ETORO AUS CAPITAL PTY LTD

PRODUCT DISCLOSURE STATEMENT

Issue Date: 31 July 2018

Last updated on 29 August 2019

eToro Aus Capital Pty Ltd

ACN 612 791 803

AFSL 491139

eToro Australia PDS (last updated on 29 August 2019) 1

 Australia recommends that you consult your adviser or obtain
Table of Contents independent advice before trading.
Section 1 – Important Information..................... 2 1.4 eToro Australia does not give Personal Advice
Section 2 – Key Information ............................. 3 eToro Australia will not give you personal financial advice
Section 3 – How to Trade................................. 8 about the CFDs.

Section 4 – Significant Risks .......................... 14 This PDS does not constitute a recommendation or opinion
that the CFDs are appropriate for you.
Section 5 – Fees, charges and costs .............. 20
Potential investors should be experienced in derivatives and
Section 6 – General Information ..................... 21 understand and accept the risks of investing in CFDs. The
Section 7 – Glossary ...................................... 25 information in this PDS is for general information purposes
only, so it does not take into account your personal objectives,
financial situation and needs.
This PDS describes the CFDs that are issued to you in
accordance with the Financial Product Terms. You should
read all of this PDS and the Financial Product Terms before
Section 1 – Important Information making a decision to deal in financial products covered by this
PDS. We recommend that you contact us if you have any
1.1 This PDS questions arising from this PDS or the Financial Product
Terms prior to entering into any transactions with us. eToro
This Product Disclosure Statement (PDS) is dated 31 July
Australia recommends that you consult your adviser or obtain
2018 and was prepared on that date by eToro Aus Capital Pty
independent advice before trading.
Ltd ACN 612 791 803; AFSL 491139 (eToro Australia), as
the issuer of over the counter contracts for difference (eToro 1.5 Your suitability to deal in the CFDs
Australia CFDs) (collectively, where applicable, these will be
referred to as “CFDs” in this PDS). If we ask you for your personal information to assess your
suitability to deal in the CFDs and we accept your application
This PDS is to make the required disclosures and to help you to deal in these CFDs, this is not personal advice or any other
decide whether the CFDs described in this PDS are advice to you. You must not rely on our assessment of your
appropriate for you. You may also use this PDS to compare suitability since it is based on the information you provide and
this financial product with similar financial products offered by the assessment is only for our purposes of deciding whether
other issuers. to open an Account for you. You may not later claim you are
not responsible for your losses merely because we have
This PDS describes the key features of our CFDs, their
opened an Account for you after assessing your suitability.
benefits, significant risks, the costs and fees of dealing in them
You remain solely responsible for your own assessments of
and other related information. The CFDs are leveraged
the features and risks, all losses and for trading with eToro
financial products so you should read this PDS and the
Australia so you should seek your own advice on whether the
Financial Product Terms in full before making any decision to
CFDs are suitable for you.
invest in them.
1.6 Currency of PDS
Some expressions used in this PDS have definitions given in
the Glossary at the end of this PDS (see Section 7). The information in this PDS is up to date at the time it was
prepared but is subject to change at any time. Any updates
1.2 eToro Australia CFDs
will be posted on our website (accessible from www.etoro.com
This PDS covers eToro Australia CFDs traded on the eToro for the pages for eToro Australia). A copy of this PDS can be
Trading Platform. These OTC CFDs are derivative products downloaded from the website or you can call eToro Australia
issued by eToro Australia (pursuant to the Financial Product to request that a paper copy be provided to you free of charge.
Terms) and are not Exchange traded products. If the new information is information which is materially
adverse to you, we will issue either a new PDS or a
1.3 Your potential liability supplementary PDS containing the new information. If the
new information is not materially adverse to you, you will be
Please especially read the “Key Information” in Section 2 able to find updated information on our website at
and “Significant Risks” in Section 4 for important www.etoro.com or by calling us using the contact details given
information about your potential liability. below. Upon request, we will send you a paper copy of the
information free of charge.
Potential investors should carefully consider the significant
1.7 Contact
risks involved in trading in over the counter leveraged
derivatives, and understand and accept the risks of investing eToro Australia can be contacted at:
in our CFDs.
Level 33, Australia Square, 264 George Street,
Trading in our CFDs is not suitable for all investors because
of the significant risks involved (see section 4 on “Significant Sydney NSW 2000
Risks”).
Telephone: +61 2 8016 9335
Your potential total liability for all of your CFDs is limited
Email: info@etoro.com.au
to the balance in your Account.
or through our website at www.etoro.com
You should carefully consider the risks of our CFDs and your
capacity to meet your obligations before investing.
This initial warning cannot set out and duplicate all of the
important information in this PDS. You should read all of
this PDS and the Financial Product Terms before making a
decision to invest in the financial products covered by this
PDS. We recommend that you contact us if you have any
questions arising from this PDS or the Financial Product
Terms prior to entering into any transactions with us. eToro

eToro Australia PDS (last updated on 29 August 2019) 2

  If your Account Value has benefited from a
Realised/Unrealised Profit, eToro Australia will pay
Section 2 – Key Information money (or credit) equivalent to that amount of the
Realised Profit into the eToro Australia client moneys
2.1 Key Features of our CFDs trust account for your benefit. This means your Account
gets paid cash (or is credited) for gains, even before you
 The CFDs are over the counter derivatives issued by Close Out your CFDs.
eToro Australia. They are not Exchange traded.
2.3 Key Risks of our CFDs
 They are for investing indirectly in a range of instruments
including for example foreign exchange currencies, The key risks of investing in the CFDs are outlined below.
index level, commodities, metals, ETFs, equities and Please see Section 4 for further information on the description
cryptocurrency price movements around the world of the significant risks.
without having to own and pay full value of the  Leverage – The CFDs are leveraged when the amount
Underlying Instrument. you pay (i.e., the total Margin and fees, charges and
 Your Account must be funded before CFDs are issued to costs) to eToro Australia is less than the full-face value
you. You do this by paying at least the Initial Margin (and of the Underlying Instrument.
you should consider funding the Account in anticipation  CFDs are typically low margin, high leveraged
of any fees and charges described in Section 5). investment You should be prepared for greater risks
 You remain liable to pay later Variation Margins and to from this kind of leveraged derivative, including being
maintain the required amount of Margin Cover. If you do liable to pay eToro Australia more Margin and your
not maintain the required Margin Cover or you do not pay Account’s Margin Requirement changing rapidly in
the required Margin call by the required time, your CFDs response to changes (e.g., in the market for the
can be Closed Out and you remain liable to pay for any Underlying Instrument).
remaining shortfall  Loss of your moneys – Your potential losses on (long
 Unlike CFDs traded on an Exchange, the CFDs are not or short) CFDs may exceed the amounts you pay (as
standardised. The terms of a contract may, in eToro Margin) for the contract or amounts we hold on trust for
Australia’s discretion, be individually tailored to the you.
requirements of the parties to the contract – you and  Trust moneys are withdrawn to pay for the CFDs for
eToro Australia. the Realised Loss – The money that you pay into the
 You have no right or obligation to acquire the Underlying eToro Australia client moneys trust account will be
Instrument itself. withdrawn to pay eToro Australia for the CFDs for fees,
costs and charges or when there is a Realised Loss. The
2.2 Key Benefits of our CFDs moneys are withdrawn as payments to eToro Australia,
so, once withdrawn they are not held on trust for you and,
 Our CFDs enable you to take a trading position with an you lose the benefits of holding those moneys in the
exposure to a particular Underlying Instrument without eToro Australia client moneys trust account.
needing to buy or sell the actual full value of the
Underlying Instrument.  Margin Cover requirements – You must have in your
Account sufficient Margin Cover so you will need to pay
 Relatively low transaction costs mean CFDs are a cost Margin before CFDs are issued and, after that, you may
effective and convenient way of gaining exposure to the be liable to pay more Margin to maintain the position. The
world financial markets without having to buy the Margin Requirement will usually be at least:
Underlying Instrument itself.
- the Margin required by eToro Australia for the
 You can use the CFDs to speculate, with a view to contract (initially and later); and
profiting from market fluctuations in the Underlying
Instrument. You may take a view of a particular - the Margin required by eToro Australia to cover any
Underlying Instrument and so invest in the CFDs payments for Realised/Unrealised Loss on other
intending to make a profit. positions in your Account; and

 You can use the CFDs to hedge your existing exposure - any Margin required by eToro Australia to cover
to an Underlying Instrument. adjustments for any foreign exchange rate; and

 You can deal in our CFDs with a view to profiting in both - any Margin required before the Margin Closeout
rising and falling markets. level is triggered (see section 3.14 under “Margin
Requirement obligation” for further information).
 The CFDs involve leverage which can be set by you
within the range offered from time to time for each CFD. If you do not meet the Margin Requirement for your
This could range from 1:1 to a high degree of leverage. Account, including at little or no notice, some or all of the
Our CFDs potentially let you invest a relatively small CFDs may be Closed Out without notice to you.
amount (in the form of the Initial Margin) to have an
exposure to the Underlying Instrument without having to  eToro FX CFDs which are denominated in foreign
pay the full price of the Underlying Instrument. This currency can expose you to fast and large changes to
leverage gives you the potential to take a greater level the value of your position and to your Account,
of risk for a smaller initial outlay, so this increases the potentially triggering the need for more Margin to be paid
potential risks and rewards. Leverage can magnify by you, including at short or no notice.
losses (see Section 4 – Significant Risks and, in  eToro Cryptocurrency CFDs can expose you to fast
particular, the paragraph “Loss from Leverage” at and large changes to the value of your position and to
section 4.1). your Account, potentially triggering the need for more
 Your moneys paid as Margin are kept in the eToro Margin to be paid by you, including at short or no notice.
Australia client moneys trust account until either paid These CFDS have other risks, such as possible delays
back to you or paid to eToro Australia for fees, costs and in closing out due to underlying illiquidity, or volatility or
charges (if applicable) or if your Account Value has early close out due to up to the underlying
suffered a Realised/Unrealised Loss. cryptocurrency.

eToro Australia PDS (last updated on 29 August 2019) 3

 Gapping Risk – The term ‘gapping’ refers to a situation During the Account establishment process, you will be
where a CFD opens at a much higher or lower price than required to complete a questionnaire regarding the CFDs. We
the previous close. In currency trading ‘gapping’ typically can only establish your Account after you have successfully
occurs when the currency re-opens for trading after a passed the questionnaire.
weekend. When ‘gapping’ occurs, you may not be able
to exit an existing position at the price you have specified; To the extent permitted by law, we do not accept liability for
instead, your Order may be filled at the next best price your choice to invest in any CFDs so you should read all of
that may be better or worse. this PDS and the Financial Product Terms carefully, consider
your own needs and objectives for investing in the CFDs and
 Execution Risk (Slippage) – We aim to provide the best take independent advice as you see fit.
possible execution from our systems and fill Orders at
2.5 Nature of the CFDs
the requested rate; however, there may be times where,
due to an increase in volatility or volume or other market A CFD is a sophisticated over-the-counter financial product
conditions, some price ‘slippage’ may occur. This which allows you to make a profit or loss from changes in the
generally occurs during significant news events or market price (or level) of the Underlying Instrument, without
‘gapping’. Execution is also subject to available liquidity actually owning the full value of the Underlying Instrument or
in the Underlying Instrument. Your Orders may not be having any direct interest in the Underlying Instrument.
filled due to the Underlying Instrument price moving
significantly or liquidity exhausted, in which case your In simple terms, the amount of any profit or loss made on the
Order will be filled at the next available price. contract will be equal to the difference between the price of
the contract with reference to the Underlying Instrument when
 Execution Risk (Delays) – Execution delays may occur the contract is opened and the price of the contract with
for a number of reasons such as technical issues with reference to an Underlying Instrument when the contract is
your internet connection to our servers. Connection closed, multiplied by the number of CFDs held.
strength may vary depending on the kind of device used;
interruptions may cause a delay in the transmission of The calculation of profit or loss is also affected by other
data between our servers to the eToro Trading Platform. payments, including payments relating to Finance Charges
and any other charges (for more information, see Section 5).
 Liquidity Risk – Liquidity risk typically occurs in volatile
markets or in circumstances where there is a major news The value can also be affected by fluctuations in foreign
announcement. When there is a lack of liquidity in the exchange if you make a Transaction denominated in a
Underlying Instrument, you may not be able to enter or currency different from the denomination of your Account
exit a Transaction at your requested price. currency.

