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About this financial services
guide (FSG)
This Financial Services Guide contains information about
the services Foster Stockbroking Pty Ltd (FSB) is licensed
to provide. The FSG also provides information on remuneration
paid to FSB and outlines how we deal with complaints. It also includes information on how to buy and sell shares
and the settlement processes and procedures involved.
This FSG
guide should be read in conjunction with the FSG of Berndale
Securities Ltd (Berndale), which is our Clearing and Settlement
Agent (see the settlements section of this FSG), the Disclosure
Statement to Clients of Foster Stockbroking Pty Ltd as
well as the explanations contained in your client application
agreement. Click
here to view this guide as a PDF.
Services provided
Under its Australian Financial Services (AFS) licence,
FSB is authorised to undertake the following activities:
- Provide research and specific advice
on stocks listed on the ASX;
- Prepare Investment Strategies
and Model Portfolios depending
on your risk profile;
- Transact buy and sell orders on
the ASX for individual stocks or transacting
individual portfolios;
- Accept and process applications
for new issues and Initial Public Offerings
(IPO’s);
- Undertake
and underwrite capital raisings for IPO’s
and existing listed ASX companies; and
- Advise
and transact for short-term traders.
FSB licensed to deal but not advise
in Managed Investment Schemes (MIS).
FSB is not licensed to advise or deal in
derivatives other than “Old Law” Exchange Traded Options.
securities trading authorisation
FSB is licensed by the Australian Securities and Investments
Commission (ASIC). FSB’s AFS licence authorises it
to advise and deal in securities. We are licensed under
the Financial Services Reform Law and our AFS licence number
is
223687. Our licence details are shown on the ASIC Website www.asic.gov.au where
you will also be able to view information about our authorised representatives..
FSB is required to comply with the provisions of the Corporations
Act 2001 which are administered by ASIC.
FSB’s AFS licence authorises it to carry on a financial
services business to provide advice and deal in a range of
financial products to both retail
and wholesale clients.
FSB’s main focus is to service professional investors, Australian and
overseas institutions, arbitrage and hedge funds, corporate clients and high
net worth individuals.
Our team consists of people with experience in corporate broking, investment
banking and research analysis, giving the firm a strong theoretical and practical
knowledge of capital markets.
Opening an account
New clients will be asked to complete a client application form, which is
designed to streamline the process for FSB to provide financial services
to its clients.
The client application form contains all the information we
require to open a securities trading account. If you are a
retail investor you will also
need to complete the Investor Profile Form to ensure we can
provide you with “personal
financial product advice” that is appropriate to your
financial situation, personal needs and investment objectives.
If you are not a retail client
you will need to complete a s708(8) certificate or a Professional
Investor Confirmation.
These documents will be included in your account-opening package.
Other documents that will be included in your account-opening
package are:
- A Sponsorship Agreement (SA) one
of which you must sign and
return to FSB.
- A copy of this FSG;
- A copy of Berndale’s
FSG; and
- A Berndale Disclosure Statement,
which outlines the terms of the agreement, you have entered
into as
a client of FSB.
As a provider of certain designated services and in accordance with the Anti-Money Laundering/Counter-Terrorism Financing Act 2006 (AML/CTF), from the 12th December 2007 when you open a securities trading account with us you will be asked for certain documents to enable us to verify your identity. Some of these documents will need to be certified by an approved person, such as a Justice of the Peace. Our settlements department will advise you of the documents that will be required and which ones need to be certified. The documents that we obtain from you will depend on the type of account that you are opening and where you are domiciled.
You will not be able to commence to buy and sell shares until your account has been activated by Berndale Securities. Our Settlements Manager will advise you when you can commence trading with us.
In certain circumstances during our relationship with you we may need to obtain additional information and documents from you. We will collect any additional information from you in accordance with the provisions of the AML/CTF Act 2006.
We are required to retain the documents that we obtain from you for a period of 7 years from the date that your account is closed.
