Home Legal Target market determinations

Prepared and effective 30 September 2023

OzForex Limited, trading as OFX (“OFX”, “we” or “us”) is an issuer and distributor of financial products to retail and wholesale clients. We have prepared the following Target Market Determinations (“TMD”) for each of our financial products in accordance with the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Act (Cth) 2019 (“Treasury Laws”).

The purpose of each TMD is to define a target market for each product. OFX is committed to taking steps to ensure each of its products is distributed by itself and other distributors in a way that is consistent with the intended target market and distribution conditions and reporting requirements outlined in the TMD.

Please note a TMD is not a Product Disclosure Statement (‘PDS’) and is not intended to provide financial advice. Any advice provided in this document is general advice only and the information in a TMD does not take into account the investment objectives, financial situation and needs of any particular person. We make no recommendation as to the merits of any financial product referred to. Please review our PDS and Financial Services Guide (‘FSG’) prior to making a decision. In addition, client specific terms and conditions will apply to any product issued to you.

OFX FINANCIAL PRODUCTS

Key Product Attributes

Spot Transfers

  • Key attributes:
    • Send money and exchange currencies, electronically
    • Exchange one currency for another at an agreed exchange rate (the ‘Spot Rate’) within 2 days of the transfer being booked
    • Limited to pre-determined amounts, with no exposure to a fluctuating exchange rate
    • Requires payment upon booking; and
    • All payments made are fully deliverable (the cost of the transfer is locked in at the time of booking the transfer).

    Forward Exchange Contract (‘Forwards’)

    • Key attributes:
      • Send money and exchange currencies, electronically
      • Exchange one currency for another at an agreed exchange rate (the ‘Forward Rate’), which may be better or worse than the Spot Rate when accounting for things such as interest rates, at some time up to 12 months into the future;
      • Limited to pre-determined amounts, with no exposure to a fluctuating exchange rate
      • Payment may be required in full or in part at the time of booking or in future, in advance of the date of transfer (the ‘Maturity Date’); and
      • All payments made are fully deliverable (the cost of the transfer is locked in at the time of booking the transfer).

    Options

    • Key attributes:
      • Send money and exchange currencies, electronically;
      • The right but not the obligation to exchange one currency for another at an agreed exchange rate (the ‘Strike Rate’), which may be better or worse than the Spot Rate when accounting for interest rates, at some time up to 12 months into the future;
      • Both the desired exchange rate (‘Strike Rate’) and the date on which the client must make an election whether or not to Exercise the Option (‘Expiry Date’) are fixed (a “European” style Vanilla Option);
      • Requires the payment of a fee (the ‘Premium’) upon booking; and
      • Foreign currency exchange not exercised if Option not exercised.

    Global Currency Account (‘GCA’)

    • Key attributes:
      • Receive and hold funds in multiple currencies;
      • Send money and exchange currencies, electronically;
      • Exchange currencies at agreed rates of transfer and times;
      • No fees to open a GCA; and
      • All payments made are fully deliverable (the cost of the transfer is locked in at the time of booking the transfer).

    TARGET MARKET

    Product Eligibility

    OFX clients must:

    • be at least 18 years old;
    • have a means by which to transfer funds electronically;
    • pass OFX customer due diligence checks, and provide the required information for OFX to complete these checks;
    • have the authority to bind any person (including non-natural legal persons) on whose behalf they are using the OFX product;
    • have a valid mobile number;
    • have a valid email address; and
    • agree to the OFX global Terms & Conditions and any region or product-specific terms.

    Target Market

    Spot Transfers

    • Needs:
      • Send money and exchange currencies, electronically; and
      • Transfer money from one country to another on a one-off or repeating basis, immediately.
    • Objectives:
      • Save money on international transfer fees at a competitive exchange rate(s); and
      • Transfer money quickly and conveniently.
    • Financial situation:
      • Ability to pay out full amount of transfer booked at times notified by OFX.

    Forward Exchange Contracts (‘Forwards’)

    • Needs:
      • Send money and exchange currencies, electronically; and
      • Transfer money from one country to another on a one-off or repeating basis, at a point in the future.
    • Objectives:
      • Save money on international transfer fees at a competitive exchange rate(s); and
      • Manage currency market volatility risk and foreign exchange exposure by ‘locking in’ a future exchange at a specified exchange rate.
    • Financial situation:
      • Ability to pay out full amount of transfer booked at times notified by OFX.

    Option Exchange Contracts (‘Options’)

    • Needs:
      • Send money and exchange currencies, electronically; and
      • Transfer money from one country to another on a one-off or repeating basis, at a point in the future.
    • Objectives:
      • Save money on international transfer fees at a competitive exchange rate(s); and
      • Manage currency market volatility risk and foreign exchange exposure by ‘locking in’ the ability to exchange at a specified exchange rate.
    • Financial situation:
      • Ability to pay out full amount of any Option exercised (transfer booked) at times notified by OFX. 

