4. The services offered by FinClear
FinClear is authorised under its AFSL to:
A. Deal in (including issuing, applying for, acquiring, varying or disposing of or arranging on behalf of another person in respect of the he following financial products:
▪ Securities (such as shares, options and warrants that can be traded on a Relevant Exchange);
▪ Interests in managed investment schemes (other than IDPS), such as units in ASX listed trusts;
▪ Derivatives, such as ASX Exchange Traded Options (ETOs);
▪ Foreign exchange contracts; and
B. Provide a custodial or depository scheme service (other than IDPS), to wholesale and retail clients.
FinClear provides/arranges to provide clearing, settlement and nominee services. You have received a copy of this FSG because your Broker has arranged for FinClear to provide one or more of the following services:
a) Clearing services for transactions in securities and interests in managed investment schemes executed on a Relevant Exchange
FinClear may be engaged by a Broker to clear the transactions in securities and interests in managed investment schemes executed on a Relevant Exchange by the Broker. If you are a client of one of those Brokers and you effect a transaction in securities or interests in managed investment schemes on a Relevant Exchange through the Broker, FinClear (as clearer) will carry the settlement obligations in respect of that transaction.
For this purpose, you will become a client of FinClear and you will owe your settlement obligations in respect of that transaction directly to FinClear and not to the Broker. If you are a client of one of those Brokers, you will be provided with a Disclosure Statement which contains more information concerning the clearing services FinClear provides and the terms of your agreement with FinClear in respect of the those services.
b) Execution, clearing and settlement services for transactions in securities on international markets
FinClear may also be engaged by a Broker to arrange execution, clearing and settlement services in securities on international markets for clients of the Broker. This means that FinClear will arrange for the execution, clearing and settlement of the transaction with an entity which holds the appropriate authorisation to do so in that market (International Securities Trader).
As a client of one of those Brokers, you may effect an international securities transaction on an international market by providing instructions to the Broker. The Broker, acting as your agent, will then communicate your instructions to FinClear who, in acting for you, will communicate them to the International Securities Trader for fulfilment through FinClear's Account with that International Securities Trader. Securities traded on your behalf using FinClear's Account will be traded beneficially for you by FinClear. For this purpose, you will become FinClear's client, but not the client of the International Securities Trader.
FinClear will also arrange for the International Securities Trader to clear and settle all transactions in securities that it has executed on your behalf under this arrangement. Accordingly, FinClear will carry the settlement obligations in respect of those transactions. For this purpose, you will become a client of FinClear and you will owe your settlement obligations in respect of those transactions directly to FinClear and not to the Broker or the International Securities Trader.
c) Settlement and nominee services - general
FinClear may also be engaged by a Broker to provide to clients of the Broker settlement services in securities and interests in managed investment schemes. This means that FinClear will settle transactions arranged for you by the Broker and executed on a Relevant Exchange for you by a Trading Participant of a Relevant Exchange. However, FinClear will only settle such transactions if, in the case of a purchase, the necessary funds are made available to FinClear and, in the case of a sale, the financial products sold are made available to FinClear, in each case in sufficient time before the time the transaction is to be settled. As part of this service, FinClear will also arrange for your securities and interests in managed investment schemes to be held as nominee by FinClear Nominees as nominee for you. For the purpose of settlement and nominee services, you will become FinClear’s client.
d) Settlement and nominee services – MDA accounts
FinClear may be engaged to provide settlement and nominee services as described in paragraph 4 b) above to clients of the Broker Brokerin connection with the provision to the Client by the Broker Brokerof managed discretionary account (MDA) services. In that event, FinClear will be responsible only for the following services:
• the settlement of transactions which the Broker has arranged to be executed on a Relevant Exchange on your behalf (provided that FinClear will only settle such transactions if, in the case of a purchase, the necessary funds are made available to FinClear and, in the case of a sale, the financial products sold are made available to FinClear, in each case in sufficient time before the time the transaction is to be settled);
• (if required) the holding by FinClear Nominees as nominee for you of securities and interests in managed investment schemes which are acquired or otherwise form part of your investment portfolio (Investments) which the Broker Broker manages for you as part of the MDA services;
• If FinClear Nominees is used to hold your securities and interests in managed investments schemes, it will be the registered holder of your Investments:
o it will receive any dividends or other distributions in respect of those Investments and will deal with them in accordance with instructions from the Broker;
o it will be entitled to cast any votes in respect of your investments and will do so in accordance with instructions from the Broker
• FinClear if required to do so under relevant regulatory requirements will provide you with an activity statement in respect of any transactions which it settles on your behalf unless you are deemed to be a wholesale client;
• any other services to be provided by FinClear to you under the Nominee and Settlement Services Agreement entered into with you. The Broker will be responsible for the following:
• management of your Investments based on an investment program agreed between you and the Broker, including the making of all investment decisions on your behalf in connection with your Investments;
• arranging for transactions to be executed on a Relevant Exchange for you by a Trading Participant of a Relevant;
• giving instructions to FinClear in connection with the settlement of transactions executed on a Relevant Exchange for you and the distributions and rights in respect of the Investments held by FinClear Nominees on your behalf; and
• any other services required in connection with the provision of MDA services to you which are not to be provided by FinClear.
e) CHESS Sponsorship services
FinClear may act as a CHESS Sponsoring Participant of the clients of its Brokers. Clients that are to be CHESS sponsored by FinClear must enter into a Sponsorship Agreement with FinClear.
Your Broker may also act as a CHESS Sponsoring Participant and engage FinClear to administer your Participant Sponsored Holdings on its behalf. In these instances, your Broker remains responsible to you for any actions or matters done or omitted to be done in respect to your Participant Sponsored Holdings.
f) Nominee and custody services
FinClear may arrange for its wholly owned subsidiary, FinClear Nominees and/or another entity to provide nominee and other custody services for clients of the Brokers for whom it provides clearing services and other clients. If you want FinClear to arrange
for FinClear Nominees to provide nominee or custody services to you, you will need to enter into an agreement for this purpose.
g) Other services
FinClear acts as agent for the clients of Brokers in providing settlement services for the client in respect of transactions executed by the client or on behalf of the client by another person.
FinClear does not provide financial product advice and is not authorised under its AFSL to provide financial product advice.