Product Disclosure Statement

Product Disclosure Statement
Margin Foreign Exchange
AND
Contracts for Difference

Issued 3 May 2016
by Imperium Forex Group Pty Limited
ACN 149 011 361
AFSL 398528
 

Please note: except where specified, this Product Disclosure Statement relates to BOTH Margin Foreign Exchange and Contracts for Difference transactions simultaneously.

Financial services are provided, and this Product Disclosure Statement has been prepared and issued, by Imperium Forex Group Pty Limited ACN 149 011 361 AFSL 398528 (“Imperium FX”). Please note that the information contained in this Product Disclosure Statement (“PDS”) does not constitute a recommendation, advice or opinion and does not take into account your individual objectives, financial situation, needs or circumstances. This is an important document and should be read in its entirety. Before entering into a Margin Foreign Exchange (“Margin FX”) or Contracts for Difference (“CFD”) transaction, you should obtain independent advice to ensure this is appropriate for your particular financial objectives, needs and circumstances.

We recommend that you also obtain independent taxation and accounting advice in relation to the impact of foreign exchange gains and losses on your particular financial situation. The taxation consequences of Margin FX or CFD transactions can be complex and will differ for each individual’s financial circumstances, and your tax adviser should be consulted prior to entering into a Margin FX or CFD transaction.

Imperium FX does not guarantee the investment performance of Margin FX or CFD products nor the investment performance of the underlying markets or instruments. Past performance is no indication or guarantee of future performance.

This PDS does not constitute an offer or invitation in any place outside Australia where or to any person to whom it would be unlawful to make such an offer or invitation. The distribution of this PDS (electronically or otherwise) in any jurisdiction outside Australia may be restricted by law and persons who come into possession of this PDS should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable law. The offer to which the PDS relates is not available to investors in the US and Japan.

If you received this PDS electronically, we can provide a paper copy free of charge upon request. For information regarding our full range of products and services, please read our Financial Services Guide (“FSG”) and visit our website. If you have any queries regarding this PDS, please contact Imperium FX.

Warning Margin FX and CFD products are considered speculative products which are highly leveraged and carry significantly greater risks than non-geared investments, such as shares. You should not invest in Margin FX or CFD products unless you properly understand the nature of Margin FX or CFD products, and are comfortable with the attendant risks.  You should obtain financial, legal, taxation and other professional advice prior to entering into a Margin FX or CFD transaction to ensure this is appropriate for your objectives, needs and circumstances.


 

 

Contents

1.     Purpose and Contents of this Product Disclosure Statement (“PDS”) 4

2.     TERMS & CONDITIONS  5

3.     Margin fx AND CFD summary table  6

4.     ASIC REGULATORY GUIDE 227 DISCLOSURE BENCHMARKS  11

5.     NATURE OF ADVICE/RELATIONSHIP  17

6.     Margin fx contracts offered by Imperium FX  18

7.     PURPOSE OF TRADING Margin fx contracts  18

8.     CFD contracts offered by Imperium FX  19

9.     PURPOSE OF TRADING CFD contracts  20

10.    MARGIN FX AND CFD PRODUCT FEATURES  21

11.    KEY BENEFITS OF TRADING MARGIN FX AND CFD contracts  24

12.    KEY RISKS OF TRADING MARGIN FX AND CFD contracts  27

13.    FEES & CHARGES  34

14.    MARGINs  36

15.    MARGIN FX TRADING EXAMPLES  38

16.    CFD TRADING EXAMPLES  40

17.    Setting up YOUR ACCOUNT  41

18.    ORDERS  43

19.    APPLICATION TERMS & CONDITIONS  44

20.    CLIENT MONIES  46

21.    Cooling off  46

22.    Superannuation  46

23.    TAXATION  47

24.    DISCLOSURE OF INTERESTS  48

25.    Ethical Considerations  49

26.    PRIVACY  49

27.    Dispute resolution  49

28.    Glossary  50

 

  1. Purpose and Contents of this Product Disclosure Statement (“PDS”)

This PDS is designed to provide you with important information regarding Margin Foreign Exchange (Margin FX) and Contracts for Difference (CFD) transactions including the following information:

  • Who we are
  • How you can contact us
  • Which products we are authorised to offer
  • Key features/risk/benefits of these products
  • Applicable fees and charges for these products
  • Any (potential) conflicts of interest we may have; and
  • Our internal and external dispute resolution process.

The information in this PDS is general only and does not take into account your personal objectives, financial situation and needs.

The information in this PDS is current as at 3 May 2016, and may be updated from time to time where that information is not materially adverse to clients. Updated information shall be provided on our website www.impfx.com.  

Imperium FX may issue a supplementary or replacement PDS as a result of certain changes, which shall be available on our website or shall be distributed in electronic form as required. If the change is an increase in fees and charges we will notify you at least 30 days in advance of the changes. Defined terms used in this PDS are defined in the Glossary in section 28 or elsewhere in this PDS. If you would like further information, please ask us. Further detail about our services is available on our website www.impfx.com.

 

 

 

 

 

 

NAME & CONTACT DETAILS OF ISSUER/SERVICE PROVIDER

The Issuer is Imperium Forex Group Pty Limited ACN 149 011 361 (“Imperium FX”).

Imperium FX holds an AFSL (398528) and is authorised to provide general financial product advice, deal in financial products and make a market in relation to:

  • Derivatives, and
  • Foreign exchange contracts

for retail and wholesale clients.

You can contact our office by any of the means listed below:

Writing to us at:                      Level 6, 301 George Street, Sydney NSW 2000 Australia

Calling us:                                  +61 1800 388 322

Sending an email to:           admin@impfx.com   

Visiting our website: www.impfx.com

  1. TERMS & CONDITIONS

Information provided to you in our FSG and PDS is important and is binding on you. Additional legal terms governing our relationship are detailed in the Account Application Terms & Conditions. You must complete, sign and return the Application (either online, electronically, fax or by post), and have your Account approved by Imperium FX. Imperium FX reserves the right to refuse to open a Margin FX or CFD Account for any person.

Imperium FX accepts Margin FX and CFD transaction order instructions primarily via the electronic trading platform but may also accept order instructions via telephone if agreed. You are required to access the electronic trading platform on a daily basis to confirm that any order instructions have in fact been received by us, reconfirm all orders that you place with us, review order Confirmations we provide, to ensure their accuracy and monitor your Margin obligations. Any order discrepancies identified must be reported to us immediately.

Regardless of any on-line Confirmation received upon placement of an instruction via the on-line trading facility, such transaction is not confirmed by Imperium until Imperium provides a Deal Confirmation.

Imperium FX will provide all clients, via the electronic trading platform or the website, with access to both daily and historical Account statements allowing you to check your open positions, Margin requirements and cash balances, and trading Confirmations. Should you have any queries relating to your statements we encourage you to contact us.

Imperium FX does not guarantee the performance, return of capital from, or any particular rate of return, of a Margin FX or CFD product or transaction. Clients may lose more than the amount of funds in their Margin FX or CFD Account, and should only invest risk capital (that is, capital you can afford to lose). Please note that the historical financial performance of any Margin FX or CFD or underlying instrument/market is no guarantee or indicator of future performance.

Please note that the examples provided in this PDS are only provided for illustrative purposes only and do not necessarily reflect current or future market or product movements, the values that Imperium FX will apply to a trade, nor how such trades impact your personal circumstances. The figures used in the examples do not necessarily reflect your personal circumstances and do not restrict in any manner the way in which Imperium FX may exercise its powers or discretions. Those examples do not constitute general or personal financial product advice to any person reading this PDS. 

  1. Margin fx AND CFD summary table

The following summary table is provided for ease of reference. However, please ensure that you read this PDS in its entirety.

Item

Summary

PDS Section reference

Who is the issuer of this PDS and the products?

Imperium Forex Group Pty Limited ACN 149 011 361 AFSL 398528

 

1

What is Margin FX?

Margin FX is an over-the-counter derivative product which enables traders to leverage a small Margin deposit for a much greater market effect in relation to currencies.  A foreign exchange contract involves the exchange of one currency for another. Margin FX differs from spot and forward foreign exchange trading in that they are legally classified as derivatives rather than foreign exchange contracts, and are cash settled (i.e. no physical delivery is available). Margin FX trading generally involves taking forward positions in a foreign currency and instead of those contracts being settled by exchange of the relevant currencies, the positions are “closed out”. Closing out involves entering into equal and opposite position with us, which generates a profit or loss on the transaction, which is then settled between us. The resulting profit or loss of the trade is the net result of the difference between the opening and closing exchange rates of each transaction, adjusted for transaction costs.

6

What are CFDs?

A Contract for Difference (CFD) is a contract under which the parties agree to exchange the cash difference between the opening value and the closing value of the contract. The CFDs we offer are over-the-counter financial products that give the holder exposure to price movements of an Underlying Instrument. Like other derivatives, CFDs allow investors to participate in the returns from movements in an Underlying Instrument, without the need to own that Underlying Instrument. CFDs allow you to make a profit or loss from the fluctuation in the Underlying Instrument and the amount of any profit or loss on a CFD Trade will be the total of the difference between the opening value of the CFD (Quantity x Our Price) and the closing value of the CFD (Quantity x Our Price); less any Commission, and Daily Financing Fee you incur and are required to pay to us in respect of the CFD.

8

What fees and charges are payable in respect of a Margin FX and CFD contracts?

No Transaction fees will be charged to clients.

The price/rate quoted to clients for derivative contracts also includes a spread in favour of Imperium FX, through which our revenue is generated. The prices/rates quoted to clients may differ from prices available in the primary or underlying markets. Accordingly, due to the spread applied between the offer and bid price, if the underlying value of the contract does not move between purchase and sale, you will make a loss to the extent of Imperium FX’s spread.

However you may incur the following fees and charges:

  • Financing charges – where positions are held open overnight, interest may be paid or payable thereon;
  • Telephone Fees – where the trading platform is available, a fee for telephone service may be levied. If applicable, this will be disclosed to you prior to trading.
  • Third Party fees – you will be liable for any fees charged for related services by third party providers, such as fees for access to certain information and services.

 

13

How do I open a Margin FX or CFD Account?

Prior to transacting in Margin FX or CFDs, you must read and understand our FSG, this PDS and the Account Application Terms & Conditions (which will be provided to you by Imperium FX) detailing the applicable terms and conditions. You must complete, sign and return the Account Application Terms & Conditions as well as adequately completing our online suitability questionnaire to our satisfaction. Imperium FX reserves the right to issue you a demo Account or request you re-do the suitability questionnaire before Account is approved by Imperium FX. Imperium FX reserves the right to refuse to open an Account for any person.

 

Once you have an Account, you may fund it with bank transfer or credit card.

17 and 19

How do I place a Margin FX or CFD transaction order with Imperium FX?

Imperium FX accepts Margin FX and CFD order transaction instructions electronically, via our on-line trading platform. CFD positions can be opened by either buying or selling a CFD, depending on whether you require a Long or Short position. CFD positions can be closed by taking the equal or opposite position to the open CFD position. That is, purchase a Long CFD to close a Short position, or sell a Short CFD to close a Long position. Imperium FX also has the discretion to offer to take your orders via telephone however this service will need to be prearranged between you and Imperium FX.

18

What is Margin?

Your Initial Margin is the amount Imperium FX debits from your Account as soon as you open a new Margin FX or CFD position or place an order to open a new Margin FX or CFD position. This acts as collateral or a security buffer and protects us in the event of a default by you. Typically we will require an Initial Margin calculated as a percentage of the contract value.

 

The Variation Margin is the unrealised profit or loss on your open position. This is the difference between the value of the product when it was bought or sold and its current market price. Should your position move in your favour we may refund part or all of the Variation Margin to you.

 

If you do not meet a Margin Call in a timely manner or within the time frame specified in the Margin Call, positions will be reduced or closed out by Imperium FX without further reference to you in accordance with the terms of the Application Terms & Conditions. A Margin Call will not be considered to have been met unless and until cleared funds have been received in the nominated Account and Imperium FX has updated the trading platform.

14, 15

How are payments made in and out of your Account?

You may transfer funds to us using mainly any of the following methods:

Bank transfer;

Credit/Debit Card; or

Online payment facility

 

In no circumstances does Imperium FX accept cash deposits.

You will only be able to withdraw moneys available to you after your Margin obligations have been met. All transfers from Imperium FX to you will be made to the bank Account nominated in your Application Terms & Conditions.

17 and 20

Do I pay or receive any financing charges?

In the event of you holding a Margin FX or CFD position overnight you may be required to pay a financing charge or maybe entitled to receive an interest payment, depending on underlying interest rate differentials of the applicable currencies.

 

If you hold a short CFD position overnight you will be entitled to receive interest. Interest calculations are based on the total notional value of your open position, and are calculated at LIBOR or LIBID plus or minus a Margin. Interest is calculated daily and posted to your Account at the end of each day.

13

What are the key risks of Margin FX and CFDs transactions?

Investment in Margin FX or CFD products carries a high level of risk and returns are volatile. You should only ever trade with risk capital ie money you can afford to lose, and should obtain independent professional advice to carefully consider whether these products are appropriate for you in light of your knowledge, experience and financial needs and circumstances.

 

Some of the significant risks involved in Margin FX and/or CFD trading include (and should be read in detail at section 12 herein):

  • Credit Risk
  • Operational Risk
  • External Market forces
  • Currency Risk
  • Loss of Margin
  • Gapping
  • Variation Margins
  • Leverage
  • Liquidity
  • Online trading platform  risk
  • Stop loss orders unavailable
  • Powers of Imperium FX
  • Reliance on third parties
  • Regulatory Risk

12

What are the tax implications of Margin FX trading?

The taxation consequences of trading in Margin FX and CFDs can be complex and will differ for each individual’s financial circumstances. We recommend that you obtain independent taxation and Accounting advice in relation to the impact of Margin FX and CFDs transactions on your particular financial situation.

23

Imperium FX’s powers in the event of default

Imperium FX has extensive powers under the terms of the Application Terms & Conditions to take action in response to a range of default events. Imperium FX may terminate your Account, and close out all or any of your Margin FX or CFD positions, including cancelling any outstanding orders.

2 and 19

How do I obtain further information?

You can contact our office as per contact details in this PDS.

 

 

1

 

 

  1. 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 Imperium FX. Imperium FX’s compliance with each benchmark is addressed in the following table:

Benchmark description

How does Imperium FX meet this benchmark?

Relevant sections of the PDS which provide further relevant information

Client qualification

Imperium FX 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. Imperium FX 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 for your personal financial circumstances and objectives.

 

However, Imperium FX 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 in our online suitability questionnaire. An Imperium FX 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. Once you have completed the questionnaire to our satisfaction or have placed five or more trades on the demo Account, we will reconsider your application.

 17

Opening collateral

Imperium FX does not meet this benchmark because it accepts as collateral for opening the account payments by credit card for more than $1000.

 

Whilst the RG227 benchmark recommends that no more than $1,000 be accepted by credit card as opening collateral on a new Account, Imperium FX has in place a process 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 by credit card.

 

Nevertheless, funding an account by credit card has additional risks and costs for the client. By using these payment methods, the client would effectively be doubling their leverage by taking credit from their credit card account and trading with leverage on their Imperium FX Account. This can add to the risks and volatility of their positions as well as incurring higher interest costs on their credit card account.

 

If clients lose on their Imperium FX products, they might not have other financial resources to repay their credit card account, incurring higher interest costs and possibly defaulting on their credit card terms.

 

Although Imperium FX may accept payments of more than $1000 from credit card accounts to fund the client’s Account and to meet later Margin payments, the client should carefully consider whether this payment method is suitable for their trading and limit it to what they can afford.

 

Imperium FX 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 amounts 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.

 

17

 

Counterparty risk – hedging

Imperium FX 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 request (and may be updated from time to time as counterparties change).

12

Counterparty risk – financial resources

Imperium FX maintains a Counterparty Risk Management policy to ensure the ongoing maintenance of adequate financial resources through imposing credit limits, collateral collection and counterparty monitoring. 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.

 

 We do not perform stress testing because we intend to fully hedge all transactions with clients with reputable licensed third party financial services providers.

12

 

Client money

Imperium FX 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 client trust account. Such monies are only applied to client trades/settlement obligations and to pay agreed fees 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.

 

Imperium FX may enter into arrangements with third party execution and clearing providers for the facilitation of 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 Imperium FX holds client funds. If the financial condition of Imperium FX 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.

20

Suspended or halted underlying assets

An underlying financial product may be placed in a trading halt on the relevant exchange in various circumstances. Additionally, it may be suspended or delisted in certain circumstances. Imperium FX (may, in its absolute discretion), cancel your order in respect of a CFD transaction which has not yet been opened, adjust the terms of a position 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, we may place a corresponding order to purchase or sell the relevant product to hedge our market risk. Imperium FX 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, Imperium FX 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.

 12 and 28

Margin calls

Imperium FX 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.

 

Imperium FX will, although not obliged to, take reasonable steps  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 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 take reasonable steps to 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 in excess to your financial needs/obligations.

 

 

14, 15, 19

  1. NATURE OF ADVICE/RELATIONSHIP

In the absence of our express written agreement to the contrary, we only provide general advice and we neither collect, nor take into consideration, information regarding your financial circumstances and needs. You understand that our decision whether to let you trade following the suitability questionnaire does not form personal advice. We recommend that you obtain your own professional advice to ensure you fully understand the nature and risks of these products and determine their suitability for your situation.

 

CFD and Margin FX are contracts between you and Imperium FX, which means both parties act as principals to the transaction and have a direct credit exposure to each other. You do not trade through an Exchange and are not afforded the protections normally associated with exchange-traded derivatives, such as guarantee arrangements.

Trading in CFDs is not suitable for all investors because of the significant risks involved. You must carefully consider whether CFDs are appropriate for you in light of your financial circumstances, experience and investment objectives. In making this decision you should be aware you could both gain and lose large amounts of money. You risk losing money because:

  • You could lose all the Margin funds you deposit with Imperium FX to establish or maintain a CFD position. In addition, you could lose further amounts as explained below.
  • If the market moves against your position, or your position is rolled over into a new contract with a differing value you may be required, at short notice, to deposit with Imperium FX further money as Margin in order to maintain your CFD position. Those additional funds may be substantial. If you fail to provide those additional funds within the required time your CFD position may be closed. You will be liable for any shortfall in your Account resulting from the closure.
  • You could lose all monies deposited with Imperium FX, and in addition, be required to pay us further funds representing losses and other fees on your open and closed CFD positions. For example, although you may only invest $1,000 in a CFD position, if the market moves against you could lose the full value of the CFD position. Under certain conditions, it could become difficult or impossible for you to liquidate or close a CFD position. For example, this can happen when there is significant change in prices over a short period.

