1. Appointment of FinClear Execution Limited (FinEx)
1.1. You appoint FinEx to provide and FinEx agrees to provide services in relation to the transfer and conversion of financial product to or from your Participant Sponsored Holding as your agent on the terms and conditions of this Sponsorship Agreement.
1.2. FinEx is a party to an Equities and Derivates Clearing Agreement with FinClear Pty Ltd (Clearing Participant). The Clearing Participant is obliged to settle as principal and has the settlement obligations for all ASX Transactions and Derivatives Contracts of FinEx and all ASX Transactions following the exercise of a Derivatives Contract (including your transactions) of your Participant Sponsored Holding
1.3 FinEx has appointed the Clearing Participant to administer your Participant Sponsored Holdings on its behalf but FinEx remains responsible to you for any actions or matters done or omitted to be done in respect.
2. FinEx’s Rights
2.1 Where you authorise FinEx to buy financial product, you will pay for those financial product by the date specified on the Confirmation (previously known as a “Contract Note‟).
2.2 Subject to clause 2.3, FinEx is not obliged to Transfer financial product into your Participant Sponsored Holding, where payment for those financial product has not been received, until payment is received.
2.3 Where a contract for the purchase of financial product remains unpaid, after FinEx has made a demand on you to pay for the financial product, FinEx, or FinEx’s Clearing Participant, may sell those financial products that are the subject of that contract at your risk and expense and that expense will include brokerage and applicable duties and/or taxes.
2.4 Where FinEx claims that an amount lawfully owed to it has not been paid by you, FinEx has the right to refuse to comply with your Withdrawal Instructions, but only to the extent necessary to retain financial product of the minimum value held in a Participant Sponsored Holding (where the minimum value is equal to 120% of the current market value of the amount claimed).
2.5 Where you or your:
a) duly authorised agent; or
b) financial services provider (e.g. your financial planner), being the holder of an Australian Financial Services Licence with sufficient financial service and financial product authorisations, authorised by you to place instructions with us to buy or sell financial product on your behalf, FinEx has your express authority to Transfer those financial product from or to your Participant Sponsored Holding.
3. Your Rights
3.1 Subject to clauses 2.3 and 2.4, FinEx or its Clearing Participant will initiate any Transfer, Conversion or other action necessary to give effect to Withdrawal Instructions within two (2) Business Days of the date of the receipt of the written Withdrawal Instructions.
3.2 Subject to clause 11.3, FinEx or its Clearing Participant will not initiate any Transfer or Conversion into or out of your Participant Sponsored Holding without your express authority; and
3.3 Subject to clause 9, you have various rights upon receiving a Participant Change Notice.
3.4 FinEx , FinEx’s Clearing Participant and you are regulated by the Corporations Act, the ASIC Act and related legislation applicable to financial services providers, the ASIC /ASX Market Integrity Rules, and ASX Settlement Operating Rules. You can obtain information confirming FinEx’s and FinEx’s Clearing Participant status as a settlement participant and AFS Licence holder from ASIC and ASTC
3.5 A complaint regarding FinEx’s services can be lodged with us, the Financial Ombudsman Service Ltd (FOS) [the contact details for FOS are included in our Financial Services Guide or are available from our Complaints Manager and ASIC. A claim for compensation can be lodged with FinEx or if the circumstances specified in Part 7.5, Division 4 of the Corporations Act apply, with the National Guarantee Fund. In relation to claims lodged with FinEx, FinEx has Professional Indemnity Insurance which satisfies the requirements of Section 912B (“Compensation Arrangements for Retail Financial Services‟) of the Corporations Act. Our arrangements are for the purpose of compensating Retail Clients for loss or damage suffered because of our breaches of our obligations under Chapter 7 (“Financial Services and Markets‟) of the Corporations Act, including losses caused by negligence, fraud, dishonesty or other misconduct that amounts to a breach of Chapter 7 and gives rise to a liability to a Retail Client. Our arrangements cover awards made by FOS and claims relating to the conduct of staff who have since left our employment.