 Market Volatility – Financial markets are subject to high You can take both “long” and “short” positions. If you take a
volatility causing rapid price fluctuations. This is primarily long position, you profit from a rise in the Underlying
due to external influences and unforeseen events. This Instrument, and you lose if the price of the Underlying
affects prices and spreads of CFDs. Instrument falls. Conversely, if you take a short position, you
profit from a fall in the price of the Underlying Instrument and
 System Risk – Operational risk is inherent when trading lose if the underlying price rises.
online. Disruptions in operational processes such as
communications, computer networks or external events Dealing in CFDs does not give you any beneficial interest in
may lead to trade execution problems. the Underlying Instrument nor any right to acquire the
Underlying Instrument itself. This is different from direct
 Counterparty risk – you have the risk that eToro trading in the Underlying Instrument where you acquire a
Australia will not meet its obligations to you under the beneficial interest in the actual financial product.
contract. The CFDs are not Exchange traded so you
As the holder of a CFD, you do not have a beneficial interest
need to consider the credit and performance risk you
in the Underlying Instrument and you have none of the rights
have on eToro Australia. This is further explained in
of an investor who holds the financial product itself.
Sections 3.21 to 3.24.
Unlike direct investments made by trading on an Exchange,
2.4 Your suitability
the CFDs are not standardised. The terms of the CFDs are
We may make an initial assessment of your suitability to invest based on the Financial Product Terms with eToro Australia,
in the CFDs based on the information you give us. You should which apply to your Account and your Transactions.
always make your own assessment of your suitability to deal
2.6 Types of CFDs
in our CFDs. You should carefully consider the features of
CFDs and their significant risks before investing in them. 2.6.1 eToro Index CFDs
Some key suitability considerations for you are: eToro Index CFDs derive their price or value from the real time
changes in the value of an Underlying Index as calculated by
 whether you have experience in trading in the
the relevant Exchange or eToro Australia valuation of that
Underlying Instrument;
Underlying Index.
 whether you understand the terms of our CFDs and how
eToro Index CFDs can only be traded during the open market
they work; hours of the relevant Exchange on which the Underlying Index
 whether you accept a high degree of risk in trading in is determined (or within any more limited hours set from time
these CFDs; to time by eToro Australia ). The available hours may be
viewed on our website.
 whether you can monitor your investments and manage
them in a volatile market; eToro Index CFDs allow you to deal in anticipated market
trends rather than individual shares.
 whether you have financial resources to provide more
Margin, especially on little or no notice; and eToro Index CFDs are valued based on the number of units
per index point of the Underlying Index. For example, if the
 whether you can bear substantial losses that might arise Underlying Index is 4600 then trading 10 eToro Index CFDs
from trading in these CFDs, especially the potentially for for that Underlying Index would mean the face value of the
unlimited losses. trade was $46,000.

Our assessment of your suitability is based on your

information and any other information we ask and you give us.

eToro Australia PDS (last updated on 29 August 2019) 4

2.6.2 eToro Commodity CFDs Cryptocurrency CFDs are opened in the same way as other
CFDs. We will quote a Bid and Ask price for a cryptocurrency
eToro Commodity CFDs’ Underlying Instrument is the value rate.
or price of a Commodity Transaction. eToro Commodity CFDs
may be denominated in any of the available currencies. eToro Cryptocurrency CFDs have the same kind of inherent
risks as other CFDs, especially those which are over
eToro Commodity CFDs are an easy way to gain access Underlying Instruments which do not have established
indirectly to commodity markets and underlying commodities markets. These risks maybe amplified by the volatility of the
such as, copper, wheat, sugar and oil. markets and the technological features of the cryptocurrency.
eToro Commodity CFDs can only be traded during the open Please see Section 4.1.
market hours of the relevant Exchange on which the 2.6.6 eToro FX CFDs
Commodity Transaction is able to be traded (or within any
more limited hours set from time to time by eToro Australia). eToro FX CFDs are leveraged products which derive their
The available hours may be viewed on our website. prices from the real time changes in the market price and
exchange rates of foreign currencies.
2.6.3 eToro Share CFDs
Prices are only quoted for eToro FX CFDs and can only be
eToro Share CFDs allow you to gain exposure to movements traded during the open market hours during which the foreign
in the price of the Underlying Instrument that you would obtain currency is traded.
directly from owning the share/equity itself.
Open hours of the market are available by viewing our website.
eToro Share CFDs can only be traded during the open market eToro Australia might not quote for a contract on a particular
hours of the relevant Exchange on which the Underlying foreign currency if that foreign currency is illiquid (for more
Instrument is traded (or within any more limited hours set from information on the effect of potential external disruptions, see
time to time by eToro Australia). The available hours may be Section 4).
viewed on our website.
eToro FX CFDs allow you to receive many of the economic
2.6.4 eToro ETF CFDs benefits of owning the full value of the foreign exchange
contract on which the eToro FX CFD is based without
eToro ETF CFDs allow you to gain exposure to movements in physically owning it (for more information on key benefits of
the price of the Underlying Instrument, an ETF. An Exchange trading in eToro FX CFDs see Section 2.2). This includes
Traded Fund is a marketable Instrument that tracks as index, CFDs in the spot price for gold or silver which are the
commodity, bonds or a basket of assets. Underlying Instruments.
eToro ETF CFDs can only be traded during the open market eToro FX CFDs are valued based on the price of the relevant
hours of the relevant Exchange on which the Underlying foreign currency pair. For example, in the case of eToro FX
Instrument is traded (or within any more limited hours set from CFDs, if you bought 10,000 of one currency against another
time to time by eToro Australia). The available hours may be and the price of the foreign currency pair was quoted as
viewed on our website. 10.40/10.60 then the eToro FX CFD would have a value of
2.6.5 eToro Cryptocurrency CFDs $106,000 (being 10.60 x 10,000).

eToro Cryptocurrency CFDs allow you to gain exposure to For more information on which eToro FX CFDs are available,
price movements in cryptocurrencies. The prices of the please download a demonstration-trading platform located on
Cryptocurrency CFDs which we quote are derived from the the website at www.etoro.com.
price feeds from cryptocurrency exchanges or cryptocurrency
Hedge Counterparties that we deal with.

2.7 Benchmark Disclosure

ASIC has adopted benchmarks for over the counter derivatives that include eToro Australia CFDs.
The benchmarks are not mandatory and are not law. ASIC has introduced them by way of stating, in Regulatory Guide 227 (RG 227),
ASIC’s expectations. Not meeting the benchmarks is not an indication of breaches or failures. Rather, the benchmarks in RG 227 also
require prominent disclosure in a PDS as to whether an issuer meets the benchmarks or, if not, the reasons why they are not met are
explained in the PDS.
The following table summarises the benchmarks as eToro Australia applies them to our OTC CFDs, and whether eToro Australia
meets them and, if not, why not.
The table also refers you to other Sections of this PDS for more information on relevant topics (to avoid duplicating the inf ormation in
this PDS).

eToro Australia PDS (last updated on 29 August 2019) 5

 ASIC RG 227 Benchmark

eToro

1. Client qualification
If an issuer meets this benchmark, the PDS should eToro Australia believes that it meets this benchmark. An explanation
clearly explain: of eToro Australia client qualification policy is described in Section 2.4
 that trading in CFDs [or other applicable – “Your Suitability”.
products] is not suitable for all investors
because of the significant risks involved; and
 how the issuer’s client qualification policy
operates in practice.

2. Opening collateral
If an issuer meets this benchmark, the PDS should eToro Australia does not meet this benchmark because it accepts as
explain the types of assets the issuer will accept as collateral for opening an Account, payments by credit card of more
opening collateral. than $1,000 as well as payments via BPay® and bank transfer and
If an issuer accepts non-cash assets as opening does not place limits on credit card payments.
collateral (other than credit cards to a limit of The additional risks and costs of paying by credit card are described
$1000), the PDS should explain why the issuer in Section 6.6 “Applications”.
does so and the additional risks that using other eToro Australia otherwise meets this benchmark.
types of assets (e.g. securities and real property) as
opening collateral may pose for the investor. This
includes, for example, the risks of ‘double leverage’
if leveraged assets are accepted as opening
collateral.

3. Counterparty risk – Hedging eToro Australia meets this benchmark:

If an issuer meets this benchmark, the PDS should  eToro Australia discloses in its PDS its hedging activity and risk
provide the following explanations: mitigation (see Section 3.22).
 a broad overview of the nature of hedging  This PDS complies with the requirements to include information
activity the issuer undertakes to mitigate its about the significant risks associated with the CFDs (see Section
market risk, and the factors the issuer takes 4) and provides an explanation of the counterparty risk
into account when selecting hedging associated with CFDs (see Sections 3.21 to 3.24).
counterparties; and  This PDS explains that, if eToro Australia defaults on its
 details about where investors can find the obligations, investors may become unsecured creditors in an
issuer’s more detailed policy on the activities it administration or liquidation.
undertakes to mitigate its counterparty and
market risk, and the names of any hedging
counterparties.

4. Counterparty risk— Financial resources

If an issuer meets this benchmark, the PDS should eToro Australia has in place a written policy outlining how we comply
explain how the issuer’s policy operates in practice. with our financial obligations and we ensure that we have sufficient
An issuer should also make available to prospective financial resources to meet our liabilities. - see Sections 3.21 and 3.23.
investors a copy of its latest audited annual financial eToro Australia would meet this benchmark except that eToro
statement, either online or as an attachment to the Australia makes available copies of its latest audited annual financial
PDS. statement only by inspection at the office of eToro Australia.

eToro Australia PDS (last updated on 29 August 2019) 6

 ASIC RG 227 Benchmark

eToro

5. Client money
If an issuer meets this benchmark, the PDS should eToro Australia meets this benchmark.
clearly: See sections 3.11, 3.12, and the risks described in section 4.
 describe the issuer’s client money policy, eToro Australia does not use client moneys paid into the eToro
including how the issuer deals with client Australia client moneys trust account for margining, guaranteeing,
money and when, and on what basis, it makes securing, transferring or for its hedging purposes. Rather, eToro
withdrawals from client money; and Australia uses funds from its own operating account for these
 explain the counterparty risk associated with purposes.
the use of client money for derivatives.

6. Suspended or halted underlying assets

If an issuer meets the benchmark, the PDS should eToro Australia meets this benchmark.
explain the issuer’s approach to trading when eToro Australia’s approach to trading when underlying assets are
underlying assets are suspended or halted. suspended or halted is described in Section 3.3 “Dealing”.
eToro Australia’s discretions and how it manages its positions are
described in Section 6.2 under “Discretions”.

7. Margin calls
If an issuer meets this benchmark, the PDS should eToro Australia has a clear policy in relation to Margin and our rights
explain the issuer’s policy and margin call practices. to Close Out positions.
eToro Australia’s margin practice is an automated process via the
eToro Trading Platform by which the platform automatically posts
warnings to the Account if you do not maintain the Margin Cover
levels.
Nevertheless, the Financial Product Terms clearly require the Client
to maintain the minimum Margin Cover at all times. A Client must meet
the Margin Cover whether or not the Client has received the warnings
on the eToro Trading Platform (or notices from us).
eToro Australia describes its margin policy in Section 3.15 but see also
Sections 3.13 and 3.14 and the risks associated at Section 4.

eToro Australia PDS (last updated on 29 August 2019) 7

 eToro Australia may at any time in its discretion, without prior
notice, impose limits on our CFDs in respect of particular
Section 3 – How to Trade Underlying Instruments. eToro Australia might do this if for
example (but not only) the market for the particular Underlying
3.1 Your Account Instrument has become illiquid or its trading status has been
Before you open an account with eToro, you should read the suspended or there is or will be, some significant disruption to
contents of this PDS, the Financial Product Terms and the the markets, including trading facilities.
FSG and decide whether CFD trading is suitable for you. You should be aware that the market prices and other market
You need to establish your Account by completing eToro data that you view through eToro Trading Platform or other
Australia’s Account application form, which will be made facilities that you arrange yourself may not be current or may
available for you online. By opening an Account, you agree to not exactly correspond with the prices for the products offered
the Financial Product Terms and you will become a Client of by eToro Australia.
eToro Australia. After eToro Australia accepts your If you access your Account and the eToro Trading Platform
application, your Account will be established. We may reject outside of the hours when Orders may be accepted, you
your Account application in our discretion. should be aware that the Orders might be processed later
Your Account covers all of the services and products which when the Underlying Instrument is open for trading. The
you apply for in your application form and which are accepted market prices (and currency exchange values) might have
by eToro Australia. We will also ask you questions that will changed significantly by the time the Order is executed.
help us assess your suitability to trade CFDs (as outlined in 3.4 Pricing - Bid/Ask spread
section 2.4 of this PDS). If we decide that you do not have the
relevant experience, we may recommend that you open a eToro Australia quotes a lower price and a higher price at
demo account prior to opening a live Account. which you can place your Order. This is referred to as the
Bid/Ask spread. The higher quoted price is the indication of
The legal terms governing your Account and your dealing in the price you can buy the CFD. The lower quoted price is the
the CFDs are set out in the Financial Product Terms. The indication of the price at which you can “sell” the CFD (that is,
Financial Product Terms also have the legal terms for your Close Out an Open Position for the CFD).
dealings with us for other financial products that are not
covered by this PDS. A simplified example of our normal spread is calculated as
follows:
3.2 Opening a CFD
AUD/USD: 0.7379/0.7383
The particular terms of each CFD are agreed between you
and eToro Australia before entering into a Transaction. Spread = (Bid price – Ask price): (0.7379-0.7383) = 4 pips
Before you enter into a CFD, eToro Australia will require you Cost = (quantity x Spread): (1,000 x 0.0004) = USD 40 cents
to have sufficient Account Value (see the Glossary in Section
7) to satisfy the Initial Margin requirements for the relevant eToro Australia’s Bid/Ask prices are set by eToro Australia
number of CFDs. The payments you make to eToro Australia and so these prices may not be the same as those quoted in
are either held as Margin (as defined in the Financial Product the relevant underlying market. Please be aware that eToro
Terms) or are later withdrawn to pay the amounts for Australia does not act as your agent to find you the best prices.
Realised/Unrealised Losses or any fees and charges that you When your Order is executed, for you to break even or before
may owe. you can realise a profit, putting aside for the sake of simple
When you Close Out an Open Position, you are entering into illustration any fees or charges, the price at which you exit
a new contract for a position of the same type and number of your position needs to have moved in your favour to at least
contracts opposite to your Open Position. You are liable for equal to the original Bid or Ask price that you started the
the costs, fees and charges as described in this PDS (see position (depending on whether you went long or short).
Section 5). You should be aware that your investment might In addition, the available pricing may be limited by tick sizes,
suffer a loss, depending on the value of your contract at minimum steps, depending on the general market rules for
termination compared with the total cost of your investment up trading the Underlying Instrument or eToro Australia’s
to the time of termination. hedging, so, depending on the product you choose, your
A CFD is opened by buying a contract, corresponding with Order to exit your position might have to be in minimum
either buying (going long) or selling (going short) the increments of pricing before it can be accepted and executed.
Underlying Instrument. You go “long” when you buy a CFD That could affect your net profit or loss.
corresponding with buying the Underlying Instrument in the 3.5 Pricing model
expectation that the price of the Underlying Instrument to
which the CFD relates will increase. eToro Australia offers prices based on its market making
pricing model.
You go “short” when you transact in CFD contract
corresponding with selling the Underlying Security in the eToro Australia does not draw on and use client moneys paid
expectation that the price of the Underlying Instrument to into the eToro Australia client moneys trust account for
which the CFD relates will decrease. hedging with its Hedge Counterparty. eToro Australia uses
funds from its operating account for this purpose.
3.3 Dealing
Generally, although the prices of CFDs on the eToro Trading
Quotes for prices for dealing in our products are indicative Platform are competitive, you should be aware that eToro
only and so are subject to the actual available price at the time Australia is acting as principal to you and so is responsible for
of execution of your Order. While eToro Australia endeavours setting the prices of opening and closing CFDs and eToro
to execute your Order to the best of its ability, there is no Australia does not act as your agent to find you the best prices.
assurance that the Order will be able to be executed at the
price of your Order. 3.6 Electronic Trading Platform