 

 

 

 

  1. Margin fx contracts offered by Imperium FX

Please note: this section applies to Margin FX’s ONLY

Margin FX contracts provided by Imperium FX are available in 50 pairs of currencies.   This means that all major currency pairs are available. However, some of the minor or more exotic currency pairs cannot be traded with Imperium FX. Please check our website for up-to-date information regarding which currency pairs are currently available.

 

Imperium FX’s Margin FX products do not result in the physical delivery of the currency but are cash adjusted or closed by the Client taking an offsetting opposite position i.e. there is not a physical exchange of one currency for another.  Margin FX products are derivatives, not foreign exchange contracts. Positions will always be closed and the client’s Account will be either credited or debited according to the profit or loss of the trade.

  1. PURPOSE OF TRADING Margin fx contracts 

Please note: this section applies to Margin FX’s ONLY

People who trade in Margin FX contracts may do so for a variety of reasons. Some trade for speculation, that is, with a view to profiting from fluctuations in the price or value of the underlying instrument or currency. For example, Margin FX traders may be short-term investors who are looking to profit from intra-day and overnight market movements in the underlying currency. Margin FX traders may have no need to sell or purchase the underlying currency themselves, but may instead be looking to profit from market movements in the currency concerned.

Others trade Margin FX to hedge their exposures to the underlying currency. Foreign exchange exposures may arise from a number of different activities.

Companies or individuals, that are dependent on overseas trade, are exposed to currency risk.  This can be to purchase (or sell) physical commodities (such as machinery) or even financial products (such as investing in securities listed on an international stock exchange). An exporter who sells its product priced in foreign currency has the risk that if the value of that foreign currency falls then the revenues in the exporter's home currency will be lower; or An importer who buys goods priced in foreign currency has the risk that the foreign currency will appreciate thereby making the cost, in local currency terms, greater than expected.

A person going on a holiday to another country has the risk that if that country's currency appreciates against their own, their trip will be more expensive.

In each of the above examples, the person or the company is exposed to currency risk. 

Currency risk is the risk that arises from international business which may be adversely affected by fluctuations in exchange rates. Imperium FX offers its clients the facility to buy or sell foreign exchange products to manage this risk. 

This enables clients to protect themselves against adverse currency swings, yet secure enhanced exchange rates when offered, thereby protecting the profit Margin made by the corporate during the business transaction relating to the foreign currency trade or protecting the cost of the client’s international holiday in the case of the traveller.

Note: The risk of loss in trading in derivatives and/or leveraged products can be substantial. A client should carefully consider whether trading such products is appropriate for them in light of their financial circumstances and objectives.

Please refer to Section 15 for worked examples.

  1. CFD contracts offered by Imperium FX

Please note: this section applies to CFD’s ONLY

A contract for difference (CFD) is an over-the-counter derivative product comprising an agreement under which one party is entitled to be paid an amount of money (profit), or has to pay an amount of money (loss), resulting from movements in the price or value of an underlying instrument or security (without actually owning that underlying instrument or security). This transaction concludes with the parties settling the difference between the purchase price and the sale price.

During the term of the CFD transaction, the price of the underlying product will be marked-to-market daily so that at the end of each Business Day, a payment will generally have to be made by you to Imperium FX or by Imperium FX to you, to reflect any changes in the value of the underlying product during that Business Day.

Please refer to Section 16 for worked examples.

Imperium FX offers CFDs in relation to Indices and Commodities.

 

 

 

Commodity CFDs

Available commodity CFDs are listed on the trading platform.  Commodity CFDs allow you to speculate on the price of a commodity, or hedge an exposure, without physically owning it. The difference between the opening and closing price of a CFD is settled in cash. At no stage do you take delivery of the underlying commodity. In order to open a CFD position an Initial Margin must be provided as collateral.

Index CFDs

Imperium FX offers CFDs in respect of a range of Indices, thereby allowing you to take positions in relation to the overall direction of a market without taking a view on a particular underlying stock or future. A short position can be used as a rough hedge to protect a diversified share portfolio in the event of a market fall. Please refer to the website for the range of index CFDs currently available.

The difference between the opening and closing price of a CFD is settled in cash. At no stage do you take delivery of the underlying product.

 

  1. PURPOSE OF TRADING CFD contracts 

Please note: this section applies to CFD’s ONLY

People who trade in CFD contracts may do so for a variety of reasons. Some trade for speculation, that is, with a view to profiting from fluctuations in the price or value of the underlying instrument. For example, CFD traders may be short-term investors who are looking to profit from intra-day and overnight market movements in the underlying instrument. CFD traders may have no need to sell or purchase the underlying instrument themselves, but may instead be looking to profit from market movements in the instrument concerned.

 

Others trade CFD to hedge their exposures to the underlying instrument.

 

 

 

  1. MARGIN FX AND CFD PRODUCT FEATURES 

Imperium FX Trading as Principal

 

Imperium FX will regularly state, via the electronic trading platform, the price at which it is prepared to Deal with you as principal. This is known as being a ‘market maker’. When Dealing in Margin FX and CFDs, as with all over-the-counter derivatives, Imperium FX is the issuer and a market maker, not a broker. Accordingly, each transaction agreed and entered into with you will be entered into as principal, not as agent.  Should you decide to transact with Imperium FX then Imperium FX will enter into a legally binding contract with you (as principal) i.e. it will be the counterparty to the transaction and each contract purchased (or sold) by you will be an individual agreement made between you and Imperium FX.

 

Long & Short Positions

 

You can open both long and short Margin FX and CFD positions with Imperium FX. Should you open a long position, your intention would be to profit from a rise in the price of the underlying instrument, and you would suffer a loss should the price of the underlying instrument fell. Conversely, should you open a short position, your intention would be to profit from a fall in the price of the underlying instrument, and you would suffer a loss should the price of the underlying instrument rise.

 

In order to close an open long or short position, you would open an equivalent offsetting position. The closure of a position will generally result in a profit or loss being realised in your Account. Should you wish to close only part of your open long or short position you can do so by entering into an equivalent offsetting position of a lesser amount than your current open position.

 

Many Margin FX and CFDs do not have an expiry date. They remain open until they are closed in accordance with the terms of the Application Terms & Conditions. A Margin FX or CFD position can only be closed by contacting Imperium FX. To close a Margin FX or CFD position, you must access the electronic trading platform to determine the current market price for the underlying instrument, with the view to close the position (or part of it). Imperium FX will confirm the current market price and you will then decide whether to accept the price, and if so, you will instruct Imperium FX to close your open position in accordance with your instructions.

 

You should note that Imperium FX is not obliged to accept your orders. Typically, this would occur should you exceed the limits imposed on your Account by Imperium FX, or where there are insufficient funds in your Account to meet your Margin obligations.

 

Imperium FX cannot predict future exchange rates and our rate quotations are not a forecast of where we believe a foreign exchange rate will be at a future date. Imperium FX calculates foreign exchange rates taking into consideration the current spot “interbank” exchange rates and the amount of currency that you wish to buy or sell

 

The rates quoted for a Margin FX or CFD by Imperium FX include a spread which favours Imperium FX. This spread is not an additional charge or fee payable by you. These spreads will differ depending on the Margin FX and CFDs traded.

 

When trading Imperium FX products, you should always be aware of the risks and benefits as detailed in this PDS.

 

Electronic Platform

 

Imperium FX provides an electronic trading platform which enables clients to trade in our products i.e. clients are provided direct access to Margin FX and CFD rates over the internet.  The terms of use applicable to utilising our electronic trading platform, are detailed in the Account Application Terms & Conditions you are required to execute prior to trading. Some of the key provisions include the following:

 

  • Imperium FX reserves the right, in its sole discretion, to institute or change any policies at any time relating to the use of our electronic trading platform. Any such changes will be advised to you directly via our electronic trading platform, email or our website.
  • Clients are granted a non-exclusive and non-transferable license to use the electronic trading platform subject to the terms of the Application Terms & Conditions.
  • Clients shall only use our electronic trading platform for its internal business or investment purposes. 
  • Clients shall not permit any third party to copy, use, modify, disassemble, translate or convert in connection with use of our electronic trading platform or distribute the platform to any third party.
  • Our electronic trading platform may be used to transmit, receive and confirm the execution of orders, subject to market conditions and applicable rules and regulations.
  • Imperium FX consents to the Client’s access and use in reliance upon the Client having adopted procedures to prevent unauthorized access to and use of the electronic trading platform, in any event, the Client agrees to any financial liability for trades executed through the electronic trading platform.
  • Where a Client is granted access to the electronic trading platform, the Client acknowledges and warrants that it has received a password granting it access to the electronic trading platform; is the sole owner of the password provided; and accepts full responsibility for any transaction that may occur on an Account opened, held or accessed through the use of the password provided to the Client by Imperium FX.
  • Clients agree to accept full responsibility for the use of the electronic trading platform and for any orders transmitted through the electronic trading platform. Imperium FX must be notified immediately should a Client become aware of any unauthorized use, loss or theft of the Client’s, username, password or account numbers; or inaccurate information with respect to the content of statements including, cash balances, open positions or transaction history.
  • The electronic trading platform is provided on an “as–is” basis and Imperium FX makes no express or implied representations or warranties to the Client regarding its operation or usability.
  • Imperium FX does not warrant that access to or use of the electronic trading platform will be uninterrupted or error-free, or that the service will meet any particular criteria with respect to its performance or quality nor do we make any warranty as to the timeliness, sequence, accuracy, completeness, reliability or content of any information, service or transaction provided through the use of the electronic trading platform or the results obtained from its use. Imperium FX expressly disclaims all implied warranties, including without limitation warranties of merchantability, title, fitness for a particular purpose, non-infringement, compatibility, security or accuracy.
  • Under no circumstances, including negligence, will Imperium FX be liable for any direct, indirect, incidental, special or consequential damages including, without limitation, business interruption or loss of profits that may result from the use of, unavailability of, or inability to use the electronic trading platform.
  • Clients agree that the use of the electronic trading platform is at the Client’s risk and the Client assumes full responsibility for any losses resulting from the use of or materials obtained via the electronic trading platform.
  • Please note that stop-outs (automatic closing of a position when Margin Calls have not been met) are implemented on our electronic trading platform at the sole discretion of Imperium FX, and no liability for the direct or indirect consequences thereof shall be accepted by Imperium FX in relation thereto.

 

 

  1. KEY BENEFITS OF TRADING MARGIN FX AND CFD contracts 

Margin FX and CFD products can provide an important risk management tools for those who manage foreign currency exposures. The significant benefits of using Margin FX or CFD products as risk management tools are to protect your exchange rate and provide cash flow certainty. Other benefits of using these products apply equally for a client as a risk management tool or for the client who is a trader or speculator. The benefits of trading Margin FX and CFD contracts are described in the table below.

 

Benefit

Explanation

Margin FX

CFDs

Protect an Exchange Rate

Imperium FX provides an electronic trading platform, enabling clients to trade in over-the-counter (as opposed to exchange-traded) derivatives such as Margin FX or CFD contracts over the internet. This facility provides clients with direct access to our system to enable them to buy and sell currency rates to protect themselves against adverse market swings.

 

Imperium FX also offers clients a way of managing volatility by using stop loss orders that enable clients to protect themselves against adverse market swings yet secure enhanced market rates when offered.  Clients can eliminate downside risk by the use of stop loss orders if the exchange rate reaches a particular level.  In addition, clients may also use limit orders which allow clients the opportunity to benefit from favourable upside market movements. 

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Provide Cash Flow Certainty

By agreeing a rate now for a time in the future you will determine the exact cost of that currency, thereby giving certainty over the flow of funds. Any profit (or loss) you make using the Imperium FX product would be offset against the higher (or lower) price you physically have to pay for the foreign currency.  

In addition to using Margin FX products as a risk management tool, clients can benefit by using Margin FX products offered by Imperium FX to speculate on changing exchange rate movements. You may take a view of a particular market or the markets in general and therefore invest in our products according to this belief in anticipation of making a profit. 

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Leverage

Margin FX and CFDs are leveraged investments and trading instruments. While leverage can magnify losses, it can also magnify profits. Leverage allows Clients to take larger exposures to more markets, than cash investors using the same capital base. Leverage also means that Clients can employ more investment and trading strategies than 'long only' investors. These include trading 'pairs', trading across asset classes, going short and taking exposures around short term events.

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Trade in Small Amounts

The electronic trading platform enables you to make transactions in small amounts. You can start using the electronic trading platform even with an opening balance as little as USD $200 (per lot) for Margin FX and USD$850 (per lot) for CFDs. When trading in a Margin FX or CFD contract offered by Imperium FX you may deposit the sum that suits you, or the amount which is in line with the amount you are willing to risk. With Imperium FX you are in full control of your funds. 

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Access to the Foreign Exchange Markets at Any Time

When using Imperium FX you gain access to a highly advanced and multi-levelled system which is active and provides you with the opportunity to trade 24 hours a day on any global market which is open for trading. This gives you a unique opportunity to react instantly to breaking news that is affecting the markets. It should be noted however, that trading in the various currency crosses may be restricted to hours where liquidity is available for any given currency cross. 

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Profit Potential in falling Markets

Since the market is constantly moving, there are always trading opportunities, whether a currency is strengthening or weakening in relation to another currency. When you trade currencies, they literally work against each other. If the AUDUSD declines, for example, it is because the US dollar gets stronger against the AUD and vice versa. So, if you think the AUDUSD will decline (that is, that the AUD will weaken versus the dollar), you would sell AUD now and then later you buy AUD back at a lower price and take your profits. The opposite trading scenario would occur if the AUD appreciates.

CFDs provide a simple and effective means to take advantage of falling markets.

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Hedging

CFDs and Margin FX contracts can be used to hedge investments, and reduce existing market risk. Clients can hedge directly, on a portfolio basis, or to cover specific risks of investments.

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Lower Costs

Generally, CFD exposures come at lower transaction costs than the same exposure taken in the Underlying Instruments. Clients pay no Imperium FX fees to open or maintain a trading Account.

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Real Time Streaming Quotes

The electronic trading platform uses the latest technology in order to offer you up-to-the-minute quotes. You may check your Accounts and positions in real time and you may do so 24 hours a day (in most circumstances) on any global market which is open for trading and make a trade based on real-time information. Imperium FX believes it is highly important for you to be able to control your funds whenever you wish and base your deals on real-time information.

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  1. KEY RISKS OF TRADING MARGIN FX AND CFD contracts 

Trading in Margin FX and CFD products carries a high level of risk and returns are volatile. The risk of loss in trading can be substantial, and you can lose more than the capital invested. You should obtain independent professional advice and carefully consider whether Margin FX or CFD products are appropriate for you in light of your knowledge, experience and investment objectives, financial needs and circumstances.

It is also important that you read and understand the terms and conditions of trading in the Application Terms & Conditions and this PDS before entering into any Margin FX or CFD transactions.

Some of the key significant risks involved in Margin FX and CFD trading include, but are not limited to, the following:

Macro-economic Risk – the general state of the Australian and international economies as well as changes in taxation policy, monetary policy, interest rates and statutory requirements are some of the factors which may influence currency markets.

Market Risk- This is the risk that the markets move against you. External market forces can cause markets and prices to change quickly, such forces include changing supply and demand relationships, governmental, agricultural, commercial and trade programs and policies, national and international political and economic events and the prevailing psychological characteristics of the marketplace. As the price of your position is based on an underlying asset these factors may affect your position and our ability to execute, settle or close out transactions on your behalf.

A “spread” position (i.e. the holding of a bought contract for one specified date and a sold contract for another specified date) is not necessarily less risky than a simple long (i.e. bought) or short (i.e. sold) position.  Furthermore a “spread” may be larger at the time you close out the position than it was at the time you opened it.

 

You should be aware that if you acquire a product offered for trading or speculative purposes (that is where you do not have a risk you need to protect yourself from), you will be fully exposed to movements in the underlying asset. 

Not a regulated market – the products offered by Imperium FX are not traded on a licensed market. Accordingly, the protections associated with licensed markets are not available to individuals, corporations or other entities trading in our products.

Market or Exchange Intervention – The rules of the relevant market (if any) or Exchange govern the trading in the Underlying security and so will indirectly affect the dealing in the products offered by Imperium FX. All of the rules of each relevant Exchange may be relevant to Imperium FX contracts so you should consider those rules. The details of those rules are outside the control of Imperium FX and they may change at any time and without notice to you.

Conflicts – Trading with Imperium FX carries an automatic risk of actual conflict of interests because Imperium FX is acting as principal in its positions with you and Imperium FX sets the price of the contracts. Imperium FX may also be transacting with other persons or other market participants. Imperium FX does not guarantee that the price given to you is the best price. You can reduce the risks to you of unfavourable pricing or opaque pricing by monitoring Imperium FX’s contract pricing and by monitoring the underlying market. Imperium FX also mitigates this risk by retaining external legal advisors, ongoing board supervision, implementing compliance procedures and maintaining a Conflicts Register.

Loss by Spread – Since Imperium FX charges a spread on some transactions, the price will have to move in your favour before you can break even. That is, even if the price does not move, you will be making a loss when entering the transaction.

Gapping -In fast moving or illiquid markets “gapping” may occur. Gapping occurs when market prices do not follow a “smooth” or continuous trend and are typically caused by external factors such as world, political, economic and corporate related events. Should gapping occur in the underlying asset on which your product is based, you may not be able to close out your position or open a new position at the price at which you have placed your order. Further, in instances of “gapping” any conditional orders opened on your Account will be filled at the next best available price which may be substantially different from the price selected when entering your conditional order. 

Margin Risk - Should the price of the underlying asset on which your product is based move against you, you may receive a Margin Call from us and, at short notice, be required to deposit a Variation Margin into your Account in order to maintain your position. Should we make a Margin Call which may be substantial, you must deposit the amount of funds that we request into your Account immediately. In the event of you failing to make Margin payments we may reduce or close all your open positions without further notice and you will be liable for any shortfall. Positions are marked-to-market on a daily basis, with payments being settled daily to account for market movements. You must be in a position to fund such requirements at all times. Initial and Variation Margin must be paid immediately after the call. The general policy of Imperium FX is that payment of the call must be received within 24 hours of the call although in times of extreme price volatility this may mean as little as 1 hour. In rare circumstances, the markets could move against your position giving Imperium FX no time to make a Margin Call before liquidating your positions in order for Imperium FX to protect the positions of itself and other clients.

