Before you apply to open an account with OMF Markets, you must carefully consider whether trading the particular financial product is appropriate for you in light of your circumstances and financial position. You should not trade unless you understand the nature of the contract and the extent of your exposure to risk.
General Advice Warning
This has been prepared for general information only and is not intended as advice. The information contained on the website, Application Forms and Disclosure documents has been prepared without taking into account any persons objectives, financial situation or needs. OMF Markets recommends you seek independent advice from your financial adviser, accountant and/or tax agent.
Make sure you have read and understood these important documents before completing the Client Application Form. They contain important information about our services to you and the products provided. We recommend that you download these documents and keep in a safe place for future reference.
- OMF Markets FX Master Agreement
- Financial Services Guide (FSG)
- Product Disclosure Statement Deliverable Foreign Exchange (PDS FX)
- Product Disclosure Statement Foreign Exchange Options (PDS FXO)
Information in the FSG, PDS FX and PDS FXO can change from time to time. When information that changes is not materially adverse to clients, we may update the information in these documents or by publishing an update on our website. You can access the latest version of these documents free of charge from our website or by contacting us.
Local Regulatory Restrictions
This website can be accessed worldwide. The information provided is however only intended for use by, any person in any country where such use would not be contrary to local law or regulation. None of the products and services referred to on this website is available to persons residing in any country where the provision of such services or investments would be contrary to local law or regulation. It is your sole responsibility to ascertain the terms of and comply with any local law or regulation to which you are subject.
General risks trading foreign exchange and derivatives
All foreign exchange products are subject to investment risk, including spot and forward deliverable foreign exchange contracts. You should only trade with money you can afford to lose. Forex (Margin FX) and other derivatives trading carries high level of risk. You could lose more than your initial investment and may owe money under the derivative. Trading Forex (Margin FX) may not be suitable for you. You should ensure that you fully understand the risks involved before trading. Margin FX trading is complex and risky and requires a high amount of knowledge, research and monitoring. Even the most skilled and experienced forex traders have difficulty predicting movements in currencies because so many factors affect exchange rates. Markets are open 24 hours a day 6 days a week (due to time zones), so you need to be available to monitor your investment.
Risk arising from issuer’s credit worthiness
When you enter into spot and forward deliverable foreign exchange contracts, currency options and margin FX transactions with OMF Markets, you are exposed to a risk that OMF Markets cannot make payments as required.
Each of our products has different product features and our products may differ from those offered by other product issuers. It is important that you read the Product Disclosure Statement and FX Master Agreement to ensure you understand how each of our products operate before trading. Features to consider include, but are not limited to:
- How to open a transaction
- Deposit and margining requirements
- Termination and extension of transactions
- Types of orders and limitations of market orders
- How we get paid
FX Options and Margin FX are OTC derivatives. OMF Markets is not obliged to sell or buy back these products before the settlement date and it cannot be traded on a market with anyone else
Deposit and margin risks
You may be required to make Initial Risk Deposit or one or more Additional Risk Deposits for Forward Contracts. If you are unable to pay any Additional Risk Deposits on time, we may close out the transaction and any other transaction that you have open with OMF Markets without notice.
OMF may require you to make additional payments in margin payments to contribute towards your future obligations is you are the seller of an FX Option. These payments may be required at short notice and can be substantial.
As Margin FX is a leveraged product, you are only required to provide a small percentage of the total trade value (as an initial margin) upfront. You need to be able to afford to lose more than the amount you invested.
As exchange rates fluctuate, the leveraged nature of a Margin FX contract will cause significant variations in the value of your position. These fluctuations can work in your favour or against you.
If the currency fluctuates against you, you may be required to provide further variation margin. It is important to understand that major currency shifts can result in unlimited losses on your position that exceed your posted margin.
Note: that margining works differently depending on whether you prefer to place orders through the desk or OMF cTrader. Where an unrealised loss erodes all of your balance above the initial margin required, OMF cTrader will automatically close out your position, therefore, there are no margin calls on OMF cTrader and you need to monitor your open positions.
In volatile markets, OMF Markets may require you to make additional margin payments to contribute towards your future obligations under these derivatives. These payments may be required at short notice and can be substantial.
Market order risks
Your Market Order may not be filled. OMF Markets will use its best endeavours to fill all Market Orders but does not guarantee that a Market Order will be filled. It is your responsibility to ensure you have adequate protection from movements in the exchange rate if your Market Order is not filled by OMF Markets. Risk management systems such as stop loss orders, will only give you limited protection by capping your losses. You may have to pay a premium price to guarantee your stop loss order.
Delay in receiving funds may happen due to technical or administrative problems by us or by intermediaries for reasons that are outside our control.
Technology risks in relation to our trading platforms are inherent in every FX contract. For example, disruptions in our operational processes such as communications, computers, computer networks, software errors and bug or external events may lead to delays in execution and settlement of transactions. In the event that a disruption occurs, you may be unable to trade in an FX product offered by us and you may suffer a financial loss or opportunity to close a position.
Entering into a FX transaction to hedge a risk, locks in an exchange rate. As exchange rates fluctuate, the rate may improve after you have locked in a rate or another provider may offer a slightly better rate at any particular point in time.
No cooling off
There is no “cooling off” period for foreign exchange transactions. That is, you can’t change your mind after you’ve entered into a foreign exchange transaction.
Limitations of ASIC regulation
OMF Markets holds an Australian Financial Services licence (AFS licence) issued by ASIC and is required to meet certain regulations.
You should be aware that:
- licensing and regulation does not imply endorsement by ASIC;
- does not protect you from investment loss; and
- does not mean that you should disregard the risks involved in trading in retail OTC derivatives.
OMF Markets is part of a corporate group. OMF Markets hedges its transactions with OM Financial Limited, a New Zealand entity. OMF Markets’ AFS licence and Australian regulation only covers the financial services provided in Australia and does not necessarily cover services provided by other members of the corporate group.
OMF Markets is committed to meeting the regulatory requirements for Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF). To comply with these requirements we may:
- require you to provide to us, or otherwise obtain, any additional documentation or other information;
- suspend, block or delay transactions on your account, or refuse to provide services to you;
- report any, or any proposed, transaction or activity to any body authorised to accept such reports relating to AML/CTF or any other law.
Other legal risk
Australia is a member state of the United Nations and must implement United Nations Security Council sanctions. It may also implement other international sanctions and impose sanctions of its own. Sanctions can cover various subject matters including financial restrictions, which may have the consequence of meaning we can’t deal with certain persons, entities or currencies. This means that if we become aware that you are such a person or entity, then we may be required to suspend, cancel or refuse you services or close or terminate any account, facility, transaction, arrangement or agreement with you. This may be at a significant cost to you.
Other important documents
If trading US equities, you’ll be required to complete and return a US Taxation treaty form (W8BEN or W8BENE for trusts and companies).
Questions? Get in touch and we can help