Contents of section 4 (What is a margin call?)
6 Contents of section 4 (What is a margin call?)
Section 4 of the Product Disclosure Statement for a standard margin lending facility must include:
if the terms of the standard margin lending facility include a margin call:
an explanation of what a margin call is; and
an explanation of when there will be a margin call in response to changes in the market; and
an explanation of when there will be a margin call at the discretion of the provider of the standard margin lending facility; and
at least 1 example of how a margin call works, including:
the impact of breaching the loan‑to‑value ratio (LVR) for the standard margin lending facility; and
how to adjust the LVR back to the required level for the standard margin lending facility; and
how the buffer (if any) for the standard margin lending facility operates; and
a description of how a margin call can be dealt with by the borrower for the standard margin lending facility; and
a statement that if there is a margin call, the provider of the standard margin lending facility will notify the borrower for the standard margin lending facility, or the borrower’s financial advisor, that the margin call has occurred; and
a statement that the borrower for the standard margin lending facility must be contactable at all times in case of a margin call; and
if the terms of the standard margin lending facility do not include a margin call, a statement to that effect.
This Act’s bill:Explanatory statement
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