LeverageAs these products are highly leveraged a small price movement in the underlying asset on which they are based can result in substantial profits or losses exceeding your Initial Margin. In addition you could be required to pay further funds representing losses and other fees on your open and closed positions.  The prices of our products may be volatile and fluctuate rapidly over wide ranges. Price fluctuations may be as a result of uncontrollable events or changes in a variety of conditions as described above in Market Risk.

Below is a hypothetical example of how gearing (leverage) magnifies losses/profits (without taking into account fees & charges):

 

Commodity purchase amount

CFD purchase amount

Initial outlay

$10,000

$10,000 (as Initial Margin)

Reference commodities purchased

 

1000

10,000

Initial price

$10.00

$10.00

value

$10,000

$100,000

gearing

0%

90%

Result where commodity price falls

Commodity price falls to $8.75.  Commodities now worth $8,750 (i.e. loss of $1,250 or -12.5%)

Commodity price falls to $8.75.  CFDs now worth $87,500 (i.e. loss of $12,500 or -125% on original outlay of $10,000)

Result where commodity price rises

Commodities now worth $11,000 (i.e. profit of $1,000 or +10%)

CFDs now worth $110,000 (i.e. profit of $10,000 or +100% on original outlay of $10,000)

 

 

Liquidity There may be periods where certain currency pairs or CFDs become illiquid. The lack of liquidity may prevent you from taking positions in FX or CFDs or from liquidating from unfavorable positions resulting in your incurring a loss.

Stop Loss Orders unavailable - Certain products can be traded in conjunction with our limit and stop loss orders which are designed to either optimise your exposure to the market or limit your loss by instructing that trades be executed at pre-determined price levels. Stop losses are instructions placed by the client with Imperium FX to close out an open position if a market trades through a specific level.  Stop loss orders are often used to attempt to limit the amount which can be lost on a position.  We note that stop losses are not guaranteed and the execution of such orders will depend on market volatility and liquidity.  So whilst stop losses generally allow you to control potential losses should the market move against you, please be aware that stop loss orders may not always limit your losses the way you anticipate. The operation of these order types should be discussed with your Imperium FX representative.

Powers of Imperium FX – Should you fail to pay any amounts due and payable, including Margin Calls, or maintenance of minimum account balances, Imperium FX have extensive powers to close out positions and charge default interest.

 Where an Adjustment Event occurs, Imperium FX may close, adjust the terms or change the Margin requirement of your positions. In such a situation, it is common industry practice for Imperium FX to have unconditional, unqualified discretion to place its own valuation on open CFD contracts. Where this discretion used, Imperium FX will provide you with written notice.

Similarly, Imperium FX reserves the absolute discretion to terminate the Terms and Conditions with immediate effect or re-price or close out a position at any time, for any value if in the sole opinion of Imperium, you are suspected of market manipulation, false trading, market rigging, fictitious transactions, wash trading, insider trading, short selling, breaching the financial services laws or breaching the AML/CTF laws.

Under the Application Terms & Conditions you also indemnify Imperium FX and its employees, agents and representatives against certain losses and liabilities. You should read the Application Terms & Conditions carefully to ensure you understand these powers and responsibilities.

Electronic Trading platform risk– You shall be responsible for providing and maintaining the means by which to access the electronic trading platform, which may include without limitation a personal computer, modem and telephone or other access line.  While the internet and the World Wide Web are generally reliable, technical problems or other conditions may delay or prevent access thereto. If you are unable to access the internet and thus, the electronic trading platform, it will mean you may be unable to trade in a product offered by Imperium FX when desired and you may suffer a loss as a result. Should the system be unavailable, clients may place their orders via telephone with a representative of Imperium FX. Furthermore, in unforeseen and extreme market situations, or a global catastrophe, Imperium FX reserves the right to suspend the operation of the electronic trading platform or any part or sections of it. In such an event, Imperium FX may, at its sole discretion (with or without notice), close out your open contracts at prices it considers fair and reasonable at such a time. Imperium FX may impose volume limits on client Accounts, at its sole discretion. Please note that such measures would only be implemented in extreme market conditions, and such discretion only reasonably exercised in the best interests of the client.

Regulatory Risk– changes in taxation and other laws, government, fiscal, monetary and regulatory policies may have a material adverse effect on your Dealings in Margin FX or CFDs, as may any regulatory action taken against Imperium FX.

Imperium FX Risk - Investors must deal directly with Imperium FX to open and close positions. Given you are dealing with Imperium FX as counterparty to every transaction, you will have an exposure to us in relation to each transaction. This is common to all OTC financial market products. To mitigate this risk, we have implemented procedures to monitor our compliance with our license conditions and our financial obligations under RG 166.

 

To assist you in assessing our credit risk, we have a summary of key financial data available to you on request.

The obligations of Imperium FX to make payments in respect of the contracts are unsecured obligations of Imperium FX, which means that you are subject to our credit risk. If we were to become insolvent, we may be unable to meet our obligations to you. You may become unsecured creditors in an administration or liquidation and will not have recourse to any underlying assets in the event of Imperium FX’s insolvency.

Imperium FX may also be unable to operate its business as a result of a regulatory impediment such as Imperium FX ceasing to hold an Australian Financial Services Licence or because ASIC impose a stop order on the PDS. Imperium FX manages this risk by clearly implementing appropriate policies and procedures to comply with licence conditions and financial services laws.

 

Counterparty Credit risk-  Imperium FX may enter into arrangements with third party execution and clearing providers for the facilitation of 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 Imperium FX holds client funds. If the financial condition of Imperium FX or assets of our counterparties or the parties with which we hold client assets deteriorate, then clients could suffer loss. Imperium FX uses reputable counterparties such as established financial institutions with good credit standing along with adequate financial resources. In selecting the counterparties, Imperium FX considers public information, credit agency reports and the most recent financial statements showing the paid up capital, assets and liabilities of those counterparties. In addition, Imperium FX undertakes searches of the relevant regulators databases to confirm that the proposed counterparty holds all the necessary licenses and/or authorities. We also use credit limits to manage our exposure to each counterparty. As of the date of this PDS, Imperium FX intends to hedge all transactions with FXCM and Goldman Sachs.

 

Foreign Exchange Risk– Your Account is maintained in the currency you have nominated, that is, the Base currency. Where you Deal in a product that is denominated in a currency other than the Base currency, all Initial and Variation Margins, profits, losses, interest rate payments/receipts and financing credits and debits in relation to that product are calculated using the currency in which the product is denominated.

Accordingly, your profits or losses may be affected by fluctuations in the relevant foreign exchange rate between the time the order is placed and the time the position is closed, liquidated, offset or exercised.

Upon closing a position that is denominated in a currency other than the Base currency of your Account, you will be able to request that the foreign currency balance be converted to the Base currency of your Account. Any conversion will be at the exchange rate quoted by Imperium FX, and subject to the Conversion Fee. Until the foreign currency balance is converted to the Base Currency, fluctuations in the relevant foreign exchange rate may affect the unrealised profit or loss made on the position.

Market Information Risk– Imperium FX may make available to you through one or more of its services, a broad range of financial information that is generated internally or obtained from agents, vendors or partners (third party providers). This includes, but is not limited to, financial market data, quotes, news, analyst opinions and research reports, graphs or data (Market Information).  

 

Market Information provided by us by email or through our website is not intended as advice. Imperium FX does not endorse or approve the Market Information and we make it available to you only as a service for your own convenience. Imperium FX and its third party providers do not guarantee the accuracy, timeliness, completeness or correct sequencing of the Market Information or warrant any results from your use or reliance on the Market Information.

 

Market Information may quickly become unreliable for various reasons including, for example, changes in market conditions or economic circumstances. Neither Imperium FX nor the third party providers are obligated to update any information or opinions contained in any Market Information and we may discontinue offering Market Information at any time without notice.

 

Operational Risk– Operational Risk is inherent in every transaction, for example, disruption to Imperium FX’s operational processes such as communications, computers, networks or external events may lead to delays in the execution of or settlement of a transaction.

Imperium FX relies on a number of technology solutions to provide you with efficient services – Imperium FX has partly outsourced the operation of this trading platform to a third party and in doing so Imperium FX relies upon this third party to ensure the systems are updated and maintained. Prior to engaging these providers, Imperium FX has performed due diligence and entered into service agreements with each provider.

 

A disruption to the Imperium FX electronic trading platform may mean you are unable to trade in a product offered by Imperium FX when desired and you may suffer a loss as a result. An example of disruption includes the “crash” of our computer based trading system. Imperium FX mitigates this risk by conducting regular backups and using appropriate IT protections.

Risk Capital– You could lose all of the Initial Margin that you deposit to establish or maintain a position. All derivatives involve risk and there is no trading strategy that can eliminate it.  The placing of contingent orders (such as a stop-loss order) may not always limit your losses to the amounts that you may want. Market conditions may make it impossible to execute such orders. In cases where you are speculating we suggest that you do not risk more capital than you can afford to lose. A good general rule is never to speculate with money which, if lost, would alter your standard of living.

 

Investment decisions – You are solely responsible for the selection of the underlying asset for any orders you place with us, and as such, the performance of any investment in Margin FX or CFDs using your trading Account will depend mainly on the your own investment decisions. If you have not correctly applied your own risk management strategies by giving orders to us to enter into contracts, you may decide under your own risk management policies to add or to close out some of those contracts (to match your exposure). The loss or profit arising as a result of this additional trading with Imperium FX will be credited or debited to your Account. You need to take into account the cost of additional hedging adjustment contracts when considering your overall risk management.

 

Adjustment Risk (CFDs) – Where an Adjustment Event occurs, Imperium FX reserves the right to adjust the terms of your CFD or order, OR not make the adjustment to the relevant CFD if it is not reasonably practicable.  Imperium FX may also elect to close your CFD position in the event of the underlying securities being subject of a take-over offer, prior to the closing date of the offer.

 

 

 

 

 

  1. FEES & CHARGES

Imperium FX will not charge a transaction fee to clients.

Imperium FX earns its income from the business spread (or Margin) that we apply to our products. This is the difference between the rate at which we buy and sell the financial instruments (i.e. between the wholesale price achieved by Imperium FX and your trade price).  This spread is incorporated into the rates quoted to you and is not an additional charge or fee payable by you. These spreads will differ depending on the contracts traded.  Accordingly, the decision to transact at a particular rate will always be your decision. However, once you agree to a particular price that is the total amount payable by you to Imperium FX.

Imperium FX does not provide a market amongst or between clients for investments or speculations. As stated above, each product purchased (or sold) by you is an individual agreement made between you and Imperium FX as principal and is not transferable, negotiable or assignable to or with any third party.

You will also be liable for fees for related services that may be charged directly by our nominated third-party service providers depending upon the type of service you use. These fees include fees for failed trades, off-market transfers, other administrative fees including monthly fees for access to certain information and services.

Any such fees incurred are immediately payable and will be deducted from your Account in accordance with the Application Terms & Conditions.

 

 

 

 

Online Trading Facility Fee

 

Imperium FX will charge a fee for use of the online trading facility which is amended from time to time. For the latest fee we charge, please refer to our website.

Telephone Fee

 

Imperium FX may charge a small fee for telephone service (unless the trading platform is unavailable). This fee will be disclosed to you prior to trading.

Financing Charges

Amounts Outstanding

If you have an amount payable to Imperium FX under the Terms and Conditions, interest will be calculated on outstanding payments from the due date until the amount is paid in full. The interest will be compounded monthly with the effect of achieving an equivalent annual compound interest rate of the greater of 10% or 3% above LIBOR. As the interest will be calculated and accrued daily, we will divide the monthly rate by the number of days in the relevant month before applying it to the daily balance. This interest will also be charged on individual Accounts with a negative net free equity balance.

CFDs

In the event of you holding a long CFD position overnight you may be required to pay a financing charge. If you hold a short CFD position overnight you may be entitled to receive interest. Interest calculations are based on the total notional value of your open position, and are calculated as set out below using the LIBOR (London Interbank Offer Rate) or LIBID (London Interbank Bid Rate) plus or minus a margin. Interest is calculated and debited from or credited to your Account on a daily basis. No interest is paid or received if you open and close a position in the same trading day. Interest is debited from and credited to your Account on a daily basis.

The LIBOR rate changes frequently and is the most widely used benchmark or reference rate for short term interest rates world-wide. LIBOR is calculated daily by the British Bankers Association and published on their website with a 1 week rolling delay.

Standard overnight interest rates applicable are outlined below.

Overnight Interest

Long

Short

LIBOR +1.8%

LIBID – 1.8%

 

The amount of interest paid/received by Imperium FX will vary each day, depending upon factors such as the closing price of the underlying asset on which the product is based, changes to holdings within your portfolio and/or changes to LIBOR or LIBID.

No interest is paid or received if you open and close a position in the same trading day.

Imperium FX may in its absolute discretion reduce the financing rates applicable to your long and short positions depending on your trading volume or Account balance. Imperium FX reserves the right to change the financing rates applicable. In the event thereof, you will receive proper notification of such change, and a revised PDS if required.

Margin FX

In the event of you holding a Margin FX position overnight you may be required to pay a financing charge or maybe entitled to receive an interest payment, depending on underlying interest rate differentials of the applicable currencies.  Interest is calculated on a daily basis and debited from and/or credited to your Account at the end of each trading day.

 

The amount of interest paid/received by Imperium FX will vary each day, depending upon factors such as the price of the underlying currency interest rate differentials on which the Margin FX transaction is based.

 

No interest is paid or received if you open and close a position in the same trading day.

 

 

 

  1. MARGINs 

Where you enter a transaction you will be required to pay an Initial Margin (an initial deposit/up-front payment).  An Initial Margin means an amount of collateral that is required from you as security to enter into a Margin position.  Typically we will require an Initial Margin calculated as a percentage of the contract value. The Initial Margin will vary depending on the type of product you trade and is determined at Imperium FX’s discretion mostly by the liquidity of the underlying asset on which the product is based.  It is typically 0.5-25% of the contract value but may be as high as 100% depending on the volatility of the relevant market and the liquidity of the underlying asset. 

In addition, in order to maintain your position, you may be required to pay additional Margin in the event of adverse market movements against your position.  Such payments are not costs but are cleared funds required by Imperium FX to cover our risk and as security for your obligations. The amount is determined by the relevant third party service provider, however Imperium FX in its absolute discretion, can impose Margin requirements above and beyond those set by service providers.

The current Margin rates applicable to each type of transaction are provided on the electronic trading platform prior to entering into a trade.

The Margin amounts are payable into the Imperium FX client trust Account and are held, used and withdrawn in accordance with the Corporations Act requirements and our agreed terms and conditions specified in the Account Application Terms & Conditions. In particular, Imperium FX will withdraw client deposits to meet Margin calls, and other payment/settlement obligations. Imperium FX may, in its discretion, request that you make Margin and deposit payments to a broker affiliated with Imperium FX. Payment pursuant to such a request will satisfy your obligation to make payments to Imperium FX.

All contracts will be subject to Margin obligations.  Accordingly, you are responsible for meeting all Margin payments required by Imperium FX. It is your sole responsibility to monitor and manage your open positions and exposures, and ensure Margin Calls are met as required. Margin Calls will be notified via the trading platform, and you are required to log-in to the system on a daily basis when you have open positions to ensure you receive notification of any such Margin Calls. Please note that if you do not check the trading platform for Margin Call notifications, and hence do not meet them in a timely manner, positions will be closed out by Imperium FX, without further reference to you, in accordance with the executed Account Application Terms & Conditions. A Margin Call will not be considered to have been met UNLESS AND UNTIL cleared funds have been received by Imperium FX in the nominated account. Imperium FX also reserves the right to close a CFD if the amount of Margin payable by you exceeds 50% of the Initial Margin in respect of that CFD.

 

In the event of a discrepancy between your instructions and the Confirmation, the details of the Confirmation will be deemed the correct transaction for the purposes of Margining. Any excess Margin paid in reliance on an erroneous Confirmation will be held in the client money trust account.

 

Positions will be monitored by Imperium FX on a continuous basis to account for any market movements. If the value of the position moves against you then you will be required to “top up” the Initial Margin and, if you are unable to do so, you will be subject to a Margin Call i.e. to pay additional Margin or alternatively to close the position in order to reduce your Initial Margin to a level acceptable to Imperium FX. The Variation Margin liability is incurred at the time of the occurrence of any movement in the market that results in an unrealised loss, regardless as to when the call to pay is made by Imperium FX on you.

 

You must be in a position to fund such requirements at all times. Initial and Variation Margin must be paid immediately after the call. The general policy of Imperium FX is that payment of the Margin Call must be received within 24 hours of the call although in times of extreme price volatility this may mean as little as 1 hour In rare circumstances, the markets could move against your position giving Imperium FX no time to make a Margin Call on you to request additional funds for Imperium FX to protect its positions.

 

If you fail to meet any Margin Call i.e. if we fail to receive cleared funds, we may reduce or close all your open positions without further notice or in the rare circumstances where Imperium FX  does not have time to make a Margin Call due to exceptional market movements, then Imperium FX may in its absolute discretion and without creating an obligation to do so, close out, without notice, all or some of your open positions (or transactions) and deduct the resulting realised loss from the Initial Margin (and other excess funds held in your Account with Imperium FX).

 

In either case, any losses resulting from Imperium FX closing your position will be debited to your Account and may require you to provide additional funds to Imperium FX.

 

CFD and Margin FX products can be highly volatile and you should ensure that you are always contactable by Imperium FX. If you are unable to be contacted for the purpose of Imperium FX making a Margin Call, we may close out your open positions without notifying you.

 

Margin calls will be made on net account basis i.e. should you have several open positions, then Margin Calls are netted across the group of open transactions.  In other words, the unrealised profits of one transaction can be used or applied as Initial or Variation Margins or to offset the unrealised losses of another transaction. 

 

You will only be allowed to Deal in and maintain positions on the basis of cleared funds being provided for your Margin obligations or your net balance is in credit.  Margin calls can be made by Imperium FX at any time and you are responsible for ensuring that they are met.

 

Imperium FX has the right to limit the size of your open positions, whether on a net or gross basis under any appropriate circumstances as determined by Imperium FX. Imperium FX also has the right to refuse any request made by you to place an order to establish a position at any time at Imperium FX’s discretion without having to give you notice.

