WealthHub Securities LimitedABN 83 089 718 249AFSL No. 230704

GPO Box 4545MelbourneVIC 3001

Telephone 13 13 80nabtrade.com.au

NABTRADEEXCHANGE TRADED OPTIONSProduct Disclosure Statement (PDS)

Issued by National Australia Bank Limited (NAB) ABN 12 004 044 937, AFSL 230686

Effective date of issue 1 July 2019

02nabtrade ETO PDS

The NAB Equity Lending product isissued by NAB. You should considerthe information in the NAB EquityLending PDS thoroughly before makinga decision to acquire a NAB EquityLending facility. You can obtain acopy of the NAB Equity Lending PDSfrom nabtrade.com.au. You shouldobtain financial advice tailored to yourpersonal financial situation and needsbefore making a decision to apply for alending facility. For further informationabout a NAB Equity Lending facility,speak to your financial adviser orcall NAB on 1300 135 145.

Deciding whether to usethis product

We’ve prepared this PDS withoutconsidering your objectives, financialsituation or needs. For that reason,before acting on the information in thisPDS, you should decide if this productmeets your objectives, financial situationand needs, and you should seek yourown professional advice.

ETOs involve significant risks, so youshould read and consider this PDScarefully. The value of investments

IMPORTANT INFORMATION

The nabtrade service

The nabtrade service (nabtrade) isthe information, trading and settlementservice provided by WealthHubSecurities Limited ABN 83 089 718 249AFSL No. 230704 (referred to in thisProduct Disclosure Statement (PDS)as WealthHub Securities (we, our orus). A copy of our nabtrade FinancialServices Guide (FSG) is available onthe Trading Site or by calling us on13 13 80. The nabtrade FSG providesyou with information about us andservices we can provide.

WealthHub Securities, the issuer of thisExchange Traded Options (ETO) PDS,is a Market Participant under the ASICMarket Integrity Rules and a whollyowned subsidiary of National AustraliaBank Limited ABN 12 004 044 937AFSL No. 230686 (NAB). NeitherNAB or any of its other subsidiariesguarantees WealthHub Securities’obligations or performance, or theproducts or services WealthHub or anyof its subsidiaries offer. An investmentin ETOs is subject to investment risks,including possible delays in repaymentand loss of income or principalinvested. Investments in ETOs throughWealthHub Securities are not depositsor other liabilities of NAB.

may rise or fall, and sometimes returnsmay be negative. Past performance isn’ta guarantee of future performance.Future returns may vary.

The financial products andservices to which this PDS relatesare offered only to people accessingthem (electronically or otherwise)in Australia.

Changes to this PDS

The information in this PDS iscurrent as at the date it was published.However, it can change from timeto time. If a change isn’t materiallyadverse to you, we may provideupdates on the Trading Site, or youcan ask for a printed copy by callingus on 13 13 80.

Some changes may mean that we needto issue a new or supplementary PDS.We’ll post any supplementary PDS onour website at nabtrade.com.au, or youcan ask for a printed copy of this PDSor any of the documents referred to inthis PDS (without charge) by calling uson 13 13 80.

Where to find out more

Phone 13 13 80

Mail nabtradeGPO Box 4545Melbourne VIC 3001

Online nabtrade.com.au

03nabtrade ETO PDS

CONTENTS

04About this Product DisclosureStatement (PDS)

05Part One: Trading ETOs

27Part Two: Fees and charges

29Part Three: Terms and conditions

44Part Four: Application forms

The nabtrade service (nabtrade) is provided by WealthHub Securities Limited ABN 83 089 718 249, AFSL No. 230704 (WealthHub Securities). WealthHub Securities is a Market Participant underthe ASIC Market Integrity Rules and a wholly owned subsidiary of National Australia Bank Limited ABN 12 004 044 937, AFSL No. 230686 (NAB). NAB doesn’t guarantee its subsidiaries’obligations or performance, or the products or services its subsidiaries offer. © National Australia Bank Limited.

04nabtrade ETO PDS

ABOUT THISPRODUCT DISCLOSURE STATEMENT

This Product Disclosure Statement (PDS) will help you decide if Exchange TradedOptions (ETOs) would suit you, and help you compare them with other financialproducts. This PDS includes:

• features of ETOs

• benefits and risks of ETOs

• details of any fees you may need to pay to trade ETOs with us, and

• other information that you should consider.

This PDS is an important document — please contact us if you have any questions.

How to use this PDS

This PDS is in four parts:

Part Contents Page

1 Trading ETOs 05

2 Fees and charges 27

3 Terms and conditions 29

4 Application forms 44

• Read the entire PDS before deciding to trade in ETOs, and keep a copyfor future reference.

• Consult your financial adviser or another independent adviser beforemaking a decision.

What products does this PDS cover?

This PDS covers ETOs traded on the Australian Securities Exchange Limited (ASX)and settled and cleared by ASX Clear Pty Limited (ASX Clear).

ETOs include:

• Equity optionsOptions over securities traded on the ASX. (This PDS generally talks aboutunderlying shares when discussing equity options.)

• Index optionsOptions over an index, such as the S&P/ASX 200’s Index or the S&P/ASX 200Property Trust Index.

In this PDS, equity options and indexoptions are collectively called ExchangeTraded Options or ETOs. This PDS doesnot cover Low Exercise Price Options(LEPOs) traded on the ASX.

For a list of companies and indicesfor which ETOs are availablevisit asx.com.au

We do not provide personal advice.If you’ve received personal advice fromyour adviser, you accept that they’reresponsible for the advice they giveyou. We aren’t responsible for theadvice your adviser gives you.

If you received this documentelectronically, or received updates in aform other than in writing, you can askus for a printed copy by contacting uson 13 13 80.

05nabtrade ETO PDS

Trading ETOs with nabtradeETOs are a powerful investment tool that can help you protect your portfolio,earn extra income and find new opportunities for profit.

ETOs involve substantial risk and you should understand both the risks andbenefits before deciding to use ETOs.

Here are just some of the reasons to consider trading ETOs.

Seven reasons to trade ETOs

More opportunities With nabtrade, opportunities come to you. The serviceoffers tools in online trading, essential news, researchand data at your fingertips, so you can make betterinformed decisions.

More control By trading with nabtrade, you can enjoy a completesnapshot of your total wealth online — from yourbank accounts and home loan to your share portfolioand margin loan, making it easier to keep yourfinancial plan on track.

Better trading tools View ETO market movements as they happen, analysethe current value of an option with our ETO valuationtool, then instantly determine the break-even point fora position.

Lower brokerage Starting at just $34.95 per order for online trades upto $10,000 our ETO brokerage rates are among thelowest in the market. See Part Two for details.

More research We’ve partnered with investment research housesfrom Australia and around the world to bring you acomplete range of incisive analysis and market insights— from technical analysis and security fundamentalsto macro-economic trends.

More support Our ETO team is run by experienced staff.You can contact them on 13 13 80.

More ways to trade onyour margin loan

If you’re a NAB Equity Lending client, you can earnextra income by writing Call Options over your shares.

What is an ETO?

An ETO is a contract to buy or sell a share or index at a predetermined price on orbefore a predetermined date. It establishes a specific price, called the strike price,at which the contract may be exercised, or acted on. An ETO has an expirationdate, and when an ETO expires, it no longer has value and no longer exists.

PART ONE:TRADING ETOS

That means you may be able to profitfrom the performance of a shareor index at a fraction of the costof direct share investments. It alsomeans you may earn extra incomefrom your existing portfolio whilehedging against possible price falls.And, because ETOs are exchange listed,you benefit from liquidity, standardisedcontracts, quick access to prices andthe use of an established and wellregulated exchange clearing house.

ETOs do involve substantial risks,especially when you’re the seller(or writer) of an ETO contract. You willneed to actively monitor and manageyour open positions. It’s importantto consider the risks as well as thebenefits before you decide if ETOsare right for you. For more informationon buyers and sellers of ETOs,see the section below.

Buyers and sellers

Every ETO contract has aseller (also called a writer) and abuyer (also called a taker):

• The buyer takes up the right toexercise the option. For example,if you buy an equity option, youhave the right to either buy orsell the underlying shares at theexercise price.

• The seller underwrites the rightsthat the option gives the buyer.For example, if you sell an equityoption, you have the obligation tobuy or sell the underlying sharesat the exercise price if the optionis exercised.

06nabtrade ETO PDS

How to trade

By phone Call 13 13 80

Online Log on to nabtrade.com.au

Trading hours

Equity options 10 am to 4.20 pm (AEST)

Updating your details

You can update most of your personal details through the Trading Site. Sometimes,we may need you to give us written confirmation of changes to your personaldetails for security or regulatory reasons.

Getting started

Step 1—Open a nabtradeaccount online

If you don’t already have a nabtradeTrading Account, apply online at theTrading Site.

Step 2 — Understanding the risks

Before you invest in ETOs you shouldconsider the risks and benefits oftrading ETOs, as outlined in this PDS.You should:

• read, understand and agree to theterms and conditions contained inthis PDS including the:

− section on “Risks oftrading ETOs” (see page 7)

− ETO Risk Disclosure Statement

• access, read and understandthe following ASX booklets(published by the ASX) availableat asx.com.au, including:

− Understanding Options Trading

− Understanding Option Strategies

− Understanding Margins

Step 3 — Apply to trade ETOs

You can apply to trade ETO’s:

• online at the Trading Site, or

• complete the forms in Part Four ofthis PDS and return them to us.

Visit the Trading Site and complete themandatory ETO questionnaire to makesure you’re ready to trade. Until you havesuccessfully completed a questionnaire,you won’t be able to trade ETOs with us.

07nabtrade ETO PDS

Why trade ETOs?An ETO gives you the right tobuy or sell a share or index at apredetermined price on or beforea predetermined date.

That means you may be able to profitfrom the performance of a share orindex at a fraction of the cost of directshare investments. It also means youmay earn extra income from yourexisting portfolio while hedgingagainst possible price falls. And,because ETOs are exchange listed,you benefit from liquidity, standardisedcontracts, quick access to prices andthe use of an established and wellregulated exchange clearing house.

ETOs can also involve substantialrisks, especially when you’re the seller(or writer) of an ETO contract. You willneed to actively monitor and manageyour open positions. So it’s importantto consider the risks as well as thebenefits before you decide to trade.

Benefits of trading ETOs

Hedging

You can use ETOs to hedge or protectyour share portfolio against a drop invalue. For example, buying put optionsover shares allows you to lock in asale price during the life of the option,regardless of share price movements.

Income

Shareholders can earn income byselling call options over shares theyalready hold. As a seller of ETOs,you’ll receive premium income upfront.Remember, however, that you’ll needto meet margin obligations throughout

the life of the position, lodging extracollateral if the price of the underlyingshare rises. And if the options areexercised, you’ll have to deliver theunderlying shares to the buyer at theexercise price, which may be belowthe current market price.

Time to decide

If you buy a call option, the purchaseprice for the underlying share islocked in until the ETO expiry date.That gives you time to decide whetherto exercise the option and buy theshares. Similarly, when you buy a putoption, you have time to decide if youshould sell the shares.

Less counterparty risk

ETOs are standardised securitiesregistered with a clearing andsettlement facility. For you as aninvestor, that means more certaintyand less risk from counterpartydefault. That’s because the clearinghouse, ASX Clear, stands betweenyou and the counterparty to eachtrade. Another benefit of this approachis that you can close out an openposition without having to dealwith the original counterparty.

Speculation

Security prices fluctuate on a dailybasis. ETOs may be used to profitfrom these fluctuations if your view ofa future market movement is correct.The variety of option combinationsalso allows you to developsophisticated strategies designedfor different market conditions.

Leverage

The initial outlay for an optionscontract is less than you would needif you were to invest directly in theunderlying shares. You can buy anoption that represents a larger numberof underlying shares for less outlay, andstill benefit from a price move in theunderlying shares. This ability to makehigher percentage returns for a smallerinitial outlay is called leverage. Whileleverage can multiply your gains, it canalso multiply your losses, as discussedin “Risks of trading ETOs” below.

Diversification

Because your initial outlay is lowerwhen you trade options, you candiversify your portfolio and gainbroader exposure to a range ofshares, or even a market index.

Risks of trading ETOs

The risk of loss in trading in ETOs canbe substantial, so you should carefullyconsider whether ETOs suit yourinvestment objectives and financialcircumstances. ETOs aren’t suitable forall investors. For example, if you placea high priority on protecting all of yourinvestment capital and avoiding thepotential for losses, then ETOs maynot be for you, since they have thepotential for unlimited losses.

You should trade ETOs only if youunderstand how they work and theextent of the risks involved. Therisks of investing in ETOs will varydepending on the strategy you useand the kind of option you’re trading.

This PDS doesn’t cover every riskassociated with trading ETOs.

08nabtrade ETO PDS

For further information about the risksof ETO trading, see ETO risk disclosurestatement on page 37 of this PDS andsee the ASX booklet, “UnderstandingOptions Trading”, especially thesection “Risks of options trading” atasx.com.au/documents/resources/UnderstandingOptions.pdf

Here are some significant risks youneed to consider when decidingwhether to trade ETOs.

Market movements

ETOs are affected by movements in theunderlying share or index. If the marketmoves against you, your ETOs mayfall in price or become worthless ator before their expiry date.

Price sensitive announcements

In particular, the value of an underlyingshare is affected by information aboutthe company announced to ASX. If youinvest in ETOs you should reviewcompany announcements regularlyfor information that may affectthe share price.

