What to know more about:
Margin Lending
Is a Margin Lending Facility and a Margin Loan the same thing?
No. The term Margin Lending Facility refers to your actual account structure i.e. the combination of your security and loan(s) which you manage as an investment vehicle. A Margin Loan is simply the dollar value that you can borrow using your existing shares or cash as security.
What is Direct Margin Lending?
Direct Margin Lending is the margin lending product offered by St.George Bank into which your HSBC Margin Loan has been transferred. On 7 August HSBC announced that it transferred its margin lending business to St.George Bank Limited. St.George is Australia's fifth-largest banking group and today has over $100 billion in assets and 2.8 million customers Australia wide.
What is Value Nominees Pty Limited?
Value Nominees Pty Limited (a wholly owned subsidiary of St George), is the new sponsor for the loan security in place of HSBC Securities Investments (Australia) Pty Limited and HSBC Margin Lending Nominees (Australia) Pty Ltd ACN 004 527 744.
What is the interest rate on my loan?
Please log on to your margin lending account or refer to our interest rate flyer, available via internet account access at www.directmarginlending.com.au
What is an Acceptable Securities List?
This is a list containing a range of shares that Direct Margin Lending will accept as collateral, or security, against your Margin Lending Facility.
When I borrow funds, what can I use them for?
You can use the funds you borrow to increase your investments or for business purposes, such as purchasing new equipment or expansion.
How do I lodge my shares as security?
If your existing holdings are Issuer Sponsored we require copies of your latest Issuer Sponsored Holding Statements with a request to convert these shares onto your account. If your existing holdings are currently Broker Sponsored please request your broker to transfer your shares to our CHESS sponsorship, or complete the share transfer form on our website.
Can I sell the shares I lodge with you as security?
You can always sell any of the shares in your portfolio including those you originally lodged as security. As your broker will deliver the proceeds of the sale directly to us, the sale funds will automatically pay down your loan balance.
How do I buy and sell shares through my Margin Lending Facility?
You can buy and sell shares through a trading account with a broker of your choice. You will need to advise them that your trades are to be settled through your Margin Lending facility and that a copy of the contract note must also be sent to Direct Margin Lending so we can settle them on your behalf.
Can drawdown on my margin loan?
Yes, you can get a loan advance. Simply put the request in writing or complete the Drawdown Request Form on our website and fax it to 1300 768 894 or Intl. +61 2 9995 8280.
How do I change my personal details?
Your change of details must be obtained in writing. Simply complete the Update my details Form aviailable on our website, then Please mail it to Direct Margin Lending PO Box R1842 Royal Exchange NSW 1225 or faxed to 1300 768 894 or Intl. +61 2 9995 8280.
How does Direct Margin Lending manage stock ownership?
Direct Margin Lending has never been, nor is currently a stock lender. All stock lodged with Direct Margin Lending as security for a margin loan is held under your own Holder Identification Number (HIN) with the Bank's nominee company, "Value Nominees Pty Limited", being the CHESS sponsor for the stock until such times as the loan is repaid. Voting and income rights continue with you unless there is an event of default by the client.
Internet Account Access
Do fees & charges apply when I use Internet Account Access?
No. This is an additional free service provided to make managing your loan simple and convenient.
How secure is Internet Account Access?
You can be confident that your account is secure. St.George Bank has employed the latest security encryption methods and Internet Account Access is further protected by your User Name and Password, which you should always keep confidential.
Is my account information 'real time'?
You can view your internet account details in real-time*. Your details are now being displayed within minutes of us processing any transactions or changes you request. Please note that details will be displayed as at the time you opened or refreshed this page and pricing will be reflected approximately 20 minutes later.
*subject to system availability
Does my financial adviser automatically have Internet Account Access to my account?
Unless you specifiically request for this, only you have access to your account details thorugh Internet Account Access.
How do I contact Direct Margin Lending?
The address for all correspondence to Direct Margin Lending is:
Direct Margin Lending
PO Box R1842
Royal Exchange NSW 2000
Phone number:
1300 300 128
Fax Number:
1300 768 894 or Int’l fax +61 2 9995 8280
Email:
directmarginlending@stgeorge.com.au
Website:
www.directmarginlending.com.au
We can also be contacted at directmarginlending@stgeorge.com.au.
Who should I address cheques to?
Any cheques should be made out to Direct Margin Lending and mailed to the above-mentioned address.
Margin Calls
What is a margin call?
A margin call occurs when falls in the value of your securities cause your current loan balance to exceed your borrowing limit plus your buffer. If this occurs you must repay part of your loan by 2:30pm (Sydney time) on the day the bank indicates you must meet the margin call (normally the day after you have been notified).
How do I know I am in a margin call?
It is your responsibility to regularly monitor your account and manage your facility position. You can do so by logging on to your margin lending Internet Account Access. In the event of a margin call, we will also try to contact you either by phone, email, SMS or ordinary mail. It is important your contact details are always kept up to date.