 

  1. MARGIN FX TRADING EXAMPLES

Please note: this section applies to Margin FX Contracts ONLY

Buying AUD/USD with a loss

You decide to take a long position on the AUD against the USD and ask for a quote for 1 lot, the equivalent of AUD$100,000. We quote you 1.0300/1.0302 and you buy 1 lot at 1.0300.

Purchase value: $100 000 (1 lot) x 1.0302 = ($103 020)

Initial margin payable at 0.5%: ($500)

Total price: ($103 020)

Total payable: ($500)

The market moves against you and by the end of the day the AUD/USD is at 1.0100/1.0105 at which point you decide to close out your position.

Sale value: $100 000 x 1.0100 = $101 000

Realised loss: ($2020)

Total loss: ($2020)

Less existing margin: $500

 

Total payable: ($1520)

 

Should you decide to hold your position overnight, a financing charge may be credited or debited from your account. For more information, see section 13.

Buying AUD/USD with a profit

You decide to take a long position on the AUD against the USD and ask for a quote for 1 lot, the equivalent of AUD$100,000. We quote you 1.0300/1.0302 and you buy 1 lot at 1.0300.

Purchase value: $100 000 (1 lot) x 1.0300 = ($103 020)

Initial margin payable at 0.5%: ($515.10)

Total price: ($103 020)

Total payable: ($515.10)

The market moves in your favour and by the end of the day the AUD/USD is at 1.0490/1.0495 at which point you decide to close out your position.

Sale value: $100 000 x 1.0490 = $104 900

Realised profit: $1880

 

Net profit: $1364.9

 

Should you decide to hold your position overnight, a financing charge may be credited or debited from your account. For more information, see section 13.

 

 

 

 

 

 

 

 

 

  1. CFD TRADING EXAMPLES

Please note: this section applies to CFDs ONLY

Buying a commodity CFD with a loss

You decide to go long on 5000 OZ (1 lot) of SILVER CFDs and we quote you 27.427/27.475 and you buy 1 lot at 27.475.

Purchase value: 5000 x 27.475 = ($137 375)

Initial margin payable at 0.5%: ($686.875)

Total price: ($137 375)

Total payable: ($686.875)

The market moves against you and by the end of the day SILVER CFDs are at 25.730/25.745 at which point you decide to close out your position.

Sale value: 5000 x 25.730 = $128 650

Realised loss: ($8725)

Total loss: ($8725)

Less existing margin: $686.875

 

Total payable: ($8038.125)

 

Should you decide to hold your position overnight, a financing charge may be credited or debited from your account. For more information, see section 13.

Buying a commodity CFD with a profit

You decide to go long on 5000 OZ (1 lot) of SILVER CFDs and we quote you 27.4275/27.4750 and you buy 1 lot at 27.4750.

Purchase value: 5000 x 27.4750 = ($137 375)

Initial margin payable at 0.5%: ($686.875)

Total price: ($137 375)

Total payable: ($686.875)

 The market moves in your favour and by the end of the day SILVER CFDs are at 29.060/29.110 at which point you decide to close out your position.

Sale value: 5000 x 29.060 = $145 300

Realised profit: $7925

Net profit: $7238.125

 

Should you decide to hold your position overnight, a financing charge may be credited or debited from your account. For more information, see section 13.

  1. Setting up YOUR ACCOUNT

Prior to transacting in Margin FX or CFDs, you must read and understand our FSG, this PDS and the Account Application Terms & Conditions (which will be provided to you by Imperium FX) detailing the applicable terms and conditions. You must then complete, sign and return the Account Application Terms & Conditions.

Imperium FX 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

 

 

Once we have received your signed Account Application Terms & Conditions, you will be emailed a link to our suitability questionnaire and you will be required to answer a series of questions designed to assess their knowledge, experience and understanding of OTC derivative products. An Imperium FX 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. Once you have completed the questionnaire to our satisfaction or have placed five or more trades on the demo account, we will proceed with your application.

You may transfer funds to us via bank transfer or credit card. Transfers to us via credit card will be subject to our suitability requirements based on your annual income. Funding an account by credit card has additional risks and costs for you. By using these payment methods, you would effectively be doubling your leverage by taking credit from their credit card account and trading with leverage on your Imperium FX Account. This can add to the risks and volatility of your positions as well as incurring higher interest costs on your credit card account.

 

Although Imperium FX may accept payments of more than $1000 from credit card accounts to fund your Account and to meet later Margin payments, our suitability requirements for credit cards are a risk management measure protecting our interests and do not constitute personal financial advice to you. We recommend you carefully consider and obtain professional advice if you wish to fund your Account with a credit card.

In no circumstances do we accept cash deposits.

When transferring funds to Imperium FX you must ensure that the funds are appropriately referenced with your Account number to enable us to easily identify your funds and apply them to your Account promptly. All payments made to Imperium FX must be free of any withholding tax or deduction. 

Imperium FX 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. 

Imperium FX does not accept funds transferred from third parties, so it is your obligation to ensure that all funds transferred to us are from the bank Account you have nominated in your Application. We may, in our absolute discretion, without creating an obligation to do so, return any funds transfer or cheque received from a third party back to the Account from which it was transferred.

Imperium FX will not accept any liability or responsibility for any losses that you may suffer as a result of, or arising out of, or in connection with, us returning any transfer of moneys or cheque from a third party, including any losses incurred by you because you are subsequently in default of your obligations under the Account Application Terms & Conditions.

  1. ORDERS 

Regardless of the type of order used, Imperium FX will issue you with a Deal Confirmation 1-2 Business Days after the trade has been executed. The Deal Confirmation will take the form of an email or other form of electronic notification from Imperium containing identification details of the product issuer and the client, the date of the transaction, description of transaction, amount payable and any applicable taxes or stamp duty payable in relation to the transaction. It is your obligation to review the Confirmation immediately and to ensure its accuracy and to report any discrepancies within 48 hours.

A Stop-loss order is an order placed to limit the loss on an open position, and can be used on for both FX and CFD contracts.  Stop-loss orders must be placed a minimum distance from Imperium FX's current bid and offer prices. The minimum distance for a stop loss order for each will be advised to you upon request.

A stop order can be seen as a “resting” market order. The order will become active when the price specified as the strike price in the stop order has been traded in the market. The stop order will then be converted into a market order. The stop order becomes a market order when the stop price is equal to last traded price in the underlying stock market. The process of the fill will be precisely as described under the order type.

A stop-loss order can be placed on the online trading platform. Two forms of stop-loss order are available currently, namely, a stop-loss order at a set price; and a trailing stop-loss order which enables you to link a stop-order at a set distance to the market. As the market moves away from the stop-order’s strike price, the strike price will be adjusted in the steps defined when the order was placed. In case the market move towards the stop orders strike price the order will remain at the initial level with the initial strike price.

For example, if you want to protect a long position in BHP that you bought at $50.00, you can place a trailing stop to sell at $42.00, with a distance to market of $7 and a step of 1 point. Then if BHP moved to $52.00, the strike price of the stop-order will be adjusted to $44.00. If BHP moves to $57.00, the strike price will be adjusted to $50.00 and so forth. When the price in BHP moves down to $50.00, your stop order will be triggered and routed as a market order.

 

Stop-loss orders placed on share CFDs will be filled if the underlying security trades at prices equal to or below the price at which you have placed your stop loss order subject to there being sufficient liquidity in the underlying security. Your stop loss orders may be filled at prices below those at which you have placed your stop loss order.

 

 

 

Imperium FX will execute a Stop-loss order once the following conditions are met:

 

  • Imperium FX 's offer price has reached the order price in the case of a buy order or Imperium FX‘s bid price has reached the order price in the case of a sell order and;
  • The relevant underlying market has traded at or through the level at which the order is placed, in sufficient size that Imperium FX could have replicated the order. Imperium FX will not fill partial orders.
  • Imperium FX will not execute stop loss orders based on crossings or special trades that have gone through the underlying market. If the relevant underlying market, and therefore our CFD price, gaps through the stop level then the order will be executed at the next available price at which the order could have reasonably been executed.

 

As the markets are constantly moving 24 hours a day, you are able to place a 'stop loss' on all open positions. Whilst this allows you to control potential losses should the market move against you, in most circumstances, stop loss orders may not always limit your losses the way you anticipate. There are no guarantees in relation to stop-loss orders, and due to the speed at which prices can move, they may be effected at a different price (known as slippage) or not at all.

There are no additional fees or charges associated with the placement of stop-loss orders (only the disclosed commission regarding the executed transaction if the order is triggered).

  1. APPLICATION TERMS & CONDITIONS 

In order to open an Account, you are required to sign our Application Terms & Conditions. This is an important legal document containing the terms and conditions which govern our relationship with you. It is provided to you separately by Imperium FX.

We recommend that you consider seeking independent legal advice before entering into the Application Terms & Conditions, as the terms and conditions detailed therein are important and affect your dealings with us.

We note the following key terms in the Account Application Terms & Conditions, some of which have been summarised throughout this PDS:

  • Client acknowledgements regarding knowledge and suitability of Margin FX and CFD products;
  • Client representations and warranties;
  • Client Account operating details;
  • Margin FX and CFD trading requirements;
  • Margin requirements and Imperium FX’s rights in respect thereof;
  • Client obligations regarding Confirmations (discrepancies);
  • Process for closing out a trade, and Imperium FX’s rights in relation to price calculation;
  • Interest payable/receivable on open positions;
  • Requirements regarding the appointment of authorised persons by the client;
  • Default events;
  • Imperium FX rights following a default event;
  • Amendment and termination rights;
  • Client Indemnity in favour of Imperium FX
  • Imperium FX’s limitation of liability;
  • Fees and charges;
  • Restrictions on assignment of agreement;
  • Telephone recordings;
  • Provision of general advice;
  • Governing law (NSW); and
  • Electronic trading platform conditions/process.
  1. CLIENT MONIES

All money deposited into your Account by you or a by person acting on your behalf, or which is received by Imperium FX on your behalf, will be held by Imperium FX in one or more segregated client money trust accounts it must maintain pursuant to the Corporations Act. Please note that individual client accounts are not separated from each other, but may be co-mingled into one segregated account.

Please note that monies will be withdrawn to meet Margins, deposits, fees, transaction settlements, or other costs and may be immediately on-forwarded by Imperium FX to our licensed third party clearing and execution providers, and applied against your Margin, exchange, fee and settlement obligations. Once the funds are withdrawn from the client money trust account, it will no longer be client money and will be dealt with by us on a proprietary basis. We will nevertheless apply these funds only to transactions corresponding with client trades. Client monies which are held pending future transactions and payments, remain in our segregated account in accordance with the Corporations Act. Funds belonging to Imperium FX such as fees will also be immediately (or no later than 28 days after becoming Imperium FX’s) transferred out of the client money account.

It is important to note that holding your money in one or more segregated accounts may not afford you absolute protection. Should Imperium FX fail to recover funds payable by its hedge counterparties, there will be a deficit in the segregated client account with the loss to be borne by all clients. This is known as counterparty risk.

Imperium FX does not accept payments from or make payments to any third parties.

Imperium FX is entitled to retain all interest earned on client moneys held in segregated accounts with a bank or approved deposit-taking institution. You will not earn interest on funds held in a client money account. The rate of interest earned by Imperium FX on this account is determined by the provider of the deposit facility.

  1. Cooling off

There are no cooling-off arrangements for Margin FX or CFD contracts. This means that when Imperium FX arranges for the execution of a Margin FX or CFD contract, you do not have the right to return the product, nor request a refund of the money paid to acquire the product.

 

  1. Superannuation

It should be noted that complying superannuation funds are subject to numerous guidelines and restrictions in relation to their investment activities which are contained in the Superannuation Industry Supervision Act 1993, and associated regulations and regulatory guidance material.

 

Without being an exhaustive list, following are some of the issues that should be considered by a Trustee of a complying superannuation fund:

  • Restrictions on borrowing and charging assets and whether Dealing in over-the-counter derivative products would breach those borrowing and charging restrictions;
  • The purpose of Dealing in over-the-counter derivative products in the context of a complying superannuation fund’s investment strategy as well as the fiduciary duties and other obligations owed by Trustees of those funds;
  • The necessity for a Trustees of a complying superannuation fund to be familiar with the risk involved in Dealing in over-the-counter derivative products and the need to have in place adequate risk management procedures to manage the risks associated in Dealing in those products; and
  • The consequences of including adverse taxation consequences if a superannuation fund fails to meet the requirements for it to continue to hold complying status.

 

  1. TAXATION 

23.1 Introduction

If you trade in Margin FX or CFDs, you may be subject to Australian taxation. This section outlines general information about significant Australian income tax and GST implication of trading derivatives.

The information contained in this section is of a general nature only and is not intended to constitute legal or taxation advice and should not be relied upon as such. Imperium FX recommends that you obtain independent professional taxation advice on the full range of taxation implications applicable to your own personal facts and circumstances.

 

23.2 Tax Consequences of Transacting in Margin FX Contracts and CFDs

The ATO has not issued any specific Tax Ruling or Determination in respect of Margin FX. However, they are similar in nature to CFDs in that they are both derivatives which provide the investor with exposure to price movements in underlying assets traded on markets, without directly investing in those underlying assets.

The taxation of CFDs is set out in ATO Tax Ruling TR 2005/15. Under TR2005/15, if you enter into a CFD position in the ordinary course of your business or for profit-making purposes, it is likely that any profit derived or loss incurred by you will be included in, or allowed as a deduction from, your assessable income.

 23.3 Treatment of Transaction Fees

Any Daily Financing Fees credited to you are likely to be included in your assessable income at the time it is credited to your Account. If you do not provide your TFN (or ABN) or proof of exemption, Imperium FX may be required to withhold tax from any payment at a rate of up to 49%.

23.4 Goods and Services Tax

GSTD 2005/3 states that no GST should be payable in relation to your trading of Margin FX or CFDs with Imperium FX. However, GST may apply to certain fees and costs charged to you.

  1. DISCLOSURE OF INTERESTS 

We do not have any relationships or associations which might influence us in providing you with our services. However, Imperium FX may share fees and charges with its associates or other third parties or receive remuneration from them with respect to your Dealings with us.

In particular, Imperium FX is a market maker, not a broker, and accordingly will always act as principal for its own benefit in respect of all Margin FX and CFD transactions with you. Imperium FX may conduct transactions to hedge its liability to you in respect of your Margin FX or CFD positions by undertaking transactions in the underlying currencies. Such trading activities may impact (positively or negatively) the prices at which you may trade Margin FX and CFD products.

You may have been referred to us by a service provider who may receive financial or non-financial benefits from us. These should have been disclosed to you by the service provider in question. Please note that such benefits will not impact fees or the rates you will be offered for financial products or services undertaken with Imperium FX.

  1. Ethical Considerations

Imperium FX contracts do not have an investment component. Labour standards or environmental, social or ethical considerations are not taken into account by Imperium FX when making, holding, varying or closing out Imperium FX contracts.

  1. PRIVACY 

Your privacy is important to us. The information you provide Imperium FX and any other information provided by you in connection with your Account will primarily be used for the processing of your Account application and for complying with certain laws and regulations. We may use this information to send you details of other services or provide you with information that we believe may be of interest to you. Full details of our privacy policy are available from our website www.impfx.com

  1. Dispute resolution 

Imperium FX has an internal dispute resolution process in place to resolve any complaints or concerns you may have, as quickly and fairly as possible in the circumstances.  Any complaints or concerns should be directed to the Director (by telephone, facsimile, or letter) at the address and telephone/fax numbers provided in section 1 of this PDS. We at admin@impfx.com will seek to acknowledge receipt your complaint within 2 Business Days for written complaints and 3 Business Days for telephone complaints at which time we will advise you on the expected timing for full resolution of the complaint. In any case, we will seek to fully resolve your complaint within 45 days. We will investigate your complaint, and provide you with our decision, and the reasons on which it is based, in writing.

If you are dissatisfied with the outcome, you have the right to lodge a complaint with the Financial Ombudsman Service (member No. 25558), an approved external dispute resolution scheme, of which Imperium FX is a member. 

Financial Ombudsman Service

Address:              GPO Box 3 MELBOURNE VIC 3001

Telephone:         1300 780 808

Facsimile:             03 9613 6399

Website:              www.fos.org.au

Email:                    info@fos.org.au

  1. Glossary 

Below is a list and the meaning of some words used in this PDS.

Term

Definition

Account

Account of the client Dealing in the products issued by Imperium FX, which is established in accordance with the terms and conditions of the Application Terms & Conditions.

Adjustment Event

An event such as a dividend payment, a corporate action (e.g., a takeover), the company whose security represents the subject matter of the CFD becoming externally administered, trading halt or suspension.

AFSL

Australian Financial Services License.

Base currency

Your Account is maintained in the currency you have nominated, that is, the base currency.

Business Day

A day (other than a Saturday or Sunday or public holiday) on which trading banks in Sydney, Australia are open for business.

Account Application Terms & Conditions

The agreement provided to you by Imperium FX, detailing the applicable terms and conditions as amended, supplemented or updated from time to time. You must complete, sign and return an Account Application Terms & Conditions, and have your Account approved by Imperium FX in order to set up an Account with Imperium FX to Deal in products issued by Imperium FX.

CFD

Contract for Difference.

Confirmation

Document or documents confirming evidence exchanged between Imperium FX and the client, confirming the terms of the product transaction.

Corporations Act

Corporations Act 2001 (Cth) which governs the provision of financial services.

Deal

Has the same meaning as provided in the Corporations Act.

EST

Eastern Standard Time, Australia.

FOS

Financial Ombudsman Service Ltd.

FSG

Imperium FX’s financial services guide as amended, supplemented or updated from time to time.

Initial Margin

An amount required to be deposited by the client with Imperium FX to open a Margin FX or CFD position.

LIBID

LIBID stands for London Interbank Bid Rate. The rate charged by one bank to another for a deposit in the wholesale money markets in London.

LIBOR

LIBOR stands for London Interbank Offer Rate. It is the rate of interest at which banks offer to lend money to one another in the wholesale money markets in London.

Margin

The Initial Margin or Variation Margin or both.

Margin Call

A demand for additional funds made to the client by Imperium FX to meet any additional Margin requirement.

Margin FX

Margin foreign exchange.

PDS

Product Disclosure Statement.

Term Currency

This is the currency of the position you have taken.

Variation Margin

The amount deposited by the client with Imperium FX including any increase or reduction arising from settlement of a closed position.

We, Us or Imperium FX

Imperium Forex Group Pty Limited ACN 149 011 361 AFSL 398528.