Price sensitive announcementsregarding shares are available onthe Trading Site and asx.com.au

Leverage

The high degree of leverage involvedin many ETOs can work against you,multiplying your losses if the marketmoves against you.

Limited life span

ETOs have a limited life span. Theirtime value falls as they approach theirexpiry date, and they’re worth nothingafter they expire. That means you needto actively manage open positions

and act promptly to safeguard yourposition as the expiry date approaches.

Limited life span becomes very relevantfor options that have a weekly expiry.

Loss of premium for buyers

If you buy an option and it expiresworthless, you’ll lose the premiumyou paid for the option, plustransaction costs. This is the maximumloss you can incur as a buyer of an ETO.

Unlimited loss for sellers

As the seller of an ETO, you earn apremium. However, it’s importantto be aware that you can also incurunlimited losses if the market movesagainst your position.

For example, if you’re the seller ofa call option and the price of theunderlying share rises, you’re atsignificant risk, especially if youdon’t own the underlying shares.If the option is exercised, you’ll beforced to buy the underlying sharesat the current (higher) market priceso you can deliver them to thebuyer at the exercise price.

Similarly, when you sell a put optionand your option is exercised in a fallingmarket, you’ll be obliged to buy theunderlying shares from the buyer at aprice above the current market price.

Loss of margin for sellers

If you’re the seller of an ETO, youcould lose all of the margin fundsyou’ve deposited with your brokerwhen the market moves against theoption position. As the seller, you mayhave to pay additional margin funds(that may be substantial) to maintainthe option position, or when you

settle the contract. See “Margins”on page 15 for more.

Difficulties closing out a position

In some cases, it could become difficultor impossible for you to close out aposition. The relationship betweenthe price of ETOs and the underlyingshare can also become distorted.For example, this could happen if:

• there’s a significant change in theprice of the underlying share overa short period of time

• there are no (or less willing) buyersand sellers in either the ETO marketor the underlying market, or

• the market is suspended ordisrupted for any reason.

Underlying market

Market events affecting the underlyingmarket for the share may make itdifficult for you to hedge or maintainyour exposure under an openETO contract.

Automatic exercise

If you’re the buyer of an open positionthat is in the money (see page 14),we’ll usually automatically exerciseyour ETO contract on expiry.

Where your option is exercisedautomatically, we’ll create acorresponding share transaction.You’re responsible for making sureyou have the money or security tosettle that transaction.

09nabtrade ETO PDS

Powers of market regulators

The Australian Securities andInvestments Commission (ASIC)and ASX have discretionary powersregarding the market and how theclearing facility operates. They can takea wide range of steps to maintain fairand orderly markets, including:

• suspending the market or allowingthe options market to trade whilethe underlying securities are in atrading halt, as appropriate

• restricting the exercise of options

• terminating an option position orsubstituting another underlyingsecurity or securities

• imposing position limits orexercise limits, or

• terminating contracts.

All of these actions can affect youroption positions and result in a loss.

Trading disputes

Trades made on ASX may be disputed.When this happens, the ASX Rules giveit the power to ask a broker to amendor cancel a trade. This will result in thecontract with the client being amendedor cancelled.

In some situations, ASX may alsoexercise powers to cancel or varytransactions, or direct others tocancel or vary them.

Trade amendmentsand cancellations

Under our terms and conditions, we,ASIC and ASX can amend or canceltrades, which may potentially cause youto lose money or increase your losses.A trade executed on your behalf may

also be amended or cancelled, evenafter it has been confirmed.

System outages

Trades on ASX take place through anelectronic trading platform and arecleared by ASX Clear, which also relieson electronic systems. Those systemscan all fail or become temporarilydisrupted. Exchanges or participantsmay also be able to cancel transactionsunder their operating rules.

A market disruption may mean thatyou’re unable to deal in ETOs, and maysuffer losses as a result. We may alsobe unable to execute all or part of yourorder according to your instructions.In these circumstances, you may notbe able to recover losses, given thelimits of liability imposed by ASX andASX Clear.

Investment capital

By trading in ETOs, you’re exposed tothe risk of losing capital. You shouldnever risk more capital than you canafford to lose. Speculation assumes ahigh degree of risk, with the distinctpossibility of financial loss.

Our discretion

Under our terms and conditions, wecan take steps to close out or otherwisechange an open option position incertain limited circumstances. If:

• you don’t pay, or provide securityfor, amounts you owe us or don’tperform any obligation resultingfrom exercising or settling an ETO

• a guarantee or other securityyou’ve provided us, is withdrawnor becomes ineffective, or

• any other event occurs that we haveagreed with you entitles us to takeaction under that agreement

then we may, without warning, take orstop taking any reasonable action, inconnection with ETO contracts enteredinto regarding your ETO account, alongwith any other rights we may haveagainst you. We may also:

• enter into one or moretransactions to close out one ormore open positions, in line withASX Clear Operating Rules

• exercise one or more ETOcontracts in line with ASX ClearOperating Rules

• exercise any other rights providedunder the Corporations Act2001 (Cth), ASX Operating Rules,ASX Clearing Rules, our agreementwith you, or perform any otherobligations arising under theCorporations Act 2001 (Cth),ASX Operating Rules or ASX ClearOperating Rules for ETOs

• sell any underlying sharesbought in connection with yourETO account with us, and any othershares in your Trading Account withus, at your risk and expense if youdon’t pay us on demand

• choose not to transfer shares intoyour Trading Account with us untilyou’ve paid us, or

• purchase the required number ofshares, at your risk and expense.

If we take any of these actions uponyour instruction, you’re liable for anydeficiency, and entitled to any surplus,that may result.

10nabtrade ETO PDS

ETO fundamentals

Types of ETOs

Equity options Index options

Purpose Gives the buyer the right to buy or sell a parcel ofshares at a predetermined exercise price, on or beforethe expiry date.

Gives the buyer the right to receive a cash payment ifthe market rises or falls to a predetermined level onthe expiry date.

Settlement style Deliverable: if an equity option is exercised,one party must deliver the underlying security.

Cash settled: if an index option is exercised, the buyerhas the right to receive a payment from the seller.The size of the payment depends on the differencebetween the exercise level and the Opening PriceIndex Calculation (OPIC) calculated by ASX on theday the option expires.

Exercise style Most ASX equity options are exercised in the“American-style”. American-style options can beexercised on or before the expiry date. However, someare exercised in the “European Style”. European-styleoptions can only be exercised on the expiry date.

ASX index ETOs are always European-style.European-style options can only be exercisedon the expiry date.

Contract size Usually 100 shares. The exercise price of the option, expressed in points,multiplied by a set dollar value, usually $10 anindex point.

For more information on the exercise and settlement of an ETO, see the section on “Trading and settlement” on page 14.Note: The expiry date can vary for example weekly or as set by the ASX.

A call or a put

ETOs come in two varieties: calls and puts, and you can buy or sell either type. See the table below for more information.

Call Put

Equity options Gives the buyer the right, but not the obligation,to buy a standard number of shares at the exerciseprice, on or before the expiry date.

If a buyer exercises their right to buy, ASX Clearassigns the exercise notice to a seller in the sameoption series. The seller must then sell the standardnumber of shares to the buyer at the exercise price.

Gives the buyer the right, but not the obligation,to sell a standard number of shares at the exerciseprice, on or before the expiry date.

If the buyer exercises their right to sell, ASX Clearassigns an exercise notice to a seller in the sameoption series. The buyer must then sell the standardamount of shares to the buyer at the exercise price.

Index options If the closing level of the index is greater thanthe exercise level of the option, the buyer has theright to exercise the option and receive a payment.The amount is determined by multiplying thedifference between the closing level and the exerciselevel by an index multiplier specified by ASX.

If the buyer exercises the option, ASX Clear assignsan exercise notice to a seller, who must then paythe equivalent amount.

If the closing level of the index is less than theexercise level of the option, the buyer has theright to exercise the option and receive a payment.The amount is determined by multiplying thedifference between the closing level and the exerciselevel by the index multiplier specified by ASX.

If the buyer exercises the option, ASX Clear assignsan exercise notice to a seller, who must then pay theequivalent amount.

11nabtrade ETO PDS

Key features

ETO contracts have standardised terms and conditions set by ASX. Here are their key features, as they appear in the ETO detailswindow on the Trading Site.

Key features of an option*

* The images represented here are of sample data only and don’t reflect real data.

ASX Code

Premium

Pay-offdiagram

Intrinsicvalue

Underlyingsecurity

Expirydate

Exerciseprice Call or Put

12nabtrade ETO PDS

Feature Description

ASX code Each option series is identified by a six letter ASX code,with the first three letters consisting of the code for theunderlying security.

Underlying security The security or index to which the ETO exposes you.

Expiry date The date when unexercised options in the series expire:in this case, December 2010.

Expiry dates are set by ASX, with each series ofoptions generally following one of these three cycles:

• January, April, July and October

• February, May, August and November, or

• March, June, September and December.

Equity options expire on the Thursday before the lastFriday in the expiry month, (as long as both the Thursdayand Friday are full business days). So, if the last day ofthe month is a Thursday, the option will expire on theprevious Thursday.

Index options expire on the third Thursday of the contractmonth (as long as that day is a business day). ASX Clear canchange these expiry dates if necessary.

For more information about expiry days, see asx.com.au

Exercise price or level For an equity option, the exercise price or strike price isthe price for which the underlying security can be boughtor sold, if the option is exercised, expressed in cents.

For index options, the exercise level is the index levelat which the buyer is entitled to a cash payment.

Call or put Every ETO is either a call (C) or put (P).

Adjustments

ASX can adjust any of an option’s features to reflect corporate actions that affectthe underlying shares, such a bonus or rights issue, special dividend, capitalreduction, or other similar event.

If ASX does adjust the option, it’ll try to do so without substantially changing theeconomic position of the seller and buyer at the time of the adjustment.

In some cases, ASX may decide not to make an adjustment for a corporate action.Instead, ASX may terminate or close out open positions. When ASX adjusts theterms of an option series, ASX Clear will also make an adjustment to the termsof contracts that are already open.

For more information about ASX option adjustments,see the “Explanatory Note for Option Adjustments” at asx.com.au/documents/resources/explanatory_note_option_adjustments.pdf

Premium

This is the price of the option, setby buyers and sellers in the market—$0.285 per underlying share in thisexample. Since equity option contractsusually cover 100 underlying shares,the current price of one contract inthis series would be $28.50.

The premium for an index optionis expressed in index points, ratherthan in cents. The price of an indexoption contract can be calculatedby multiplying the premium by theindex multiplier set by ASX for thatoption series, usually $10 a point.For example, a premium of 30 pointswith an index multiplier of $10 givesa price of $300 per contract.

13nabtrade ETO PDS

Valuing options

The value of an option will fluctuate during its life, depending on factors including:

• the current price of the underlying share or the level of the underlying index

• the volatility of the underlying share or index

• the time remaining to expiry date (Options become less valuable as theyapproach expiry.) This becomes very relevant for short dated options

• interest rates

• dividends (Holding an option doesn’t give you the right to any dividendspaid on the underlying shares, unless you exercise a call option to becomethe owner of the shares before the ex-dividend date. Any fall in the priceof the underlying shares as the result of a dividend will affect the value ofyour option.)

For more information about pricing options, see “Option pricing fundamentals”in ASX booklet, “Understanding Options Trading” at asx.com.au/documents/resources/UnderstandingOptions.pdf

Are you in the money?

An ETO is said to be in the money, at the money or out of the money, dependingon the current price of the underlying security:

Exercise pricelower thanprice of theunderlying security

Exercise priceequal toprice of theunderlying security

Exercise pricehigher thanprice of theunderlying security

Call In the money At the money Out of the money

Put Out of the money At the money In the money

14nabtrade ETO PDS

Trading and settlement

Opening a position

Entering into an ETO contract as either buyer or seller is called opening a position.After opening a position, you have several choices, depending on whether you’rethe buyer or the seller:

Open Choices

Buyer(taker)

Buy to open • Sell to close: sell an option in respect of the sameunderlying equity or index to take a profit or limita loss.

• Allow to expire: hold the option to expiry and allowit to lapse.

• Exercise the option.

Seller(writer)

Sell to open • Buy to close: buy an option in respect of the sameunderlying equity or index to take a profit or limita loss.

• Allow to expire: hold the option to expiry and riskhaving it exercised. If it’s not exercised, it will lapsewithout any further obligations on your part.

Closing a position

You close a position by entering into an opposite position for an option in thesame series. So, if you have an open position in an option as a buyer, you can closethat position by entering into an option in the same series as a seller, effectivelycancelling your open position.

You may choose to close a position to:

• Avoid exercise: as a seller, you may want to close out the option to avoid therisk of having the option exercised.

• Take a profit: if the market has moved in your favour, you can take a profit byclosing your position. For example, if you buy a call option and the underlyingshares rise, you may be able to sell the same option series for a higherpremium, closing your position and making a profit.

• Limit a loss: if the market has moved against you, you may want to limit yourlosses. For example, if you buy a call option and the underlying shares fall,you may wish to sell the same option series while it still retains some value.

Exercising an option

The date when you can exercise an option depends on its exercise style(see page 10). When a buyer exercises an option, ASX Clear will randomlyassign that exercise to an open position held by a seller in the same option series.

Automatic exercise

If you’re the buyer of an openposition that is in the money, we’llusually automatically exercise yourETO contract on expiry.

