4275 | 5 June 2024

INTERACTIVE BROKERS AUSTRALIA PTY LTD
TARGET MARKET DETERMINATION – FOREIGN EXCHANGE CONTRACTSInteractive Brokers Australia Pty Ltd (IBA) issues foreign exchange (FX) contracts to its retail clients. Detailed information is available in the IBA foreign exchange contracts ProductDisclosure Statement, available here.
In compliance with our obligations under Part 7.8A of the Corporations Act 2001 (Cth), which relates to the product design and distribution obligations (DDO), IBA has prepared thefollowing target market determination (TMD) relating to the issue of FX contracts to our clients.
This TMD is available to the public free of charge.

DDO REQUIREMENTAPPLICATION TO FX CONTRACTSClass of retail clients that comprise the target market for this product – s 994B(5)(b)
1. Description of the likely objectives,
financial situation and needs ofconsumers in the target market

Background
IBA) is an online broker that provides trade execution, clearing and custody services to clients around the world. IBA does not employ any
advisers or brokers who manage client accounts. Trades are entered by the client or the client’s self-selected financial representative on a
personal computer or mobile device and transmitted over the internet to IBA for execution on various market centres. IBA client service
personnel are specifically prohibited from providing any investment or trading or tax advice to clients.
IBA’s online account registration system requires applicants to satisfy the below criteria prior to FX contracts trading permission being activatedin the client account.
Target Market:
Clients who satisfy the identification requirements under anti-money laundering and counter-terrorism financing legislation and who holdan IBA account denominated in any of AUD, USD, GBP, EUR or HKD.
Age Group: Above 18 years of age

Financial Situation: clients who meet the financial requirements of and have been approved to trade another financial productthrough their IBA accounts, such as stocks, bonds, options, futures/ futures options and CFDs.

Knowledge and experience: Clients who satisfy the knowledge and experiential requirements and who have been approved totrade another financial product through their IBA accounts, such as stocks, bonds, options, futures/ futures options and CFDs.
Specifically, the client will need to have a minimum of “good” or “extensive” knowledge in at least one other asset class.

Maximum Term: 2 business days after the trade date.

Risk Appetite: Clients who have the ability to bear the foreign currency exposure risk of trading in financial products denominatedin foreign currencies.

Objectives and Needs: Clients who:o wish to manage their foreign currency exposure risk in connection with a specific currency; and/or

Target Market Determination

DDO REQUIREMENT

Page 2APPLICATION TO FX CONTRACTS
o need to meet the margin or settlement obligations due for the client’s dealing in international financial markets and/or
convert the proceeds generated from trading in international financial markets back to one of AUD, USD, GBP, EUR orGBP.
Class of persons that are not within the Target Market

2. Description of FX contracts (includingits key attributes)

3. Explanation of why FX contracts,
including its key attributes, is likely to
be consistent with the likely
objectives, financial situation andneeds of consumers in the targetmarket

Anyone who resides in a jurisdiction where trading in over-the-counter products is prohibited.

Clients who do not wish to trade financial products other than FX contracts.

Clients who have a risk appetite inconsistent with the risk and potential financial loss of trading in financial products denominatedin a foreign currency.

FX contracts have the following key attributes:
FX contracts are an over-the-counter product that allows clients to exchange one currency for another at an agreed exchange rateon an agreed date.

IBA only offers FX contracts using exchange rates, which is the rate IBA is quoting at which it will exchange currencies on thesettlement date.

FX contracts are products in which IBA faces the client in all FX contracts it issues.

There are two situations in which IBA issues FX contracts to its clients:

o

Client-initiated transactions in FX contracts for currency pairs comprising any two of AUD, USD, HKD, GBP and EUR
currencies. For example, IBA offers its clients the ability to trade FX contracts which convert AUD to USD or USD to AUD;
essentially, selling Australian Dollars against buying US Dollars or selling US Dollars against buying Australian Dollars.

oAs part of its automatic foreign exchange service: where if you do not have a margin account and you undertake a dealing ina financial product in a currency which IBA does not support you holding or which you currently do not hold and IBA undertakes(a) transaction(s) in a FX contract for and on your behalf to purchase the amount of such currency required to meet themargin or settlement obligations due for your dealing in the financial product and sells one or more other currencies which
you do hold to meet your settlement obligations on such FX transaction(s); or when it sells the proceeds (if any) following aclient closing out a position which is in a currency other than AUD, USD, GBP, HKD or EUR, or sells a ‘nominal balances’(excluding the nominated base currency of the account, where the total balance held for client in a currency is less than USD$5 or equivalent) and purchases an amount of the base currency of the client’s account.

FX contracts can be used for a variety of purposes, including settlement of transactions denominated in foreign currencies, hedging,speculation, diversification, cash flow certainty, exchange rate protection and generating trading profits, hence consumers with avariety of investment objectives and needs will likely be within the target market. For instance:
oClients who have margin or settlement obligations denominated in a foreign currency, or who need to convert proceeds
denominated in a non-supported currency back to the base currency of their IBA account, need to enter into FX contracts andare thus likely within the target market of FX contracts.

oClients who seek to hedge their exposure to the currency risk of trading or owning other classes of financial products
denominated in a foreign currency will likely utilize FX contracts and are thus likely within the target market.

