You are solely responsible for such debits and if the debit exceeds your available funds, you are required to pay OFX the equivalent amount within 48 hours of becoming aware of such deficiency.

•  In certain circumstances we may be entitled to reverse a transaction or execute a recall, see the OFX Terms and Conditions or Global Account Terms of Service for more details. Where this puts your Balance into negative you are liable to reimburse us for any negative Balance.

•  There is a risk your GCA or OFX Global Account may be used for fraudulent and unauthorised transactions if the security of your GCA or OFX Global Account, your OFX Card or your access to your online account is compromised. It is important that you safeguard all account credentials including passwords.

You may reduce your risks by minimising the amount of funds received and held in your virtual accounts at any one time.

10 OFX Card Service

10.1 What is the OFX Card?

The OFX Card is a prepaid debit card that is connected to your OFX Global Account and allows you to spend your Balance. Prior to being issued an OFX Card you must have registered with us and have opened an OFX Global Account. You must have an available Balance in your OFX Global Account to satisfy the total amount of the transaction, inclusive of any applicable fees and charges. If there are insufficient funds to settle the transaction, the transaction will be rejected.

The OFX Card can be a virtual card or a physical card, see the OFX Card Agreement (Business) at ofx.com for more information.

10.2 Withdrawing funds via the OFX Card

When you tap or insert your card or enter your card details online (for card not present transactions) the payment will be made in the local currency of the merchant you are wanting to pay unless you have insufficient funds in your corresponding currency OFX Global Account. When you have the full amount payable available in your corresponding currency OFX Global Account the funds will be pulled and your Balance will be updated accordingly.

If you have insufficient funds in your corresponding currency OFX Global Account, we will execute a spot contract using funds from your AUD OFX Global Account to the applicable local currency of the merchant. Details of the transaction will be available in your transaction history within your online account.

For example, if you are paying a merchant in the US and they are charging you in USD the Payment will be made from your USD OFX Global Account Balance where you have a sufficient USD Balance. Where your USD Balance is insufficient, we will perform a spot contract converting from AUD to USD using your AUD Balance. The exchange rate used will be the then current Spot Rate as per the Automatic Conversion provisions in the OFX Terms and Conditions.

10.3 Fees

(a) Margin – see section 5.5(a) of this PDS, above;

(b) Transaction Fees – see section 5.5(b) of this PDS, above. Please note that more than one Transaction Fee may be incurred if you are transferring funds to multiple Recipient Accounts; and

(b) Third Party Transaction Fees – see section 5.5(c) of this PDS, above

(d) if you request a physical card you will be charged a one off fee of AUD$10 per card; and

(e) Automatic FX Conversion of a Cross-Border Transactions (also known as the margin included in the foreign exchange rate when using your card) is charged per transaction. It is generally higher than a non-card foreign exchange transaction Margin. The details of your transaction including your exchange rate will be included in your Service Confirmation within your transaction history;

10.4 Significant Benefits

The significant general benefits of the OFX products and services referred to in this PDS are outlined in section 10, below. The significant specific benefits of having an OFX Card are as follows:

•  You can easily access your Balance to make payments for goods or services using a card (anywhere the card is accepted globally) including in store and online;

•  The card is designed to be accepted anywhere in the world Visa or Mastercard cards are accepted electronically; and

•  It reduces the need to carry physical cash.

10.5 Significant Risks

The general risks of the OFX products and services referred to in this PDS are outlined in section 11, below. The significant specific risks of having an OFX Card are as follows:

•  There is a risk your OFX Card may be used for fraudulent and unauthorised transactions if the security of your OFX Card, your access to your online account or your PIN is compromised. It is important that you safeguard all account credentials including passwords and your PIN.

•  You are liable for any actions or transactions undertaken by Authorised Users or Additional Cardholders. You should only appoint someone as an Authorised User or Additional Cardholder when necessary and ensure you have carefully considered who to appoint.

11 SIGNIFICANT BENEFITS OF USING OFX’S SERVICE

OFX offers:

•  real-time pricing, which can be accessed simply by logging in to the website or mobile app and requesting a live exchange rate quote;

•  immediate access to an online trading platform 24 hours a day, seven days a week;

•  customer service team available 24 hours a day, seven days a week;

•  competitive exchange rates (see section 3.3 of this PDS, above) and transaction times;

•  accurate transaction records with your transaction history accessible at any time simply by using your login on our website or calling our staff;

•  access to market commentary and other general foreign exchange information and historical currency charts; and

•  visibility to market/interbank rates and a transparent service which will allow you to compare our rates against market/interbank rates and against your bank’s or other provider’s rates.

12 OTHER SIGNIFICANT RISKS OF USING OFX’S SERVICE

Regardless of whether you enter into a Spot Contract, a Forward Contract or an Option, there are risks you must consider before you enter into any transaction with OFX.

