Week 01 2. CHIX about-tracrs PDF

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Download Week 01 2. CHIX about-tracrs PDF

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TraCRs–A new world of investment opportunities TraCRs are investment securities that are opening up a world of choice for Australian investors.

Best of both worlds

Easy to access

Traded in Australian dollars

As a TraCR holder you have a beneficial interest in the underlying US share (and the right, subject to the terms of issue, to convert your TraCR holding into that share). You also hold an Australian security which is traded, cleared and settled in Australian dollars (AUD), under Australian regulation, during Australian trading hours.

TraCRs are quoted and traded exclusively on Chi-X, an Australian exchange. To find out how easy it is to invest in TraCRs, speak to your broker or adviser.

TraCRs are traded in AUD, with dividends paid in AUD, making them easy to manage within your investment portfolio.

Why invest in TraCRs? • New opportunities: Add exposure to some of the world’s best-known and best-performing brands to your portfolio.

• A simple process: Trade TraCRs during Australian trading hours via your Australian trading account, broker or adviser.

• Diversify your portfolio: Access sectors underrepresented in Australia, such as technology and healthcare.

• Transparency: TraCRs settle through CHESS and are held on your HIN in the same way as Australian securities, giving you complete visibility of your holdings.

• Protected by Australian regulations: Access the benefits of owning US shares, under the protection of Australian regulations.

How do I buy TraCRs? You buy a TraCR the same way you buy other Australian securities.Talk to your adviser or broker about how to place an order.

About Chi-X Australia Chi-X is the securities and derivatives exchange transforming the Australian investment market through a focus on customers and innovation. Chi-X delivers easy, cost-effective access to local and global investment opportunities.

WHAT ARE TRACRS? TraCRs, or Transferable Custody Receipts, are securities exclusively quoted on Chi-X, the innovative securities and derivatives exchange that delivers local and global opportunities for Australian investors.

TraCRs give Australian investors access to the benefits of owning US shares in some of the world’s biggest brands.

How do they work? US Share (e.g. Apple Inc) A

US Custodian B

Australian TraCR Issuer C

Clearing, Settlement & Registry ( HIN or SRN)

D

TraCR Holder E

Legend

A The TraCR is based on a US share.

Legal title (to the US share)

B The US custodian holds the US share for the benefit of the TraCR issuer.

Beneficial interest

C The Issuer holds an AFSL and issues, redeems and manages the operational processes for TraCRs as outlined in the terms of issue.

Legal title to the TraCR and a benefi cial interest in the US Share

D The clearing, settlement & regisitry processes manage the transfer, settlement and holdings of TraCRs issued.

E Holders of TraCR units hold legal title to the TraCR unit and have a beneficial interest in the US share held by the custodian for that TraCR.

FAQs 1. Can I trade TraCRs through any broker? TraCRs are traded on Chi-X through Chi-X trading participants, which are listed on the ‘Trading Information’ section of the Chi-X Australia website. Ask your broker or adviser how you can place an order through a Chi-X trading participant.

7. Can I convert my TraCRs into the underlying US share? TraCRs may be converted into the underlying US share at any time, subject to the terms of issue. To do this you will, however, be required to have a custodian or broker account in the US where the US share can be held.

2. Will I own the underlying US share? When investing in TraCRs, you are buying an Australian security, giving you a beneficial interest in the US share, but not legal title. As such, the TraCR gives you the rights and benefits of owning the US share, subject to the terms of issue of the TraCR. 3. Will there be market makers? The TraCR issuer may rely upon liquidity provided by a market maker to enable retail investors to buy and sell TraCRs. For example, multiple market makers may compete with each other to offer bid/offer prices for the local market.

8. Will US taxes apply? The PDS for a TraCR will outline the application of US taxes. When you purchase TraCRs, you will be sent a W-8BEN US tax form. If you complete and return an eligible form before your dividends are due, the tax withheld may be reduced. At the time of drafting this brochure the standard withholding rates on dividend payments were 30% (no W-8BEN completed) and 15% (a W-8BEN completed and filed). A tax credit for this amount may be available from the Australian tax office, depending on your particular circumstances.

4. What happens if the TraCR issuer or US custodian becomes insolvent? The underlying US share is held in trust for the benefit of the TraCR holder, off the US custodian or issuer’s balance sheet and ring-fenced from insolvency risk. 5. Am I exposed to other currency prices? Yes. The underlying US share is priced in US dollars in its home market and consequently the Australian dollar value of a TraCR and its dividends will be affected by the value of the underlying US share and the US dollar relative to the Australian dollar. 6. How much does it cost to invest in a TraCR? Your broker or advisor will explain the fees for trading or advice. In addition to any trading or advice fees, the TraCR PDS outlines fee information, including a service fee which at the time of drafting this document was up to ten basis points (0.10%) of the value of the US share, charged each time an ordinary dividend is paid but capped:(a) to 20% of the ordinary dividend and (b) at four dividends per year.

© 2019, Chi-X Australia Pty Ltd (“Chi-X”) ABN 47 129 584 667. All rights reserved. Chi-X and TraCR are Chi-X Group trade marks. Chi-X holds an Australian Market Licence and operates a fi nancial market in Australia. TraCRs are fi nancial products issued by third parties and quoted on the Chi-X market. To the extent permitted by law Chi-X makes no representations or warranties and excludes all liability in relation to the information contained in this document. This document is provided for informational purposes only. Under no circumstances is it to be used as a basis for, or considered as an offer to, engage in any activity or purchase or sell any security, or as a solicitation or recommendation of the purchase, sale, or offer to purchase or sell any security.

Contact Address

Phone

Online

CHI-X AUSTR ALIA PTY LTD Level 23, Governor Phillip Tower 1 Farrer Place, Sydney NSW 2000 Australia

Phone: +61 2 8078 1700

Email: [email protected] Website: www.chi-x.com.au...