MINIs SPDS 26072011 74.61 1 70.88 CCLKMA Coca-Cola Amatil Limited Long 9.16 1 10.08 CCLKMP Coca-Cola Amatil Limited Short 13.74 1 12.37 CDUKMA Cudeco Limited Long 2.3 1 2.53 CDUKMP

Macquarie MINIs pìééäÉãÉåí~êó=mêçÇìÅí=aáëÅäçëìêÉ=pí~íÉãÉåí=

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26 July 2011 Macquarie Bank Limited ABN 46 008 583 542 and AFSL 237502

MACQUARIE BANK LIMITEDMACQUARIE MINIS

IMPORTANT INFORMATION This document is a Supplementary Product Disclosure Statement and is dated 26 July 2011 (“SPDS”). This SPDS supplements the Product Disclosure Statement dated 11 July 2011 (together, the “PDS”) and together, they establish the terms of issue of the Macquarie MINIs referred to below. The terms of the PDS continue in full force and effect except to the extent that those terms are modified by this SPDS. You should read this SPDS together with the PDS. Words defined in the PDS have the same meaning when used in this SPDS. This SPDS supersedes and replaces the previous SPDS dated 21 July 2011. EXPERIENCED INVESTORS You should not invest in MINIs unless you:

are familiar with shares, securities, warrants, leveraged investments, options and investment in shares and securities generally; and

understand and are comfortable with the risks associated with an investment in MINIs. An investment in MINIs does not suit investors seeking a traditional investment product (such as a direct unleveraged investment in shares). You should be aware that:

MINIs are a speculative investment and there is a material risk that you could lose all of the money that you invest in MINIs; and

the value of a MINI can vary materially in a relatively short period of time; and

the higher the leverage of a MINI, the riskier an investment in that MINI will be. FURTHER ADVICE RECOMMENDED Investing in MINIs involves financial and other risks and is only suitable for you if:

an investment in MINIs does not represent a significant part of your investment portfolio or program; and

you fully understand the risks associated with an investment in MINIs. Before you invest in MINIs, you should:

carefully read all of the PDS, and this SPDS;

seek professional legal, taxation and financial advice to determine whether an investment in MINIs is right for you; and

carefully consider the potential benefits of, and the risks associated with, an investment in MINIs, in light of your particular investment needs, objectives and financial and taxation circumstances. In particular, you should be aware that the value of your MINI will be significantly affected by:

- the value of the Reference Asset; and

- funding costs associated with holding a MINI

More detailed information about the effect that these factors may have on the value of a MINI is set out in Section 2 of the PDS. Further details about the risks associated with MINIs are set out in Section 3 of the PDS. DIVERSIFICATION AND RISK As well as considering the risks associated with an investment in MINIs, you should also consider how an investment in MINIs fits into your overall investment portfolio. By diversifying your investment portfolio, you can reduce your exposure to failure or underperformance of any one investment, investment manager or asset class. SUPERANNUATION CONSIDERATIONS Trustees of superannuation funds must formulate and implement an appropriate investment strategy that has regard to the whole of the circumstances of their superannuation fund and must act in the best interests of the members of their fund. This includes ensuring that they are familiar with the risks involved in, and have in place adequate risk management procedures to manage the risks associated with, an investment in MINIs prior to making such an investment. In this context, trustees should give careful consideration to whether leveraged investments generally, and in particular highly leveraged investments, are an appropriate investment for the superannuation fund. Relevant to this consideration will be the risks of a leveraged investment as described in Section 3 of the PDS and other relevant factors such as the diversification of the assets of the superannuation fund, and the overall leverage of the superannuation fund. Macquarie recommends trustees obtain independent legal, financial and taxation advice before making any investment decision. In particular, given that you could lose all of the money you invest in MINIs, trustees should carefully consider how much they want to invest in MNIs having regard to the size of the superannuation fund, the diversification of the superannuation fund’s investments, and the overall level of leverage (or gearing) within the superannuation fund.

Section 1

Key Information Issuer: Macquarie Bank Limited

ABN 46 008 583 542 and AFSL 237502

Registrar: Computershare Investor Services Pty LimitedLevel 4, 60 Carrington Street Sydney NSW 2000, Australia

Phone: 1300 85 05 05 Website: www-au.computershare.com

An application has been made to the ASX for the taking of such action as is necessary to enable the relevant Macquarie MINIs to be traded on the ASX. Section 2

Details of the most recent MINI Series Please note that the details of each Series of Macquarie MINIs referred to in this SPDS are only valid as at the close of business on 25 July 2011 and may change throughout their term in accordance with the Terms of Issue. Current details for any Series can be obtained by contacting your stockbroker or adviser or contacting Macquarie (see the Directory for details).

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AGOKMA Atlas Iron Limited Long 3.04 1 3.34 AGOKMP Atlas Iron Limited Short 5.06 1 4.56 AIOKMA Asciano Group Long 1.24 1 1.37 AIOKMP Asciano Group Short 2.07 1 1.86

ALLKMA Aristocrat Leisure Limited

Long 1.59 1 1.75

ALLKMP Aristocrat Leisure Limited

Short 2.95 1 2.66

AMCKMA Amcor Limited Long 5.73 1 6.30 AMCKMP Amcor Limited Short 8.95 1 8.06 AMPKMA AMP Limited Long 3.85 1 4.24 AMPKMP AMP Limited Short 5.88 1 5.29

ANZKMC Australia and New Zealand Banking

Group Ltd Long 15.95 1 16.74

ANZKMD Australia and New Zealand Banking

Group Ltd Long 10.63 1 11.16

ANZKMR Australia and New Zealand Banking

Group Ltd Short 26.58 1 25.25

ANZKMS Australia and New Zealand Banking

Group Ltd Short 31.89 1 30.30

AQAKMA Aquila Resources Limited

Long 5.12 1 5.63

AQAKMP Aquila Resources Limited

Short 8.54 1 7.68




ASXKMA ASX Limited Long 23.05 1 25.35 ASXKMP ASX Limited Short 38.41 1 34.57 AWCKMA Alumina Limited Long 1.85 1 2.03 AWCKMP Alumina Limited Short 2.81 1 2.53

BBGKMA Billabong International Limited Long 4.8 1 5.28

BBGKMP Billabong International Limited Short 7.5 1 6.75

BENKMA Bendigo Bank Limited Long 6.88 1 7.57 BENKMP Bendigo Bank Limited Short 11.35 1 10.22 BHPKMD BHP Billiton Ltd Long 32.69 1 34.32 BHPKME BHP Billiton Ltd Long 21.79 1 22.88 BHPKMS BHP Billiton Ltd Short 54.48 1 51.75 BHPKMT BHP Billiton Ltd Short 65.37 1 62.1 BLDKMA Boral Limited Long 3.47 1 3.82 BLDKMP Boral Limited Short 5.14 1 4.63

BLYKMA Boart Longyear Limited

Long 3.08 1 3.39

BLYKMP Boart Longyear Limited

Short 4.94 1 4.44

BOQKMA Bank of Queensland Limited

Long 6.26 1 6.89

BOQKMP Bank of Queensland Limited

Short 10.44 1 9.39

BSLKMA Bluescope Steel Limited

Long 0.92 1 1.01

BSLKMP Bluescope Steel Limited

Short 1.53 1 1.38

BXBKMA Brambles Limited Long 5.83 1 6.41 BXBKMP Brambles Limited Short 8.39 1 7.55

CBAKMC Commonwealth Bank

of Australia Long 37.31 1 39.17

CBAKMD Commonwealth Bank

of Australia Long 24.87 1 26.11

CBAKMR Commonwealth Bank

of Australia Short 62.18 1 59.07

CBAKMS Commonwealth Bank

of Australia Short 74.61 1 70.88

CCLKMA Coca-Cola Amatil

Limited Long 9.16 1 10.08

CCLKMP Coca-Cola Amatil

Limited Short 13.74 1 12.37

CDUKMA Cudeco Limited Long 2.3 1 2.53 CDUKMP Cudeco Limited Short 4.26 1 3.84 COHKMA Cochlear Limited Long 55.3 1 60.83 COHKMP Cochlear Limited Short 92.16 1 82.95

CPUKMA Computershare Limited

Long 6.26 1 6.89

CPUKMP Computershare Limited

Short 10.44 1 9.39

CSLKMA CSL Limited Long 27.39 1 30.13 CSLKMP CSL Limited Short 39.41 1 35.47 CSRKMA CSR Limited Long 1.97 1 2.16 CSRKMP CSR Limited Short 3.28 1 2.95

CTXKMA Caltex Australia





CTXKMP Caltex Australia Limited

Short 13.51 1 12.16

CWNKMA Crown Limited Long 7.13 1 7.84 CWNKMP Crown Limited Short 10.91 1 9.82 DJSKMA David Jones Limited Long 2.34 1 2.57 DJSKMP David Jones Limited Short 3.9 1 3.51

ERAKMA Energy Resources Of Australia Limited Long 3.2 1 3.52

ERAKMP Energy Resources Of Australia Limited Short 5.46 1 4.91

FGLKMA Foster's Group Limited Long 4.09 1 4.5 FGLKMP Foster's Group Limited Short 6.13 1 5.52

FMGKMA Fortescue Metals Group Limited

Long 5.22 1 5.74

FMGKMB Fortescue Metals Group Limited

Long 4.24 1 4.66

FMGKMP Fortescue Metals Group Limited

Short 7.82 1 7.04

FMGKMQ Fortescue Metals Group Limited

Short 8.8 1 7.92

FXJKMA Fairfax Media Limited Long 0.74 1 0.81 FXJKMP Fairfax Media Limited Short 1.1 1 0.99 GPTKMA GPT Group Long 2.41 1 2.65 GPTKMP GPT Group Short 3.61 1 3.25

HVNKMA Harvey Norman Holdings Limited Long 1.76 1 1.94

HVNKMP Harvey Norman Holdings Limited Short 2.94 1 2.64

IAGKMA Insurance Australia Group Limited Long 2.73 1 3

IAGKMP Insurance Australia Group Limited Short 3.93 1 3.54

ILUKMA Iluka Resources Limited Long 13.39 1 14.73

ILUKMP Iluka Resources Limited Short 24.87 1 22.38

IPLKMA Incitec Pivot Limited Long 3.18 1 3.49 IPLKMP Incitec Pivot Limited Short 4.66 1 4.2 JBHKMA JB Hi-Fi Limited Long 11.76 1 12.94

JHXKMA James Hardie Industries N.V.

Long 4.39 1 4.83

JHXKMP James Hardie Industries N.V.

Short 7.31 1 6.58

KARKMA Karoon Gas Australia Limited

Long 3.53 1 3.89

KARKMP Karoon Gas Australia Limited

Short 5.89 1 5.3

KCNKMA Kingsgate Consolidated Limited

Long 6.54 1 7.2

KCNKMP Kingsgate Consolidated Limited

Short 11.64 1 10.47

LEIKMA Leighton Holdings Limited

Long 16.75 1 18.42

LEIKMP Leighton Holdings Limited

Short 26.75 1 24.08

LLCKMA Lend Lease Long 7.17 1 7.88




Corporation Limited

LLCKMP Lend Lease

Corporation Limited Short 10.75 1 9.68

LYCKMA Lynas Corporation


LYCKMP Lynas Corporation


MGRKMA Mirvac Group Long 0.99 1 1.09 MGRKMP Mirvac Group Short 1.49 1 1.34

MGXKMA Mount Gibson Iron


MGXKMP Mount Gibson Iron


MINKMA Mineral Resources


MINKMP Mineral Resources


MYRKMA Myer Holdings Limited Long 1.8 1 1.98 MYRKMP Myer Holdings Limited Short 3 1 2.7

NABKMC National Australia Bank Ltd

Long 18.45 1 19.37

NABKMD National Australia Bank Ltd

Long 12.30 1 12.92

NABKMR National Australia Bank Ltd

Short 30.75 1 29.21

NABKMS National Australia Bank Ltd

Short 36.90 1 35.06

NCMKMC Newcrest Mining Ltd Long 30.45 1 33.50 NCMKMD Newcrest Mining Ltd Long 20.30 1 22.33 NCMKMR Newcrest Mining Ltd Short 50.75 1 45.68 NCMKMS Newcrest Mining Ltd Short 60.90 1 54.81 ORGKMA Origin Energy Limited Long 11.63 1 12.8 ORGKMP Origin Energy Limited Short 18.59 1 16.73 ORIKMA Orica Limited Long 21.59 1 23.75 ORIKMP Orica Limited Short 31.71 1 28.54 OSHKMA Oil Search Limited Long 5.54 1 6.09 OSHKMP Oil Search Limited Short 8.14 1 7.33 OSTKMA OneSteel Limited Long 1.47 1 1.61 OSTKMP OneSteel Limited Short 2.37 1 2.13 OZLKMA Oz Minerals Limited Long 10.46 1 11.51 OZLKMP Oz Minerals Limited Short 18.14 1 16.32

PANKMA Panoramic Resources Limited

Long 1.28 1 1.41

PANKMP Panoramic Resources Limited

Short 2.39 1 2.15

PDNKMA Paladin Resources Limited

Long 1.89 1 2.17

PDNKMP Paladin Resources Limited

Short 3.16 1 2.69

PNAKMA Pan Australian Resources Limited

Long 3.05 1 3.35

PNAKMP Pan Australian Resources Limited

Short 5.41 1 4.87

QANKMA Qantas Airways Limited

Long 1.54 1 1.7

QANKMP Qantas Airways Short 2.22 1 2




Limited

QBEKMA QBE Insurance Group


QBEKMP QBE Insurance Group


QRNKMA Qr National Limited Long 2.62 1 2.88 QRNKMP Qr National Limited Short 4.18 1 3.76

RHCKMA Ramsay Health Care


RHCKMP Ramsay Health Care


RIOKMC Rio Tinto Ltd Long 61.76 1 64.84 RIOKMD Rio Tinto Ltd Long 41.17 1 43.23 RIOKMR Rio Tinto Ltd Short 102.93 1 97.78 RIOKMS Rio Tinto Ltd Short 123.51 1 117.33

RMDKMA Resmed Inc Long 2.35 1 2.58 RMDKMP Resmed Inc Short 3.59 1 3.23 SGPKMA Stockland Long 2.5 1 2.75 SGPKMP Stockland Short 3.74 1 3.37

SHLKMA Sonic Healthcare Limited

Long 8.9 1 9.79

SHLKMP Sonic Healthcare Limited

Short 16.52 1 14.87

STOKMA Santos Limited Long 10.65 1 11.71 STOKMP Santos Limited Short 15.97 1 14.37

SUNKMA Suncorp-Metway


SUNKMP Suncorp-Metway Limited

Short 9.06 1 8.16

TAHKMA Tabcorp Holdings Limited

Long 2.43 1 2.67

TAHKMP Tabcorp Holdings Limited

Short 4.05 1 3.65

TCLKMA Transurban Group Long 4.03 1 4.43 TCLKMP Transurban Group Short 6.43 1 5.79

TELKMA Telecom Corporation

of New Zealand Limited

Long 1.45 1 1.59

TELKMP Telecom Corporation

of New Zealand Limited

Short 2.69 1 2.42

TENKMA Ten Network Holdings Limited

Long 0.83 1 0.91

TENKMP Ten Network Holdings Limited

Short 1.38 1 1.24

TLSKMC Telstra Corporation Ltd Long 2.30 1 2.41 TLSKMD Telstra Corporation Ltd Long 1.53 1 1.61 TLSKMR Telstra Corporation Ltd Short 3.83 1 3.63 TLSKMS Telstra Corporation Ltd Short 4.59 1 4.36 TOLKMA Toll Holdings Limited Long 3.57 1 3.92 TOLKMP Toll Holdings Limited Short 5.69 1 5.13 TTSKMA Tatts Group Limited Long 1.79 1 1.97 TTSKMP Tatts Group Limited Short 2.87 1 2.58 UGLKMA United Group Limited Long 10.37 1 11.4 UGLKMP United Group Limited Short 17.28 1 15.55 WBCKMC Westpac Banking Long 15.86 1 16.65




Corporation

WBCKMD Westpac Banking

Corporation Long 10.57 1 11.10

WBCKMR Westpac Banking

Corporation Short 26.43 1 25.10

WBCKMS Westpac Banking

Corporation Short 31.71 1 30.12

WDCKMA Westfield Group Long 6.59 1 7.25 WDCKMP Westfield Group Short 9.89 1 8.9 WESKMA Wesfarmers Limited Long 23.13 1 25.44 WESKMP Wesfarmers Limited Short 38.55 1 34.7 WORKMA WorleyParsons Limited Long 21.82 1 24 WORKMP WorleyParsons Limited Short 36.36 1 32.73 WOWKMA Woolworths Limited Long 22.1 1 23.21 WOWKMP Woolworths Limited Short 33.16 1 31.5

WPLKMC Woodside Petroleum

Ltd Long 29.96 1 31.46

WPLKMD Woodside Petroleum

Ltd Long 19.98 1 20.97

WPLKMR Woodside Petroleum

Ltd Short 49.94 1 47.44

WPLKMS Woodside Petroleum

Ltd Short 59.93 1 56.93

WRTKMA Westfield Retail Trust Long 2.06 1 2.27 WRTKMP Westfield Retail Trust Short 3.1 1 2.79 WSAKMA Western Areas NL Long 4.1 1 4.5 WSAKMP Western Areas NL Short 7.61 1 6.84

WTFKMA Wotif.com Holdings Limited

Long 3.23 1 3.56

WTFKMP Wotif.com Holdings Limited

Short 6.01 1 5.41

Section 3

Details of existing MINI Series Please note that the details of each Series of Macquarie MINIs referred to in this SPDS are only valid as at the close of business on 25 July 2011 and may change throughout their term in accordance with the Terms of Issue. Current details for any Series can be obtained by contacting your stockbroker or adviser or contacting Macquarie (see the Directory for details).




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ANZKMA

Australia and New Zealand

Banking Group Ltd Long 17.5 1 18.4 N/A

ANZKMB


Banking Group Ltd Long 12.4 1 13 N/A

ANZKMP Australia and New Zealand Short 23.7 1 22.5 N/A





Banking Group Ltd

ANZKMQ


Banking Group Ltd Short 28.8 1 27.4 N/A

BHPKMA BHP Billiton Long 39.2714 1 41.15 N/ABHPKMB BHP Billiton Ltd Long 36.2 1 38 N/ABHPKMC BHP Billiton Ltd Long 25.5 1 26.8 N/ABHPKMP BHP Billiton Short 47.9191 1 45.5 N/ABHPKMQ BHP Billiton Ltd Short 49 1 46.5 N/ABHPKMR BHP Billiton Ltd Short 59.6 1 56.6 N/A

CBAKMA Commonwealth Bank of Australia Long 41.5 1 43.5 N/A

CBAKMB Commonwealth Bank of Australia Long 29.3 1 30.7 N/A

CBAKMP Commonwealth Bank of Australia Short 56.1 1 53.3 N/A

CBAKMQ Commonwealth Bank of Australia Short 68.3 1 64.9 N/A

NABKMA National Australia

Bank Ltd Long 20 1 21 N/A

NABKMB National Australia

Bank Ltd Long 14.1 1 14.8 N/A

NABKMP National Australia

Bank Ltd Short 27.1 1 25.7 N/A

NABKMQ National Australia

Bank Ltd Short 33 1 31.3 N/A

NCMKMA Newcrest Mining

Ltd Long 32.7 1 35.9 N/A

NCMKMB Newcrest Mining

Ltd Long 24.5 1 27 N/A

NCMKMP Newcrest Mining

Ltd Short 49 1 44.1 N/A

NCMKMQ Newcrest Mining

Ltd Short 57.2 1 51.5 N/A

NWSKMA News

Corporation Long 11.7 1 12.8 N/A

NWSKMB News


NWSKMC News


NWSKMP News

Corporation Short 17.5 1 15.7 N/A

NWSKMQ News

Corporation Short 19 1 17.1 N/A

NWSKMR News

Corporation Short 20.4 1 18.4 N/A RIOKMA Rio Tinto Ltd Long 69.1 1 72.5 N/ARIOKMB Rio Tinto Ltd Long 48.8 1 51.2 N/ARIOKMP Rio Tinto Ltd Short 93.4 1 88.8 N/ARIOKMQ Rio Tinto Ltd Short 113.8 1 108.1 N/A

TLSKMA Telstra

Corporation Ltd Long 2.6 1 2.7 N/A

TLSKMB Telstra

Corporation Ltd Long 1.8 1 1.9 N/A





TLSKMP Telstra

Corporation Ltd Short 3.5 1 3.3 N/A

TLSKMQ Telstra

Corporation Ltd Short 4.2 1 4 N/A

WBCKMA Westpac Banking


WBCKMB Westpac Banking

Corporation Long 12.4 1 13 N/A

WBCKMP Westpac Banking


WBCKMQ Westpac Banking


WPLKMA Woodside

Petroleum Ltd Long 33.1 1 34.7 N/A

WPLKMB Woodside

Petroleum Ltd Long 23.3 1 24.5 N/A

WPLKMP Woodside

Petroleum Ltd Short 44.7 1 42.5 N/A

WPLKMQ Woodside

Petroleum Ltd Short 54.4 1 51.7 N/A XJOKMA S&P/ASX 200 Long 4,063.71 100 4,265.00 SPI200 SEP11XJOKMB S&P/ASX 200 Long 3,888 100 4,082 SPI200 SEP11XJOKMC S&P/ASX 200 Long 3,777 100 3,965 SPI200 SEP11XJOKMD S&P/ASX 200 Long 3,665 100 3,849 SPI200 SEP11XJOKME S&P/ASX 200 Long 3,443 100 3,615 SPI200 SEP11XJOKMF S&P/ASX 200 Long 3,332 100 3,499 SPI200 SEP11XJOKMP S&P/ASX 200 Short 4,958.46 100 4,715.00 SPI200 SEP11XJOKMQ S&P/ASX 200 Short 4,998 100 4,748 SPI200 SEP11XJOKMR S&P/ASX 200 Short 5,109 100 4,854 SPI200 SEP11XJOKMS S&P/ASX 200 Short 5,221 100 4,959 SPI200 SEP11XJOKMT S&P/ASX 200 Short 5,443 100 5,171 SPI200 SEP11XJOKMU S&P/ASX 200 Short 5,554 100 5,276 SPI200 SEP11

Registered Trade Marks

The Index is a registered trade mark of Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. and has been licensed for use by Macquarie Bank Limited. The Macquarie MINIs are not sponsored, endorsed, sold or promoted by Standard & Poor’s and Standard & Poor’s makes no representation regarding the advisability of investing in securities generally or in the Macquarie MINIs particularly or the ability of the Index to track general stock market performance. S&P’s only relationship to the Issuer is the licensing of certain trademarks and trade names of S&P and of the Index which is determined, composed and calculated by S&P without regard to the Issuer or the Holders of the Macquarie MINIs. S&P has no obligation to take the needs of the Issuer or the Holders of the Macquarie MINIs into consideration in determining, composing or calculating the Index. S&P is not responsible for and has not participated in the determination of the timing of, prices at or quantities of the Macquarie MINIs to be issued or in the determination of or calculation of the formula by which the Cash Settlement Amount is to be ascertained. S&P has no obligation or liability in connection with the administration, marketing or trading of the Macquarie MINIs.

No Liability on the part of S&P

S&P does not guarantee the accuracy and/or the completeness of the Index or any data included therein and S&P shall have no liability for an errors, omissions or interruptions therein. S&P makes no warranty, express or implied, as to results to be obtained by the Issuer, Holders of the Macquarie MINIs or any other person or entity from the use of the Index or any data included therein. S&P makes no express or implied warranties, and expressly disclaims all warranties of merchantability or fitness for a particular purpose or use with respect to the Index or any data included therein. Without limiting any of the foregoing, in no event shall S&P have any liability for any special, punitive, indirect or consequential damages (including lost profits) even if notified of the possibility of such damages.

Section 4

Additional Information - Macquarie retains the right not to issue or sell any more MINIs at any time;

- The initial issue size for each Series referred to in this SPDS is 10,000,000 MINIs; and

- Information about the Macquarie Group’s potential conflicts of interest in relation to the Reference Assets referred to in this SPDS can be obtained by visiting www.macquarie.com/disclosures.

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Directory

ISSUER Macquarie Bank Limited ABN 46 008 583 542 and AFSL 237 502

Macquarie Securities Group

Level 3, No. 1 Martin Place Sydney NSW 2000 Australia

1800 087 110

(02) 8232 6882

[email protected]

macquarie.com.au/minis

REGISTRAR

Computershare Investor Services Pty Limited

Level 4

60 Carrington Street Sydney NSW 2000 Australia Phone 1300 850 505

11 July 2011Macquarie Bank LimitedABN 46 008 583 542 and AFSL 237502

Macquarie MINIsProduct Disclosure Statement

Macquarie Bank LiMited

�

IMPORTANT NOTICEThis�is�a�Product�Disclosure�statement�(PDS)�which�has�been�prepared�by�Macquarie�Bank�Limited�ABN�46�008�583�542�and�AFsL�237502�(Macquarie).�This�PDs�is�dated�11�July�2011.

PDS AND SuPPLEMENTARy PRODuCT DISCLOSuRE STATEMENTSThis�PDs�contains�general�information�about�Macquarie�MINIs�(“Macquarie MINIs”�or�“MINIs”)�including�an�overview�of�what�a�MINI�is�and�how�it�works,�the�general�risks�of�investing�in�a�MINI,�information�about�the�fees�and�costs�of�a�MINI�and�taxation�considerations�for�Australian�residents�investing�in�a�MINI.�Additional�terms�relating�to�each�series�of�MINIs�will�be�set�out�in�a�supplementary�Product�Disclosure�statement�(sPDs)�which�will�be�supplemental�to,�and�should�be�read�together�with,�the�PDs.

This�Product�Disclosure�statement�(the�“PDS”)�contains�a�description�of�the�Terms�&�Conditions�on�which�MINIs�may�be�made�available�to�retail�clients�in�Australia.�The�complete�Terms�&�Conditions�that�apply�to�MINIs�are�set�out�in�the�Terms�&�Conditions�set�out�in�section�8�of�this�PDs.�

To�the�extent�permitted�by�law,�Macquarie�accepts�no�liability�whatsoever�for�any�loss�or�damage�arising�from�you�relying�on�any�other�information�when�investing.�

yOu SHOuLD READ THIS PDS AND THE RELEVANT SPDS IN FuLL BEFORE MAKING ANy INVESTMENT DECISION.

