Margin Lending for Citizenship by Investment

March 2017 Archived Article: Multiply Your Investment Power to Acquire Citizenship of Your Choice

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POWER UP YOUR PORTFOLIO

OVERVIEW

Multiply your investment benefits with a Margin Lender. Use this powerful investment tool to unlock the equity in your existing investments, combine it with borrowed funds to acquire your profit more effectively.

COMMON STRATEGIES

With the extra investment capital from a Margin Lender, you can build a larger portfolio that can allow you to diversify your investments over a wider range of assets. This means more - it gives you greater exposure to price movements, dividends, franking credits and corporate actions.

ADVANCED STRATEGIES
  • POP THE VALUE: You may simply want to borrow cash on the collateral of your securities for a non-investment purpose.
OR
  • PROTECT THE VALUE: Combine Exchange Traded Options with your Margin Loan to access strategies that can generate additional income or protect the value of your shares.
OR
  • PURVEY THE VALUE: Purvey the extra investment capital from a Margin Lender* to acquire the Citizenship of Your Choice within selective CARICOM members instead of a full cash involvement.

HOW IT WORKS

  • Once you have established a Margin Loan with a Margin Lender*, you transfer your existing shares, managed funds and/or cash into it as collateral. Margin Lender calculates the lending value, which determines how much you can borrow.
  • Your gearing level moves with the daily price movements of your portfolio.
  • You must monitor your gearing level to ensure it stays below the approved limits.

investor BENEFITS

Build wealth over time

Combines the power of gearing with the discipline of cash spending, helping you build wealth over the long term.

Diversify

Diversification – across varied jurisdictions and countries - can help to reduce investment risk. The extra purchasing power of a Margin Loan with a Margin Lender* allows you to diversify as opportunities arise with a Citizenship of Your Choice.

Unlock equity

Don’t sell your shares to realise the equity in your portfolio to acquire the Citizenship of Your Choice by full cash involvement - harness its borrowing power with a Margin Loan. Defer capital gain (and loss) events, and use a leveraged portfolio at the same time.

Invest tax effectively

Obtain potential tax deductions by claiming interest expenses. Bring forward interest expenses by prepaying interest. Potentially reduce your tax liability by buying more stocks that pay franked dividends.

FLEXIBLE INVESTING

Choose from a range of interest rate and repayment options - with no minimum loan balance requirements - to create the Margin Loan that suits you best.

LIQUIDITY

If at any time you need to access the capital in your loan security, you can add assets and/or transfer additional available funds - effectively adding cash on margin call when you need it.

EXTRAORDINARY EVENTS

You shall not be liable for loss caused directly or indirectly by government restrictions, exchange or market rulings, suspension of trading, war, strikes or other conditions beyond your control. Margin Lender will provide some basic information about purchasing securities on margin and alert you to the risks involved with maintaining a margin account. Margin Lender* refers to the margin as the margin lending program.

When you purchase securities, you may pay for the securities in full, or if your account has been established as a margin account with the margin lending program, you may borrow part of the purchase price from Margin Lender*, thereby leveraging your investment. If you choose to borrow funds for your purchase, Margin Lender*’s collateral for the loan will be the securities purchased, other assets in your margin account, and your assets in any other accounts at Margin Lender* other than retirement accounts. If the securities in your margin account decline in value, so does the value of the collateral supporting your loan, and, as a result, action taken such as to issue a margin call and/or sell securities in any of your accounts held with us, in order to maintain the required equity in your account

Before opening a margin account, you should carefully review the terms governing margin loans with the terms are in your account agreement and disclosures. It is important that you fully understand the risks involved in using margin.

These risks including the following:

  • You can lose more funds than you deposit in the margin account. A decline in the value of securities that are purchased on margin may require you to provide additional funds to your Margin Lender* to avoid the forced sale of those securities or other securities or assets in your account(s).
  • You also will be responsible for any shortfall in the account after a taken sale of securities in your account(s).
  • Some investors mistakenly believe that they must be contacted for a margin call to be valid and that securities or other assets in their accounts cannot be liquidated to meet the call unless they are contacted first.
  • Your failure to satisfy the call may cause Margin Lender* to liquidate or sell securities in your account(s). *Different terms and conditions may apply.
  • While an extension of time to meet margin requirements may be available to you under certain conditions, you do not have a right to the extension.

This disclosure explains leveraging on margin principles and describes general terms and conditions for margin lending.