Where your option is exercisedautomatically, we’ll create acorresponding share transaction.You’re responsible for making sureyou have the money or security tosettle that transaction.

If you don’t want to have an ETOposition exercised automatically,you’ll need to let us know before4.30 pm on the day of expiry.

Settlement after exercise

Equity options

When a buyer exercises an equityoption, ASX Clear assigns an exercisenotice to a seller with an open positionin the same series. As a result, thebuyer and seller will have a contractfor the sale and purchase of theunderlying shares at the exerciseprice. Both parties must then settlethis transaction as they would forany other ASX transaction.

Buyers and sellers pay for and deliverthe underlying shares through theClearing House Electronic SubregisterSystem (CHESS) on T+2 from the dateof exercise (that is, two business daysafter the trade occurs).

Your obligations regarding financialproduct settlement are set out in thenabtrade Client Agreement.

15nabtrade ETO PDS

Index options

Index options are cash settled.When a buyer exercises an indexoption, and ASX Clear assigns theexercise notice to a seller, that sellermust pay the cash settlement amountto ASX Clear. This amount will bedetermined by the difference betweenthe exercise level (set by ASX) and theOpening Price Index Calculation (OPIC),calculated by ASX on the expiry date.

Cash settlement follows the rulesof ASX Clear.

For more information aboutsettlement of index options, see“Trading index options” in ASX booklet“Understanding Options Trading”, atasx.com.au/documents/resources/UnderstandingOptions.pdf

Margins

Where a Clearing Participant has anexposure to ASX Clear under an ETOcontract, ASX Clear will call for amountsof money from the Clearing Participantto help cover that exposure. Thesepayments are known asmargins.

A margin is the amount calculatedby ASX Clear to cover the risk offinancial loss on an ETO contract ifthere’s an adverse market movement.The margin amount fluctuates on adaily basis depending in part, to anymovement in share price.

Under the terms of our agreementwith you, you need to make anymargin payments that ASX Clear asksfor to cover positions we have enteredinto for you.

We may also call for greater amountsof margin if we need to: for example,where we believe the existing marginis insufficient to cover the risk.

Why does ASX Clear charge margins?

Margins are normally features of allexchange traded derivative products.They’re designed to protect ASX Clearagainst default.

The seller of an ETO will generally needto pay a margin for that contract orprovide collateral acceptable to ASXClear because ASX Clear is exposed tothe risk of the seller not performingtheir obligations if and when theoption is exercised.

The buyer of an ETO won’t need topay a margin for that contract, becausethey’re not at risk— their maximumloss is limited to the option premium,plus transaction costs.

How are margins calculated?

Margin payments are determineddaily by ASX Clear, following the closeof trading each day. During periodsof extreme volatility, ASX Clear maymake an intra-day margin call.

The margin is made up oftwo components:

• Premium margin: determined byreferring to the market value ofthe underlying share at the closeof business each day.

• Risk margin: the potential changein the price of the option contract,assuming a maximum probableinter-day move in the price ofthe underlying security or index.For more details, see ASX booklet“Understanding Margins”, atasx.com.au/documents/resources/UnderstandingMargins.pdf

Collateral

You can meet your ASX Clear marginobligations by paying cash or byproviding certain types of eligiblecollateral, such as shares.

You may lodge shares with ASXClear that you hold on your HolderIdentification Number (HIN) (andthat are acceptable to ASX Clear)as collateral for margin obligationsfor ETO positions.

ASX Clear hold the shares you lodgewith them as third-party security,which means that they’re used ascollateral to cover your clearingobligations. We can’t use the sharesyou’ve lodged for our or other clients’dealings unless you authorise usto do so.

To manage risk, ASX Clear maysometimes apply a discount to thevalue of the collateral you lodge, calleda haircut. For example, if you lodge$10,000 worth of collateral and ASXClear applies a 30% haircut, then yourcollateral gives you $7,000 worth ofcover for any margin obligations.

For more detail about the marginingprocess used by the clearing house,see the ASX booklet, “UnderstandingMargins”, at asx.com.au/documents/resources/UnderstandingMargins.pdf

You must pay us a margin, or providealternative collateral acceptable to us,by 1 pm on the business day followinga call for margin.

For more information on the paymentterms for option transactions, includingpremiums, cash settled options andmargins, see asx.com.au

16nabtrade ETO PDS

Dividends and entitlements

Buyers and sellers of ETOs aren’tentitled to dividends, franking creditsor other entitlements paid or madeby the issuer of the underlyingshares unless they also hold theunderlying shares.

If you’re the buyer of a call option andyou want to benefit from a prospectivedividend or entitlement, you’ll need toexercise the option first. Then, you’llneed to allow enough time to executethe trade before the ex-dividendor ex-entitlement date (the datewhen the right to a current dividendor other entitlement is no longerattached to a security).

When a buyer exercises an equityoption, the sale or purchase of theunderlying shares settles on the secondbusiness day following the exerciseof the option.

Strategies

ETOs are versatile investments thatcan help you:

• hedge against changes in yourunderlying share portfolio

• use leverage to increase yourpotential for profit

• earn extra income from yourportfolio through optionpremiums, and

• profit when your view offuture market movements isproved correct.

ETOs are flexible because you canboth buy and sell an ETO contract.You can also take a number of positionsthat target specific movements in theoverall market, and movements inindividual underlying shares.

You can use index options to tradea view on the market as a whole.Using ETOs as part of your overallinvestment strategy can allow you totake advantage of rising, falling andneutral markets. However, buying andselling ETOs involves risks — see “Risksof trading ETOs” on page 7 for more.

Creating a strategy

By combining several options ina single position, you can create awide variety of strategies — somesimple, some very complex. However,regardless of which strategy you use,there are some key considerationsyou need to keep in mind:

• Time decay: the effect of time— especially the tendency foroptions to lose value as theyapproach expiry. This becomesvery relevant for short datedoptions.

• Volatility: the effects of increasing ordecreasing share price fluctuationson the value of an option.

• Margins: it’s important to calculatethe potential margins you may needto pay on a position, particularlyin the worst case scenario, then tomake sure you’re prepared withsufficient cash or collateral.

• Dividends: the effect of dividendsand capital reconstructions on youroption position.

• Exercise: as a seller, it’s importantto understand the likelihood of abuyer exercising an option earlyand the times when early exerciseis most likely to happen. As a buyer,you need to understand the processfor options to be automaticallyexercised when they expire in the

money: you also need to know howto avoid exercising your options byclosing your position before expiry.

• Liquidity: while market makers helpto maintain liquidity on ASX optionsmarket, they’re not required toprovide quotes in all series or at alltimes. That means illiquidity mayaffect your ability to enter or exit aposition, especially when an optionis deeply in or out of the money.

Leverage

It’s also important to understandthe effects of leverage. When youbuy an ETO, you usually pay only afraction of the total contract value,so options are highly leveraged orgeared. This multiplies your potentialfor profit, but as an option buyer yourloss may be limited to the premiumyou have paid.

Similarly, when you sell to open,you have the potential to earnpremium income without investingcapital upfront. But you could also beexposed to large financial losses if aposition doesn’t move in your favour.

That means you should only enter intoa transaction if you fully understand thenature and extent of the risks associatedwith trading ETOs, as well as your rightsand obligations. It’s also essential tohave well developed risk managementstrategies before you trade.

While this PDS includesimportant information about therisks, characteristics and benefits ofETOs, we recommend you do furtherresearch before you trade. If necessary,obtain advice about the specific risks,characteristics and benefits of theETO you wish to trade, as well asthe relevant ASX rules.

17nabtrade ETO PDS

Case study 1: Long call

Objective To gain leveraged exposure so as to profit from share price rises or just time to decide.

How it works You buy call options over shares you believe will go up in price.

Considerations This strategy may be useful when you believe that the underlying share may rise in the near term.

By buying a call option with an exercise price at or above the current share price, you can lock in apurchase price regardless of market movements. Then, if the share price rises, you can exercise theoption and buy the shares at the exercise price or take a profit by selling the call option you bought.

Alternatively, if the share price falls below the exercise price, you can simply let the option expireworthless and buy the shares at the lower price.

Break-even point Equal to the exercise price of the option plus the premium paid.

The call option in action Susan believes that Telstra shares (TLS) will rise quickly over a short period of time. TLS is currentlytrading at $2.85. She wants to take advantage of this but doesn’t want to commit a large amountof money to the transaction just in case the price rise doesn’t occur.

Susan buys 10 TLS July $3 Call options at a premium of $0.27

If Telstra rises above $3 during the life of the option, Susan’s ETOs will be in the money. Susan canthen choose to exercise the option and buy the shares at the $3 exercise price, let the option expire,or to close out the options position and take any profits.

Susan’s pay-off diagram*

* This is a pay-off diagram for one ETOcontract. The cost to Susan is 10 timesthat amount. The images representedhere are sample data only and don’t reflectreal data. The diagram represents profit/loss on each underlying equity that ETOsrelate to, and as such doesn’t representher total potential profit/loss in the casestudy. This case study also doesn’t includeany brokerage, fees or consider any taximplications. For more information ontax implications see page 23.

Profit

Loss

-$0.27

Exercise price$3.00 Profit

potential

Share price

Maximum loss on strategy

$3.00

Break-even$3.27

$3.27

18nabtrade ETO PDS

Case study 2: Long put

Objective To protect your position from share price falls.

How it works You buy put options over shares you already own.

Considerations This strategy may be useful when you believe that the underlying share may fall in thenear term.

By buying a put option with an exercise price at or above the current share price, you canlock in a guaranteed sale price regardless of market movements. Then, if the share pricefalls, you can either exercise the option and sell the shares, or take a profit by selling theput option you bought.

Alternatively, if the share price rises, you can either allow the option to expire worthless,or close your position prior to expiry.

Break-even point Equal to the exercise price of the option minus the premium paid.

The put option in action Martin owns 1,000 Woolworths shares. The shares are currently worth $26 each.While he’s confident that they will produce strong returns in the long term,he’s concerned that they may trade lower over the next few months.

So he decides to buy 10 (10 options x 100 shares = 1,000 shares) put option contractswith an exercise price of $26 for a premium of 50 cents.

If Woolworths falls below $25.50 during the life of the option, Martin will be in themoney on his options position. He can then choose to exercise the option and sell hisshares at the $26 exercise price, or to close out the options position and take any profits.

Martin’s pay-off diagram*

* Note: the above payoff diagram is for 1 ETOcontact. To determine the total profit orloss you need to multiply by the numberof contracts entered into.

The images represented here are sample dataonly and don’t reflect real data. The diagramrepresents profit/loss on each underlyingequity that ETO’s relate to, and as such doesnot represent total potential profit/loss inthe case study. The case study does notinclude any brokerage, fees or consider anytax implications. For more information onthese implications see page 23.

Share price

Profit

Loss

- $0.50

Break-even$25.50

Profitpotential

Limited loss on strategy

$25.50 $26.00

Exerciseprice $26.00

19nabtrade ETO PDS

Case study 3: Covered short call

Objective To earn extra income from an existing share holding.

How it works You sell call options over shares you already own.

Considerations Most frequently used by income oriented investors, this strategy may be useful when you believethat the market will be neutral or slightly lower in the near term.

By selling a call option with an exercise price above the original purchase price of your shares,you can ensure that your investment produces a profit if the option contract is exercised.

However, if the share price rises significantly above the exercise price before the option expires,the option is likely to be exercised and you’ll have to sell the shares to deliver to the other partyand you may miss out on the potential profit your share investment may otherwise have realised.

Meanwhile, your profit from the ETO contract is limited to the ETO premium.

For that reason, you may wish to close out the position before expiry if the market moves against you.

Break-even point Equal to the exercise price of the ETO plus the premium income received.

The covered short callin action

Joanna owns 1,000 BHP shares, currently worth $45 each. While she‘s confident that herinvestment will be profitable in the longer term, she doesn’t expect BHP to trade higher in thenext few months. So she decides to earn some extra income from her holding by selling 10(10 options x 100 shares = 1,000 shares) BHP call option contracts with an exercise price of $47,for a premium of 25 cents a share.

If BHP rises above $47 during the life of the option, Joanna risks having the option exercised againsther, forcing her to sell at the exercise price of $47. But if BHP remains below that level, she’ll keepboth her shares and the additional option income. By writing out of the money calls over the sameshares on a recurring basis, she has the potential to increase the return from her existing portfolio.

Joanna’s pay-off diagram*

* Note: the above payoff diagram is for 1 ETOcontact. To determine the total profit orloss you need to multiply by the numberof contracts entered into.

The images represented here are sample dataonly and don’t reflect real data. The diagramrepresents profit/loss on each underlyingequity that ETO’s relate to, and as such doesnot represent total potential profit/loss inthe case study. The case study does notinclude any brokerage, fees or consider anytax implications. For more information onthese implications see page 23.

Profit

Loss

$0.25

Exerciseprice$47.00

Limitedprofit

potential

Share price

Loss potentialon strategy

$47.00 $47.25

Break-even$47.25

20nabtrade ETO PDS

Case study 4: Short put

Objective To earn income in a flat or rising market.

How it works You sell put options over shares.

Considerations Sometimes used by income oriented investors, this strategy may be useful when you believe thatthe market will be neutral or rising lower in the near term.

It can also be used as a way to buy stock cheaply. If the share price falls and the option is exercised,the purchase price is effectively the strike price of the option less the premium received, which isless than the price of the stock at the time of writing the ETO.