CORPORATIONS ACT CLASSIFICATIONMINIs�are:

■■ ‘derivatives’�under�section�761D�of�the�Corporations Act 2001�(Cth);�and

■■ ‘warrants’�(within�the�meaning�of�regulation�1.0.02�of�the�Corporation Regulations 2001�(Cth)).��

FOREIGN JuRISDICTIONSNo�action�has�been�taken�to�register�or�qualify�MINIs,�or�otherwise�to�permit�a�public�offering�of�MINIs,�in�any�jurisdiction�outside�of�Australia.��

The�PDs�is�not�an�offer�or�invitation�in�any�place�in�which,�or�to�any�person�to�whom,�it�would�not�be�lawful�to�make�such�an�offer�or�invitation.�The�distribution�of�the�PDs�outside�Australia�may�be�restricted�by�law.�Persons�who�come�into�possession�of�the�PDs�who�are�not�in�Australia�should�seek�advice�on�and�observe�such�restrictions.�Any�failure�to�comply�with�such�restrictions�may�be�a�violation�of�applicable�securities�laws.��

MINIs�have�not,�and�will�not,�be�registered�under�the�united�states�securities�Act�of�1933,�as�amended�(uS Securities Act),�or�the�laws�of�any�state�of�the�united�states�and�may�not�be�offered�or�sold�within�the�united�states�or�to,�or�for�the�account�or�benefit�of,�a�us�Person�(as�defined�under�regulation�s�under�the�us�securities�Act).��

CHANGES AND uPDATES TO INFORMATION IN THE PDSThe�information�in�the�PDs�is�current�as�at�the�date�it�was�issued,�but�may�change�from�time�to�time.�Where�such�information�changes�and�such�change�is�not�materially�adverse�to�you,�we�may�update�the�information�by�posting�a�notice�on�our�website�(see�the�Directory�for�details).�If�you�would�like�a�free�paper�copy�of�any�updated�information,�please�contact�us�(see�the�Directory�for�details).

REPRESENTATIONSThe�PDs�has�been�prepared�and�issued�by�Macquarie�as�issuer.�Any�other�parties�distributing�this�product�are�only�doing�so�as�a�distributor�for�Macquarie.�You�should�only�rely�on�information�in�the�PDs.�No�person�is�authorised�to�give�any�information,�or�to�make�any�representation,�about�MINIs�that�is�not�contained�in�the�PDs.�Any�information�or�representation�not�contained�in�the�PDs�may�not�be�relied�on�as�having�been�authorised�by�Macquarie.��

Nothing�in�the�PDs�is�an�express�or�implied�endorsement�by�Macquarie�of�an�investment�in�a�MINI�or�any�other�security�or�Index�referable�to�a�MINI.��

uNDERLyING REFERENCE ASSETreferences�in�this�PDs�or�any�sPDs�to�any�Listed�entity�(other�than�Macquarie),�any�Index�or�any�Index�sponsor,�are�only�included�for�the�purposes�of�identifying�the�reference�Asset�to�which�a�Macquarie�MINI�may�relate�and�the�issuer�of�that�reference�Asset.�such�references�are�not�an�express�or�implied�endorsement�by�any�Listed�entity�or�Index�sponsor�of�the�Macquarie�MINIs.�No�Listed�entity�(other�than�Macquarie)�or�Index�sponsor�accepts�any�responsibility�for�any�statement�in�this�PDs�or�any�sPDs,�or�assumes�any�liability�in�respect�of�the�Macquarie�MINIs.��

No�Listed�entity�(other�than�Macquarie)�or�Index�sponsor�has�been�involved�in�the�preparation�of�this�PDs�or�any�sPDs,�or�given�any�information�specifically�to�Macquarie�for�the�purpose�of�their�preparation.�Nothing�in�this�PDs�or�any�sPDs�can�be�relied�on�as�implying�that�there�has�been�no�change�in�the�affairs�of�any�Listed�entity,�any�Index�sponsor�or�Macquarie�since�the�date�of�this�PDs�or�the�relevant�sPDs�(as�the�case�may�be),�or�as�a�representation�as�to�the�future�in�relation�to�any�Listed�entity,�any�reference�Asset�or�Macquarie.

NO COOLING-OFF PERIOD

There�is�no�‘cooling-off’�period�when�you�buy�or�sell�a�Macquarie�MINI.�

ENQuIRIES AND COMPLAINTSWe�have�procedures�for�dispute�resolution,�and�they�are�available�to�you�free�of�charge.�You�may�make�a�complaint�relating�to�Macquarie�MINIs�directly�to�us�in�writing.�We�will�always�acknowledge�any�complaint�promptly�and�provide�a�substantive�response�within�no�more�than�45�days.�If�the�outcome�is�unsatisfactory,�you�may�refer�your�complaint�to�the�Financial�Ombudsman�service�at:

Mail�to:�� GPO�Box�3,�Melbourne�VIC�3001Telephone:�� 1300�78�08�08*�or�(03)�9613�7366�(9am�-�5pm�AesT)Fax:�� (03)�9613�6399Website:�� fos.org.au

*Calls�charged�at�the�local�rate�from�landlines;�at�the�applicable�rate�of�your�carrier�if�calling�from�a�mobile.�

ADMISSION TO TRADING STATuSunless�otherwise�stated�in�an�sPDs,�an�application�will�be�made�to�the�AsX�to�enable�the�series�of�MINIs�referred�to�in�the�relevant�sPDs�to�be�admitted�to�trading�status�on�the�AsX�within�seven�days�of�the�date�of�the�relevant�sPDs.�The�fact�that�the�AsX�may�admit�a�series�of�MINIs�to�trading�status�from�time�to�time�is�not�to�be�taken�in�any�way�as�an�indication�of�the�merits�of�Macquarie�or�the�MINIs.

The�AsX�does�not�warrant�the�accuracy�or�truth�of�the�contents�of�this�PDs�or�the�sPDs�for�the�series.�In�admitting�the�MINIs�to�trading�status�and�not�objecting�to�the�Terms�&�Conditions,�the�AsX�has�not�authorised�or�caused�the�issue�of�this�PDs�or�the�sPDs�for�the�series�and�is�not�in�any�way�a�party�to,�or�concerned�in,�authorising�or�causing�the�issue�of�this�PDs�or�the�sPDs�for�the�series,�or�the�making�of�offers�or�invitations�with�respect�to�any�series�of�MINIs.�The�AsX�takes�no�responsibility�for�the�contents�of�this�PDs�or�the�sPDs�for�the�series.�The�AsX�makes�no�representation�as�to�whether�this�PDs,�the�sPDs�for�the�series�or�the�Terms�&�Conditions�comply�with�the�Corporations Act�or�the�AsX�Operating�rules.

MAKING AN INFORMED DECISION

All�investments�involve�a�degree�of�risk.�Please�ensure�that�you�consider�the�risks�of�investment�in�Macquarie�MINIs,�including�those�set�out�in�section�3�of�this�PDs.�

As�well�as�the�risks�of�this�particular�product,�you�should�also�consider�how�an�investment�in�this�product�fits�into�your�overall�portfolio.�You�should�also�consider�whether�the�amount�invested�in�this�product�is�appropriate�given�the�overall�size�of�your�investment�portfolio.�Diversification�of�your�investment�portfolio�can�be�used�as�part�of�your�overall�portfolio�risk�management�to�limit�your�exposure�to�failure�or�underperformance�of�any�one�investment,�manager�or�asset�class.

An�investment�in�Macquarie�MINIs�may�not�suit�potential�investors�who�are�unfamiliar�with�the�risks�associated�with�a�MINIs�and�leveraged�investments.�An�investment�in�MINIs�is�not�a�traditional�investment�product�and�may�not�suit�investors�who�do�not�have�experience,�and�are�unfamiliar,�with�MINIs.

You�should�not�invest�in�MINIs�unless�you:�

■■ are�familiar�with�listed�securities,�warrants�and�with�leveraged�investments��in�general;�and

■■ understand�and�are�comfortable�with�the�risks�of�investing�in�MINIs.

To�the�extent�permitted�by�law,�the�AsX�will�be�under�no�liability�for�any�claim�whatsoever,�including�for�any�financial�or�consequential�loss�or�damage�suffered�by�you�or�any�other�person,�where�that�claim�arises�wholly�or�substantially�out�of�reliance�on�any�information�contained�in�this�PDs�or�the�sPDs�for�the�series,�or�any�error�in,�or�omission�from,�this�PDs�or�the�relevant�sPDs.

GLOSSARyIn�section�7�of�this�PDs�is�a�Glossary�in�which�various�words�and�phrases�used�in�the�PDs�are�defined.�If�you�do�not�understand�a�word�or�phrase,�you�should�refer�to�the�Glossary.�Capitalised�words�that�are�used�in�the�PDs�have�the�meaning�set�out�in�the�Glossary,�unless�the�context�requires�otherwise.�unless�stated�otherwise�(a)�all�dollar�amounts�and�performance�data�in�the�PDs�are�quoted�in�Australian�dollars�(AuD);�and�(b)�all�references�to�time�are�to�time�in�sydney,�Australia.

ABOuT uSThe�value�of�any�investment�you�make�in�the�MINIs�depends�on,�among�other�things,�whether�we�can�and�do�perform�our�obligations.�

Our�obligations�under�the�Terms�&�Conditions�and�in�relation�to�the�MINIs�are�not�deposit�liabilities�of�ours,�and�they�are�not�guaranteed�by�any�other�party.�They�are�unsecured�contractual�obligations�which�will�rank�equally�with�our�other�unsecured�contractual�obligations�and�with�our�unsecured�debt�(other�than�liabilities�mandatorily�preferred�by�law).�In�this�regard�section�13A(3)�of�the�Banking�Act�1959�(Cth)�provides�that�in�the�event�we�become�unable�to�meet�our�obligations,�our�assets�in�Australia�will�be�available�to�meet�certain�liabilities�in�priority�to�all�of�our�other�liabilities,�including�our�obligations�under�the�Terms�&�Conditions�and�in�relation�to�the�MINIs.�such�preferred�liabilities�include,�without�limitation,�certain�debts�and�costs�owed�to�the�Australian�Prudential�regulatory�Authority,�liabilities�in�relation�to�protected�accounts�and�any�debts�or�liabilities�to�the�reserve�Bank�of�Australia.

1

Macquarie MINIs

2Section 1Investment Overview

8Section 2Macquarie MINIs

26Section 3 Risks You Should Consider

33Section 4Fees and Other Costs

35Section 5Taxation for Australian Residents

38 Section 6Additional Information

43Section 7Glossary

51Section 8Terms & Conditions

Contents

1

2

To find information on the topics listed below, see the Section number listed. This overview indicates the kind of information you can find in this PDS, but is not intended to be a complete summary. You should read all of (1) this PDS carefully, together with any SPDS relevant to the Series that you want to invest in and (2) the Terms & Conditions and seek professional legal, taxation and financial advice to determine whether an investment in Macquarie MINIs is appropriate for you.

You should not invest in Macquarie MINIs unless you are an experienced investor and:

■ are familiar with shares, securities, warrants, leveraged investments, options and investment in shares and securities generally; and

■ understand and are comfortable with the risks associated with an investment in Macquarie MINIs.

An investment in Macquarie MINIs does not suit investors seeking a traditional investment product (such as a direct unleveraged investment in shares). You should be aware that:

■ Macquarie MINIs are a speculative investment and there is a material risk that you could lose all of the money that you invest in Macquarie MINIs; and

■ the value of a Macquarie MINI can vary materially in a relatively short period of time; and

■ the higher the leverage of a Macquarie MINI, the riskier an investment in that Macquarie MINI will be.

Please read this PDS and the relevant SPDS carefully before investing and seek professional legal, taxation and financial advice to determine whether Macquarie MINIs are appropriate for you. Section 2 of the PDS contains more detailed information about factors that can affect the value of an investment in Macquarie MINIs and Section 3 of this PDS provides further information on some of the risks associated with investing in Macquarie MINIs.

Topic Highlights Further information

Issuer Macquarie Bank Limited (ABN 46 008 583 542 and AFSL 237502) No. 1 Martin Place Sydney NSW 2000 Australia

Phone: 1800 087 110Email: [email protected]: www.macquarie.com.au/minis

Section 6.1

Macquarie MINIs (“MINIs”)

■ ASX Traded Exposure to Reference Assets: Macquarie MINIs are ASX-traded warrants which give you exposure to an underlying asset (called a “Reference Asset”). The types of Reference Assets you may get exposure to are: (a) shares, units or exchange traded funds listed on the ASX and/or (b) indices, including those linked to the performance of commodity prices, the Australian sharemarket, or international sharemarkets.

Section 2.1

■ Long and Short Exposure: The exposure enables you to benefit from either gains in the value or level of the Reference Asset (in the case of a MINI Long) or from falls in the value or level of the Reference Asset (in the case of a MINI Short). You can realise this gain (or loss) by selling your Macquarie MINI on the ASX or by exercising your Macquarie MINI and receiving a cash payment from us.

Section 2.2

■ Leveraged ‘delta 1’ exposure: Your exposure to a Reference Asset is a ‘delta 1’ exposure, so the value of your Macquarie MINI generally moves cent-for-cent with the price of the Reference Asset. The exposure is also leveraged, so your gains or losses (as a proportion of the amount you invest) will be magnified.

Section 2.2

Section 1

Investment Overview

3


Macquarie MINIs (“MINIs”)

Continued

■ Inbuilt Daily Funding Costs: Because Macquarie MINIs are a leveraged investment, Macquarie may charge you a funding cost on the leverage component of your Macquarie MINI. This funding cost, called a Daily Funding Cost, is not directly payable by you but instead will be reflected in the value of your Macquarie MINI (see Section 2.3.1). Daily Funding Costs will accrue on a daily basis, at the end of each day. However as Daily Funding Costs change, the Strike Price of your Macquarie MINI will be adjusted to reflect that change.

Section 2.3.1

■ Dividend adjustments: You are not entitled to receive any dividends that may be paid on the underlying Reference Asset. However the Strike Price will be adjusted to reflect any payment of dividends, on Ex-Dates.

Section 2.3.3

■ Stop Loss - pay no more than initial price: You have the benefit of a Stop Loss Level feature meaning you are not liable to pay any amounts beyond the initial price paid by you for your Macquarie MINI. If a Stop Loss Event occurs, the relevant Series of the Macquarie MINIs will be terminated and you may receive no payments. In other words, you may still lose all of the money you have invested - but you will not be required to pay any additional amounts to us.

Section 2.4

■ No expiry date ‘American style’: Macquarie MINIs do not have an expiry date, however they may be terminated if they are exercised by you or a Stop Loss Event, Extraordinary Event or Issuer Call Event occurs.

Section 2.6

■ Cash Settled: Macquarie MINIs are cash settled only (meaning that you will never own the Reference Asset).

Section 2.6

Reference Asset

Macquarie MINIs may be linked to a range of different Reference Assets as specified in the relevant SPDS for the Series of Macquarie MINIs. The types of Reference Assets you may obtain exposure to include:

■ shares, units or exchange traded funds listed on the ASX; and/or

■ indices, including those linked to the performance of commodity prices, the Australian sharemarket, or international sharemarkets (Index MINIs).

Please note, Index MINIs track the price of the relevant Index Future Contract rather than the published index level.

You are responsible for selecting any Macquarie MINI that you enter into and therefore, the Reference Asset that you will have exposure to. As such, the performance of any Macquarie MINI will depend mainly on investment decisions made by you.

Section(s) 2.1 and 2.2

Strike Price and the value of your Macquarie MINI

On any given day the difference between the Strike Price and the value of the Reference Asset will give you the ‘value’ of your Macquarie MINI (see section 2.2.1 for further information).

The initial Strike Price for a Series of Macquarie MINIs will be specified in the SPDS for those MINIs and will be adjusted daily from then on. It is important to note that the Strike Price, relative to the value of the Reference Asset, will have an important influence on the price or value of a Macquarie MINI.

Section(s) 2.1

Section 2.3

4


Strike Price and the value of your Macquarie MINI

Continued

Adjustment to the Strike Price - Daily Funding Costs

The Strike Price of a Macquarie MINI will be adjusted on a daily basis to reflect Daily Funding Costs. Daily Funding Costs are not directly payable by you. Instead the Strike Price of your MINI will be adjusted to reflect Daily Funding Costs.

■ If you hold a Long MINI, the daily funding cost is ordinarily “payable” by you to Macquarie.

■ If you hold a Short MINI, the daily funding cost is ordinarily “payable” by Macquarie to you.

In both cases, no amount is actually payable by either party. Rather, the Strike Price will be adjusted to reflect the accrual of these amounts on a daily basis. The Daily Funding Cost will therefore generally decrease the value of a MINI Long and increase the value of a MINI Short (ignoring any movement in the Reference Asset Value).

See Section 2.3 of this PDS for further details.

Adjustment to Strike Price - Index Adjustment

In the case of Index MINIs, the underlying Reference Asset (ie the Index Futures Contract) has an expiry date. Because Index MINIs do not have an expiry date, when an Index Futures approaches expiry, the Reference Asset for the corresponding Index MINI will be automatically changed (or “rolled”) to the next Index Futures Contract. This rollover may cause an adjustment to the Strike Price and Stop Loss Level. See Section 2.3.4 of this PDS for further details.

Adjustment to Strike Price - Dividend Adjustment

Purchasing a Macquarie MINI does not entitle you to receive any dividends or distributions from a Reference Asset. Where the underlying Reference Asset is a listed Security, on the day the Reference Asset trades Ex-Dividend, the Strike Price and the Stop Loss Level will be decreased by the amount of the dividend or distribution for both MINI Longs and MINI Shorts.

Section 2.3

Section 2.3.4

Section 2.3.3

Stop Loss Level Feature

A Stop Loss Event occurs when the value of the Reference Asset falls below a specified level (for MINI Longs) or rises above a specified level (for MINI Shorts) (Stop Loss Level). The Stop Loss Level ensures that the value of the MINI can never be negative. This means that you can never lose more than your initial investment in a Macquarie MINI. It also means that Macquarie will never request additional payments, like margin calls, from you.

You should note that the triggering of a Stop Loss Event will not prevent you from losing all of the money that you invest nor is there any guarantee that the price achieved on occurrence of a Stop Loss Event will be equal to the Stop Loss Level.

Section 2.4

Fees and other costs

On acquisition of a Macquarie MINI

If you acquire a Macquarie MINI on the ASX, in addition to any amount you may have to pay to acquire that Macquarie MINI, your broker or adviser may also charge you a fee or commission in relation to that purchase.

Disposing of your Macquarie MINIs

If you sell your Macquarie MINIs on the ASX, your broker or adviser may charge you a fee or commission in relation to that sale.

Section 4

5


Fees and other costs

Continued

Exercise or early termination of your Macquarie MINI – Expenses

If you choose to exercise your Macquarie MINI or where it is terminated early (e.g. by Extraordinary or Issuer Call Event) any cash payment that you may receive from Macquarie (“Cash Settlement Amount”) will be reduced by the amount of any Expenses. See Section 2.6.2 of this PDS for further details.

Daily Funding Costs

Macquarie may charge you a Daily Funding Cost on your Macquarie MINI. Although not a cost directly payable by you, you should note that the accrual of the Daily Funding Cost will affect the value of your Macquarie MINI. This is because any Daily Funding Costs affect the Strike Price of your Macquarie MINI. For more information about Daily Funding Costs, including the factors that will affect the amount of Daily Funding Costs you may need to pay, see section 2.3.1 and 2.3.2 of this PDS.

You can also refer to www.macquarie.com.au/minis for the applicable Daily Funding Cost for your MINI.

Adviser fees

A member of the Macquarie Group may make discretionary payments to your financial adviser. Any such payments are made from Macquarie’s profit and are non-rebateable payments.

Section 2.6.2

Section 2.3.1

Significant risks As with any investment decision, you need to consider an investment in Macquarie MINIs carefully and in light of your individual circumstances.

You should not invest in Macquarie MINIs unless you:

■ are familiar with shares, securities, warrants, leveraged investments, options and investment in shares and securities generally;

■ understand and are comfortable with the risks of an investment in Macquarie MINIs; and

■ have the ability to tolerate a reasonable level of risk.

An investment in Macquarie MINIs does not suit investors seeking a traditional investment product such as a direct unleveraged investment in shares.

Macquarie MINIs are a speculative investment and there is a material risk that you could lose all of the money that you invest in Macquarie MINIs.

This Section is not intended to be a comprehensive summary of all of the risks of investing in Macquarie MINIs but highlights certain risks that we encourage you to consider in detail and discuss with your financial adviser. More detailed information about the risks of investing in a Macquarie MINI is set out in Section 3.

Some of the significant risks of investing in Macquarie MINIs include the following:

Poor performance and volatility of the Reference Assets

If the Reference Asset performs poorly, the value of your MINI may decrease. This may cause a Stop Loss Event to occur and your Macquarie MINI will be terminated. Upon a Stop Loss Event, you may not be entitled to receive any Stop Loss Value. You may therefore lose some or all of the money you invest.

In recent times, markets have experienced more volatile conditions and volatility in some markets increased to very high levels. Investing in highly volatile conditions implies a greater level of risk for investors than an investment in a more stable market. You should carefully consider the risk of additional volatility before making any investment decision.

Section 3

Section 1Investment

overview

6


Significant risks

Continued

Leverage risk

Compared to a direct investment in the relevant Reference Asset, losses and gains on Macquarie MINIs can be magnified because of the leverage incorporated within Macquarie MINIs. For example, if:

■ in the case of a MINI Long, the value of the Reference Asset declines over the term of the MINI or stays the same; or

■ in the case of a MINI Short, the value of the Reference Asset increases over the term of the MINI or stays the same,

then you may end up losing a larger proportion of your investment in Macquarie MINIs compared to a direct investment in the relevant Reference Asset.

Generally the higher the leverage of your Macquarie MINI, the riskier your investment will be. You should consider the risks of leverage and seek independent financial advice before investing in Macquarie MINIs.

Break even risk

In general terms, to break-even in relation to an investment in a Macquarie MINI:

■ in the case of a MINI Long, the value of the relevant Reference Asset for your Macquarie MINI will need to increase at a greater rate than the Strike Price (which generally increases daily by the amount of the Daily Funding Cost);

■ in the case of a MINI Short, the value of the relevant Reference Asset for your Macquarie MINI will need to decrease at a greater rate than the Strike Price (which generally decreases daily by the amount of the Daily Funding Cost),

and by enough to ensure that any amount you are entitled to receive following the sale or exercise of the Macquarie MINI (if any) is enough to cover any amounts you have paid to acquire that Macquarie MINI (and any other costs including brokerage). Note that if you exercise your Macquarie MINI, the amount you receive will also be reduced by the amount of any Expenses.

Early Termination

Macquarie has the right to terminate your Macquarie MINI early in certain circumstances. Where an Issuer Call Event or Extraordinary Event occurs with respect to your Macquarie MINI, your MINI may be terminated. In this case, you will only be entitled to receive the value of that Macquarie MINI at the time the early termination occurs, as determined by us less any Expenses. See Section 2.6 of this PDS for more information about the early termination of a Macquarie MINI (including the list of events which may trigger an early termination). It is also important to note that events which could be treated by us as an Extraordinary Event or our decision to call an Issuer Call Event may be beyond your control. In the event your Macquarie MINIs are terminated early Expenses (which are similar to break costs) may be payable by you to Macquarie and any such Expenses may be significant.

Section 3

7


Significant risks

Continued

Counterparty risk

The value of your investment in a Macquarie MINI depends on Macquarie performing its obligations under the Macquarie MINIs. It is important to note that our obligations under the Macquarie MINIs are unsecured contractual obligations which will rank equally with our other unsecured contractual obligations and unsecured debt in the event of our insolvency (other than liabilities mandatorily preferred by law). You must make your own assessment of our ability to meet our obligations under the Macquarie MINIs. You can obtain up-to-date information about us, including financial information, by either referring to www.macquarie.com.au/shareholdercentre or by contacting us on 1800 087 110.

Section 3

Taxation considerations

The taxation outcomes of investing in MINIs will depend on your individual circumstances. You should seek independent taxation advice before investing in Macquarie MINIs.

Section 5

Superannuation Considerations

Trustees of superannuation funds must formulate and implement an appropriate investment strategy that has regard to the whole of the circumstances of their superannuation fund and must act in the best interests of the members of their fund. This includes ensuring that they are familiar with the risks involved in, and have in place adequate risk management procedures to manage the risks associated with, an investment in Macquarie MINIs prior to making such an investment.

In this context, trustees should give careful consideration to whether leveraged investments generally, and in particular highly leveraged investments, are an appropriate investment for the superannuation fund. Relevant to this consideration will be the risks of a leveraged investment as described in Section 3 of this PDS and other relevant factors such as the diversification of the superannuation fund’s investments and the overall level of leverage (or gearing) within the superannuation fund. Macquarie recommends trustees obtain independent legal, financial and taxation advice before making any investment decision.

Section 3

Registrar Computershare Investor Services Pty Limited

Phone: 1300 85 05 05 (within Australia)

Website: www-au.computershare.com

Terms & Conditions

This PDS (and any SPDS relevant to the Series that you want to invest in) summarises the significant features of Macquarie MINIs. Before making any decision to purchase a MINI, you should make sure you have read and understood the legal agreements which govern the MINIs (the “Terms & Conditions”) in Section 8 of this PDS.

It is important that you read and understand the Terms & Conditions before making any investment decision about Macquarie MINIs.

Section 8

How to invest in MINIs

To invest in a Macquarie MINI, you should:

■ carefully read all of this PDS, any SPDS relevant to the Series that you wish to invest in and the Terms & Conditions;

■ consult your professional legal, taxation and financial adviser; and

■ contact your broker or financial adviser and organise for them to place an order to acquire the relevant MINI on the ASX on your behalf.

Section 1Investment

overview

8

Section 2

Macquarie MINIs

This Section is a summary of the important features of MINIs. The contractual terms of a MINI are set out in the Terms & Conditions. If you purchase a MINI, you agree to be bound by the Terms & Conditions. You should therefore read and understand the Terms & Conditions before entering into any MINIs. You should also obtain professional advice which takes into account what you currently have, and what you want and need for your financial future.

8Section 2.1 What are Macquarie MINIs?

8Section 2.2 How do Macquarie MINIs work?

11Section 2.3 What is the Strike Price and how is it calculated?

16Section 2.4 What is a Stop Loss Event?

19Section 2.5Trading in Macquarie MINIs

22Section 2.6 How can my Macquarie MINIs terminate?

25Section 2.7 Can my Macquarie MINI be adjusted?

2.1 What are Macquarie MINIs?2.1.1 What are Macquarie MINIs?

Macquarie MINIs are ASX traded warrants which:

■ give you leveraged (geared) exposure to the performance of a specified Reference Asset (Reference Asset). The type of Reference Assets you can get exposure to may include:

– shares, units or exchange traded funds listed on the ASX (called a Share MINI); and/or

– indices, including those linked to the performance of commodity prices, the Australian sharemarket, or international sharemarkets (an Index MINI);

■ give you the opportunity to benefit from either gains in the value or level of the Reference Asset (called a MINI Long) or from falls in the value or level of the Reference Asset (called a MINI Short);

■ give you “delta-1” exposure to the Reference Asset, that is, intraday Macquarie MINIs generally move cent-for-cent with the price of the Reference Asset;

■ have an embedded Stop Loss Level feature meaning you cannot lose more than your initial investment; and

■ do not have an expiry date, making them suitable for both short-term trading and long-term investing.

