When borrowing to invest, it is important to remember that while your returns can potentially increase, your losses can too.

We try to limit the effects of market fluctuations through margin calls.

How does a margin call occur?

Margin calls occur when the market value of your portfolio falls to where your security value is lower than the amount you have borrowed.

To help prevent this from occurring ANZ provides a buffer of 5% to give you additional time to get your portfolio back to an acceptable security position. If the 5% buffer is exceeded, your account will be placed in 'margin call'.

What is a buffer?

If a margin loan is in buffer no further funds can be borrowed until the account is restored to within acceptable LVR limits. It’s a timely reminder to review your portfolio and avert a potential margin call when your margin loan is in buffer.

Clearing a margin call

If a margin call occurs on your account ANZ will always attempt to contact you. However, it is up to you to monitor your account and keep it in a position that prevents a margin call from occurring.

Should a margin call be placed on your account it must be cleared by close of trade on the following ASX trading day. To bring the balance between your borrowings and your portfolio value back to an acceptable level you can either;

If you are not able to clear a margin call by close of trade on the following ASX trading day, ANZ Investment Lending will sell enough of your existing securities to clear the amount of your margin call. This will occur even if we are unable to contact you.

Most importantly, once in margin call, any subsequent rises in the market value of your portfolio will not clear the margin call.

Find out ways to minimise the risk of a margin call.

If you need help, please call the ANZ Client Services Team on 1800 639 330, Monday to Friday, 8.00am to 6.00pm (AEST) during ASX trading days.

^ An ANZ V2 PLUS account is automatically linked when you take out an ANZ Share Investment Loan.

BPAY® is registered to BPAY® Pty Ltd ABN 69 079 137 518.

Important information

Leveraging a share portfolio is fast becoming a popular wealth creation strategy. However, you should be aware that whilst leveraging into investments increases the potential return, it is important to recognise that it can also multiply the effects of falls in sharemarket values. We therefore strongly advise you talk to your financial planner, tax adviser and/or stockbroker and ensure you understand the risks, the specific tax implications as well as the legal and financial ramifications of a share investment lending facility.

The information provided is general in nature only and has not been prepared taking into consideration your particular needs, circumstances or objectives. ANZ recommends you read the ANZ Share Investment Loan Product Disclosure Statement and the ANZ Investment Lending Terms and Conditions which are available by calling the Client Services Team or from anz.com/investmentlending before acquiring the product. Fees and charges apply. All ANZ Investment Lending applications are subject to ANZ’s credit approval criteria.

References to an ‘ANZ E*TRADE Share Investment Loan are references to that product or, where appropriate, to the division of ANZ that administers that product. BPAY® is registered to BPAY® Pty Ltd ABN 69 079 137 518. E*TRADE Australia does not provide investment advice to its clients.

The ANZ E*TRADE Online Investing service is provided by ETRADE Australia Securities Ltd (trading as “E*TRADE Australia”) (ACN 078 174 973, AFSL No.238277), a Participant of the ASX Group. E*TRADE Australia is a subsidiary of ANZ and is a separate entity from ANZ. ANZ does not have any liability to you in respect of any information, product or service offered by E*TRADE Australia. Similarly, E*TRADE Australia does not have any liability to you in respect of ANZ’s activities and services. © 2003 E*TRADE Financial Corporation and E*TRADE Australia. All rights reserved. E*TRADE Australia does not provide investment advice to it’s clients. E*TRADE and the Asterisk Logo are registered trademarks of E*TRADE Financial Corporation or it’s subsidiaries and are used with permission.

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