Quotes will be given and Transactions made during the open Your Account gives you access to the eToro Trading Platform.
market hours of the relevant market on which the Underlying This arranged by eToro Australia from its affiliate. Please note
Instruments are traded. The open hours of the relevant that all of your dealings with eToro CFDs are only with eToro
Exchanges are available by viewing our website. Such hours Australia as principal in the transaction with you.
may change according to the relevant Exchange’s changes or
in our discretion. We do not accept telephone or other voice Orders.

eToro Australia PDS (last updated on 29 August 2019) 8

All of the CFDs issued pursuant to this PDS will use the eToro Any adjustment will be uniformly applied across all relevant
Trading Platform. positions at the time. Please contact eToro Australia if you
have any queries on whether the adjustment will be made to
We will try to use our best efforts to make the Trading Platform a particular CFD.
available when you access them; however, we cannot give an
absolute assurance or guarantee that the Trading Platform will You may not direct eToro Australia how to act on a corporate
be available on a continuous basis due to systems action (including a dividend) or other shareholder benefit.
maintenance, system failures and other related technological
or external factors. eToro Australia may elect to close a position (without prior
notice to you) if an adjustment event occurs and it determines
You must carefully read and follow the operational rules for that it is not reasonably practicable to make an adjustment.
the Trading Platform. The Trading Platform from time to time eToro Australia may also elect to close an eToro Australia
may impose special operating rules including but not limited CFD if the eToro Australia CFD’s Underlying Instruments are
to: the subject of a take-over offer, scheme of arrangement or
other mechanism for change in control, prior to the closing
 posting Margin (such as when payment is required and date of the offer.
when the payment is effective);
eToro Australia CFDs do not entitle you to direct eToro
 how Margins are calculated (such as automatic Australia on how to exercise any voting rights in connection
adjustments outside of trading hours, including at the with the eToro Australia CFD’s Underlying Instrument.
weekend); and
Clients should be aware that some Exchanges purge orders
 how Orders are managed. in securities that undergo corporate actions. You should seek
confirmation from eToro Australia of any action for specific
We strongly recommend that prior to engaging in live trading,
corporate actions that might affect your eToro Australia CFDs.
you open a “demo” account and conduct simulated trading.
This enables you to become familiar with the Trading Platform. 3.9 Suspensions and de-listings
There is also online help available on the Trading Platform, If an Underlying Instrument to which a CFD Transaction
which has information relating to the operation of the Trading relates is suspended or has halted trading for whatever
Platform. reason, we may suspend trading in the CFD and we may
increase the amount of Margin required to support that Open
3.7 Confirmations of Transactions
Position in our reasonable discretion. If the Open Position
If you transact in our CFDs, the confirmation of the remains suspended for a time that we think is unacceptable to
Transaction, as required by the Corporations Act, may be us in our sole discretion, we may Close Out the Open Position
obtained only by accessing the daily statement online, which at the Closing Price.
you can print for your records. It is your obligation to review
If an Underlying Instrument to which a CFD Transaction has
the confirmation of Transactions immediately to ensure its
been de-listed, we may Close Out all affected Open Positions
accuracy and to report any discrepancies within 24 hours.
at the Closing Price in our discretion.
3.8 Distributions and Corporate Actions
3.10 No Shareholder Benefits
eToro Australia has a discretion to adjust your Account in
As a holder of a CFD, if the CFD’s Underlying Instrument is a
respect of a dividend, takeovers and Transformations
share or other voting security, you do not have rights to vote,
(including events such as share consolidations/splits,
attend meetings or receive the issuer’s reports, nor can you
acquisitions, mergers, takeovers, spinoffs, MBOs, de-listings,
direct eToro Australia to act on those rights. Other benefits
etc.) attributable to any Underlying Instrument, or a security
such as participation in shareholder purchase plans or
which is in an index used as the Underlying Instrument. We
discounts are also unavailable.
are not obliged to make any adjustment at all or, if we do, any
kind or degree of adjustment. 3.11 Payments and Client Moneys
We will decide and calculate any adjustment (net of any taxes Here is an explanation of payments you make for our CFDs.
and the timing of the adjustment to your CFDs). If we make
an adjustment, we will while we always retain an absolute A. Establishing a Position
discretion, we may have regard as we think appropriate to Before you transfer any money to eToro, you should carefully
have regard to market practice and take into account the consider how your money will be held and used and the risks
treatment we receive from our Hedge Counterparties or any to you of paying money to eToro Australia.
relevant third party.
Please see the entire description that follows.
eToro Australia may elect to close a position (without prior
notice to you) if an adjustment event occurs and it determines Steps:
that it is not reasonably practicable to make an adjustment. Step 1
eToro Australia may also elect to close an eToro Australia
CFD if the eToro Australia CFD’s Underlying Instruments are You (as our Client) pay money into the eToro Australia client
the subject of a take-over offer, scheme of arrangement or moneys trust account for Margin. You would need to do this
other mechanism for change in control, prior to the closing to fund your Account before trading if there is not enough
date of the offer. Margin Cover.

If the CFDs relate to an index, and a share (which is a Step 2

constituent of the index) goes ex-dividend, then typically an
CFDs are issued to you when your Orders are accepted and
adjustment will be made automatically to the index level (by
executed.
the index provider) to reflect this dividend.
No money is withdrawn from the eToro Australia client
eToro Australia has discretion whether to make an adjustment
moneys trust account just for you to open your contract.
at all and, if it does, for an amount for the divided (whether for
a weighted proportion of the dividend or otherwise), being an Step 3
amount to be credited to your Account in respect of your long
positions and debited from short positions. Whether the After you have paid money as Margin and established your
adjustment is at all or its amount and timing remains in the position, eToro Australia will keep the moneys which you have
discretion of eToro Australia. paid into the eToro Australia client moneys trust account in
there until it needs to be paid for fees, charges and costs or if

eToro Australia PDS (last updated on 29 August 2019) 9

there has been a Realised Loss on your Account at which  for the purpose of the licensee entering into, or
point eToro Australia withdraws funds to pay itself since these meeting obligations under, transactions that the
are moneys to which eToro Australia is entitled (by reason of licensee enters into to hedge, counteract or
the terms of your Account). Whether or not there is a offset the risk to the licensee associated with a
Realised/Unrealised Loss on your Account is determined transaction between the licensee and the client;
when eToro Australia revalues your Account. and
Step 4 2. impose record-keeping, reconciliation and reporting
obligations on licensees that hold “derivative retail
Money will be paid by eToro Australia to the eToro Australia client money”.
client moneys trust account for your benefit. This occurs when
the revaluation of your Account by eToro Australia shows a eToro Australia does not use client moneys paid into the
Realised Profit. eToro Australia client moneys trust account for margining,
guaranteeing, securing, transferring, adjusting or settling
Further explanation of Client moneys when establishing dealings in derivatives. Instead, eToro Australia uses funds
a position from its own operating account for this purpose.
The above steps give a very brief outline. The following gives In practical terms, when you make a payment which is
further explanation. deposited into the eToro Australia client moneys trust account,
eToro Australia client moneys trust account you are making payments held as Margin for your CFDs which
may be withdrawn to be paid entirely to eToro Australia for
Moneys paid by you to eToro Australia for the CFDs are any Realised Loss or for fees, charges and costs which you
initially deposited into a trust account maintained by eToro, owe to us.
which is referred to in this PDS as the “eToro Australia client
moneys trust account”. You make your deposit by using 3.13 Margin payments
BPay®, electronic or telegraphic transfer, by cheque, credit You must pay the Initial Margin before the CFD is issued to
card or other means approved by us. you. You must then maintain the minimum amount of Margin
eToro Australia only permits clients to trade on cleared funds. Cover required by us. Separately, you must pay any Variation
eToro Australia recommends that when credit cards are used Margin when we require.
as an account funding method that no more than $1,000 is To pay Margin you must first deposit the funds into the eToro
used as an initial payment; however, we do not enforce this Australia client money trust account. Your payment is only
policy since we believe that the capping of a one-off payment effective when we receive your cleared funds and we credit
is not likely to act as a protective measure. We do however your Account to reflect the Margin payment.
reiterate that when dealing in CFDs you may incur a loss
which is far greater than the amount that you have paid and Here are the key features of Margining that are explained
advise that you not only take this into account when you are further in this section:
using a credit card to make the first ever deposit into your
Account, but also for all subsequent deposits.  You are liable to meet all calls for Margin for your
Account.
The moneys paid by you into the eToro Australia client
moneys trust account is held for you (until they are withdrawn,  When you have CFDs, you are also liable to meet all
at which point they become moneys belonging to eToro) and Margin calls for additional payments to eToro Australia.
are segregated from eToro Australia’s own funds. This means
 This Margin call obligation is in addition to your
those funds are not available to pay general creditors in the
obligation to maintain the minimum required Margin
event of receivership or liquidation of eToro (unless a court
Cover for your Account.
orders differently).
You should be aware that, generally, for trust accounts such  There is no limit as to when you need to meet your
as the eToro Australia client moneys trust account: Margin calls, how often or the amount of the Margin calls.

 Individual Clients do not have separate or segregated  The timing and amount of each Margin call will depend
accounts. on movements in the market price of the open positions,
the movements in the market price of the Non-margin
 All Clients’ moneys are combined into one account. product, if used as Margin and the changes to your
account value.
 Moneys and other assets in the trust account that belong
to non-defaulting Clients are potentially at risk of being  You have an obligation to meet the Margin call even if
withdrawn and not being re-paid to the Client even eToro Australia cannot successfully contact you.
though they did not cause the default.
 You have a risk of your CFDs being immediately Closed
eToro Australia is entitled to retain all interest earned on the Out if you do not meet the requirement to meet a Margin
money held in the eToro Australia client moneys trust account. call.
3.12 Client Money Rules  When you have CFDs, you are obliged to maintain
always the minimum Margin Cover for all of your
eToro Australia will deal with client moneys in accordance with CFDs.
the Client Money Rules. In short, in relation to withdrawals
from the eToro Australia client money trust account, the Client  It is your obligation to monitor the minimum amount
Money Rules: of Margin Cover required for your Account.
1. limit (or in many cases, prohibit) a financial services  It is your obligation to maintain the minimum Margin
licensees’ (including eToro Australia’s) entitlement Cover always for so long as you have Open Positions.
to withdraw client moneys from its client money
trust account:  We are not obliged to notify you about your obligation,
though we may do so by email, telephone call or
 for the licensee’s use for working capital; otherwise, as a courtesy.
 for the licensee meeting obligations incurred by  You have a risk of all your CFDs being Closed Out if you
it other than on behalf of the client; and do not have sufficient Account Value, regardless of
whether you have checked your Account’s requirement
for minimum Margin Cover or whether you have tried to