2.1.2 What Reference Assets are applicable to Macquarie MINIs?

Macquarie MINIs can be linked to the performance of a range of assets from Australian shares, units or exchange traded funds listed on the ASX or domestic or international indices.

The Reference Asset for a Macquarie MINI will be specified in the relevant SPDS for that Series. You should note that different types of Reference Assets have different risks, and you should ensure that you are familiar with the risk of the type of Reference Asset for the Series of Macquarie MINIs you purchase.

2.2 How do Macquarie MINIs work? On or before the Issue Date for a Series of Macquarie MINIs, Macquarie will specify in the relevant SPDS for that Series of Macquarie MINIs:

9

■ the Reference Asset to which the Macquarie MINI relates;

■ whether the Macquarie MINI is a MINI Long or MINI Short;

■ the initial Strike Price of the Macquarie MINI;

■ the Conversion Factor of the Macquarie MINI; and

■ the initial Stop Loss Level in relation to that Macquarie MINI Series.

The initial Stop Loss Level will be set above the Strike Price and below the Reference Asset Value (at the time that the Strike Price is determined by Macquarie) for a MINI Long. Conversely, the initial Stop Loss Level will be set below the Strike Price and above the Reference Asset Value (at the time that the Strike Price is determined by Macquarie) for a MINI Short.

2.2.1 Valuing a MINI

The value of a Macquarie MINI is based on the following calculation for both Share MINIs and Index MINIs:

■ Value of MINI Long = (Reference Asset Value – Strike Price) / Conversion Factor

■ Value of MINI Short = (Strike Price – Reference Asset Value) / Conversion Factor.

The price at which the Macquarie MINI is traded on ASX may be higher or lower than this value (See Section 2.5.2 for more details).

The Reference Asset Value of:

■ a Share MINI, is the price of the applicable Security on the ASX.

■ an Index MINI, is the price on the ASX of the applicable Index Futures Contract for the Reference Index.

What is the Conversion Factor?

For Share MINIs, the Conversion Factor represents the number of Macquarie MINIs you have to hold in order to get exposure to one Reference Share. The Conversion Factor will typically be 1 for Share MINIs (unless otherwise specified by the Issuer). This means by purchasing one Share MINI, you will have exposure to one Reference Share.

For Index MINIs, the Conversion Factor converts the level of the Reference Index into a dollar value. The Conversion Factor will typically be 100 for Index MINIs (unless otherwise specified by the Issuer). This means by purchasing one Index MINI, you will have exposure to one 100th of the level of the Reference Index.

2.2.2 Leverage and funding costs

The Strike Price of a Macquarie MINI relative to the Reference Asset Value represents the amount of leverage incorporated into a Macquarie MINI. A MINI with a high amount of leverage will experience larger movements in value relative to the Reference Asset, and will generally be more risky than a MINI with less leverage. The following diagram shows the value of several investments with varying degrees of leverage.

Because of this leverage, Macquarie may charge you a Daily Funding Cost on the leverage component of your Macquarie MINI. Daily Funding Costs are not directly payable by you. Instead, if you hold a Macquarie MINI overnight, the Strike Price will be adjusted by the Daily Funding Cost. Daily Funding Costs vary depending on whether you hold a MINI Long or a MINI Short. See Section 2.3.1 of this PDS for more detail on Daily Funding Costs.

The above example does not take into account Daily Funding Costs, dividends or taxes and assumes that when a Stop Loss Event occurs, the Macquarie Close Out Price is equal to the Reference Asset Value.

Change in Reference Asset Value

Valu

e of

Inve

stm

ent

Reference Asset MINI Long -70% Leverage MINI Long -50% Leverage

0%

50%

100%

150%

200%

250%

300%

55% -45% -35% -25% -15% -5% 5%0 15% 25% 35% 45% 55%

10

2.2.3 Examples of valuing a MINI

The following are illustrative examples only of the value of a Macquarie MINI. Actual performance may differ materially. The Interest Rate used below is an indicative Interest Rate only and may differ from the actual Interest Rate. The actual Interest Rate will be announced by Macquarie via the ASX company announcement platform and our website at www.macquarie.com.au/minis before the open of trading on the ASX each day. The examples do not take into account any additional costs you may incur in acquiring or disposing of a Macquarie MINI (ie third party brokerage costs and advisor fees and commissions etc) or taxes or any Expenses you may need to pay. The rounding used in these examples has been used for the purposes of simplifying the examples only, and may be different to the rounding that will actually be used by Macquarie in relation to any Macquarie MINIs that you hold. The actual rounding which will apply to your Macquarie MINIs is set out in clause 12.6 of the Terms & Conditions.

Example – Share MINI Long

An investor purchases a BHP MINI Long with a Strike Price of $36 and Conversion Factor of 1. If BHP is trading at $45, the Macquarie MINI is valued at $9.00 on the day of purchase.

Reference Asset: BHP

Reference Asset Value: $45.00

Strike Price: $36.00

Day 1 Value of MINI = (Reference Asset Value – Strike Price) / Conversion Factor

= ($45.00 – $36.00) / 1

= $9.00

The investor chooses to hold their Macquarie MINI overnight. The Strike Price on the next day is adjusted by the Daily Funding Cost. If the BHP stock price remains unchanged, this adjustment reduces the value of the Macquarie MINI.

Interest Rate: 10.00%

Daily Funding Cost: $0.0099

Strike Price on Day 2: $36.00 + $0.0099

= $36.0099

Day 2 Value of MINI = $45.00 – $36.0099

= $8.9901

Example – Share MINI Short

An investor purchases a BHP MINI Short with a Strike Price of $54 and Conversion Factor of 1. If BHP is trading at $45, the Macquarie MINI is valued at $9.00 on the day of purchase.




Day 1 Value of MINI = (Strike Price – Reference Asset Value) / Conversion Factor

= ($54.00 – $45.00) / 1

= $9.00

The investor chooses to hold their Macquarie MINI overnight. The Strike Price on the next day is adjusted by the Daily Funding Cost. If the BHP stock price remains unchanged, this adjustment increases the value of the Macquarie MINI.


Daily Funding Cost: $0.0015

Strike Price on Day 2: $54.00 + $0.0015

= $54.0015

Day 2 Value of MINI = $54.0015 – $45.00

= $9.0015

Example – Index MINI Long

The Reference Asset codes used below are examples of the codes used by the ASX to represent futures contracts over the S&P/ASX 200 Index (“XJO”). An Index Futures Contract code consists of four alphanumeric characters. The first two characters are “AP”, the third character indicates the expiry month, and the fourth character indicates the expiry year.

An investor purchases an XJO MINI Long with a Strike Price of 3,760 and Conversion Factor of 100. If the Index Futures Contract is trading at 4,700, the Macquarie MINI is valued at $9.40 on the day of purchase.

Reference Asset: APM1 (June 2011 SPI 200TM)

(See Section 2.3.4 for an explanation of how we adjust Index MINIs to accommodate the expiry of futures contracts.)

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Reference Asset Value: 4,700

Strike Price: 3,760

Day 1 Value of MINI = (Reference Asset Value – Strike Price) / Conversion Factor

= (4,700 – 3,760) / 100

= $9.40

The investor chooses to hold their Macquarie MINI overnight. The Strike Price on the next day is adjusted by the Daily Funding Cost. If the Index Futures Contract price remains unchanged, this adjustment reduces the value of the Macquarie MINI.


Daily Funding Cost: 0.5151

Strike Price on Day 2: 3,760 + 0.5151 = 3,760.5151

Day 2 Value of MINI = (4,700 – 3,760.5151) / 100

= $9.3948

Example – Index MINI Short

An investor purchases an XJO MINI Short with a Strike Price of 5,640 and Conversion Factor of 100. If the Index Futures Contracts are trading at 4,700, the Macquarie MINI is valued at $9.40 on the day of purchase.

Reference Asset: APU1 (September 2011 SPI 200TM)


Strike Price: 5,640

Day 1 Value of MINI = (Strike Price – Reference Asset Value) / Conversion Factor

= (5,640 – 4,700)/100

= $9.40

The investor chooses to hold their Macquarie MINI overnight. The Strike Price on the next day is adjusted by the Daily Funding Cost. In this example, the Daily Funding Cost reflects a negative Interest Rate. This has the effect of decreasing the Strike Price. Please refer to Section 2.3.1 of this PDS for more detail on factors affecting the Daily Funding Cost.

Interest Rate: -7.50%

Daily Funding Cost: -1.1589

Strike Price on Day 2: 5,640 – 1.1589

= 5,638.8411

Day 2 Value of MINI = (5,638.8411 – 4,700)/100

= $9.3884

The above examples demonstrate the theoretical movement of the value of a Macquarie MINI. Please note that the value at which you acquire or dispose of your Macquarie MINI on the ASX may be more or less than the relevant level of the Reference Asset at the corresponding time. This may be due to bid/offer spreads in the market for the Macquarie MINI or changes in the Reference Asset Value between the placement of your order and execution or other factors.

2.3 What is the Strike Price and how is it calculated?The Strike Price of a Macquarie MINI relative to the Reference Asset Value represents the amount of leverage incorporated into a Macquarie MINI. On the date you acquire a Macquarie MINI, the closer the Reference Asset Value is to the Strike Price, the greater the amount of leverage. This is because you have a larger exposure to the Reference Asset relative to the price you have paid. Because of this leverage, Macquarie may charge you a Daily Funding Cost. Daily Funding Costs will affect the Strike Price, and therefore the value of your Macquarie MINI. See section 2.3.1 for more information on Daily Funding Costs. You should also note that the closer the Stop Loss Level is to the Reference Asset Value, the higher the probability of a Stop Loss Event occurring and the higher the risk that you may lose all of your initial investment. See Section 2.4 for more information in relation to a Stop Loss Event.

The initial Strike Price for each Series of Macquarie MINIs will be announced in the relevant SPDS for that Series. From then on it will be adjusted on a daily basis.

2.3.1 How is the Strike Price adjusted to take into account Daily Funding Costs?

The Strike Price will be adjusted on a daily basis by Macquarie to reflect the Funding Costs notionally “payable” in respect of a Macquarie MINI. The Daily Funding Cost is the notional cost or benefit to you for the leverage embedded in the Strike Price. The Daily Funding Cost is calculated by reference to the Interest Rate and is added to the Strike Price each day.

The Daily Funding Cost is calculated using the following formula:

Daily Funding Cost per day =

Interest Rate x Strike Price

365 days

Section 2Macquarie

MINIs

12

The daily Strike Price is calculated by adding the Daily Funding Cost to the Strike Price on the previous day. For Long MINIs, the Daily Funding Cost will ordinarily be a positive amount - which means that the Strike Price increases by this amount daily – resulting in a corresponding reduction in the value of a MINI Long and increase in the value of a MINI Short (ignoring any movement in the Reference Asset Value). In some instances, the Interest Rate will be negative, resulting in a negative Daily Funding Cost per day. This will have the effect of decreasing the Strike Price overnight. Please refer to Section 2.3.2 for more detail on factors affecting the Interest Rate.

Macquarie will announce the new Strike Price and the Interest Rate via the ASX company announcement platform and our website at www.macquarie.com.au/minis before the open of trading on the ASX each day.

Please be aware that at certain times during the week, the Strike Price reported by Macquarie for that day may reflect more than one day’s Daily Funding Costs. For example, Monday’s Strike Price will ordinarily reflect the Daily Funding Costs that have accrued over the weekend. However, this is smoothed out during each week so that if you hold a Macquarie MINI for a full week, you will only incur 7 days worth of Daily Funding Costs.

Note that the Daily Funding Costs are notional i.e. they are reflected in the Strike Price, and therefore the value of a Macquarie MINI on any given day, but no amounts are actually payable by you. As such, Daily Funding Costs affect the value of your Macquarie MINI and you should take into account these costs when considering whether you will break even in relation to your investment in a Macquarie MINI.

The following are illustrative examples only. Actual performance may differ materially. The Interest Rates are indicative Interest Rates only and may differ from the actual Interest Rate. The actual Interest Rate will be announced by Macquarie via the ASX company announcement platform and our website at www.macquarie.com.au/minis before the open of trading on the ASX each day. The examples do not take into account any additional costs or expenses you may incur in acquiring or disposing of a Macquarie MINI (e.g. third party brokerage costs and advisor fees and commissions etc) or taxes or any Expenses you may need to pay. The rounding used in these examples has been used for the purposes of simplifying the examples only, and may be different to the rounding that will actually be used by Macquarie in relation to any Macquarie MINIs that you hold. The actual rounding which will apply to your Macquarie MINIs is set out in clause 12.6 of the Terms & Conditions.


An investor purchases a BHP MINI Long with a Strike Price of $36 and Interest Rate of 10%.



Interest Rate: 10%

Daily Funding Cost per day = (10% x $36.00) / 365

= $0.0099

Note the positive Daily Funding Cost per day will increase the Strike Price. This means that in the case of a MINI Long, if all other factors remain unchanged, the value of the MINI will decrease.


An investor purchases a BHP MINI Short with a Strike Price of $54 and Interest Rate of 1%.




Daily Funding Cost per day = (1% x $54.00) / 365

= $0.0015

Note the positive Daily Funding Cost per day will increase the Strike Price. This means that in the case of a MINI Short, if all other factors remain unchanged, the value of the MINI will increase.


An investor purchases an XJO MINI Long with a Strike Price of 3,760 and Interest Rate of 5%.

Reference Asset: APM1 (June 2011 SPI 200TM Index Future)

Strike Price: 3,760


Daily Funding Cost per day = (5% x 3,760) / 365

= 0.5151

Note the positive Daily Funding Cost per day will increase the Strike Price. This means that in the case of a MINI Long, if all other factors remain unchanged, the value of the MINI will decrease.

13


An investor purchases an XJO MINI Short with a Strike Price of 5,640 and Interest Rate of -5%

Reference Asset: APZ1 (December 2011 SPI 200TM Index Future)

Strike Price: 5,640

Interest Rate: -5.00%

Daily Funding Cost per day = (-5% x 5,640) / 365

= -0.7726

Note the negative Daily Funding Cost per day will decrease the Strike Price. This means that in the case of a MINI Short, if all other factors remain unchanged, the value of the MINI will decrease.

2.3.2 What factors affect the Daily Funding Cost?

The Daily Funding Costs applicable to a Series of Macquarie MINIs will be determined by Macquarie and may be influenced by a number of factors, including:

■ prevailing interest rates;

■ volatility of the Reference Asset;

■ liquidity of the Reference Asset;

■ stock borrowing market conditions (this is relevant where Macquarie is required to borrow stock to hedge its exposure under a Macquarie MINI); and

■ costs incurred by Macquarie, including but not limited to costs in relation to our hedging, market-making, funding and risk management activities.

Variable Change in Variable Effect on Daily Funding Cost – MINI Long

Effect on Daily Funding Cost – MINI Short

Prevailing interest rates Increase Increase Increase

Volatility of Reference Asset Increase Increase Decrease

Liquidity of Reference Asset Increase Decrease Increase

Stock borrowing cost of Reference Asset

Increase Decrease Decrease

Costs incurred by Macquarie Increase Increase Decrease

Please note the above is not an exhaustive list of all factors which might affect the Daily Funding Cost.

In certain circumstances, these factors may contribute to a negative Interest Rate. A negative Interest Rate will lead to a negative Daily Funding Cost per day, which has the effect of decreasing the Strike Price of the Macquarie MINI.

Typically a change in market interest rates will affect the Interest Rate applied to your Macquarie MINI. However you should note that, as issuer, Macquarie has the sole discretion to change the Interest Rate at any time in a commercially reasonable manner. This change may adversely affect the value of your MINI by way of an increased Daily Funding Cost. The change in Interest Rate may be caused by Macquarie’s own internal cost of funding and hedging activities, and under these circumstances, the Interest Rate may not reflect fluctuations seen in the market interest rate. Macquarie’s internal cost of funds may be affected by such factors as general market conditions or ratings downgrade. You should also note that as a result of all these factors funding rates may be positive or negative.

2.3.3 How is the Strike Price adjusted for Dividends?

Because you will not own the Reference Asset directly, your Macquarie MINI does not entitle you to receive any Dividends from the Reference Asset. Where the underlying Reference Asset is a listed Security and a Dividend has been paid on that Security, on the day that the Reference Asset trades Ex-Dividend, the Strike Price and the Stop Loss Level will be decreased by the Notional Dividend Amount for both MINI Longs and MINI Shorts.

Changes to the Strike Prices for Macquarie MINIs will be announced on the ASX company platform.

Please refer to Section 3.6 for detail on what happens if the share price does not fall by the same amount as the dividend.

Section 2Macquarie

MINIs

14

The following are illustrative examples only. Actual performance may differ materially.


An investor holds a MINI Long over RIO with a Strike Price of $64.00, Stop Loss Level of $70.40 and Conversion Factor of 1.

Cum-dividend


Strike Price Level: $64.00

Stop Loss Level: $70.40

MINI Value: = ($80.00 – $64.00) / 1

= $16.00

Ex-Dividend

By reducing the Strike Price, the MINI Long is more ‘in-the-money’. However on the Ex-Date, RIO’s stock price is expected to fall (all things being equal) by the Dividend Amount. The effect of this is that the MINI value is preserved over the Ex-Date. Note if the stock moves by more or less than the Dividend Amount, the MINI value will not remain at $16.00.

Actual dividend amount: $0.50

Reference Asset Value: $80.00 – $0.50 = $79.50

Strike Price: $64.00 – $0.50 = $63.50

Stop Loss Level: $70.40 – $0.50 = $69.90

MINI Value = $79.50 – $63.50

= $16.00


An investor holds a MINI Short over RIO with a Strike Price of $96.00, Stop Loss Level of $86.40 and Conversion Factor of 1.

Cum-dividend



Stop Loss Level: $86.40

MINI Value: = ($96.00 – $80.00) / 1

= $16.00

Ex-Dividend

By reducing the Strike Price, the MINI Short is less ‘in-the-money’. However on the Ex-Date, RIO’s stock price is expected to fall (all things being equal) by the Dividend Amount. The effect of this is that the MINI value is preserved over the Ex-Date. Note if the stock moves by more or less than the Dividend Amount, the MINI value will not remain at $16.00.

Actual dividend amount: $0.50

Reference Asset Value: $80.00 – $0.50 = $79.50

Strike Price: $96.00 – $0.50 = $95.50

Stop Loss Level: $86.40 – $0.50 = $85.90

MINI Value = $95.50 – $79.50

= $16.00

2.3.4 How is the Strike Price of an Index MINI adjusted to take into account futures contract rolls?

Where the Reference Asset of a Macquarie MINI is an Index, the value of the Macquarie MINI on any given date will be determined by reference to the applicable Index Futures Contract, which is the futures contract applicable to the Index. For example, for Macquarie MINIs which reference the S&P/ASX 200 Index, the relevant futures contract will be the contract known as the “SPI 200TM”.

Futures contracts have an expiry date, generally at the end of each quarter. Since Macquarie MINIs do not have an expiry date, when a current Index Futures Contract expires, it will be automatically replaced by another Index Futures Contract. The new Index Futures Contract will be over the same Index and is for same period or `tenor’ (although it expires at a later date) – this is called a “futures contract roll”. For example on the expiry of a 3 month SPI 200TM in December 2011, the relevant Index Future Contract will become the March 2012 SPI 200TM.

When there is a futures contract roll, the MINI will require an adjustment, because the expiring and succeeding Index Futures Contract will not have the same price. The Strike Price and the Stop Loss Level will be adjusted by us to take into account this difference.

15



Original Strike Price: 4,000

Original Stop Loss Level: 4,400

Conversion Factor: 100

Expiring Futures Contract Price: 4,600

Succeeding Futures Contract Price: 4,625

Pre-contract roll

MINI Value = (Expiring Futures Price – Strike Price) / Conversion Factor

= (4,600 – 4,000) / 100

= $6.00

Post-contract roll

Strike Price: = Original Strike Price + (Succeeding Futures Price – Expiring Futures Price)

= 4,000 + (4,625 – 4,600)

= 4,025

Stop Loss Level: Macquarie will adjust the Stop Loss Level to take into account the effect of the adjusted strike

MINI Value: = (Succeeding Futures Price – Strike Price) / Conversion Factor

= (4,625 – 4,025) / 100

= $6.00



Original Strike Price: 5,000

Original Stop Loss Level: 4,500


Expiring Futures Contract Price: 4,600

Succeeding Futures Contract Price: 4,625

Pre-contract roll

MINI Value: = (Strike Price – Expiring Futures Price) / Conversion Factor

= (5,000 – 4,600) / 100

= $4.00

Post-contract roll

Strike Price: = Original Strike Price + (Succeeding Futures Price – Expiring Futures Price)

= 5,000 + (4,625 – 4,600)

= 5,025

Stop Loss Level: Macquarie will adjust the Stop Loss Level to take into account the effect of the adjusted strike

MINI Value: = (Strike Price – Succeeding Futures Price) / Conversion Factor

= (5,025 – 4,625) / 100

= $4.00

Section 2Macquarie

MINIs

16

2.4 What is a Stop Loss Event?What is a Stop Loss Level?

The Stop Loss Level is the level of a Reference Asset at which a Stop Loss Event will occur and your Macquarie MINI will be terminated. The initial Stop Loss Level is set before a MINI is issued and disclosed in the first SPDS for each Series of MINIs. The Stop Loss Level is set:

■ above the Strike Price and below the current value of the Reference Asset for MINI Longs; and

■ below the Strike Price and above the current value of the Reference Asset for MINI Shorts.

Thereafter, the Stop Loss Level is updated for Dividends (see Section 2.3.3 of this PDS for details). Macquarie may also adjust the Stop Loss Level on the first Trading Day of each month. This adjustment will reflect the current value of the Reference Asset and general market conditions. Macquarie may also adjust the Stop Loss Level during the course of the month to take into account Potential Adjustment Events or for any other reason.

The Stop Loss Level will generally (but not always) be set between 70% and 95% of the Strike Price in the case of MINI Shorts and 105% and 130% for MINI Longs.

The Stop Loss Level is published daily. This information is available on www.macquarie.com.au/minis and announced on the ASX company platform.

What factors may influence the level of the Stop Loss Level?

Factors that may influence where the Stop Loss Level is set include:

■ the Reference Asset Value;

■ the difference between the Strike Price and Reference Asset Value;

■ the historical or anticipated volatility of the Reference Asset; and

■ the historical or anticipated liquidity of the Reference Asset.

Variable Change in Variable Effect on Stop Loss Level – MINI Long

Effect on Stop Loss Level – MINI Short

Reference Asset Value Increase Increase Increase

Volatility of the Reference Asset Increase Increase Decrease

Liquidity of Reference Asset Increase Decrease Increase

What is a Stop Loss Event?

A Stop Loss Event occurs when the value of the Reference Asset falls below a specified level (for MINI Longs) or equals or rises above a specified level (for MINI Shorts). The specified level is called the Stop Loss Level. The Stop Loss Level ensures that the value of the Macquarie MINI can never be negative, that is, that you can never lose more money than the money you have invested. It also means that Macquarie will not request additional payments, like margin calls, from you.

Stop Loss Events for Macquarie Index MINIs

If you have a Macquarie Index Mini, a Stop Loss Event will only occur where the relevant Index Futures Contract trades through the Stop Loss Level during ASX trading hours. This means that if the Index Futures Contract relating to a series of Index MINIs trades through the Stop Loss Level at any other time (i.e. outside the hours the Macquarie MINI is trading on the ASX), a Stop Loss Event will not occur.

What happens if the Stop Loss Level is triggered?

If the Reference Asset Value at any time trades:

■ at or below the Stop Loss Level for a MINI Long; or

■ at or above the Stop Loss Level for a MINI Short,

then:

■ trading in the relevant MINI Series is halted;

■ Macquarie will close out its underlying Hedge Position corresponding to the halted Macquarie MINIs;

■ unless a Market Disruption Event has occurred, trading will recommence by 2pm on the Macquarie Close Out Date and will continue until the close of trading on the trading day following the Macquarie Close Out Date , allowing you to sell your position on the ASX at the Stop Loss Value (which is the price at which Macquarie will be buying that Macquarie MINI on the ASX during that period). The Stop Loss Value will be the intrinsic value of

17

the Macquarie MINI determined by Macquarie using a price for the Reference Asset which is generally based on the average price Macquarie can achieve (the Macquarie Close Out Price) when closing out its Hedge Positions. See below for a further explanation of how the Macquarie Close Out Price is determined;

■ if a Market Disruption Event has occurred, trading will recommence at 2pm following the day on which Macquarie has determined the Macquarie Close Out Price;

■ if you do not sell your position during this time, the MINI Series will terminate and Macquarie will transfer the Stop Loss Value to you within ten Business Days of the Macquarie Close Out Date.

How are the Stop Loss Value and Macquarie Close Out Price determined?

If a Stop Loss Level is triggered you may be entitled to receive a Stop Loss Value. The Stop Loss Value is determined as follows:

■ For a MINI Long: Stop Loss Value = (Macquarie Close Out Price – Strike Price on the Stop Loss Event Date)/Conversion Factor, floored at zero;

■ For a MINI Short: Stop Loss Value = (Strike Price on the Stop Loss Event Date – Macquarie Close Out Price)/Conversion Factor, floored at zero.

“Floored at zero” means that the Stop Loss Value will never be less than zero. This means that Macquarie will never request an additional payment from you in respect of your Macquarie MINI.

The Macquarie Close Out Price is the price determined by Macquarie (acting reasonably) as the average price Macquarie achieves when closing out its Hedge Position (or, if it didn’t have a Hedge Position, the average price it would have achieved) using its best efforts. If a Market Disruption Event occurs for 10 consecutive days, Macquarie may make a good faith estimate of the price.

For a MINI Long, if the Macquarie Close Out Price is less than the Strike Price, the Stop Loss Value will be zero. Conversely for a MINI Short, if the Macquarie Close Out Price is more than the Strike Price, the Stop Loss Value will be zero.

How does the Stop Loss Level protect your investment?

The Stop Loss Level ensures that you will never lose more than your initial investment. It also means that you will never have to make additional payments to us. However you should note that you can still lose all of the money you have invested.

As the Stop Loss Level is set above the Strike Price for MINI Longs and below the Strike Price for MINI Shorts, if the Reference Asset Value falls (for MINI Longs) or rises (for MINI Shorts) to the Stop Loss Level, trading in that Series of MINIs will be halted, the Stop Loss Value determined and you will then be able to sell your MINIs back to Macquarie. The minimum Stop Loss Value you may receive is zero.

You should note that there is no guarantee that Macquarie will be able to close out its Hedge Positions to achieve a Macquarie Close Out Price that it better than the Stop Loss Level. This means that although the Stop Loss Level should theoretically result in you receiving a Stop Loss Value of greater than zero, the Macquarie Close Out Price may well be at a level below or above the Stop Loss Level.

There is therefore no guarantee that you will receive any money back on your investment in a Macquarie MINI if a Stop Loss Event happens.

You should also note that once a Stop Loss Event has occurred the Macquarie MINI will be terminated. This means that you will not have the opportunity to participate in any subsequent movement in the Reference Asset Value.

