EXCHANGE TRADED NOTES by gyvwpsjkko

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									EXCHANGE TRADED NOTES
          OVERVIEW OF RMB’s EXCHANGE TRADED NOTES



          WHAT IS AN RMB ETN?     RMB ETNs have been introduced to open up the listed product universe to investors –
                                  offering them easy access to a wide range of assets that were previously hard to reach.

                                  When an investor buys an RMB ETN, FirstRand Bank Limited commits to redeem the
                                  value of the note upon maturity. RMB ETNs can either be held to maturity or sold on the
                                  secondary market via the JSE.

                                  RMB ETNs are traded on the JSE exactly like a share. Like Exchange Traded Funds (ETFs),
                                  RMB ETNs closely track the return of a benchmark index or strategy. But unlike ETFs,
                                  the underlying pool of assets is owned by FirstRand, and not held in a segregated fund
                                  or Collective Investment Scheme. When buying RMB ETNs, an investor does not buy a
                                  stake in the underlying assets but rather a commitment from FirstRand Bank Limited
                                  that upon maturity the cash value of the ETN will be paid out to the holder of the ETNs.




          BENEFITS AND RISKS OF   BENEFITS OF TRADING AND INVESTING IN RMB ETNs INCLUDE:
                                  •	     Access to new markets and strategies, allowing investors to diversify their
          AN ETN                         portfolios
                                  •	     Cost-efficiency
                                  •	     Liquidity can be bought or sold at any point in time during normal JSE trading
                                         hours - RMB is the market maker of the RMB ETNs
                                  •	     Exposure to a portfolio of products through a single investment
                                  •	     Convenience of trading a share - without the complications of trading futures or
                                         physical commodities
                                  •	     Transparent exposure to an index that is calculated and published daily

                                  RISKS OF TRADING AND INVESTING IN RMB ETNs INCLUDE:
                                  •	     Investing in RMB ETNs may result in a loss for the investor
                                  •	     RMB ETNs are exposed to the credit risk of FirstRand Bank Limited
                                  •	     RMB	ETNs	could	encompass	potentially	unprofitable	trading	strategies	

                                  The	risks	identified	above	are	not	exhaustive.		You	should	also	review	carefully	the	
                                  related “Risk Factors” section of the programme of the product, available on the RMB
                                  website www.rmb.co.za.




          KEY	FEATURES            PAYMENT	AT	MATURITY
                                  If you hold your RMB ETNs to maturity, you will receive a cash payment at maturity that
                                  is linked to the current price of the corresponding index or strategy, less investor fees.
                                  No physical delivery applies.

                                  LIQUIDATING	PRIOR	TO	MATURITY
                                  You	can	liquidate	RMB	ETNs	before	their	maturity	date	in	two	ways:

                                  •	     Trade	them	on	the	Johannesburg	Stock	Exchange	during	normal	trading	hours
                                  •	     R
                                         	 edeem	a	large	block	of	the	particular	RMB	ETN,	directly	to	FirstRand	Bank	
                                         Limited, subject to certain procedures and conditions. A redemption charge may
                                         apply

                                  INVESTOR FEE
                                  The	investor	fee	is	specific	to	each	RMB	ETN.	It	is	calculated	cumulatively	based	on	the	
                                  performance of the RMB ETN and is based on the value of the RMB ETN. For a more
                                  complete description of how the investor fee is calculated, please refer to the Applicable
                                  Pricing	Supplement	of	the	specific	ETN,	available	on	the	RMB	website	www.rmb.co.za.



DECEMBER 2010                                                                                                                  Page 2
                 NO PRINCIPAL PROTECTION OR GUARANTEES
                 Investors will receive a cash payment linked to the performance of the corresponding
                 index or strategy, less investor fees, and no principal protection or guarantees are
                 offered.

                 RATINGS
                 RMB ETNs are not independently rated, and rely on the credit of FirstRand Bank Limited.
                 Any change in the rating of FirstRand could affect the market price of the RMB ETN.

                 VOTING RIGHTS
                 Because RMB ETNs are debt securities, they do not have any voting rights.

                 UNSECURED DEBT
                 RMB ETNs are senior, unsecured, unsubordinated debt securities issued by FirstRand
                 Bank Limited.