eToro Australia PDS (last updated on 29 August 2019) 10

 make a payment but it has not been credited to your How is Margin Cover calculated?
Account.
eToro Australia sets the amount of the Initial Margin,
3.14 Margin Requirement obligation calculates the Margin Cover and sets the Margin Requirement.
 You must maintain Margin Cover that meets the Margin The Initial Margin set by eToro Australia can be dependent on
Requirement for your Account. the Leverage Ratio, the type of contract selected by the Client
and calculated as a percentage of the full-face value of the
 There is no grace period as to when you need to meet CFDs.
Margin Requirement obligations. There is no limit on how
often the Margin Requirement may change. eToro Ordinarily the Initial Margin requirements are calculated to
Australia’s Margin practice is an automated process by cover the maximum expected movement in the market in the
which the eToro Trading Platform sends warnings to near future but the ongoing Margin Requirement will change
your Account online at different Margin Requirement when the market changes and so might not be sufficient in all
levels. The Margin Closeout levels are stated on our circumstances.
website.
Owing to the volatility of the market, the amount of Margin
 The timing and amount of your Margin Requirement Requirement to maintain your Open Positions may change at
obligations for your Account will depend on movements any time after a position has been opened due to market
in the market price of the Underlying Instrument and the changes, changes made to your Account by eToro Australia
changes to the Account Value. (as permitted by the Financial Product Terms) or due to eToro
Australia performing a revaluation for any
 You have an obligation to meet the Margin Requirement Realised/Unrealised Loss or Realised/Unrealised Profit on
even if eToro Australia (by the eToro Trading Platform or your Account. If you have CFDs denominated in a currency
otherwise) cannot successfully or does not contact you. other than the base currency of your Account, any fluctuations
You must not rely on receiving any warning from us or in the exchange rate adverse to your CFD position can lead
you not accessing your Account. to automatic adjustments to your required Margin Cover, so
you need to monitor these CFD positions very carefully.
 You have a risk of some or all your CFDs being Closed
Out if you do not meet the obligation to meet the Margin You should be aware that you can reach the stage of not
Requirement. having enough Margin Cover to meet the Margin Requirement
because changes in valuation of your CFDs are automatic,
 It is your obligation to monitor the Margin Requirement reflecting the rapid changes in the market values.
and the Margin Cover for your Account.
The Margin Requirement is linked to the Margin Closeout level
 It is your obligation to maintain the minimum Margin
as the example below explains.
Cover always for so long as you have an Open Position
in a CFD. To satisfy the Margin Requirements, you may:
 You have a risk of your CFDs (and all other products held  Close Out existing positions to reduce your Margin
in your Account) being Closed Out if you do not have in Requirements; or
your Account sufficient Margin Cover credited to it,
regardless of whether you have checked your Account’s  pay additional funds as Margin for your Account; or
Margin Requirement or whether you have tried to make
a payment but it has not been credited to your Account.  a combination of the above.

3.15 Margin policy If the actions taken are not sufficient to maintain the Margin
Cover to meet the Margin Requirement then you risk some or
eToro Australia applies the following main Margin principles: all your positions being automatically Closed Out.
 Each Client is required to have Margin Cover for the Under the Financial Product Terms, your obligations arise
amount known as “Initial Margin” before issuance of a from the time you have an Open Position. If the market moves
CFD. so as to increase the Margin Requirements, or eToro Australia
increases the Margin Requirement, you immediately owe the
 The Initial Margin is determined by eToro Australia increased amount of the Margin Cover, regardless of if or
based on a number of factors, including the Leverage when we contact you to pay more Margin. Your obligation to
Ratio applied to an eToro Australia CFD, Margin required maintain the Margin Cover to meet the Margin Requirement
to hedge the underlying market, any margin which eToro remains at all times, whether or not we contact you and
Australia is required to pay its Hedge Counterparty (if whether or not you log into your Account.
applicable), eToro Australia’s risk assessment of the
Client, and any Realised/Unrealised Loss. You will be required to provide the required Margin Cover
whether or not you receive a Margin call. In other words, you
 The Initial Margin could be available either by the Client are responsible for monitoring your positions and providing
paying funds (as Margin) into the eToro Australia client the required level of Margin Cover. You might receive notice
moneys trust account or because there is already about Margin Cover requirements by email, SMS messages
sufficient Margin held in that account. If there is not or, when you access your Account via the eToro Trading
sufficient Margin Cover (including all available Margin) Platform, by messages on your screen, but you need to
for the CFD to be opened (due to its Initial Margin provide the Margin Cover whether or not you get that notice
requirement) then the position will not be executed. from us (including through the eToro Trading Platform).
 If the CFD is opened, the Client’s Account is adjusted at The values of your CFD positions are ordinarily marked to
any time, often continuously and quickly, for its Margin market on a continuous basis, which automatically leads to
Requirement according to market movement so that no corresponding changes in Margin Cover requirements for
Client is intentionally materially benefited from other your Account. At weekends or at other times when trading on
Clients’ trading. This unintended benefit could occur if, the Exchange relevant to the Underlying Instrument is closed,
for example, the Client’s Margin requirements are not some Margin Cover requirements automatically increase. You
adjusted in line with market changes or the credit risk on should note that if the underlying market is not trading then
the Client. the value might not change until the market re-opens and
there might be a gap in prices/values at the time of re-opening.
Your Margin defaults

eToro Australia PDS (last updated on 29 August 2019) 11

If you do not ensure that you maintain the level of Margin current market price, the order is filled instantly at the
Cover to meet the Margin Requirement, some or all of your best available price above or at the limit price.
Open Positions may be Closed Out and the resulting Realised
Loss deducted from any proceeds. Any losses resulting from When a limit order is triggered, it is filled as soon as possible
Closing Out your Open Positions will be debited to your at the price obtainable on the market. Note that the price at
Account and you may be required to provide additional funds which your Order is filled may differ from the price you set for
to eToro Australia to cover any shortfall. If you do not comply the order if the opening price of the market is better than your
with your obligations, all of your Open Positions can be Closed limit price.
Out automatically. Market Order
It is your responsibility to pay your Margin on time and in A Market Order is executed immediately when placed (subject
cleared funds, so please keep in mind the possibility of delays to the usual filters and discretions held by eToro Australia). It
in the banking and payments systems. If your payment is not is priced using the current spot, or market price, of the
credited by eToro Australia by the time you are required to Underlying Instrument.
have the necessary Margin Cover, you could automatically,
and quickly, lose some or all your positions (and suffer further A Market Order, once executed, immediately becomes an
losses because of having to meet a shortfall). You should Open Position, so is subject to fluctuations in the market. This
maintain a prudent level of Margin Cover and make payments means that should the market move against you, the value of
in sufficient time to be credited to your Account. Please see your Open Position deteriorates – this is an Unrealised Loss.
“Margin risks” in Section 4. If you were to close the position at this time, you would realise
the loss and after that, your Account Balance would be
As at the date of this PDS, Accounts can be funded by credit updated to include the revised values.
card, electronic funds transfer and other methods permitted
from time to time. Our available payment methods can be Take Profit Order
found on our website. A Take Profit Order automatically closes an Open Position
3.16 Valuation when the price reaches your specified Take Profit Order price.
Take Profit Orders are used to lock-in profits when you are
During the term of our CFDs, eToro Australia will determine unavailable to monitor your Open Positions.
the value of your entire Account, based on the value of the
CFDs and all other Open Positions in your Account. The For example, if you are long USD/JPY at 109.62 and you want
values of your CFD positions may be adjusted to reflect the to take your profit when the rate reaches 110.00, you can set
positions being marked to market when the market or this rate as your Take Profit Order. If the Ask price reaches
Exchange for the relevant Underlying Instrument is open. 110.00, the Open Position is closed by the eToro Trading
Platform and your (gross trading) profit on that closed position
3.17 Order Types is established. Your Transaction is closed at the current
market rate. In a fast-moving market, there may be a gap
Different types of Orders are available on the eToro Trading between the current market rate and the rate you set as your
Platform when you log in. The following are examples of Order Take Profit Order.
types that may be available to you.
Stop Loss Orders
Important notice about this section
eToro Australia may, in its discretion, accept an Order from
When you request one of the types of Orders described in this you to close a position if the price moves to or beyond a level
section, we have discretion whether or not to accept and specified by you. This is known as a “stop-loss order”.
execute any such request. We will, at our discretion, accept
or reject any Orders. You would generally choose to place a stop-loss order to
provide some risk protection. Stop-loss orders are commonly
The price at which we accept an Order to trade will generally used to exit positions and to protect investments if the market
be based on filling the full volume of the Order in one moves against an Open Position.
Transaction if possible.
For example, if your Open Position moves towards making a
The type of Orders and how they may be filled, if at all, might loss based on a level chosen by you, the stop-loss order
depend on the rules of the Exchange where the Underlying would be triggered to try to close your Open Position.
Instruments are being traded or our compliance and
operational filters and configurations. For some CFDs which Stop-loss orders to sell are placed below the current market
you choose to deal in, there may be a minimum trade value or level and your stop-loss order would be executed, i.e.,
other restrictions (e.g., pricing) that relate to a particular triggered if our Bid price (for a stop-loss order that requires an
market. Order to sell a contract) moves against you to a point that is
at or lower than the level specified by you (and accepted by
References to Orders being filled immediately or positions us).
being Closed Out immediately or automatically refer to
processing of Transactions as soon as practical in the Conversely, stop-loss orders to buy are placed above the
ordinary course of electronic processing, and subject to current market level and your stop-loss order would be
compliance and operational filters. The speed of electronic executed, i.e., triggered if our offer price (for a stop-loss order
processing can depend on a number of technical factors, that requires an Order to buy a contract) moves against you
including any transaction filters required for our compliance. to a point that is at or above the level specified by you (and
accepted by us).
Limit Order
All stop-loss orders are subject to agreement by us, so you
Limit orders are commonly used to enter a market and to take cannot be assured that you will always be able to have a stop-
profit at predefined levels. loss order. While eToro Australia has absolute discretion
whether to accept a stop-loss order, it will generally try to do
 Limit orders to buy are placed below the current market so, subject to market conditions, compliance and operational
price and are executed when the Ask price hits or configuration and the reasonableness of your stop-loss order.
breaches the price level specified. If placed above the
current market price, the order is filled immediately at the Your Order may be unreasonable if, for example, the level you
best available price below or at the limit price. have specified is too far away from the market price, the
Underlying Instrument or trading in the Underlying Instrument
 Limit orders to sell are placed above the current market has been halted or suspended on the market.
price and are executed when the Bid price hits or
breaches the price level specified. If placed below the

eToro Australia PDS (last updated on 29 August 2019) 12

Even if we accept your stop-loss order, market conditions may eToro Australia also has the right to decide to make an
move against you rapidly. It is possible that you may receive adjustment in any circumstance if eToro Australia considers
the best available price on the market, which is worse than the an adjustment is appropriate. eToro Australia has a discretion
one you have requested from eToro Australia. A gap in market to determine the extent of the adjustment to place the parties
prices reflects the market for the CFDs, so can occur for any substantially in the same economic position they would have
reason, without any apparent reason or at any time. been in had the adjustment event not occurred.
Order duration eToro Australia may elect to close a position (without prior
notice to you) if an adjustment event occurs and it determines
Orders will remain in effect until either it has been cancelled that it is not reasonably practicable to make an adjustment.
by you or us; executed by us; or we no longer quote the CFD
which your Order was placed over. Although there are no specific limits on eToro Australia’s
discretions, eToro Australia must comply with its obligations
Typically, eToro Australia offers one main Order duration, as a financial services licensee to act efficiently, honestly and
“Good until cancelled”. This is an Order that you have placed fairly.
that will remain in effect until it is cancelled by you (or us).
The amount of any gross profit or loss you make on a position
General will be based on the difference between the amount paid for
We may cancel, modify, suspend or discontinue, temporarily the position when it is issued (including fees and charges) and
or permanently, at any time in our sole discretion any existing the amount credited to your Account when the position is
type of Order or the ability to place any Orders (or both) Closed Out (including allowance for any fees, costs and
including without limitation limit orders such as stop loss, take charges).
profit, buy limit and sell limit orders, either generally or with 3.21 Counterparty Risk
respect to a specific Underlying Instruments or with respect to
a specific direction of a specific instrument. When you deal in our CFDs, you have a counterparty risk with
eToro Australia. Because you are dealing with eToro Australia
3.18 Short eToro Australia CFDs as counterparty to every transaction, you will have an
When dealing in short eToro Australia CFD positions, you are exposure to us in relation to each transaction if we are not
highly likely to be affected by the laws and Exchange rules in ready, willing or able to meet our obligations, for example, if
the country as they apply to short selling of the Underlying eToro Australia were to become insolvent.
Instrument. You should satisfy yourself that eToro Australia is able to meet
3.19 Market Conduct its obligation to you. You can assess eToro Australia’s
financial ability to meet its counterparty obligations by
Clients should be aware that some practices in placing Orders reviewing its financial statements.
can constitute, or be involved in, market manipulation or
creating a false market which is conduct prohibited under the You are reliant on eToro Australia’s ability to meet its
Corporations Act or under other countries’ laws. eToro counterparty obligations to you to settle the relevant contract.
Australia has policies and procedures to manage attempts to eToro Australia limits this exposure by hedging its exposure
use Orders and the eToro Trading Platform to engage in or be to its clients by entering into opposite transactions as principal
involved in, illegal or otherwise unacceptable market conduct. in the wholesale market in relation to its exposures with clients.
eToro Australia is then exposed to counterparty risk with that
It is the Client’s responsibility to be aware of unacceptable hedging party.
market practices and the legal implications. A Client may be
liable for penalties to regulators such as ASIC or be liable to Please note that eToro Australia does not use client moneys
eToro Australia for costs to eToro Australia arising out of to hedge any of its positions with its Hedge Counterparty.
those trading practices of the Client, which lead to the Client, Those positions are funded by eToro Australia’s operating
eToro Australia or any other person suffering loss or penalty. account. eToro Australia will withdraw your client moneys to
pay amounts to which it is entitled, and pay moneys into the
3.20 Closing a position eToro client moneys trust account for your benefit, following
revaluations of your Account (as explained in this PDS).
Our CFDs do not have an expiry date (unless specified
through the eToro Trading Platform). They remain open until An account with eToro Australia is not insured or guaranteed
they are Closed Out. With most CFDs, you can hold the by the Australian government or any other entity.
position for as long as the eToro Trading Platform permits. Consequently, should we become insolvent there is no
This may be for less than a day, or for months. guarantee that your account will maintain its value (however,
please refer to the section 3.12 Clients Money Rules for
If you wish to close an Open Position, you enter a new position further clarification).
that is equal and opposite to the Open Position. To close a
‘bought’ or ‘long’ position - you sell. To close a ‘short’ or ‘sold’ 3.22 Risks from eToro Australia’s Hedge Counterparties
position - you buy.
eToro Australia operates a market-making model, which
At the time that the positions are closed, the eToro Trading means it may at any time choose to hedge or not to hedge
Platform will calculate the remaining payment rights and some or all of its positions and it may change that at any time
obligations to reflect movements in the Contract Value since (and without disclosing its hedging). Any of those hedge
the previous business close (including any other positions means that eToro Australia will have one or more
credits/debits). Because you enter a position to Close Out the Hedge Counterparties, each of which potentially owes a net
existing position, there may be a fee on the position used to amount to eToro Australia.
close the position – see Section 5.
It is possible that eToro Australia’s Hedge Counterparty may
To provide the CFDs to you in an efficient and low-cost become insolvent or it is possible that other clients of that
manner, eToro Australia has discretion in determining closing Hedge Counterparty may cause a default, which reduces the
prices. In general, without limiting eToro Australia’s discretion, financial resources or capacity for that Hedge Counterparty to
it should be expected that eToro Australia will act reasonably perform its obligations owed to eToro Australia under the
and have regard to a range of relevant factors at the time, the hedge CFDs.
closing price of the Underlying Instrument for the position, any
foreign currency exchange rates which are relevant due to the Since eToro Australia is liable to you as principal on the
denomination of the position or Accounts and any suspension contract, eToro Australia could be exposed to the insolvency
or halt in trading of the Underlying Instrument. of its Hedge Counterparty or other defaults which affect the
Hedge Counterparty.