The examples below are intended to demonstrate the potential outcomes of a Stop Loss Event. They are illustrative only. Actual performance may differ materially. The examples do not take into account any additional costs or expenses you may incur in acquiring or disposing of a Macquarie MINI (ie third party brokerage costs and advisor fees and commissions etc) or taxes or any Expenses you may need to pay.

Section 2Macquarie

MINIs

18


An investor holds a WBC MINI Long with a Strike Price of $18, Stop Loss Level of $19.80 and Conversion Factor of 1. WBC is trading at $22.50, so the MINI value = ($22.50 - $18.00) / 1 = $4.50.

During the morning the WBC share price drops below $19.80, the Stop Loss Level. The following table illustrates the Stop Loss Event.

Day Action

Day 1 (day of Stop Loss Event)

Trading in WBC MINI Long is halted

Day 1 (day of Stop Loss Event) and Day 2

Macquarie unwinds its hedge by selling WBC shares The average sale price achieved (Macquarie Close Out Price) is $19.40

Day 2 At 2pm trading in WBC MINI Longs recommences and investors can sell their MINIs back to Macquarie at the Stop Loss Value.

Stop Loss Value = max{0, (Macquarie Close Out Price – Strike Price on the Stop Loss Event Date) / Conversion Factor}

= ($19.40 – $18.00) / 1 = $1.40

Day 2 The investor sells their WBC MINI Long back to Macquarie on-market. The loss per MINI = $1.40 – $4.50 = -$3.10

Day 3 At market close, the WBC MINI is terminated.

If the investor did not sell their MINI back to Macquarie on-market, they are entitled to receive the Stop Loss Value in cash within 10 Business Days of the date that investors can sell their MINIs back to Macquarie (ie Day 2 above)

There is no guarantee that you will receive anything upon the occurrence of a Stop Loss Event. In the example above, if Macquarie unwound the WBC shares at a Macquarie Close Out Price of $17.80, the Stop Loss Value = max{0, $17.80 – $18} = $0.


An investor holds a XJO MINI Short with a Strike Price of 5,640, Stop Loss Level of 5,076 and Conversion Factor of 100. The Index Futures Contracts are trading at 4,700, so the MINI Value = (5,640 – 4,700) / 100 = $9.40.

During the afternoon, the Index Futures Contracts rise above 5,076, the Stop Loss Level. The following table illustrates the Stop Loss Event.

Day Action

Day 1 (day of Stop Loss Event)

Trading in XJO MINI Short is halted

Day 1 (day of Stop Loss Event) and Day 2

Macquarie unwinds its hedge in the Index Futures Contract The average purchase price achieved (Macquarie Close Out Price) is 5,127.

Day 2 At 2pm trading in XJO MINI Shorts recommences and investors can sell their MINIs back to Macquarie at the Stop Loss Value.

Stop Loss Value = max{0, (Strike Price on the Stop Loss Event Date – Macquarie Close Out Price) / Conversion Factor}

= (5,640 – 5,127) / 100 = $5.13

Day 2 The investor sells their XJO MINI Long back to Macquarie on-market. The loss per MINI = $5.13 – $9.40 = -$4.27

Day 3 At market close, the WBC MINI is terminated.

If the investor did not sell their MINI back to Macquarie on-market, they are entitled to receive the Stop Loss Value in cash within 10 Business Days of the date that investors can sell their MINIs back to Macquarie (ie Day 2 above)

There is no guarantee that you will receive anything upon the occurrence of a Stop Loss Event. In the example above, if Macquarie unwound its hedge at a Macquarie Close Out Price of 5,700 the Stop Loss Value = max{0, (5,640 – 5700) / 100} = $0.

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2.5 Trading in Macquarie MINIs2.5.1 How do I acquire a Macquarie MINI?

If you want to invest in Macquarie MINIs, you should:

1. carefully read all of this PDS, any SPDS relevant to the MINIs you want to invest in and the Terms & Conditions;

2. consult your professional legal, taxation and financial adviser; and

3. contact your broker or financial adviser and organise for them to place an order to acquire the relevant MINIs on the ASX on your behalf.

2.5.2 Purchasing a Macquarie MINI on the ASX

The value of a Macquarie MINI on any given day is based on the following relationship between the Reference Asset Value and the Strike Price.

■ For a MINI Long= (Reference Asset Value – Strike Price on that date)/Conversion Factor; and

■ For a MINI Short = (Strike Price on that date – Reference Asset Value)/Conversion Factor.

Please note the price on the ASX of the Macquarie MINI may not be equal to this value, because the price is determined by market factors. It may be subject to bid/offer spreads on the ASX (because there is a gap between the price at which buyers and sellers of Macquarie MINIs are offering to trade) and other factors.

The price at which you acquire the Macquarie MINI may also be different from the value you expect because of the changes in the Reference Asset Value between the placement of your order and execution by your broker.

If you acquire a Macquarie MINI on the ASX, in addition to any amount you may have to pay to acquire the Macquarie MINI on the ASX, your broker or adviser may also charge you a fee or commission in relation to that purchase.

2.5.3 Selling a Macquarie MINI on the ASX

You may be able to end your investment in Macquarie MINIs by selling your Macquarie MINIs on the ASX. Macquarie has certain obligations under the ASX Operating Rules to make a market in the Macquarie MINIs. However this does not oblige Macquarie to buy a MINI from you at a price specified by you (nor does it oblige Macquarie to sell you a Macquarie MINI). Your broker or adviser may charge you a fee or commission in relation to any sale of a Macquarie MINI.

Please note that for the reasons explained in Section 2.5.2 , the value at which you dispose of your Macquarie MINI on the ASX may be more or less than you expect.

2.5.4 Examples

The examples below are intended to demonstrate the returns that may result when trading a MINI. They are illustrative only. Actual performance may differ materially. In the example below the average Daily Funding Cost is based on average daily Interest Rates of 9.50% for Share MINI Long and 1.00% for Share MINI Short, which are indicative Interest Rates only and may differ from the actual Interest Rates. The actual Interest Rates will be announced by Macquarie via the ASX company announcement platform and our website at www.macquarie.com.au/minis before the open of trading on the ASX each day. The examples do not take into account any additional costs or expenses you may incur in acquiring or disposing of a Macquarie MINI (ie third party brokerage costs and advisor fees and commissions etc) or taxes or any Expenses you may need to pay. The rounding used in these examples has been used for the purposes of simplifying the examples only, and may be different to the rounding that will actually be used by Macquarie in relation to any MINIs that you hold. The actual rounding which will apply to your Macquarie MINIs is set out in clause 12.6 of the Terms & Conditions.

Section 2Macquarie

MINIs

20

Example 1: Share MINI Long

An investor who expects CBA to increase purchases 500 CBA MINI Longs with a Strike Price of $40, Stop Loss Level of $44 and Conversion Factor of 1. CBA is trading at $50 at the time of purchase, so the investor pays $50 – $40 = $10 for the MINI.

Four scenarios are detailed in the table below.

Transaction Units CBA Price Strike Price

Stop Loss Level

MINI Value Profit/(Loss) per MINI

Gain/(Loss) %

Purchase 500 $50.00 $40.00 $44.00 $10.00

Stock Price up 5%

Sale (intraday) 500 $52.50 $40.00 $44.00 $12.50 $2.50 25.0%

Sale (3 weeks) 500 $52.50 $40.2190 $44.00 $12.28 $2.28 22.8%

Stock Price down 5%

Sale (intraday) 500 $47.50 $40.00 $44.00 $7.50 ($2.50) (25.0%)

Sale (3 weeks) 500 $47.50 $40.2190 $44.00 $7.28 ($2.72) (27.2%)

Scenario 1:

The CBA stock price rallies to $52.50 on the day of purchase and so the value of the MINI rises to $52.50 – $40 = $12.50. If the investor sells their Macquarie MINIs at this price, they will make a total profit of 500 x ($12.50 – $10) = $1,250. Since the investor sold their Macquarie MINIs on the same day of purchase, they were not subject to any Daily Funding Costs.

Scenario 2:

The investor holds their CBA MINI Long for 3 weeks. After 3 weeks, the Strike Price has increased from $40 (on the day of purchase) to $40.2190 reflecting 3 weeks of Daily Funding Costs with an average Daily Funding Cost of $0.0104. If the CBA stock price has rallied to $52.50, the value of the MINI is now $52.50 – $40.22 = $12.28. This reflects an increase in the CBA price of $2.50 less the total Daily Funding Cost of $0.22. If the investor sells their MINI at this price, they will make a total profit of 500 x ($12.28 – $10) = $1,140. This amounts to a gain of 22.8% on their initial investment.

Scenario 3:

The CBA stock price drops to $47.50 on the day of purchase and so the value of the Macquarie MINI falls to $47.50 – $40 = $7.50. If the investor sells their Macquarie MINIs at this price, they will make a total loss of 500 x ($7.50 – $10) = -$1,250. Since the investor sold their Macquarie MINIs on the same day of purchase, they were not subject to any Daily Funding Costs. This amounts to a loss of 25.0% on their initial investment.

Scenario 4:

The investor holds their CBA MINI Long for 3 weeks. After 3 weeks, the Strike Price has increased from $40 (on the day of purchase) to $40.2190 reflecting 3 weeks of Daily Funding Costs with an average Daily Funding Cost of $0.0104. If the CBA stock price has dropped to $47.50, the value of the MINI is now $47.50 – $40.22 = $7.28. This reflects a drop in the CBA price of $2.50 plus the total Daily Funding Costs of $0.22. If the investor sells their MINI at this price, they will make a total loss of 500 x ($7.28 – $10) = -$1,360. This amounts to a loss of 27.2% on their initial investment.

21

Example 2: Share MINI Short

An investor who expects CBA shares to decrease purchases 500 CBA MINI Shorts with a Strike Price of $60, Stop Loss Level of $54 and Conversion Factor of 1. CBA is trading at $50 at the time of purchase, so the investor pays $60 – $50 = $10 for the Macquarie MINI.

Four scenarios are detailed in the table below.

Transaction Units CBA Price Strike Price

Stop Loss Level

MINI Value Profit/(Loss) per MINI

Gain/(Loss) %

Purchase 500 $50.00 $60.00 $54.00 $10.00

Stock Price up 5%

Sale (intraday) 500 $52.50 $60.00 $54.00 $7.50 ($2.50) (25.0%)

Sale (3 weeks) 500 $52.50 $60.0336 $54.00 $7.53 ($2.47) (24.7%)

Stock Price down 5%

Sale (intraday) 500 $47.50 $60.00 $54.00 $12.50 $2.50 25.0%

Sale (3 weeks) 500 $47.50 $60.0336 $54.00 $12.53 $2.53 25.3%

Scenario 1:

The CBA stock price rallies to $52.50 on the day of purchase and so the value of the Macquarie MINI falls to $60 – $52.50 = $7.50. If the investor sells their Macquarie MINIs at this price, they will make a total loss of 500 x ($7.50 – $10) = -$1,250. Since the investor sold their Macquarie MINIs on the same day of purchase, they were not subject to any Daily Funding Costs.

Scenario 2:

The investor holds their CBA MINI Short for 3 weeks. After 3 weeks, the Strike Price has increased from $60 (on the day of purchase) to $60.0336 reflecting 3 weeks of Daily Funding Costs with an average Daily Funding Cost of $0.0016. If the CBA stock price has rallied to $52.50, the value of the Macquarie MINI is now $60.03 – $52.50 = $7.53. This reflects a loss from the increase in the CBA price of $2.50 less the total Daily Funding Costs of $0.03. If the investor sells their Macquarie MINI at this price, they will make a total loss of 500 x ($7.53 – $10) = -$1,235. This amounts to a loss of 24.7% on their initial investment

Scenario 3:

The CBA stock price drops to $47.50 on the day of purchase and so the value of the Macquarie MINI rises to $60 – $47.50 = $12.50. If the investor sells their Macquarie MINIs at this price, they will make a total profit of 500 x ($12.50 – $10) = $1,250. Since the investor sold their Macquarie MINIs on the same day of purchase, they were not subject to any Daily Funding Costs. This amounts to a gain of 25.0% on their initial investment.

Scenario 4:

The investor holds their CBA MINI Short for 3 weeks. After 3 weeks, the Strike Price has increased from $60 (on the day of purchase) to $60.0336 reflecting 3 weeks of Daily Funding Costs with an average Daily Funding Cost of $0.0016. If the CBA stock price has dropped to $47.50, the value of the MINI is now $60.0336 – $47.50 = $12.53. This reflects a profit from the drop in the CBA price of $2.50 plus the total Daily Funding Cost of $0.03.If the investor sells their MINI at this price, they will make a total profit of 500 x ($12.53 – $10) = -$1,265. This amounts to a gain of 25.3% on their initial investment.

Section 2Macquarie

MINIs

22

2.6 How can my Macquarie MINIs terminate?Macquarie MINIs do not have a scheduled maturity date. However your investment in Macquarie MINIs can be terminated in any of the following ways:

(a) where you choose to exercise your Macquarie MINI;

(b) where your Macquarie MINIs have been terminated, which can occur in certain circumstances, including;

(i) where there has been a Stop Loss Event (see section 2.4);

(ii) where an Extraordinary Event has occurred (see section 2.6.4); or

(iii) where an Issuer Call Event has occurred (see section 2.6.6).

2.6.1 How do you exercise a Macquarie MINI?

Your MINI does not have a fixed time in which it must be exercised. Macquarie MINIs are therefore ‘American’ style investments. When you exercise a Macquarie MINI, you may be entitled to receive a Cash Settlement Amount.

If you wish to exercise your MINI, you must provide an Exercise Notice to Macquarie which specifies the number of MINIs you wish to exercise. The Exercise Notice can be obtained from our website (see Directory for details). The Exercise Notice contains instructions on how it should be completed and where it should be sent.

A MINI cannot be exercised:

■ if a Stop Loss Event has occurred (see section 2.4 ); or

■ if an Extraordinary Event has occurred (see section 2.6.4 ).

Macquarie will only accept a valid Exercise Notice. Please refer to clause 1.4 of the Terms & Conditions for when an Exercise Notice is effective.

2.6.2 What is the Cash Settlement Amount of your MINI if you exercise it?

If you have supplied Macquarie with a valid Exercise Notice for your Macquarie MINI, it will be exercised on the Business Day following the day on which the Exercise Notice is received by Macquarie (the Exercise Date). The Cash Settlement Amount of your MINI is calculated as follows:

(a) For a MINI Long: Cash Settlement Amount = the greater of: (i) (Final Reference Asset Value – Strike Price on the Valuation Date)/Conversion Factor – Expenses; and (ii) zero

(b) For a MINI Short: Cash Settlement Amount = the greater of: (i) (Strike Price on the Valuation Date – Final Reference Asset Value)/Conversion Factor – Expenses; and (ii) zero

The above calculation will also be used to determine the Cash Settlement Amount upon the occurrence of an Extraordinary Event or Issuer Call Event. See Sections 2.6.4 and 2.6.6 for an explanation of these events.

Unless a Market Disruption Event occurs on the Exercise Date, the Final Reference Asset Value means (a) in the case of a Share MINI, the official closing price of the Reference Asset, or (b) in the case of an Index MINI, the official closing level of the Index Futures Contract, on the Valuation Date. The Strike Price that is used in the calculation of the Cash Settlement Amount is the Strike Price on the Valuation Date.

The Expenses are an amount equal to the actual costs and expenses incurred by Macquarie in connection with the exercise of your MINI including the unwind of Hedge Positions. The amount of the Expenses is determined by Macquarie but cannot exceed 20% of the Strike Price divided by the Conversion Factor on the Exercise Date.

For example, the following shows a hypothetical example of how the Cash Settlement Amount may be calculated for an Index MINI Short provided a valid Exercise Notice has been provided to Macquarie and the maximum amount of Expenses are charged:



Strike Price: 5,200


Expenses: = 20% x Strike Price / Conversion Factor

= 20% x 5,200/100

= $10.40

Cash Settlement Amount: = Max ((5,200 – 4700) / 100 – $10.40, $0.00)

= $0.00

23

Following the exercise of a Macquarie MINI, Macquarie will pay you the Cash Settlement Amount within 10 Business Days of the Exercise Date.

2.6.3 Can I cancel an Exercise Notice that I have given to Macquarie?

Any Exercise Notice you give to Macquarie is irrevocable, and therefore cannot be cancelled by you (unless otherwise agreed by Macquarie (acting reasonably).

2.6.4 What happens if an Extraordinary Event occurs?

If an Extraordinary Event occurs Macquarie may, with the consent of the ASX, specify an Early Termination Date and you will receive the Cash Settlement Amount 10 Business Days following the Valuation Date.

The Cash Settlement Amount you will receive will be calculated in accordance with Section 2.6.2 above.

2.6.5 What is an Extraordinary Event?

An Extraordinary Event refers to any of the following events:

■ for a Share MINI, it is announced that the Reference Share will:

– be de-listed or withdrawn from admission to trading status on the Relevant Exchange;

– cease to be an Approved Financial Product (as defined in the ASX Settlement Operating Rules);

– be subject to an Insolvency Event (as defined in the Glossary); or

– be subject to a Nationalisation (as defined in the Glossary).

■ for an Index MINI, it is announced that the relevant Index Futures Contract will:

– be delisted or withdrawn from admission to trading status on the Relevant Exchange ; or

– cease to be an Approved Financial Product (as defined in the ASX Settlement Operating Rules).

■ for any Macquarie MINI:

(i) where a Potential Adjustment Event has occurred or is expected to occur and we determine that (acting in a commercially reasonable manner):

(a) it is not reasonably practicable to adjust the Macquarie MINI in relation to the Potential Adjustment Event in the manner described in Section 2.7.2 of this PDS; or

(b) if the Macquarie MINI were to be adjusted in the manner described in Section 3.9 of this PDS in relation to the Potential Adjustment Event:

– we would not be able to continue to effectively manage our risk, on an on-going basis, of maintaining the Macquarie MINI on issue; or

– we would incur a material increase in costs in managing our risk, on an on-going basis, of maintaining the Macquarie MINI on issue (for example, in respect of establishing, holding and/or unwinding any of our Hedge Positions in respect of a Macquarie MINI),

(ii) it is announced that a Series of Macquarie MINIs are, or will:

(1) be de-listed, withdrawn or suspended from admission to trading status; or

(2) cease to be Approved Financial Products,

otherwise than as a result of the acts of Macquarie;

(iii) a Hedging Disruption occurs (see below); or

(iv) where it has or will become illegal for Macquarie to give effect to any material provision of the Terms & Conditions.

If the occurrence of an Extraordinary Event triggers an early termination, you will be entitled to the Cash Settlement Amount determined in the manner described in Section 2.6.2 of this PDS.

What is a Hedging Disruption?

When we issue you with a Macquarie MINI, this exposes us to market risk until that Macquarie MINI is exercised or terminated. We try to hedge this risk in various ways. We do so on the basis that we expect that we will be able to effectively:

1. manage that risk until the Macquarie MINI is exercised or terminated; and

2. service any Macquarie MINI that you hold (for example, continuing to have the Macquarie MINIs quoted on the ASX) up until when the Macquarie MINI is exercised or terminated.

However some matters are beyond the control of Macquarie, and any change from the circumstances existing on the date the Macquarie MINI was originally sold by Macquarie to you could have a significant effect on:

1. Macquarie’s ability to effectively manage its risk of providing you with that Macquarie MINI;

Section 2Macquarie

MINIs

24

2. Macquarie’s ability to continue to effectively service any Macquarie MINI that you hold; and

3. the cost to Macquarie to effectively manage its risk of providing you with the MINIs and/or the cost of continuing to effectively service any Macquarie MINI that you hold.

As a result, it is necessary for Macquarie to have the right to terminate your Macquarie MINIs where a Hedging Disruption occurs.

A Hedging Disruption includes where:

(a) Macquarie is unable, whether due to:

(i) Internal Trading Restrictions (as defined in the Glossary);

(ii) legal or regulatory issues;

(iii) the unavailability of stock borrow in relation to the relevant Reference Asset (other than as a result of Macquarie’s own actions);

(iv) any change announced to any applicable short selling laws in Australia or any governmental or regulatory interpretation thereof; or

(v) other circumstances beyond the reasonable control of Macquarie,

to acquire, substitute, maintain or dispose of any Hedge Positions, or realise, recover or remit the proceeds of any such Hedge Positions; or

(b) due to:

(i) the adoption of, or any change in, any applicable law or regulation, including any tax law; or

(ii) any change in the interpretation by any court, tribunal or regulatory authority of any applicable law or regulation (including any action taken by a taxing authority),

Macquarie has incurred, or will incur, a materially increased cost in performing its obligations in respect of a Macquarie MINI when compared with circumstances existing on the date on which the Macquarie MINI was first listed on the ASX (including due to any increase in tax liability, decrease in tax benefit or other adverse effect on Macquarie’s tax position); or

(c) due to:


(ii) any change in the interpretation by any court, tribunal or regulatory authority of any applicable law or regulation (including any action taken by a taxing authority); or

(iii) any reduction in either:

(1) the liquidity of; or

(2) the availability of stock-borrow for,

a Reference Asset; or

(iv) any other circumstance(s) beyond the reasonable control of Macquarie,

Macquarie has, or will incur a materially increased cost in acquiring, substituting, maintaining or

disposing of any Hedge Positions, or realising, recovering or remitting the proceeds of any such

Hedge Positions in respect of a Macquarie MINI when compared with circumstances existing on the date on which the Macquarie MINI was first listed on the ASX, unless Macquarie determines that, notwithstanding this event:

(v) it would be able to continue to effectively manage its risk, on an on-going basis, if the Macquarie MINI were to remain on issue; and

(vi) it would not incur a material increase in costs in managing its risk, on an on-going basis, if the Macquarie MINI were to remain on issue,

in which case Macquarie may elect to not treat such event as a Hedging Disruption.

2.6.6 What is an Issuer Call?

An Issuer Call Event occurs where Macquarie terminates a Series of Macquarie MINIs. Macquarie must give you at least 30 days prior notice of an Issuer Call Event which will nominate an Issuer Call Date. If a Stop Loss Event or Extraordinary Event does not occur in relation to the Macquarie MINI on or before the Valuation Time on the nominated Issuer Call Date, Macquarie will pay you the Cash Settlement Amount 10 Business Days after the Valuation Date. The Cash Settlement Amount will be determined under Section 2.6.2 above.

Investors should note that designating an Issuer Call Event is entirely at the discretion of Macquarie.

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2.7 Can my Macquarie MINI be adjusted?Where a Potential Adjustment Event occurs in relation to your Macquarie MINI we may:

■ make an adjustment (acting in a commercially reasonable manner) to the terms of your Macquarie MINI to account for such Potential Adjustment Event; or

■ treat such Potential Adjustment Event as an Extraordinary Event (see Section 2.6.5 of this PDS).

2.7.1 General approaches to adjustments

As a general rule, the objective of an adjustment will be (to the extent practicable) to ensure that the market value of your Macquarie MINI (as determined by us at the relevant time) will be unchanged (apart from small differences which may arise due to rounding errors) after the adjustment is made.

It is however important to note that under the Terms & Conditions, we may adjust the terms of your MINI:

■ for any event for which we determine (acting in a commercially reasonable manner) an adjustment would be appropriate; and

■ in any way we determine (acting in a commercially reasonable manner) to be appropriate.

2.7.2 What is a Potential Adjustment Event?

Potential Adjustment Event is defined in the Glossary and includes an adjustment of all types of Reference Assets.

Potential Adjustment Events relating to an Index or Index Futures Contract include:

(a) a material change in the formula for, or the method of, calculating an Index or Index Futures Contract; or

(b) any other material modification to an Index or Index Futures Contract;

(c) the cancellation of an Index or Index Futures Contract; and

(d) the failure of an Index or Index Futures Contract to have its level or value calculated or announced.

Potential Adjustment Events relating to Securities includes:

(a) any dividend or distribution, including ordinary, special or abnormal Dividends or distributions in relation to a Reference Asset (as determined by Macquarie);

(b) any subdivision, consolidation, re-classification or other reconstruction of an entity which issued a Reference Asset;

(c) a cancellation or repurchase of a Reference Asset;

(d) a rights issue or other distribution (renounceable or non-renounceable) given to holders of a Reference Asset;

(f) a takeover offer or on-market or off-market buy-back in respect of a Reference Asset;

(g) a suspension or delisting in respect of a Reference Asset; or

(h) any other event that may have a dilutive or concentrative effect on the theoretical value of a Reference Asset.

You should refer to the definition of Potential Adjustment Event in the Glossary for further information about what events may constitute a Potential Adjustment Event.

Section 2Macquarie

MINIs

26

Section 3

Risks You Should Consider

Any investment you make in a MINI may decrease as well as increase in value. In particular a MINI should not be seen as a predictable low risk investment. Before investing, you should carefully consider the significant risks that may affect the value of your investment. You should also be aware that you may lose some or all of the money you invest in a MINI. Further, you should be aware that the return (if any) you receive on your MINI may not reflect the return you would realise if you actually owned the underlying Reference Asset.

This Section is not intended to be a comprehensive summary of all the risks associated with investing in a MINI but highlights particular risks that we encourage you to consider in detail and discuss with your financial adviser.

27Section 3.1 Movements in the value of the Reference Assets and Stop Loss Events

27Section 3.2 Leverage Risk

28Section 3.3 Break even Risk

29Section 3.4 Early Termination

29Section 3.5Counterparty Risk

30Section 3.6 dividends and Reference Asset Value

30Section 3.7 Market Disruption Events

30Section 3.8Exercise of discretion by Macquarie

30Section 3.9Potential Adjustment Events

31Section 3.10Liquidity Risk

31Section 3.11General Market Risks

31Section 3.12Potential Conflicts of Interest

31Section 3.13 Taxation Considerations

32Section 3.14Investment Decisions

32Section 3.15Past Performance

32Section 3.16Change of Law

32Section 3.17Suspension of Macquarie MINI Trading

You should consider whether investing using leverage is appropriate for you. MINIs are designed for investors who have experience investing in leveraged products.

27

Suitability

You should only:

■ consider investing in a MINI if you have experience in shares, securities, warrants, options and leveraged investments in shares, indices, futures contracts and securities generally;

■ reach an investment decision after carefully considering, with your adviser, the suitability of investing in a MINI in your particular circumstances; and

■ understand and are comfortable with the risks associated with an investment in Macquarie MINIs.

An investment in Macquarie MINIs does not suit investors seeking a traditional investment product (such as a direct unleveraged investment in shares). There is a material risk that you could lose all of the money that you have invested in Macquarie MINIs.

As well as the risks of this product, you should also consider how an investment in this product fits into your overall portfolio and whether your Investment Amount in any Series is appropriate given the overall size of your investment portfolio.

Diversification of your investment portfolio can be used as part of your overall portfolio risk management. This can limit your exposure to failure or underperformance of any one investment, investment counterparty or asset class.

3.1 Poor performance and volatility of the Reference Assets and Stop Loss EventsThe value of a Macquarie MINI on any given day will depend on the performance of the Reference Asset.