          FAQs   HOW	CAN	YOU	USE	RMB	ETNs	AS	PART	OF	YOUR	INVESTMENT	PORTFOLIO?
                 RMB ETNs allow for convenient exposure to market benchmarks, indices or strategies,
                 less investor fees. RMB ETNs typically seek to offer cost-effective investments in sectors
                 of	the	market	that	were	previously	expensive	and	difficult	to	access.	

                 HOW DO RMB ETNs GENERATE RETURNS?
                 Investors may trade RMB ETNs on the Johannesburg Stock Exchange at market price
                 or receive a payment upon maturity or early redemption, based on index or strategy
                 performance, less investor fees.

                 HOW	CAN	YOU	BUY	AND	SELL	RMB	ETNs?	
                 RMB	ETNs	are	listed	on	the	JSE.	You	can	buy	and	sell	RMB	ETNs	through	a	stockbroker	
                 at	any	time	and	will	be	subject	to	brokerage	commissions.	You	may	sell	RMB	ETNs	in	
                 several	ways.	You	can	sell	the	RMB	ETNs	in	the	secondary	market	during	trading	hours.	
                 You	may	also	choose	early	redemption	if	you	own	a	large	block	of	RMB	ETNs	and	
                 redeem the block directly to FirstRand Bank Limited. A redemption charge and certain
                 redemption conditions may apply to certain RMB ETNs. Alternatively, you may hold the
                 RMB ETNs until maturity and receive a cash payment from the issuer based upon the
                 positive or negative performance of the underlying index, less investor fees.

                 HOW	CAN	YOU	FIND	PRICE	INFORMATION	ABOUT	RMB	ETNs?	
                 The market price of RMB ETNs may be found on the RMB website as well as various
                 financial	websites	and	in	some	major	newspapers.

                 WHERE ARE RMB ETNs LISTED?
                 The RMB ETNs currently available are listed on the Johannesburg Stock Exchange.

                 WHEN	CAN	I	BUY	OR	SELL	RMB	ETNs?
                 RMB ETNs can be bought or sold during JSE market hours.

                 IS THERE A MINIMUM TRADE SIZE FOR RMB ETNs?
                 No. RMB ETNs can be bought and sold at their market price on the secondary market
                 similar to other publicly traded securities.

                 DO RMB ETNs HAVE A NET ASSET VALUE?
                 Because RMB ETNs are debt securities and not unit trusts or exchange-traded funds,
                 they do not have a net asset value (NAV). Each will, however, have an Intraday Indicative
                 Value (Index Value), meant to approximate their intrinsic economic value which will be
                 published daily on the RMB website.

                 The actual trading price of RMB ETNs may differ from their Intraday Indicative
                 Value as the trading price takes into account all relevant factors including the RMB
                 ETN’s expected total return, the creditworthiness of the issuer, and liquidity in the
                 marketplace.




DECEMBER 2010                                                                                                 Page 3
                          IF FIRSTRAND LIMITED’S CREDIT RATING IS DOWNGRADED, WHAT HAPPENS TO THE
                          INDICATIVE VALUE?
                          The indicative value calculation of the RMB ETNs will not change in response to a
                          FirstRand Limited credit event. However, the trading price of the RMB ETNs may be
                          adversely impacted.




          HOW TO INVEST   THROUGH A STOCKBROKER
                          Clients can purchase and sell RMB ETNs via registered JSE stockbrokers.

                          Alternatively for online broking please contact:

                          FNB SHARE INVESTING
                          Visit: www.fnb.co.za/shareinvesting
                          Or call: 0860 SHARES (742 737)

                          THROUGH RMB
                          For investments in excess of a one million units please contact RMB Exchange Traded
                          Products Desk directly on Tel: +27 11 282 8271




          CONTACT US      PRODUCT SALES AND TRADING
                          Tel:     +27 11 282 8271
                          Fax:     +27 11 384 3206
                          Email:   yusuf.wadee@rmb.co.za or vicki.goodwin@rmb.co.za
                          Website: www.rmb.co.za

                          PHYSICAL	ADDRESS
                          Rand Merchant Bank
                          1 Merchant Place
                          Corner Fredman Drive & Rivonia Road
                          Sandton 2196
                          South Africa

                          POSTAL ADDRESS
                          PO Box 786273
                          Sandton 2146
                          South Africa




DECEMBER 2010                                                                                                   Page 4
          DISCLAIMER   RMB Exchange Traded Notes (RMB ETNs) are listed debt securities that trade on the
                       JSE Limited. RMB Exchange Traded Notes are issued by FirstRand Bank Limited under
                       its ZAR30,000,000,000 Note Programme. This brochure has been prepared by Rand
                       Merchant Bank, a division of FirstRand Bank Limited.