CHESS Sponsorship
CHESS (Clearing House Electronic Subregister System) is a system of registering
and transferring financial products electronically. If you agree to broker
sponsorship, instead of receiving a certificate in respect of your shares
or other financial products as when “Issuer Sponsored”, you receive
a holding statement. Berndale Securities is a controlling participant for
CHESS purposes and by entering into a sponsorship agreement with Berndale,
you accept
them as your controlling participant.
We highly recommend that you become “Broker Sponsored” as it makes
buying and selling securities and other financial products easier and more
convenient for you as all your holdings can be identified under a single HIN
(Holder Identification Number). Also, we can monitor your portfolio via the
SHARES stockbroking computer system used by FSB and Berndale and it gives Berndale
immediate access to securities for delivery to the market when settling transactions.
Furthermore, it can be less costly than “Issuer Sponsored” trades
and Broker sponsorship also enables you to establish a direct debit facility
(see below).
You may transact prior to the allocation of a HIN but these trades will be
registered as Issuer Sponsored.
cash management trust (CMT) account or direct debit/credit facility
Your Adviser can help you establish a CMT Account with Macquarie Bank. A
CMT Account can be used to hold funds and settle securities transactions.
A CMT
account is advantageous to you because both Berndale and FSB have access
to your CMT account through SHARES and can therefore immediately ascertain
if
you have sufficient funds to settle a buy transaction. In addition, funds
can automatically be drawn from or deposited to your CMT on settlement of
transactions
when the direct debit/credit facility is enabled.
Alternatively, you may choose to authorise Berndale Securities/FSB to Directly
Debit or Directly Credit your own bank account for settlement purposes. This
option is only available for CHESS Sponsored clients.
A CMT or DD/CF (Direct Debit/Credit Facility) is
preferable because:
- It makes settlement obligations
easier to meet and it minimises the risk of failed
buy trades;
- You earn interest immediately when
the funds are deposited;
- Your funds will attract a competitive
interest rate if deposited into a CMT account; and
- A
CMT or DD/CF reduces your paperwork and makes it easier
to track your transactions.
If you elect to have the Direct
Credit facility only, you can make payments for buys
via
the following methods:
- Bpay
- Electronic Funds Transfer (EFT)
- Cheque
either posted to Berndale Securities or delivered to
FSB offices.
If you do not elect to have a DD/CF
or a CMT Account, you must remember to advise us of any
change of address
as otherwise the receipt of settlement funds could be delayed.
FSB may receive a trailing commission based on the
balance of client monies held in CMT
accounts.
Cancellation of trades by the ASX
In certain circumstances, the ASX Market Rules allow the ASX to take any
action it considers appropriate to deal with erroneous trades, including
cancelling
or amending a trade. FSB is entitled to cancel or amend a trade without further
reference to you where the ASX has recommended or required it, or where it
is permitted under the ASX Market Rules.
providng financial product advice
FSB Advisers are trained to give advice in securities and they meet the ASIC
Policy Statement 146 requirements. Your Adviser is an authorised representative
of FSB and is authorised to provide you with some or all of the services
we provide.
There are two types of financial
product advice; personal advice
and general advice
- Personal advice
is advice that
has been formulated after
considering one or more of your objectives,
financial situation and needs
(“your
personal circumstances”).
If you require personal advice
you will be asked
to provide certain personal
information to ensure you
are provided with
advice
that is appropriate. It is
important that this information
is accurate
and complete and you should
immediately notify your Adviser
if your personal
circumstances change. You
are not obliged to provide
us with
personal
financial
information,
however if you do not, your
Adviser will be restricted
in the type
of advice we are able to
provide you with. We are
also required
to warn you that the
advice is based on incomplete
or inaccurate information
and that
the advice will be restricted
to general financial product
advice
only.
- General advice is advice
that does not take into account
your personal circumstances.
Before acting
on
any general advice your should consider the appropriateness of the advice in
light of your personal circumstances and/or
you should obtain
a copy of and consider the
Product Disclosure Statement (PDS), if any, for the relevant
product before making any
decision.
Disclosure documents
In addition to this FSG you may also receive a Statement of Advice (SoA)
and /or a Product Disclosure Statement (PDS) such as a prospectus registered
with
ASIC.
