DDO REQUIREMENT

APPLICATION TO SPOT FX CONTRACTS

Class of retail clients that comprise the target market for this product – s 994B(5)(b)

1. Description of the likely objectives, financial situation and needs of consumers in the target market

Background

Tiger Brokers (AU) Pty Limited (“TBAU”) is an online broker that provides financial product trading services to retail and wholesale clients. We are authorized and regulated by the Australian Securities and Investments Commission (ASIC), with license number 300767 and business office located at Suite 28.01, 25 Bligh Street Sydney, NSW 2000.

TBAU does not employ any advisers or brokers who manage client accounts. Trades are entered by the client or the client’s self-selected financial representative on a personal computer or mobile device and transmitted over the internet to TBAU for execution on various market centers. All trades in TBAU client account are self-directed by the client. TBAU client service personnel are specifically prohibited from providing any investment or trading or tax advice to clients.

The DDO aim to assist Clients to obtain appropriate financial products by requiring product issuers and distributors to have a consumer- centric approach to the design and distribution of financial products.

If you are a retail client, you should refer to the relevant Product Disclosure Statement (PDS) before deciding whether to acquire or continue to hold the relevant product. You can get a copy of the relevant PDS from our website.

You should not base any decision to trade solely on the contents of this TMD. Before deciding to open a trading account, you should read this TMD alongside the PDS and FSG.

Target Market

Clients who satisfy each of the following criteria:

This FX product is suitable for clients who are engaging or proposing to engage in:

• 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.

The categories above are not mutually exclusive. That said, the client can fall under one or all categories and it is sufficient for a client to fall within one of the categories above to be within the target market.

Clients must also meet the following conditions:

• Clients who are above the age of 18;

• Clients who have the adequate levels of financial literacy;

• Clients who understand the nature of the products in relation to trading in spot FX contracts; and

• Clients who could accept the risk of spot FX contracts defined in the TBAU Spot Foreign Exchange PDS

Likely purposes and objectives

Clients who satisfy the above criteria and wish to trade in spot FX contracts are likely for one or more of the following purposes:

• cash flow certainty

• exchange protection

• foreign exchange speculation

Likely liquidity needs

• Clients who do not require instant currency exchange settlement and wish to agree to a spot exchange rate with a settlement timeframe of T+0 and/or T+2.

Likely financial situations

• Clients who understand and have the willingness and financial standing to accept the risks defined in the TBAU Spot Foreign Exchange PDS

• Clients whose accounts have sufficient cash balances in the converting currency to fulfill the settlement obligations

Retail clients for whom our products are unsuitable

Our products are generally unsuitable for the following classes of retail clients

• Clients who are natural persons below the age of 18

• Clients who do not wish to accept or have low tolerance to the risk associated with trading spot FX contracts

• Clients who have low levels of financial literacy and technological literacy

• Clients who require the currency settlement to be instant or T+1.

• 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 

• Clients who reside in a country which restricts or prohibits in trading in spot FX contracts

2. Description of spot FX contracts (including its key attributes)

Spot FX contracts have the following key attributes:

• Foreign exchange contracts (which are not settled immediately) with a settlement date that is up to 2 days after the date on which the contract was entered into, are spot contracts. TBAU currently offers FX contracts settling today(T+0) and in 2 business days(T+2). Reference in this TMD to spot contracts or spot FX contracts incorporate value today and spot FX transactions.

• TBAU only offers spot FX contracts using spot exchange rates, which is the rate TBAU is quoting at which it will exchange currencies on the settlement date.

• When TBAU deals in the spot FX contracts, TBAU faces the client in all spot FX contracts it issues.

• Situations in which TBAU issues spot FX contracts to its clients include but not limited to:

  o The spot FX contracts that TBAU is deemed to issue when it undertakes a conversion of currency on the client’s behalf in order to meet the outstanding or settlement obligations due from the client.

  o  TBAU arranges dealings in FX in a range of currencies for its clients including but not limited to AUD, USD and HKD. For example, TBAU offers its clients the ability to trade Spot FX contracts which convert AUD to USD or USD to AUD; essentially, selling Australian Dollars against buying US Dollars or selling US Dollars against buying Australian Dollars.

3. Explanation of why spot FX contracts, including its key attributes, is likely to be consistent with the likely objectives, financial situation and needs of consumers in the target market

• Spot FX contracts can be used for a variety of purposes, including hedging, speculation, cash flow certainty, exchange rate protection and generating trading profits, hence consumers with purposes defined in section 1 hereabove will likely be within the target market.

• Given that spot FX contracts can be used for speculation, some clients trading TBAU issued spot FX contracts will incur losses while others incur profits.

