Legal

ASIC REGULATORY GUIDE 227 DISCLOSURE BENCHMARKS

ASIC Regulatory Guide 227 requires Margin FX and CFD issuers to publish certain information addressing a range of disclosure benchmarks. These benchmarks are required to be addressed on an ’if not, why not’ basis, and are intended to assist retail investors to properly understand the complexity and risks of trading in OTC derivative products, particularly with regard to leverage.

There are 7 disclosure benchmarks required to be addressed, all of which we are of the view, have been met by IMPFX. IMPFX’s compliance with each benchmark is addressed in the following table:

Benchmark desription How does IMPFX meet this benchmark? Relevant sections of the PDS which provide further relevant information
Client qualification IMPFX maintains and applies a written policy which sets out the minimum qualification criteria that prospective retail investors will need to demonstrate before we will open a trading account for you. IMPFX also maintains a written policy/procedure to ensure such criteria are properly applied, and unsuitable investors are not accepted. We also maintain records of our assessments.

Please note that we do not provide personal advice regarding the suitability of trading in these products as we do not assess your personal financial circumstances and objectives.

IMPFX does not accept retail investors unless they are able to satisfactorily answer a suitability questionnaire, which addresses the following criteria:
- Previous trading experience in financial products-,Understanding of leverage, margins and volatility
- Understanding of the key features of the product
- Understanding the trading process and relevant technology
- Ability to monitor and manage the risks of trading-,Understanding that only risk capital should be traded

During the registration process, new clients will be required to answer a series of questions designed to assess their knowledge, experience and understanding of OTC derivative products such as CFDs and Margin FX. An IMPFX representative may contact you with further follow-up questions, or we may offer you our demo account to further your experience, in our sole discretion if we consider this appropriate.
3,6,7,9 and 20
Opening collateral IMPFX only permits clients to open an account and trade with cleared funds (ie transfer of cash from your banking account to your trading account). Please note that an account may be opened with a cash transfer from your bank account or with a credit card (but only to certain amount limits for credit cards). No other financial products will be accepted as collateral to open a trading account, although we may accept such as collateral to meet subsequent Margin Calls in special agreed circumstances.

Whilst the RG227 benchmark recommends that no more than $1,000 be accepted by credit card as opening collateral on a new account, please note that IMPFX do not always comply with this restriction, as we have a process in place to address the suitability of credit card deposits as opening collateral. We utilise a tiered range of internal limits established with our payment processor, based on an individual client’s annual income, and accordingly may accept between $1,000-$25,000 as an initial deposit on credit card, depending on the size of your annual income.

IMPFX will only act on funds that have cleared, so we recommend that you maintain sufficient Margin in your account at all times to maintain your open positions.
3, 18
Counterparty risk – hedging IMPFX maintains and applies a written policy to manage our exposure to market risk from client positions. This includes strict risk management controls to monitor and manage (hedge) our trading exposures on an intraday basis, and includes a process for assessing our hedging counterparties (to ensure they are of sufficient financial standing, are licensed by a comparable regulator, and are of sound reputation).

A summary of our policy, which notes our current approved hedging counterparties, is available on our website (and may be updated from time to time as counterparties change).
13
Counterparty risk – financial resources IMPFX maintains and applies a written policy to ensure the ongoing maintenance of adequate financial resources. We further maintain a detailed Risk Register, in which the key risks of our business are addressed and reviewed. Please note that we have processes in place to ensure we monitor our compliance with our licence conditions and ASIC RG 166 (financial) obligations, as well as obtain a review and input from our independent external legal and accounting advisers.,Further, our external independent auditor conducts an audit at the conclusion of every financial year, a copy of which can be provided to you upon written request. Please contact us in writing at the address/email provided herein, should you wish to obtain a free-of-charge copy of our latest audited financial statements which may assist in your assessment of credit risk.

We undertake stress testing on a quarterly basis to ensure that in the event of significant adverse market movements, we hold sufficient liquid funds to meet our obligations.
13
Client money IMPFX maintains and applies a clear policy with regard to the use of client money. Please note that money you deposit into your trading account is co-mingled with other client money in our segregated client trust account. Such monies are only applied to client trades/settlement obligations and to pay agreed fees to counterparties etc, in line with the Corporations Act requirements.

Please note that monies deposited into your trading account to meet margins, deposits, fees, transaction settlements, or other costs shall be immediately on-forwarded (where applicable) to our licensed third party clearing and execution providers, and applied against your margin, exchange, fee and settlement obligations. Client monies which are held pending future transactions and payments, are retained in our segregated account in accordance with the Corporations Act. It is important to note that holding your money in one or more segregated accounts may not afford you absolute protection.

IMPFX enters into arrangements with third party execution and clearing providers for the facilitation of hedge transactions and settlements, and avails monies received for margin calls and settlements to such providers for this purpose. Accordingly clients are indirectly exposed to the financial risks of our counterparties and organisations with whom IMPFX may hold client funds. If the financial condition of IMPFX or assets of our counterparties or the parties with which we hold client assets deteriorate, then clients could suffer loss because the return of the client capital could become difficult.

Client trades can only be placed when there are cleared funds in the client’s account. Accordingly, no scenario is anticipated which would result in a shortfall in the client trust account, necessitating the use of one client’s money to cover the obligations of another client.
21
Suspended or halted underlying assets An underlying financial product of an OTC Derivative may be placed in a trading halt on the relevant exchange in various circumstances. Additionally, it may be suspended or delisted in certain circumstances. IMPFX may, in its absolute discretion, cancel your order in respect of a CFD transaction which has not yet been opened, or close any open CFD, where the underlying financial product is the subject of a trading halt, suspension or delisting. When you place an order for a CFD or Margin FX contract with us, it is likely that we will place a corresponding order to purchase or sell the relevant product to hedge our market risk. IMPFX has the discretion as to when and if it will accept an order. Without limiting this discretion, it is likely that we will elect not to accept an order in circumstances where our corresponding order cannot be filled. Accordingly, IMPFX may at any time determine, in our absolute discretion, that we will not permit the entry into CFDs or Margin FX transactions over one or more underlying instruments, securities or currencies. 3 and 20
Margin calls IMPFX maintains and applies a written policy detailing our margining practices. This details how we monitor client accounts to ensure you receive as much notice as possible regarding margin calls, our rights regarding the levying of margin calls and closing out of positions when such calls are not met in a timely manner, and what factors we consider when exercising such close-out rights.

All open positions are monitored on a real-time basis intraday, to ensure changing margin requirements are identified in a timely manner.

IMPFX seeks to provide you with timely and sufficient notice of margin calls, to facilitate your ability to meet them. However, please note that certain market conditions or events may trigger extreme volatility, requiring urgent funds to be applied to retain your open positions.

Please note that all margin calls will be communicated to you via the trading platform and it is your obligation to ensure you are always available to receive and action such margin calls when you have open positions with us. We may provide margin call notifications to you via email or SMS if otherwise expressly agreed with you.

However, we reserve our full rights to immediately close positions in relation to which margin calls have not been met, in order to protect against exposure to further losses in the positions.

We reiterate that trading in CFD and Margin FX products carries a high level of risk and returns are volatile. The risk of loss in trading can be substantial, and you can incur losses in excess of the capital you have invested. Accordingly, you should only trade with risk capital ie money you can afford to lose, and which is excess to your financial needs/obligations.
13, 15 and 18