You’ll break even if at expiry the share price is equal to the strike price of the ETO less the premiumreceived. As the share price falls beyond this point, the potential losses of the sold put are limitedonly by a fall in the share price to zero.

Therefore this strategy can result in heavy losses if the share price falls significantly. Only write putsif you have the financial capacity to buy the underlying shares should you be exercised. Monitor theposition closely. You’ll need to close out an in the money option in order to avoid exercise.

Break-even point Equal to the exercise price of the option minus the premium income received.

The covered call in action Andrew believes the market will be neutral or slightly bullish in the short term. He’s interestedin receiving income from selling a put option over ORG shares, currently worth $15.50 each.Andrew is happy to buy the shares if the option is exercised.

Andrew decides to earn some income by selling 20 (20 options x 100 shares = 2,000 shares)ORG put option contracts with an exercise price of $15, for a premium of 55 cents a share.

If ORG falls below $15 during the life of the ETO, Andrew risks having the option exercised againsthim, forcing him to buy the shares at the exercise price of $15. However, if ORG remains above thatlevel, he‘ll retain the premium income.

Andrew’s pay-off diagram*

* Note: the above payoff diagram is for 1 ETOcontact. To determine the total profit orloss you need to multiply by the numberof contracts entered into.

The images represented here are sampledata only and don’t reflect real data.The diagram represents profit/loss on eachunderlying equity that ETO’s relate to, andas such does not represent total potentialprofit/loss in the case study. The case studydoes not include any brokerage, fees orconsider any tax implications. For moreinformation on these implications seepage 23.

Share price

Profit

Loss

$0.55

Break-even$14.45

Limitedprofit

potential

Loss potentialon strategy

$14.45 $15.00

Exerciseprice $15.00

21nabtrade ETO PDS

Other importantinformation

The role of ASX Clear

ETOs are traded on the ASX tradingplatform and cleared through ASX Clear,a licensed clearing and settlementfacility under the Corporations Act 2001(Cth). WealthHub Securities LimitedABN 83 089 718 249 AFSL N. 230704is a participant of both ASX andASX Clear.

As a participant, we must complywith the operating rules of both ASXand ASX Clear (the Clearing Rules).All ETOs that we trade for you, will becleared by ASX Clear, and are subjectto the Clearing Rules.

When we enter into an ETO for you,we report the transaction to ASXClear for registration. When ASX Clearregisters a contract, they terminatethe original traded contract andreplace it with two contracts, knownas Derivatives CCP Contracts — onebetween ASX Clear and the buyer’sbroker, and the other between ASXClear and the seller’s broker.

This process of registering andcreating two Derivatives CCPContracts is called novation.It’s described briefly in “You andyour broker” in the ASX booklet,“Understanding Options Trading”available at asx.com.au/documents/resources/UnderstandingOptions.pdf

You don’t take part directly in eitherof those contracts registered withASX Clear. Although we may act onyour instructions or for your benefit,when the ETO is registered with ASXClear in our name as the ClearingParticipant, we incur obligations toASX Clear as principal, even thoughwe may have entered into the ETOon your instructions.

Client trust accounts

According to the Corporations Act2001 (Cth), we can use your moneyheld in our trust account to meetmargin obligations, and guarantee,secure, transfer, adjust or set dealingsin derivatives. Refer to clause 19.1 inPart three of this PDS.

National Guarantee Fund

Please note: the National GuaranteeFund (NGF) does not apply to ETOtrades but does apply to the resultantequity trades.

The NGF protects investors inthese circumstances:

• if an equity option is exercised,the NGF guarantees the resultingtrades will be completed in certaincircumstances, and

• if you’ve entrusted property tous while dealing in ETOs, and welater become insolvent, you mayclaim on the NGF, according to itsgoverning rules, for any propertynot returned to you or not dealtwith according to our obligationsto you. There are limits on claimsto the NGF for property that hasbeen entrusted.

For more information about protectionoffered by NGF, see segc.com.au

Cooling-off period

There are no cooling-offarrangements for ETOs.

Environmental, social or ethicalconsiderations

ETO contracts don’t have aninvestment component andare speculative in nature.Labour standards, environmental,social or ethical considerations haven’tbeen taken into account in relation tothese financial products.

Consent to be named in the PDS

National Australia Bank LimitedABN 12 004 044 937 AFSL 230686has consented to the references to“National Australia Bank”, “NationalAustralia Bank Limited” and “NAB”included in this PDS. Neither NationalAustralia Bank Limited nor any ofits directors, officers, employees oradvisers assumes any responsibilityfor the accuracy or completeness ofthis PDS.

22nabtrade ETO PDS

Where to find out more

Strategies

You can find out more about options strategies at the Insight Centre onthe Trading Site.

We also recommend you read these free ASX educational booklets,referred to throughout this PDS:

Booklet Available from

Understanding Options TradingDiscusses the features and contractspecifications of ETOs and outlines therisks and advantages of trading options.It also gives examples of how ETOs workand provides basic option trading strategies.

asx.com.au/documents/resources/UnderstandingOptions.pdf

Understanding Option StrategiesProvides more detail about trading strategies.

https://www.asx.com.au/products/equity-options/strategies.htm

Understanding MarginsExplains what margins are, how ASX Clearcalculates them and how a Clearing Participantcan meet margin obligations to ASX Clear.

asx.com.au/documents/resources/UnderstandingMargins.pdf

If you can’t access a booklet online, you can call ASX and ask for a copy.Alternatively simply contact us.

If you have questions about the ETO market or any part of the booklets,we’d be happy to help. Call nabtrade on 13 13 80.

Premiums

If you’re the buyer of an ETO,you’ll need to pay a premium forthe ETO contract.

If you’re the seller of an ETO, you’llbe entitled to receive a premium forthe sale of the ETOs contract.

For detailed information aboutpremiums on ETO contracts, see“Option Pricing Fundamentals” in theASX booklet “Understanding Options”,at asx.com.au/documents/resources/UnderstandingOptions.pdf You canalso visit the ASX Options Calculator athttps://www.asx.com.au/prices/calculators.htm

Margin and collateral

If you’re the seller of an ETO contract,you’ll need to make margin paymentsand, in some cases, provide collateralto ASX Clear. Margins can change daily,so you need to have funds or sharesavailable to cover them. For moreinformation, see:

• “Margins” on page 15 for generalinformation about margins

• Part Two of this PDS for details ofany further margin requirementswe may ask for, or

• The ASX booklet, “UnderstandingMargins” at asx.com.au/documents/resources/UnderstandingMargins.pdffor detailed information on marginand collateral requirements.

23nabtrade ETO PDS

ETOs may or may not qualify asfinancial arrangements under theTOFA rules. Whether an ETO constitutesa financial arrangement for you canonly be determined by looking at yourindividual facts, circumstances and, tosome extent, the purposes regardingyour ETO. Generally, an ETO that canbe cash settled will constitute a financialarrangement under the TOFA rules.

However, the TOFA rules shouldn’tgenerally apply to the ETOs enteredinto by:

• individual investors

• a superannuation entity,management investment schemeor an entity substantially similarto a managed investment schemeunder foreign law with assets ofless than $100 million

• certain financial entities with aturnover of less than $20 million, or

• other entities with a turnover of lessthan $100 million, financial assets ofless than $100 million and assets ofless than $300 million,

where the ETO is not a qualifyingsecurity for tax purposes. For thesepurposes, an ETO shouldn’t generallyconstitute a qualifying security.

You can also choose to apply theTOFA rules even if you don’t satisfythese thresholds.

Since the TOFA rules generally applyto financial arrangements entered intoon or after 1 July 2010, they’re likely toaffect ETOs traded through nabtrade.So, if you’re subject to the TOFA rulesthe TOFA rules could apply to anyETOs you enter into.

You should obtain your own taxationadvice about the application of TOFArules to your circumstances.

If you’re not subject to the TOFA rules,your ETOs should generally be taxed asoutlined below.

Significant tax implications

This document is not acomprehensive and complete taxguide. Your tax position when youtrade ETOs will depend on yourindividual circumstances, particularlywhether you’re trading on a revenueor capital account.

Tax laws can be complex and maychange over time. We suggest you getprofessional tax advice before enteringinto or disposing of an ETO contract.

You may also like to review thecontent regarding the tax treatmentof ETOs at https://www.asx.com.au/prices/calculators.htm

Taxation of financial arrangements

In 2009, the Tax Laws Amendment(Taxation of Financial Arrangements)Act 2009 introduced new rules (knownas the TOFA rules) for taxing returnsfrom financial arrangements.

The TOFA rules define financialarrangements, then set out six methodsfor accounting for gains or losses onthose arrangements. Four of thosemethods are elective, subject to certainsafeguards. Together, they determinethe tax timing and treatment ofarrangements covered by the rules.The TOFA rules generally cover tax gainsand losses from financial arrangementson revenue account, (not as capitalgains or losses).

24nabtrade ETO PDS

Revenue account

Seller of the option If you sell an option in the ordinary course of your business, or you sell an option overan underlying revenue asset, the option will be treated as being on revenue account.

The premium that you receive as the seller will be assessable on a due and receivablebasis. This will generally happen when the option is registered with the ASX Clear.Where any premium is credited to the seller’s ASX Clear account, the amount will beassessable on the same basis.

Any margin calls that follow aren’t deductible when they’re deposited into your ASX Clearaccount. These margins will merely reduce your overall net position when a buyer closesout, settles or exercises the option.

If as the seller you receive interest on the margins held in your ASX Clear account,you must include that interest in your assessable income.

Buyer of the option As a buyer you’ll generally hold an option on a revenue account when you hold or tradeit in the ordinary course of business, or you use the option to hedge an underlyingrevenue asset.

In this case, any premium you pay is generally regarded as being deductible on a dueand payable basis. This will generally happen when you register the option with theASX Clear.

If the option on a revenue account lapses, there are no further tax implications.However, if it’s exercised, the option strike price will form part of the acquisitioncost or disposal proceeds for the related underlying asset.

Alternatively, if the option is closed out before it expires, any gain or loss on theoption position will be treated as assessable or deductible.

Capital account

Seller of the option If you sell an option over an underlying capital transaction, the option will be held oncapital account. Consequently, any income tax implications will be determined accordingto the Capital Gains Tax (CGT) provisions.

The premium that the seller of the option receives will lead to an assessable capital gainon a received or a receivable basis. If any premium is credited to your ASX Clear account,the amount will still be assessable on this basis.

Any subsequent margin calls will merely reduce your overall net position when you closeout, settle or exercise the option.

If as the seller, you receive interest on the margins held in your ASX Clear account,you must include it in the seller’s assessable income.

Exercise of a call option Where a call option is exercised, the option premium and the proceeds on the sale of theunderlying asset should be treated as a single transaction. As a result, both the premiumand the proceeds received will be part of the seller’s capital proceeds for CGT purposes.

This may have practical implications if you sell an option and you receive the premiumand sale proceeds in different income years.

25nabtrade ETO PDS

Exercise of a put option If you exercise a put option, the option premium received and exercise price paid willgenerally be reflected in the cost base of the underlying asset for the seller. The seller’scost base for the underlying asset for CGT purposes should generally include the exerciseprice paid, reduced by the option premium received.

This may have practical implications if you sell an option and receive the premium ina different income year from the payment of the strike price and acquisition of theunderlying capital asset.

Buyer of the option If you buy an option, you’ll generally hold it on capital account if you’re hedging anunderlying capital transaction. Any resulting income tax implications will be determinedaccording to the CGT provisions.

As a buyer, you won’t have any taxation consequences for any premium paid for optionsthat are held on a capital account.

If an option on a capital account lapses, you’ll realise a capital loss, equal to thepremium paid.

When an option is settled or closed out, you’ll realise a capital gain or loss dependingon the amount paid (which will be the premium plus any incidental costs) for the option,as well as the amount received on settlement.

Exercising a call option If as a buyer you exercise a call option, you generally need to include the option premiumin the cost base when you dispose of the underlying asset.

Exercising a put option If as a buyer you exercise a put option, you generally need to deduct the optionpremium from the proceeds you receive when you dispose of the underlying asset.

Index ETOs In general, there are no specific legislative rules dealing with income tax with respectto trading index ETOs. So the taxation consequences of investing in index ETOs shallbe determined by taking into account the investor’s circumstances in accordance withgeneral tax principles.

Generally, the tax principles to be applied when investing in index ETOs will be the sameas those outlined above. However, as the circumstances of each investor are different,investors should obtain professional tax advice relating to whether their index ETOs areheld on revenue account and the timing of any tax consequences, particularly given thatan index ETO will be cash settled.

However, there’s an alternative view that any tax consequences don’t occur until theindex ETOs are closed out, exercised or expire.

In this regard, the alternative view may mean you need to account for index optionsusing a net profits method, rather than a due and receivable or due and payableapproach on a gross receipts basis (as the case is for equity ETOs).

Complying Superannuation Funds andManaged Investment Trusts

Certain investors (such as complying superannuation funds), or managed investmentstrusts that are eligible for, and make the capital account election, will generally be taxedon capital account for their ETOs.

26nabtrade ETO PDS

Resolving complaints

If you have a concern about any aspect of our service, please call us on 13 13 80.We’ll work to resolve the issue as soon as we can.

If we can’t solve your concern, or you’re not satisfied with our solution,please write to us at the address below:

By mail The Complaints ManagernabtradeGPO Box 4545Melbourne VIC 3001

If your complaint isn’t resolved to your satisfaction within 45 days, you can getfurther information from the Australian Financial Complaints Authority.