If the Reference Asset performs poorly, the value of your MINI will decrease. This may result in a Stop Loss Event occurring and you may not be entitled to receive any Stop Loss Value. You therefore may lose some or all of the money you invest. You should also note that once a Stop Loss Event has occurred the Macquarie MINI will be terminated. This means that you will not have the opportunity to participate in any subsequent movement in the Reference Asset Value. You should note that there is no guarantee that the Stop Loss Value will equal the Stop Loss Price. This is particularly true where the Reference Asset is an illiquid asset meaning the price Macquarie achieves may be different from the Stop Loss Price.

The value of your Macquarie MINI may also be affected by fees and expenses which may be deducted from the value, particularly in the case of an early exercise or early termination where any Expenses will be deducted from the Cash Settlement Amount payable to you.

You are responsible for selecting any Macquarie MINIs to enter into. As such, the performance of your investment will depend mainly on investment decisions made by you.

In recent times, markets have experienced more volatile conditions and volatility in some markets increased to very high levels. Investing in highly volatile conditions implies a greater level of risk for investors than an investment in a more stable market. You should carefully consider the risk of additional volatility before making any investment decision.

YOU SHOULD BE AWARE THAT THE VALUE OF MACQUARIE MINIS COULD VARY MATERIALLY IN A RELATIVELY SHORT PERIOD OF TIME. MACQUARIE MINIS ARE A SPECULATIVE INVESTMENT AND THERE IS A MATERIAL RISK THAT YOU COULD LOSE ALL OF THE MONEY THAT YOU INVEST IN MACQUARIE MINIS.

3.2 Leverage riskCompared to a direct investment in the relevant Reference Asset, losses and gains on Macquarie MINIs can be magnified because of the leverage incorporated within the Macquarie MINI. For example, if:

■ in the case of a Long MINI, the value of the Reference Asset declines or stays the same; or

■ in the case of a Short MINI, the value of the Reference Asset increases or stays the same;

the value of an investment in a Macquarie MINI will decrease at a greater rate than a direct investment in the relevant Reference Asset.

As an example, assume you have $10,000 to invest. XYZ Shares are trading at $10.00 and XYZ MINI Longs issued by Macquarie with a Strike Price of $7.50 and a Conversion Factor of 1 are trading at $2.50. This means that you can either invest your $10,000 directly in 1,000 XYZ Shares or in 4,000 Macquarie MINIs and get exposure to the performance of 4,000 XYZ Shares. As the Macquarie MINI in this case has provided exposure to quadruple the number of XYZ Shares, if the XYZ Share price falls to $9.00, the value of your investment in the Macquarie MINI may fall by four

28

times the amount that a direct investment in the XYZ Shares would have fallen.

The higher the leverage of your Macquarie MINI, the riskier your investment will be. You should consider the risks of leverage and seek independent financial advice prior to investing in Macquarie MINIs.

3.3 Break-even riskThere is a risk that you will lose money on your investment in a Macquarie MINI (and you will not “break-even” on your investment) even if the value of the Reference Asset moves in a favourable direction (i.e. increases in the case of a MINI Long or decreases in the case of a MINI Short).

To break-even on an investment in a Macquarie MINI:

■ in the case of a MINI Long, the value of the relevant Reference Asset for your Macquarie MINI will need to increase at a greater rate than the Strike Price (which generally increases daily by the amount of the Daily Funding Cost);

■ in the case of a MINI Short, the value of the relevant Reference Asset for your Macquarie MINI will need to decrease, or otherwise increase at a lower rate than the Strike Price (which generally increases daily by the amount of the Daily Funding Cost),

and by enough to ensure that any amount you are entitled to receive following the sale or exercise of the Macquarie MINI (if any) is enough to cover any amounts you have paid to acquire that Macquarie MINI as well as any expenses, fees and/or costs (such as brokerage) that you may need to pay, as well as any Expenses.

The examples below are intended to highlight this risk.

Please note the examples below are illustrative only. They do not take into account any additional costs or expenses you may incur in acquiring or disposing of a Macquarie MINI (ie third party brokerage costs and advisor fees and commissions etc), inflation or taxes. Actual break-even amounts/levels may be materially higher (for MINI Long) or lower (for MINI Short) than those set out in the indicative examples provided. The average Daily Funding Cost is based on an average daily Interest Rate of 5.00% for the Index MINI Long and 1.00% for the Share MINI Short which is an indicative Interest Rate only and may differ from the actual Interest Rate. The actual Interest Rate will be announced by Macquarie via the ASX company announcement platform and our

website at www.macquarie.com.au/minis before the open of trading on the ASX each day. Before you make any investment decision, it is recommended that you or your financial adviser consider the amount you have to pay to acquire a Macquarie MINI so that you understand what performance is required in order for you to break-even in relation to your investment.

You should also note that in the case of exercise by a Holder, an Extraordinary Event or an Issuer Call Event, Expenses will be deducted from the Cash Settlement Amount which you will be paid. These Expenses have not been factored into this example.


An investor purchases an XJO MINI Long with a Strike Price of 3,760 and Conversion Factor of 100. If the Index Futures Contract is trading at 4,700, the MINI is valued at $9.40 on the day of purchase.



Strike Price: 3,760


Day 1 Value of MINI = (Reference Asset Value – Strike) / Conversion Factor

= (4,700 – 3,760) / 100

= $9.40

The investor holds their XJO MINI Long for 4 weeks. After 4 weeks, the Strike Price has increased from 3,760 (on the day of purchase) to 3,774.4487 reflecting 4 weeks of Daily Funding Costs. Assume the Reference Asset Value does not move, the value of the MINI will drop to $9.2555:



Average Daily Funding Cost: 0.5160

Strike Price: 3,774.4487

Value of MINI = (Reference Asset Value – Strike) / Conversion Factor

= (4,700 – 3,774.4487) / 100

= $9.2555

Gain (Loss): = $9.2555 – $9.40

= -($0.1445)

In order to break-even, the Index Futures Contract price would have had to rise to 4,714.45.

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Example – RIO MINI Short

An investor purchases a RIO MINI Short with a Strike Price of $92 and Conversion Factor of 1. If RIO is trading at $80, the MINI is valued at $12 on the day of purchase.

Reference Asset: RIO

Reference Asset Value: $80

Strike Price: $92


Day 1 Value of MINI = (Strike – Reference Asset Value) / Conversion Factor

= ($92 – $80) / 1 = $12

The investor holds their RIO MINI Short for 4 weeks. After 4 weeks, the Strike Price has increased from $92 (on the day of purchase) to $92.07 reflecting 4 weeks of Daily Funding Costs. The investor will breakeven if the stock price ends at $80.07.

Reference Asset: RIO


Average Daily Funding Cost: $0.0025


Value of MINI = (Strike – Reference Asset Value) / Conversion Factor

= ($92.07 – $80.07) / 1 = $12

Gain (Loss): $12 – $12 = $0

You should also be aware that the amount you receive on disposal, exercise or termination of a Macquarie MINI is unlikely to have the same real value as it would on the date of the investment due to the likely effect of inflation and the time value of money. For example, assume the rate of inflation is 4% and an investor has purchased a MINI at a price of $10. If the investor were to sell the MINI after one year, the inflation-adjusted break-even price of the MINI would be $10.40. If the investor sells the MINI for less than $10.40, the sale proceeds will have less real value than the initial purchase price had at the time of purchase.

3.4 Early TerminationMacquarie has the right to terminate your Macquarie MINI in certain circumstances. Where an Issuer Call or Extraordinary Event (see Section 2.6 of this PDS) occurs with respect to your Macquarie MINI, your MINI may be terminated.

You should refer to Section 2.6.5 and 2.6.6 and the definition of Extraordinary Event and Issuer Call Event in the Glossary for more information about what events may result in the early termination of a Macquarie MINI. You should also be aware that the events which constitute Extraordinary Events or Issuer Call Events may be decided by us and may include events which are beyond your control.

Where an Extraordinary Event occurs in relation to a Macquarie MINI:

■ we may, with the consent of the ASX declare that the Macquarie MINI will terminate (on the Early Termination Date);

■ you will then be entitled to receive an amount equal to the Cash Settlement Amount of the Macquarie MINI on the Early Termination Date (as determined by us) (see Section 2.6.5 of this PDS for details);

These amounts will be paid to you within 10 Business Days of the Early Termination Date. However we may, at our discretion, elect to set-off any amounts we owe you in connection with the early termination of a Macquarie MINI against any other monies which you may owe to us.

In the event your Macquarie MINIs are terminated early Expenses may be payable by you to Macquarie and any such Expenses may be significant.

3.5 Counterparty risk The value of your investment in a Macquarie MINI depends on, among other things, whether we can, and do, perform our obligations under the Macquarie MINI. Our obligations under the Macquarie MINI:

■ are not deposit liabilities;

■ are not guaranteed by any other party; and

■ are unsecured contractual obligations which will rank equally with our other unsecured contractual

Section 3Risks you

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obligations and unsecured debt (other than liabilities mandatorily preferred by law).

In this regard, Section 13A(3) of the Banking Act 1959 (Cth) provides that if we become unable to meet our obligations, our assets in Australia will be used to meet our deposit liabilities in Australia in priority to all of our other liabilities, including our obligations to you under a Macquarie MINI.

You must make your own assessment of our ability to meet our obligations under a Macquarie MINI. You can obtain up-to-date information about us, including financial information, by either referring to macquarie.com.au/shareholdercentre or by contacting us (see the Directory for details).

3.6 Dividends and Reference Asset ValueIn general, if a Reference Asset goes ex-dividend, the price of that Reference Asset should fall by the same amount of the dividend. However, a Reference Asset Value may not always fall by the same amount as the amount of its dividend. The Reference Asset Value may fall more or less than the amount of the dividend or it may not fall at all. The Strike Price however, will always be decreased by the amount of the dividend. Therefore, if the Reference Asset Value has fallen by more or less than the amount of the dividend, the value of Macquarie MINI will be affected and will not remain unchanged.

3.7 Market Disruption EventsIf a Market Disruption Event occurs or exists on an Exercise Date, Early Termination Date or a date on which Macquarie determines the Macquarie Close Out Price for a Macquarie MINI, this could delay the determination of the value of the Reference Assets underlying your Macquarie MINI and consequently:

■ whether any amounts will be paid by us to you; and

■ the day on which such amounts may be payable by us to you.

You should be aware that Market Disruption Events can occur at any time and for any reason.

3.8 Exercise of discretion by MacquarieYou should note that a number of provisions in the Terms & Conditions confer discretions on us which could affect the value of your investment in a Macquarie MINI. These include the discretion to:

■ terminate your Macquarie MINI (see Section 2.6.5) of this PDS;

■ nominate Market Disruption Events (see Section 3.7 of this PDS);

■ adjust your Macquarie MINI for corporate actions (see Sections 2.7 and 3.9 of this PDS).

The exercise or non-exercise of these discretions could adversely affect the value of your Macquarie MINI. You do not have the power to direct us concerning the exercise of any discretion however Macquarie must exercise all discretions in a commercially reasonable manner. You should refer to the Terms & Conditions for more information about our discretions.

3.9 Potential Adjustment EventsIf a Potential Adjustment Event occurs in relation to your Macquarie MINI, such as bonus or rights issues, consolidations, sub-divisions, buy-backs, takeovers, mergers, special dividends or an Index cancellation or modification, we have broad discretions to deal with and adjust the terms of your Macquarie MINI (see Section 2.7 of this PDS).

If a Potential Adjustment Event occurs, we may:

(1) make any adjustment we consider appropriate (with the consent of the ASX) to the terms of your Macquarie MINIs, for the purposes of preserving (to the extent reasonably practicable and subject to small differences that may arise due to rounding) the economic equivalence of the parties’ positions immediately prior to the adjustments being made in relation to the Potential Adjustment Event and after the adjustment; and

(2) determine the effective date of such adjustments; or

(3) where we determine that (acting in a commercially reasonable manner):

(i) it is not reasonably practicable to adjust the Macquarie MINI in relation to the Potential Adjustment Event in the manner described in paragraph (1) above; or

(ii) if the Macquarie MINI were to be adjusted in the manner described in paragraph (1) above in relation to the Potential Adjustment Event:

(a) we would not be able to continue to effectively manage our risk, on an on-going basis, of maintaining the Macquarie MINI on issue; or

(b) we would incur a material increase in costs in managing our risk, on an on-

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going basis, of maintaining the Macquarie MINI on issue (for example, in respect of establishing, holding and/or unwinding any of our Hedge Positions in respect of a Macquarie MINI),

we may treat such event as an Extraordinary Event and terminate your Macquarie MINIs (see Section 2.6.5 of this PDS).

You should refer to Section 2.7 of the PDS for more information on how your Macquarie MINIs may be treated in relation to a Potential Adjustment Event and more information about what events might be considered by us to be a Potential Adjustment Event.

3.10 Liquidity RiskYou should be aware that there is no firm indication as to how Macquarie MINIs will trade in the secondary market, nor is there sufficient evidence as to whether the market will be liquid or illiquid. A liquid market is generally one in which there is sufficient trading activity to satisfy both buyers and sellers. An illiquid market is generally one in which it is difficult to convert Macquarie MINIs into cash, with minimum loss. Accordingly, in an illiquid market there is a risk that you may not be able to sell your Macquarie MINIs at a price you wish to.

To ensure sufficient liquidity, Macquarie undertakes to the ASX that there will be a market by maintaining buy orders at market prices for the life of Macquarie MINIs. Please note that although you can sell your Macquarie MINIs, you may still incur a loss on the sale price of your Macquarie MINIs.

We note that Holders also have the ability to exercise a Macquarie MINI rather than dispose of it on the ASX. Investors should be aware that if they do exercise Macquarie has the right to deduct Expenses when calculating the Cash Settlement Amount (if any).

3.11 General Market RisksGeneral movements in local and international stock markets, prevailing and anticipated economic conditions, investor sentiment, interest rates and exchange rates could all affect the market price of Macquarie MINIs. These risks are generally applicable to any investment on the ASX or any other stock market.

3.12 Potential conflicts of interestWe will generally hedge our exposure under a Macquarie MINI, but are not obliged to. Our hedging activities may be conducted in securities, options, futures or other derivatives related to your Macquarie MINI, and any Reference Assets to which your Macquarie MINI relates. We may effect or unwind a substantial part of our hedging activities on the early termination of your Macquarie MINI, or where a Stop Loss Event occurs. These hedging activities may affect the value of the Reference Assets and consequently any Stop Loss Value you may receive in the event of a Stop Loss Event or any Cash Settlement Amount in the event of an Extraordinary Event or Issuer Call Event.

We may also:

1. trade in (whether as principal or agent); and

2. have opposing interests to your interests as the Holder of a Macquarie MINI in

such assets, financial products and derivatives, and may profit from such activities.

Other conflicts of interest may also arise in relation to Macquarie MINIs. Please see Section 6.2 of this PDS for more information about potential conflicts of interests and other activities of members of the Macquarie Group.

3.13 Taxation considerationsThe taxation considerations summarised in Section 5 of the PDS are based on a number of assumptions which are set out in Section 5.1. In considering the potential taxation outcomes of investing in a Macquarie MINI, it is important that you consider:

1. the applicability of those assumptions in relation to your investment in a Macquarie MINI; and

2. the impact that certain events (such as us declaring an Early Termination Date for your Macquarie MINI) may have on your taxation outcomes.

In addition, there are a number of tax risks that may arise from an investment in Macquarie MINIs:

(a) As set out in section 5.3.1 , there is a risk that acquisition of a Macquarie MINI may impact your eligibility for franking tax offsets associated with franked dividends you receive from securities you hold;

(b) If the Commissioner of Taxation concludes that the MINIs are a financing arrangement

Section 3Risks you

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for Macquarie, there is a risk that the taxation outcomes in section 5 may not apply and the taxation outcomes from an investment in Macquarie MINIs may be different;

(c) There is a risk that a Macquarie MINI could be characterised as a qualifying security under Division 16E of Part III of the Income Tax Assessment Act 1936 and therefore subject to the Taxation of Financial Arrangements (TOFA) provisions of the Tax Act. This characterisation will only be available where it is reasonably likely, at the time of issue of the Macquarie MINI, that the sum of all payments under the Macquarie MINI will exceed its issue price. If the Macquarie MINI is characterised as a “qualifying security”, the TOFA provisions may, in some circumstances, require gains and losses in respect of the Macquarie MINI to be recognised on a compounding accruals basis over the term the Macquarie MINI is held. As such, this characterisation will only be of relevance to you if you hold a Macquarie MINI for a material period over a year end.

The taxation outcomes of investing in a Macquarie MINI will depend on your individual circumstances and we recommend you seek independent taxation advice which takes into account what you currently have, and what you want and need for your financial future before making any investment decision.

3.14 Investment decisions It is impossible in a document of this type to take into account what you currently have, and what you want and need for your financial future. Accordingly, nothing in this PDS is a recommendation by us or any other member of the Macquarie Group about either:

(a) an investment in a Macquarie MINI or any other financial product; or

(b) the suitability of a Macquarie MINI for any investor or any particular investor’s trading or investment strategy.

You should not rely on this PDS as the sole basis for any investment decision in relation to a Macquarie MINI, any particular Reference Asset or any other financial product, but should obtain additional information and where necessary, obtain independent financial advice. Macquarie has not engaged or authorised anyone to act as your adviser or fiduciary in respect of any investment you make in a Macquarie MINI. Any party selling or advising you in relation to this product is not an

agent or representative of Macquarie (as the issuer of the Macquarie MINIs).

You are responsible for the selection of any Macquarie MINIs you enter into. As such, the performance of, and risks associated with, any Macquarie MINIs investment will mainly depend on the investment decisions made by you.

3.15 Past performance The past performance of any Macquarie MINI or Reference Asset is not a guide to future performance, which may differ materially.

3.16 Change of lawChanges to laws, their interpretation or government administrative practices in Australia, including taxation and corporate regulatory laws and practices, could have a negative impact on your investment returns. As the application of such laws, rules and practices may depend on your individual circumstances, you should seek your own advice as to how such factors may affect your investment in a Macquarie MINI.

3.17 Suspension of Macquarie MINI TradingTrading in Macquarie MINIs on the ASX may be halted or suspended by the ASX in accordance with the ASX Operating Rules. This may occur, for example, whenever the ASX deems such action appropriate to protect investors or if Macquarie fails to comply with the ASX Operating Rules or the Terms & Conditions. Macquarie may also request the ASX to suspend trading of the Macquarie MINIs on the ASX at any time, including due to:

1. our Internal Trading Restrictions or requirements (e.g where the Macquarie Group is advising in relation to a proposed takeover); or

2. legal or other regulatory reasons.

Section 3Risks you should consider

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Section 4

Fees and Other Costs

This Section shows fees and other costs that you may be charged. These fees and costs may be payable by you, deducted from any moneys we owe you (including any return on your investment), or may be recovered by us exercising our rights under the Terms & Conditions.

For information about the significant tax implications of investing in Macquarie MINIs see Section 5 of the PDS.

You should read all the information about fees and costs because it is important to understand their impact on your investment.

33Section 4.1 Amounts available to acquire a Macquarie MINI

33Section 4.2 Adviser commissions

34Section 4.3 Tax

34Section 4.4 Expenses – Extraordinary Event or Issuer Call Event Early Termination

34Section 4.5Expenses – Exercise Notice

34Section 4.6 Goods and Services Tax (GST)

4.1 Amounts payable to acquire a Macquarie MINI4.1.1 Purchase price

The initial price of a MINI, is calculated as follows:

■ For a MINI Long: Purchase Price = (Reference Asset Value – Strike Price) / Conversion Factor; and

■ For a MINI Short: Purchase Price = (Strike Price – Reference Asset Value) / Conversion Factor.

After you have purchased a Macquarie MINI, you will not be required to make any further payments in connection with the MINI.

4.1.2 Daily Funding Cost

Please note however that the impact of the adjustment to the Strike Price for the Daily Funding Cost will affect the value of your MINI on a daily basis. This is not an amount payable by you however you should note that it may affect the value of your Macquarie MINI. Please see section 2.3.1 for further information.

4.2 Adviser Commissions4.2.1 Brokerage and Adviser Fees

Your broker may charge you a fee or commission in relation to the purchase or sale of a Macquarie MINI. Your financial adviser may charge you a fee in relation to advice on the purchase or sale of a Macquarie MINI.

4.2.2 Discretionary Commissions

We or another member of the Macquarie Group may make further discretionary payments to your financial adviser or broker. These payments (if any) are based on a number of factors including the volume of Macquarie Group products sold to your financial adviser’s or broker’s clients and the relationship between your financial adviser or broker and the Macquarie Group. As the factors on which these payments are based may be unrelated to MINIs and are not recovered from the return you receive under a MINI, it is not possible to express these payments as a percentage of your investment in a MINI. These payments are made using the Macquarie Group’s own resources. You should ask your financial adviser or broker for further details of any such arrangements.

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4.2.3 Soft Dollar Commissions

We or another member of the Macquarie Group may from time to time provide or receive non-monetary benefits, sometimes known as “soft dollar commissions”. These may be provided to (or received from), for example, financial advisers or brokers. These benefits may include, but are not restricted to, research and market information, free or subsidised services, accommodation, broking arrangements, software and sponsorship of seminars and conferences. These benefits, when provided, will be paid by us or another member of the Macquarie Group out of our own or their own resources.

4.3 TaxFor information about the significant tax implications relating to Macquarie MINIs, see Section 5 of the PDS.

4.4 Expenses – Extraordinary Event or Issuer Call EventIf an Extraordinary Event or Issuer Call Event occurs, the Cash Settlement Amount you receive will be net of Expenses. Expenses are the actual costs incurred by Macquarie in connection with the Early Termination of your MINIs such as the cost of unwinding hedging arrangements.

The Factors which influence the determination of Expenses include (but are not limited to) illiquidity of any underlying Hedge Positions, the volatility of underlying Hedge Positions and other costs associated in unwinding the relevant Hedge Positions. If these factors increase it is likely that the actual Expenses incurred by Macquarie and therefore payable by you will also increase.

The Expenses in relation to an Extraordinary Event or Issuer Call Event are determined by Macquarie but will not exceed 20% of the Strike Price on the Early Termination Date or Issuer Call Date (as the case may be).

See section 2.6.2 for an example of how Expenses may impact the Cash Settlement Amount you receive. Please refer to the Glossary for a full definition of Expenses.

4.5 Expenses – when you exercise your Macquarie MINI If you elect to exercise your Macquarie MINI, the Cash Settlement Amount you receive will be net of any Expenses you may need to pay. The Expenses are the actual costs incurred by Macquarie associated with the exercise of your Macquarie MINIs such as the cost of unwinding hedging arrangements. These costs may be influenced by market volatility and/or liquidity of the Reference Asset. Please refer to the Glossary for a full definition of Expenses.

The Factors which influence the determination of Expenses include (but are not limited to) illiquidity of any underlying Hedge Positions, the volatility of Underlying Hedge Positions and other costs associated in unwinding the relevant Hedge Positions. If these factors increase it is likely that the Expenses actually incurred by Macquarie and as such payable by you will also increase.

The Expenses in relation to when you exercise your Macquarie MINI are determined by Macquarie but will not exceed 20% of the Strike Price on the Exercise Date.

See section 2.6.2 for an example of how Expenses may impact the Cash Settlement Amount you receive.

4.6 Goods and Services Tax (GST)Unless otherwise stated, fees and charges quoted in this PDS are inclusive of GST (if any). You should also note that, if GST becomes payable by Macquarie in connection with any supply made to you under or in connection with this PDS, Macquarie can require you to pay an additional amount on account of GST.

Section 4 Fees and other costs

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Section 5

Taxation for Australian Residents

This Section provides a general summary of the Australian taxation implications for Holders of Macquarie MINIs. The information in this summary is of a general nature only, and does not address all of the taxation implications that may arise for a Holder. As the taxation implications for each Holder may be different, Macquarie recommends that you obtain your own independent professional advice on the full range of taxation implications applicable to your own facts and circumstances.

This summary is based on Australian taxation laws in force and administrative practices generally accepted as at the date of this PDS. Any of these may change in the future without notice and legislation introduced to give effect to announcements may contain provisions that are currently not contemplated. Future changes in taxation laws, their interpretation or associated administrative practices could affect the tax treatment of Macquarie MINIs.

All references in this summary to legislative provisions are to provisions of the Income Tax Assessment Act 1936 or the Income Tax Assessment Act 1997 (together, the Tax Act).

35Section 5.1 Assumptions

35Section 5.2 Purchase and Disposal of Macquarie MINIs

36Section 5.3 Holding Macquarie MINIs

37Section 5.4 Taxation of Financial Arrangements

37Section 5.5Part IVA

37Section 5.6 Goods and Services Tax

37Section 5.6 Stamp Duty

5.1 AssumptionsThis summary of taxation implications assumes:

■ you are an Australian resident for tax purposes at all times;

■ all transactions will be denominated in Australian dollars;

■ all transactions you enter into with Macquarie will be at prevailing market prices and otherwise on arm’s length terms; and

■ you do not enter into any Macquarie MINI in substitution for an economically equivalent transaction you otherwise would have entered into.

5.2 Purchase and Disposal of Macquarie MINIs 5.2.1 Revenue Account

Where you acquire Macquarie MINIs with a profit making purpose, any gain or loss made on disposal or exercise should be on revenue account. This is consistent with the view of the Commissioner of Taxation (“the Commissioner”) in Taxation Ruling TR 2005/15 (regarding contracts for differences or “CFDs”). Although there are some differences between the CFDs described in TR 2005/15 and Macquarie MINIs, it is considered that the Commissioner would adopt a similar view given the many similarities.

Holders typically acquire Macquarie MINIs with the intention of making a profit, and as such, any profit on disposal or exercise should be included in assessable income and any loss should be deductible.

If you acquire Macquarie MINIs for the purpose of sale or exchange in the ordinary course of business, Macquarie MINIs may be considered as trading stock. In this case, Macquarie MINIs will be held on revenue account though the trading stock provisions of the Tax Act will apply. You should seek specific advice if your Macquarie MINIs are likely to be held as trading stock.

5.2.2 Capital Account and Hedgers

You should be aware that if you acquire Macquarie MINIs other than for a profit making purpose or in the ordinary course of business, or with the intention of holding your Macquarie MINIs as a long-term

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investment, you may be considered to hold the MINIs on capital account, and the relevant capital gains tax (“CGT”) provisions of the Tax Act would apply.

For example, if you use your Macquarie MINIs to hedge an underlying transaction on capital account, your Macquarie MINIs may be considered as also being held on capital account. In these circumstances, the acquisition cost of your Macquarie MINIs should be included in the cost base/reduced cost base of your Macquarie MINIs for CGT purposes and any gain or loss on disposal or exercise should be treated as a capital gain or loss and not on revenue account. In these circumstances, the CGT exemption which disregards capital gains and losses from gambling activities should not apply. However, CGT discount treatment should be available if you are an individual or trust or are a complying superannuation entity, and you hold your MINIs for at least 12 months prior to disposal or exercise, reducing any taxable capital gain by 50% (for individuals and trusts) or 331/3% (for complying superannuation entities).