eToro Australia PDS (last updated on 29 August 2019) 13

The following information is applicable with respect to eToro The risks you have by dealing with eToro Australia cannot be
Australia’s the main affiliated Hedge Counterparty as at the simplistically assessed by reference to historical financial
date of this PDS. Please be aware that eToro Australia does information about eToro Australia or its Hedge Counterparty
not make any representation that it will hedge, or that it will or general statements of principle.
hedge only with the following affiliated Hedge Counterparty.
The credit risk you have on eToro Australia depends on,
Hedge Counterparty: eToro (Europe) Limited whether it systematically manages all Client Accounts on the
same basis, its solvency generally, as well as on the amount
Further information: eToro (Europe) Limited is a company (and kind) of its capitalisation, its cash flow, all of its business
incorporated in Cyprus (registered number HE200585). It is a risks, its Client and Instrument concentration risks, its
regulated financial services company and investment firm. counterparty risks for all of its business and transactions (not
just the CFDs), its risk management systems and actual
It is regulated by the Cyprus Securities and Exchange implementation of that risk management.
Commission (licensee number CIF 109/10) and operates in
accordance with Markets in Financial Instruments Directive Your credit risk on eToro Australia will fluctuate throughout the
(MiFID) of the European Union. day and from day to day, including due to the implied credit
risk on its Hedge Counterparty, whose credit risk to eToro
You should note that: Australia (and so indirectly to you) cannot be assessed or
verified on a continuous basis or perhaps at all.
 eToro (Europe) Ltd has not been involved in the
preparation of this PDS nor has authorised any You should consider all of those factors and not rely only on
statement made in this PDS relating to it. past financial statements since that could be materially
incomplete information for your purposes, not current and
 eToro (Europe) Ltd has no contractual or other legal
therefore potentially misleading as a guide to the current
relationship with you as holder of the CFDs. eToro
solvency and creditworthiness of eToro Australia.
(Europe) Ltd is not liable to you and you have no legal
recourse against eToro (Europe) Ltd (because eToro The eToro Australia annual directors’ report and an audited
Australia acts as principal to you and not as agent) nor annual financial report will be available for inspection free of
can you require eToro Australia to act against eToro charge on request by contacting eToro Australia for an
(Europe) Ltd. appointment at its offices.
 eToro Australia gives no assurance as to the solvency or 3.24 Payments to you in eToro Australia insolvency
performance of any Hedge Counterparty.
If eToro Australia becomes insolvent, here is how you could
 The regulation of a Hedge Counterparty is no assurance be paid for any net credit balance in your Account:
of the credit quality of the Hedge Counterparty or of any
regulated or voluntary scheme for meeting the claims of  Any moneys in the eToro Australia client moneys trust
creditors of the Hedge Counterparty. For example, account should be paid to you, after deduction for any
although a Hedge Counterparty may be regulated by amounts properly payable to eToro Australia for the
Cyprus financial services law that gives no assurance CFDs or other financial products or which you have
that the Hedge Counterparty has good credit quality or it otherwise agreed are payable to eToro Australia (and
will perform its obligations to eToro Australia. subject to any court orders to the contrary).

 The credit quality of the Hedge Counterparty can change  eToro Australia will owe you any remaining net amount
quickly. eToro Australia may not be able to make after paying to you your moneys from the eToro Australia
assessments of the credit quality of its Hedge client moneys trust account.
Counterparty at the time the changes occur which it can  eToro Australia will need to assess the amounts
disclose. Reports by independent credit rating agencies prudently available to pay Clients from its own funds, and
may not be available because of their lack of consent or
may choose to pay out interim amounts from any
because they are not licensed to allow such reports to be available funds.
cited in the PDS given to retail clients.
 The precise amounts and timing of any further possible
 eToro Australia may use other Hedge Counterparties
payments might not be known until the net position with
and may do so without prior notice to you of that. For its Hedge Counterparty is known and paid to eToro
example, in times of exceptional market difficulties or
Australia.
communications technology problems, eToro Australia
may decide it is prudent to hedge with other hedge  The position of the Hedge Counterparty depends on
counterparties other than with eToro (Europe) Ltd. what it recovers from its Hedge Counterparty and what it
owes its clients.
 If eToro Australia becomes aware that material
information about the Hedge Counterparty changes or a  eToro Australia will need to assess the amounts
significant matter later changes, eToro Australia will prudently available to pay CFD Clients, and may choose
issue a supplementary product disclosure statement, or to pay out interim amounts.
a new product disclosure statement. If the new
information is not materially adverse to you, eToro  eToro Australia will need to assess fair and reasonable
Australia will provide the updated information on its allocation to Clients, having regard to, for example any
website. amounts paid from the eToro Australia client moneys
trust account, Account balances and amounts recovered
eToro Australia is not authorised to set out in this PDS any from its Hedge Counterparty.
further information published by the Hedge Counterparty and
eToro Australia takes no responsibility for third-party
information about the Hedge Counterparty which may be
available to you. If you require further information about the Section 4 – Significant Risks
Hedge Counterparty used by eToro Australia before deciding
Dealing in our financial products involves a number of
whether to invest in the CFDs, please contact us so we can
significant risks. You should seek independent advice and
provide to you any further information of the Hedge
consider carefully whether our products are appropriate for
Counterparty, which is publicly available.
you given your experience, financial objectives, needs and
3.23 Solvency of eToro circumstances.
4.1 Key Risks

eToro Australia PDS (last updated on 29 August 2019) 14

You should consider these key risks involved in our offering:
KEY RISKS IMPORTANT ISSUES
KEY RISKS IMPORTANT ISSUES
Foreign Foreign currency conversions
exchange risk: required for your Account (see
Loss from You may choose to trade CFDs with section 6 for a further description)
Leverage: leverage that can lead to large can expose you to foreign exchange
losses as well as large gains. The risks between the time the
high degree of leverage offered in Transaction is entered into and the
our products can work against you time the relevant conversion of
as well as for you. The leveraged currencies occurs.
nature of the eToro Australia CFDs
gives a moderate to high risk of a Foreign exchange markets can
loss larger than the amounts you change rapidly. This exposes you to
pay eToro Australia as Margin. It potentially adverse changes in the
can also cause volatile fluctuations value of your Account, which can be
in the Margin Requirements. large (depending on foreign
exchange rates) and volatile. This
You can minimise the risk of losses will directly affect the value of a
on positions by monitoring your position.
Open Positions and Closing Out the
positions before losses arise.
Counterparty You have the risk that eToro
risk on eToro Australia may not meet its
Client moneys The money which you pay into the Australia: obligations to you under the CFDs.
may be eToro Australia client moneys trust The CFDs are not Exchange traded
withdrawn to account may be withdrawn to pay so you need to consider the credit
pay eToro eToro Australia moneys to which it and related risks you have on eToro
Australia: is entitled. This includes amounts Australia.
for any Realised Losses as well as
for any fees, charges and costs. eToro Australia believes that your
counterparty risk on eToro Australia
Those moneys withdrawn to pay is low, especially due to its feature
eToro Australia are eToro of paying moneys into the eToro
Australia’s moneys (and are not Australia client moneys trust
held for you), reducing the amount account if there is any Realised
of moneys held in the eToro Profit on your Account and due to its
Australia client money trust account Margin policy and risk management
held beneficially for you. which it implements for the benefit
of Clients.
Margin risk: You must be able to pay to eToro
Australia the amount of required eToro Australia also believes that
Margin as and when required, your counterparty risk is reduced by
otherwise some or all your the additional feature of eToro
Transactions may be Closed Out Australia not using client moneys to
without notice to you. hedge any of its positions with its
Hedge Counterparty. Those
Margin Requirements are highly positions are funded from eToro
likely to change continuously, in line Australia’s operating account.
with market movements in the
Underlying Instrument. You can minimise your counterparty
risk on eToro Australia by limiting
You should be aware that there is a the amount you pay eToro, dealing
high risk of Margin Requirements prudently and requesting payment
changing and at times, very rapidly. to you of any surplus in your
There is a moderate to high risk that Account which is not required for
if the market value of the Underlying prudent Margin Cover
Instrument moves rapidly against management; however, this
you, you will be required to pay approach may increase your Margin
more Margin without eToro Cover risk, resulting in all of your
Australia giving you notice of that. positions being Closed Out. Please
see Sections 3.21 to 3.24.
You can minimise your risk of losing
your positions after failing to meet
Margin Requirements by carefully Cryptocurrency The prices available for
selecting the type and amount of CFD risks: cryptocurrencies fluctuate
CFDs to suit your needs, having risk significantly on any given day and
management tools in place (such as over time (so your eToro
placing stop loss orders, limit orders Cryptocurrency CFDs pricing will
or any other Order permitted by also fluctuate as significantly and as
eToro), monitoring the positions, often).
maintaining a prudent level of cash There is no regulated market for
balance in your Account and cryptocurrencies. This affects the
providing sufficient Margin within pricing, liquidity, integrity of the
the time required by eToro markets and any exchange used for
Australia. Please see Sections 3.13 dealing in the cryptocurrencies
to 3.15 for further information about which are the Underlying
Margin. Instruments. Exchanges offering
pricing for cryptocurrencies have

eToro Australia PDS (last updated on 29 August 2019) 15

 KEY RISKS IMPORTANT ISSUES KEY RISKS IMPORTANT ISSUES
little or no regulation or protections any Open Positions. In our sole
for users of them. Exchanges may discretion we may decide (but for
be partly centralised, decentralised avoidance of any doubt we are not
or some other combination of order obliged to do so) to adjust your
book facilities. These factors affect Account in respect of a fork or other
the pricing, liquidity and cost of event depending on the
transactions in cryptocurrencies, circumstances of each event
which can correspondingly affect attributable to any specific
the pricing of eToro Cryptocurrency cryptocurrency. eToro assumes
CFDs. absolutely no responsibility
whatsoever in respect of an
Cryptocurrencies rely on a number unsupported branch of a forked
of key factors which are not present protocol or the cryptocurrency
in other Underlying Instruments, resulting from such event.
such as technology inherent in the
software for the cryptocurrency, If at any time any of the
nodes and mining of cryptocurrencies that is an
cryptocurrencies. These are Underlying Instrument for your CFD
technical features which are outside is delisted or we no longer support
the scope of this PDS so you should the cryptocurrencies for any reason,
be familiar with the key features of then the applicable CFD may be
cryptocurrencies before dealing in immediately closed. If eToro is
an CFDs in relation to them. None notified that a cryptocurrency which
of these are regulated or backed by is the Underlying Instrument for your
any government or voluntary CFD which you hold in your Account
institution, so there are additional is likely to be delisted or removed or
risks inherent in cryptocurrencies, cancelled from any of the
and their predictability is much more exchanges (some of them or all)
uncertain. Cryptocurrencies have and eToro Australia believes that it
experienced a range of issues, such (or its Hedge Counterparty) will not
as forking or delays in transactions, be able to trade in such
which can affect the pricing of eToro cryptocurrencies, or if there is
Cryptocurrency CFDs. another significant disruption to a
market for a cryptocurrency or the
It is possible that some cryptocurrency itself is subject to a
cryptocurrencies may become significant disruption, then eToro
worthless, leading to your eToro Australia may exercise its
Cryptocurrency CFDs becoming discretions to adjust the pricing or to
worthless. terminate the eToro Cryptocurrency
Here is more information about CFD. It will do so in accordance with
those risks may arise due to the its obligations and duties, acting
features of our CFDs. Please note reasonably for the market as a
that this PDS does not disclose all whole, without having to consider
of the risks of cryptocurrencies. any particular client.