By phone 1800 931 678

By mail The ManagerAustralian Financial Complaints AuthorityGPO Box 3Melbourne VIC 3001

Online afca.org.au

Not all customers will be eligible to make use of the services of the AustralianFinancial Complaints Authority. For information on if you are eligible,contact the Australian Financial Complaints Authority directly.

Financial crimes monitoring

We are obliged to comply withthe Anti-Money Laundering andCounter-Terrorism Financing Act 2006(Cth) Under those laws, we have tomeet strict identification requirementsbefore we can offer you the service.Where we’re legally obliged to do so,we may disclose the information we’vegathered about you to regulatory orlaw enforcement agencies.

You should also be aware thattransactions may be delayed, blockedor declined where we have reasonablegrounds to believe they may breachAustralian law or the law of anyother country.

27nabtrade ETO PDS

About this part

This part should be read in conjunctionwith Parts One, Three and Four ofthe PDS, describing the ETO productswe trade.

Goods and Services Tax (GST)

GST applies on brokerage and fees. Wecharge 10% GST on brokerage and fees.The fees shown in this PDS include GST.

PART TWO:FEES AND CHARGES

Brokerage

When you buy or sell an ETO contract, we calculate our brokerage as apercentage of the premium payable by the buyer (or taker) of the contract.

The minimum brokerage for opening or closing a position is $34.95 per trade,including GST.

Type of trade Transaction size Brokerage

Online Trade Up to and including$10,000.00

$34.95

Above $10,000.01 0.35% of the trade value

Over the phone trade $49.95 or 0.55% of trade value (whichever is greater)

Equity trade from optionexercise or assignment

$59.95 or 0.11% of trade value (whichever is greater)

ASX Clear fees

Fee Amount

Transaction fee(equity options)

$0.13 per contract plus GST

Exercise or assignment fee(equity options)

$0.05 per contract plus GST

Exercise fee(index options)

$0.35 per contract plus GST

Registration fee(index options)

$0.45 per contract plus GST

How much will it cost?

We’ll let you know the exact cost of each transaction when it’s confirmed. Here’s anexample of the costs for a typical options trade:

Trade Buy 20 XYZ March $50 Call Options at $1

Premium 20 Contracts (2,000 shares) x $1 = $2,000

Brokerage $34.95

ASX Clear fees 20 x 0.14 = $2.80

Total $2,037.75

Note that, in addition to the above, you will still be subject to margin requirements

(see below, and “Margins” and “Collateral” on page 15).

28nabtrade ETO PDS

Margin requirements

The margin called by ASX Clear for ETOs is made up of two components,both determined by ASX Clear:

Total margin = premium margin + risk margin + our buffer

We may add an additional buffer margin, which is equal to 100% of therisk margin.

See “Margins” on page 15 of Part One of this PDS for more information.

An example of margins in action for a single stock portfolio:

Premium margin $180

Risk margin $129

nabtrade buffer $129

Total margin $438

Other fees

Service Fee

Confirmation delivery by email No charge

Confirmation delivery by post $3.85 each

Order amendments and cancellations No charge

Email alert 1 alert credit*

SMS alert 2 alert credits

Credit alert bundles* 100 alert credits = $11200 alert credits = $22300 alert credits = $33

Miscellaneous queries and otherrequests outside the normal courseof business

$60 per hour, with a minimumcharge of $60

Off-market transfer $55 per holding

Sell fail fee (failure to settle tradewithin the required time)

Transaction size Amount

Up to and including$100,000.00

$100 plus GST

Above $100,000.01 0.10% of the tradevalue plus GST

Buy fail $100 per day plus GST

* One alert credit costs $0.11

29nabtrade ETO PDS

PART THREE:TERMS AND CONDITIONS

ETO Client AgreementThis ETO Client Agreement (Agreement) forms part of this PDS. This document should be read in conjunction with Parts One,Two and Four of the PDS, describing ETOs.

1. Definitions and interpretation

1.1 Unless otherwise defined, all capitalised terms have the same meaning given to them in the relevant Rules, and asdefined in the nabtrade Client Agreement. If there is any inconsistency between the Rules and the nabtrade Client Agreement,the Rules will prevail.

Term Definition

ASIC Australian Securities & Investments Commission.

ASX Australian Securities Exchange operated by the Australian Securities Exchange LimitedACN 008 624 691.

ASX Clear ASX Clear Pty Limited ACN 001 314 503.

Authorised Person A Person authorised to represent the Account holder in accordance with these termsand conditions.

Base Rate NAB Equity Lending’s published variable rate for loans of less than $250,000.

Confirmation The confirmation note WealthHub Securities sends you on execution or partial executionof a Transaction.

Derivatives CCP Contract Means one of the two matching contracts between ASX Clear and a Participant that arisewhen a Derivative Market Contract is registered by and novated to the ASX Clear underthe ASX Clear Operating Rules.

ETO contract Means a Derivatives Market Contract or Derivatives CCP Contract (each as defined in theASX Clear Operating Rules) as the context requires.

Market The market operated by the Market Operator under Australian Market Licence(Australian Securities Exchange Limited) 2002.

nabtrade Is a registered trademark of NAB and the brand under which nabtrade Servicesare provided.

nabtrade Client Agreement For Parts A to E and G, the nabtrade Client Agreement is the agreement formed whenWealthHub Securities accepts your application for an Account (subject to the relevantterms and conditions, Application Forms and any additional parts).

For Part F and G in relation to the Cash Products, it’s the agreement between you andNational Australia Bank Limited ABN 12 004 044 937, AFSL No. 230686.

Part G defines the terms used throughout the nabtrade Client Agreement.

Part H contains the NAB Privacy Notification.

nabtrade Financial Services Guide The Financial Services Guide prepared by WealthHub Securities in accordance withsection 941A of the Corporations Act 2001 (Cth).

National Australia Bank and NAB National Australia Bank Limited ABN 12 004 044 937, AFSL No. 230686, including itsdirectors, officers, employees, agents and representatives.

30nabtrade ETO PDS

Term Definition

Person An individual, joint account holder, a company, a trustee or a body corporate.

Rules Any or all of:

• the ASX Group Rules

• the ASX Operating Rules

• the ASX Settlement Operating Rules

• the ASX Clear Operating Rules

• the ASIC Market Integrity Rules, and

• any other applicable law.

Trading Site Any or all of:

• the website, located at nabtrade.com.au

• any other related website operated by or for NAB, and

• any other website WealthHub Securities provides you with or tells you about,

in relation to the Services.

Telephone Service The telephone service accessed on 13 13 80 or any other number WealthHub Securitiesnominates.

WealthHub Securities, we, our, us WealthHub Securities Limited ABN 83 089 718 249 and AFSL No. 230704,including its directors, officers, employees, agents and representatives.

You or your The Person(s) named as applicant on the Application Form. This is the Person to whichWealthHub Securities provides the Services through the Trading Site and, where relevant,includes the Authorised Person.

If the applicant is a company or body corporate, the meaning of ‘you’ and ‘your’ extendsto include the directors and officers of the company.

1.2 WealthHub Securities is a memberof ASX Clear. Subject to the terms andconditions of this Agreement, theCorporations Act (Cth) 2001, the Rulesand any other statute or common law,we’ll deal in ETOs on your behalf. Wedon’t offer LEPOs.

2. Application of the Rules

2.1 You and WealthHub Securitiesagree to be bound by the CorporationsAct (Cth) , the Rules and theprocedures, customs, usages andpractices of the ASX and its relatedentities (as they’re amended fromtime to time), as far as they applyto ETOs traded on ASX.

2.2 You acknowledge that each ETOregistered with ASX Clear is subjectto the operating rules and practices,directions, decisions and requirementsof ASX Clear.

2.3 You acknowledge that as anabtrade client, you’re bound by theterms and conditions of the nabtradeClient Agreement. To the extent thereis any inconsistency between the termsof this Agreement and the termsof the nabtrade Client Agreement,this Agreement will apply in respectof any ETO dealings we undertakeon your behalf.

3. You’ll provide information

3.1 You agree to supply all necessarydocumentation and/or informationas required by us, concerning Markettransactions.

3.2 You must provide the necessaryidentification information to us beforewe can trade ETOs on your behalf.

31nabtrade ETO PDS

4. Explanatory booklets, risk,financial objectives anddisclosure documentation

4.1 You acknowledge that:

a. you’ve received, read andunderstood the currentexplanatory booklet about options,“Understanding Options Trading”,published by ASX

b. you’ve read and understood thenabtrade ETO PDS

c. dealing in ETOs incurs a risk of loss

d. we won’t give any advice orrecommendation regardingyour transactions, and

e. you’ve thought about yourobjectives, financial situation andneeds and decided that dealing inETOs is right for you.

5. Authority

5.1 You represent and warrant:

a. if you’re acting as principal, you’reaged 18 years or over and have thelegal power and right to executecontracts and other documents inrelation to this Agreement

b. if you’re a body corporate, thatyour incorporation details arecurrent and valid, and

c. if you’re a trustee: a licence you hold

− these terms and conditionswill bind you in both a personalcapacity and in your capacityas trustee

− you can be indemnified outof the assets of the trust for allliabilities incurred under theseterms and conditions

− you’ve properly exercisedyour trust powers and havefull authority to enter intothis arrangement and alltransactions under it, and

− your instructions are lawfuland authorised.

5.2 You acknowledge and agree that atour discretion, for legitimate business,prudential or regulatory reasons andas notified to you:

a. we may assign you a trading level.This trading level will classify whichETO strategies you can use and isbased on our assessment of yourlevel of experience in trading ETOs.Information relating to tradinglevels can be found on theTrading Site.

b. we won’t be liable for any losses,damages, costs and expensesrelating to the trading levelassigned to you. We may changethe assessment criteria in relationto a trade at any time, and

c. we may also reserve the right tochange your trading level withoutnotice to you.

6. Our obligationsand your rights

6.1 Even though we may act accordingto your instructions (or for yourbenefit), you acknowledge anyETO contract arising from any ordersubmitted to the Market, is entered intoby WealthHub Securities as principal.

6.2 Upon registration of an ETOcontract you acknowledge that weincur obligations to ASX Clear asprincipal, even though we may haveentered into the ETO contract onyour instructions.

6.3 You acknowledge that any benefitor right we obtain when we registeran ETO contract with ASX Clear bynovating a contract under the Rules,or any other legal result of registrationis personal to us. The benefit or legalresult doesn’t pass to you. You haveno rights, either by subrogation orotherwise, against ASX Clear regardingany of our dealings (or any otherParticipant or Market Participant)in ETO transactions and DerivativesCCP Contracts.

6.4 We reserve the right to refuse tofollow your instructions, in accordancewith clause 11 of this Agreement.

6.5 You acknowledge that:

a. instructions via the Trading Siteor the Telephone Service maybe limited to a specific type ofdealing. This is at our discretion,for legitimate business, prudentialor regulatory reasons and asnotified to you, and

b. we don’t offer straight-throughprocessing of ETO orders andthat orders are placed by anappropriately accredited ETO dealer.

6.6 Unless we agree otherwise withyou, all orders and instructions yougive us in relation to ETO contractsto write, close, take, buy or sell ETOcontracts will, on the business daythat they’re given:

a. be on a day-only basis, and

b. if unexecuted, automatically lapseat the close of normal trading.

32nabtrade ETO PDS

7. Dealing as principal

7.1 You acknowledge that we may,in situations allowed under theCorporations Act 2001 (Cth) and theRules, take the opposite position in atransaction in an ETO contract, eitheracting for another client or on ourown account.

8.WealthHub Securitiesmay demand funds orsecurity or evidence

8.1 You acknowledge that we (inrelation to obligations we incur forentering into any Derivatives CCPContracts on your behalf) may:

a. demand the payment of money

b. demand that you provide evidencethat you’ll be able to comply withthe demands or future demandsregarding these obligations, or

c. demand the provision of any othersecurity that we may consider,in our discretion, suitable inconnection with these obligations.

8.2 You acknowledge that you mustcomply with any demand made byus under clause as soon as possible.We are required to settle ETO marginobligations (if any) with ASX Clear by10.30 am on each trading day. To makesure we can meet those obligations,we may call for you to pay money orprovide other security, that we at ourdiscretion deem suitable. You mustpay any amount called, or providesecurity within 24 hours of the call forpayment or security, unless otherwisestipulated by us.

9. Fees

9.1 You may pay us fees, taxes andcharges for your dealings in ETOs atthe rates we determine and as notifiedto you. We will give at least 30 BusinessDays’ notice prior to any increase infees or charges other than governmentfees or charges taking effect.

9.2 You acknowledge and agree thateach individual order instruction:

a. has its own individual fees, taxesand charges. Multiple orders on thesame day, in the same series don’tamalgamate into a single net orderinstruction, and

b. may not be completely executedin one single transaction. Forpartially completed orders, youacknowledge that any outstandingbalance will remain in the Marketat your nominated limit price untilsuch time as:

− the order is filled, you provideinstructions to amend theorder, or

− the order expires at the end ofthe day. If the order is partiallyexecuted at the end of theday the order will attract theminimum brokerage fee.

9.3 If you choose to place a new orderfor the remaining balance, the newinstruction will be treated as a separateorder, and the minimum brokerage feeis applicable.