You should seek independent taxation advice regarding the application of the CGT provisions to your circumstances before investing.

5.2.3 Purchase of Macquarie MINIs

There should be no immediate taxation consequences arising from the purchase of Macquarie MINIs. Where you hold Macquarie MINIs on revenue account, the acquisition cost (which may include the on market purchase price and brokerage costs) will not be deductible at the time of acquisition, but will be relevant in determining the assessable gain or deductible loss on the sale, exercise or termination of Macquarie MINIs.

5.2.4 Disposal of Macquarie MINIs

Where you hold Macquarie MINIs on revenue account and dispose of them on the ASX (including disposal back to Macquarie as the designated market maker), this disposal should give rise to assessable income to the extent the disposal proceeds exceed the acquisition cost and other costs of holding your Macquarie MINIs. Conversely, you should make a deductible loss to the extent that the acquisition cost and other costs of holding your Macquarie MINIs exceeds the disposal proceeds.

5.2.4 Exercise of Macquarie MINIs

Where you hold Macquarie MINIs on revenue account and provide an Exercise Notice, the

exercise should give rise to assessable income to the extent that the Cash Settlement Amount exceeds the acquisition cost and other costs of your Macquarie MINIs. Conversely, you should make a deductible loss to the extent that the acquisition cost and other costs of your Macquarie MINIs exceeds the Cash Settlement Amount (if any).

5.2.5 Stop Loss Event

Where you hold Macquarie MINIs on revenue account and they terminate as a result of a Stop Loss Event, the termination should give rise to assessable income to the extent that the Stop Loss Value exceeds the acquisition cost of your Macquarie MINIs. Conversely, you should make a deductible loss to the extent that the acquisition cost and other capitalised costs of holding Macquarie MINIs exceeds the Stop Loss value (if any).

5.3 Holding Macquarie MINIs5.3.1 Dividends

You will not receive any Dividends or Special Dividends as a result of holding Macquarie MINIs. Consequently, you will not derive assessable income from the Reference Asset, and no franking credits will be available to you by virtue of holding Macquarie MINIs.

You should note that a Macquarie MINI may be considered a “position” in relation to other securities that you may hold outside of your investment in Macquarie MINIs. Further, an adjustment to a Macquarie MINI may be a “related payment”. Each of these conclusions will be relevant in the determination of your eligibility for franking tax offsets for franking credits attaching to dividends or distributions in relation to those securities.

You should take independent taxation advice as to the impact of acquiring Macquarie MINIs on your eligibility for franking tax offsets.

5.3.2 Funding Costs

There will no direct tax consequences with respect to the Daily Funding Cost included in the calculation of the Strike Price. Funding Costs are not a direct loss or outgoing, but a notional amount which affects the Strike Price (and therefore the value of the Macquarie MINI). The Funding Costs will be used to calculate your eventual gain or loss on disposal, Exercise or Termination.

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5.4 Taxation of Financial Arrangements The Taxation of Financial Arrangements (“TOFA”) provisions of the Tax Act may apply to certain taxpayers. Broadly, this legislation impacts the taxation of financial arrangements in terms of the timing of derivation of assessable income, the quantum of a gain or loss for taxation purposes and also the character of a particular receipt.

The TOFA provisions do not apply to certain investors; including

a) individuals;

b) superannuation entities and managed investment schemes with assets of less than AUD $100 million;

c) authorised deposit-taking institutions, securitisation vehicles or other financial sector entities with an aggregated turnover of less than AUD $20 million; and

d) Other entities with an aggregated turnover of less than $100 million and financial assets of less than $100 million and total assets of less than $300 million;

unless the investor makes a specific election for the provisions to apply, or the arrangement is considered to be a “qualifying security” for the purposes of the Tax Act. A Macquarie MINI should not be considered a “qualifying security” unless it is “reasonably likely”, at the time of issue of the Macquarie MINI, that the sum of all payments under the Macquarie MINI will exceed its issue price.

The TOFA provisions are complex, and to the extent they apply, their application is dependent on the particular investor’s facts and circumstances. Accordingly, Macquarie strongly recommends that investors take independent taxation advice in respect of Macquarie MINIs.

5.5 Part IVAPart IVA is the general anti-avoidance provision of the Tax Act. It applies where the dominant purpose of the taxpayer (or any other person) in entering into a “scheme” is to obtain a “tax benefit”. A “tax benefit” is relevantly defined as:

a) an amount not being included in assessable income where, but for the scheme, that amount would reasonable be expected to have been included; or

b) an amount being allowed as a deduction where, but for the scheme, that amount would not reasonably be expected to have been allowable.

The application of Part IVA to a particular taxpayer can only be conclusively determined on an examination of that taxpayer’s individual circumstances. Nevertheless, the following comments are able to be made for a typical investor.

For the purposes of Part IVA, the dominant purpose of an investor acquiring Macquarie MINIs, being the only relevant “scheme”, should be seen to include obtaining exposure (either positive or negative) to a particular Reference Asset, for example, for the purpose of deriving a profit on the disposal or exercise of the Macquarie MINIs, or for hedging other exposures the investor may have. On this basis, Part IVA should not apply to the acquisition, holding and disposal of Macquarie MINIs by a typical investor.

5.6 Goods and Services TaxThe A New Tax System (Goods and Services Tax) Act 1999 and related legislation impose a goods and services tax (“GST”) on certain “supplies”. The A New Tax System (Goods and Services Tax) Regulations 1999 identify a range of supplies that are financial supplies on which GST is not payable.

The acquisition, holding and disposal of Macquarie MINIs will not give rise to a liability for GST. GST may apply to fees that you may be charged (e.g. fees charged by your broker or financial adviser). You should seek independent taxation advice as to whether an input tax credit is available for any such GST.

5.7 Stamp DutyThe acquisition, holding and disposal of Macquarie MINIs should not give rise to any stamp duty in any jurisdiction in Australia.

Section 5Taxation for

Australian Residents

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Section 6

Additional Information

38Section 6.1 About Macquarie

39Section 6.2 Potential conflicts of interest

39Section 6.3 Substantial shareholdings, takeovers and associations

39Section 6.4 Foreign holders

40Section 6.5 Shareholding limits or restrictions

40Section 6.6 Anti-money laundering regulations

40Section 6.7 Amendments to the PDS and the Terms & Conditions

41Section 6.8 Register and Form of Holding

41Section 6.9 Enquiries and complaints

41Section 6.10 No cooling-off period

41Section 6.11 Privacy statement

42Section 6.12 Ethical considerations

42Section 6.13 Consents

42Section 6.14Stock Borrowing

6.1 About MacquarieMacquarie Bank Limited (Macquarie Bank) is an authorised deposit-taking institution under section 9 of the Banking Act 1959 (Cth). Macquarie Bank is a wholly-owned subsidiary of Macquarie Group Limited (MQG). MQG, which is the ultimate parent of the Macquarie Group is listed on the ASX and is regulated by APRA as a non-operating holding company of an authorised deposit-taking institution.

The obligations of Macquarie Bank under the Terms & Conditions and in relation to the MINIs are not deposit liabilities of Macquarie Bank, and they are not guaranteed by any other party. They are unsecured contractual obligations of Macquarie Bank which will rank equally with Macquarie Bank’s other unsecured contractual obligations and with its unsecured debt other than liabilities mandatorily preferred by law. In this regard section 13A(3) of the Banking Act 1959 (Cth) provides that in the event of Macquarie Bank becoming unable to meet its obligations, the assets of Macquarie Bank in Australia will be available to meet certain liabilities in priority to all other liabilities of Macquarie Bank including the obligations of Macquarie Bank under the Terms & Conditions and in relation to the MINIs. Such preferred liabilities include, without limitation, certain debts and costs owed to the Australian Prudential Regulatory Authority, liabilities in relation to protected accounts and any debts or liabilities to the Reserve Bank of Australia.

Further information about the Macquarie Group structure and Macquarie Bank is available from www.macquarie.com.au.

Disclosure obligations

Macquarie Bank is a disclosing entity under the Corporations Act and has a continuous disclosure obligation under that Act and the ASX Listing Rules. This means that, subject to certain exceptions, Macquarie Bank must disclose to the ASX any information concerning it that a reasonable person would expect to have a material effect on the price or value of Macquarie Bank’s securities. Copies of the information disclosed to ASX can be viewed on the ASX website: www.asx.com.au (listing code MBLHB).

Documents available

Macquarie Bank will provide a copy, free of charge, of its most recent publicly available financial reports and interim reports to any person who requests such copies by contacting Macquarie Bank (see the Directory for details).

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These documents are available online at: www.macquarie.com.au/shareholdercentre.

Updated information

You can obtain up-to-date information about Macquarie Bank, including financial information, by referring to www.macquarie.com.au/shareholdercentre.

6.2 Potential conflicts of interestPotential conflicts of interest arise because some of the members of the Macquarie Group:

■ may hold securities in members of the Macquarie Group and/or hold positions under MINIs;

■ may receive remuneration based on the issue or performance of MINIs, in whole or in part;

■ may buy and sell (whether as principal or agent) financial products related to MINIs and/or the Reference Assets;

■ may also hold directorships in an issuer of any Reference Asset;

■ may have business relationships or alliances (including joint ventures) with an issuer of any Reference Asset;

■ may be a substantial shareholder of an issuer of any Reference Asset; and

■ may have a commercial relationship with senior executives of an issuer of any Reference Asset and may sell financial products to, or advise, such senior executives in relation to MINIs or matters unconnected with the MINIs.

In addition, members of the Macquarie Group may from time to time advise the issuer of any Reference Asset (or its officers) in relation to activities unconnected with MINIs and which may or may not affect the value of the Reference Asset or your MINI. Such relationships and advisory roles may include:

■ acting as manager or joint lead manager in relation to the offering or placement of rights, options or other securities;

■ underwriting the offering or placement of rights, options or other securities;

■ advising in relation to mergers, acquisitions or takeover offers; and

■ acting as general financial adviser in respect of, without limitation, corporate advice, financing, funds management, property and other services.

These activities may have an affect on the value of your MINI.

Where we enter into transactions which may result in a conflict of interest, we operate in accordance with related party protocols and Macquarie Group policies and procedures which require us to transact on terms that would be reasonable if the parties were dealing at arm’s length. These policies and procedures, including related party policies, are governed by the ‘Macquarie Group Conflicts of Interest Policy’, which applies a code of conduct to our directors and officers, and promotes integrity, responsibility and accountability. The code of conduct provides that where related party transactions exist, we must ensure legislative requirements are met and investors’ interests are protected.

6.3 Substantial shareholdings, takeovers and associations The acquisition of MINIs may have implications for you (particularly substantial shareholders) under Chapters 6, 6A and 6C of the Corporations Act. The precise effect will depend on your particular circumstances.

The following summary of the law as at the date of this PDS is intended to assist you in identifying some possible practical obligations that may arise as a result of you acquiring MINIs. Your obligations will, however, be affected by your individual circumstances and you should obtain your own advice.

6.4 Foreign holdersThe acquisition of MINIs may also have implications for you under the Foreign Acquisitions and Takeovers Act 1975 (Cth) (FATA). The following very general summary of FATA is not exhaustive and is not legal advice. You should not rely solely on this Section, and should seek your own legal advice in relation to all aspects of your proposed investment including, but not limited to, those referred to below.

Under FATA, the Treasurer of Australia may prohibit a proposed acquisition of securities in an Australian corporation or interests in the assets of an Australian business where the result of the acquisition would be that a foreign person, together with their associates, would have an interest of at least 15% of the issued securities in the corporation (or interests in the assets of an Australian business), or two or more foreign persons (together with their associates) would in aggregate have an interest of at least

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40% of the issued securities in the corporation or the assets of an Australian business. Furthermore, if such an acquisition has already occurred, the Treasurer may order the person who acquired the securities or interests in the assets to dispose of them to an approved person. The concepts of acquisition, interest, associate and foreign person are very widely defined in FATA. FATA also requires certain persons to give the Treasurer prior notice of their intention to make certain acquisitions.

Foreign ownership of securities in Australian companies may also be restricted under other Commonwealth or State legislation, or under Government policy. You should make your own enquiries.

6.5 Shareholding limits or restrictionsSome Listed Entities may be subject to legislation which prescribes maximum shareholding limits for shareholders or restrictions which may prohibit or limit the interests in that Listed Entity that you may acquire. You should inform yourself of the restrictions that may apply to the acquisition of MINIs.

6.6 Anti-money laundering regulations If you acquire a Macquarie MINI:

(a) you undertake that you will not knowingly do anything to put us or any other member of the Macquarie Group in breach of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006, rules and other subordinate instruments (AML/CTF Laws). You undertake to notify us if you aware of anything that would put us or any other member of the Macquarie Group in breach of AML/CTF Laws.

(b) If requested by us or any other member of the Macquarie Group, you undertake to provide additional information and assistance, and comply with all reasonable requests, to facilitate our or any other member of the Macquarie Group’s compliance with AML/CTF Laws in Australia or any equivalent laws in any overseas jurisdiction;

(c) You undertake that you are not aware and have no reason to suspect that:

– the money used to fund your investment in Macquarie MINIs is derived from or related to money laundering, terrorism financing or similar activities (Illegal Activities); and

– the proceeds of investment made in connection with MINIs will fund Illegal Activities.

(d) you acknowledge that we, and other members of the Macquarie Group, are subject to AML/CTF Laws. In acquiring a Macquarie MINI you consent to us and other members of the Macquarie Group disclosing in connection with AML/CTF Laws any of your Personal Information (as defined in the Privacy Act 1988 (Cth)) we have.

(e) In certain circumstances we, or another member of the Macquarie Group, may be obliged to freeze or block an account or MINI where it is used in connection with Illegal Activities or suspected Illegal Activities. Freezing or blocking can arise as a result of the account monitoring that is required by AML/CTF Laws. If this occurs, neither us, nor any other member of the Macquarie Group, are liable to you for any consequences or losses whatsoever and you agree to indemnify us, and each other member of the Macquarie Group, if we, or any other member of the Macquarie Group, are found liable to a third party in connection with the freezing or blocking of your account or a MINI.

(f) you acknowledge that we, and each other member of the Macquarie Group, retain the right not to provide any financial service or financial product to any person that we, or any other member of the Macquarie Group, decides, in its sole discretion, that it does not wish to supply.

6.7 Amendments to the PDS and the Terms & ConditionsThe Terms & Conditions of the MINIs may be amended in the event of a Potential Adjustment Event (as described in Section 2.7). Other Changes to the Terms & Conditions are also permitted where such Change is made in accordance with clause 11.2 of the Terms & Conditions. You should refer to clause 11.2 of the Terms & Conditions for complete details of the situations in which the Terms & Conditions may be amended.

You should be aware that clause 11.2 permits certain changes to the Terms & Conditions without the consent of Holders. These Changes include situations where Macquarie, with the consent of the ASX, deems such change to be necessary or desirable for the purposes of complying with any requirement of law or the ASX or where the change does not, in the reasonable opinion of Macquarie, materially prejudice the interests of Holders.

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6.8 Register and Form of Holding MINIs will be held in uncertificated form. As MINIs will be CHESS Approved Securities, a CHESS Sub-register and an Issuer Sponsored Sub-register of Holdings will be established in respect of each Series of MINIs.

Issuer Sponsored Register

Macquarie will arrange (at its cost) for a register of Holders of each Series of MINIs to be established and maintained at the offices of Computershare Investor Services Pty Limited (see Directory on last page) in Sydney. The Register will be open during normal business hours for inspection by any Holder.

The Clearing House Electronic Sub-register System (CHESS)

CHESS (Clearing House Electronic Sub-register System) is a computer system which electronically transfers title between the buyers and sellers of securities on the ASX. It is a paperless system where security ownership is recorded on an account in CHESS, rather than through the use of physical share certificates. CHESS also uses the electronic settlement of transactions between CHESS participants (i.e. stockbrokers and institutional investors).

CHESS is operated by ASX Settlements Pty Limited, a wholly owned subsidiary of the ASX. All CHESS participants must abide by the published rules known as the ASX Settlement Operating Rules.

Macquarie will apply to have the MINI offered under this PDS admitted to CHESS. When the MINIs become “CHESS Approved Securities”, MINIs held by a Holder who is a participant in CHESS or a person sponsored by a participant in CHESS will be registered on the CHESS Sub-register. All other holdings will be registered in Issuer Sponsored Sub-register.

Under the CHESS system, Holders will be provided with a holding statement on a monthly basis whenever there is a change in their holding. The holding statement will record the number of MINIs held and the particulars of the Holder, including the Holder’s Holder Identification Number in the case of a CHESS Holder or a Shareholder Reference Number in the case of an Issuer Sponsored Holder. Holders who hold Macquarie MINIs with more than one sponsoring participant will receive separate holding statements from the ASX.

6.9 Enquiries and complaints We have procedures for dispute resolution, and they are available to you free of charge. You may make a complaint relating to MINIs directly to us in writing. We will always acknowledge any complaint promptly and provide a substantive response within no more than 45 days. If the outcome is unsatisfactory, you may refer your complaint to the Financial Ombudsman Service at:

Financial Ombudsman Service

GPO Box 3 Melbourne VIC 3001

Telephone: 1300 78 08 08 Fax: (03) 9613 6399 Email: [email protected]

www.fos.org.au

6.10 No cooling-off periodThere is no ‘cooling-off’ period in relation to the acquisition of a Macquarie MINI.

6.11 Privacy statement By acquiring a Macquarie MINI you agree to us collecting and using personal information about you and manage the products and services we provide to you. This includes monitoring, auditing and evaluating those products and services, modelling data, data testing, communicating with you and dealing with any complaints or enquiries.

You need not give us any personal information we request. However, if you do not provide us with complete information, we may not be able provide you with an appropriate level of service.

You agree to allow us to provide access to your personal information to members of the Macquarie Group as well as external service providers (including those located offshore), which provide services in connection with our products and services, for example, mail houses and professional advisers.

If you notify us that you are using the services of an advisor we may supply that adviser with information about your investments.

Section 6Additional

Information

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We may also disclose your personal information:

■ if, acting in good faith, we believe that the law requires or permits us to do so;

■ if you consent;

■ if we believe the disclosure of such information is reasonably necessary or desirable in connection with either:

– the issuing, lapsing, expiry or administration of the MINIs;

– effecting transactions in accordance with the Terms & Conditions of Issue;

– Macquarie’s internal risk management requirements, procedures and policies,

and the recipient of such information has agreed to maintain the confidentiality of such information on terms acceptable to Macquarie (acting in a commercially reasonable manner); or

■ to any person proposing to acquire an interest in our business.

We and other members of the Macquarie Group may use your personal information to offer products or services that may be of interest to you, unless you request us not to.

Under the Privacy Act 1988, you may request access to your personal information that we hold.

You can contact us to make such a request, or for any other reason relating to the privacy of your personal information, by telephoning us on the telephone number, or by writing to us at the address, listed in the Directory.

Our privacy statement and details on how you may access or update your personal information can be accessed at www.macquarie.com.au/au/privacy_policy.htm.

6.12 Ethical considerationsWe do not take labour standards or social, environmental or ethical considerations into account when selecting, retaining or realising a MINI.

6.13 ConsentsClayton Utz has given and not withdrawn its consent to be named in this PDS in the form and context in which it is named. Clayton Utz has not authorised or caused the issue of this PDS, does not make, or purport to make, any statement in this PDS (or any statement on which a statement in this PDS is based), and takes no responsibility for any part of this PDS other than Section 5.

Computershare Investor Services Pty Limited has given and, as at the date hereof, has not withdrawn, its written consent to be named as Share Registrar in the form and context in which it is named.

Computershare Investor Services Pty Limited has had no involvement in the preparation of any part of the Product Disclosure Statement other than being named as Share Registrar to the Company. Computershare Investor Services Pty Limited has not authorised or caused the issue of, and expressly disclaims and takes no responsibility for, any part of the Prospectus.

6.14 Stock BorrowingStock borrowing refers to a market transaction where securities are transferred from the owner (the lender) to another party (the borrower). The borrower is obliged to return the securities or equivalent securities to the lender either on demand or at the end of the loan term. Stock borrowing (otherwise known as `securities lending’) usually occurs between professional investors (such as institutions) in the market and usually involves securities held by custodians. Macquarie will sometimes borrow the Reference Asset or other assets to enable it to hedge its economic exposure under a Macquarie MINI. The number of a particular type of security or asset available to be borrowed (if any) and the fee payable by the borrower can vary depending on a number of market factors (including the liquidity of the security or asset, prevailing interest rates and the nature of market trading in the security or asset at the particular time).

Section 6Additional Information

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Section 7

Glossary

This Section contains some of the definitions contained in the Terms & Conditions. If you acquire a Macquarie MINI, you agree to be bound by the Terms & Conditions. You should therefore read and understand the Terms & Conditions and this Glossary before purchasing a Macquarie MINI. You should also obtain professional advice which takes into account what you currently have, and what you want and need for your financial future.

In this PDS, any SPDS and the Terms & Conditions, the following definitions will apply unless the context otherwise requires:

Accretion means all rights, accretions, entitlements and other property attaching to a Reference Asset (including, without limitation, all voting rights, franking credits and rights to receive dividends and other distributions or shares, notes, options or other securities exercisable, declared, paid or issued in respect of a Reference Asset).

Affected Series has the meaning given to that term in clause 2.1 of the Terms & Conditions.

AML/CTF Laws means the Anti-Money Laundering and Counter-Terrorism Financing Act 2006, rules and other subordinate instruments.

Approved Financial Product has the meaning set out in the ASX Settlement Operating Rules.

ASX means ASX Limited (ABN 98 008 624 691) or the Australian Securities Exchange, as the context requires.

ASX Operating Rules means the operating rules of the ASX, as amended from time to time. A copy of these rules can be obtained from www.asx.com.au, or alternatively, by contacting Macquarie.

ASX Settlement means ASX Settlement Pty Limited (ABN 49 008 504 532).

ASX Settlement Operating Rules means the settlement operating rules of ASX Settlement from time to time. A copy of these rules can be obtained from www.asx.com.au, or alternatively, by contacting Macquarie.

Australian Dollars or AUD means the lawful currency of Australia.

Business Day means a day on which banks are open for business in Sydney, other than a Saturday, Sunday, New Year’s Day, Good Friday, Easter Monday, Christmas Day or Boxing Day or any declared public holiday.

Calculation Strike Price means the Strike Price on the relevant Valuation Date.

Cash Settlement Amount means in relation to an Exercise Date, Issuer Call Date or Early Termination Date (as the case may be) an amount in AUD calculated as the greater of:

(a) in respect of a MINI Long:

(i) ((the Final Reference Asset Value less the Calculation Strike Price) divided by the Conversion Factor) – Expenses ; and

(ii) zero; and

(b) in respect of a MINI Short:

(i) ((the Calculation Strike Price less the Final Reference Asset Value) divided by the Conversion Factor) – Expenses; and

(ii) zero;

Change means, in respect of these Terms & Conditions, any modification, variation, alteration or deletion of, or addition to, these Terms & Conditions.

CHESS has the meaning set out in the ASX Settlement Operating Rules.

CHESS Sub-register has the meaning set out in the ASX Settlement Operating Rules.

Closing Time means 4.15pm (Sydney time).

Conversion Factor means, in respect of a Macquarie MINI, the number specified as such in the SPDS for that Macquarie MINI, as may be adjusted from time to time in accordance with the Terms & Conditions.

Daily Cut-off Time means 12:00noon (Sydney time).

Daily Funding Cost means an amount calculated by Macquarie as follows:

Daily Funding Cost = (Interest Rate x Strike Price on the previous day)/365

Default Rate means, on any day, 2% plus the 90-day bank bill swap bid rate (expressed as a percentage) for that day quoted on the page designated as “BBSW” on the Reuters Monitor or another page that replaces that system to display the bank bill swap rate, calculated daily.

Directory means the contact details of Macquarie and the Registrar set out on the back cover of this PDS.

Dividends means all ordinary cash dividends, distributions or other payments in respect of a Reference Asset which Macquarie reasonably determines to be in the nature of, or characterised as, a dividend, distribution or other payment which is not a Special Dividend.

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Early Termination Date has the meaning set out in clause 4.1(a) of the Terms & Conditions.

Electronic Communication means a communication of information in the form of data, text or images by means of guided or unguided electromagnetic energy, or both. Electronic Communications include email.

Eligible Holder means the Holder of a Macquarie MINI on the day that is three (3) Settlement System Business Days after the date on which a valid Exercise Notice is given in relation to that Macquarie MINI in accordance with clause 1.4 of the Terms & Conditions.

Exercise Date means, in relation to a Macquarie MINI, the Business Day following the date on which a valid Exercise Notice is given in accordance with clause 1.3(a) of the Terms & Conditions.

Exercise Notice means a notice in the form obtained from our website (see Directory for details) and given in accordance with clause 1.4 of the Terms & Conditions.

Ex-Date means the date upon which a Security goes Ex-Dividend.

Ex-Dividend means in respect of a Security, that an acquirer of the Security after the Ex-Date will not be entitled to any dividend or distribution in respect of that Security.

Expenses means:

(a) an amount equal to any incidental costs that are actually incurred by Macquarie in relation to any termination of a Macquarie MINI (including in unwinding of the hedging arrangements, taxes and other expenses) as a result of an Exercise Notice, Issuer Call Event or Extraordinary Event; and

(b) where Macquarie has reasonably formed the view the Holder submitting an Exercise Notice has, via substantial or systematic trading, taken advantage of an unintended or inadvertent mis-pricing difference between the price of the MINI and the price of the Reference Asset at the time of acquisition, an amount reasonably determined by Macquarie to remove the advantage the Holder obtained; and

(c) an amount equal to such other actual costs, fees, charges or losses to Macquarie that Macquarie in its sole discretion considers are attributable to giving effect to the Exercise Notice;

but in either event cannot exceed 20% of the Strike Price on the relevant Valuation Date.

Extraordinary Event means any of the following events:

(a) for a Share MINI, it is announced that the Reference Share will:

(i) be delisted or withdrawn from admission to trading status on the Relevant Exchange;

(ii) cease to be an Approved Financial Product (as defined in the ASX Settlement Operating Rules);

(iii) subject to an Insolvency Event; or

(iv) subject to a Nationalisation;

(b) for an Index MINI, it is announced that the relevant Index Futures Contract will:

(i) be delisted or withdrawn from admission to trading status on the Relevant Exchange; or

(ii) cease to be an Approved Financial Product (as defined in the ASX Settlement Operating Rules);

(c) for any Macquarie MINI:

(i) if a Potential Adjustment Event occurs, or is expected to occur, in relation to a Reference Asset and clause 5.4(b) of the Terms & Conditions applies;

(ii) it is announced that a Series of Macquarie MINIs are, or will:

(1) be de-listed, withdrawn or suspended from admission to trading status; or

(2) cease to be Approved Financial Products,

otherwise than as a result of the acts of Macquarie;

(iii) a Hedging Disruption occurs; or

(iv) it has or will become illegal for Macquarie to give effect to any material provision of the Terms & Conditions.