eToro Australia does not own or Under certain market conditions,

control the underlying software you may find it difficult or impossible
protocols which govern the to liquidate a CFD position. This can
operation of cryptocurrencies occur, for example, when the
available as Underlying Instruments market reaches a daily price
for eToro Cryptocurrency CFDs for fluctuation limit (“limit move”), if
trading in our platform. In general, there is insufficient liquidity in the
the underlying protocols are open market.
source and anyone can use, copy, eToro Cryptocurrency CFDs
modify, and distribute them. There should be seen like as an
is no guarantee of their functionality, extremely high risk investment.
security, or availability. The You should never invest funds that
underlying protocols are subject to you cannot afford to lose.
sudden changes in operating rules
(forks) and other events and Given the foregoing,
transformations, and that cryptocurrencies are not
such forks, transformations and appropriate for all investors. You
other events may materially affect should not deal in these CFDs
the value, function or even the name unless you have the necessary
of the cryptocurrency. eToro knowledge and expertise, you
Australia may, in its sole discretion, understand these products’
temporarily suspend access to characteristics and your exposure
CFDs with that cryptocurrency as to risk. You should also be satisfied
the Underlying Instrument; decide that the product is suitable for you in
not to support (or to cease light of your circumstances and
supporting) the forked protocol financial position.
entirely or the cryptocurrency
resulting from such event; or to The risk of loss in trading eToro
delay offering CFDs, which means Cryptocurrency CFDs can be
you would not be able to Close Out substantial. You should, therefore,

eToro Australia PDS (last updated on 29 August 2019) 16

 KEY RISKS IMPORTANT ISSUES SIGNIFICANT IMPORTANT ISSUES
RISKS
carefully consider whether such
trading is suitable for you in light of market prices may move such that
your circumstances and financial the Contract Value of the position on
resources. You should be aware closing can be significantly less than
that you may sustain a total loss of the amount you invested in them.
the funds in your Account. If the
market moves against your position, There is no guarantee or assurance
you may be called upon by us to that you will make profits, or not
provide a substantial amount of make losses, or that unrealised
additional Margin, on short notice, in profits or losses will remain
order to maintain your position. If unchanged.
you do not provide the required You can reduce your risk by
funds within the time required by us, understanding the market relevant
your position may be liquidated at a to the CFDs, monitoring your
loss. positions carefully and closing your
eToro Australia currently allows Open Positions before
trading in eToro Cryptocurrency unacceptable losses arise.
CFDs over the weekend, though it
may stop that at any time and from Not a regulated The financial products offered by
time to time. Given that market: eToro Australia are derivatives and
cryptocurrency exchanges might are not covered by the rules for
operate over weekends, there can Exchange-traded CFDs. For
be a significant difference between example, trading on the ASX is
Friday’s close and Sunday’s open governed by rules applicable to
prices of eToro Cryptocurrency brokers and generally has the
CFDs. All such factors may result in benefit of a guarantee system
you either not completing an Order known as the National Guarantee
on a specific trading day or Fund which provides protection from
completing an Order on a fraud or misconduct by brokers in
substantially less favourable price. connection with certain ASX trades.
The ASX rules and the National
Guarantee Fund do not apply to
You can manage these risks by only trading in our CFDs.
investing in eToro Cryptocurrency Over-the-counter derivatives, such
CFD if you are experienced in the as the CFDs, by their nature may not
cryptocurrency, you manage your at times be liquid investments in
exposure by limiting your exposure, themselves. If you want to exit the
placing appropriate orders and position, you rely on eToro
carefully and frequently monitoring Australia’s ability to Close Out at the
your Open Positions. time you wish, which might not
Since your Margin Cover match the liquidity or market price of
requirements for eToro the Underlying Instrument.
Cryptocurrency CFDs may be large, You can reduce your risk by
and may be increased over the carefully reading this PDS, the
weekend, you can help to mange Financial Product Terms and taking
your risks by carefully considering independent advice on the legal and
the amount of Margin you have in financial aspects relevant to you.
your Account, the risks of all of your
Open Positions and your capacity to
trade or to provide more Margin Market A market disruption may lead to you
Cover immediately, even outside of disruptions: being unable to deal in our financial
banking payment hours. products when you wish, and you
may suffer a loss because of that.
This is because the market
4.2 Other Significant Risks disruption events which affect the
Underlying Instrument will also
You should consider these other significant risks involved in affect the contract positions on the
our products: same or very similar basis.

SIGNIFICANT IMPORTANT ISSUES Examples of disruptions include the

RISKS “crash” of a computer-based trading
system, a fire or other Exchange
emergency, or an Exchange or
Market risk: Financial markets can change government regulatory body
rapidly; they are speculative and declaring an undesirable situation
volatile. Prices of currencies depend has developed in relation to series of
on a number of factors including, but CFDs or a trade, and suspends
not limited to, commodity prices or trading in those CFDs or currencies
central bank decisions, interest or cancels that trade.
rates, demand and supply and
actions of governments. You can attempt to minimise the
effect of market disruptions by
Our products are highly speculative obtaining information released by
and volatile. There is a high risk that the market relevant to the position

eToro Australia PDS (last updated on 29 August 2019) 17

 SIGNIFICANT IMPORTANT ISSUES SIGNIFICANT IMPORTANT ISSUES
RISKS RISKS
and acting after the event as Open Positions, placing and
appropriate (if any) to the position maintaining prudent Orders
held, such as Closing Out because (including Stop Loss Orders), if such
the values have significantly exists at the time you opened your
changed since before the event. position and managing your Open
Positions before the Account Value
Orders and It may become difficult or impossible balance reaches or falls below the
gapping: for you to Close Out a position. This Margin Closeout level applicable to
can happen, for example, when your Account.
there is a significant change in the
Contract Value over a short period. Cancelation for eToro Australia may void from the
There is a moderate to high risk of error: outset any Transaction containing or
this occurring. based on any manifest error or a
price, or series of prices, which are
eToro Australia’s ability to Close Out subsequently determined to be
a position depends on the market for unrepresentative of the actual
the Underlying Instrument. Stop market valuation of the Underlying
Loss Orders (and other Order types) Instrument. This is exercised in our
might not always be filled and, even discretion, so you have risk of a
if placed, might not limit your losses Transaction later being cancelled,
to the amount specified in the Order, whether or not you were aware that
since they are not guarantees that there was an error in the pricing
there will be no loss. which we later decide has occurred.
You should consider placing Stop In the absence of our fraud or wilful
Loss Orders or other Orders that default, we will not be liable to you
might limit your losses, if such for any loss, cost, claim, demand or
Orders exists at the time you expense following any such
opened your position, but also cancelation.
closely monitor your Account and We consider this to be a low risk,
the relevant market in case the Stop since it does not occur often, but it
Loss Order is not fully filled or not can occur so you can manage your
filled at all and you need to take risk by monitoring the available
further action to limit your losses. prices and your Account.
For further information, see the
description on “Stop-Loss Orders” in
Section 3.17. eToro Trading You are responsible for the way you
Platform: access the eToro Trading Platform
or your other contact with eToro
Auto eToro Australia may without prior Australia. If you are unable to
Liquidation: notice to you liquidate some or all access the eToro Trading Platform,
your Open Positions if the Account you will be unable to trade in our
Value balance reaches or falls CFDs (including Closing them Out)
below the Margin Closeout level or you might not be aware of the
applicable to your Account. This can current Margin Cover and Margin
generate fees and realised losses in Requirement and so you may suffer
your Account. loss (and liable to pay fees) as a
eToro Australia does not assure you result.
that eToro Australia will act on this eToro Australia may also suspend
right, at any time or in respect of all the operation of the eToro Trading
or any of your Open Positions. You Platform or any part of it, without
should not rely on this right to prior notice to you. Although this is
manage your risk and your considered a low risk since it would
obligation to maintain Margin Cover usually only happen in unforeseen
to meet your Account’s Margin extreme situations, eToro Australia
Requirement. has discretion in determining when
The more basic risks to you are that to do this. If the eToro Trading
you fail to manage your own Platform is suspended, you might
Account by maintaining adequate have difficulty contacting eToro, you
Margin Requirement, you fail to might not be able to contact eToro
monitor your Open Positions, you Australia at all, or your Orders may
(wrongly) rely on eToro Australia not be able to be executed at prices
liquidating your Open Positions or quoted to you.
you fail to manage your Open There is a moderate to high risk that
Positions before the Account Value eToro Australia imposes volume
balance reaches or falls below the limits on Client Accounts or limits or
Margin Closeout level applicable to filters on dealing in particular CFDs,
your Account. which could prevent or delay
You can manage the risk of eToro execution of your Orders, at your
Australia liquidating some or all your risk.
Open Positions, or the risk of you You have no recourse against eToro
wrongly relying on eToro Australia to Australia in relation to the availability
do this, by carefully monitoring your

eToro Australia PDS (last updated on 29 August 2019) 18

 SIGNIFICANT IMPORTANT ISSUES SIGNIFICANT IMPORTANT ISSUES
RISKS RISKS
or otherwise of the eToro Trading determined by eToro Australia in the
Platform, nor for technological or circumstances permitted by the
software errors or limitations. Financial Product Terms.

Market: The rules of the relevant market (if Regulatory A Client may incur losses that are
any) or Exchange govern the trading bodies: caused by matters outside the
in the Underlying Instrument and so control of eToro Australia. For
might indirectly affect your dealing in example, actions taken by a
the CFDs. regulatory authority exercising its
powers during a market emergency
All the rules (if any) of each relevant may ultimately result in losses to the
market or Exchange may be Client because of the effect of those
relevant to the CFDs, so you should actions on the Underlying
consider those rules. The details of Instrument and so, will affect the
those rules are outside the control of terms of the Client’s contract (with or
eToro and they may change at any without any decision by eToro).
time and without notice to you.
A regulatory authority can, in
Conflicts: Trading with eToro Australia for its extreme situations, suspend trading
OTC CFDs carries an automatic risk or alter the price at which a position
of actual conflicts of interests is settled, which might lead to
because eToro Australia is acting as changes to the pricing for the
principal in its positions with you and Underlying Instrument for the
eToro Australia sets the price of the Client’s position.
CFDs and also because it might be
transacting with other persons, at eToro If you fail to pay, or to provide
different prices or rates, or eToro Australia’s currency for, amounts payable to
Australia might be dealing with powers on eToro Australia or fail to perform any
market participants in relation to its default, obligation under your Transactions,
exposure to you or to any aspect of indemnities and eToro Australia has extensive
all of its Clients’ Accounts. limitations on powers under the Financial Product
liability Terms to take steps to protect its
You can monitor eToro Australia’s position.
CFD pricing compared with other
CFDs which have comparable terms For example, eToro Australia has
and by monitoring the underlying the power to Close Out positions, to
market. decide whether to accept Orders or
to execute them and to determine
Valuations: eToro Australia decides the values the rates of interest it charges.
of its financial products issues to Additionally, under the Financial
you. Typically, this is by some Product Terms, you agree to
reference to (but not automatically indemnify eToro Australia losses
solely derived from) the market and liabilities, including, for
value (or, if relevant, index level) of example, in default scenarios.
the relevant Underlying Instrument Although these powers, limits on the
on the relevant market which in turn liability of eToro Australia and the
affects the price quoted by any indemnities you give to eToro
relevant Hedge Counterparty to Australia are extensive and
eToro Australia. eToro Australia potentially expose you to significant
does not commit to providing prices risks, eToro Australia must comply
directly from a market. with its obligations as a financial
If the market fails to provide that services licensee to act efficiently,
information (for example, due to a honestly and fairly.
failure in trading systems or data You should read the Financial
information service) or trading in the Product Terms carefully to
Underlying Instrument is halted or understand these matters.
suspended, eToro Australia
determines its value based only on
its own information (not market Operational risk: There is always operational risk in
pricing). the CFDs. For example, disruptions
in operational processes such as
Due to the nature of our financial communications, computers and
products, eToro Australia’s computer networks, or external
discretion is unfettered and so has events may lead to delays in the
no condition or qualification. execution and settlement of a
Transaction.
While there are no specific limits on
eToro Australia’s discretions, eToro We might not be liable to you if
Australia must comply with its losses arise owing to delays, errors
obligations as a financial services or failures in operational processes
licensee to act efficiently, honestly outside our control, including but not
and fairly. You therefore have the limited to faults in the eToro Trading
risk of relying on whatever value is

eToro Australia PDS (last updated on 29 August 2019) 19

 SIGNIFICANT IMPORTANT ISSUES
RISKS
Platform or in the provision of data
or services by third parties.
Section 5 – Fees, charges and costs
eToro Australia derives a financial benefit by entering into
other transactions with other persons at different rates from
those charged to the Client.

