28 May 2024

1. GENERAL INTRODUCTION

1.1 Important Information

The information in this Product Disclosure Statement (PDS) does not take into account your personal objectives, financial situation and needs. Before instructing Tiger Brokers (AU) Pty Limited to deal in a foreign exchange contract on your behalf, you should read this PDS and be satisfied that such dealing is appropriate in view of your objectives, financial situation and needs.

We recommend that you consult your financial adviser before trading in foreign exchange.

1.2 Purpose of this PDS 

This PDS has been prepared by Tiger Brokers (AU) Pty Limited (TBAU), the issuer of the foreign exchange (FX) contracts offered under this PDS. TBAU’s contact details are set out in section 1.3 below. When we use terms ‘we’, ‘us’ or ‘our’ in this PDS, the reference is to TBAU.

This PDS sets out the significant features of FX contracts, including the risks, benefits and costs involved in trading these products. This PDS is designed to assist you in deciding whether the FX contracts offered under this PDS are appropriate for your needs and to assist you in comparing it with other financial products you may be considering. This PDS is an important document and we recommend you contact us should you have any questions.

Although the information in this PDS is up to date as at the date of publication, it is subject to change from time to time. Where such information is not materially adverse, we may provide updates on our website at www.tigerbrokers.com.au under Agreements and Disclosure. A paper copy is also available on request at no charge to you.

 We may also be required to issue a new PDS or a supplementary PDS as a result of certain changes, in particular where the changes are materially adverse to retail clients. Any supplementary PDS will be posted on our website at www.tigerbrokers.com.au. A paper copy will also be available on request at no charge to you.

The offer of FX contracts under this PDS is only available to persons receiving this PDS (electronically or otherwise) in Australia. This PDS does not constitute an offer or invitation in any place in which, or to any person to whom, it would not be lawful to make such an offer or invitation.

If you require any legal, taxation or other advice we strongly recommend that you seek such advice prior to opening an account with TBAU and or trading the Spot FX contract described in this PDS.

When we use terms ‘we’, ‘us’ or ‘our’ in this PDS, the reference is to TBAU.

 1.3 About Tiger Brokers (AU) Pty Limited

The issuer – Tiger Brokers (AU) Pty Limited

TBAU is the issuer of the FX contracts offered under this PDS.

 TBAU holds an Australian Financial services License, number 300767, which authorises TBAU to deal in FX contracts.

 Tiger Brokers (AU) Pty Limited is a subsidiary of UP Fintech Holding Limited, known as "Tiger Brokers" (NASDAQ: TIGR), a leading online brokerage firm focusing on global investors.  Founded in 2014, Tiger Brokers became one of the major players dealing with US equity trading, among trading platforms catered to global investors in less than two years.

Contact details

Our contact details are below:

Tiger Brokers (AU) Pty Limited

Suite 28.01, 25 Bligh Street

Sydney, NSW 2000

Telephone Numbers:

+61 02 9169 6999

Email:

clientservice@tigerbrokers.com.au

2. KEY FEATURES OF FOREIGN EXCHANGE

2.1 What is an FX contract?

A “foreign exchange contract” is defined in s761A of the Corporations Act 2001 (Cth) as a contract to (a) buy or sell currency; or (b) to exchange one currency for another currency.

In general, a FX contract allows you to exchange one currency for another at an agreed exchange rate. Exchange rates may be quoted as value today exchange rates, value tomorrow exchange rates, spot exchange rates or forward exchange rates.

A value today exchange rate applies to an FX contract with a settlement date that is on the same date as the trade date. This type of FX transaction is commonly referred to as Value Today.

A value tomorrow exchange rate applies to an FX contract with a settlement date that is 1 business day after the trade date. This type of FX transaction is commonly referred to as Value Tomorrow.

A spot exchange rate applies to an FX contract with a settlement date that is 2 business days after the trade date. This type of FX transaction is commonly referred to as Spot.

A forward exchange rate applies to an FX contract with a settlement date that is more than 2 business days after the trade date. This type of FX transaction is commonly referred to as a Forward.

TBAU currently offers FX contracts settling today(T+0) and in 2 business days(T+2).

Reference in this PDS to Spot FX contracts, Spot contracts, or FX contracts incorporate value today and spot FX transactions.