Final Reference Asset Value means:

(a) in respect of a Reference Share, the official closing price of the Reference Share on the Valuation Date in relation to the Exercise Date, Issuer Call Event or Extraordinary Event (as the case may be), of the relevant Macquarie MINIs;

(b) in respect of a Reference Index, the closing level of the Index Futures Contract on the Valuation Date in relation to the Exercise Date, Issuer Call Event or Extraordinary Event (as the case may be), of the relevant Macquarie MINIs;

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except that if sub-paragraph (b) of the definition of Valuation Date applies, the Final Reference Asset Value of the relevant Reference Asset will be the price, value or level (as the context requires) reasonably determined by Macquarie as its good faith estimate of the price, value or level (as the context requires) that would have prevailed under paragraph (a) or (b) above (as the context may require) if the Market Disruption Event had not occurred on that tenth Potential Valuation Date.

Futures Rollover means, in relation to any Macquarie Index MINI, the replacement of the current Index Futures Contract with the next succeeding Index Futures Contract over the Reference Index just prior to expiry of the current Index Futures Contract.

Glossary means this Section 7 of this PDS.

GST means any goods and services tax levied under the GST Act.

GST Act means A New Tax System (Goods and Services Tax) Act 1999.

Hedge Positions means:

(a) in the case of a Share MINI, Securities equivalent to the Reference Share for that Macquarie MINI;

(b) in the case of an Index MINI, the applicable Index Futures Contract; and

(c) for the purposes of determining a Hedging Disruption, in relation to any Macquarie MINI, in addition to (a) and (b) above any other transaction(s) or asset(s) Macquarie reasonably considers necessary to manage its risk (whether market risk, foreign exchange risk or any other form of risk) of entering into and performing its obligations with respect to the Macquarie MINI.

Hedging Disruption occurs in respect of a Macquarie MINI where:

(a) Macquarie is unable, whether due to:

(i) Internal Trading Restrictions;

(ii) legal or regulatory issues;

(iii) the unavailability of stock borrow in relation to the relevant Reference Asset (other than as a result of Macquarie’s own actions);

(iv) any change announced to any applicable short selling laws in Australia or any governmental or regulatory interpretation thereof; or

(v) other circumstances beyond the reasonable control of Macquarie,

to acquire, substitute, maintain or dispose of any Hedge Positions, or realise, recover or remit the proceeds of any such Hedge Positions; or

(b) due to the:

(i) adoption of, or any change in, any applicable law or regulation, including any tax law; or

(ii) any change in the interpretation by any court, tribunal or regulatory authority of any applicable law or regulation (including any action taken by a taxing authority),

Macquarie has incurred, or will incur, a materially increased cost in performing its obligations in respect of a Macquarie MINI when compared with circumstances existing on the date on which a Macquarie MINI was first listed on the ASX (including due to any increase in tax liability, decrease in tax benefit or other adverse effect on Macquarie’s tax position); or

(c) due to:


(ii) any change in the interpretation by any court, tribunal or regulatory authority of any applicable law or regulation (including any action taken by a taxing authority);

(iii) any reduction in either:

(1) the liquidity of; or

(2) the availability of stock borrow for, a Reference Asset; or

(iv) any other circumstance(s) beyond the reasonable control of Macquarie,

Macquarie has, or will incur a materially increased cost in acquiring, substituting, maintaining or disposing of any Hedge Positions, or realising, recovering or remitting the proceeds of any such Hedge Positions in respect of a Macquarie MINI when compared with circumstances existing on the date on which a Macquarie MINI was first listed on the ASX,

unless Macquarie determines that, notwithstanding the occurrence of such event:

(1) it would be able to continue to effectively manage its risk, on an on-going basis, if a Macquarie MINI were to remain on issue; and

(2) it would not incur a material increase in costs in managing its risk, on an on-going basis, if a Macquarie MINI were to remain on issue,

Section 7Glossary

46

in which case Macquarie may elect to not treat such event as a Hedging Disruption.

Holder means, in relation to a Macquarie MINI, the person whose name is from time to time recorded in the Register as the holder of that Macquarie MINI.

Illegal Activities means money laundering, terrorism financing or similar or related activities.

In-the-money means on any date, that a Macquarie MINI would theoretically have a positive cash value not taking into account costs and expenses involved in realising this value.

Index means, in respect of a Macquarie MINI, the index published by an Index Sponsor to measure the performance of a particular market.

Index Futures Contract means in relation to a Reference Index for a Series of Index MINIs, the listed futures contract specified by Macquarie in the SPDS for the Series as being the Index Futures Contract corresponding to the Reference Index, as adjusted from time to time on each Rollover Date in accordance with the Terms & Conditions and notified by Macquarie to Holders.

Index MINI means a MINI Long or a MINI Short with a Reference Asset that is an Index which is valued (for the purposes of the Index MINI) by reference to a corresponding Index Futures Contract.

Index Roll Adjustment means an amount determined by Macquarie in sole discretion acting reasonably to take into account a Futures Rollover.

Index Sponsor means the entity that:

(a) is responsible for setting and reviewing the rules and procedures and the methods of calculation and adjustments, if any, related to an Index; and

(b) announces (directly or through an agent) the level of the Index on a regular basis.

Insolvency Event means, in relation to a Reference Share and the relevant Listed Entity, an announcement is made that the Listed Entity that issued that Reference Share:

(a) will be subject to a voluntary or involuntary liquidation, or other winding-up;

(b) will be subject to either

(i) an arrangement or other compromise with its creditors or

(ii) an external administration; or

(c) is bankrupt or insolvent (or any other analogous term).

Internal Trading Restrictions means any internal restriction imposed on Macquarie that has the effect of limiting the ability of Macquarie to acquire, substitute, maintain or dispose of any Hedge Positions in relation to a Macquarie MINI, including where:

(a) the Macquarie Group is advising a Listed Entity in relation to a proposed Potential Adjustment Event; or

(b) any further acquisitions or substitutions of any Hedge Positions or the Reference Asset for a Macquarie MINI may require Macquarie, or another member of the Macquarie Group, to make a take-over offer in relation to the issuer of the Reference Asset for that Macquarie MINI under the Corporations Act (or any analogous legislation in any overseas jurisdiction).

Interest Rate means in respect of a Series, the interest rate per annum announced by Macquarie from time to time via the ASX company announcement platform and our website at www.macquarie.com.au/minis before the open of trading on the ASX each day.

Issue Date means for each Series of Macquarie MINIs the date specified as the Issue Date in the relevant SPDS.

Issuer Call Event means when Macquarie issues an Issuer Call Notice.

Issuer Call Notice means a notice issued by Macquarie under clause 3.1 of the Terms & Conditions.

Issuer Call Date means the date specified in the Issuer Call Notice.

Issuer Sponsored Holding has the meaning set out in the ASX Settlement Rules.

Issuer Sponsored Sub-register has the meaning set out in the ASX Settlement Rules.

Listed Entity means the legal entity that issued a Reference Asset (or any part thereof) and any trust in which the Reference Asset (or any part thereof) is an interest.

Listing Date means, in relation to a Series of Macquarie MINIs, the date on which such Series commences quotation on the ASX.

Macquarie means Macquarie Bank Limited (ABN 46 008 583 542 and AFSL 237502).

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Macquarie Close Out Price means the average price (or level, in the case of an Index Future Contract) determined by Macquarie (acting reasonably) at which, following a Stop Loss Event, it:

(a) unwinds the relevant Hedge Position; or,

(b) if no Hedge Position is held, would have been able to unwind a notional Hedge Position,

using its best efforts on or prior to 1pm on the relevant Valuation Date, except if sub-paragraph (b) of the definition of Valuation Date applies, in which case the Macquarie Close Out Price of the relevant Hedge Position will be the price or level (as the context requires) reasonably determined by Macquarie as its good faith estimate of the average price or level that would have prevailed if the Market Disruption Event had not occurred on that tenth Potential Valuation Date.

Macquarie Close Out Date means the Trading Day following the Stop Loss Event Date unless the applicable Valuation Date is postponed in accordance with these Terms & Conditions in which case the Macquarie Close Out Date will be the date upon which the Macquarie Close Out Price is determined.

Macquarie Entity means Macquarie and its related bodies corporate, or any one or more of them as the case may require.

Macquarie Group means Macquarie, each Macquarie Entity and their officers, directors, employees, agents or any one of them as the case may require.

Macquarie MINI or MINI means a warrant issued by Macquarie pursuant to the Terms & Conditions, as described in this PDS, and any relevant SPDS.

Market Disruption Event means any event beyond the reasonable control of Macquarie that disrupts or impairs the ability of Macquarie to effect transactions in, or obtain market values for:

(a) in the case of a Share MINI:

(i) the Reference Share; or

(ii) futures or options contracts relating to the Reference Share (as applicable);

(b) in the case of an Index MINI:

(i) the Reference Index (including where the Index Sponsor fails to calculate and announce a relevant Index):

(ii) securities comprising 20% or more of the Reference Index; or

(iii) futures or options contracts relating to the Reference Index or one or more securities comprising 20% or more of the Reference Index,

on the ASX or any Relevant Exchange including, without limitation:

(i) any suspension of, or limitation imposed on, trading by the ASX, Macquarie’s internal restrictions or policies or the Relevant Exchange;

(ii) the closure of the ASX or the Relevant Exchange prior to its Scheduled Closing Time; or

(iii) the failure of the ASX or the Relevant Exchange to open on a day on which it or they are scheduled to be open for trading for its or their respective regular trading sessions,

which, in any case, Macquarie acting reasonably determines to be material.

MINI Long means a Macquarie MINI specified in the SPDS for that Macquarie MINI as a MINI Long.

MINI Short means a Macquarie MINI specified in the SPDS for that Macquarie MINI as a MINI Short.

Nationalisation occurs where it is announced that any Reference Asset for a Macquarie MINI, or if applicable, all or substantially all of the assets of the relevant Listed Entity are, or will be, nationalised, expropriated or are otherwise required to be transferred to any governmental agency, authority, entity or instrumentality thereof.

Notional Dividend Amount means, an amount, as determined by Macquarie, equal to the sum of Dividends in respect of the Reference Asset which have an Ex-Date occurring during the Observation Period, without regard to any withholding tax or other deductions multiplied by the prevailing dividend percentage payable under market standard stock borrow agreements, as determined by Macquarie acting reasonably.

Observation Period means each day from (and including) the Issue Date, to (and excluding) the earlier of the next Trading Day or Valuation Date (as the case may be) and thereafter each day from (and including) the Trading Day, to (and excluding) the earlier of the next Trading Day or the Valuation Date (as the case may be).

Office means the principal office of Macquarie in Sydney, as specified in the Directory.

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Payment Date means, in respect of a Macquarie MINI, a day which is no later than ten (10) Business Days following the Valuation Date of a Macquarie MINI.

Potential Adjustment Event means, in respect of a Reference Asset or Index Futures Contract for a Macquarie MINI, the occurrence of any one or more of the following:

(a) a Special Dividend;

(b) a subdivision, consolidation or reclassification of a Reference Share;

(c) a distribution, issue or dividend (whether by way of bonus, capitalisation or similar issue) to holders of the Reference Share of:

(i) Securities;

(ii) other share capital granting the right to payment of dividends and/or the proceeds of liquidation of the relevant Listed Entity (or any other entity);

(iii) share capital or other Securities of another issuer as a result of a spin-off, demerger or other similar transaction, or

(iv) any other type of Securities, rights or warrants or other assets or property;

(d) a call by the Listed Entity in relation to any Reference Share that is not fully paid;

(e) in respect of the relevant Listed Entity, any event that results in any shareholder rights being distributed or becoming separated from shares of common stock or other shares of the capital stock of the Listed Entity pursuant to a shareholder rights plan or arrangement directed against hostile takeovers that provides for a distribution of preferred stock, warrants, debt instruments or stock rights or other Securities;

(f) a redemption, cancellation or re-purchase by the relevant Listed Entity or any other party of Securities, whether out of profits or capital and whether the consideration for such redemption, cancellation or re-purchase is cash, Securities or otherwise;

(g) a tender offer, exchange offer or a takeover bid for the Reference Share or any analogous offer;

(h) a consolidation, amalgamation, de-merger, merger, scheme of arrangement or binding share exchange of the relevant Listed Entity with or into another entity or person;

(i) it is announced that the Reference Share will be de-listed from the Relevant Exchange on which such Reference Share (as the case may be) was listed and is re-listed on another exchange acceptable to Macquarie;

(j) any amendment or change to the terms, or cancellation, of a Potential Adjustment Event previously announced in relation to a Reference Asset;

(k) if, in respect of an Macquarie Index MINI:

(i) the Index or Index Futures Contract is not, or will not be, calculated and announced by the Index Sponsor or Index Future Sponsor;

(ii) the Index or Index Futures Contract is, or will be, replaced by a successor index;

(iii) the Index or Index Futures Contract expires;

(iv) the Index Sponsor or Index Futures Contract Sponsor announces that it will make a material change in the formula for, or the method of calculating, that Index or Index Futures Contract or in any way materially modifies that Index or Index Futures Contract (other than a modification prescribed in that formula or method to maintain that Index in the event of changes in constituent stock and capitalisation and other routine events); and

(l) any other event which Macquarie reasonably determines, with the consent of the ASX, may have a dilutive or concentrative effect on the theoretical value of a Reference Asset or Index Futures Contract or a Macquarie MINI.

Potential Valuation Date means a Scheduled Exchange Business Day.

Product Disclosure Statement or PDS means the Product Disclosure Statement issued by Macquarie and dated 11 July 2011, as may be amended or supplemented from time to time, including by way of any SPDS.

Record Date means, the date and time at which entitlements are determined for:

(a) in respect of a Macquarie MINI, Holders registered at that time; and

(b) in respect of a Reference Asset, holders of securities or other assets or property equivalent to the Reference Asset registered at that time.

Reference Asset means the assets specified in the relevant SPDS as being applicable to that Series of Macquarie MINIs:

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(a) in respect of a Share MINI, the Reference Share; and

(b) in respect of an Index MINI, the Reference Index.

Reference Asset Value means:

(a) in respect of a Reference Asset which is not an Index, the most recently traded price on the Relevant Exchange, during normal open market trading sessions; and

(b) in respect of a Reference Asset which is an Index, the most recently traded value of the relevant Index Futures Contract during the hours which the Macquarie Index MINI is available for trading on the ASX as reasonably determined by Macquarie.

Reference Index means the Index to which that Macquarie MINI may relate from time to time.

Reference Share means, the Security to which that Macquarie MINI may relate from time to time.

Register means the register of Holders kept and maintained by or on behalf of Macquarie in respect of a Macquarie MINIs in accordance with the Terms & Conditions.

Registrar means, in respect of a Series, the party named in the SPDS for that Series (or as otherwise notified by Macquarie from time to time).

Relevant Exchange means, in respect of a Reference Asset, the principal exchange on which:

(a) the Reference Asset, or, in the case of a Reference Asset which is an Index, securities comprising 20% or more of the Index; or

(b) futures contracts relating to any of the foregoing,

(as the case may be and as the context may require) is or are primarily traded, as reasonably determined by Macquarie.

Rollover Date means the date upon which a current Index Futures Contract is rolled to the next occurring futures contract with the same tenor.

Schedule means a schedule of the Terms & Conditions.

Scheduled Closing Time means the usual or customary Closing Time of the ASX or the Relevant Exchange (as the context may require) on a day on which such exchange is scheduled to be open for trading for its regular trading sessions.

Scheduled Exchange Business Day means a day which is:

(a) a Business Day; and

(b) a day on which the Relevant Exchange is scheduled to be open for trading for its respective regular trading session(s).

Security or Securities means (whether or not fully or partially paid):

(a) shares, units or debentures; and

(b) any other financial product, unit or security or combination thereof acceptable to Macquarie,

including, for the avoidance of doubt, any fraction thereof.

Series means Macquarie MINIs issued with identical Terms & Conditions (e.g, Reference Asset, Strike Price and Listing Date) under this PDS and any relevant SPDS.

Settlement System Business Day means any day which is a Business Day and a day on which the ASX Settlement is able to execute settlement instructions (as reasonably determined by Macquarie).

Share MINI means a MINI Long or a MINI Short with a Reference Asset that is a Security traded on the ASX.

Special Dividend means any dividend, interest or other distribution of any kind whatsoever (whether in cash or property) that Macquarie reasonably determines to be in the nature of, or characterised as, a special dividend (or any other analogous term).

stock borrow or stock borrowing is explained in section 6.14.

Stop Loss Event means that, in respect of a Macquarie MINI, the Reference Asset Value of the relevant Reference Asset is:

(a) for a MINI Long, less than or equal to the Stop Loss Level for that Macquarie MINI; and

(b) for a Macquarie MINI Short, greater than or equal to the Stop Loss Level,

at any time the Macquarie MINI is available for trading on the ASX on any Trading Day.

Stop Loss Event Date means the date on which a Stop Loss Event occurs.

Stop Loss Level means, in relation to a Macquarie MINI:

(a) initially, the amount specified in the SPDS; and

(b) thereafter, each amount announced by Macquarie on each Stop Loss Reset Date,

as may be adjusted from time to time in accordance with the Terms & Conditions. The Stop Loss Level

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will be rounded at Macquarie’s discretion to 2 decimal places, with 0.005 being rounded upwards.

Stop Loss Reset Date means:

(a) the first day of each calendar month, provided that if such day is not a Business Day the next following Business Day or

(b) each Business Day, at the determination of Macquarie upon which the Stop Loss Level is reset by Macquarie acting in good faith.

Stop Loss Value means an amount in AUD calculated as the greater of:

(a) in respect of a MINI Long:

(i) (the Macquarie Close Out Price less the Strike Price on the Stop Loss Event Date) divided by the Conversion Factor; and

(ii) zero; and

(b) in respect of a MINI Short:

(i) (the Strike Price on the Stop Loss Event Date less the Macquarie Close Out Price) divided by the Conversion Factor); and

(ii) zero;

Strike Price means, in respect of a Macquarie MINI, initially the amount or value specified as such in the SPDS for that Macquarie MINI and thereafter the amount or value determined in accordance with clause 5, of the Terms & Conditions. The Strike Price will be rounded at Macquarie’s discretion to 4 decimal places with 0.00005 being rounded upwards.

Supplementary Product Disclosure Statement or SPDS means any supplementary product disclosure statement issued by Macquarie which amends or supplements the PDS.

Tax Act means:

(a) the Income Tax Assessment Act 1936 (Cth);

(b) the Income Tax Assessment Act 1997 (Cth); and

(c) Schedule 1 to the Taxation Administration Act 1953.

Terms & Conditions means the terms of issue of a Macquarie MINIs, as set out in Section 8 of this PDS, as may be amended or supplemented from time to time.

Trading Day means each day which is a Scheduled Exchange Business Day or would have been a Trading Day but for the occurrence of a Market Disruption Event.

Valuation Date means as applicable, the Exercise Date, Issuer Call Date, Macquarie Close Out Date or Early Termination Date of a Macquarie MINI, provided however that where a Market Disruption Event occurs on such date, Macquarie may:

(a) subject to paragraph (b), delay the Valuation Date to the next Potential Valuation Date on which there is no Market Disruption Event; or

(b) where there is a Market Disruption Event on each of the ten Potential Valuation Dates immediately following the first date which would have been the Valuation Date for the Macquarie MINI (but for the first occurrence of a Market Disruption Event), Macquarie may deem the tenth Potential Valuation Date to be the Valuation Date notwithstanding the occurrence of a Market Disruption Event on such date.

we, us, and our means Macquarie.

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Section 8

Terms and Conditions

In the event of any inconsistency between these Terms & Conditions and any part of the PDS these Terms & Conditions will prevail.

1. The Macquarie MINIs1.1 Grant of a Macquarie MINI

Macquarie will grant a Macquarie MINI, on and subject to these Terms & Conditions and any other terms set forth in the PDS or SPDS for that Macquarie MINI, to each person, whose name is entered in the Register as the Holder of that Macquarie MINI.

1.2 Nature of a Macquarie MINI

Subject to these Terms & Conditions, a Macquarie MINI is an agreement by Macquarie to:

(a) pay to the Holder, on exercise of that Macquarie MINI, the Cash Settlement Amount (if any) in accordance with clause 1.3; and

(b) set and adjust a Stop Loss Level and upon the occurrence of a Stop Loss Event pay to the Holder the Stop Loss Value (if any).

1.3 Exercise of a Macquarie MINI

(a) A Holder may, at any time prior to the Daily Cut-off Time on any Business Day prior to the occurrence of a Stop Loss Event or Extraordinary Event give an Exercise Notice to Macquarie in relation to some or all of the Holder’s Macquarie MINIs.

(b) If an Eligible Holder has delivered to Macquarie a valid Exercise Notice in respect of a Macquarie MINI in accordance with clause 1.3(a) and 1.4, a Macquarie MINI will terminate on the Valuation Date and Macquarie must pay to that Holder the Cash Settlement Amount on the Payment Date.

(c) An Exercise Notice given to the Issuer cannot be revoked. After delivery of the Exercise Notice the MINIs which are subject to such notice may not be transferred.

1.4 Exercise Notices

(a) An Exercise Notice does not become valid and effective unless:

(i) it has been duly completed;

(ii) the Exercise Notice is received by Macquarie by way of facsimile transmission or email transmission to the fax number or email

address specified on the Exercise Notice by the Daily Cut-off Time on a Business Day;

(iii) no Stop Loss Event or Extraordinary Event has occurred or is subsisting;

(iv) the person who gives the Exercise Notice is or becomes the Eligible Holder of the relevant Macquarie MINI.

(b) Any Exercise Notice given by a Holder in respect of a Macquarie MINI may not be revoked by a Holder unless otherwise agreed by Macquarie (such consent not to be unreasonably withheld, for example, where Macquarie would not incur any loss, cost or expense by agreeing to the revocation).

(c) Any Exercise Notice received by Macquarie after the Daily Cut-off Time on a Business Day will be deemed to be received before the Daily Cut-off Time on the next succeeding Business Day.

1.5 Satisfaction of obligations

A Macquarie MINI will terminate and the parties will have no further obligations to each other with respect to that Macquarie MINI on payment by Macquarie of the Cash Settlement Amount (if any) in respect of that Macquarie MINI under clause 1.3(b) (other than the obligations arising pursuant to clause 11.1).

1.6 No interest in Reference Asset or Accretions

The Holder acknowledges and agrees that a Macquarie MINI does not confer on a Holder any right or interest in respect of the Reference Asset or any Accretions to any Reference Asset.

2 Stop Loss Event2.1 Occurrence of a Stop Loss Event

Following the occurrence of a Stop Loss Event in relation to a Series of Macquarie MINIs (the “Affected Series”), Macquarie will:

(a) suspend trading on the ASX in the Affected Series until 2pm on the Macquarie Close Out Date;

(b) give notice of the occurrence of the Stop Loss Event to the Holders of the Affected Series;

(c) determine the applicable Macquarie Close Out Price; and

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(d) on recommencement of trading following the suspension of trading under clause 2.1(a) until the close of trading on the Trading Day following the Macquarie Close Out Date, buy Macquarie MINIs on the ASX for the Stop Loss Value.

2.2 Payment of Stop Loss Value

If a Holder fails to sell a Macquarie MINI in the Affected Series to Macquarie pursuant to clause 2.1(d), Macquarie will pay the Stop Loss Value for the Macquarie MINI to the Holder within 10 Business Days of the end of the trading period specified in sub-clause 2.1(d).

2.3 Stop Loss Events Prevails

In the event of the occurrence of a Stop Loss Event after an Issuer Call Event for an Affected Series but prior to the close of trading on the relevant Issuer Call Date, the provisions of this clause 2 will prevail over any provisions of these Terms & Conditions in respect of that Issuer Call Event.

2.4 Satisfaction of Obligations

A Macquarie MINI will terminate and the parties will have no further obligations to each other with respect to that Macquarie MINI on payment by Macquarie of the Stop Loss Value (if any) , other than the obligations arising under clause 11.1).

3 Issuer Call3.1 Occurrence of an Issuer Call Event

Macquarie may, by giving the Holder at least 30 day’s prior notice, give notice of an Issuer Call Event and issue an Issuer Call Notice nominating a day (the “Issuer Call Date”) on which Macquarie will terminate a Series of Macquarie MINIs.

3.2 Payment of Cash Settlement Amount following Issuer Call

Provided that no Stop Loss Event or Extraordinary Event occurs prior to the close of trading on the Issuer Call Date, a Holder on the Issuer Call Date will be entitled to receive the Cash Settlement Amount (if any) in respect of that Macquarie MINI on the Payment Date.

3.3 Satisfaction of obligations

A Macquarie MINI will terminate on the Issuer Call Date and the parties will have no further obligations to each other with respect to that Macquarie MINI on payment by Macquarie of the Cash Settlement Amount (if any) in respect of that Macquarie MINI under clause 3.2 (other than the obligations arising under clause 11.1).

4. Extraordinary Events4.1 Termination of Macquarie MINI on Extraordinary Event

(a) A Macquarie MINI will terminate on the day on which an Extraordinary Event is nominated by Macquarie (the “Early Termination Date”) (with the consent of the ASX) unless either:

(i) Macquarie, when nominating the Extraordinary Event, specifies a later date on which a Macquarie MINI will terminate as a result of the Extraordinary Event, in which case such later date will be the Early Termination Date; or

(ii) the nomination of the Extraordinary Event is subsequently withdrawn in accordance with clause 4.2.

(b) Where a Macquarie MINI terminates on an Early Termination Date pursuant to this clause 4.1, the Holder on the Early Termination Date will be entitled to receive the Cash Settlement Amount (if any) from Macquarie on the Payment Date.

4.2 Withdrawal of Nomination

Macquarie may, with the consent of the ASX, withdraw any event nominated as an Extraordinary Event at any time prior to a Macquarie MINI terminating under clause 4.

4.3 Notice of Nominations or Withdrawals

Where a nomination or withdrawal of a nomination of an Extraordinary Event is made under this clause 4, Macquarie will, as soon as reasonably practicable, notify Holders of that nomination or withdrawal (as the case may be) by:

(a) either:

(i) placing a notice in a major financial daily newspaper (if any) and a major daily newspaper in each State and Territory of

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Australia giving details of the nomination or withdrawal (as the case may be); or

(ii) giving notice in writing of the details of the nomination or withdrawal (as the case may be) to Holders of the affected Macquarie MINIs, and

(b) giving a copy of the text of that notice to ASX.

4.4 Termination on payment of Cash Settlement Amount

A Macquarie MINI will terminate and the parties will have no further obligations to each other with respect to that Macquarie MINI on payment by Macquarie of the Cash Settlement Amount (if any) in respect of that Macquarie MINI under clause 4.1(b) (other than the obligations arising under clause 11.1).

5. Record Dates, Potential Adjustment Events and other Adjustments to Strike Price and Stop Loss Level5.1 Record Dates

For each Macquarie MINI, Macquarie will fix Record Dates at the same times, or as near as practicable (after taking into account differences in the respective settlement systems used to settle trades in a Macquarie MINIs and any relevant Reference Assets), as any relevant Record Dates for any relevant Reference Asset.