12.1 Credit Risk

Credit risk (also referred to as counterparty risk) is the risk that OFX will become insolvent and become unable to perform our contractual obligations to you (i.e. send the agreed amount of currency to your Recipient Account at the agreed time). When you enter into a transaction with us, you are reliant on our ability to meet our obligations to you on the terms of each transaction, so you are taking a risk in relation to our solvency.

For further details as to the nature and extent of this risk, please see section 3.7,above. Clients who hold funds in a virtual account as part of the GCA and OFX Global Account have the benefit of the Bank Guarantee as described in section 9.3, above, which helps mitigate this risk for GCA and OFX Global Account Clients only.

12.2 Operational Risk

Operational risk is the risk of loss resulting from inadequate or failed systems, internal processes or external events. We utilise a range of internal and third-party systems and providers to provide our service. There is a risk that these systems and providers fail and, as a result, may mean we are unable to provide our service. Such risks include, but are not limited to, delays in settlement and technical issues resulting in errors with payment details or investigation items. We utilise multiple internal processes to protect against errors in settling client payments, including segregation of duties, policies and dual authorisation for all payments. The risks involved in the use of third-party external systems are contingent upon measures implemented by the third-party provider.

There are important provisions relating to the use of the platform on our website in our Terms of Use and in our OFX Terms and Conditions.

You must ensure that you fully understand these provisions and the risks involved in relying on an online, electronic system and the limitations in the service that OFX can provide in relation to the platform.

12.3 Technology and Data Security Risk

We employ current technological security measures, including encryption for all data transfers over the internet.

We also have in place physical risk reduction processes and procedures, such as locked filing cabinets and restricted access to offices. Strategic risk reduction processes are in place such as security clearances and limiting access to a “need-to-know” basis. However, there are significant risks associated with using and relying on a web-based, electronic trading platform. Such risks include, but are not limited to, risks related to the use of software and or telecommunications systems such as software errors and bugs, delays in telecommunications systems, interrupted service, data supply errors, faults or inaccuracies and security breaches.

While we will use all reasonable efforts to ensure uninterrupted access to the website at all times, we cannot guarantee that such access

will never be interrupted as a result of technical or other unforeseen problems as these are matters largely outside our control. We therefore reserve the right to suspend or terminate access to the website (and or the mobile app) at any time and without prior notice and we can’t accept any liability for any loss caused by lack of access to our system or for any errors in the software and or related information systems.

There are important provisions relating to the use of the platforms on our website in our Website Use Agreement and in our OFX Terms and Conditions.

You must ensure that you fully understand these provisions and the risks involved in relying on an online, electronic system and the limitations in the service that OFX can provide in relation to the platforms.

12.4 Discretionary Powers of OFX

We have a number of discretionary powers which may affect your ability to conduct transactions, including the right to Terminate your transaction/s without prior notice to you. We refer you to the Client Agreement which sets out these powers and suggest that you should fully understand them before entering into a transaction. You should understand that we may refuse to enter into a transaction, or Terminate any open transactions, without prior notice, in circumstances including but not limited to the following:

•  if you fail to make any payment when it is due, including the payment of any Advance Payment that has been requested by us;

•  if you fail to provide any information we have requested or any information you have given us is or becomes, in our opinion, inaccurate or misleading;

•  if we are unable to complete a transaction due to our own, or a counterparty bank’s, compliance and/or regulatory requirements;

•  in the event of your death or loss of mental capacity;

•  if bankruptcy or winding up proceedings are commenced against you;

•  if the performance of our obligations under this PDS becomes illegal;

•  if a dispute has arisen between us; or

•  if you breach any term of our Client Agreement or of any transaction.

You should be aware that we may be obliged to freeze or block your account and or funds if information comes to our attention that leads us to believe that it is being used in connection with fraudulent activities, money laundering or terrorist financing activities or if we are required to do so by a court or regulatory authority. If this occurs, we are not obliged to provide a reason or explanation and we will not be liable to you for any indirect or consequential losses whatsoever and you agree to indemnify us if we suffer loss as a result of action taken by a third party recipient arising from any such action we have taken in relation to your account. For further details on our process for collecting and storing of information, please see the OFX Privacy Policy on our website www.ofx.com and section 12.1 of this PDS, below.

12.5 Foreign Exchange Risk

Once you have entered into a Spot Contract or a Forward Contract with us that involves the exchange of currencies, you will have locked in an exchange rate, so your transaction will not be affected by subsequent exchange rate movements; you will

be protected from adverse exchange rate movements and, equally, you will be precluded from benefiting from favourable exchange rate movements. However, in deciding whether or not to enter into a Spot Contract or a Forward Contract, you need to understand the associated foreign exchange risks.