                       All	the	risks	and	significant	issues	related	to	subscribing	for,	or	purchasing	RMB	ETNs	
                       are not disclosed and therefore, prior to purchasing or transacting, you should fully
                       understand	the	products,	any	risks	and	significant	issues	related	to	or	associated	with	
                       them. The products may involve a high degree of risk including, amongst others, the risk
                       of low or no investment returns, the potential for capital or principal loss, counterparty
                       or	issuer	default,	adverse	or	unanticipated	financial	market	fluctuations,	inflation	rate	
                       risk,	exchange	rate	risk	and	interest	rate	risk.	The	value	of	any	product	may	fluctuate	
                       daily as a result of these risks, market conditions, general sentiment and other factors.
                       RMB	does	not	predict	actual	results,	performances	and/or	financial	returns	and	no	
                       assurances, warranties or guarantees are given in this regard. FirstRand Bank Limited or
                       any of its associates or subsidiary companies does not guarantee the performance of its
                       funds and past performance is not indicative of future performance.

                       The information provided in this document does not constitute investment advice.
                       These products may not be appropriate and/or suitable for your particular investment
                       objectives,	financial	situation	or	needs.	Investors	should	ensure	that	they	fully	
                       understand any transaction that they enter into and should obtain independent
                       financial,	taxation	and	legal	advice	before	making	any	decisions	about	any	investment	in	
                       securities.

                       Members of RMB may act as placement agent, calculation agent, advisor or lender,
                       make a market in, or may have been a manager or a co-manager of, the most recent
                       public offering in respect of these instruments and related underlying instruments.
                       Members of RMB and/or their respective directors and employees may own the
                       investments in these instruments and related underlying instruments and may sell them
                       to or buy them from customers on a principal basis.

                       The complete terms and conditions should be taken from the respective programme
                       memorandum and its supplements available on the RMB website (www.rmb.co.za).
                       This document is for information purposes only and you should not regard this as
                       a	prospectus	for	any	security	or	financial	product	or	transaction.	Details	of	fees	and	
                       charges as well as full details relating to the relevant index calculation on the RMB ETN
                       is available from the RMB website and the applicable pricing supplement. The price at
                       which RMB ETN’s trade on the Exchange may differ from the Index Price or Indicative
                       Intraday Value published on the RMB website.

                       The information and views expressed are given as at the date of writing and may
                       change without prior notice. Although the information herein has been obtained
                       from sources believed to be reliable, FirstRand Bank Limited or any of its associates or
                       subsidiary companies does not guarantee that it is accurate or complete and does not
                       guarantee the reasonableness of the assumptions made. The information provided in
                       this document is to be used at your own risk.

                       RMB expressly disclaims any liability for any damage or loss as a result of errors or
                       omissions in the information, data or views contained or expressed herein even if
                       notified	of	the	possibility	of	such	damage	or	loss.	RMB	does	not	warrant	or	guarantee	
                       merchantability,	non-infringement	of	third	party	rights	or	fitness	for	a	particular	use	and/
                       or purpose.

                       This document is intended solely for clients and prospective clients of members of RMB
                       and is not intended for, and may not be relied on by persons to whom this report may
                       not be provided by law. This document may not be reproduced or distributed to any
                       other person without the prior consent of a member of RMB. Unauthorised use or
                       disclosure of this document is strictly prohibited. By accepting this document, you agree
                       to be bound by the foregoing limitations.

                       Rand Merchant Bank is a division of FirstRand Bank limited Reg. No. 1929/001225/06
                       Rand Merchant Bank is an Authorised Financial services provider




DECEMBER 2010

								
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