 

 

 

 

 

Product Disclosure Statement

Margin Foreign Exchange

AND

Contracts for Difference

 

Issued 3 May 2016

by Imperium Forex Group Pty Limited

ACN 149 011 361

AFSL 398528


 

 

 

 

 

 

 

Please note: except where specified, this Product Disclosure Statement relates to BOTH Margin Foreign Exchange and Contracts for Difference transactions simultaneously.

Financial services are provided, and this Product Disclosure Statement has been prepared and issued, by Imperium Forex Group Pty Limited ACN 149 011 361 AFSL 398528 (“Imperium FX”). Please note that the information contained in this Product Disclosure Statement (“PDS”) does not constitute a recommendation, advice or opinion and does not take into account your individual objectives, financial situation, needs or circumstances. This is an important document and should be read in its entirety. Before entering into a Margin Foreign Exchange (“Margin FX”) or Contracts for Difference (“CFD”) transaction, you should obtain independent advice to ensure this is appropriate for your particular financial objectives, needs and circumstances.

We recommend that you also obtain independent taxation and accounting advice in relation to the impact of foreign exchange gains and losses on your particular financial situation. The taxation consequences of Margin FX or CFD transactions can be complex and will differ for each individual’s financial circumstances, and your tax adviser should be consulted prior to entering into a Margin FX or CFD transaction.

Imperium FX does not guarantee the investment performance of Margin FX or CFD products nor the investment performance of the underlying markets or instruments. Past performance is no indication or guarantee of future performance.

This PDS does not constitute an offer or invitation in any place outside Australia where or to any person to whom it would be unlawful to make such an offer or invitation. The distribution of this PDS (electronically or otherwise) in any jurisdiction outside Australia may be restricted by law and persons who come into possession of this PDS should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable law. The offer to which the PDS relates is not available to investors in the US and Japan.

If you received this PDS electronically, we can provide a paper copy free of charge upon request. For information regarding our full range of products and services, please read our Financial Services Guide (“FSG”) and visit our website. If you have any queries regarding this PDS, please contact Imperium FX.

Warning Margin FX and CFD products are considered speculative products which are highly leveraged and carry significantly greater risks than non-geared investments, such as shares. You should not invest in Margin FX or CFD products unless you properly understand the nature of Margin FX or CFD products, and are comfortable with the attendant risks.  You should obtain financial, legal, taxation and other professional advice prior to entering into a Margin FX or CFD transaction to ensure this is appropriate for your objectives, needs and circumstances.


 

 

Contents

1.     Purpose and Contents of this Product Disclosure Statement (“PDS”) 4

2.     TERMS & CONDITIONS  5

3.     Margin fx AND CFD summary table  6

4.     ASIC REGULATORY GUIDE 227 DISCLOSURE BENCHMARKS  11

5.     NATURE OF ADVICE/RELATIONSHIP  17

6.     Margin fx contracts offered by Imperium FX  18

7.     PURPOSE OF TRADING Margin fx contracts  18

8.     CFD contracts offered by Imperium FX  19

9.     PURPOSE OF TRADING CFD contracts  20

10.    MARGIN FX AND CFD PRODUCT FEATURES  21

11.    KEY BENEFITS OF TRADING MARGIN FX AND CFD contracts  24

12.    KEY RISKS OF TRADING MARGIN FX AND CFD contracts  27

13.    FEES & CHARGES  34

14.    MARGINs  36

15.    MARGIN FX TRADING EXAMPLES  38

16.    CFD TRADING EXAMPLES  40

17.    Setting up YOUR ACCOUNT  41

18.    ORDERS  43

19.    APPLICATION TERMS & CONDITIONS  44

20.    CLIENT MONIES  46

21.    Cooling off  46

22.    Superannuation  46

23.    TAXATION  47

24.    DISCLOSURE OF INTERESTS  48

25.    Ethical Considerations  49

26.    PRIVACY  49

27.    Dispute resolution  49

28.    Glossary  50

 

  1. Purpose and Contents of this Product Disclosure Statement (“PDS”)

This PDS is designed to provide you with important information regarding Margin Foreign Exchange (Margin FX) and Contracts for Difference (CFD) transactions including the following information:

  • Who we are
  • How you can contact us
  • Which products we are authorised to offer
  • Key features/risk/benefits of these products
  • Applicable fees and charges for these products
  • Any (potential) conflicts of interest we may have; and
  • Our internal and external dispute resolution process.

The information in this PDS is general only and does not take into account your personal objectives, financial situation and needs.

The information in this PDS is current as at 3 May 2016, and may be updated from time to time where that information is not materially adverse to clients. Updated information shall be provided on our website www.impfx.com.  

Imperium FX may issue a supplementary or replacement PDS as a result of certain changes, which shall be available on our website or shall be distributed in electronic form as required. If the change is an increase in fees and charges we will notify you at least 30 days in advance of the changes. Defined terms used in this PDS are defined in the Glossary in section 28 or elsewhere in this PDS. If you would like further information, please ask us. Further detail about our services is available on our website www.impfx.com.

 

 

 

 

 

 

NAME & CONTACT DETAILS OF ISSUER/SERVICE PROVIDER

The Issuer is Imperium Forex Group Pty Limited ACN 149 011 361 (“Imperium FX”).

Imperium FX holds an AFSL (398528) and is authorised to provide general financial product advice, deal in financial products and make a market in relation to:

  • Derivatives, and
  • Foreign exchange contracts

for retail and wholesale clients.

You can contact our office by any of the means listed below:

Writing to us at:                      Level 6, 301 George Street, Sydney NSW 2000 Australia

Calling us:                                  +61 1800 388 322

Sending an email to:           admin@impfx.com   

Visiting our website: www.impfx.com

  1. TERMS & CONDITIONS

Information provided to you in our FSG and PDS is important and is binding on you. Additional legal terms governing our relationship are detailed in the Account Application Terms & Conditions. You must complete, sign and return the Application (either online, electronically, fax or by post), and have your Account approved by Imperium FX. Imperium FX reserves the right to refuse to open a Margin FX or CFD Account for any person.

Imperium FX accepts Margin FX and CFD transaction order instructions primarily via the electronic trading platform but may also accept order instructions via telephone if agreed. You are required to access the electronic trading platform on a daily basis to confirm that any order instructions have in fact been received by us, reconfirm all orders that you place with us, review order Confirmations we provide, to ensure their accuracy and monitor your Margin obligations. Any order discrepancies identified must be reported to us immediately.

Regardless of any on-line Confirmation received upon placement of an instruction via the on-line trading facility, such transaction is not confirmed by Imperium until Imperium provides a Deal Confirmation.

Imperium FX will provide all clients, via the electronic trading platform or the website, with access to both daily and historical Account statements allowing you to check your open positions, Margin requirements and cash balances, and trading Confirmations. Should you have any queries relating to your statements we encourage you to contact us.

Imperium FX does not guarantee the performance, return of capital from, or any particular rate of return, of a Margin FX or CFD product or transaction. Clients may lose more than the amount of funds in their Margin FX or CFD Account, and should only invest risk capital (that is, capital you can afford to lose). Please note that the historical financial performance of any Margin FX or CFD or underlying instrument/market is no guarantee or indicator of future performance.

Please note that the examples provided in this PDS are only provided for illustrative purposes only and do not necessarily reflect current or future market or product movements, the values that Imperium FX will apply to a trade, nor how such trades impact your personal circumstances. The figures used in the examples do not necessarily reflect your personal circumstances and do not restrict in any manner the way in which Imperium FX may exercise its powers or discretions. Those examples do not constitute general or personal financial product advice to any person reading this PDS. 

  1. Margin fx AND CFD summary table

The following summary table is provided for ease of reference. However, please ensure that you read this PDS in its entirety.

Item

Summary

PDS Section reference

Who is the issuer of this PDS and the products?

Imperium Forex Group Pty Limited ACN 149 011 361 AFSL 398528

 

1

What is Margin FX?

Margin FX is an over-the-counter derivative product which enables traders to leverage a small Margin deposit for a much greater market effect in relation to currencies.  A foreign exchange contract involves the exchange of one currency for another. Margin FX differs from spot and forward foreign exchange trading in that they are legally classified as derivatives rather than foreign exchange contracts, and are cash settled (i.e. no physical delivery is available). Margin FX trading generally involves taking forward positions in a foreign currency and instead of those contracts being settled by exchange of the relevant currencies, the positions are “closed out”. Closing out involves entering into equal and opposite position with us, which generates a profit or loss on the transaction, which is then settled between us. The resulting profit or loss of the trade is the net result of the difference between the opening and closing exchange rates of each transaction, adjusted for transaction costs.

6

What are CFDs?

A Contract for Difference (CFD) is a contract under which the parties agree to exchange the cash difference between the opening value and the closing value of the contract. The CFDs we offer are over-the-counter financial products that give the holder exposure to price movements of an Underlying Instrument. Like other derivatives, CFDs allow investors to participate in the returns from movements in an Underlying Instrument, without the need to own that Underlying Instrument. CFDs allow you to make a profit or loss from the fluctuation in the Underlying Instrument and the amount of any profit or loss on a CFD Trade will be the total of the difference between the opening value of the CFD (Quantity x Our Price) and the closing value of the CFD (Quantity x Our Price); less any Commission, and Daily Financing Fee you incur and are required to pay to us in respect of the CFD.

8

What fees and charges are payable in respect of a Margin FX and CFD contracts?

No Transaction fees will be charged to clients.

The price/rate quoted to clients for derivative contracts also includes a spread in favour of Imperium FX, through which our revenue is generated. The prices/rates quoted to clients may differ from prices available in the primary or underlying markets. Accordingly, due to the spread applied between the offer and bid price, if the underlying value of the contract does not move between purchase and sale, you will make a loss to the extent of Imperium FX’s spread.

However you may incur the following fees and charges:

  • Financing charges – where positions are held open overnight, interest may be paid or payable thereon;
  • Telephone Fees – where the trading platform is available, a fee for telephone service may be levied. If applicable, this will be disclosed to you prior to trading.
  • Third Party fees – you will be liable for any fees charged for related services by third party providers, such as fees for access to certain information and services.

 

13

How do I open a Margin FX or CFD Account?

Prior to transacting in Margin FX or CFDs, you must read and understand our FSG, this PDS and the Account Application Terms & Conditions (which will be provided to you by Imperium FX) detailing the applicable terms and conditions. You must complete, sign and return the Account Application Terms & Conditions as well as adequately completing our online suitability questionnaire to our satisfaction. Imperium FX reserves the right to issue you a demo Account or request you re-do the suitability questionnaire before Account is approved by Imperium FX. Imperium FX reserves the right to refuse to open an Account for any person.

 

Once you have an Account, you may fund it with bank transfer or credit card.

17 and 19

How do I place a Margin FX or CFD transaction order with Imperium FX?

Imperium FX accepts Margin FX and CFD order transaction instructions electronically, via our on-line trading platform. CFD positions can be opened by either buying or selling a CFD, depending on whether you require a Long or Short position. CFD positions can be closed by taking the equal or opposite position to the open CFD position. That is, purchase a Long CFD to close a Short position, or sell a Short CFD to close a Long position. Imperium FX also has the discretion to offer to take your orders via telephone however this service will need to be prearranged between you and Imperium FX.

18

What is Margin?

Your Initial Margin is the amount Imperium FX debits from your Account as soon as you open a new Margin FX or CFD position or place an order to open a new Margin FX or CFD position. This acts as collateral or a security buffer and protects us in the event of a default by you. Typically we will require an Initial Margin calculated as a percentage of the contract value.

 

The Variation Margin is the unrealised profit or loss on your open position. This is the difference between the value of the product when it was bought or sold and its current market price. Should your position move in your favour we may refund part or all of the Variation Margin to you.

 

If you do not meet a Margin Call in a timely manner or within the time frame specified in the Margin Call, positions will be reduced or closed out by Imperium FX without further reference to you in accordance with the terms of the Application Terms & Conditions. A Margin Call will not be considered to have been met unless and until cleared funds have been received in the nominated Account and Imperium FX has updated the trading platform.

14, 15

How are payments made in and out of your Account?

You may transfer funds to us using mainly any of the following methods:

Bank transfer;

Credit/Debit Card; or

Online payment facility

 

In no circumstances does Imperium FX accept cash deposits.

You will only be able to withdraw moneys available to you after your Margin obligations have been met. All transfers from Imperium FX to you will be made to the bank Account nominated in your Application Terms & Conditions.

17 and 20

Do I pay or receive any financing charges?

In the event of you holding a Margin FX or CFD position overnight you may be required to pay a financing charge or maybe entitled to receive an interest payment, depending on underlying interest rate differentials of the applicable currencies.

 

If you hold a short CFD position overnight you will be entitled to receive interest. Interest calculations are based on the total notional value of your open position, and are calculated at LIBOR or LIBID plus or minus a Margin. Interest is calculated daily and posted to your Account at the end of each day.

13

What are the key risks of Margin FX and CFDs transactions?

Investment in Margin FX or CFD products carries a high level of risk and returns are volatile. You should only ever trade with risk capital ie money you can afford to lose, and should obtain independent professional advice to carefully consider whether these products are appropriate for you in light of your knowledge, experience and financial needs and circumstances.

 

Some of the significant risks involved in Margin FX and/or CFD trading include (and should be read in detail at section 12 herein):

  • Credit Risk
  • Operational Risk
  • External Market forces
  • Currency Risk
  • Loss of Margin
  • Gapping
  • Variation Margins
  • Leverage
  • Liquidity
  • Online trading platform  risk
  • Stop loss orders unavailable
  • Powers of Imperium FX
  • Reliance on third parties
  • Regulatory Risk

12

What are the tax implications of Margin FX trading?

The taxation consequences of trading in Margin FX and CFDs can be complex and will differ for each individual’s financial circumstances. We recommend that you obtain independent taxation and Accounting advice in relation to the impact of Margin FX and CFDs transactions on your particular financial situation.

23

Imperium FX’s powers in the event of default

Imperium FX has extensive powers under the terms of the Application Terms & Conditions to take action in response to a range of default events. Imperium FX may terminate your Account, and close out all or any of your Margin FX or CFD positions, including cancelling any outstanding orders.

2 and 19

How do I obtain further information?

You can contact our office as per contact details in this PDS.

 

 

1

 

 

  1. 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 Imperium FX. Imperium FX’s compliance with each benchmark is addressed in the following table:

Benchmark description

How does Imperium FX meet this benchmark?

Relevant sections of the PDS which provide further relevant information

Client qualification

Imperium FX 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. Imperium FX 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 for your personal financial circumstances and objectives.

 

However, Imperium FX 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 in our online suitability questionnaire. An Imperium FX 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. Once you have completed the questionnaire to our satisfaction or have placed five or more trades on the demo Account, we will reconsider your application.

 17

Opening collateral

Imperium FX does not meet this benchmark because it accepts as collateral for opening the account payments by credit card for more than $1000.

 

Whilst the RG227 benchmark recommends that no more than $1,000 be accepted by credit card as opening collateral on a new Account, Imperium FX has in place a process 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 by credit card.

 

Nevertheless, funding an account by credit card has additional risks and costs for the client. By using these payment methods, the client would effectively be doubling their leverage by taking credit from their credit card account and trading with leverage on their Imperium FX Account. This can add to the risks and volatility of their positions as well as incurring higher interest costs on their credit card account.

 

If clients lose on their Imperium FX products, they might not have other financial resources to repay their credit card account, incurring higher interest costs and possibly defaulting on their credit card terms.

 

Although Imperium FX may accept payments of more than $1000 from credit card accounts to fund the client’s Account and to meet later Margin payments, the client should carefully consider whether this payment method is suitable for their trading and limit it to what they can afford.

 

Imperium FX 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 amounts 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.

 

17

 

Counterparty risk – hedging

Imperium FX 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 request (and may be updated from time to time as counterparties change).

12

Counterparty risk – financial resources

Imperium FX maintains a Counterparty Risk Management policy to ensure the ongoing maintenance of adequate financial resources through imposing credit limits, collateral collection and counterparty monitoring. 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.

 

 We do not perform stress testing because we intend to fully hedge all transactions with clients with reputable licensed third party financial services providers.

12

 

Client money

Imperium FX 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 client trust account. Such monies are only applied to client trades/settlement obligations and to pay agreed fees 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.

 

Imperium FX may enter into arrangements with third party execution and clearing providers for the facilitation of 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 Imperium FX holds client funds. If the financial condition of Imperium FX 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.

20

Suspended or halted underlying assets

An underlying financial product may be placed in a trading halt on the relevant exchange in various circumstances. Additionally, it may be suspended or delisted in certain circumstances. Imperium FX (may, in its absolute discretion), cancel your order in respect of a CFD transaction which has not yet been opened, adjust the terms of a position 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, we may place a corresponding order to purchase or sell the relevant product to hedge our market risk. Imperium FX 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, Imperium FX 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.

 12 and 28

Margin calls

Imperium FX 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.

 

Imperium FX will, although not obliged to, take reasonable steps  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 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 take reasonable steps to 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 in excess to your financial needs/obligations.

 

 

14, 15, 19

  1. NATURE OF ADVICE/RELATIONSHIP

In the absence of our express written agreement to the contrary, we only provide general advice and we neither collect, nor take into consideration, information regarding your financial circumstances and needs. You understand that our decision whether to let you trade following the suitability questionnaire does not form personal advice. We recommend that you obtain your own professional advice to ensure you fully understand the nature and risks of these products and determine their suitability for your situation.

 

CFD and Margin FX are contracts between you and Imperium FX, which means both parties act as principals to the transaction and have a direct credit exposure to each other. You do not trade through an Exchange and are not afforded the protections normally associated with exchange-traded derivatives, such as guarantee arrangements.

Trading in CFDs is not suitable for all investors because of the significant risks involved. You must carefully consider whether CFDs are appropriate for you in light of your financial circumstances, experience and investment objectives. In making this decision you should be aware you could both gain and lose large amounts of money. You risk losing money because:

  • You could lose all the Margin funds you deposit with Imperium FX to establish or maintain a CFD position. In addition, you could lose further amounts as explained below.
  • If the market moves against your position, or your position is rolled over into a new contract with a differing value you may be required, at short notice, to deposit with Imperium FX further money as Margin in order to maintain your CFD position. Those additional funds may be substantial. If you fail to provide those additional funds within the required time your CFD position may be closed. You will be liable for any shortfall in your Account resulting from the closure.
  • You could lose all monies deposited with Imperium FX, and in addition, be required to pay us further funds representing losses and other fees on your open and closed CFD positions. For example, although you may only invest $1,000 in a CFD position, if the market moves against you could lose the full value of the CFD position. Under certain conditions, it could become difficult or impossible for you to liquidate or close a CFD position. For example, this can happen when there is significant change in prices over a short period.