Statement of Advice (SoA)
Retail clients who seek personal financial product advice will be provided
with a SoA. A SoA is a disclosure document that helps a retail client understand
and decide whether to rely on personal advice. In order to provide you with
a SoA we are required by law to collect details about your financial situation,
particular needs and investment objectives. We obtain this information from
the Investor Profile Form, which you are required to complete when you open
an account with us. If the information you provide us with is inaccurate
or incomplete, we will be limited in the type of advice we can provide you
with.
Therefore, if you wish to receive personal financial product advice we recommend
you answer all the questions on the Investor Profile Form.
The SoA will summarise the advice, detail the basis on which it was given
and include information about any fees and/or charges that you will incur.
Any
potential conflicts of interest will also be disclosed in the SoA.
We recommend you contact your Adviser if your financial situation, particular
needs and investment objectives change so that we can provide you with reliable
investment advice best suited to your specific needs and requirements.
We are not required to provide you with a SoA
when we provide you with general financial product
advice or when when we provide you with small investment advice as defined in s946AA(1) of the Corporations Act or when you are provided with Further
Advice (FA), that is, when
future time critical advice is given in a live
market to an existing client
and provided that
- You have previously been given
a SoA that set out your relevant personal circumstances
;
- The Adviser has verified the your
personal circumstances immediately before the FA is
given or within the last 12 months; and
- The
basis on which the FA is given must not
be significantly different
from the basis on which
the previous advice
was given.
You may request a copy
of the FA within
90 days of the advice
being
given.
We are entitled to
charge a fee for
this service
and your Adviser
will disclose any costs
to you.
You may also receive
a Statement of Additional
Advice (SOAA), which
is
a document which
under certain circumstances
can “incorporate by reference” information
previously given to you in the original SoA.
Providing instructions
Telephone is the usual manner of instructing FSB to buy or sell securities
and other financial products. We also accept instructions in person or by
mail, facsimile or email. However instructions send by facsimile, mail or
email will
not be deemed to be received until your Adviser has acknowledged and confirmed
receipt of the instructions with you.
Instructions to buy or sell listed securities and other financial products
may be accepted on a “good till cancelled basis” or good for the “day
only”. Alternatively you may request a “ time limit order”.
You should discuss your requirements with your Adviser.
The time taken to process a transaction might be affected by your price instructions,
the volume of securities to be traded, the liquidity of the stock and/or
market conditions. Your Adviser will tell you if there are any unexpected
delays in
executing your order.
FSB reserves the right to choose not to process an instruction if the order
could be deemed to be creating a false or misleading market or it could otherwise
be construed as inappropriate trading.
Once your order has been executed you will receive a confirmation from Berndale
detailing the transaction. The settlement date and time for sales or purchases
is specified on the front of the relevant confirmation.
Short Selling
Our terms of trading include the following terms:
a. You agree to notify us, each time you place a sale order, of the relevant category of sale to which your sale order relates in accordance with the requirements of the Corporations Act 2001(Cth) and ASIC Class Orders 08/751, 08/764 and 08/824 as amended from time to time.
b. Each time you place a sale order with us and notify us of the relevant category of sale to which you sale relates in accordance with paragraph(a) above, you will be taken to have warranted and represented to us that the sale will meet the requirements and conditions of the particular category of sale so notified by you.
c. You must, to the maximum extent permitted by law, at all times and from time to time, indemnify and keep us and each of our related bodies corporate(as defined in the Corporations Act and each of our and their respective directors, officers, employees and agents(each an Indemnified Person) harmless from and against all liabilities, losses, damages, costs or expenses or indirectly or directly incurred or suffered by the Indemnified Person, and from and against all actions, proceedings, claims or demand made against the Indemnified Person as a result of any breach by you of your obligations in paragraph (a) above or any representation or warranty taken to have been made by you as contemplated in paragraph (b) above not being true or correct.
Settlements
We pass all our settlement duties to our Clearing and
Settlement Agent, Berndale Securities Limited.
The
ASX Market Rules requires
all share transactions
to be settled on the
third business day
after the transaction
was undertaken or T+3
in industry
terms.