2.2 Uses of Spot FX contracts

TBAU does not make a market in FX contracts and may only deal in these financial products on your behalf. This may limit how you may use FX contracts offered under this PDS. FX contracts are offered by TBAU in the course of and in connection with the provision of other financial products and services. Clients can instruct TBAU to arrange a FX transaction for the purposes of:

• Repatriating profits and proceeds in foreign currencies from trading financial products back to Australia;

• Settling payments of securities or derivatives transactions in a foreign currency; and

• Foreign currency investing for speculative or hedging purposes in the course of or in connection with trading other financial products on TBAU’s platform.

TBAU acts as riskless principal in these transactions.

The FX contract offered by TBAU is not intended for clients who have no intention to trade any financial products other than the FX contracts, whose sole purpose of opening account with TBAU is to engage in currency conversion

2.3 What currencies are offered

TBAU facilitates dealings in FX in a range of currencies for its clients. The list of available currencies changes from time to time. Clients can refer to TBAU’s website and trading platform for latest offerings.

2.4 Spot exchange rates

Foreign exchange spot rate quotes will be expressed in a conventional form of AUD.USD. In the example given, AUD is the “base currency”1 and USD is the “quote”, “terms” or “counter” currency. The convention refers to how many units of USD is equal to one unit of AUD. For instance, the quote may be expressed as AUD.USD 0.65. This means that in this quote, every 1 unit of AUD equals 0.65 of USD, or the exchange rate of AUD to USD is 1 to 0.65.

TBAU does not make a market in FX contracts, and may only deal in these financial products on your behalf. When TBAU arranges a dealing in a FX contract, the rate quoted to you is dependent on the following factors, which includes but not limited to:

• Quotes received from TBAU’s FX liquidity providers who may take into account number of factors, such as:       

• The current market spot exchange rate;

• Volatility factors; and

• Transaction amount

• TBAU’s margin, which is already included in the rates quoted to you.

Please refer to section 5 for more information on TBAU’s FX liquidity providers and refer to section 6 of this PDS and Financial Service Guide for fees charged by TBAU.

2.5 How does an FX contract work?

Spot contract (T+2)

In the following example assume that you maintain a long AUD balance, have a zero USD balance and you need 100,000 USD to buy US stocks including brokerage in 5 business days.

In order to trade the USD securities, you wish to enter into a Spot FX contract with TBAU today to buy 100,000 USD and sell AUD settling in 2 business days.

You log onto the TBAU’s trading platform to review the spot exchange rate.  For the given USD amount, TBAU quotes you a spot exchange rate of AUD/USD 0.6500. The AUD indicated to settle the trade at the quoted rate is calculated by dividing the USD amount by the quoted rate: 100,000/0.6500=153,846.15 AUD. If you accept this indicative quote, a Spot FX contract is entered into between you and TBAU. In this example you enter an order to sell AUD and buy USD. Please note, the rate at which the FX contract is executed may differ from the rate quoted to you. That means, the actual amount of AUD required to settle the transaction can be less or more than the AUD amount originally indicated. Assume the executed rate is 0.6498, the actual AUD required to settle the trade on T+2 will be 153,893.51 AUD. Please refer to section 3.1 of this PDS for more details.

Spot contract (T+0)

If, using the example above and assuming all else being equal, you need 100,000 USD to buy US stocks including brokerage today, you may enter into a Spot FX contract valued today with TBAU to buy 100,000 USD and sell AUD settling today. T+0 currency exchange transactions are settled on the same day but they are not instantly settled. The settlement can take up to one hour or more to complete.

Examples are used for illustrative purposes only. The actual spot exchange rate will depend on the actual market rates and on the date of calculation. The FX fees charged by TBAU are already included in FX rates quoted to you.  Please refer to section 6 of this PDS for more details on transaction costs.

2.6 Funding requirements

Spot contract T+2

Before initiating a T+2 spot contract, you must ensure your account has a sufficient cash balance in the converting currency to fulfill the settlement obligation.

The cash balance includes both settled and unsettled cash balance in the account.

The settled cash refers to the amount of cash that is readily available for withdrawal or for use in purchasing financial products. It typically includes funds from the sale of financial products and currency conversions that have already been settled, meaning the transactions have been completed and the funds are no longer subject to any holds or restrictions.