5.2 Adjustment to Strike Price

The Holder agrees and acknowledges that the Strike Price will be adjusted by Macquarie on each day during the term of the Macquarie MINI in accordance with the following formula. The Strike Price on any day is equal to:

(a) the Strike Price on the previous day; plus

(b) the Daily Funding Costs for that day; minus

(c) in the case of a Share MINI the Notional Dividend Amount (if any) for that day, or in the case of an Index MINI the Index Roll Adjustment (if any) for that day.

Macquarie will, on each Trading Day prior to a Stop Loss Event Date, Issuer Call Date or Early Termination Date (relating to that Macquarie MINI) on which a Macquarie MINI remains admitted to trading status on the ASX, announce the Strike Price and Interest Rate applicable to that Macquarie MINI

prior to the commencement of trading on the ASX on that Trading Day.

5.3 Stop Loss Level

The Holder agrees and acknowledges that the Stop Loss Level for a Macquarie MINI will be adjusted by Macquarie:

(a) in relation to a Share MINI on any day on which there is a Notional Dividend Amount in relation to the Reference Asset for that Macquarie MINI;

(b) in relation to an Index MINI on any day on which there is a Futures Rollover in relation to the relevant Index Futures Contract for that Macquarie MINI; and

(c) on each Stop Loss Reset Date.

Macquarie will, on a Scheduled Trading Day on which there is a change to the Stop Loss Level, announce the revised Stop Loss Level applicable to that Macquarie MINI prior to the commencement of trading on the ASX on that Scheduled Exchange Business Day.

5.4 Potential Adjustment Events

(a) If a Potential Adjustment Event occurs, or is expected to occur, in relation to a Reference Asset, Macquarie may, unless clause 5.4(b) applies:

(i) adjust a Macquarie MINI in accordance with clause 5.4(c); and

(ii) determine the effective date of such adjustments.

(b) Where Macquarie determines (acting in a commercially reasonable manner) that:

(i) if a Macquarie MINI were to be adjusted in accordance with clause 5.4(c) in relation to the Potential Adjustment Event:

(1) Macquarie would not be able to continue to effectively manage its risk, on an on-going basis, of maintaining a Macquarie MINI on issue; or

(2) Macquarie would incur a material increase in costs in managing its risk, on an on-going basis, of maintaining a Macquarie MINI on issue (for example, in relation to establishing, holding and/or unwinding any of Macquarie’s Hedge Positions in respect of a Macquarie MINI); or

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(ii) it is not reasonably practicable to adjust a Macquarie MINI in relation to the Potential Adjustment Event in accordance with clause 5.4(c),

Macquarie may treat such Potential Adjustment Event as an Extraordinary Event and fix an Early Termination Date in respect of that Macquarie MINI pursuant to clause 4.

(c) If clause 5.4(b) does not apply, adjustments that may be made by Macquarie to a Macquarie MINI include, with the consent of the ASX, any one or more of the following:

(i) any adjustments consistent with the methodology employed by the ASX for adjustments to exchange-traded options in respect of events similar to the applicable Potential Adjustment Event; or

(ii) as Macquarie determines (acting in a commercially reasonable manner) having regard to the relevant Potential Adjustment Event and its effect on a Macquarie MINI, provided however that any such adjustments are made for the purposes of preserving (to the extent reasonably practicable) the economic equivalence of the parties’ positions immediately prior to the adjustments being made in relation to the Potential Adjustment Event (apart from small differences which may arise due to rounding).

(d) If Macquarie makes an adjustment to a Macquarie MINI pursuant to this clause 5.4, Macquarie will give the Holder of such Macquarie MINI and the ASX written notice of that adjustment by way of an ASX market announcement as soon as reasonably practicable following the determination by Macquarie of the adjustments to be made to a Macquarie MINI.

5.5 EligibilityAny adjustment to a Macquarie MINI under clause 5.4 will be made on the Record Date for the Potential Adjustment Event so that a person who becomes registered as the Holder the Macquarie MINI after the Record Date has no entitlement whatsoever to any amount or benefit in respect of that Potential Adjustment Event.

5.6 Reconstruction

Macquarie may reconstruct a Series of Share MINIs either:

(a) in the event of a consolidation or subdivision of the Reference Share, or of a Listed Entity declaring a bonus issue to holders of Reference Shares; or

(b) in the event of any other corporate action which results in the holder of a Reference Share becoming the holder of one or more Securities or fractions thereof (whether of a different kind or otherwise), with the consent of ASX; or

(c) with the approval of the Holders of the relevant Series by resolution in accordance with Schedule 2;

by

(d) consolidating and dividing the Share MINIs in the Series into a lesser number of Share MINIs (including into different Series), and amending the Terms & Conditions of each Share MINI; or

(e) subdividing all of the Share MINIs in the Series into a greater number of Share MINIs (including into different Series), and amending the Terms & Conditions corresponding to each Share MINI,

so that the proportion which the number of reconstructed Share MINIs bears to the original number of Share MINIs is directly inverse to the proportion which the amount of the revised Strike Price bears to the Strike Price before the reconstruction.

5.7 Reconstruction – whole numbers

If subsequent to the reconstruction of a Series of Share MINIs in accordance with clause 5.6 Macquarie determines that a Holder would otherwise be entitled to a number of Share MINIs including a fraction of an Share MINI, the Holder’s entitlement to such Share MINIs will be rounded down to the nearest whole number.

6. Currency Conversion6.1 Currency Conversion

Where an amount or value is to be converted from one currency to another currency under these Terms & Conditions, Macquarie will determine the exchange rate at which such conversion will occur having regard to:

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(a) such exchange rates as Macquarie acting reasonably is able to, or would be able to, transact at, or effect, the relevant currency conversion required under these Terms & Conditions; and

(b) market exchange rates prevailing at the relevant time.

7. Register of Holders, Certificates and Transfers7.1 Register

Macquarie must keep and maintain, or cause the Registrar to keep and maintain, a Register of Holders in accordance with the requirements of the ASX Operating Rules and the ASX Settlement Operating Rules. The Register must, except when duly closed, be open at all reasonable times during business hours on each Business Day for inspection by any Holder or any person authorised in writing by a Holder.

7.2 No Certificates for Macquarie MINIs

(a) Macquarie need not issue a certificate evidencing the title of a Holder to a Macquarie MINI but must comply with the Corporations Act, the ASX Operating Rules and the ASX Settlement Operating Rules concerning the issue of notices relating to Macquarie MINIs.

(b) Each Holder may receive a holding statement concerning Macquarie MINIs held by the Holder from time to time in accordance with clause 7.2(a). Holding statements will contain any information required by the Corporations Act, the ASX Operating Rules and the ASX Settlement Operating Rules. A holding statement is not an item of separate property and is not conclusive evidence of a holding of Macquarie MINIs.

7.3 Transfer

(a) A Macquarie MINI may be transferred if the transfer is in the manner prescribed by, or under, the Corporations Act, the ASX Operating Rules and the ASX Settlement Operating Rules (as applicable), or if permitted, in accordance with the provisions in Schedule 1.

(b) Macquarie:

(i) must deal with, certify and register a transfer of a Macquarie MINI which complies with clause 7.3(a) and AML/CTF Laws in

accordance with the ASX Operating Rules and the ASX Settlement Operating Rules; and

(ii) may refuse to register such a transfer where to do so is permitted by, and in accordance with any procedures prescribed by, the Corporations Act, the ASX Operating Rules and the ASX Settlement Operating Rules or AML/CTF Laws.

7.4 Notice of Trusts

Except as required by law, no notice of any trust (express, implied, resulting or constructive) will be entered in the Register. Except as otherwise provided in these Terms & Conditions, or as ordered by a court of competent jurisdiction or as required by law, Macquarie is not bound to take notice of any trust or equity affecting the ownership of a Macquarie MINI or the rights incidental to a Macquarie MINI.

7.5 Situs

Property in Macquarie MINIs is, for all purposes, situated at the place where the Register is situated and not elsewhere.

7.6 Evidence

Except as otherwise provided in these Terms & Conditions, Macquarie must recognise the Holder as the holder and absolute owner of a Macquarie MINI and all persons may act accordingly.

7.7 CHESS

When (and if) Macquarie MINIs become “Approved Financial Products”, as that term is defined in the ASX Settlement Operating Rules, holdings of Macquarie MINIs will be registered on CHESS or the Issuer Sponsored Sub-register. Macquarie MINIs held by a Holder that is either sponsored by, or is, a participant in CHESS may be registered on the CHESS Sub-register. All other holdings of Macquarie MINIs will be registered on the Issuer Sponsored Sub-register.

7.8 Correctness of Register

(a) Unless Macquarie has reasonable grounds to believe that the Register or such advice is not correct:

(i) Macquarie is entitled to assume that the Register is correct and need not enquire into its correctness; and


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(ii) any advice given to Macquarie by the Registrar as to the contents of, or matters relating to, the Register will be prima facie evidence of the contents of, or other matters relating to, the Register.

(b) Macquarie is not liable for any mistake in, or omission from, the Register except to the extent that the mistake or omission is attributable to its own negligence or fraud.

8. Notices8.1 Sending notices

(a) Subject to clause 8.2:

(i) all Exercise Notices must be given to Macquarie in accordance with clause 1.4; and

(ii) all other notices and communications required under these Terms & Conditions to be in writing must be sent to the recipient by hand, prepaid post (airmail if outside Australia) or Electronic Communication.

(b) All notices and other communications are to be sent to the addresses of the respective parties as set out in:

(i) in the case of a Holder, the Register; or

(ii) in the case of Macquarie, the Directory,

or as otherwise notified by one party to the other in writing from time to time.

(c) A communication sent by Electronic Communication must state the first and last name of the sender and the Electronic Communication is taken to be signed by the named sender.

8.2 Effectiveness of Notices

A notice or other communication given by

(a) Macquarie to a Holder is deemed to be duly received by the Holder as follows:

(i) if sent by hand, when left at the address of the recipient;

(ii) if sent by prepaid post, five days after the date of posting; or

(iii) if sent by Electronic Communication, either:

(1) on receipt by the sender of an acknowledgement or transmission report generated by the device from

which the Electronic Communication was sent indicating that the Electronic Communication was sent in its entirety to the recipient; or

(2) four hours after the time sent (as recorded on the device from which the sender sent the Electronic Communication) unless the sender receives an automated message that the Electronic Communication has not been delivered,

whichever happens first; and

(b) the Holder to Macquarie is deemed to be duly received by Macquarie when it is actually received by Macquarie.

8.3 Posting notices on Macquarie’s website

Macquarie may also give a communication to a Holder by making it available at Macquarie’s website (as specified in the Directory) for the Holder’s retrieval by Electronic Communication, on the condition that Macquarie notify the Holder that the communication is available for the Holder’s retrieval. A communication Macquarie makes available for a Holder’s retrieval will be deemed to be duly received by the Holder when communication Macquarie sends the Holder to notify the Holder of the availability of the communication for retrieval is deemed to be received under clause 8.2(a) of these Terms & Conditions.

8.4 Joint Holders

If more than one person is entered in the Register as the Holder of any Macquarie MINI, a notice given by Macquarie to the first-named joint Holder in the Register is effective as notice to all of those persons.

9. Anti-Money Laundering – Counter-Terrorist FinancingEach Holder:

(a) undertakes:

(i) that it will not knowingly do anything to put Macquarie or any other Macquarie Entity in breach of any AML/CTF Laws;

(ii) to notify Macquarie if it is, or becomes aware of anything that would put either Macquarie, any other Macquarie Entity or the Holder in breach of AML/CTF Laws; and

(iii) to, if requested by Macquarie, provide additional information and assistance and

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comply with all reasonable requests to facilitate Macquarie’s compliance with AML/CTF Laws in Australia or equivalent laws in any overseas jurisdiction.

(b) represents that it is not aware, and has no reason to suspect that:

(i) the money used to fund an investment in any Macquarie MINI is derived from, or related to, Illegal Activities; and

(ii) proceeds of an investment made in any Macquarie MINI will fund Illegal Activities;

(c) consents to each Macquarie Entity disclosing, in connection with, or as required by, AML/CTF Laws, any of the Holder’s Personal Information (as defined in the Privacy Act 1099 (Cth)) that that Macquarie Entity holds; and

(d) acknowledges and agrees:

(i) that Macquarie, and other members of the Macquarie Group, are subject to AML/CTF Laws;

(ii) that a Macquarie Entity may, in connection with its obligations under AML/CTF Laws, freeze, block or take any other action in relation to, one or more Macquarie MINIs or any associated account where they are used in connection with Illegal Activities or suspected Illegal Activities and that if this occurs no Macquarie Entity will be liable to the Holder for any consequences or losses whatsoever arising as a result thereof;

(iii) freezing or blocking or the taking of any other action can arise as a result of the monitoring that is required by AML/CTF Laws; and

(iv) to indemnify each Macquarie Entity if such party is found liable to a third party in connection with the freezing or blocking of, or the taking of any other action in relation to, any Macquarie MINIs or any associated account in connection with its obligations under AML/CTF Laws; and

(v) each Macquarie Entity retains the right not to provide services and/or issue Macquarie MINIs to any person that that Macquarie Entity decides, in that party’s discretion, that it does not wish to supply.

10. PrivacyEach Holder consents to Macquarie giving, from time to time, to:

(a) any other Macquarie Entity;

(b) any other third parties; or

(c) a person notified to Macquarie in writing by the Holder as its representative for the purposes of any Macquarie MINI,

any information in Macquarie’s possession about the Holder, these Terms & Conditions or any matter contemplated by these Terms & Conditions that such parties may request from time to time provided that, in the case of the persons referred to in paragraphs (a) and (b) above, the giving of such information to such parties must only occur to the extent that:

(1) it is required or permitted by law, or requested by any governmental or judicial body;

(2) the giving of such information is considered by Macquarie to be reasonably necessary or desirable in connection with either:

(i) the issuing, lapsing, termination or administration of a Macquarie MINIs;

(ii) effecting transactions in connection with the Terms & Conditions; or

(iii) Macquarie’s internal risk management requirements, procedures and policies,

and the recipient of such information has agreed to maintain the confidentiality of such information on terms acceptable to Macquarie (acting in a commercially reasonable manner); and

(3) it relates to a proposal by any person to acquire an interest in Macquarie’s business.

Information may be given in electronic, paper or spoken form. Macquarie is not in any way liable to a Holder, and each Holder releases Macquarie, Macquarie’s directors and employees from any liability, for the unauthorised accessing or release of any such information by such parties (except to the extent, and only to the extent, such unauthorised accessing or release arises from Macquarie’s negligence or fraud).


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11. Miscellaneous11.1 Failure of Macquarie to pay

If Macquarie fails to pay any amount when due to a Holder, interest accrues on that amount at the Default Rate calculated on a daily basis from (and including) the day on which such payment was due to (and excluding) the date of payment.

11.2 Changes to the Terms & Conditions

Macquarie may from time to time, by notice sent to the Holder, make any Change to these Terms & Conditions:

(a) where the terms of that Change are approved by a resolution of the Holders passed in accordance with the provisions of Schedule 2; or

(b) with the consent of the ASX, where:

(i) the Change is necessary in the reasonable opinion of Macquarie to comply with any statutory or other requirements of law or any requirement of ASX;

(ii) the Change is to rectify any defect, manifest error or ambiguity in these Terms & Conditions where the amendment does not materially prejudice the interests of Holders;

(iii) the Change permits the transfer of a Macquarie MINI by a method other than as set out in these Terms & Conditions;

(iv) the Change is made in connection with an adjustment (e.g, under clause 5 of these Terms & Conditions) or an Extraordinary Event; or

(v) in the reasonable opinion of Macquarie, the Change does not materially prejudice the interests of Holders.

11.3 Notifications to the ASX

Macquarie must, if required by the ASX Operating Rules, notify ASX of any Change to these Terms & Conditions made under clause 11.2.

11.4 No requisition

Nothing in these Terms & Conditions authorises a Holder (alone or together with other Holders) to requisition the consideration of any resolution.

11.5 Telephone recording

Each party agrees to:

(a) the other party recording any telephone conversations concerning a Macquarie MINI or any proposed investment in a Macquarie MINI;

(b) the retention of any recording so made;

(c) the use of any recording so made as evidence of the content of the conversation.

Each party further acknowledges and agrees that the other party is not obliged to maintain a copy of such recordings or transcripts and may from time to time destroy copies of any recordings so made in accordance with its internal policies and guidelines.

11.6 Directions and Discretions

A Holder is not entitled to give any direction to Macquarie concerning the exercise by Macquarie of any discretion relating to a Macquarie MINI or any other discretion conferred on Macquarie by these Terms & Conditions; provided however that any discretion conferred on Macquarie pursuant to the Terms & Conditions must be exercised in a commercially reasonable manner.

Each Holder hereby acknowledges that the requirement to act in a commercially reasonably manner does not however require Macquarie to always act in the best interests of Holders.

11.7 Buy Back and Cancellation

Macquarie (or its nominee) may buy one or more Macquarie MINIs that have been issued and cancel or resell those Macquarie MINIs. Where Macquarie cancels a Macquarie MINI, it will do so by recording such cancellation in the Register.

11.8 Copy of Terms & Conditions Available

Macquarie must keep available for inspection at the Office a copy of these Terms & Conditions (incorporating any Changes) and Holders and members of the public have the same right to inspect these Terms & Conditions as they have to inspect the Register.

11.9 Joint Holders and Joint Tenancy

There must not be more than three Holders of a Macquarie MINI except in the case of the legal representatives of a deceased Holder. Where there are joint holders of a Macquarie MINI:

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(a) all notices, payments and other correspondence to joint Holders may be directed, given or made to the first-named joint Holder in the Register; and

(b) if a joint Holders dies, the survivor joint Holders will be the only persons recognised by Macquarie as having any title or interest in a Macquarie MINI.

11.10 Amounts donated to charity

Where at any time a Holder is entitled to receive a payment under these Terms & Conditions in respect of a particular Series and the aggregate amount of that payment is less than AUD5.00, Macquarie may, instead of paying such amount to the Holder, donate such monies to a charity of Macquarie’s choice.

11.11 Unclaimed monies

Any payments made to Holders but remaining unclaimed may be dealt with by Macquarie in accordance with laws applicable to unclaimed monies.

11.12 Information

A Holder will provide information reasonably requested by Macquarie for the purposes of:

(a) the issuing, lapsing, termination or administration of a Macquarie MINI;

(b) effecting transactions in connection with the Terms & Conditions; or

(c) where such information is required in connection with Macquarie’s compliance with any applicable law.

11.13 No Merger

Unless expressly provided in these Terms & Conditions, no right of a party merges in, adversely affects or is adversely affected by any other right, judgment or remedy which a party (or anyone claiming through it) may have or obtain.

11.14 Waiver

Any delay, relaxation or indulgence on the part of a party in exercising any power or right conferred on such party by these Terms & Conditions does not operate as a waiver of that power or right nor does any single exercise of any power or right preclude any other or further exercise of it or the exercise of any other power or right under these Terms & Conditions.

11.15 Reliance on documents and experts

(a) Macquarie may rely on:

(i) any document or Email (including any facsimile transmission, telegram or telex); and

(ii) advice, information and statements of the Registrar or other persons employed or retained by it,

each a “Communication” unless it has reasonable grounds to believe that such Communication is not genuine or correct and will not be liable for any act or omission undertaken in reliance on that Communication.

(b) Where Macquarie considers that it requires any advice, information or statement from any of the persons referred to in paragraph (a) of this clause 11.15, for the purpose of exercising or performing its powers and obligations under these Terms & Conditions, Macquarie will have no liability in connection with any reasonable delay in the exercise or performance of the relevant powers or duties pending receipt of the relevant advice, information or statements.

11.16 Entire Agreement

Each party acknowledges and agrees that, unless otherwise agreed in writing, these Terms & Conditions contain all the terms on which Macquarie MINIs are or will be provided.

11.17 Severability

(a) Any part of these Terms & Conditions which is illegal, void or unenforceable will be:

(i) to the extent applicable, read down to the extent to which such provision is reasonably necessary to protect Macquarie’s legitimate interests; or

(ii) where such provision cannot be read down in such manner, ineffective to the extent only of that illegality, voidness or unenforceability, without invalidating any other term, provision of part of these Terms & Conditions.

(b) If any condition, clause, provision or term (“Condition”) of these Terms & Conditions or the Glossary contains within it any sub-conditions, sub-clauses, sub-provisions or sub-terms (“Sub-Conditions”), each of those Sub-Conditions and any combination of any Sub-Conditions is a separate Condition and is to be read as if it was a separately expressed Condition.


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11.18 Governing law and jurisdiction

These Terms & Conditions are governed by and are to be construed in accordance with the laws of New South Wales and the parties submit to the non-exclusive jurisdiction of the courts of New South Wales and any court hearing appeals from those courts.

12. Interpretation12.1 Definitions

Capitalised terms used in these Terms & Conditions will have the meaning set out in the Glossary.

12.2 General

In the PDS any SPDS and these Terms & Conditions, unless the context otherwise requires:

(a) a reference to any legislation or legislative provision includes any statutory modification or re-enactment thereof, or legislative provision substituted therefore, and any subordinate legislation issued under, that legislation or legislative provision;

(b) the singular includes the plural and vice versa;

(c) a reference to an individual or person includes a corporation, partnership, joint venture, association, authority, trust, government and governmental authority and vice versa;

(d) a reference to a gender includes all genders;

(e) a reference to a clause or Schedule is to a clause or schedule of, or to, these Terms & Conditions;

(f) a reference to any agreement or document (including, without limitation, these Terms & Conditions, the ASX Operating Rules and the ASX Settlement Operating Rules) is to that agreement or document (and, where applicable, any of its provisions) as amended, novated, supplemented or replaced from time to time;

(g) a reference to “dollars”, “cents” and “$” is a reference to Australian currency unless expressly stated otherwise;

(h) where an expression is defined, another part of speech or grammatical form of that expression has a corresponding meaning;

(i) a reference to a date or time is to that date or time in Sydney, Australia, unless expressly stated otherwise;

(j) expressions not otherwise defined in these Terms & Conditions which are defined in the Corporations Act have the meaning given to them in the Corporations Act; and

(k) expressions not otherwise defined in these Terms & Conditions or the Corporations Act 2001 which are defined in the ASX Operating Rules or the ASX Settlement Operating Rules have the meaning given to them in the ASX Operating Rules or ASX Settlement Operating Rules as the case may be.

12.3 General

In the PDS any SPDS and these Terms & Conditions, headings are for convenience only and do not affect interpretation.

12.4 ASX Operating Rules and ASX Settlement Operating Rules

These Terms & Conditions are subject, to the extent that they apply to Macquarie MINIs, to any contrary requirement from time to time of the Corporations Act, the ASX Operating Rules or the ASX Settlement Operating Rules, unless ASIC, the ASX or ASX Settlement (as applicable) gives or has given a waiver of any or all of those rules. Where a provision of the Corporations Act, the ASX Operating Rules or ASX Settlement Rules as they apply (with waivers, notices, approvals and consents from ASX, ASX Settlement Operating or ASIC) to Macquarie MINIs is inconsistent with a provision of these Terms & Conditions, then the provision of these Terms & Conditions will be interpreted, or will be amended, so as to be consistent and to permit compliance with the relevant provision of the Corporations Act, the ASX Operating Rules or ASX Settlement Operating Rules, so far as is lawful and so far as does not materially prejudice the interests of Holders.

12.5 Series of Macquarie MINIs

These Terms & Conditions apply separately to each Series and are to be construed accordingly.

12.6 Calculations and rounding

In these Terms & Conditions:

(a) all calculations will be done to not less than two decimal places; and

(b) all amounts payable to a Holder in relation to a Series held by that Holder will be aggregated and that aggregate will be rounded to the nearest whole cent.

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12.7 GST

If GST is payable by Macquarie in relation to any supply made to a Holder under or in connection with these Terms and Conditions or the terms of the PDS or SPDS for a Macquarie MINI, the consideration provided for that supply (other than under this clause) shall be increased by an additional amount equal to the GST payable on the supply. The additional amount must be paid by the Holder, and Macquarie will provide a tax invoice, at the same time as the other consideration for that supply is to be provided. Terms used in this clause have the meanings in the GST Act.

Schedule 1Transfer of Macquarie MINIs1. No fee will be charged for the registration of a

transfer.

2. A transfer must be in accordance with the Corporations Act, the ASX Operating Rules and the ASX Settlement Operating Rules.

3. The transferor of a Macquarie MINI is regarded as remaining the owner of a Macquarie MINI the subject of the instrument of transfer until the name of the transferee is entered in the Register in respect of that Macquarie MINI.

4. ON REGISTRATION OF THE TRANSFER OF A MACQUARIE MINI, THE TRANSFEREE WILL BE RECOGNISED AS ENTITLED TO THAT MACQUARIE MINI FREE FROM ANY EQUITY, SET OFF OR CROSS-CLAIM OF MACQUARIE AGAINST THE TRANSFEROR.

Schedule 2Resolution of HoldersA resolution of the Holders of a Series is duly passed if and only if:

1. Macquarie dispatches by notice to every Holder in the Series affected by the proposed Change:

(i) a document setting out the terms of the proposed Change;

(ii) a ballot paper enabling the Holder to vote either in favour of or against the Change either by way of a postal ballot or at a meeting of Holders (at the discretion of Macquarie);

(iii) a document setting out the reasons for and any advantages or disadvantages of the Change; and

(iv) a document summarising the provisions of this Schedule 2;

2. Macquarie retains all ballot papers which are returned to it on the voting date or within the voting period (which must, in any event, be not less than fifteen (15) Business Days after the date of dispatch of the last of the notices referred to in paragraph 1 of this Schedule 2);

3. Macquarie’s auditor (after consultation with Macquarie’s solicitors, if desired by either the auditor or Macquarie) determines the validity of all ballot papers returned on the voting date or during the voting period;

4. Macquarie’s auditor adds together all of the votes cast on valid ballot papers during the voting period (calculated on the basis of one vote for each Macquarie MINI held by the person casting that vote) in favour of the Change and all of the votes cast on valid ballot papers during the voting period (calculated on the same basis) against the Change;

5. the number of votes validly cast in favour of the Change (as determined by the previous paragraph) is not less than three times greater than the number of votes validly cast against the Change (as so determined); and

6. if Macquarie or a person associated with Macquarie (within the meaning of Part 1.2 Division 2 of the Corporations Act 2001 (Cth) (other than section 13 and 14)) returns a ballot paper, it is to be treated as not being valid unless the person holds the relevant Macquarie MINI as trustee or nominee for another person that is not so associated with Macquarie.


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Issuer

Macquarie Bank Limited ABN 46 008 583 542 and AFSL 237 502

�No.1�Martin�Place�sydney�NsW�2000�Australia

� 1800�087�110

� [email protected]

� macquarie.com.au/minis

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Computershare Investor Services Pty Limited

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� 1300�850�505

� www-au.computershare.com

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� 1800�087�110