Therefore to
ensure the ASX settlement
requirements are met,
your settlement funds
(if you do not have
a direct debit facility)
for a buy transaction
should be directly
deposited into Berndale’s
bank account the day
before settlement
date so that the funds
are available before
10 am on T+3. The
details of the
account are shown
on the front of the
confirmation.
Please contact your Adviser immediately if you believe you may not be able
to satisfy your obligations.
If settlement
of a sell transaction
does not occur
within T+3, “fail
fees” may
be incurred (see
below).
If you fail to settle a transaction by the specified date or time you must
indemnify Berndale and FSB against all costs, expenses and losses incurred
as a result of your failure to settle by the due date. Berndale and FSB
will be entitled to re-sell or re-purchase the securities for the uncompleted
transaction
and any other securities FSB holds as a sponsor for you on CHESS. More
information can be found under Section 7 of the Berndale Disclosure Statement
that you
receive when you open an account with us.
FSB staff will help you resolve any shareholding or settlement problems
you may have.
foster stockbrokings' remuneration for the services provided
Brokerage
Foster Stockbroking receives brokerage whenever shares or other securities
are brought or sold. FSB utilises a two-tiered pricing system:
1.Standard Settlement Clients
If your shareholdings are CHESS- sponsored and held with FSB on a Holder Identification Number(HIN); and you have a Direct Debit (DD) and Direct Credit(DC) banking facility, you will be charged a minimum brokerage rate of $85.00 plus GST per contract note.
2.Non-standard Settlement Clients
- If your shareholdings are held by the respective Share Registries on various Security Reference Numbers (SRNs); and/or
- You pay for buy trades by cheque, BPay or Electronic Funds Transfer (excluding Direct Debit facility); and/or
- You receive a cheque for the proceeds of sell trades or request to receive proceeds by Electronic Funds Transfer (as opposed to the automatic Direct Credit facility;
You will be charged a minimum brokerage rate of $105.00 plus GST per contract note
Otherwise brokerage
is
charged as a percentage of the value of the transaction. The specific brokerage
rate will depend on factors such as the level and type of service provided
and the size and frequency of transactions. The brokerage rate might be
applicable to all transactions or to a single transaction.
Brokerage rates are negotiable and should be discussed with your Adviser
prior to transacting any business. Your Adviser will disclose the amount
of brokerage
payable in the confirmation for the transaction.
In the instance of capital raising such as an Initial Public Offering (IPO)
or a placement, a fee may also be paid to FSB. Fees from Third Parties
will be separately disclosed to clients.
ASX Fail fees
On sell transactions, if your shares are not delivered prior to T+3, the
ASX charges a fail fee, which is charged to your account. The settlement
date is
shown on the confirmation note and if, when placing your order, there is
any doubt that shares will be available for settlement by T+3, please discuss
this
with your Adviser, or our settlements area. Fail fees range from $110 to $5,500 per security per day, incl. GST depending upon the size of the transaction.
On buy transactions, FSB reserves the right to charge late settlement fees
at its sole discretion.
FSB Fail Fees
In addition to the ASX fail fees, FSB may also charge an additional fee for failed trades as follows:
Failed Buy Trades: For buy trades which have not been paid for within 3 business days, FSB reserves the right to charge $55.00 incl. GST per failed trade in any one month plus interest at 3% above the cash rate as set by the Reserve Bank of Australia, calculated monthly.
Failed Sell Trades
For sell trades for which stock has not been provided within 3 business days, FSB reserves the right to charge $55.00 incl GST per failed trade in any month plus interest at 3% above the cash rate as set by the Reserve Bank of Australia, calculated on the market value of the Securities not provided.
Search fees
If you wish to sell Issuer Sponsored securities and you supply details
and/or a Security Reference Number (SRN) which is incomplete, incorrect
or unknown,
FSB may need to apply for the correct SRN via CHESS and a charge of $15.00
plus GST is payable. This charge will apply each time a SRN is verified
via CHESS. These charges will be levied through Berndale, our Third Party
Clearer.