The unsettled cash balance refers to the funds from recent transactions in a brokerage account that have not yet completed the settlement process. These funds are typically not available for withdrawal until the settlement is finalized.

In order to utilize the settlement proceeds from the unsettled cash balance to meet the settlement obligation of the FX contract, the settlement date of the unsettled cash balance must fall on the same day as or precedes the settlement date of the FX contract. In essence, the unsettled cash balance must be settling within the T+2 timeframe.

Spot contract T+0

Before initiating a T+0 spot contract, you must ensure your account has a sufficient settled cash balance in the converting currency to meet the settlement obligation. Only funds that are already settled and available can be used to meet the settlement obligation for a T+0 transaction.

3. SIGNIFICANT RISKS OF FX CONTRACTS

Starting from the time at which you enter an FX contract with TBAU, risk factors may lead to changes in financial outcomes that are unfavorable to you.

Monitoring of any risks associated with this product is your responsibility (subject to the responsibility of TBAU for its own operational systems under "Operational risk" – see section 3.5).

Prior to entering into FX contracts, you should carefully consider the following risk factors as well as other information either contained in this PDS or of which you are otherwise aware and consider whether entering into FX contract is suitable for you, given your individual objective and circumstances. We recommend that you obtain independent advice on the suitability of trading FX contract for you.

3.1 TBAU does not provide live quote prices at which it may enter into a FX contract with you

TBAU is not licensed to, and does not, quote prices for the FX currencies pairs at which it will enter into an FX contract with you. This means that when you instruct TBAU to enter into a FX contract with you, you will not know the exact spot rate at which you will be exchanging currency under the terms of the contract. You will only be able to confirm the FX spot rate at which the FX contract was executed when TBAU confirms the execution of the contract. TBAU endeavours to achieve the best available prices for you and generally the FX contract spot prices will be close to those available in the interbank market, but this is not guaranteed (refer below).

3.2 Opportunity loss

You will forgo any benefit of a favourable FX movement between the time you enter into an FX contract and the settlement date.

The rate achieved with an FX contract may not be as favourable as the rate you could have achieved if you had not entered into an FX contract at all.

3.3 Market risk

As there is no centralized foreign exchange market, you will have limited ability to externally determine the competitiveness of the spot prices that TBAU quotes to you; they may be better or worse than other FX providers are able to provide.

Markets can be volatile and are subject to a host of factors, including economic conditions, government regulations, legislations, market sentiment, local and international political events  and environmental and technological issues.

Market risk is the risk that the value of your FX transaction will change as a result of a movement in the underlying market price. Exchange rates between foreign currencies can change rapidly due to a wide range of economic, political and other conditions, exposing you to risk of exchange rate losses in addition to the inherent risk of loss from trading the underlying financial product. If you deposit funds in a currency to trade products denominated in a different currency, your gain or loss on the underlying investment therefore may be affected by changes in the exchange rate between the currencies.

3.4 Credit risk

Credit risk (also known as counterparty risk) is common to all financial markets products. You are reliant on TBAU’s ability to meet its obligations to you under the terms of each FX transaction.

3.5 Operational risk

Operational risk is the risk of loss resulting from inadequate or failed internal processes, people, systems or external events.

You are reliant on the ability of TBAU to price and settle your transaction in a timely and accurate manner. TBAU in turn is dependent on the reliability of its own operational processes that include communications, computers and computer networks. Disruptions in TBAU's processes may lead to delay in the execution and settlement of your transaction. Such disruptions may result in contractual outcomes that are less favourable to you.

However, once you have entered into a transaction, the management of risks associated with its own operational processes is the responsibility of TBAU.

3.6 Legal, tax and regulatory risks

Legal, tax and regulatory changes could occur during the term of an FX contract, which may adversely affect the FX transaction. You should seek independent tax advice before entering into an FX transaction.

3.7 The price at which TBAU can execute a FX contract may not be the best available price

TBAU has access to FX prices supplied by FX Liquidity Providers. Nonetheless, the prices quoted to TBAU are subject to changing market conditions and therefore quote prices and size can and do change rapidly. In addition, TBAU’s other clients may place orders for FX contracts before you do and which may therefore trade ahead of your order.