    Global Currency Account (‘GCA’)

    • Needs:
      • Send money and exchange currencies, electronically; and
      • Transfer money from one country to another on a repeating basis, oftentimes a part of a business, now or in the future.
    • Objectives:
      • Save money on international transfer fees at a competitive exchange rate(s); and
      • Transfer money quickly and conveniently.
    • Financial Situation:
      • Ability to pay out full amount of any transfer booked at times notified by OFX.

    Target Market Appropriateness

    • Spot Transfers: This product is suitable for the target market because it is limited to predetermined values chosen by the client and there is no exposure to fluctuation of FX rates as the Spot Rate is locked in at the time of confirming the transfer.
    • Forwards: This product is suitable for the target market because it is limited to predetermined values and times chosen by the client and there is no adverse exposure to fluctuation of FX rates as the Forward Exchange Rate is locked in at the time of confirming the transfer.
    • Options: The product is suitable for the target market because it is limited to predetermined values, including the Premium, and times chosen by the client and there is protection against unfavourable currency movement whilst allowing flexibility to take advantage of favourable movements. 
    • Global Currency Account (‘GCA’): This product is suitable for the target market because it is limited to clients with a predetermined need to receive foreign currency and make payments in multiple currencies.

    DISTRIBUTION CONDITIONS AND RESTRICTIONS

    Distribution Channels and Conditions

    OFX clients are required to register an online account directly with OFX. Once registered, OFX products can be distributed to OFX clients either online through their secure account, via email if agreed between the customer and OFX, or over-the-phone (excluding Options, which can only be distributed over-the-phone).

    Spot Contracts, Options and Forwards will be distributed separately.

    OFX client may be referred to OFX products by third parties with whom OFX has an agreement (an “OFX Referral Partner”). You may receive the product via an Enterprise Partner. OFX does not allow third parties with whom it has no agreement with to distribute its products. All OFX clients are, however, required to register with OFX prior to being issued an OFX product.

    Product-Specific Conditions

    • Forwards and Options will only be distributed to OFX clients that have a desire to lock in a currency exchange rate for a future transfer. 
    • Option and the Global Currency Account will only be distributed to OFX clients with a legitimate business need to purchase the GCA product. These clients are required to answer additional questions and provide additional documentation to confirm this need.

    Distribution Appropriateness

    Distribution channels and conditions imposed on OFX products are likely to be appropriate because:  

    • OFX products are easy to understand: OFX products are uncomplicated, and an online platform plus the ability to speak to an OFXer allows OFX to answer any (potential or current) OFX client questions. OFXers are also trained to identify instances in which the product is not suitable for a potential OFX client;
    • The distribution of OFX products is strictly controlled: only OFX, OFX Referral Partners and OFX Enterprise Partners are allowed to distribute OFX products, and OFX clients who are distributed OFX products by OFX Referral Partners must nevertheless be approved by OFX; and
    • Distribution channels assist in confirming the eligibility of an OFX client for an OFX product: distribution is limited to online account and over-the-phone interactions.

    TMD REVIEW

    We will review each TMD contained herein if any event or circumstance suggests that the TMD is no longer appropriate. This may include:

    • Where there is a material change to the product (e.g. adding or removing key product features) or distribution (e.g. adding an authorised representative to OFX’s AFSL, OFX choosing to no longer use referral partners as a distribution channel);
    • If we receive a significant number of complaints (>15% month to month change) regarding the design or distribution of the product; or
    • The occurrence of a significant dealing i.e. a dealing to clients outside of the TMD for a product, and which is significant considering the guidance provided by ASIC Regulatory Guide 274 Product design and distribution obligations.

    We will review the TMD within 10 business days of the event occurring.

    Periodic Review

    Notwithstanding the above, OFX will do an initial review of each TMD within two years of the effective date and no less than once every two years thereafter.

    Reporting and Monitoring

    OFX as the distributor and issuer of the product collects data and information on the client’s use of the product, client complaints and feedback as well as client losses or cancelled transfers and runs reports at least quarterly to understand if the product has been sold to anyone outside the target market. The reports are also used to improve our client service and products.

    We will also collect information, every two years, from our distributors in relation to this TMD including details of any client complaints relating to the distribution of OFX products and or details on any significant dealing.

    Board Approval and Oversight

    This TMD has been reviewed and approved by the OzForex Limited board of directors. The board retains oversight over the suitability of the TMD through quarterly review of complaints received by OFX for the products covered by this TMD.