4. Supply of Information
4.1 You will supply all information and supporting documentation which is reasonably required to permit FinEx to comply with the registration requirements, as are in force from time to time, under ASX Settlement Operating Rules.
4.2 Notifications made by you (e.g. change of address) must be in writing.
5. Exchange Traded Options, Pledging and Sub-positions
5.1 Where you arrange with ASX Clear to lodge Financial Products in a Participant Sponsored Holding as cover for written positions in the Australian Options Market, and inform FinEx of the arrangement, you authorise FinEx, or FinEx’s Clearing Participant to take whatever action is reasonably required by ASX Clearing in accordance with the ASX Clearing Operating Rules and ASX Settlement Operating Rules to give effect to that arrangement.
5.2 Where you arrange with any person to give a charge or any other interest in Financial Products in a Participant Sponsored Holding, you authorise FinEx, or FinEx’s Clearing Participant, to take whatever action is reasonably required by the person in accordance with the ASX Settlement Operating Rules to give effect to that arrangement.
5.3 You acknowledge that where, in accordance with this Agreement and/or your instructions, FinEx or FinEx’s Clearing Participant initiates any action which has the effect of creating a sub-position over Financial Products in your Participant Sponsored Holding, your right to transfer, convert or otherwise deal with those Financial Products is restricted in accordance with the terms of the ASX Settlement Operating Rules relating to sub-positions.
5.4 Nothing in this Agreement operates to override any interest of ASX Clear in the Financial Products.
6.1 You will pay all brokerage, fees and associated transactional costs within the period prescribed by FinEx.
6.2 FinEx mayl charge you administration fees to cover its costs in relation to administration of your Participant Sponsored Holding (e.g. OffMarket Transfers) and to pay for other services and arrangements you request
7. Notifications and Acknowledgements
7.1 You acknowledge that if a Transfer is taken to be effected by FinEx under Section 9 of the ASX Settlement Operating Rules and the Source Holding for the Transfer is a Participant Sponsored Holding sponsored under this Agreement, then:
a) you may not assert or claim against ASX Settlement or the relevant Issuer that the Transfer was not affected by FinEx or that FinEx was not authorised by you to effect the Transfer; and
b) unless the Transfer is also taken to have been effected by an Approved Market Operator or a Clearing Participant of ASX Clear, the Participant Sponsored Holder has no claim arising out of the Transfer against the compensation arrangement applicable to the Approved Market Operator or the Clearing Participant of ASX Clear under the Corporations Act and Corporations Regulations; and
c) if the Sponsoring Participant is not a Market Participant of an Approved Market Operator, that neither the Approved Market Operator, nor a Related Party of the Approved Market Operator has any responsibility for regulating the relationship between the Participant Sponsored Holder and the Sponsoring Participant, other than in relation to the Rules relating to Sponsorship Agreements.
7.2 In the event FinEx breaches any of the provisions of this Agreement, you may refer that breach to any regulatory authority, including ASX Settlement.
7.3 In the event that FinEx is suspended from CHESS participation, subject to the assertion of an interest in Financial Products controlled by FinEx, by FinEx‟s liquidator, receiver, administrator or trustee:
a) you have the right, within twenty (20) Business Days of ASTC giving Notice of suspension, to give notice to ASTC requesting that any Participant Sponsored Holdings be removed either:
(i) from the CHESS Sub- register; or
(ii) from the control of FinEx to the control of another Sponsoring Participant with whom you have concluded a valid Sponsorship Agreement pursuant to ASTC Settlement Rule 12.19.10; or
b) where you do not give notice under clause 7.3(a), ASX Settlement may effect a change of Controlling Participant under ASX Settlement Operating Rule 12.19.11 and you will be deemed to have entered into a new Sponsorship Agreement with the substitute Sponsoring Participant on the same terms as the existing Sponsorship Agreement. Where you are deemed to have entered into a Sponsorship Agreement, the new Sponsoring Participant must enter into a Sponsorship Agreement with you within ten (10) Business Days of the change of Controlling Participant.