5.1 Fees - General

Please be aware that there is no separate “spread” charged
as a fee – it is simply the difference that arises between the
Bid and Ask prices as a result of the rates chosen by eToro
Australia.
The specific details for each CFD (sometimes referred to as
the Trading Conditions) will depend on a range of factors,
including your choice of Underlying Instruments and their
markets. The variable details are available at
http://www.etoro.com/en/customer-service/fees/.

5.2 Finance Charge and Finance Credit adjustments on

CFDs
Finance Charges and Finance Credits are calculated daily on
CFD positions held overnight and are dependent on the
underlying market of the Underlying Instrument and the actual
rates decided by us.
When you hold a position overnight, your Account is debited
or credited the overnight swap or rollover rate (otherwise
known as the Finance Charge or Finance Credit).
The swap or rollover rate is decided by us by reference to the
interest rate differential between the interest rates offered by
the countries whose currencies you are trading (by way of our
CFDs) plus or minus an amount (referred to as “spread”)
applied by eToro Australia.
Any Open Positions held by you after the relevant hour for the
CFD (as shown on http://www.etoro.com/en/customer-
service/fees/ ) (Overnight Hour), which is considered the
beginning and end of the trading day for that CFD, are
considered to be held overnight and so are subject to
overnight fee/credit as further explained below.
When holding such position open after the Overnight Hour, an
overnight fee/credit will be either added or subtracted from
your Account with respect to such position.
The overnight fee/credit amount is a constant fee/percentage
of the position value/dollar amount per units and is based on
a number of factors including among others, whether the
Transaction is a buy or a sell, relevant interest rates, the
currency in which it is denominated, instrument differentials,
daily price fluctuations and other economic and market related
factors.
The overnight fee/credit for each instrument is displayed on
http://www.etoro.com/en/customer-service/fees/ link for each
specific Underlying Instrument on the Trading Platform. Any
specific differences or details may be found there.
Please be aware that since most liquidity providers (which
include global banks, financial institutions, prime brokers and
other market makers) across the globe are closed on
Saturdays and Sundays (their local time), there is no overnight
on these days, but most liquidity providers still apply interest
for those two days. To account for that, we will book two/three
days of overnight fee/credit on the day relevant for such
Instrument as set out on http://www.etoro.com/en/customer-
service/fees/ (WE Overnight Day), which makes a typical
Overnight Day overnight fee/credit a multiple of the
amount on the preceding weekdays, all as set out on
http://www.etoro.com/en/customer-service/fees/. Market
holidays will be charged on a daily basis and not in advance
before the holiday (for instance if any of the currencies traded
has a major holiday).

eToro Australia PDS (last updated on 29 August 2019) 20

In deciding whether to open a position for a CFD with a for example, interest rates, currency supply and demand and
specific Underlying Instrument, you should be aware of the actions of government. In some situations, exchanges of
overnight fee/credit rates because they will be added or foreign currency may be suspended and further, may be
subtracted(as the case may be) to or from your Account. allowed after a delay and the rates substantially different due
to, for example, government decisions. These will impact on
5.3 Interest on cash balances the rates of conversion set by eToro Australia.
You do not receive interest on moneys held for you in the 6.2 Discretions
eToro Australia client money trust account. eToro Australia
does not pay any interest on cash balances in your Account eToro Australia has discretions under the Financial Product
even if paid to eToro Australia by any third party, unless Terms which can affect your Account Orders and positions.
otherwise agreed in writing. You do not have any power to direct how we exercise our
discretions.
5.4 Bank Fees
When exercising our discretions, we will comply with our legal
Please be aware that you may incur fees imposed on your obligations as the holder of an Australian Financial Services
Transaction by your bank or intermediary banks. eToro Licence. We will have regard to our policies and to managing
Australia is not responsible for these additional charges. all risks (including but not limited to financial, credit and legal
5.5 Conversion fee risks) for ourselves and all our Clients, our obligations to our
counterparties, market conditions and our reputation.
eToro Australia will convert any profit or loss of your
Transactions from the trade currency to the currency of your We will try to act reasonably in exercising our discretions but
Account at our current exchange rate which may be different we are not obliged to act in your best interests or to avoid or
to the spot foreign exchange rate. minimise a loss in your Account, or avoid causing you fees on
Transactions.
5.6 Charges, External Fees and Taxes
Our significant discretions are:
In some cases, there may be fees charged by third party
banks (e.g., bank charges on international payment transfers • whether to accept your Order (including to Close Out a
and credit card payments) to eToro Australia which eToro position) or to amend it;
Australia may charge you. These are not part of our financial • any risk limits or other limits or filters we impose on your
products but you might incur them in relation to your payments Account or your trading;
to us or receipts from us.
• determining Margin Cover and Margin Requirements,
For example, if eToro Australia is charged a credit/debit especially the amount of Initial Margin, and any grace time to
card/e-wallet fee for receiving your payment, eToro Australia meet any changed Margin Requirement;
will charge you for that (and any GST), and apply that to your
Account. • determining values of Underlying Instruments (for opening
and closing positions and for determining Margin Cover);
If there is a chargeback for any payment to your Account
(whether made by you or in your name), you may be • setting Bid prices and Ask prices; and
responsible for covering any reversed payments and charge
back fees incurred by eToro Australia. • Closing your positions and setting the Closing Value.

You are responsible for any transaction duty, GST or similar You should consider the significant risks that arise from eToro
goods and services or value added tax payable in respect of Australia exercising its discretions – see Section 4.
trading in Transactions (except for any income tax payable by Our other discretions include:
eToro).
• setting our fees and interest rates;
5.7 Details and Demonstration account
• adjusting your positions for adjustments made in the market
We encourage you to visit our Trading Platform to see how to the Underlying Instrument;
the Transactions work and their specific fees, charges and
costs. Our demonstration account is a free way to see and • adjusting, Closing Out or cancelling Transactions or Orders
learn examples. due to applying our compliance or operational policies;
• setting foreign currency exchange conversion rates;
• opening and closing your Account; and
Section 6 – General Information
• interpretation, variation and application of our policies.
6.1 Accounts denominated in foreign currency
Please note that while we have discretions, the Trading
Each Account will be denominated in US dollars or any other Conditions typically are set or applied for automatic outcomes,
currency permitted by eToro Australia from time to time. such as Closing Out all of your Open Positions if your Account
does not meet the Margin Requirement.
If you instruct eToro Australia to make a Transaction
denominated in a currency different from the denomination of 6.3 Policies
your Account currency, eToro Australia will convert the
currency value of your Transaction into the Account’s eToro Australia has a number of policies that can affect your
currency. Any such conversion is subject to eToro Australia’s investments. The policies are guidelines that eToro Australia
procedures and approval. (including all of its staff) is expected to follow but policies are
not part of the Financial Product Terms and do not give you
The foreign currency conversions can expose you to foreign additional legal rights or powers.
currency exchange risks between the time the Transaction is
entered and the time the relevant conversion of currencies We may change our policies at any time without notice to you.
occurs. This will immediately impact on the margining of your We may amend, withdraw, replace or add to our policies at
Account, so you must be careful to understand and to monitor any time without notice to you. Our policies might help you
the effect of trading in products denominated in foreign understand how we operate but all the important disclosures
currencies. are set out in or referred to in this PDS and the Financial
Product Terms set out our respective contractual rights and
Foreign exchange markets can change rapidly. Foreign obligations so you should only rely on this PDS and not on the
currency exchange rates depend on many factors including policies.

eToro Australia PDS (last updated on 29 August 2019) 21

A summary of our key policies is available by contacting us, If you lose on your CFDs, you might not have other financial
which we will send you by email free of charge. resources to repay your credit card account, incurring higher
interest costs and possibly defaulting on your credit card
Our key policies relevant to our products currently are: terms.
• client suitability policy; Although eToro accepts payments of more than $1,000 from
• client moneys policy; credit card accounts to fund your Account and for later Margin
payments, please carefully consider whether this payment
• risk management policy (to the extent it applies to Clients, method is suitable for your dealing and limit it to what you can
hedging and Hedge Counterparties); and afford.
• conflicts of interests’ management policy 6.7 Taxation Implications
6.4 Anti-Money Laundering Laws The Australian Taxation Office (ATO) Taxation Ruling
2005/15 describes the income tax and capital gains tax
eToro Australia is subject to anti-money laundering and implications of trading in CFDs for differences and margin
counter-terrorism financing laws (AML laws) that can affect foreign exchange CFDs.
the CFDs. If your Account is established, eToro Australia may
disclose your personal information and stop or Close Out Our products will have taxation implications for Clients,
Transactions on your Account for the purposes of the AML depending on the current tax laws and administration, the
laws or under eToro Australia’s AML laws, policies and nature of the Client for tax laws, the terms of the transactions
procedures, without liability to you for any loss that arises due and other circumstances. These are invariably complex and
to that occurring. specific to each Client. You should consult your tax adviser
before trading in these financial products.
6.5 About eToro Australia
The following summary assumes that the Client will hold the
eToro Australia is an Australian incorporated company, contract on revenue account, i.e. the Client will be carrying on
licensed to provide financial services in OTC derivatives to a business of either trading or investing in these types of
retail clients and wholesale clients. financial products or the Client will enter into the financial
Further information about eToro Australia is available at products for profit making purposes (or both). This summary
www.etoro.com (follow through to the pages for eToro does not consider the taxation position if you enter into the
Australia). financial products detailed in this PDS for the purposes of
hedging risks associated with other investments held by the
eToro Australia is part of the eToro group of companies. None client on capital account.
of the other companies in the eToro group guarantee or
assure the performance by eToro Australia of its obligations If you are entering into a contract for the purposes of hedging,
to you. then the taxation consequences will depend on the nature of
the underlying transaction or the asset or liability which is
eToro Australia also provides or arranges the services of its being hedged. It is recommended that you obtain your own
affiliates to you. This includes the eToro Trading Platform and professional taxation advice for this scenario.
CopyTrading tools. The terms of these are with the respective
The following information should be regarded as general
service providers, which are affiliates of eToro Australia information only.
domiciled outside of Australia and subject to their respective
countries' laws, regulations and (if applicable) investor Profits and losses on our CFDs
protections). Such services are covered by the following Any realised gains derived or losses incurred by you in
documents: respect of a contract ordinarily should be included in your
assessable income. Realisation will generally occur when the
https://www.etoro.com/en/copytrading-authorization/ right or obligation to receive or pay on the contract ceases.
When calculating the amount of profit or loss, you need to
https://www.etoro.com/customer-service/terms-conditions/ consider the difference between the Closing Value and the
Contract Value on commencement of the position and any
https://www.etoro.com/customer-service/general-risk- fees on Open Positions paid or received by you.
disclosure/
The availability of tax deductions or losses incurred because
of entering into these contacts to offset current and future year
Please note that your CFDs are only with eToro Australia and, income will depend on your personal circumstances and you
despite using any services from affiliates of eToro Australia, will need to seek advice from your tax adviser in this regard.
you are unlikely to have any investor protections in relation to
the CFDs with eToro Australia other than pursuant to the Interest you receive on your Account is likely to be treated as
Financial Product Terms and Australian law. assessable income for Australian tax purposes at the time that
it is credited to the Account. If you do not provide your TFN
6.6 Applications (or ABN if applicable) or proof of exemption, eToro Australia
may be required to withhold tax from any interest payment at
You apply for an Account by completing an online application
the highest marginal rate (possibly plus any levy).
form which accompanies the online access to the Financial
Product Terms. Capital gains tax
Accounts can be funded by credit card, electronic transfer, or A contract for difference is classified as a capital gains tax
other methods permitted by eToro Australia from time to time. asset under the Income Tax Assessment Act 1997
Please note that eToro Australia does not accept cheques or (Commonwealth) (ITAA). Your dealing in eToro Australia
cash deposits. CFDs will have capital gains tax implications for you. In
calculating any capital gain or loss in respect of your dealing
Funding your Account by credit card has additional risks and
in eToro Australia CFDs, it is our understanding that you are
costs for you. By using that payment method, you effectively
entitled to take into consideration the cost of acquiring, holding
would be doubling your leverage by taking credit from your
and disposing of the eToro Australia CFD.
credit card account and dealing with leverage on your Account.
This can add to the risks and volatility of your positions as well Tax file number withholding rules
as potentially higher interest costs on your credit card account.
The tax file number withholding rules only apply to those
investments as set out in income tax legislation. eToro

eToro Australia PDS (last updated on 29 August 2019) 22

Australia’s current understanding is that those withholding 6.12 Dispute Resolution
rules do not apply to its financial products; however, if it is later
determined to apply and you have not provided eToro eToro Australia is committed to providing our clients with
Australia with your tax file number or an exemption category, outstanding service. If you have a complaint about the
eToro Australia may be obliged to withhold interest payments financial product or service provided to you, please raise the
at the highest margin tax rate and remit that amount to the issue with us by taking the following steps:
ATO.
Other fees, charges or commissions 1. Contact our eToro Australia Dispute Resolution
Officer and provide the details of your complaint.
If the position gives rise to gains that are assessable or losses You may do this by telephone, email or letter.
that are deductible, any fees other than charges or
commissions ordinarily should be available as a deduction at 2. If your complaint is not satisfactorily resolved, within
the time they are paid by the investor and debited against their three (3) Business Days of receipt of your initial
Account. complaint, please put your complaint in writing and
send it to the Compliance Department at:
Goods and Services Tax
According to the ATO GST Determination GSTD2005/3, the eToro Aus Capital Pty Ltd
provision, acquisition or disposal of a contract for difference is Level 33, Australia Square, 264 George Street
a financial supply under the provisions of the A New Tax Sydney NSW 2000
System (Goods and Services) Tax 1999 and related
regulations and is input taxed, with no GST imposed. or by email at info@etoro.com.au