 

 

 

 

  1. Margin fx contracts offered by Imperium FX

Please note: this section applies to Margin FX’s ONLY

Margin FX contracts provided by Imperium FX are available in 50 pairs of currencies.   This means that all major currency pairs are available. However, some of the minor or more exotic currency pairs cannot be traded with Imperium FX. Please check our website for up-to-date information regarding which currency pairs are currently available.

 

Imperium FX’s Margin FX products do not result in the physical delivery of the currency but are cash adjusted or closed by the Client taking an offsetting opposite position i.e. there is not a physical exchange of one currency for another.  Margin FX products are derivatives, not foreign exchange contracts. Positions will always be closed and the client’s Account will be either credited or debited according to the profit or loss of the trade.

  1. PURPOSE OF TRADING Margin fx contracts 

Please note: this section applies to Margin FX’s ONLY

People who trade in Margin FX contracts may do so for a variety of reasons. Some trade for speculation, that is, with a view to profiting from fluctuations in the price or value of the underlying instrument or currency. For example, Margin FX traders may be short-term investors who are looking to profit from intra-day and overnight market movements in the underlying currency. Margin FX traders may have no need to sell or purchase the underlying currency themselves, but may instead be looking to profit from market movements in the currency concerned.

Others trade Margin FX to hedge their exposures to the underlying currency. Foreign exchange exposures may arise from a number of different activities.

Companies or individuals, that are dependent on overseas trade, are exposed to currency risk.  This can be to purchase (or sell) physical commodities (such as machinery) or even financial products (such as investing in securities listed on an international stock exchange). An exporter who sells its product priced in foreign currency has the risk that if the value of that foreign currency falls then the revenues in the exporter's home currency will be lower; or An importer who buys goods priced in foreign currency has the risk that the foreign currency will appreciate thereby making the cost, in local currency terms, greater than expected.

A person going on a holiday to another country has the risk that if that country's currency appreciates against their own, their trip will be more expensive.

In each of the above examples, the person or the company is exposed to currency risk. 

Currency risk is the risk that arises from international business which may be adversely affected by fluctuations in exchange rates. Imperium FX offers its clients the facility to buy or sell foreign exchange products to manage this risk. 

This enables clients to protect themselves against adverse currency swings, yet secure enhanced exchange rates when offered, thereby protecting the profit Margin made by the corporate during the business transaction relating to the foreign currency trade or protecting the cost of the client’s international holiday in the case of the traveller.

Note: The risk of loss in trading in derivatives and/or leveraged products can be substantial. A client should carefully consider whether trading such products is appropriate for them in light of their financial circumstances and objectives.

Please refer to Section 15 for worked examples.

  1. CFD contracts offered by Imperium FX

Please note: this section applies to CFD’s ONLY

A contract for difference (CFD) is an over-the-counter derivative product comprising an agreement under which one party is entitled to be paid an amount of money (profit), or has to pay an amount of money (loss), resulting from movements in the price or value of an underlying instrument or security (without actually owning that underlying instrument or security). This transaction concludes with the parties settling the difference between the purchase price and the sale price.

During the term of the CFD transaction, the price of the underlying product will be marked-to-market daily so that at the end of each Business Day, a payment will generally have to be made by you to Imperium FX or by Imperium FX to you, to reflect any changes in the value of the underlying product during that Business Day.

Please refer to Section 16 for worked examples.

Imperium FX offers CFDs in relation to Indices and Commodities.

 

 

 

Commodity CFDs

Available commodity CFDs are listed on the trading platform.  Commodity CFDs allow you to speculate on the price of a commodity, or hedge an exposure, without physically owning it. The difference between the opening and closing price of a CFD is settled in cash. At no stage do you take delivery of the underlying commodity. In order to open a CFD position an Initial Margin must be provided as collateral.

Index CFDs

Imperium FX offers CFDs in respect of a range of Indices, thereby allowing you to take positions in relation to the overall direction of a market without taking a view on a particular underlying stock or future. A short position can be used as a rough hedge to protect a diversified share portfolio in the event of a market fall. Please refer to the website for the range of index CFDs currently available.

The difference between the opening and closing price of a CFD is settled in cash. At no stage do you take delivery of the underlying product.

 

  1. PURPOSE OF TRADING CFD contracts 

Please note: this section applies to CFD’s ONLY

People who trade in CFD contracts may do so for a variety of reasons. Some trade for speculation, that is, with a view to profiting from fluctuations in the price or value of the underlying instrument. For example, CFD traders may be short-term investors who are looking to profit from intra-day and overnight market movements in the underlying instrument. CFD traders may have no need to sell or purchase the underlying instrument themselves, but may instead be looking to profit from market movements in the instrument concerned.

 

Others trade CFD to hedge their exposures to the underlying instrument.

 

 

 

  1. MARGIN FX AND CFD PRODUCT FEATURES 

Imperium FX Trading as Principal

 

Imperium FX will regularly state, via the electronic trading platform, the price at which it is prepared to Deal with you as principal. This is known as being a ‘market maker’. When Dealing in Margin FX and CFDs, as with all over-the-counter derivatives, Imperium FX is the issuer and a market maker, not a broker. Accordingly, each transaction agreed and entered into with you will be entered into as principal, not as agent.  Should you decide to transact with Imperium FX then Imperium FX will enter into a legally binding contract with you (as principal) i.e. it will be the counterparty to the transaction and each contract purchased (or sold) by you will be an individual agreement made between you and Imperium FX.

 

Long & Short Positions

 

You can open both long and short Margin FX and CFD positions with Imperium FX. Should you open a long position, your intention would be to profit from a rise in the price of the underlying instrument, and you would suffer a loss should the price of the underlying instrument fell. Conversely, should you open a short position, your intention would be to profit from a fall in the price of the underlying instrument, and you would suffer a loss should the price of the underlying instrument rise.

 

In order to close an open long or short position, you would open an equivalent offsetting position. The closure of a position will generally result in a profit or loss being realised in your Account. Should you wish to close only part of your open long or short position you can do so by entering into an equivalent offsetting position of a lesser amount than your current open position.

 

Many Margin FX and CFDs do not have an expiry date. They remain open until they are closed in accordance with the terms of the Application Terms & Conditions. A Margin FX or CFD position can only be closed by contacting Imperium FX. To close a Margin FX or CFD position, you must access the electronic trading platform to determine the current market price for the underlying instrument, with the view to close the position (or part of it). Imperium FX will confirm the current market price and you will then decide whether to accept the price, and if so, you will instruct Imperium FX to close your open position in accordance with your instructions.

 

You should note that Imperium FX is not obliged to accept your orders. Typically, this would occur should you exceed the limits imposed on your Account by Imperium FX, or where there are insufficient funds in your Account to meet your Margin obligations.

 

Imperium FX cannot predict future exchange rates and our rate quotations are not a forecast of where we believe a foreign exchange rate will be at a future date. Imperium FX calculates foreign exchange rates taking into consideration the current spot “interbank” exchange rates and the amount of currency that you wish to buy or sell

 

The rates quoted for a Margin FX or CFD by Imperium FX include a spread which favours Imperium FX. This spread is not an additional charge or fee payable by you. These spreads will differ depending on the Margin FX and CFDs traded.

 

When trading Imperium FX products, you should always be aware of the risks and benefits as detailed in this PDS.

 

Electronic Platform

 

Imperium FX provides an electronic trading platform which enables clients to trade in our products i.e. clients are provided direct access to Margin FX and CFD rates over the internet.  The terms of use applicable to utilising our electronic trading platform, are detailed in the Account Application Terms & Conditions you are required to execute prior to trading. Some of the key provisions include the following:

 

  • Imperium FX reserves the right, in its sole discretion, to institute or change any policies at any time relating to the use of our electronic trading platform. Any such changes will be advised to you directly via our electronic trading platform, email or our website.
  • Clients are granted a non-exclusive and non-transferable license to use the electronic trading platform subject to the terms of the Application Terms & Conditions.
  • Clients shall only use our electronic trading platform for its internal business or investment purposes. 
  • Clients shall not permit any third party to copy, use, modify, disassemble, translate or convert in connection with use of our electronic trading platform or distribute the platform to any third party.
  • Our electronic trading platform may be used to transmit, receive and confirm the execution of orders, subject to market conditions and applicable rules and regulations.
  • Imperium FX consents to the Client’s access and use in reliance upon the Client having adopted procedures to prevent unauthorized access to and use of the electronic trading platform, in any event, the Client agrees to any financial liability for trades executed through the electronic trading platform.
  • Where a Client is granted access to the electronic trading platform, the Client acknowledges and warrants that it has received a password granting it access to the electronic trading platform; is the sole owner of the password provided; and accepts full responsibility for any transaction that may occur on an Account opened, held or accessed through the use of the password provided to the Client by Imperium FX.
  • Clients agree to accept full responsibility for the use of the electronic trading platform and for any orders transmitted through the electronic trading platform. Imperium FX must be notified immediately should a Client become aware of any unauthorized use, loss or theft of the Client’s, username, password or account numbers; or inaccurate information with respect to the content of statements including, cash balances, open positions or transaction history.
  • The electronic trading platform is provided on an “as–is” basis and Imperium FX makes no express or implied representations or warranties to the Client regarding its operation or usability.
  • Imperium FX does not warrant that access to or use of the electronic trading platform will be uninterrupted or error-free, or that the service will meet any particular criteria with respect to its performance or quality nor do we make any warranty as to the timeliness, sequence, accuracy, completeness, reliability or content of any information, service or transaction provided through the use of the electronic trading platform or the results obtained from its use. Imperium FX expressly disclaims all implied warranties, including without limitation warranties of merchantability, title, fitness for a particular purpose, non-infringement, compatibility, security or accuracy.
  • Under no circumstances, including negligence, will Imperium FX be liable for any direct, indirect, incidental, special or consequential damages including, without limitation, business interruption or loss of profits that may result from the use of, unavailability of, or inability to use the electronic trading platform.
  • Clients agree that the use of the electronic trading platform is at the Client’s risk and the Client assumes full responsibility for any losses resulting from the use of or materials obtained via the electronic trading platform.
  • Please note that stop-outs (automatic closing of a position when Margin Calls have not been met) are implemented on our electronic trading platform at the sole discretion of Imperium FX, and no liability for the direct or indirect consequences thereof shall be accepted by Imperium FX in relation thereto.

 

 

  1. KEY BENEFITS OF TRADING MARGIN FX AND CFD contracts 

Margin FX and CFD products can provide an important risk management tools for those who manage foreign currency exposures. The significant benefits of using Margin FX or CFD products as risk management tools are to protect your exchange rate and provide cash flow certainty. Other benefits of using these products apply equally for a client as a risk management tool or for the client who is a trader or speculator. The benefits of trading Margin FX and CFD contracts are described in the table below.

 

Benefit

Explanation

Margin FX

CFDs

Protect an Exchange Rate

Imperium FX provides an electronic trading platform, enabling clients to trade in over-the-counter (as opposed to exchange-traded) derivatives such as Margin FX or CFD contracts over the internet. This facility provides clients with direct access to our system to enable them to buy and sell currency rates to protect themselves against adverse market swings.

 

Imperium FX also offers clients a way of managing volatility by using stop loss orders that enable clients to protect themselves against adverse market swings yet secure enhanced market rates when offered.  Clients can eliminate downside risk by the use of stop loss orders if the exchange rate reaches a particular level.  In addition, clients may also use limit orders which allow clients the opportunity to benefit from favourable upside market movements. 

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Provide Cash Flow Certainty

By agreeing a rate now for a time in the future you will determine the exact cost of that currency, thereby giving certainty over the flow of funds. Any profit (or loss) you make using the Imperium FX product would be offset against the higher (or lower) price you physically have to pay for the foreign currency.  

In addition to using Margin FX products as a risk management tool, clients can benefit by using Margin FX products offered by Imperium FX to speculate on changing exchange rate movements. You may take a view of a particular market or the markets in general and therefore invest in our products according to this belief in anticipation of making a profit. 

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Leverage

Margin FX and CFDs are leveraged investments and trading instruments. While leverage can magnify losses, it can also magnify profits. Leverage allows Clients to take larger exposures to more markets, than cash investors using the same capital base. Leverage also means that Clients can employ more investment and trading strategies than 'long only' investors. These include trading 'pairs', trading across asset classes, going short and taking exposures around short term events.

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Trade in Small Amounts

The electronic trading platform enables you to make transactions in small amounts. You can start using the electronic trading platform even with an opening balance as little as USD $200 (per lot) for Margin FX and USD$850 (per lot) for CFDs. When trading in a Margin FX or CFD contract offered by Imperium FX you may deposit the sum that suits you, or the amount which is in line with the amount you are willing to risk. With Imperium FX you are in full control of your funds. 

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Access to the Foreign Exchange Markets at Any Time

When using Imperium FX you gain access to a highly advanced and multi-levelled system which is active and provides you with the opportunity to trade 24 hours a day on any global market which is open for trading. This gives you a unique opportunity to react instantly to breaking news that is affecting the markets. It should be noted however, that trading in the various currency crosses may be restricted to hours where liquidity is available for any given currency cross. 

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û

Profit Potential in falling Markets

Since the market is constantly moving, there are always trading opportunities, whether a currency is strengthening or weakening in relation to another currency. When you trade currencies, they literally work against each other. If the AUDUSD declines, for example, it is because the US dollar gets stronger against the AUD and vice versa. So, if you think the AUDUSD will decline (that is, that the AUD will weaken versus the dollar), you would sell AUD now and then later you buy AUD back at a lower price and take your profits. The opposite trading scenario would occur if the AUD appreciates.

CFDs provide a simple and effective means to take advantage of falling markets.

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Hedging

CFDs and Margin FX contracts can be used to hedge investments, and reduce existing market risk. Clients can hedge directly, on a portfolio basis, or to cover specific risks of investments.

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ü

Lower Costs

Generally, CFD exposures come at lower transaction costs than the same exposure taken in the Underlying Instruments. Clients pay no Imperium FX fees to open or maintain a trading Account.

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Real Time Streaming Quotes

The electronic trading platform uses the latest technology in order to offer you up-to-the-minute quotes. You may check your Accounts and positions in real time and you may do so 24 hours a day (in most circumstances) on any global market which is open for trading and make a trade based on real-time information. Imperium FX believes it is highly important for you to be able to control your funds whenever you wish and base your deals on real-time information.

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  1. KEY RISKS OF TRADING MARGIN FX AND CFD contracts 

Trading in Margin FX and CFD products carries a high level of risk and returns are volatile. The risk of loss in trading can be substantial, and you can lose more than the capital invested. You should obtain independent professional advice and carefully consider whether Margin FX or CFD products are appropriate for you in light of your knowledge, experience and investment objectives, financial needs and circumstances.

It is also important that you read and understand the terms and conditions of trading in the Application Terms & Conditions and this PDS before entering into any Margin FX or CFD transactions.

Some of the key significant risks involved in Margin FX and CFD trading include, but are not limited to, the following:

Macro-economic Risk – the general state of the Australian and international economies as well as changes in taxation policy, monetary policy, interest rates and statutory requirements are some of the factors which may influence currency markets.

Market Risk- This is the risk that the markets move against you. External market forces can cause markets and prices to change quickly, such forces include changing supply and demand relationships, governmental, agricultural, commercial and trade programs and policies, national and international political and economic events and the prevailing psychological characteristics of the marketplace. As the price of your position is based on an underlying asset these factors may affect your position and our ability to execute, settle or close out transactions on your behalf.

A “spread” position (i.e. the holding of a bought contract for one specified date and a sold contract for another specified date) is not necessarily less risky than a simple long (i.e. bought) or short (i.e. sold) position.  Furthermore a “spread” may be larger at the time you close out the position than it was at the time you opened it.

 

You should be aware that if you acquire a product offered for trading or speculative purposes (that is where you do not have a risk you need to protect yourself from), you will be fully exposed to movements in the underlying asset. 

Not a regulated market – the products offered by Imperium FX are not traded on a licensed market. Accordingly, the protections associated with licensed markets are not available to individuals, corporations or other entities trading in our products.

Market or Exchange Intervention – The rules of the relevant market (if any) or Exchange govern the trading in the Underlying security and so will indirectly affect the dealing in the products offered by Imperium FX. All of the rules of each relevant Exchange may be relevant to Imperium FX contracts so you should consider those rules. The details of those rules are outside the control of Imperium FX and they may change at any time and without notice to you.

Conflicts – Trading with Imperium FX carries an automatic risk of actual conflict of interests because Imperium FX is acting as principal in its positions with you and Imperium FX sets the price of the contracts. Imperium FX may also be transacting with other persons or other market participants. Imperium FX does not guarantee that the price given to you is the best price. You can reduce the risks to you of unfavourable pricing or opaque pricing by monitoring Imperium FX’s contract pricing and by monitoring the underlying market. Imperium FX also mitigates this risk by retaining external legal advisors, ongoing board supervision, implementing compliance procedures and maintaining a Conflicts Register.

Loss by Spread – Since Imperium FX charges a spread on some transactions, the price will have to move in your favour before you can break even. That is, even if the price does not move, you will be making a loss when entering the transaction.

Gapping -In fast moving or illiquid markets “gapping” may occur. Gapping occurs when market prices do not follow a “smooth” or continuous trend and are typically caused by external factors such as world, political, economic and corporate related events. Should gapping occur in the underlying asset on which your product is based, you may not be able to close out your position or open a new position at the price at which you have placed your order. Further, in instances of “gapping” any conditional orders opened on your Account will be filled at the next best available price which may be substantially different from the price selected when entering your conditional order. 

Margin Risk - Should the price of the underlying asset on which your product is based move against you, you may receive a Margin Call from us and, at short notice, be required to deposit a Variation Margin into your Account in order to maintain your position. Should we make a Margin Call which may be substantial, you must deposit the amount of funds that we request into your Account immediately. In the event of you failing to make Margin payments we may reduce or close all your open positions without further notice and you will be liable for any shortfall. Positions are marked-to-market on a daily basis, with payments being settled daily to account for market movements. You must be in a position to fund such requirements at all times. Initial and Variation Margin must be paid immediately after the call. The general policy of Imperium FX is that payment of the call must be received within 24 hours of the call although in times of extreme price volatility this may mean as little as 1 hour. In rare circumstances, the markets could move against your position giving Imperium FX no time to make a Margin Call before liquidating your positions in order for Imperium FX to protect the positions of itself and other clients.