Although TBAU attempts to obtain the best price for your orders on Spot FX contracts, because of the inherent possibility of transmission delays between and among yourself, TBAU and FX Providers, the fact that prices and orders sizes do change rapidly, the fact that TBAU's FX Liquidity Providers will try to earn a spread profit on transactions with TBAU (differential between the bid and ask prices quoted for various currencies), or other technical issues, execution prices can be worse than the quotes displayed on TBAU’s platform.

To execute your order, TBAU engages in back-to-back transactions with one or more counterparties. These counterparties on occasion may cancel or adjust FX trades with us in the event of market or technical problems. In these cases we may have to cancel or adjust Spot FX contracts that you have executed.

TBAU cannot guarantee that the execution price for any particular FX contract will reflect the best available FX rate available at any given time.

3.8 Cooling off period

There are no cooling-off arrangements for FX contracts.

3.9 Other risks

There are other risks that relate to trading in FX, foreign securities, and options transactions, which involve exposures to a combination of the following risk factors: market risk, credit risk, settlement risk, liquidity risk, operational risk and legal risk. For example, there can be serious market disruptions if economic or political or other unforeseen events locally or overseas affect the market. Also, the settlement date of FX trades can vary due to time zone differences and bank holidays. When trading across FX markets, this may necessitate borrowing funds to settle FX trades. The interest rate on borrowed funds must be considered when computing the cost of trades across multiple markets. The FX Liquidity Provider (as counterparties) may, on occasion, cancel or adjust FX trades with us in the event of market or technical problems and in these cases we may have to cancel or adjust FX contracts that you have executed. In addition to these types of risk there may be other factors such as accounting and tax treatment issues that you should consider.

4. SIGNIFICANT BENEFITS OF FX CONTRACTS

The benefits of entering into FX contracts will depend on how it satisfies your risk management strategy and financial circumstances. Various uses of FX contracts were discussed at section 2.2 of this PDS.

The benefits of an FX contract include:

(a) Provides cash flow certainty – FX contracts allow you to lock in an exchange rate for the purchase or sale of foreign currency amounts on a certain date, eliminating exchange rate uncertainty.

(b) Provides exchange rate protection – FX contracts can help provide you with protection against unfavorable FX movements between the time you enter into an FX contract and settlement date.

(c) Provides foreign exchange speculation – FX contracts can provide you the potential to gain from the favorable FX movements.

5. TRADING FX WITH TBAU

5.1 How to instruct TBAU to deal in FX contracts

You may instruct TBAU to deal in a FX contract on your behalf through the Tiger Trade Trading platform (Tiger Trade platform). When trading you should keep aware of all risks and benefits of trading FX contracts (refer to sections 3 and 4).

The following are examples of how you may enter into an FX contract with TBAU.

TBAU is an online-only broker and customers submit orders to TBAU through Tiger Trade platform by logging in through a secure username and password. You acknowledge that TBAU does not know whether someone entering Orders with your username/password is you. Unless TBAU is notified and agrees, you will not allow anyone to access your Account. You are responsible for the confidentiality and use of your username/password and agree to report any theft/loss of such username/password, or any unauthorized access to your Account, immediately by telephone or email to TBAU. You remain responsible for all Transactions entered using your username/password. You acknowledge and agree that any communication transmitted by you or on your behalf is made at your risk and you authorise TBAU to rely and act on, and treat as fully authorised and binding on you, any communication that we reasonably believe to have been transmitted by you or on your behalf by any agent who we reasonably believe to have been duly authorised by you.

You may submit an order to enter into an FX contract or contract(s) to convert balances in one currency, such as AUD, to another currency, such as USD .

The execution of an FX contract is subject to you having sufficient funds in your account. Similarly, the execution of certain dealings in financial products denominated in other currencies will also be subject to having sufficient balances in other currencies to cover the costs of such dealing.

Subject to the terms and conditions of the FX contract, on the settlement date the currencies in the currency pair are exchanged. You must ensure that you have sufficient funds in your Account to settle the FX contract and you will generally not be able to withdraw any funds from your account which are otherwise required to settle a dealing in a financial product or pay TBAU’s commission.