Except for fees and charges as set out in this PDS, amounts eToro Australia will make every effort to try to resolve your
payable for or in respect of positions are not subject to goods complaint quickly and fairly. Complaints received in writing will
and service tax for Australian residents. Clients should seek be acknowledged within two (2) Business Days of written
their own independent advice. receipt of your complaint and we will use our best endeavours
to try to resolve your complaint within 45 days of receipt of
6.8 Cooling Off
your written complaint.
There is no cooling off arrangement for our offering. You do
not have the right to return any eToro Australia OTC contract 3. If you are not satisfied with the final response
acquired, nor request a refund of the money paid to acquire provided by our Compliance Department, you may
the CFD. If you change your mind after entering into a contract exercise your right to complain to the Australian
with eToro, you must Close it Out, pay any Transaction fees Financial Market Authority Limited (AFCA if your
and take the risk of incurring a loss in doing so. complaint is within its rules. AFCA is an external
dispute resolution scheme. The contact details for
6.9 Ethical Considerations AFCA are:
eToro Australia OTC contracts do not have a managed
investment component. Australian Financial Markets Authority Limited
G.P.O. Box 3
Labour standards or environmental, social or ethical Melbourne VIC 3001
considerations are not taken into account by eToro Australia Telephone: 1300 780 808
when making, holding, varying or Closing Out the CFDs. Website: www.afca.org.au
6.10 Jurisdictions
Please note that we will need to respond to your complaint
The distribution of this PDS in jurisdictions outside Australia prior to AFCA initiating any investigation into your complaint.
may be subject to legal restrictions. Any person who resides
outside Australia who gains access to this PDS should comply eToro Australia is a member of the AFCA complaints
with any such restrictions and failure to do so may constitute resolution scheme (No. 40378). The service provided to you
a violation of financial services laws. by AFCA is free of charge.

eToro Australia may decline applications for Accounts , or for The Australian Securities and Investments Commission
access to particular kinds of CFDs (such as eToro (ASIC) also has an Info line on 1300 300 630 which you may
Cryptocurrency CFDs) at any time and from time to time due use to make a complaint and obtain information about your
for any reason, including due to regulations in relation to rights.
Underlying Instruments (such as cryptocurrencies).
6.13 Privacy
eToro Australia’s operations are governed by the laws in
Australia. All the information collected by eToro Australia, in the
application form or otherwise, is used for the purpose of
6.11 eToro insurance providing you with the financial products and services,
maintaining your Account, and for the purpose of assessing
eToro Australia has a comprehensive insurance policy in whether you would be suitable as a Client.
place to cover a variety of different scenarios, some which
may assist in the repayment of deficits arising from dealing in eToro Australia has obligations under, and has procedures in
Hedge Counterparties or if there is fraudulent activity by one place to ensure its compliance with, the Privacy Act 1988
of eToro Australia’s employees, directors or authorised (Commonwealth).
representatives that results in your money being used in
fraudulent activities. Significantly, these obligations include the following:

If the insurance policy is insufficient or the insurer fails to Collecting personal information
perform its obligations, eToro Australia may not be able to In collecting personal information, eToro Australia is required:
make the payments it owes to you.
• to collect only information which is necessary for the
purpose described above;
• to ensure that collection of the information is by fair and
lawful means; and

eToro Australia PDS (last updated on 29 August 2019) 23

• to take reasonable steps to make you, the individual, aware
of why the information is being collected and that you may
access the information held by us.
If necessary, eToro Australia may also collect information on
directors and shareholders of a corporate client or agents or
representatives of the Client. eToro Australia may be required
by law to collect information, such as for taxation purposes or
to identify persons who open or operate an Account.
eToro Australia may take steps to verify information given to
it, in accordance with relevant laws, such as consulting
registries, referees, employers or credit agencies. This
information will not be disclosed to any other person although
eToro Australia may disclose this information to its related
bodies corporate or agents in the ordinary course of eToro
Australia providing you with its products and services.
Using the personal information
If eToro Australia has collected the information from you,
eToro Australia will only use the information for the purposes
described below and above unless you consent otherwise.
Personal information may be disclosed to:
• any person acting on your behalf, including your adviser,
accountant, solicitor, executor, attorney or other
representative;
• related bodies corporate or agents in the ordinary course
of eToro Australia providing you with its products and services
if you use, or intend to use, services of those other
corporations;
• any organisations to whom eToro Australia outsources
administrative functions;
• brokers or agents who refer your business to eToro
Australia (so that we may efficiently exchange information and
administer your account);
• regulatory authorities; and
• as required or permitted by law or by court order.
This information will not be disclosed to any other person
without your consent.
You may access your personal information held by eToro
Australia (subject to permitted exceptions), by contacting
eToro Australia.
Since eToro Australia is obliged by law to take reasonable
steps to ensure that the personal information used is accurate,
up to date and complete, please tell us immediately if any of
the information provided in this section changes.
Retaining personal information
eToro Australia takes reasonable steps to maintain secure
protection of all personal information obtained from misuse,
loss, unauthorised access, modification or disclosure.

eToro Australia PDS (last updated on 29 August 2019) 24

 eToro Australia CFD means an OTC contract issued by
Section 7 – Glossary eToro Australia pursuant to the Financial Product Terms.
ABN means Australian business number.
eToro Australia client moneys trust account means the
Account means your account with eToro Australia bank account (or any one of several of them) maintained by
established under the Financial Product Terms, including all eToro Australia as a trust account under section 981B of the
Transactions recorded in them, for using the eToro Trading Corporations Act. The moneys held in it beneficially for you
Platform. are credited to your Account.
Financial Product Terms means the terms of your Account eToro Commodity CFD means an eToro Australia CFD
with eToro Australia for all of your Accounts by which you deal (issued by eToro Australia pursuant to the Financial Product
in Transactions (as amended from time to time). Variations or Terms) whose Underlying Instrument is a Commodity
additional terms may be notified to you from time to time in Transaction.
accordance with your current Financial Product Terms.
eToro Cryptocurrency CFD means an eToro Australia CFD
Account Value means the current value of your Account (issued by eToro Australia pursuant to the Financial Product
equity which is calculated by eToro Australia by combining: Terms) whose Underlying Instrument is a cryptocurrency.
• the equivalent balance of your Account in the eToro client eToro FX CFD means an eToro Australia CFD (issued by
moneys trust account; eToro Australia pursuant to the Financial Product Terms)
which derives an amount calculated by reference to foreign
• the Realised/Unrealised Losses and Realised/Unrealised
exchange rates.
Profits;
eToro Index CFD means an eToro Australia CFD (issued by
• indicative costs to Close Out (fees, Finance Charges); and
eToro Australia pursuant to the Financial Product Terms)
• the values of Transactions not yet booked. whose Underlying Instrument is an index comprised of
securities of issuers listed on an Exchange, typically an index
AML Laws means the Anti-Money Laundering and Counter- sponsored or promoted by an Exchange.
Terrorism Financing Act 2006 (Commonwealth) and any
related regulations, rules and instruments. eToro Share CFD means an eToro Australia CFD (issued by
eToro Australia pursuant to the Financial Product Terms)
Ask means the price which eToro Australia as the seller is whose Underlying Instrument is a share or other Exchange-
willing to accept i.e. the price at which you can buy the traded financial product.
contract. This is also known as the “offer price”.
eToro Trading Platform means any of the online trading
ASX means the currencies and other Exchanges operated by platforms provided (or arranged to be provided) by eToro
ASX Limited. Australia for accessing your Account and placing Orders.
Australian Dollars or AUD$ means the lawful currency of the Exchange means the relevant market or any other exchange
Commonwealth of Australia. or market on which the relevant Underlying Instrument trades
or, in the case of an index, to which it relates. It includes
Balance means the funds or posted credit value available in
unregulated exchanges for cryptocurrencies.
an Account that may be used for dealing in the CFDs.
Finance Charge means a charge payable by you in respect
Base Currency is the first currency quoted in a currency pair,
of your Transaction, in accordance with the Financial Product
for example in the quote AUD/USD, the AUD is the Base
Terms.
Currency.
Financial Product Terms means the terms governing both
Bid means the price which eToro Australia as the buyer is
the OTC contracts and your Account with eToro Australia for
willing to accept i.e., the price at which you can sell the
all of your Accounts by which you deal in Transactions (as
contract.
those terms are amended from time to time). Variations or
Business Day means a weekday which is not a gazetted additional terms may be notified to you from time to time in
public holiday in Sydney accordance with your current Financial Product Terms.

CFD means the same as an OTC contract. Hedge Counterparty means a person with whom eToro
Australia enters into a hedge contract to hedge eToro
Client refers to the person who has an Account with eToro Australia’s exposure to Client positions.
Australia.
Initial Margin means the amount which you are required to
Close Out, Closed Out and Closing Out in relation to a provide to eToro Australia as the initial Margin to open a
Transaction means discharging or satisfying the obligations of position.
the Client and eToro Australia under the transaction and this
includes matching up the Transaction with another Leverage Ratio means the ratio set by eToro Australia which
Transaction of the same kind under which the Client has enables the Client to open a Transaction with an exposure
assumed an offsetting opposite position. referable to that ratio.

Closing Value means the value determined by eToro Margin Closeout means the automatic Close Out of all of
Australia by multiplying the number of your contract by the your Open Positions which occurs if the Balance does not
price (or, if an index, the level) of the contract. equal or exceed the Margin Requirement.

Commodity Transaction means a transaction to buy or sell Margin means the amount of funds paid to eToro Australia
a specific quantity of a described commodity or to make a and credited to your Account as Margin.
payment calculated by reference to changes in the level of an
Margin Cover means the amount calculated by eToro
index or interest rate, at an agreed date in the future.
Australia as the value in your Account available to meet your
Contract Value means the face value of the contract, and is Account’s Margin Requirement and for any further CFDs. It
calculated by eToro Australia by multiplying the applicable comprises Margin held in the eToro Australia client moneys
price (or, if an index, the level) of the contract by the number trust account for you and some part (in the discretion of eToro
of CFDs. Australia) of any Realised/Unrealised Loss and any
Realised/Unrealised Profit.
Corporations Act means the Corporations Act 2001
(Commonwealth).

eToro Australia PDS (last updated on 29 August 2019) 25

Margin Requirement means the minimum amount of Margin Funds is the lesser of the Balance of your Account and the
required to be maintained in your Account before the Account Margin Requirement.
Value reaches the Margin Closeout level.
Market Order has the meaning given to it in section 3.17 of
this PDS.
Open Position means, at any time, a Transaction which has
not been Closed Out, or settled prior to the time agreed for
settlement. Take Profit Order
Order means any instruction provided by you to enter into a
Transaction or to Close Out a Transaction.
OTC means over-the-counter (in contrast with Exchange-
traded).
OTC contract means an over-the-counter contract, provided
pursuant to the Financial Product Terms, for a financial
product, including options and CFDs in respect of foreign
exchange or other commodities, such as metals. eToro
Australia acts as principal to you in your OTC contracts.
Realised/Unrealised Loss refers to each of the following:
(a) Realised Loss – the amount by which the value of an
Open Position on Close Out is less than the value of the Open
Position when the Open Position was last valued or if the
Open Position has never been valued previously, it is the
value when the position was opened; and
(b) Unrealised Loss – the amount by which the value of an
Open Position (not on Close Out) is less than the value of the
Open Position when it was last valued or if the Open Position
has never been valued previously, it is the value when the
position was opened.
Realised/Unrealised Profit refers to each of the following:
(a) Realised Profit – the amount by which the value of an
Open Position on Close Out is more than the value of the
Open Position when the Open Position was last valued or if
the Open Position has never been valued previously, the
value when the position was opened; and
(b) Unrealised Profit – the amount by which the value of an
Open Position (not on Close Out) is more than the value of
the Open Position when it was last valued or if the Open
Position has never been valued previously, the value when
the position was opened.
Take Profit Order has the meaning given to it in section 3.17
of this PDS.
Term Currency is the second currency quoted in a currency
pair, for example for the quote AUD/USD, the Term Currency
is the USD.
TFN means tax file number.
Trading Conditions means the operating rules and
conditions for your trading on the eToro Trading Platform from
time to time.
Trailing Stop Order has the meaning given to it in section
3.17 of this PDS.
Transaction means any of the kinds of CFDs which are dealt
under the Financial Product Terms.
Underlying Index means an Underlying Instrument which is
an index when it is used as the basis for the calculations of
prices for an eToro Australia Index CFD.
Underlying Instrument means the instrument which is used
as the basis for the calculations of prices for your CFDs. This
includes an Underlying Index.
Withdrawable Funds means the amount of cash which may
be paid to you from the Account if requested. There are
Withdrawable Funds only if you have excess Balance over
your Margin Requirement and our fees, charges and costs
owing and payable to us. The amount of the Withdrawable

eToro Australia PDS (last updated on 29 August 2019) 26