9.4 For further information, refer tothe nabtrade Financial Services Guide.

10. Recording ofconversations

10.1 You acknowledge that:

a. you authorise us to record anytelephone communications withyou, with or without an audibletone warning device

b. you should record the relevantdetails of any conversation that youhave with us, including the nameof the operator and the date andtime of the call. We may ask youfor this information if you wantaccess to a recording of a telephonecommunication between you andus, and

c. if there’s a dispute you have aright to listen to any recordingof the conversations, but youacknowledge that any recordingis our property and that wereserve the right to charge youa cost recovery fee for access toa recording.

11. Right to refuse to deal

11.1 You acknowledge that we mayrefuse to deal in, or may limit dealingsin ETOs for you at any time where:

a. you fail to pay any amount you’reliable for under this Agreementwhen it falls due

b. you breach any material term ofthis Agreement

c. where we have reasonablegrounds to believe to act on yourinstructions would result in us:

− breaching the CorporationsAct 2001 (Cth), the Rules,any Australian law, the lawof another country, or any ofour internal business rules

33nabtrade ETO PDS

− being an accessory to a breachof the Corporations Act 2001(Cth), the Rules, Australian lawor the law of another country

d. we have any reasonable grounds tobelieve that your instruction is, ormay be being used in connectionwith, a breach of the Anti-MoneyLaundering and Counter- TerrorismFinancing Act 2006 (Cth).

11.2 We may tell you the reason forthe restriction or suspension (and anyconditions) as soon as is reasonablypossible (unless prohibited by legalor regulatory reasons). We don’tneed to tell you before restrictingor suspending your account access.

11.3 You’ll be liable to pay us for losses,damages, costs and expenses where weexercise our right to refuse to deal.

12. Default

12.1 If:

a. you fail to pay or provide securityfor any amount you owe us, oryou fail to perform any obligationthat results from the exercise orsettlement of a Derivatives CCPContract, or

b. a guarantee or other securitythat you give us is withdrawnor becomes ineffective and anyother replacement security isn’tacceptable to us, or

c. any other event occurs (which we’veagreed with you in this Agreement),

we have the right to take action underthis section. We may, along with anyother rights we may have against you,and without giving you notice, take orrefrain from taking any reasonableaction regarding ETO contracts

entered into for you (including withoutlimitation, Derivatives CCP Contractsarising from those contracts) and:

a. enter into one or more transactionsto close out of one or moreDerivatives CCP Contracts,in line with the Rules

b. exercise one or more DerivativesCCP Contracts, in line with the Rules

c. exercise any other rights, orperform any other obligationsgranted by the Rules and thisAgreement, or

d. deal in any of your securities orother property we hold, and usethe proceeds to pay for the default.

12.2 You acknowledge and agree that:

a. on demand you’ll pay or reimburseus all charges, costs and expenseswhere we incur any charge, costand expense in connection withthis Agreement

b. you’ll be liable to pay anyadditional costs incurred by us ondemand. These may include:

− brokerage, fail fees, stampduties and GST

− borrowing costs or losses

− other reasonable expenses weincur in relation to actions underthis clause or the Rules, and

− interest on the outstandingamount from the due date untilthe date we receive payment,at the rate of two percentagepoints above the Base Rate,calculated daily from the duedate to the date of payment.You also agree to pay any failfees arising from the failureto settle.

c. where we have incurred additionalcosts, we’ll demand paymentfrom you, either verbally or inwriting, and

d. you’ll indemnify us for all losses,damages, costs and expenses(except to the extent resulting fromor caused by our negligence, fraudor dishonesty) resulting from yourbreach, default or failure to settleunder this Agreement.

13. Appointing ASX Clear PtyLimited and others as agent

13.1 You irrevocably appoint ASXClear, and every director, managerand assistant manager of ASX Clear (asapplicable) to do all acts and executeall documents on your behalf, for thepurpose of exercising the powers givento ASX Clear as prescribed under theASX Clear Operating Rules.

14. Termination of Agreement

14.1 You acknowledge that thisAgreement can be terminated if eitherparty gives at least five Business Days’notice in writing. Termination will beeffective upon receipt of the notice bythe other party.

15. Effect of terminationand variation

15.1 Termination doesn’t affect you orour existing rights and obligations priorto termination. When this Agreementis terminated, we’ll close out allDerivatives CCP Contracts we’ve enteredinto, and registered for you. This isunless you have directed us to transferthose contracts to another Participant,in accordance with the Rules.

34nabtrade ETO PDS

15.2 We can amend this Agreementfor legitimate business, prudentialor regulatory reasons, by 10Business Days’ prior notice to you.Your continued use of this serviceis an acceptance of the variation.

15.3 Where a variation of thisAgreement is:

a. required to comply with theRules and any applicable law

b. necessitated by an immediate needto restore or maintain the securityof this service or your accounts, or

c. a minor change,

this variation may not be notified toyou, and will take effect when you firstuse that new or varied service.

15.4 If a change is not acceptableto you, and you terminate thisAgreement, you’ll need to close outall ETO contracts that are open at thetime you terminate this Agreement.All applicable fees and charges willbe payable by you.

16. Revised termsprescribed by ASX

16.1 If the Rules prescribe amendedminimum terms for an ETO clientagreement (the New Terms), anyinconsistency between the minimumand New Terms will be overriddenby the New Terms of this Agreement.These New Terms automatically apply.

17.WealthHub Securities toprovide copies of changes

17.1 We’ll provide a copy of theNew Terms to you as soon as we can.

18.Margins

18.1 You agree that when you writea Derivatives CCP Contract to open aposition, margins will be payable. Thatmargin is an ongoing obligation duringthe life of the Derivatives CCP Contract.

18.2 You must to ensure that theseobligations are met on a daily basis.If you’re unable to meet theseobligations it’s your responsibilityto close out any open DerivativesCCP Contracts immediately.

18.3 You agree that we may requiremargins in excess of those required byASX Clear. We may allow such moniesto be retained in an account on termsapproved by WealthHub Securities inits absolute discretion.

19. Client funds and property

19.1 We must deal with any moneyand property paid or given to us inconnection with the Participant/clientrelationship following the CorporationsAct 2001 (Cth) and the Rules. Youacknowledge that we may combineyour and our other clients’ money anddeposit it in a trust account or client’ssegregated account. You acknowledgethat all money credited to yoursegregated account that we maintainmay be used by us to meet the defaultof any of our clients. You acknowledgethat we may retain interest paid by ASXClear on money provided by you underthis Agreement.

20. Assignment

20.1 You acknowledge that at all timeswhen a written short Derivatives CCPContract is open, you as the writer areexposed to the risk of that DerivativesCCP Contract being assigned.

20.2 Where a Derivatives CCP Contractis assigned, you must take deliveryof (for short put contracts), or supply(for short call contracts) the requirednumber of underlying shares at theexercise price on T+2. Where thisoccurs for a naked ETO contract, you’reresponsible for executing the requiredtrade(s) and notifying us on T+1.

21. Exercise

21.1 You acknowledge that weautomatically exercise DerivativesMarket Long Position Contracts(that is, any call or put option that hasbeen bought to open) on expiry that isin the money.

21.2 You acknowledge that it’s yourresponsibility to contact and instructus on the day of expiry if you don’twish in the money long positions tobe exercised. You also acknowledgethat once the in the money longposition has expired, it’s worthlessand can’t be exercised or traded onthe Market. Any subsequent tradesinvolving the same series will beconsidered to be the opening ofa new position.

22. Change of Participant

22.1 If you receive a Participant ChangeNotice from us at least 20 BusinessDays’ before the date proposed in theNotice for the Change of Participant,you don’t have to agree to the changeof Participant. You may also choose todo any of the things set out below.

22.2 You may choose to terminatethis Agreement in line with clause 14of this Agreement or by instructingus to transfer your Derivatives CCPContracts to another Participant.

35nabtrade ETO PDS

22.3 If you don’t do anything toterminate this Agreement and don’tindicate that you disagree with thechange of Participant, this Agreementwill be novated on the effective date tothe new Participant and will be bindingon all parties as if, on the effective date:

a. the new Participant is a party toyour Agreement, substituting theexisting Participant

b. any rights of ours are transferred tothe new Participant, and

c. we’re released by you from anyobligations arising on or after theeffective date.

22.4 The novation won’t take effectuntil you’ve received notice from thenew Participant, confirming that theyconsent to acting for you on our behalf.As a result, the effective date maybe later than the date written in theParticipant Change Notice.

22.5 If you do anything that isconsistent with the novation of theAgreement to the new Participant,(such as instructing the newParticipant) on or after the effectivedate, we’ll take this as your consent.

22.6 Your Agreement continues forour benefit regarding any rightsand obligations accruing before theeffective date. In addition, to theextent that any law or provision ofany agreement makes the novationnot binding or effective on theeffective date, then your Agreementwill continue to benefit us until thenovation is effective. We’ll hold thebenefit of the Agreement on trust forthe new Participant.

22.7 Nothing in this section will preventthe completion of ETO contracts andDerivatives CCP Contracts by us wherethe obligation to complete thosetransactions arises before the effectivedate. Your Agreement will continueto apply to completing ETO contracts,despite the novation of the Agreementto the new Participant.

23. Adjustments

23.1 You acknowledge that it’s yourresponsibility to know about potentialadjustments to Derivatives CCPContracts that you trade. From timeto time ASX may announce anadjustment to a Derivatives CCPContract specification by varyingthe contract size, exercise price,expiry date, number of contractsand the underlying security.

23.2 You accept all responsibilityfor trading in Derivative CCP Contractswhere the adjustment is pending orhas occurred.

24. ETO Settlement

24.1 You acknowledge that settlementof a Derivative CCP Contract:

a. occurs on T+1, and

b. you’re required to have sufficientcleared funds available in youraccount to meet the debt.

25. Collateral sponsored byWealthub Securities

25.1 You understand that you mayneed to, or want to lodge financialproducts held in your sponsoredholding with us as collateral forany open Derivative CCP Contract.You acknowledge that:

a. you need to be CHESS Participantsponsored by WealthHub Securities

b. you need to provide us with theoriginal completed CollateralCover Authorisation Form(Authorisation Form)

c. the arrangement will be subjectto the terms of the AuthorisationForm, Sponsorship Agreement, ASXClear Operating Rules, and ASXSettlement Operating Rules.

26. Confirmations

26.1 You acknowledge thatConfirmations are issued subject to:

a. directions and decisionsmade under the Rules andtheir requirements

b. customs and usages of theMarket, and

c. correction of errors and omissions.

26.2 We may, at our discretion,send Confirmations for ETOcontracts on your behalf by(unless proven otherwise):

a. email, facsimile transmissionor electronic data interchange(including internet) to yourlast notified email address orfacsimile number (if supplied).You acknowledge that theconditions set out in the Rules applyto these Confirmations. Electroniccommunications are deemed to bereceived on the day of sending, or

b. post to your last notified address —with an assumed receipt date of theBusiness Day after posting.

36nabtrade ETO PDS

26.3 By providing us with an electronicmail address (email address) youauthorise us to dispatch electronicConfirmations to your email address.You’re responsible for:

a. ensuring that your email addressis operational and able toreceive electronic Confirmationswe issue, or

b. advising us of any change toyour email address as soonas practicable.

26.4 You agree, that at our discretion,we may:

a. provide you with access to anelectronic version of a Confirmationvia the Trading Site (or any othermeans we advise), or

b. issue a paper based Confirmationto your mailing address insteadof electronic Confirmation oronline access.

26.5 If you don’t wish to access yourConfirmation online, or you don’t wantto receive an electronic Confirmation atyour email address, you must notify usin accordance with this Agreement.

26.6 We may issue subsequentConfirmations if the previousConfirmation contained an error oromission. In this event, the subsequentConfirmation supersedes all previousConfirmations in all respects.

26.7 You agree that if we issue youwith a Confirmation, it constitutesevidence of the ETO contract unlessit includes an error. Where you haveinformation to show there’s an error,you must bring this to our attention,as soon as reasonable, so that itcan be corrected. Once corrected,the amended Confirmation will be

evidence of the matters set out in it.

37nabtrade ETO PDS

ETO risk disclosure statement (Risk Statement)This Risk Statement doesn’t disclose all aspects of risk associated with trading ETOs and you shouldn’t rely on thisRisk Statement as being a complete explanation of all the risks. When you apply for ETOs, you acknowledge that youshould read and understand this Risk Statement. We recommend that you obtain independent financial, legal andtaxation advice before entering into any financial investment decision.

ASX operates a number of markets in derivatives products, including ETOs and LEPOs. This Risk Statement highlights someof the risks associated with ETOs, but does not highlight risks associated with LEPOs.

You should read this Risk Statement along with this PDS and before you invest, you should carefully assess your experience,investment objectives, financial resources and all other relevant considerations. ETOs aren’t suitable for some clients.Because of the risks associated with trading ETOs, you should invest in them if you understand your rights and obligations inregard to these products and the extent of your exposure to risk.

Effect of leverageor gearing

All financial products carry a degree of risk. The initial outlay of capital may be small relative to thetotal contract value, so the transactions are leveraged or geared. A relatively small market movementmay have a proportionately larger impact on the contract’s value, which could work against you,as well as in your favour.

You may lose all of your margin funds deposited with us in relation to your positions. If the marketmoves against your position, or margin levels are increased, you may have to pay additional fundson short notice to maintain your position, or when you settle your ETO contracts.

If you don’t provide additional funds when we ask for them, we could close out your position andyou will be liable to us for any resulting loss.

Specific product risks ETOs are options over underlying securities or an underlying index. Buyers of options and sellersof options should understand the mechanics of the two different types of options — call and putoptions — and the nature and extent of the risks, rights and obligations associated with each.