Foreign exchange currency markets are subject to many influences which may result in rapid currency fluctuations. Those influences are unpredictable and often entirely unforeseen. They include such things as changes in a country’s political condition, changes in the global economic climate and natural disasters, all of which may substantially affect the price or availability of a given currency. This is also known as volatility risk.

13 APPLICABLE LAWS

13.1 Privacy

We are subject to privacy laws. By entering into the OFX Terms and Conditions, you consent to us collecting, storing and disclosing any of your Personal Information in accordance with our Privacy Policy which is available on our website at www.ofx.com. The protection of your information is very important to us. We have practices which include the secure storage of Personal Information and safeguards against the accidental release of personal information, and we also employ a number of technology security mechanisms to help safeguard your information and to help Us to provide you with a secure service. Our website also contains additional information on how we ensure the security of your personal and account information. Please contact us at privacy@ofx.com  if you have any concerns.

13.2 AML/CTF

By entering into the OFX Terms and Conditions, you undertake that you will not knowingly do anything to put us in breach of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) and the associated rules and regulations (“AML/CTF Laws”). You undertake to notify us if you are aware of anything that would put us in breach of the AML/CTF Laws. We are required to comply with these laws, including the need to establish your identity (and, if relevant, the identity of other persons associated with your account).

Additionally, from time to time, we may require further information and or documentation to assist with this process. We may be required to report information about you, or provided by you, to the relevant authorities. Generally speaking, we will be prohibited from telling you when this occurs.

You undertake that you are not aware and have no reason to suspect that:

(a) the money you are intending to transfer is derived from or related to the proceeds of crime, money laundering, terrorism financing, tax evasion or similar activities (constituting some, but not all forms of “Illegal Activities”); or(

(b)    the funds you are transferring will fund any Illegal Activities.

In certain circumstances, we may not be able to transact with you or other persons associated with your account and may be obliged to delay processing a transaction, block or freeze an account or funds which were or are being used in connection with Illegal Activities or suspected Illegal Activities, at our sole discretion. If this occurs, we are not liable to you for any indirect or consequential losses whatsoever and you agree to indemnify us if we are found liable to a third party in connection with the freezing or blocking of your account.

14 TAX IMPLICATIONS

14.1 Independent Tax Advice

There may be tax implications associated with any transaction you enter into with Us and the relevant tax rules or their interpretation may change from time to time. You are therefore encouraged to seek professional tax advice prior to entering into any transaction with Us to understand whether there are any tax implications as a result of entering into transactions with us.

14.2 GST

GST is not payable on the Fees we charge.

15 COMPLAINTS

15.1 Internal Complaints Procedure

We have an internal complaints handling process in place to resolve any complaints you may have quickly and fairly. We will acknowledge your complaint within 24 hours and investigate your complaint and aim to send a final response to you within 30 Business Days of receipt of your complaint. All complaints should be discussed with your usual contact at OFX in the first instance who will attempt to resolve your complaint immediately. Further details in relation to our complaints handling process are outlined in our Complaints Policy and available on our website at www.ofx.com.

15.2  Australian Financial Complaints Authority

If more than 30 days from the date of your complaint has passed and you have not received a final response, or if you are dissatisfied with the outcome of our internal procedure, you have the right to complain to AFCA.

AFCA provides fair and independent financial services complaint resolution that is free to consumers.

Website: www.afca.org.au 

Email: info@afca.org.au

Telephone: 1800 931 678 (free call)

In writing to: Australian Financial Complaints Authority, GPO Box 3, Melbourne VIC 3001.

This is an approved external dispute resolution scheme of which OFX is a member.

16  CHANGES TO THIS PDS

16.1  Notification of Changes

Some of the information in this PDS may change from time to time. If any of the changes are materially adverse to the information in this document, we will issue a supplementary or replacement PDS. If the changes are not materially adverse to the information in this PDS, we will post the information on our website at www.ofx.com and you may request, free of charge, a paper copy of any information updated in this manner.

17 DEFINITIONS

Additional Terms means the additional terms and or conditions, set out in the ‘Additional Terms’ notice issued to you by OFX, which apply to you and vary or amend the terms of your GCA or OFX Global Account.

Advance Payment means a part payment of the final amount due on settlement in such sum as OFX deems necessary to cover its Settlement Risk.

Business Days means a day other than a Saturday, Sunday or public holiday on which banks are open for business in the city in which the OFX group entity you are dealing with operates in.

Bank Guarantee means the bank guarantee issued by NAB and held on trust by Global Loan Agency Services Australia Nominees Pty Ltd as independent trustee (“Trustee”) for each GCA or OFX Global Account holder in order for us to rely on the Exemption Notice.

Currency Pair means the two currencies that are the subject of the transaction.

