I have an acct with CITI which is unfunded so thought I had better read the pds incase I need it oneday .
THIS IS WORSE THAN MF .
http://www.filesandimages.com/Brand/CityIndexAustralia/PDF/PDS_CA.pdf
"We may pay, withdraw, deduct or apply any amounts from your monies held in any segregated account by CIA.
and to use such moneys in our business from time to time, including for the payment of amounts to our counterparties."
2.4 Segregated Account
Assets corresponding to the value of the margins and other security deposits that we receive from you are classified as Client assets and are administered in accordance with the provisions of the Corporations Law.
Consequently, all monies that Clients deposit with CIA will be segregated from CIA?s funds and managed in accordance with the Customer Agreement.
However, CIA has certain rights as forth below:
? We may withdraw, deduct or apply any amounts payable by you under the Customer Agreement from your monies held in any segregated account or invested by CIA, including, without limitation making a payment for, or in connection with, the margining, adjusting or settling of dealings in CIA? Products and the payment of finance charges, transaction fees and interest payments due to us under the Customer Agreement;
? We may pay, withdraw, deduct or apply any amounts from your monies held in any segregated account by CIA.
and to use such moneys in our business from time to time, including for the payment of amounts to our counterparties.
Your monies may be co-mingled into one or more segregated accounts with the monies of other CIA Clients in accordance with the provisions of the Corporations Act.
We are also obliged to pay any monies due to Clients in relation to dealings in CIA? Products into a segregated account. Those obligations to Clients under the Customer Agreement are unsecured obligations, meaning that Clients are unsecured creditors of CIA.
Warning about segregated accounts
It is important to note that the holding of Client monies in one or more segregated accounts may not afford
Clients absolute protection.
You could incur a loss, depending on the creditworthiness of CIA, its covering counterparties or counterparties holding Client segregated assets.
The purpose of segregated accounts is to manage the monies of all our Clients separately from our own funds. However, individual Client?s monies are co-mingled into one or more segregated Client accounts.
Furthermore, segregated accounts may not insulate Client monies from a default in the segregated Client accounts. However, it is CIA?s policy to replenish the funds in a segregated account from CIA?s own funds if there is a deficit in a segregated account because a Client has defaulted.
Should there be a deficit in the segregated accounts and in the unlikely event CIA became insolvent before it replenished the funds, Clients will be unsecured creditors with respect to the balance of our obligations.
What is an unsecured creditor?
In the event of the insolvency of CIA, as an unsecured creditor of CIA, Clients will need to submit to the liquidator proof of the balance of CIA?s obligations, as evidenced by their Account statements. The liquidator then assesses all proofs of debts to determine to which creditors the company?s assets may be distributed, and what order of priority will be taken into account.
2.5 Counterparty Risk
CIA conducts over-the-counter transactions with its counterparties to hedge the market risk arising from Client transactions. Consequently, Clients are indirectly exposed to the credit and counterparty risk of CIA?s counterparties.
If the conditions of the business or assets of our counterparties deteriorate, then performance of the hedge transactions may be compromised.
A copy of the latest financial statements of the issuer are available free of charge upon request
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