5.2 Nature of Foreign Exchange Transaction between Customer and TBAU

When you enter into an FX contract on TBAU’s platform, TBAU, as the counterparty to your trade, may effectuate that transaction by entering into an offsetting transaction with one of TBAU's affiliates, or with a third party currency exchange provider(Collectively, TBAU's "FX Liquidity Providers"). In such transactions, TBAU is the principal to the contract with you as issuer. The FX Liquidity Provider is not acting in the capacity of a financial adviser or fiduciary to you or to TBAU, but rather, is taking the other side of TBAU's offsetting trade in an arm's length contractual transaction. You should be aware that the FX Liquidity Provider may from time to time have substantial positions in, and may make a market or otherwise buy or sell instruments similar or economically related to, the FX contracts entered into by you. TBAU's FX Liquidity Providers may also undertake proprietary trading activities, including hedging transactions related to the initiation or termination of FX contracts with TBAU, which may adversely affect the market price or other factors underlying the FX contract entered into by you and consequently, the value of such transaction.

6. FEES AND CHARGES 

TBAU acts as riskless principal in these transactions. When you enter into a FX contract with us, we may charge a fee in Pips that is already included in the exchange rate quoted to you.

For more details, please refer to Financial Service Guide. You should read the important information about the fees before making a decision. The material relating to the fees may change between the time when you read this PDS and the day when you acquire the product.

7.  CLIENT MONEY

TBAU must deal with any money which you pay or give to TBAU, or which is otherwise received by TBAU for the Services provided by TBAU, in accordance with the Corporations Act and Applicable Laws. For instance, TBAU may be required to pay these monies in a client’s segregated account or into a trust account which complies with the requirements of the Corporations Act. You acknowledge that your monies and the monies of other clients of TBAU may be combined and deposited by TBAU in a client’s segregated account or a trust account.

You authorise TBAU to withdraw any or all monies to which you are otherwise entitled in any clients' segregated account or trust account maintained by TBAU to meet any liability, obligation or other Loss which you owe to TBAU.

TBAU is entitled to, and will retain, all interest or income accrued or paid by ADIs, service providers and financial service licensees in respect of the client money held by TBAU. TBAU may in its discretion elect to pass through to you some or all of the interest or income accrued on the uninvested cash balance we hold for you as client money. Please refer to Financial Service Guide for more details.

8. DISPUTE RESOLUTION SYSTEM

If you have any concerns or complaints about the financial service or financial products provided to you, you could let us know :

By email: compliance@tigerbrokers.com.au

By Post: Suite 28.01, 25 Bligh Street Sydney, NSW 2000

By phone: +61 02 9169 6999

If you are not satisfied with how your complaint is responded to by TBAU or 30 days have elapsed, you may direct your concerns in writing to the Australian Financial Complaints Authority (“AFCA”) which is an independent dispute resolution scheme of which TBAU is a member. The dispute resolution scheme offered by AFCA is provided to you free of charge. AFCA details are:

Australian Financial Complaints Authority

GPO Box 3, Melbourne, Victoria 3001

Telephone: 1800 931 678

Internet: www.afca.org.au

Email: info@afca.org.au

9. TAXATION IMPLICATIONS

TBAU does not provide tax advice. It is important to note that a client’s tax position when trading FX contracts will depend on your individual circumstances and the trading strategies that you adopt.

We strongly recommend that you seek independent professional tax advice on the tax implications relevant to your circumstances before trading FX contracts.

9.1 Goods and Services Tax (GST)

Generally, no GST is payable in relation to the FX contracts and charges associated with the transaction. This is on the basis that they are considered to be ‘financial supplies’ under the A New Tax System (Goods and Services Tax) Act 1999. Consequently, they are input taxed and no GST is payable on their supply. However, independent advice should be sought from your accountant or financial adviser confirming this, before acting in reliance thereon.

9.2 INTERNATIONAL TAX INFORMATION SHARING

TBAU has certain obligations to report transaction information to the Australian Tax Office (ATO) on citizens of other countries, including in connection with the US Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standard (CRS). We may also request you to provide certain information.

We do not provide taxation advice, or advice about FATCA or CRS. You should consult your personal tax adviser if you believe that you are impacted by FATCA or CRS obligations.