7.4 You acknowledge that before you executed the Sponsorship Agreement, FinEx provided you with an explanation of the effect of the Sponsorship Agreement and that you understood the effect of the Sponsorship Agreement.
7.5 You acknowledge that in the event of your death or bankruptcy, a Holder Record Lock will be applied to all Participant Sponsored Holdings in accordance with the ASX Settlement Operating Rules, unless your legally appointed representative or trustee elects to remove your Participant Sponsored Holdings from the CHESS Subregister.
7.6 You acknowledge that in the event of your death, this Sponsorship Agreement is deemed to remain in operation, in respect of the legally appointed representative authorised to administer your estate, subject to the consent of the legally appointed representative, for a period of up to three calendar months after the removal of a Holder Record Lock applied pursuant to clause 7.5
8. Joint Holdings
8.1 You acknowledge that in the event of the death of one of the Holders, FinEx will transfer all Holdings under the joint Holder Record into new Holdings under a new Holder Record in the name of the surviving joint Participant Sponsored Holder(s), and that this Sponsorship Agreement will remain valid for the new Holdings under the new Holder Record.
8.2 You acknowledge that in the event of the bankruptcy of one of the Holders, FinEx will:
a) unless the legally appointed representative of the bankrupt Participant Sponsored Holder elects to remove the Participant Sponsored Holdings from the CHESS Sub-register, establish a new Holder Record in the name of the bankrupt Participant Sponsored Holder, transfer the interest of the bankrupt Participant Sponsored Holder into new Holdings under the new Holder Record and request that ASX Settlement apply a Holder Record Lock to all Holdings under that Holder Record; and
b) establish a new Holder record in the name(s) of the remaining Participant Sponsored Holder(s) and Transfer the interest of the remaining Participant Sponsored Holder(s) into new Holdings under the new Holder Record.
9. Change of Controlling Participant
9.1 If you receive a Participant Change Notice from FinEx in relation to your Participant Sponsored Holding and the Participant Change Notice was received at least 20 Business Days prior to the date proposed in the Participant Change Notice for the change of Controlling Participant, you are under no obligation to agree to the change of Controlling Participant, and may choose to do any of the things set out in clause 9.2 or 9.3.
9.2 You may choose to terminate this Agreement by giving Withdrawal Instructions to FinEx, including whether you wish to:
a) transfer your Participant Sponsored Holding to another Controlling Participant ; or
b) transfer your Participant Sponsored Holding to one or more Issuer Sponsored Holdings
For a) and b) above will be subject to all conditions stipulated by ASX Settlement in connection with the transfer having been met and ASX Settlement consenting to the transfer.
9.3 If you do not take any action to terminate the Agreement in accordance with clause 9.2 above, and do not give any other instructions to FinEx which would indicate that you do not agree to the change of Controlling Participant then, on the Effective Date, the Agreement will have been taken to be novated to the New Controlling Participant and will be binding on all parties as if, on the Effective Date:
a) the New Controlling Participant is a party to the Agreement in substitution for FinEx;
b) any rights of FinEx are transferred to the New Controlling Participant; and
c) FinEx is released by you from any obligations arising on or after the Effective Date.
9.4 The novation in clause 9.3 will not take effect until you have received a notice from the New Controlling Participant confirming that the New Controlling Participant consents to acting as your Controlling Participant. The Effective Date may as a result be later than the date set out in the Participant Change Notice.
9.5 You will be taken to have consented to the events referred to in clause 9.4 by the doing of any act which is consistent with the novation of the Agreement to the New Controlling Participant (for example by giving an instruction to the New Controlling Participant), on or after the Effective Date, and such consent will be taken to be given as of the Effective Date.
