﻿ Trading & Settlement - POEMS

# Margin Financing

Financing Quantum
We provide 70% financing for ‘A’ grade shares and 50% financing for ‘B’ grade shares. Shares graded as ‘C’ will not be marginable. The list of marginable securities will be made available to you when your Investment Margin trading account is approved. All new Phillip Margin (M) accounts will have an initial credit limit of S\$50,000.

Margin Requirement
Margin ratio = Collateral / Ledger
Margin ratio must always be equal to or greater than 140% in order to trade.

Collateral refers to the value of the securities held in the account after accounting for all outstanding buy and sell trades. To obtain the collateral value of the securities, the value of ‘A’ shares will be multiplied by a price factor of 1.00, and ‘B’ shares multiplied by a price factor of 0.70.
Collateral Value = Market Value of ‘A’ shares * 1.00 + Market Value of ‘B’ shares * 0.70
Ledger refers to the amount of loan utilized.

Example:
A customer deposits S\$10,000 cash and S\$10,000 worth of ‘A’ shares, and buys S\$31,250 worth of ‘B’ shares. Assuming that the market prices remain stable.
Collateral:
‘A’ shares deposited: S\$10,000 x 1.00 (price factor) = S\$10,000
‘B’ shares purchased: S\$31,250 x 0.70 (price factor) = S\$21,875
Total collateral: S\$10,000 + S\$21,875 = S\$31,875

Ledger:

Cash deposited: -S\$10,000 (reduces the ledger amount)
‘B’ share purchased: S\$31,250 (increases the ledger amount)
Total ledger: -S\$10,000 + S\$31,250 = S\$21,250

Margin Ratio = Collateral / Ledger
= 31,875 / 21,250
= 150% (ratio is within limit)

Margin Calls
A margin call occurs when the margin ratio falls below 130%.
If 120% ≤ margin ratio < 130%, you have 3 market days including the day of notice to restore the margin ratio to at least 130%.
If the margin ratio falls below 120%, you have to restore the margin ratio to at least 130% on the same day of notice before 3.00 p.m.
Methods of meeting margin call:
– Depositing cash
– Depositing shares
– Liquidating shares

Custody of Shares
All shares traded through the Phillip Investment Margin Account (both local and foreign shares) will be held in our custody.

Share Settlement
All shares transacted through the Phillip Investment Margin Account will be settled in the account. Therefore, all share purchases and subsequent sales must be conducted through this account.

Multi-currency Facility
Account holders have the option to opt for Multi-currency facility.
For foreign currency denominated contracts (USD, HKD, MYR, JPY, AUD, GBP, EUR, CAD), settlement will take place in the traded currency or SGD. Respective currency accounts should have sufficient funds to avoid incurring interest on debit balances. Rates on debit balances are as follows:

 Currency Interest on debit balance SGD 6.00% p.a. HKD 7.00% p.a. USD 6.00% p.a. AUD 8.75% p.a. GBP 4.50% p.a. JPY* 4.20% p.a. EUR 7.00% p.a. CAD 7.00% p.a. MYR No debit balance allowed

Withdrawal

Sale proceeds and contra gains will be credited into the Investment Margin account. The amount that may be withdrawn is based on the Available Cash. Withdrawal in excess of credit balances will be considered as a loan.

Monthly Statement

Besides being able to view your monthly transactions online, physical statements will be mailed to you if you have any transactions in that month.
To save the environment and enjoy greater convenience, you may opt to receive monthly statements by emails (E-statements) instead. To opt for E-statements, kindly follow the steps below:

2. Click on Stocks >Acct Mgmt> Update Particulars
3. Scroll down to
6. Click on the Update button.

Upon completing the steps above, monthly statements will be sent to you by email instead of physical statements.

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IMPORTANT INFORMATION

This material is provided by Phillip Capital Management (S) Ltd (“PCM”) for general information only and does not constitute a recommendation, an offer to sell, or a solicitation of any offer to invest in any of the exchange-traded fund (“ETF”) or the unit trust (“Products”) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. You should read the Prospectus and the accompanying Product Highlights Sheet (“PHS”) for key features, key risks and other important information of the Products and obtain advice from a financial adviser (“FA“) pursuant to a separate engagement before making a commitment to invest in the Products. In the event that you choose not to obtain advice from a FA, you should assess whether the Products are suitable for you before proceeding to invest. A copy of the Prospectus and PHS are available from PCM, any of its Participating Dealers (“PDs“) for the ETF, or any of its authorised distributors for the unit trust managed by PCM.

An ETF is not like a typical unit trust as the units of the ETF (the “Units“) are to be listed and traded like any share on the Singapore Exchange Securities Trading Limited (“SGX-ST”). Listing on the SGX-ST does not guarantee a liquid market for the Units which may be traded at prices above or below its NAV or may be suspended or delisted. Investors may buy or sell the Units on SGX-ST when it is listed. Investors cannot create or redeem Units directly with PCM and have no rights to request PCM to redeem or purchase their Units. Creation and redemption of Units are through PDs if investors are clients of the PDs, who have no obligation to agree to create or redeem Units on behalf of any investor and may impose terms and conditions in connection with such creation or redemption orders. Please refer to the Prospectus of the ETF for more details.

Investments are subject to investment risks including the possible loss of the principal amount invested. The purchase of a unit in a fund is not the same as placing your money on deposit with a bank or deposit-taking company. There is no guarantee as to the amount of capital invested or return received. The value of the units and the income accruing to the units may fall or rise. Past performance is not necessarily indicative of the future or likely performance of the Products. There can be no assurance that investment objectives will be achieved.

Where applicable, fund(s) may invest in financial derivatives and/or participate in securities lending and repurchase transactions for the purpose of hedging and/or efficient portfolio management, subject to the relevant regulatory requirements. PCM reserves the discretion to determine if currency exposure should be hedged actively, passively or not at all, in the best interest of the Products.

The regular dividend distributions, out of either income and/or capital, are not guaranteed and subject to PCM’s discretion. Past payout yields and payments do not represent future payout yields and payments. Such dividend distributions will reduce the available capital for reinvestment and may result in an immediate decrease in the net asset value (“NAV”) of the Products. Please refer to <www.phillipfunds.com> for more information in relation to the dividend distributions.

The information provided herein may be obtained or compiled from public and/or third party sources that PCM has no reason to believe are unreliable. Any opinion or view herein is an expression of belief of the individual author or the indicated source (as applicable) only. PCM makes no representation or warranty that such information is accurate, complete, verified or should be relied upon as such. The information does not constitute, and should not be used as a substitute for tax, legal or investment advice.

The information herein are not for any person in any jurisdiction or country where such distribution or availability for use would contravene any applicable law or regulation or would subject PCM to any registration or licensing requirement in such jurisdiction or country. The Products is not offered to U.S. Persons. PhillipCapital Group of Companies, including PCM, their affiliates and/or their officers, directors and/or employees may own or have positions in the Products. Any member of the PhillipCapital Group of Companies may have acted upon or used the information, analyses and opinions herein before they have been published.

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Phillip Capital Management (S) Ltd (Co. Reg. No. 199905233W)
250 North Bridge Road #06-00, Raffles City Tower ,Singapore 179101
Tel: (65) 6230 8133 Fax: (65) 65383066 www.phillipfunds.com