Advisers’ Remuneration
Our Advisers are remunerated by salary and they may also receive a performance-based
commission if brokerage targets are achieved but commissions are not linked
to specific transactions unless otherwise disclosed to you.
Dispute resolution
We aim to give our clients quality advice and to provide
an efficient follow-on service. However, if you have
a complaint we recommend that in the first instance
you discuss your complaint with your Adviser. Alternatively, you may write
to our Compliance Manager providing as much detail as possible, such as names
and any relevant documentation, and mail it to Level 21, 25 Bligh Street,
Sydney, NSW 2000.
Our procedure to resolve any complaint is to acknowledge the complaint in
writing, conduct an investigation and discuss the complaint with relevant
person/s,
and then send a first response to the client within a two-week period.
If you have a complaint about any services provided to you by Berndale Securities
you should have that complaint dealt with according to Berndale’s complaint
resolution procedures as detailed on page 5 of their FSG and section 17 of
the Disclosure Statement.
FSB is a member of the Financial Ombudsman Service (FOS), If you
feel a satisfactory resolution has not been achieved you can write to FOS
at GPO Box 3, Melbourne, Victoria 3001 or contact them on
Tel: 1300 78 08 08,
Fax: (03) 9613 6399, Email: info@fos.org.au, Website:
www.fos.org.au
The Australian Securities and Investments Commission ASIC also provides a
free infoline service on 1300 300 630.
professional indemnity insurance
In accordance with ASX Market Rules, FSB maintains professional
indemnity insurance cover that FSB reasonably determines
is adequate having regard
to the nature
and extent of its business and the responsibilities and risks assumed in
connection with that business. Such cover includes insurance against a
breach of duty
FSB owes in a professional capacity arising from any act or omission of
FSB and its employees.
FSB has in place compensation arrangements that satisfy s912B of the Corporations Act.
Privacy
Client privacy is important to FSB and our privacy policy
is available from the Foster Stockbroking website.
General Risk Disclosure Statement and guidance for investors
Introduction
Equity securities in common with all other asset classes (property and
government bonds) can decline in value as well as appreciate. The measure
of this change
in value is often referred to as volatility (the more the value varies
over time, the more volatile the asset is and therefore the more risk involved
in
investing in it). On the other hand, in general, the less volatile an asset
is, the less likelihood there is for any significant capital gain or loss
from investing in that asset.
Some of the possible
risks
that may be associated with investing in listed securities are outlined below:
Overall Market
Risks
The risk of loss by reason of movements in the share market generally.
These can be caused by any number of factors including political, economic,
taxation
or legislative factors. Specific examples are changes in interest rates,
political changes, changes in taxation or superannuation laws, international
crises or
natural disasters.
Stock Specific Factors
These would include current and future company profitability, the strength
of the company’s management and directors and the significance of any
key personnel, the company’s profit history, the company’s
tangible asset base, debt level and fixed cost structure, litigation,
exploration results or whether it is developing a new product.
Domestic
versus International
Factors
The vulnerability of the company to international events or market factors,
would include movements in exchange rates, changes in trade or tariff policies
and changes in other stock or bond markets.
Sector Specific Factors.
These would include demand for the product the company produces, commodity
prices, the economic cycle of industry, changes in consumer demands, lifestyle
changes and changes in technology.
Limitations
of research
Your Adviser can provide you with certain research reports. In preparing research
reports, FSB does not take into account the specific investment objectives,
financial situation or particular needs of any specific recipient. Reports
are published only for information purposes and are not to be construed as
a solicitation or any offer to buy or sell any securities or related financial
instruments. FSB is not aware if a recipient intends to rely on any report
and is not aware of the manner in which the recipient will use any report.
Investors must obtain personal financial advice from their investment Adviser
to determine whether the information contained in any report is appropriate
to the investor’s financial circumstances.
Contact Details
Foster Stockbroking Pty Limited
Level 21, 25 Bligh Street
Sydney, NSW 2000
Tel: +61-2 9221 8711
Fax: +61-2 9221 1031
Website: www.fostock.com.au
21 January 2009
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