The value of an ETO will depend on many factors, such as the exercise price, the price of theunderlying shares or the level of the underlying index, the volatility of the underlying shares or theunderlying index, the time remaining to the expiry date, interest rates, dividends and other factorsand general risks that apply to markets. The time remaining to the expiry date becomes very relevantfor short dated options.

The buyer of a call or put option has a known and limited potential loss. If a purchased option expiresworthless, the buyer will lose the total value paid for the option (the premium), plus transactioncosts. Selling ETO’s potentially involves much greater risk than buying options. The premium theseller of an ETO receives is fixed and limited, but the seller may incur losses greater than thatamount. For more information on ETOs, you should consider your own investment objectives,financial situation and particular needs before making a decision, and read the ASX publication,“Understanding Options Trading” at asx.com.au/documents/resources/UnderstandingOptions.pdf

Risk-reducing ordersor strategies

Placing certain orders (such as stop loss orders), to limit losses to certain amounts, might not beeffective because market conditions may make it impossible to carry out these orders. Strategiesusing combinations of positions, such as spread and straddle positions, may be as risky as takingsimple long or short positions.

Terms and conditionsof ETO contracts

You should ask your adviser about the terms and conditions of ETO contracts and any ASX derivativeproducts that you’re thinking about investing in. In some situations, ASX or ASX Clear may modify thespecifications of outstanding contracts.

38nabtrade ETO PDS

Suspending orrestricting trading andpricing relationships

Market conditions (such as illiquidity) or actions by ASX or ASX Clear (for example, suspendingtrading in an ASX derivative product), may increase the risk of loss by making it difficult or impossibleto make transactions or close out existing positions. Normal pricing relationships mightn’t exist incertain circumstances — for example, in periods of high buying or selling pressure, high marketvolatility or illiquidity in the market for a particular ETO. The Rules give ASX and ASX Clear broadpowers to take action in the interests of maintaining fair and orderly markets. Sometimes, this mayaffect your positions.

Margins, cash and property We may have to pay margins or provide property as collateral to ASX Clear in connection with itdealing in ETOs for you. Under our Agreement, you’ll need to provide us with money or someform of security so ASX Clear can manage the risks associated with dealing in ETOs.

You should familiarise yourself with the protections for money or other property you deposit fortransactions, (particularly if we become insolvent or bankrupt). The Corporations Act 2001 (Cth) andother legislation and Rules govern the extent to which you may recover the money or property thatyou give us. In certain circumstances you may have a claim against the National Guarantee Fund.

Fees and charges Before you instruct us to deal in any ETO, you should read this PDS and the nabtrade FinancialServices Guide so you’re aware of all fees and other charges that you may be liable for as described inthis PDS and the nabtrade Financial Services Guide.

Trading facilities As with all trading facilities and systems, the systems used in the market are vulnerable to temporarydisruption or failure. This may result in your order not being executed as you instructed or notexecuted at all. Your ability to recover certain losses may depend on limits on liability imposed bythe system provider, ASX, ASX Clear or us.

Risks of margin loancovered call writing

Selling covered call ETOs over margined securities is a risky trading strategy that should only beattempted when you understand all of the risks. Subject to us having appropriate arrangementsin place with a margin lender, we may allow you to do this. You may be required to enter intoadditional arrangements with us about those arrangements. You should be aware if you entercovered-call arrangements that you may suffer significant losses if the price of the shares fall.In addition, you’ll also have obligations to repay the loan to the margin lender. You shoulddiscuss this with your margin lender and financial adviser and consider these risks.

39nabtrade ETO PDS

PrivacyThis notification covers NationalAustralia Bank Ltd ABN and its related companies (the ‘Group’).It includes all the banking, financing,funds management, financial planning,superannuation, insurance, brokingand e-commerce organisations inthe Group. We are grateful for thetrust and confidence you have inus to safeguard your privacy. Thenotification tells you how we collectyour information, what we use itfor and who we share it with. It alsopoints out some key features of ourPrivacy Policy available at www.nab.com.au/privacy. By providing personalinformation to us, you consent tothe collection, use and disclosureof your information in accordancewith this Notification and any otherarrangements that apply between us.

How we collect informationfrom you

We’ll collect your personal informationfrom you directly whenever we can, forexample when you fill out a form withus, when you’ve given us a call, usedour websites (including via cookies) ormobile applications or dropped intoone of our branches. (See our CookiesPolicy www.nab.com.au/cookies formore information). Sometimes wecollect your personal informationfrom third parties. You may not beaware that we have done so. If wecollect information that can be used toidentify you, we will take reasonablesteps to notify you of that collection.

How we collect yourinformation fromother sources

Sometimes we collect informationabout you from other sources. We maycollect information about you that ispublicly available (for example frompublic registers or social media), ormade available by third parties. We dothis where:

• we distribute or arrange productson behalf of others, including ourbusiness partners;

• we can’t get hold of you and needto update your contact details;

• we need information from thirdparties about an application youmake through us;

• we need information for fraudprevention purposes;

• we are checking the security youare offering;

• we can learn insight about yourfinancial needs, such as throughproperty information;

• you have consented to thirdparties sharing it with us, suchas organisations we have loyaltyprograms with or we sponsor;

• at your request, we exchangeinformation with your legalor financial advisers or otherrepresentatives.

We may use or disclose informationabout you in order to combinethe information that we hold withinformation collected from or held byexternal sources.

When the law authorisesor requires us tocollect information

We may collect information about youbecause we are required or authorisedby law to collect it. There are laws thataffect financial institutions, includingcompany and tax law, which requireus to collect personal information.For example, we require personalinformation to verify your identityunder Commonwealth Anti-MoneyLaundering law.

NAB believes that by applying for thisaccount, you’re not a US citizen or taxresident. If you are a US citizen or taxresident, you’ll need to advise NAB bycalling between am andpm (AEST/ADST) Monday to Friday.

How we use your information

We use your information to provideyou with the product or service youasked for, and for other purposesincluding:

• giving you information abouta product or service includingfinancial help, guidance and advice;

• considering whether you areeligible for a product or service,including identifying or verifyingyou or your authority to act onbehalf of a customer;

• processing your application andproviding you with a product orservice;

• administering the product orservice we provide you, whichincludes answering your requestsand complaints, varying productsand services, conducting marketresearch, and managing ourrelevant product portfolios;

40nabtrade ETO PDS

• telling you about other productsor services that may be of interestto you, or running competitionsand other promotions (this canbe via email, telephone, SMS, iM,mail, or any other electronic meansincluding via social networkingforums), unless you tell us not to;

• identifying opportunities to improveour service to you and improvingour service to you

• determining whether a beneficiarywill be paid a benefit;

• assisting in arrangements withother organisations (such as loyaltyprogram partners) in relation toa product or service we makeavailable to you;

• allowing us to run our businessand perform administrative andoperational tasks (such as trainingstaff, risk management; developingand marketing products andservices, undertaking planning,research and statistical analysis; andsystems development and testing)

• preventing or investigating anyfraud or crime, or any suspectedfraud or crime;

• as required by law, regulation orcodes binding us; and

• for any purpose for which you havegiven your consent.

You can let us know at any time ifyou no longer wish to receive directmarketing offers from the Group.We will process your request assoon as practicable. Where you havesubscribed to something specific (liketo hear from one of our sponsoredorganisations) then these subscriptionswill be managed separately. If you nolonger wish to receive these emailsclick the unsubscribe link included inthe footer of our emails.

How we use your creditinformation

In addition to the ways for usingpersonal information mentionedabove, we may also use your creditinformation to:

• enable a mortgage insurer ortitle insurer to assess the riskof providing insurance to usor to address our contractualarrangements with the insurer;

• assess whether to accept aguarantor or the risk of a guarantorbeing unable to meet theirobligations;

• consider hardship requests; and

• assess whether to securitise loansand to arrange the securitising ofloans.

What happens if you don’tprovide your informationto us?

If you don’t provide your informationto us, we may not be able to:

• provide you with the product orservice you want;

• manage or administer your productor service;

• personalise your experience withus;

• verify your identity or protectagainst fraud; or

• let you know about other productsor services from our Group thatmight better meet your financial,e-commerce and lifestyle needs.

Sharing your information

We may share your information withother organisations for any purposesfor which we use your information.

Sharing with the Group

We may share your personalinformation with other Groupmembers. This could depend on theproduct or service you have appliedfor and the Group member you aredealing with. Where appropriate weintegrate the information we holdacross the Group to provide us witha complete understanding of youand your needs, including giving youaccess to the Group or related productsyou hold via Internet Banking.

Sharing with MLC Limited

NAB acts for MLC Limited ABN (described as MLC LifeInsurance) in distributing their lifeinsurance products. MLC Limited isno longer part of the NAB Groupof companies. We may exchangepersonal information with MLC Limitedor their service providers in orderto administer and manage your lifeinsurance products that are issuedby them. We may also need to shareinformation so as to ensure:

• your insurance premium iscalculated correctly (balanceinformation may be required to beshared so your insurance can becalculated) and where authorised,make payments on your behalf toMLC Limited;

• insurance claims and benefits arepaid;

• insurance products are viewableto service customer contact (thisincludes showing your insuranceproducts in NAB Internet Bankingif you have a NAB Internet BankingID);

• NAB and MLC Limited can both tellyou about our respective marketingand products offers (includingensuring customers who hold MLCLimited products are excluded fromNAB Group campaigns marketingMLC Limited products);

• a smooth customer experiencewhen you contact us, including:

• we can transfer you to the rightservice centre;

• where appropriate, NAB and MLCLimited can cooperate in order tohandle your complaint;

• being able to provide assistanceshould you wish to speak aboutyour MLC Limited products held(for example, where possible,we may assist by updating contactdetails on request).

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Some of the information exchangedwill be stored and visible within NABGroup customer databases; with someof these databases being accessible toMLC Limited for a transition period. Allinformation stored in these databasesis subject to this privacy policy as wellas NAB Group’s security proceduresand controls.

Sharing at your request

We may need to share your personalinformation with your representativeor any person acting on your behalf(for example, financial advisers, lawyers,settlement agents, accountants,executors, administrators, trustees,guardians, brokers or auditors) andyour referee such as your employer(to confirm details about you).

Sharing with Credit Reporting bodies

When we’re checking your creditworthiness and at other times, wemight share information about youwith credit reporting bodies. Whenwe give your information to a creditreporting body, it may be included inreports that the credit reporting bodygives other organisations (such asother lenders) to help them assessyour credit worthiness.

Some of the information that wegive to credit reporting bodies mayreflect adversely on your creditworthiness, for example, if you failto make payments or if you commita serious credit infringement (likeobtaining credit by fraud). That sort ofinformation may affect your ability toget credit from other lenders.

With your consent, personalinformation may also be sharedwith credit reporting bodies orother approved third parties whoare authorised to assess the validityof identification information. Thesechecks help us verify whether youridentity is real and are not acredit check.

Sharing with third parties

We may disclose your personalinformation to third parties outside ofthe Group, including:

• those involved in providing,managing or administering yourproduct or service;

• authorised representatives of theNAB Group who sell products orservices on our behalf;

• credit reporting bodies or otherapproved third parties who areauthorised to assess the validityof identification information;

• insurance, investment,superannuation and managed fundsorganisations, and their advisersand service provider;

• medical professionals, medicalfacilities or health authorities whoverify any health information youmay provide;

• real estate agents, valuers andinsurers (including lenders’mortgage insurers and title insurers), re-insurers, claim assessors andinvestigators;

• brokers or referrers who refer yourapplication or business to us;

• other financial institutions, such asbanks, as well as guarantors andprospective guarantors of yourfacility;

• organisations involved in debtcollecting, including purchasersof debt;

• fraud reporting agencies (includingorganisations that assist with fraudinvestigations and organisationsestablished to identify, investigateand/or prevent any fraud, suspectedfraud, crime, suspected crime, ormisconduct of a serious nature);

• organisations involved in surveyingor registering a security property orwhich otherwise have an interest insuch property;

• organisations we sponsor andloyalty program partners, includingorganisations the NAB Group hasan arrangement with to jointly offerproducts or has an alliance with toshare information for marketingpurposes;

• companies we arrange or distributeproducts for, such as insuranceproducts;

• rating agencies to the extentnecessary to allow the rating agencyto rate particular investments;

• any party involved in securitisingyour facility, including the ReserveBank of Australia (sometimesthis information is de-identified),re-insurers and underwriters, loanservicers, trust managers, trusteesand security trustees;

• service providers that maintain,review and develop our businesssystems, procedures and technologyinfrastructure, including testing orupgrading our computer systems;

• payments systems organisationsincluding merchants, paymentorganisations and organisationsthat produce cards, cheque booksor statements for us;

• our joint venture partners thatconduct business with us;

• organisations involved in acorporate re-organisation ortransfer of NAB Group assets orbusiness;

• organisations that assist withour product planning, analytics,research and development;

• mailing houses and telemarketingagencies and media organisationswho assist us to communicatewith you, including media or socialnetworking sites;

• other organisations involved in ournormal business practices, includingour agents and contractors, aswell as our accountants, auditorsor lawyers and other externaladvisers (e.g. consultants and anyindependent customer advocates);

• government or regulatory bodies(including the Australian Securitiesand Investment Commissionand the Australian Tax Office) asrequired or authorised by law(in some instances these bodiesmay share it with relevant foreignauthorities); and

• where you’ve given your consent orat your request, including to yourrepresentatives, or advisors.