How can I rectify a margin call position on my margin loan?
A margin call may be remedied by either one or a combination of the following:
- Making a direct deposit into your linked Cash Management Account (CMA)
- Contributing additional acceptable security; or
- Selling the required amount of security to place the account back into order.
Once actioned, please fax us a copy of supporting documents (eg. contract note, redemption details, deposits confirmation etc) on 1300 768 894 or email us a scanned copy at directmarginlending@stgeorge.com.au
CMA
What is a CMA?
A CMA is a cash management trust account linked to your margin loan. You can deposit cash to this account which is lodged as security to the margin loan, geared at 100%. Direct Margin Lending has opened a Cash Management Account (CMA) on your behalf with Value Nominees, a fully owned subsidiary of St.George Bank, as the trustee.
What are the benefits of a CMA?
The following are some of the benefits of a CMA:
- You have an account to deposit your cash which is geared at 100% for your margin loan.
- You earn credit interest on credit balances in the CMA.
- You can nominate relevant Share registries to credit dividend payments into this account.
- This setup helps optimise your interest payments by allowing funds transfer between your CMA and variable margin loan (and vice versa).
What is the cost of setting up the CMA?
We set up the CMA on your behalf for free.
Under what name is the CMA set up?
Margin lending CMAs are opened on your behalf by Value Nominees Pty Limited, a fully owned subsidiary of St.George Bank.
Do I need to provide a TFN or ABN? What are the implications if I don’t?
You do not have to provide us with your Tax File Number (TFN) or Australian Business Number (ABN). However, if you choose not to, tax may be charged on any interest earned in your CMA at the highest marginal rate plus the Medicare levy. For more information about TFNs, ABNs or Exemptions, please contact the Australian Taxation Office.
Is there a minimum balance required to be maintained?
The CMA always retains a minimum balance of $1.00.
How do I deposit funds into my CMA?
Your CMA has a BSB and a unique account number which appears on the Margin Lending Internet Account Access and on your margin lending or CMA statements. You may choose to send us a cheque, (made payable to Direct Margin Lending) or, make a direct deposit into your CMA via your bank’s internet banking or BPay.
When is my deposit reflected in the CMA?
For funds transferred electronically before 5pm on weekdays, the deposit will be reflected in the CMA on the next business day.
Is there an overdraft facility on my CMA?
There is no overdraft facility on your CMA. However, if you wish to draw funds from your margin loan, please complete a Drawdown Request Form.
Where can I check my CMA details?
CMA details are available via your Margin lending Internet Account Access, under Bank Account Details. You can also check the balance on the Portfolio summary screen under security code SGBCMA
Do I earn interest on my CMA balance?
Yes, you earn interest on any credit balance on your CMA. For the latest CMA interest rate, please refer to our interest rate flyer, available via internet account access at www.directmarginlending.com.au
How do I transfer funds between the CMA and my margin loan?
You have two options on the margin lending or CMA application form.
Your first option is to have the funds automatically transferred between your CMA and variable margin loan (and vice versa). This is the default option.
The second option is to transfer the funds between your CMA and the Margin Loan (and vice versa) only upon request.
If you select option one, you can rest assured that this will automatically transfer any credit balance on your variable loan to the CMA so you can earn interest, and, transfer funds in the CMA to pay off your variable loan if it has a debit balance, (whichever is applicable) reducing the total amount of interest you pay.
Can I change the option of transferring funds between the CMA and my margin loan?
Yes, you can change your selection at any time. Simply fax us a written request on 1300 768 894 or post it to Reply Paid 1842, Royal Exchange NSW 1224.
When are funds transferred between the CMA and my margin loan?
This is a daily process and is updated at the end of each business day.
How do I access the money in the CMA?
To access the funds in your CMA, please check that the amount you wish to withdraw is less than your available funds and then fax us a request on 1300 768 894 or post it to Reply Paid 1842, Royal Exchange NSW 1224. You can only draw funds from your CMA by instructing Margin Lending. You can not draw funds directly from your CMA via internet banking or by going into a branch.
What fees do I need to pay on the CMA?
There are no fees on your CMA.
Do I receive statements for the CMA? How often?
Yes. Unless you have elected otherwise, you receive six monthly CMA statements in January and July respectively.
Why is a CMA set up with a Savings Gearing Loan?
By applying for Savings Gearing, you authorise us to open a CMA on your behalf. The CMA is opened in the name of Value Nominees Pty Limited, a fully owned subsidiary of St.George Bank.
This account is set up to collect part of the payment for your investments from your margin loan and the other part from your external bank account as per your instructions.
Your Fund Manager will draw on the CMA to make your total Monthly Investment.
Note: This CMA cannot be used for any other purposes, eg. Interest or Dividend payments.