Accordingly, if a FX contract was to be issued to a client in the target market, it would likely be consistent with the likely objectives, financial
situation and needs of the consumer (s 994B(8)(b)).
Conditions and restrictions relating to the distribution of this product – s 994B(5)(c)Target Market Determination

4. Outline of the conditions andrestrictions relating to distributionof FX contracts

Page 3

IBA has a high degree of control over the distribution of its FX contracts.

In particular, IBA only issues FX contracts:

DDO REQUIREMENT

odirectly to clients who complete the online application and who personally satisfy all of the target market criteria; oroto an AFS Licensed intermediary that operates an omnibus account with IBA (a Distributor). In these cases, IBA will face
the Distributor rather than the end client directly.

IBA has less control over the distribution of its FX contracts to persons (who are not IBA clients) in circumstances where they aredistributed through a Distributor.

APPLICATION TO FX CONTRACTSDistribution conditions for direct IBA clients:
oclients will answer a series of questions contained in the online application; ando

where clients' answers indicate that they are not in the target market, they will not be issued with a FX contract.

Distribution conditions for Distributors:
All Distributors wishing to distribute IBA’s FX contracts must:

5. Explanation of why these distribution
conditions and restrictions will makeit more likely that the consumers whoacquire the FX contracts are in thetarget market

oenter into an agreement with IBA which, among other things, governs the distribution of financial products; andoensure that the Distributor’s client is within the target market. IBA will not do business with any Distributor that does notcontractually agree to this.

IBA will also seek regular statements and data from Distributors to ensure that the Distributor is complying with the requirement to
distribute IBA’s FX contracts only to persons within the target market.

IBA will programmatically prevent any person that directly opens an IBA account and who is not within the target market fromaccessing IBA issued FX contracts.

Similarly, IBA will contractually require that any Distributor that distributes IBA issued FX contracts ensures that they are only
distributed to persons that satisfy the target market. IBA will regularly monitor the performance of Distributors in complying withthis distribution condition.

In light of the above, we consider it highly likely that only the consumers who are within the target market will access IBA issued
FX contracts.

Reviews
6. Outline of the events andReview Triggers:
circumstances that would reasonably Significant losses incurred by clients.
indicate to IBA that the TMD for FX
 The nature of and number of complaints from consumers indicating that the risks of FX contracts are not well understood.
contracts is no longer appropriate (i.e.
"review triggers" – s 994B(5)(d) Significant compensation paid out in relation to FX contracts.
Feedback received directly or through Distributors.

IBA becomes aware of a significant dealing in FX contracts to clients outside of the target market.

Material changes to laws or regulations affecting FX contracts or the nature of IBA-issued FX contracts.

7. The period of time between the start of IBA will review the appropriateness of its target market at least every 6 months at the quarterly APAC Compliance Committee meetingthe day this TMD is made and the day attended by legal, compliance and senior business management, or earlier if the chair of the APAC Compliance Committee determines thatthat the first periodic review of thethe nature and extent of detriment to retail clients warrants an earlier review of the target market.
TMD will conclude – s 994B(5)(e)Target Market Determination

8. The period of time between theconclusion of a periodic review of
the TMD and the conclusion of thenext periodic review – s 994B(5)(f)Page 4

IBA will review the appropriateness of its target market at least every 6 months at the quarterly APAC Compliance Committee meeting
attended by legal, compliance and senior business management, or earlier if either a review trigger occurs or the chair of the APAC
Compliance Committee determines that the nature and extent of detriment to retail clients warrants an earlier review of the target market.

Reporting period for reporting information about the number of complaints about the product – s 994B(5)(g)
9. The reporting period in which the
distributors of IBA's financial
products are required to provide
information

IBA will require that Distributors report information about the number and nature of complaints received about the product and whether any
persons not in the target market were distributed IBA issued FX contracts, within 10 business days of receipt of the complaint or theoccurrence of the dealing.

DDO REQUIREMENTAPPLICATION TO FX CONTRACTS

about the number ofcomplaints received about theproduct
Information Sharing
10. Outline of the kinds of informationthat IBA will require from distributors
to promptly identify that the TMD for
FX contracts is no longer appropriate– s 994B(5)(h)In order to promptly determine if the target market continues to be appropriate, IBA will require that Distributors provide IBA withthe following information on a quarterly basis:oProfit or loss incurred by clients trading FX contracts;

oAny compensation paid out in relation to FX contracts; andoAny feedback about the FX contract product and / or the target market.

In addition, as detailed in section 9, IBA will require that the distributor provide information about any complaints relating to
CFDs or any dealings in CFDs outside of the target market within 10 business days of receipt of the complaint or the occurrenceof the dealing.

11. The distributors that will be required
to provide the information specifiedabove– s 994B(5)(h)(i)

IBA will require all of the above data from the Distributors, given that IBA does not have any contractual relationship with the end clientsof the Distributor and cannot obtain the data itself.

12. The reporting period for the relevant
distributors to provide theinformation specified above – s
994B(5)(h)(ii)

Unless stated otherwise, IBA will require the information specified above on a quarterly basis.