Conditions and restrictions relating to the distribution of this product – s 994B(5)(c)

4. Outline of the conditions and restrictions relating to distribution of spot FX contracts

• The products are distributed by TBAU and various third parties who may be involved in the distribution of the products, including various introducing brokers (each a Distributor, and together, the Distributors).

• TBAU has a high degree of control over the distribution of its spot FX contracts. In particular, TBAU only issues spot FX contracts to clients who directly open accounts with TBAU and personally satisfy all of the target market criteria.

• All Distributors that wish to distribute TBAU’s spot FX contracts must ensure that the potential client or client introduced is within the target market.

• TBAU requires that all Distributors seek approval from TBAU prior to publishing any marketing material on Spot FX Contracts.

• TBAU will also seek regular statements and data from Distributors to ensure that the Distributors are complying with the requirement to distribute TBAU’s spot FX contracts only to persons within the target market.

5. Explanation of why these distribution conditions and restrictions will make it more likely that the consumers who acquire the spot FX contracts are in the target market

• TBAU considers the distribution conditions and restrictions support TBAU’s assessment that the product will likely be distributed to the target market because of the following controls:

• All FX Spot Contracts are issued and finalized by TBAU, not distributors.

• During the onboarding processes, clients are required to declare and they have read and understand the TMD and PDS.

• Ongoing training is provided to the client facing staff who may provide technical support and answer clients’ questions regarding the spot FX contracts’ TMD and PDS.

• Reasonable steps are taken to ensure our marketing strategy is targeting potential clients who fall within the identified target market for our products. All marketing material and campaigns require appropriate approval prior to publication, which is to ensure it does not contain elements which may attract potential clients outside of the target market.

• Implementing contractual requirements to the effect of the conditions outlined above ensures that they are only distributed by distributors to persons that satisfy the target market. TBAU will regularly monitor the performance of distributors in complying with this distribution condition

Reviews

6. Outline of the events and circumstances that would reasonably indicate to TBAU that the TMD for spot FX contracts is no longer appropriate (i.e. "review triggers" – s 994B(5)(d)

Review Triggers when:

• There are significant dealings in issuing spot FX contracts, which are not consistent with the target market or this TMD. This trigger occurs where significant distribution is occurring outside the target market, and does not refer to any one particular dealing in spot FX Contracts

• Distributor has reported a large volume of complaints related to spot FX contracts

• TBAU has received a large volume of complaints in relation to spot FX contracts, indicating that the nature and risks of spot FX contracts are not well understood

• Significant compensation paid out in relation to spot FX contracts

• TBAU has detected significant issues with the distribution of spot FX contracts through monitoring of our day-today activities, or the monitoring and supervision of our Distributors

• Material changes to key attributes, investment objective and/or fees

• Key attributes have not performed as disclosed by a material degree and for a material period

• The use of Product Intervention Powers, regulator orders or directions that affects the product

7. The period of time between the start of the day this TMD is made and the day that the first periodic review of the TMD will conclude – s 994B(5)(e)

The first periodic review of this TMD will occur in December 2022.

8. The period of time between the conclusion of a periodic review of the TMD and the start of the next periodic review – s 994B(5)(f)

TBAU will review the appropriateness of its target market on an annual basis

Reporting period for reporting information about the number of complaints about the product – s 994B(5)(g)

9. The reporting period in which the distributors of TBAU's financial products are required to provide information about the number of complaints received about the product

TBAU will require that Distributors report information about the number and nature of complaints received about the product and whether any persons not in the target market were distributed TBAU issued spot FX contracts, within 10 business days after the end of each quarter.

Information Sharing

10. Outline of the kinds of information that TBAU will require from distributors to promptly identify that the TMD for spot FX contracts is no longer appropriate – s 994B(5)(h)

Complaint: the number, nature, resolution and compensation of complaints about spot FX contracts

Feedback: client feedback about the spot FX contract product and / or the target market

Significant dealings:

• details and reasons why they are considered as the significant dealings;

• how they are identified

• steps taken or to be taken to persons affected

• steps taken or to be taken to stop it happening again

11. The distributors that will be required to provide the information specified above

– s 994B(5)(h)(i)

TBAU will require all of the above data from all Distributors. No party may engage in the distribution of TBAU’s spot FX contracts unless they have entered into a service level agreement with us.

12. The reporting period for the relevant distributors to provide the information specified above – s 994B(5)(h)(ii)

Complaint: Quarterly

Feedback: Quarterly

Significant dealing: as soon as practicable and in any event within 10 business days after becoming aware.