Delivery means payment to us of the full amount of the currency you are exchanging.

Exemption Notice means the “Exemption Notice for Certain Guaranteed Holders of Stored Value Under Section 25” dated 4 March 2004 issued by the Reserve Bank of Australia.

Exercise means exercising the rights under the Option.

Expiry Date means the date on which the Option must be exercised, failing which it automatically expires and ceases to be exercisable.

Fees means all fees, costs and charges associated with your transaction, which are set out in more detail in sections 3.6, 5.5, 6.8, 7.10 and 9.3 of this PDS.

Forward Contract means an agreement where one currency is sold or bought against another currency at an agreed exchange rate for settlement on a specified date in the future.

Forward Points means the amount by which a Forward Rate varies from the Spot Rate as a result of the differential in interest rates between the two currencies in a  Currency Pair.

Forward Rate means the Spot Rate adjusted to a future date having regard primarily to the interest rates prevailing in the two currencies in the Currency Pair.

Global Currency Account or GCA means the client account that is not a bank account, held with OFX used to receive and hold foreign currency.

Global Currency Account Service Agreement means the agreement that we will ask you to enter into in addition to the OFX Terms and Conditions and before we begin transacting with you.

Hedge means activity initiated in order to mitigate or reduce economic exposure to adverse price or currency movements, by taking a related offsetting or mitigating position, such as a Forward Contract or an Option.

Illegal Activities means any actual or alleged unlawful or criminal acts including but not limited to money laundering, terrorism financing or any similar activities.

Instructions means a request made by you to enter into a transaction.

Interbank Spot Rate means the market Spot Rate that we receive from the foreign exchange wholesale market, being a preferential rate given to organisations conducting large and frequent transactions.

Limit Order means an order to enter into a Spot Contract which becomes binding only when a certain exchange rate (“Target Rate”) nominated by You is reached.

Margin means the difference between the exchange rate we pay our provider, which we access through the wholesale foreign exchange market, and the rate that we quote to you.

Marketplace means an e-commerce platform that facilitates the sale of products and services by a third party.

Maturity Date (or Settlement Date or Delivery Date) means the agreed date on which the funds that are being exchanged must be received by us. This date may be brought forward or extended by OFX at its discretion.

NAB means the National Australia Bank Limited ABN 12 004 044 937.

OFX Global Account means a multi-currency account allocated to you, that is not a bank account, that allows you to receive, hold and transfer funds in and out of.

OFX Terms and Conditions means the master agreement or general terms and conditions that we will ask you to enter into before we begin transacting with you.

Option means an agreement that gives the buyer the right but not the obligation to enter into a foreign exchange transaction at an agreed exchange rate on an agreed date on the terms set out in the Client Agreement.

Option Agreement means the verbal contract which you enter into with us upon your over-the-phone Instructions to us to enter you into an Option.

Option Confirmation means an email confirmation provided to you by us confirming the details of the Option Agreement.

PDS means this Product Disclosure Statement.

Personal Information has the meaning as stated in the Privacy Act 1988 (Cth).

Pooled Account means the separate account which holds commingled OFX client GCA and OFX Global Account funds.

Premium is the Option fee payable.

Privacy Policy means the privacy policy on our website at www.ofx.com.

Profit means the same as Margin (see above).

Recipient Account means the bank account nominated by you to which we send your funds, which could be an account in your name or an account of a third party such as a supplier or service provider.

Regular Payment means an instruction to make payments on a weekly, monthly or quarterly basis up to 12 months in advance either by way of a series of Spot Contracts or by way of a series of Forward Contracts.

Settlement Risk means the risk we assume that you fail to settle a transaction in accordance with its terms and that a loss will be realised by us as a consequence of exchange rate fluctuations.

Spot Contract (also referred to as Spot Transaction) means an agreement to exchange one currency for another at an agreed exchange rate within 2 Business Days of the transaction being booked.

Spot Rate means the exchange rate for settlement within 2 Business Days from the date the transaction was booked.

Strike Rate is the agreed exchange rate for the foreign exchange transaction that is the subject of the Option.

Terminate or Termination means cancelling the transaction and selling back the currency we have bought for you when you entered into the transaction.

Termination Date means the day on which you or we cancel or Terminate a transaction.

Transaction Fee means a fee charged on transactions to cover administrative costsand other operational costs as detailed in section 3.6.

Trustee means Global Loan Agency Services Australia Nominees Pty Ltd (ACN 608 945 008)

Email: apac@glas.agency Attention: Transaction Management Group (OFX), Level 23, Governor Phillip Tower, 1 Farrer Place, Sydney NSW 2000, ph. +61 2 7202 4631

We, Our, or Us (or ‘we’, ‘our’ or ‘us’) means OzForex Limited trading as “OFX” (ABN: 65 092 375 703).