9.6 The Agreement continues for the benefit of FinEx in respect of any rights and obligations accruing before the Effective Date and, to the extent that any law or provision of any agreement makes the novation in clause 9.3 not binding or effective on the Effective Date, then the Agreement will continue for the benefit of FinEx until such time as the novation is effective, and FinEx will hold the benefit of the Agreement on trust for the New Controlling Participant.
9.7 Nothing in this clause 9 will prevent the completion of CHESS transactions by FinEx where the obligation to complete those transactions arises before the Effective Date and the Agreement will continue to apply to the completion of those transactions, notwithstanding the novation of the Agreement to the New Controlling Participant under this clause 9.
10. Claims for Compensation
10.1 The avenues available to you for making a claim for compensation are described in clauses 3.4 and 10.3.
10.2 If FinEx breaches a provision of this Agreement and you make a claim for compensation pursuant to that breach, the ability of FinEx to satisfy that claim will depend on FinEx‟s financial circumstances.
10.3 If a breach by FinEx of a provision of this Agreement falls within the circumstances specified under Part 7.5, Division 4 of the Corporations Act, you may make a claim on the National Guarantee Fund for compensation. For more information on the circumstances in which you may make a claim on the National Guarantee Fund or for information on the National Guarantee Fund generally, contact the Securities Exchange Guarantee Corporation Limited via ASX.
11.1 Subject to the ASX Settlement Operating Rules, this Agreement will be terminated upon the occurrence of any of the following events:
a) by notice in writing, from either you or FinEx to the other party, to terminate this Agreement;
b) upon FinEx becoming insolvent;
c) upon the termination or suspension of FinEx‟s access to CHESS by ASX Settlement i.e. FinEx‟s recognition as an ASX Settlement Participant has been terminated or suspended, preventing us from acting as a Sponsoring Participant); or
d) upon the giving of Withdrawal Instructions to FinEx by another Controlling Participant in accordance with ASX Settlement Operating Rule 7.1.10(c) and Clause 9.1 Termination under Clause 12.1(a) will be effective upon receipt of written notice by the other party to the Agreement.
11.2 In the event that any of the holdings comprise Mfund products, the new Controlling Participant is accredited in accordance with Section 18 of the ASX Settlement Rules to facilitate the settlement of mFund Products.
11.3 ASX Settlement will not accept a Notice of change of Controlling Participant where Holdings to which the Notice relates comprise mFund Products and the new Controlling Participant is not accredited in accordance with Section 18 of the ASX Settlement Rules to facilitate the settlement of mFund Products. In this instance, the existing Controlling Participant must convert the mFund Product Holdings to Holdings on the Issuer Sponsored Subregister. If the existing Controlling Participant fails to convert the mFund Product Holdings to Holdings on the Issuer Sponsored Subregister, ASX Settlement may convert the mFund Product Holdings to Holdings on the Issuer Sponsored Subregister.
12.1 Should any of the provisions in this Agreement be inconsistent with the provisions in the ASX Settlement Operating Rules, FinEx will, by giving you not less than 7 Business Days written Notice, vary the Agreement to the extent to which in FinEx‟s reasonable opinion is necessary to remove any inconsistency.
13.1 You indemnify FinEx against, and you must therefore pay FinEx on demand for liability, loss or costs FinEx suffers or incurs in connection with:
a) FinEx performing its obligations under this Agreement; or
b) FinEx acting as your Controlling Participant or agent for the purposes of CHESS Sponsorship; or
c) You doing something that you agreed not to do or not doing something that you agreed to do under this Agreement.
14.1 All duties or taxes (e.g. GST) applicable to this Agreement or applicable to services provided in accordance with this Agreement will be paid by you.
14.2 This Agreement is governed by the laws for the time being in force in the State of Victoria and the parties to this Agreement submit to the non-exclusive jurisdiction of the Courts of Victoria and Courts which may hear appeals from those Courts