LeverageAs these products are highly leveraged a small price movement in the underlying asset on which they are based can result in substantial profits or losses exceeding your Initial Margin. In addition you could be required to pay further funds representing losses and other fees on your open and closed positions.  The prices of our products may be volatile and fluctuate rapidly over wide ranges. Price fluctuations may be as a result of uncontrollable events or changes in a variety of conditions as described above in Market Risk.

Below is a hypothetical example of how gearing (leverage) magnifies losses/profits (without taking into account fees & charges):

 

Commodity purchase amount

CFD purchase amount

Initial outlay

$10,000

$10,000 (as Initial Margin)

Reference commodities purchased

 

1000

10,000

Initial price

$10.00

$10.00

value

$10,000

$100,000

gearing

0%

90%

Result where commodity price falls

Commodity price falls to $8.75.  Commodities now worth $8,750 (i.e. loss of $1,250 or -12.5%)

Commodity price falls to $8.75.  CFDs now worth $87,500 (i.e. loss of $12,500 or -125% on original outlay of $10,000)

Result where commodity price rises

Commodities now worth $11,000 (i.e. profit of $1,000 or +10%)

CFDs now worth $110,000 (i.e. profit of $10,000 or +100% on original outlay of $10,000)

 

 

Liquidity There may be periods where certain currency pairs or CFDs become illiquid. The lack of liquidity may prevent you from taking positions in FX or CFDs or from liquidating from unfavorable positions resulting in your incurring a loss.

Stop Loss Orders unavailable - Certain products can be traded in conjunction with our limit and stop loss orders which are designed to either optimise your exposure to the market or limit your loss by instructing that trades be executed at pre-determined price levels. Stop losses are instructions placed by the client with Imperium FX to close out an open position if a market trades through a specific level.  Stop loss orders are often used to attempt to limit the amount which can be lost on a position.  We note that stop losses are not guaranteed and the execution of such orders will depend on market volatility and liquidity.  So whilst stop losses generally allow you to control potential losses should the market move against you, please be aware that stop loss orders may not always limit your losses the way you anticipate. The operation of these order types should be discussed with your Imperium FX representative.

Powers of Imperium FX – Should you fail to pay any amounts due and payable, including Margin Calls, or maintenance of minimum account balances, Imperium FX have extensive powers to close out positions and charge default interest.

 Where an Adjustment Event occurs, Imperium FX may close, adjust the terms or change the Margin requirement of your positions. In such a situation, it is common industry practice for Imperium FX to have unconditional, unqualified discretion to place its own valuation on open CFD contracts. Where this discretion used, Imperium FX will provide you with written notice.

Similarly, Imperium FX reserves the absolute discretion to terminate the Terms and Conditions with immediate effect or re-price or close out a position at any time, for any value if in the sole opinion of Imperium, you are suspected of market manipulation, false trading, market rigging, fictitious transactions, wash trading, insider trading, short selling, breaching the financial services laws or breaching the AML/CTF laws.

Under the Application Terms & Conditions you also indemnify Imperium FX and its employees, agents and representatives against certain losses and liabilities. You should read the Application Terms & Conditions carefully to ensure you understand these powers and responsibilities.

Electronic Trading platform risk– You shall be responsible for providing and maintaining the means by which to access the electronic trading platform, which may include without limitation a personal computer, modem and telephone or other access line.  While the internet and the World Wide Web are generally reliable, technical problems or other conditions may delay or prevent access thereto. If you are unable to access the internet and thus, the electronic trading platform, it will mean you may be unable to trade in a product offered by Imperium FX when desired and you may suffer a loss as a result. Should the system be unavailable, clients may place their orders via telephone with a representative of Imperium FX. Furthermore, in unforeseen and extreme market situations, or a global catastrophe, Imperium FX reserves the right to suspend the operation of the electronic trading platform or any part or sections of it. In such an event, Imperium FX may, at its sole discretion (with or without notice), close out your open contracts at prices it considers fair and reasonable at such a time. Imperium FX may impose volume limits on client Accounts, at its sole discretion. Please note that such measures would only be implemented in extreme market conditions, and such discretion only reasonably exercised in the best interests of the client.

Regulatory Risk– changes in taxation and other laws, government, fiscal, monetary and regulatory policies may have a material adverse effect on your Dealings in Margin FX or CFDs, as may any regulatory action taken against Imperium FX.

Imperium FX Risk - Investors must deal directly with Imperium FX to open and close positions. Given you are dealing with Imperium FX as counterparty to every transaction, you will have an exposure to us in relation to each transaction. This is common to all OTC financial market products. To mitigate this risk, we have implemented procedures to monitor our compliance with our license conditions and our financial obligations under RG 166.

 

To assist you in assessing our credit risk, we have a summary of key financial data available to you on request.

The obligations of Imperium FX to make payments in respect of the contracts are unsecured obligations of Imperium FX, which means that you are subject to our credit risk. If we were to become insolvent, we may be unable to meet our obligations to you. You may become unsecured creditors in an administration or liquidation and will not have recourse to any underlying assets in the event of Imperium FX’s insolvency.

Imperium FX may also be unable to operate its business as a result of a regulatory impediment such as Imperium FX ceasing to hold an Australian Financial Services Licence or because ASIC impose a stop order on the PDS. Imperium FX manages this risk by clearly implementing appropriate policies and procedures to comply with licence conditions and financial services laws.

 

Counterparty Credit risk-  Imperium FX may enter into arrangements with third party execution and clearing providers for the facilitation of 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 Imperium FX holds client funds. If the financial condition of Imperium FX or assets of our counterparties or the parties with which we hold client assets deteriorate, then clients could suffer loss. Imperium FX uses reputable counterparties such as established financial institutions with good credit standing along with adequate financial resources. In selecting the counterparties, Imperium FX considers public information, credit agency reports and the most recent financial statements showing the paid up capital, assets and liabilities of those counterparties. In addition, Imperium FX undertakes searches of the relevant regulators databases to confirm that the proposed counterparty holds all the necessary licenses and/or authorities. We also use credit limits to manage our exposure to each counterparty. As of the date of this PDS, Imperium FX intends to hedge all transactions with FXCM and Goldman Sachs.

 

Foreign Exchange Risk– Your Account is maintained in the currency you have nominated, that is, the Base currency. Where you Deal in a product that is denominated in a currency other than the Base currency, all Initial and Variation Margins, profits, losses, interest rate payments/receipts and financing credits and debits in relation to that product are calculated using the currency in which the product is denominated.

Accordingly, your profits or losses may be affected by fluctuations in the relevant foreign exchange rate between the time the order is placed and the time the position is closed, liquidated, offset or exercised.

Upon closing a position that is denominated in a currency other than the Base currency of your Account, you will be able to request that the foreign currency balance be converted to the Base currency of your Account. Any conversion will be at the exchange rate quoted by Imperium FX, and subject to the Conversion Fee. Until the foreign currency balance is converted to the Base Currency, fluctuations in the relevant foreign exchange rate may affect the unrealised profit or loss made on the position.

Market Information Risk– Imperium FX may make available to you through one or more of its services, a broad range of financial information that is generated internally or obtained from agents, vendors or partners (third party providers). This includes, but is not limited to, financial market data, quotes, news, analyst opinions and research reports, graphs or data (Market Information).  

 

Market Information provided by us by email or through our website is not intended as advice. Imperium FX does not endorse or approve the Market Information and we make it available to you only as a service for your own convenience. Imperium FX and its third party providers do not guarantee the accuracy, timeliness, completeness or correct sequencing of the Market Information or warrant any results from your use or reliance on the Market Information.

 

Market Information may quickly become unreliable for various reasons including, for example, changes in market conditions or economic circumstances. Neither Imperium FX nor the third party providers are obligated to update any information or opinions contained in any Market Information and we may discontinue offering Market Information at any time without notice.

 

Operational Risk– Operational Risk is inherent in every transaction, for example, disruption to Imperium FX’s operational processes such as communications, computers, networks or external events may lead to delays in the execution of or settlement of a transaction.

Imperium FX relies on a number of technology solutions to provide you with efficient services – Imperium FX has partly outsourced the operation of this trading platform to a third party and in doing so Imperium FX relies upon this third party to ensure the systems are updated and maintained. Prior to engaging these providers, Imperium FX has performed due diligence and entered into service agreements with each provider.

 

A disruption to the Imperium FX electronic trading platform may mean you are unable to trade in a product offered by Imperium FX when desired and you may suffer a loss as a result. An example of disruption includes the “crash” of our computer based trading system. Imperium FX mitigates this risk by conducting regular backups and using appropriate IT protections.

Risk Capital– You could lose all of the Initial Margin that you deposit to establish or maintain a position. All derivatives involve risk and there is no trading strategy that can eliminate it.  The placing of contingent orders (such as a stop-loss order) may not always limit your losses to the amounts that you may want. Market conditions may make it impossible to execute such orders. In cases where you are speculating we suggest that you do not risk more capital than you can afford to lose. A good general rule is never to speculate with money which, if lost, would alter your standard of living.

 

Investment decisions – You are solely responsible for the selection of the underlying asset for any orders you place with us, and as such, the performance of any investment in Margin FX or CFDs using your trading Account will depend mainly on the your own investment decisions. If you have not correctly applied your own risk management strategies by giving orders to us to enter into contracts, you may decide under your own risk management policies to add or to close out some of those contracts (to match your exposure). The loss or profit arising as a result of this additional trading with Imperium FX will be credited or debited to your Account. You need to take into account the cost of additional hedging adjustment contracts when considering your overall risk management.

 

Adjustment Risk (CFDs) – Where an Adjustment Event occurs, Imperium FX reserves the right to adjust the terms of your CFD or order, OR not make the adjustment to the relevant CFD if it is not reasonably practicable.  Imperium FX may also elect to close your CFD position in the event of the underlying securities being subject of a take-over offer, prior to the closing date of the offer.

 

 

 

 

 

  1. FEES & CHARGES

Imperium FX will not charge a transaction fee to clients.

Imperium FX earns its income from the business spread (or Margin) that we apply to our products. This is the difference between the rate at which we buy and sell the financial instruments (i.e. between the wholesale price achieved by Imperium FX and your trade price).  This spread is incorporated into the rates quoted to you and is not an additional charge or fee payable by you. These spreads will differ depending on the contracts traded.  Accordingly, the decision to transact at a particular rate will always be your decision. However, once you agree to a particular price that is the total amount payable by you to Imperium FX.

Imperium FX does not provide a market amongst or between clients for investments or speculations. As stated above, each product purchased (or sold) by you is an individual agreement made between you and Imperium FX as principal and is not transferable, negotiable or assignable to or with any third party.

You will also be liable for fees for related services that may be charged directly by our nominated third-party service providers depending upon the type of service you use. These fees include fees for failed trades, off-market transfers, other administrative fees including monthly fees for access to certain information and services.

Any such fees incurred are immediately payable and will be deducted from your Account in accordance with the Application Terms & Conditions.

 

 

 

 

Online Trading Facility Fee

 

Imperium FX will charge a fee for use of the online trading facility which is amended from time to time. For the latest fee we charge, please refer to our website.

Telephone Fee

 

Imperium FX may charge a small fee for telephone service (unless the trading platform is unavailable). This fee will be disclosed to you prior to trading.

Financing Charges

Amounts Outstanding

If you have an amount payable to Imperium FX under the Terms and Conditions, interest will be calculated on outstanding payments from the due date until the amount is paid in full. The interest will be compounded monthly with the effect of achieving an equivalent annual compound interest rate of the greater of 10% or 3% above LIBOR. As the interest will be calculated and accrued daily, we will divide the monthly rate by the number of days in the relevant month before applying it to the daily balance. This interest will also be charged on individual Accounts with a negative net free equity balance.

CFDs

In the event of you holding a long CFD position overnight you may be required to pay a financing charge. If you hold a short CFD position overnight you may be entitled to receive interest. Interest calculations are based on the total notional value of your open position, and are calculated as set out below using the LIBOR (London Interbank Offer Rate) or LIBID (London Interbank Bid Rate) plus or minus a margin. Interest is calculated and debited from or credited to your Account on a daily basis. No interest is paid or received if you open and close a position in the same trading day. Interest is debited from and credited to your Account on a daily basis.

The LIBOR rate changes frequently and is the most widely used benchmark or reference rate for short term interest rates world-wide. LIBOR is calculated daily by the British Bankers Association and published on their website with a 1 week rolling delay.

Standard overnight interest rates applicable are outlined below.

Overnight Interest

Long

Short

LIBOR +1.8%

LIBID – 1.8%

 

The amount of interest paid/received by Imperium FX will vary each day, depending upon factors such as the closing price of the underlying asset on which the product is based, changes to holdings within your portfolio and/or changes to LIBOR or LIBID.

No interest is paid or received if you open and close a position in the same trading day.

Imperium FX may in its absolute discretion reduce the financing rates applicable to your long and short positions depending on your trading volume or Account balance. Imperium FX reserves the right to change the financing rates applicable. In the event thereof, you will receive proper notification of such change, and a revised PDS if required.

Margin FX

In the event of you holding a Margin FX position overnight you may be required to pay a financing charge or maybe entitled to receive an interest payment, depending on underlying interest rate differentials of the applicable currencies.  Interest is calculated on a daily basis and debited from and/or credited to your Account at the end of each trading day.

 

The amount of interest paid/received by Imperium FX will vary each day, depending upon factors such as the price of the underlying currency interest rate differentials on which the Margin FX transaction is based.

 

No interest is paid or received if you open and close a position in the same trading day.

 

 

 

  1. MARGINs 

Where you enter a transaction you will be required to pay an Initial Margin (an initial deposit/up-front payment).  An Initial Margin means an amount of collateral that is required from you as security to enter into a Margin position.  Typically we will require an Initial Margin calculated as a percentage of the contract value. The Initial Margin will vary depending on the type of product you trade and is determined at Imperium FX’s discretion mostly by the liquidity of the underlying asset on which the product is based.  It is typically 0.5-25% of the contract value but may be as high as 100% depending on the volatility of the relevant market and the liquidity of the underlying asset. 

In addition, in order to maintain your position, you may be required to pay additional Margin in the event of adverse market movements against your position.  Such payments are not costs but are cleared funds required by Imperium FX to cover our risk and as security for your obligations. The amount is determined by the relevant third party service provider, however Imperium FX in its absolute discretion, can impose Margin requirements above and beyond those set by service providers.

The current Margin rates applicable to each type of transaction are provided on the electronic trading platform prior to entering into a trade.

The Margin amounts are payable into the Imperium FX client trust Account and are held, used and withdrawn in accordance with the Corporations Act requirements and our agreed terms and conditions specified in the Account Application Terms & Conditions. In particular, Imperium FX will withdraw client deposits to meet Margin calls, and other payment/settlement obligations. Imperium FX may, in its discretion, request that you make Margin and deposit payments to a broker affiliated with Imperium FX. Payment pursuant to such a request will satisfy your obligation to make payments to Imperium FX.

All contracts will be subject to Margin obligations.  Accordingly, you are responsible for meeting all Margin payments required by Imperium FX. It is your sole responsibility to monitor and manage your open positions and exposures, and ensure Margin Calls are met as required. Margin Calls will be notified via the trading platform, and you are required to log-in to the system on a daily basis when you have open positions to ensure you receive notification of any such Margin Calls. Please note that if you do not check the trading platform for Margin Call notifications, and hence do not meet them in a timely manner, positions will be closed out by Imperium FX, without further reference to you, in accordance with the executed Account Application Terms & Conditions. A Margin Call will not be considered to have been met UNLESS AND UNTIL cleared funds have been received by Imperium FX in the nominated account. Imperium FX also reserves the right to close a CFD if the amount of Margin payable by you exceeds 50% of the Initial Margin in respect of that CFD.

 

In the event of a discrepancy between your instructions and the Confirmation, the details of the Confirmation will be deemed the correct transaction for the purposes of Margining. Any excess Margin paid in reliance on an erroneous Confirmation will be held in the client money trust account.

 

Positions will be monitored by Imperium FX on a continuous basis to account for any market movements. If the value of the position moves against you then you will be required to “top up” the Initial Margin and, if you are unable to do so, you will be subject to a Margin Call i.e. to pay additional Margin or alternatively to close the position in order to reduce your Initial Margin to a level acceptable to Imperium FX. The Variation Margin liability is incurred at the time of the occurrence of any movement in the market that results in an unrealised loss, regardless as to when the call to pay is made by Imperium FX on you.

 

You must be in a position to fund such requirements at all times. Initial and Variation Margin must be paid immediately after the call. The general policy of Imperium FX is that payment of the Margin Call must be received within 24 hours of the call although in times of extreme price volatility this may mean as little as 1 hour In rare circumstances, the markets could move against your position giving Imperium FX no time to make a Margin Call on you to request additional funds for Imperium FX to protect its positions.

 

If you fail to meet any Margin Call i.e. if we fail to receive cleared funds, we may reduce or close all your open positions without further notice or in the rare circumstances where Imperium FX  does not have time to make a Margin Call due to exceptional market movements, then Imperium FX may in its absolute discretion and without creating an obligation to do so, close out, without notice, all or some of your open positions (or transactions) and deduct the resulting realised loss from the Initial Margin (and other excess funds held in your Account with Imperium FX).

 

In either case, any losses resulting from Imperium FX closing your position will be debited to your Account and may require you to provide additional funds to Imperium FX.

 

CFD and Margin FX products can be highly volatile and you should ensure that you are always contactable by Imperium FX. If you are unable to be contacted for the purpose of Imperium FX making a Margin Call, we may close out your open positions without notifying you.

 

Margin calls will be made on net account basis i.e. should you have several open positions, then Margin Calls are netted across the group of open transactions.  In other words, the unrealised profits of one transaction can be used or applied as Initial or Variation Margins or to offset the unrealised losses of another transaction. 

 

You will only be allowed to Deal in and maintain positions on the basis of cleared funds being provided for your Margin obligations or your net balance is in credit.  Margin calls can be made by Imperium FX at any time and you are responsible for ensuring that they are met.

 

Imperium FX has the right to limit the size of your open positions, whether on a net or gross basis under any appropriate circumstances as determined by Imperium FX. Imperium FX also has the right to refuse any request made by you to place an order to establish a position at any time at Imperium FX’s discretion without having to give you notice.

