A segregated trust account is a special type of bank account where client funds are kept completely separate from a company's operational accounts. This segregation is crucial for several reasons:

• Protection from Company Insolvency: If our company were to face financial difficulties or insolvency (which is extremely unlikely given our strong financial position), your funds would remain protected and separate from company assets. This means creditors would have no claim to these funds.
• Prevention of Misuse: Segregated accounts ensure that your money cannot be used for company operations, expenses, or any purpose other than executing your trading activities.
• Regulatory Compliance: Maintaining segregated client accounts is a requirement under ASIC's client money rules in the Corporations Act, which we strictly adhere to.
• Transparent Fund Management: Segregation creates clear boundaries between client and company funds, enabling easier auditing, reconciliation, and regulatory oversight.

When you deposit funds with us, your money is held in a segregated trust account with either National Australia Bank or Commonwealth Bank of Australia, both of which are among Australia's "Big Four" banks and are themselves regulated by the Australian Prudential Regulation Authority (APRA). This adds an extra layer of security to your deposits.

Negative balance protection is a safeguard that ensures you can never lose more than the funds you have deposited in your trading account. Here's how it works:

• Risk Limitation: Under normal trading conditions, if your account balance falls below the margin requirement, positions will be automatically closed through our margin call and stop-out procedures, preventing your account from reaching a negative balance.
• Gap Protection: However, during extreme market events or significant price gaps (when a market opens at a drastically different price than its previous close), it's theoretically possible for losses to exceed your account balance. With negative balance protection, any resulting negative balance will be automatically reset to zero.
• No Additional Liability: This means you will never face a debt or obligation to pay additional funds to cover trading losses, regardless of market conditions or the size of your positions.
• Automatic Implementation: This protection is automatically applied to all retail client accounts; you don't need to request or activate it.

For example, if you have $5,000 in your account and hold positions that suffer losses of $7,000 due to an unexpected market event, without negative balance protection, you would owe the additional $2,000. With our negative balance protection, your account would simply be adjusted to $0, with no further obligation on your part.

This feature is particularly valuable during times of high volatility, such as major economic announcements, central bank decisions, or geopolitical events that can cause significant and sudden market movements.

Yes, we maintain comprehensive insurance coverage to provide additional protection for client funds:

• Professional Indemnity Insurance: We maintain professional indemnity insurance as required by ASIC. This insurance covers potential losses arising from professional negligence or errors.
• Cybersecurity Insurance: We hold specialized cybersecurity insurance that provides coverage in the unlikely event of a security breach or cyber attack. This policy covers potential losses related to unauthorized access to client data or funds.
• Crime Insurance: Our comprehensive crime insurance policy provides additional coverage against fraud, theft, and other criminal activities that could potentially affect client funds.

It's important to note that while these insurance policies provide an additional layer of protection, they do not replace the fundamental security provided by our segregated trust accounts and other security measures. Our primary approach to protecting your funds relies on preventative measures and robust security systems rather than remediation through insurance.

Additionally, deposits with Australian banks (where client funds are held) are eligible for protection under the Australian Government's Financial Claims Scheme (FCS) up to AUD 250,000 per account holder per ADI in the event of a bank failure, though this is an extremely unlikely scenario given the stability of Australia's banking system.