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FAQs

Margin Lending - Frequently Asked Questions



Frequently Asked Questions

Q. Is a Margin Lending Facility and a Margin Loan the same thing?
A. 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, managed funds or cash as security.


Q. What can I use as security against my Margin Lending Facility?
A. You can use cash, shares, managed funds or master trusts which are included on the BankSA Margin Lending Acceptable Securities List.


Q. What is an Acceptable Securities List?
A. This is a list containing a range of securities - shares, managed funds and master trusts - that BankSA Margin Lending will accept as collateral, or security, against your Margin Lending Facility.


Q. When I borrow funds, what can I use them for?
A. You can use the funds you borrow to increase your investments in shares or managed funds or for business purposes, such as purchasing new equipment or expansion.


Q. Can I have more than one Margin Lending Facility?
A. Yes. However you need to provide separate security for each Margin Lending Facility.


Q. How do I lodge my shares as security?
A. 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.


Q. Can I sell the shares I lodge with you as security?
A. You may 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.


Q How do I buy and sell shares through my Margin Lending Facility?
A. You can buy and sell shares through the 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 BankSA Margin Lending so we can settle them on your behalf.


Q. How do I buy and sell managed fund investments through my Margin Lending Facility?
A. Complete the application form included in the managed fund prospectus and return it to BankSA Margin Lending for processing. To sell a managed fund investment, you need to complete and return a Managed fund redemption Request.


Q. How long does it take to have my Margin Lending Facility approved?
A. For an individual applicant, approval will take 24-48 hours. A company or trust applicant should allow up to 5 working days.


Q. What is a margin call?
A. A margin call occurs when falls in the value of your security cause your current loan balance to exceed your borrowing limit plus your buffer. If this occurs you must repay part of your loan by 1:30pm Adelaide time on the day we indicate you must meet the margin call (normally the day after you have been notified)


Q. How do I know I am in a margin call?
A. 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.


Q. How can I rectify a margin call position on my margin loan?
A. 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); or
  • Depositing cash into our account:
    Bank: St.George Bank Limited
    BSB: 332-096
    Account: 599000006
    Account Name: St.George Margin Lending
  • Contributing additional acceptable security; or
  • Selling the required amount of security to place the account back into order.

Q. How soon can I start trading?
A. Before you can start trading BankSA Margin Lending needs to have any security you are offering lodged and confirmed. Shares generally take between 2 and 5 working days. Managed funds take between 5-10 working days, as these need to be transferred into our nominee name. Cash security is available as soon as the funds are cleared.


Q. How can I access my Margin Lending Facility?
A. You can access your 1300 305 172 Margin Lending Facility a number of ways:

  • By phone. Simply call 1300 304 065 (+61 2 9236 3130), or fax: +61 2 9236 3093 7:30am - 5:30pm, Adelaide time, Monday to Friday
  • Contacting our adviser.

Q. Can I get a loan drawdown?
A. 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 your personal Account Manager.

Q. How does BankSA Margin Lending manage stock ownership?

BankSA Margin Lending has never been, nor is currently a stock lender. All stock lodged with BankSA 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.

Q. What is a CMA?
A. 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%.

Q. What are the benefits of a CMA?
A. 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).

If you use Savings Gearing, you can make regular monthly instalment payments to your Fund Manager via the CMA.

Q. What is the cost of setting up the CMA?
A. We set up the CMA on your behalf for free.

Q. Under what name is the CMA set up?
A. Margin lending CMAs are opened on your behalf by Value Nominees Pty Limited, a fully owned subsidiary of St.George Bank.

Q. Do I need to provide a TFN or ABN? What are the implications if I don’t?
A. 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.

Q. Is there a minimum balance required to be maintained?
A. The CMA always retains a minimum balance of $1.00.

Q. How do I deposit funds into my CMA?
A. 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 BankSA Margin Lending) or, make a direct deposit into your CMA via your bank’s internet banking or BPay.

Q. When is my deposit reflected in the CMA?
A. For funds transferred electronically before 5pm on weekdays, the deposit will be reflected in the CMA on the next business day.

Q. Is there an overdraft facility on my CMA?
A. There is no overdraft facility on your CMA. However, if you wish to draw funds from your margin loan, please complete a Drawdown Request.

Q. Where can I check my CMA details?
A. 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. Please note that this is not displayed through Internet Banking.

Q. Do I earn interest on my CMA balance?
A. Yes, you earn interest on any credit balance on your CMA. Please refer to our interest rates for the current CMA rates.

Q. How do I transfer funds between the CMA and my margin loan?
A. 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.

Q. Can I change the option of transferring funds between the CMA and my margin loan?
A. Yes, you can change your selection at any time. Simply fax us a written request on 02 9236 3093 or post it to GPO Box 1467 Royal Exchange NSW 1225.

Q. When are funds transferred between the CMA and my margin loan?
A. This is a daily process and is updated at the end of each business day.

Q. How do I access the money in the CMA?
A. 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 02 9236 3093 or post it to GPO Box 1467 Royal Exchange NSW 1225. 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.

Q. What fees do I need to pay on the CMA?
A. There are no fees on your CMA.

Q. Do I receive statements for the CMA? How often?
A. Yes. Unless you have elected otherwise, you receive CMA statements at the beginning of the month, for the previous month.

Q. Why is a CMA set up with a Savings Gearing Loan?
A. 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. If you wish to do so, you may set up another CMA by call our Account Management Team on 1300 305 172.

Q. Why is a CMA set up with a Protected Loan?
A. By applying for a Protected Loan, 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 hold cash as security for the Protected loan, in the event that you may choose to sell your protected stock.

Note: This CMA cannot be used for any other purposes, e.g. Savings Gearing, Interest or Dividend payments. If you wish to do so, you may set up another CMA by completing a Cash Management Trust Account Form. Any cash used to support a Protected Loan is reserved, the remainder can be used as normal.

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