 

  1. MARGIN FX TRADING EXAMPLES

Please note: this section applies to Margin FX Contracts ONLY

Buying AUD/USD with a loss

You decide to take a long position on the AUD against the USD and ask for a quote for 1 lot, the equivalent of AUD$100,000. We quote you 1.0300/1.0302 and you buy 1 lot at 1.0300.

Purchase value: $100 000 (1 lot) x 1.0302 = ($103 020)

Initial margin payable at 0.5%: ($500)

Total price: ($103 020)

Total payable: ($500)

The market moves against you and by the end of the day the AUD/USD is at 1.0100/1.0105 at which point you decide to close out your position.

Sale value: $100 000 x 1.0100 = $101 000

Realised loss: ($2020)

Total loss: ($2020)

Less existing margin: $500

 

Total payable: ($1520)

 

Should you decide to hold your position overnight, a financing charge may be credited or debited from your account. For more information, see section 13.

Buying AUD/USD with a profit

You decide to take a long position on the AUD against the USD and ask for a quote for 1 lot, the equivalent of AUD$100,000. We quote you 1.0300/1.0302 and you buy 1 lot at 1.0300.

Purchase value: $100 000 (1 lot) x 1.0300 = ($103 020)

Initial margin payable at 0.5%: ($515.10)

Total price: ($103 020)

Total payable: ($515.10)

The market moves in your favour and by the end of the day the AUD/USD is at 1.0490/1.0495 at which point you decide to close out your position.

Sale value: $100 000 x 1.0490 = $104 900

Realised profit: $1880

 

Net profit: $1364.9

 

Should you decide to hold your position overnight, a financing charge may be credited or debited from your account. For more information, see section 13.

 

 

 

 

 

 

 

 

 

  1. CFD TRADING EXAMPLES

Please note: this section applies to CFDs ONLY

Buying a commodity CFD with a loss

You decide to go long on 5000 OZ (1 lot) of SILVER CFDs and we quote you 27.427/27.475 and you buy 1 lot at 27.475.

Purchase value: 5000 x 27.475 = ($137 375)

Initial margin payable at 0.5%: ($686.875)

Total price: ($137 375)

Total payable: ($686.875)

The market moves against you and by the end of the day SILVER CFDs are at 25.730/25.745 at which point you decide to close out your position.

Sale value: 5000 x 25.730 = $128 650

Realised loss: ($8725)

Total loss: ($8725)

Less existing margin: $686.875

 

Total payable: ($8038.125)

 

Should you decide to hold your position overnight, a financing charge may be credited or debited from your account. For more information, see section 13.

Buying a commodity CFD with a profit

You decide to go long on 5000 OZ (1 lot) of SILVER CFDs and we quote you 27.4275/27.4750 and you buy 1 lot at 27.4750.

Purchase value: 5000 x 27.4750 = ($137 375)

Initial margin payable at 0.5%: ($686.875)

Total price: ($137 375)

Total payable: ($686.875)

 The market moves in your favour and by the end of the day SILVER CFDs are at 29.060/29.110 at which point you decide to close out your position.

Sale value: 5000 x 29.060 = $145 300

Realised profit: $7925

Net profit: $7238.125

 

Should you decide to hold your position overnight, a financing charge may be credited or debited from your account. For more information, see section 13.

  1. Setting up YOUR ACCOUNT

Prior to transacting in Margin FX or CFDs, you must read and understand our FSG, this PDS and the Account Application Terms & Conditions (which will be provided to you by Imperium FX) detailing the applicable terms and conditions. You must then complete, sign and return the Account Application Terms & Conditions.

Imperium FX 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

 

 

Once we have received your signed Account Application Terms & Conditions, you will be emailed a link to our suitability questionnaire and you will be required to answer a series of questions designed to assess their knowledge, experience and understanding of OTC derivative products. An Imperium FX 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. Once you have completed the questionnaire to our satisfaction or have placed five or more trades on the demo account, we will proceed with your application.

You may transfer funds to us via bank transfer or credit card. Transfers to us via credit card will be subject to our suitability requirements based on your annual income. Funding an account by credit card has additional risks and costs for you. By using these payment methods, you would effectively be doubling your leverage by taking credit from their credit card account and trading with leverage on your Imperium FX Account. This can add to the risks and volatility of your positions as well as incurring higher interest costs on your credit card account.

 

Although Imperium FX may accept payments of more than $1000 from credit card accounts to fund your Account and to meet later Margin payments, our suitability requirements for credit cards are a risk management measure protecting our interests and do not constitute personal financial advice to you. We recommend you carefully consider and obtain professional advice if you wish to fund your Account with a credit card.

In no circumstances do we accept cash deposits.

When transferring funds to Imperium FX you must ensure that the funds are appropriately referenced with your Account number to enable us to easily identify your funds and apply them to your Account promptly. All payments made to Imperium FX must be free of any withholding tax or deduction. 

Imperium FX 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. 

Imperium FX does not accept funds transferred from third parties, so it is your obligation to ensure that all funds transferred to us are from the bank Account you have nominated in your Application. We may, in our absolute discretion, without creating an obligation to do so, return any funds transfer or cheque received from a third party back to the Account from which it was transferred.

Imperium FX will not accept any liability or responsibility for any losses that you may suffer as a result of, or arising out of, or in connection with, us returning any transfer of moneys or cheque from a third party, including any losses incurred by you because you are subsequently in default of your obligations under the Account Application Terms & Conditions.

  1. ORDERS 

Regardless of the type of order used, Imperium FX will issue you with a Deal Confirmation 1-2 Business Days after the trade has been executed. The Deal Confirmation will take the form of an email or other form of electronic notification from Imperium containing identification details of the product issuer and the client, the date of the transaction, description of transaction, amount payable and any applicable taxes or stamp duty payable in relation to the transaction. It is your obligation to review the Confirmation immediately and to ensure its accuracy and to report any discrepancies within 48 hours.

A Stop-loss order is an order placed to limit the loss on an open position, and can be used on for both FX and CFD contracts.  Stop-loss orders must be placed a minimum distance from Imperium FX's current bid and offer prices. The minimum distance for a stop loss order for each will be advised to you upon request.

A stop order can be seen as a “resting” market order. The order will become active when the price specified as the strike price in the stop order has been traded in the market. The stop order will then be converted into a market order. The stop order becomes a market order when the stop price is equal to last traded price in the underlying stock market. The process of the fill will be precisely as described under the order type.

A stop-loss order can be placed on the online trading platform. Two forms of stop-loss order are available currently, namely, a stop-loss order at a set price; and a trailing stop-loss order which enables you to link a stop-order at a set distance to the market. As the market moves away from the stop-order’s strike price, the strike price will be adjusted in the steps defined when the order was placed. In case the market move towards the stop orders strike price the order will remain at the initial level with the initial strike price.

For example, if you want to protect a long position in BHP that you bought at $50.00, you can place a trailing stop to sell at $42.00, with a distance to market of $7 and a step of 1 point. Then if BHP moved to $52.00, the strike price of the stop-order will be adjusted to $44.00. If BHP moves to $57.00, the strike price will be adjusted to $50.00 and so forth. When the price in BHP moves down to $50.00, your stop order will be triggered and routed as a market order.

 

Stop-loss orders placed on share CFDs will be filled if the underlying security trades at prices equal to or below the price at which you have placed your stop loss order subject to there being sufficient liquidity in the underlying security. Your stop loss orders may be filled at prices below those at which you have placed your stop loss order.

 

 

 

Imperium FX will execute a Stop-loss order once the following conditions are met:

 

  • Imperium FX 's offer price has reached the order price in the case of a buy order or Imperium FX‘s bid price has reached the order price in the case of a sell order and;
  • The relevant underlying market has traded at or through the level at which the order is placed, in sufficient size that Imperium FX could have replicated the order. Imperium FX will not fill partial orders.
  • Imperium FX will not execute stop loss orders based on crossings or special trades that have gone through the underlying market. If the relevant underlying market, and therefore our CFD price, gaps through the stop level then the order will be executed at the next available price at which the order could have reasonably been executed.

 

As the markets are constantly moving 24 hours a day, you are able to place a 'stop loss' on all open positions. Whilst this allows you to control potential losses should the market move against you, in most circumstances, stop loss orders may not always limit your losses the way you anticipate. There are no guarantees in relation to stop-loss orders, and due to the speed at which prices can move, they may be effected at a different price (known as slippage) or not at all.

There are no additional fees or charges associated with the placement of stop-loss orders (only the disclosed commission regarding the executed transaction if the order is triggered).

  1. APPLICATION TERMS & CONDITIONS 

In order to open an Account, you are required to sign our Application Terms & Conditions. This is an important legal document containing the terms and conditions which govern our relationship with you. It is provided to you separately by Imperium FX.

We recommend that you consider seeking independent legal advice before entering into the Application Terms & Conditions, as the terms and conditions detailed therein are important and affect your dealings with us.

We note the following key terms in the Account Application Terms & Conditions, some of which have been summarised throughout this PDS:

  • Client acknowledgements regarding knowledge and suitability of Margin FX and CFD products;
  • Client representations and warranties;
  • Client Account operating details;
  • Margin FX and CFD trading requirements;
  • Margin requirements and Imperium FX’s rights in respect thereof;
  • Client obligations regarding Confirmations (discrepancies);
  • Process for closing out a trade, and Imperium FX’s rights in relation to price calculation;
  • Interest payable/receivable on open positions;
  • Requirements regarding the appointment of authorised persons by the client;
  • Default events;
  • Imperium FX rights following a default event;
  • Amendment and termination rights;
  • Client Indemnity in favour of Imperium FX
  • Imperium FX’s limitation of liability;
  • Fees and charges;
  • Restrictions on assignment of agreement;
  • Telephone recordings;
  • Provision of general advice;
  • Governing law (NSW); and
  • Electronic trading platform conditions/process.
  1. CLIENT MONIES

All money deposited into your Account by you or a by person acting on your behalf, or which is received by Imperium FX on your behalf, will be held by Imperium FX in one or more segregated client money trust accounts it must maintain pursuant to the Corporations Act. Please note that individual client accounts are not separated from each other, but may be co-mingled into one segregated account.

Please note that monies will be withdrawn to meet Margins, deposits, fees, transaction settlements, or other costs and may be immediately on-forwarded by Imperium FX to our licensed third party clearing and execution providers, and applied against your Margin, exchange, fee and settlement obligations. Once the funds are withdrawn from the client money trust account, it will no longer be client money and will be dealt with by us on a proprietary basis. We will nevertheless apply these funds only to transactions corresponding with client trades. Client monies which are held pending future transactions and payments, remain in our segregated account in accordance with the Corporations Act. Funds belonging to Imperium FX such as fees will also be immediately (or no later than 28 days after becoming Imperium FX’s) transferred out of the client money account.

It is important to note that holding your money in one or more segregated accounts may not afford you absolute protection. Should Imperium FX fail to recover funds payable by its hedge counterparties, there will be a deficit in the segregated client account with the loss to be borne by all clients. This is known as counterparty risk.

Imperium FX does not accept payments from or make payments to any third parties.

Imperium FX is entitled to retain all interest earned on client moneys held in segregated accounts with a bank or approved deposit-taking institution. You will not earn interest on funds held in a client money account. The rate of interest earned by Imperium FX on this account is determined by the provider of the deposit facility.

  1. Cooling off

There are no cooling-off arrangements for Margin FX or CFD contracts. This means that when Imperium FX arranges for the execution of a Margin FX or CFD contract, you do not have the right to return the product, nor request a refund of the money paid to acquire the product.

 

  1. Superannuation

It should be noted that complying superannuation funds are subject to numerous guidelines and restrictions in relation to their investment activities which are contained in the Superannuation Industry Supervision Act 1993, and associated regulations and regulatory guidance material.

 

Without being an exhaustive list, following are some of the issues that should be considered by a Trustee of a complying superannuation fund:

  • Restrictions on borrowing and charging assets and whether Dealing in over-the-counter derivative products would breach those borrowing and charging restrictions;
  • The purpose of Dealing in over-the-counter derivative products in the context of a complying superannuation fund’s investment strategy as well as the fiduciary duties and other obligations owed by Trustees of those funds;
  • The necessity for a Trustees of a complying superannuation fund to be familiar with the risk involved in Dealing in over-the-counter derivative products and the need to have in place adequate risk management procedures to manage the risks associated in Dealing in those products; and
  • The consequences of including adverse taxation consequences if a superannuation fund fails to meet the requirements for it to continue to hold complying status.

 

  1. TAXATION 

23.1 Introduction

If you trade in Margin FX or CFDs, you may be subject to Australian taxation. This section outlines general information about significant Australian income tax and GST implication of trading derivatives.

The information contained in this section is of a general nature only and is not intended to constitute legal or taxation advice and should not be relied upon as such. Imperium FX recommends that you obtain independent professional taxation advice on the full range of taxation implications applicable to your own personal facts and circumstances.

 

23.2 Tax Consequences of Transacting in Margin FX Contracts and CFDs

The ATO has not issued any specific Tax Ruling or Determination in respect of Margin FX. However, they are similar in nature to CFDs in that they are both derivatives which provide the investor with exposure to price movements in underlying assets traded on markets, without directly investing in those underlying assets.

The taxation of CFDs is set out in ATO Tax Ruling TR 2005/15. Under TR2005/15, if you enter into a CFD position in the ordinary course of your business or for profit-making purposes, it is likely that any profit derived or loss incurred by you will be included in, or allowed as a deduction from, your assessable income.

 23.3 Treatment of Transaction Fees

Any Daily Financing Fees credited to you are likely to be included in your assessable income at the time it is credited to your Account. If you do not provide your TFN (or ABN) or proof of exemption, Imperium FX may be required to withhold tax from any payment at a rate of up to 49%.

23.4 Goods and Services Tax

GSTD 2005/3 states that no GST should be payable in relation to your trading of Margin FX or CFDs with Imperium FX. However, GST may apply to certain fees and costs charged to you.

  1. DISCLOSURE OF INTERESTS 

We do not have any relationships or associations which might influence us in providing you with our services. However, Imperium FX may share fees and charges with its associates or other third parties or receive remuneration from them with respect to your Dealings with us.

In particular, Imperium FX is a market maker, not a broker, and accordingly will always act as principal for its own benefit in respect of all Margin FX and CFD transactions with you. Imperium FX may conduct transactions to hedge its liability to you in respect of your Margin FX or CFD positions by undertaking transactions in the underlying currencies. Such trading activities may impact (positively or negatively) the prices at which you may trade Margin FX and CFD products.

You may have been referred to us by a service provider who may receive financial or non-financial benefits from us. These should have been disclosed to you by the service provider in question. Please note that such benefits will not impact fees or the rates you will be offered for financial products or services undertaken with Imperium FX.

  1. Ethical Considerations

Imperium FX contracts do not have an investment component. Labour standards or environmental, social or ethical considerations are not taken into account by Imperium FX when making, holding, varying or closing out Imperium FX contracts.

  1. PRIVACY 

Your privacy is important to us. The information you provide Imperium FX and any other information provided by you in connection with your Account will primarily be used for the processing of your Account application and for complying with certain laws and regulations. We may use this information to send you details of other services or provide you with information that we believe may be of interest to you. Full details of our privacy policy are available from our website www.impfx.com

  1. Dispute resolution 

Imperium FX has an internal dispute resolution process in place to resolve any complaints or concerns you may have, as quickly and fairly as possible in the circumstances.  Any complaints or concerns should be directed to the Director (by telephone, facsimile, or letter) at the address and telephone/fax numbers provided in section 1 of this PDS. We at admin@impfx.com will seek to acknowledge receipt your complaint within 2 Business Days for written complaints and 3 Business Days for telephone complaints at which time we will advise you on the expected timing for full resolution of the complaint. In any case, we will seek to fully resolve your complaint within 45 days. We will investigate your complaint, and provide you with our decision, and the reasons on which it is based, in writing.

If you are dissatisfied with the outcome, you have the right to lodge a complaint with the Financial Ombudsman Service (member No. 25558), an approved external dispute resolution scheme, of which Imperium FX is a member. 

Financial Ombudsman Service

Address:              GPO Box 3 MELBOURNE VIC 3001

Telephone:         1300 780 808

Facsimile:             03 9613 6399

Website:              www.fos.org.au

Email:                    info@fos.org.au

  1. Glossary 

Below is a list and the meaning of some words used in this PDS.

Term

Definition

Account

Account of the client Dealing in the products issued by Imperium FX, which is established in accordance with the terms and conditions of the Application Terms & Conditions.

Adjustment Event

An event such as a dividend payment, a corporate action (e.g., a takeover), the company whose security represents the subject matter of the CFD becoming externally administered, trading halt or suspension.

AFSL

Australian Financial Services License.

Base currency

Your Account is maintained in the currency you have nominated, that is, the base currency.

Business Day

A day (other than a Saturday or Sunday or public holiday) on which trading banks in Sydney, Australia are open for business.

Account Application Terms & Conditions

The agreement provided to you by Imperium FX, detailing the applicable terms and conditions as amended, supplemented or updated from time to time. You must complete, sign and return an Account Application Terms & Conditions, and have your Account approved by Imperium FX in order to set up an Account with Imperium FX to Deal in products issued by Imperium FX.

CFD

Contract for Difference.

Confirmation

Document or documents confirming evidence exchanged between Imperium FX and the client, confirming the terms of the product transaction.

Corporations Act

Corporations Act 2001 (Cth) which governs the provision of financial services.

Deal

Has the same meaning as provided in the Corporations Act.

EST

Eastern Standard Time, Australia.

FOS

Financial Ombudsman Service Ltd.

FSG

Imperium FX’s financial services guide as amended, supplemented or updated from time to time.

Initial Margin

An amount required to be deposited by the client with Imperium FX to open a Margin FX or CFD position.

LIBID

LIBID stands for London Interbank Bid Rate. The rate charged by one bank to another for a deposit in the wholesale money markets in London.

LIBOR

LIBOR stands for London Interbank Offer Rate. It is the rate of interest at which banks offer to lend money to one another in the wholesale money markets in London.

Margin

The Initial Margin or Variation Margin or both.

Margin Call

A demand for additional funds made to the client by Imperium FX to meet any additional Margin requirement.

Margin FX

Margin foreign exchange.

PDS

Product Disclosure Statement.

Term Currency

This is the currency of the position you have taken.

Variation Margin

The amount deposited by the client with Imperium FX including any increase or reduction arising from settlement of a closed position.

We, Us or Imperium FX

Imperium Forex Group Pty Limited ACN 149 011 361 AFSL 398528.

 

 

 

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