42nabtrade ETO PDS

Sharing outside of Australia

We run our business in Australiaand overseas. We may need to sharesome of your information (includingcredit information) with organisationsoutside Australia. Sometimes, we mayneed to ask you before this happens.You can view a list of the countries inwhich those overseas organisations arelocated at www.nab.com.au/privacy/overseas-countries-list/

We may store your information incloud or other types of networked orelectronic storage. As electronic ornetworked storage can be accessedfrom various countries via an internetconnection, it’s not always practicableto know in which country yourinformation may be held. If yourinformation is stored in this way,disclosures may occur in countriesother than those listed.

Overseas organisations may berequired to disclose information weshare with them under a foreign law.In those instances, we will not beresponsible for that disclosure.

We will not share any of your creditinformation with a credit reportingbody, unless it has a businessoperation in Australia. We arenot likely to share credit eligibilityinformation (that is, credit informationwe obtain about you from a creditreporting body or that we derive fromthat information) with organisationsunless they have business operationsin Australia. However in the eventNAB seeks assistance from a relatedcompany to manage defaulting loans,we may need as a consequencedisclose credit eligibility informationto the Bank of New Zealand, locatedin New Zealand. We are likely to shareother credit information about youwith organisations outside Australia.A list of countries in which thoseoverseas organisations are located isset out above.

Accessing your information

You can ask us to access informationthat we hold about you. You havespecial rights to access creditinformation we obtain about youfrom a credit reporting body or thatwe derive from that information.You can find out how to access yourinformation (including your crediteligibility information) by readingour Privacy Policy, available atwww.nab.com.au/privacy or by calling and asking us for a copy.

Correcting your information

You can ask us to correct informationwe hold about you. You havespecial rights to correct your creditinformation. You can find out how tocorrect your information (includingyour credit information) by readingour Privacy Policy, available atwww.nab.com.au/privacy or by calling and asking us for a copy.

Complaints

If you have a complaint about a privacyissue, please tell us about it. You canfind out how to make a complaint(including special rights for creditinformation complaints) and how wewill deal with these complaints, byreading our Privacy Policy, available atwww.nab.com.au/privacy or by calling and asking us for a copy.

Contact us

We care about your privacy. Pleasecontact us if you have any questionsor comments about our privacypolicies and procedures. We welcomeyour feedback.

You can contact us by:

• submitting an online Compliments,Suggestions or Complaints form viawww.nab.com.au

• calling our contact centre on (Hearing impairedcustomers can call TTY )

• speaking to us in person at a branch

Contact details for creditreporting bodies

When we’re checking your creditworthiness and at other times, wemight share information aboutyou with credit reporting bodies.The contact details of those creditreporting bodies are set out below.Each credit reporting body has acredit reporting policy about howthey handle your information. You canobtain copies of these policies at theirwebsites.

Illionwww.illion.com.au

• illion’s credit reporting policy isset out at www.illion.com.au/legal/illion-credit-reporting-policy-australia

Phone:

Email: pac.austral@illion.com.au

Experian Australia –www.experian.com.au

• Experian’s credit reporting policy isset out at www.experian.com.au/privacy-policy

Phone:

Mail: Consumer SupportExperian AustraliaPO Box North Sydney NSW

Equifax Australia Information Servicesand Solutions Pty Limitedwww.mycreditfile.com.au

• Equifax’s credit reporting policy isset out at www.equifax.com.au/credit-reporting-privacy

Mail: Equifax Public AccessPO Box North Sydney NSW

43nabtrade ETO PDS

Contact credit reportingbodies if you think you havebeen the victim of a fraud

If you believe that you have been orare likely to be the victim of fraud(including identity fraud), you canrequest a credit reporting body notto use or disclose the informationthey hold about you. If you do this,the credit reporting body mustn’t useor disclose the information duringan initial day period without yourconsent (unless the use or disclosureis required by law). This is known as aban period.

If, after the initial day ban period,the credit reporting body believes onreasonable grounds that you continueto be or are likely to be the victim offraud, the credit reporting body mustextend the ban period as they thinkreasonable in the circumstances. Thecredit reporting body must give you awritten notice of the extension.

Contact credit reportingbodies if you don’t want yourinformation used by them fordirect marketing/pre-screening purposes

Credit reporting bodies can use thepersonal information about youthat they collect for a pre-screeningassessment at the request of a creditprovider unless you ask them notto. A pre-screening assessment isan assessment of individuals to seeif they satisfy particular eligibilityrequirements of a credit provider toreceive direct marketing. You havethe right to contact a credit reportingbody to say that you don’t want yourinformation used in pre-screeningassessments. If you do this, the creditreporting body must not use yourinformation for that purpose.

44nabtrade ETO PDS

PART FOUR:APPLICATION FORMS

Completing the forms

Before you start filling in this form it’simportant that you:

• are a nabtrade client and haveread and agreed to the terms andconditions of the nabtrade ClientAgreement and the nabtradeFinancial Services Guide

• have an existing CHESS sponsorednabtrade Trading Account

• access, read and understandthe following ASX booklets(published by ASX) availableat asx.com.au, including:

− Understanding Options Trading

− Understanding Option Strategies

− Understanding Margins

• read and understand the termsand conditions contained in thenabtrade ETO PDS including the:

− ETO Client Agreement

− ETO Risk Disclosure Statement,and

− NAB Privacy Notification

• complete the Collateral CoverAuthorisation Form and send theoriginal copy to us, and

• complete the mandatory ETOquestionnaire, which is onlyavailable online at the Trading Site,to make sure you meet the criteria.Until you have successfullycompleted this questionnaire,you won’t be able to trade ETOs.

This application applies only to personsreceiving this PDS in Australia.We reserve the right to decline yourapplication.

Contact us

By phone 13 13 80

By mail nabtradeGPO 4545Melbourne VIC 3001

Online nabtrade.com.au

45nabtrade ETO PDS

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ETO Application Form 1

nabtrade Trading Account number Name(s) in which your Trading Account is held

ETO Application Form

Please use black or blue pen and write in CAPITALS. If you need help completing this form, please call . You can onlyapply to trade Exchange Traded Options (ETOs) if you have a Trading Account.

Please don’t use photocopies of this form—it includes unique information to help process your application faster.

WealthHub Securities LimitedABN AFSL No.

nabtradeGPO Box Melbourne VIC

Telephone nabtrade.com.au

Section 1 nabtrade Trading Account details

Section 2 Before you sign

Before you start filling in this form it is important that you:

• are a nabtrade client and have read and understood theterms and conditions of the nabtrade Client Agreement

• have an existing CHESS sponsored nabtrade Trading Account

• access, read and understand the following ASX booklets(published by the ASX) available at asx.com.au, including:

– Understanding Options Trading

– Understanding Options Strategies

– Understanding Margins

• read and understand the terms and conditions contained inthe nabtrade ETO PDS including the:

– ETO Client Agreement

– the ETO Risk Disclosure Statement, and

– the NAB Privacy Notification

• complete the Collateral Cover Authorisation Form andreturn the original copy by post, and

• complete the mandatory ETO Questionnaire which is onlyavailable online at nabtrade.com.au to make sure you meetthe criteria

– Until you have successfully completed this outstandingaction you won’t be able to trade ETO’s.

*F1DI14000000000F** F 1 D I 1 4 0 0 0 0 0 0 0 0 0 F *

Section 3 Signatures

Please provide signatures of all persons authorised to operate the account.

Applicant : Individual, Director of Company, Company Secretary or Trustee

Given name(s) / Family name (PLEASE PRINT) Signature

✗ Date / /

Applicant : Individual, Director of Company, Company Secretary or Trustee

Given name(s) / Family name (PLEASE PRINT) Signature

✗ Date / /

Applicant : Individual, Director of Company, Company Secretary or Trustee

Given name(s) / Family name (PLEASE PRINT) Signature

✗ Date / /

ETO Application Form 2

Section 4 Next Steps

So that your ETO Account can be opened, you also need to complete the Collateral Cover Authorisation and returnit with your completed ETO Application form.

Each applicant who wishes to trade ETOs will also need to successfully complete the online ETO questionnaire,which is available at nabtrade.com.au

Please complete and return this form and the Collateral Cover Authorisation (copies or faxes won’t be accepted)by post to:

Post:

nabtradeGPO Box 4545Melbourne VIC 3001

A144436-0718

The nabtrade service (nabtrade) is provided by WealthHub Securities Limited ABN , AFSL No. (WealthHub Securities). WealthHub Securities isa Market Participant under the ASIC Market Integrity Rules and a wholly owned subsidiary of National Australia Bank Limited ABN , AFSL No. (NAB). NAB doesn’t guarantee its subsidiaries’ obligations or performance, or the products or services its subsidiaries offer. © National Australia Bank Limited.

Collateral Cover Authorisation 1

Your Account Number Holder Identification Number (HIN)

NT

Name

Collateral coverauthorisation

Please use black or blue pen and write in CAPITALS. If you need help completing this form, please call us on .

Please don’t use photocopies of this form — it includes unique information to help us process your application faster.

ASX Clear number – FOR OFFICE USE ONLY

WealthHub Securities LimitedABN AFSL No.

nabtradeGPO Box Melbourne VIC

Telephone nabtrade.com.au

Section 1 Account Details

Section 2 Declaration

I/We acknowledge and agree that:

. authorise my Controlling Participant to, without limitation, reserve, withdraw, transfer or otherwise deal with the FinancialProducts (the “Collateral”) registered in the name of the Registered Holder in the ASX Clear Pty Limited, ABN (“ASX Clear”) Subposition as Collateral Cover for obligations in respect of Options Market Contracts registered in my accounts(Accounts) with a Clearing Participant (ASX Clear Participant).

. The Registered Holder acknowledges that on behalf of the Registered Holder the Controlling Participant will reserve, withdraw,transfer or otherwise deal with the Collateral in the ASX Clear Subposition, by sending the appropriate Collateral lodgementmessage in accordance with the ASX Clear Operating Rules and Procedures (as amended from time to time).

. In registering Collateral in the ASX Clear Subposition, the Registered Holder acknowledges that the Collateral will be subjectto a security interest in favour of ASX Clear, from the time they are reserved to the ASX Clear Subposition as in the mannerreferred to above, and will remain subject to the security interest until ASX Clear permits it to be withdrawn from the ASXClear Subposition.

. The Registered Holder acknowledges that the security interest secures all amounts and obligations owing by the ASX ClearParticipant to ASX Clear in connection with the Accounts.

. The Registered Holder warrants that, the Collateral is not and must not be subject to any other security interest, other thanwhere the parties to the security interest agree between themselves in writing that ASX Clear’s security interest in respectof the Collateral has priority over that security interest, and the parties hold the benefit of such agreement on trust for thebenefit of ASX Clear, unless ASX Clear otherwise agree in writing.

. If the Controlling Participant is unable to insert the HIN at the time the Register Holder signs this form, the Registered Holderirrevocably authorises the Controlling Participant to insert the HIN on this agreement on the Registered Holder’s behalf. TheControlling Participant agrees that it will notify the Registered Holder of the HIN in writing as soon as reasonably possible.

. Defined terms have the same meaning as defined in the ASX Clear Operating Rules or the ASX Settlement Operating Rulesand Procedures (as amended from time to time).

. If the ASX Clear Participant is unable to insert the Account Numbers and/or HIN at the time the Registered Holder signs thisform, the Registered Holder irrevocably authorises the ASX Clear Participant to insert the Account Numbers and/or HIN on thisagreement and agrees the ASX Clear Participant will insert the Account Numbers and/or HIN on the Registered Holders behalf,prior to lodging this Authorisation with ASX Clear. The ASX Clear Participant agrees that it will notify the Registered Holder ofthe account numbers and/or HIN in writing as soon as reasonably possible.

*F1DI13000000000F** F 0 D I 1 3 0 0 0 0 0 0 0 0 0 F *

Collateral Cover Authorisation 2

Section 3 Signatures

Please provide signatures of all persons registered to operate the Trading Account.

Person :*

Given name(s) / Family name (PLEASE PRINT) Signature

✗ Date / /

Person :*

Given name(s) / Family name (PLEASE PRINT) Signature

✗ Date / /

Person :*

Given name(s) / Family name (PLEASE PRINT) Signature

✗ Date / /

* If a corporation, must be signed in accordance with the Corporations Act (Cth), or if signed under Power of Attorney,a copy of the Power of Attorney must also be attached to this Authorisation.

Witnessed by: Mandatory

Given name(s) / Family name (PLEASE PRINT) Signature

✗ Date / /

Section 4 Next Steps

Please complete and return this form (copies or faxes won’t be accepted) and any attachments by post to:

Post:

nabtradeGPO Box 4545Melbourne VIC 3001

A109913-0518

The nabtrade service (nabtrade) is provided by WealthHub Securities Limited ABN 83 089 718 249, AFSL No. 230704 (WealthHub Securities). WealthHub Securities isa Market Participant under the ASIC Market Integrity Rules and a wholly owned subsidiary of National Australia Bank Limited ABN 12 004 044 937, AFSL No. 230686(NAB). NAB doesn’t guarantee its subsidiaries’ obligations or performance, or the products or services its subsidiaries offer. © National Australia Bank Limited.

50nabtrade ETO PDS

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51nabtrade ETO PDS

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© 2019 National Australia Bank Limited ABN 12 004 044 937 AFSL and Australian Credit Licence 230686 A109150 -0619