FX DERIVATIVES by gdf57j

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									              FX Derivatives
Supplementary product diScloSure Statement
    FX Derivatives



    This document (“Supplement”) relates to the Markets               contentS
    Products listed in the Contents section (“FX derivatives”)
    and is supplemental to and forms part of the Global Markets       1.    General information about FX Derivatives                 2
    Product Disclosure Statement (“disclosure Statement”)             2.    Use of examples in this Supplement                       2
    prepared by aNZ National Bank Limited (“Bank”) from time
    to time.                                                          Structured FX derivatives                                      3
    To obtain a copy of the most recent Disclosure Statement          3.    What is a Participating Forward?                         3
    contact your Relationship Manager, your Markets Dealer or
    call 0800 107 562.                                                4.    What is a Ratio Forward?                                 3

    Terms defined in the Disclosure Statement have the same           5.    What is a Knock-Out Forward? (Including a Late
    meanings in this Supplement and in particular FX Derivatives            Starting or Early Finishing Knock-Out Forward)           4
    are Markets Products for the purposes of the Disclosure           6.    What is a Ratio Knock-Out Forward? (Including a Late
    Statement. The FX Derivatives are identified in the Contents            Starting or Early Finishing Ratio Knock-Out Forward)     5
    section as either Structured FX Derivatives, which are Forwards
    for the purposes of the Disclosure Statement, or Exotic FX        7.    What is a Converting Forward? (Including a Late
    Options, which are Options for the purposes of the Disclosure           Starting or Early Finishing Converting Forward)          7
    Statement. The general information set out in the Disclosure      8.    What is a Smart Forward? (Including a Late
    Statement applies to FX Derivatives and should be read in               Starting or Early Finishing Smart Forward)               8
    conjunction with this Supplement.
                                                                      9.    What is a Ratio Smart Forward? (Including a Late
    This Supplement is prepared by aNZ National Bank Limited                Starting or Early Finishing Ratio Smart Forward)         9
    as at 30 June 2010.
                                                                      10.   What is a Smart Forward Plus? (Including a Late
    This Supplement is intended for use in New Zealand only.                Starting or Early Finishing Smart Forward Plus)          11
    It should not be distributed in any jurisdiction in which its
    distribution, or the offer of Markets Products, is restricted.    11.   What is a Ratio Smart Forward Plus? (Including a Late
                                                                            Starting or Early Finishing Ratio Smart Forward Plus)    12
                                                                      12.   What is a Smart Forward Combo? (Including a Late
                                                                            Starting or Early Finishing Smart Forward Combo)         14
                                                                      13.   What is a Smart Forward Plus (aWCR)? (Including a Late
                                                                            Starting or Early Finishing Smart Forward Plus (aWCR))   15
                                                                      14.   What is a FX Collar?                                     16
                                                                      15.   What is a Ratio Collar?                                  17
                                                                      16.   What is a Smart Collar? (Including a Late Starting
                                                                            or Early Finishing Smart Collar)                         18
                                                                      17.   What is a Ratio Smart Collar? (Including a Late
                                                                            Starting or Early Finishing Ratio Smart Collar)          20

                                                                      exotic FX options                                              21
                                                                      18.   What is a Knock-Out Option? (Including a Late
                                                                            Starting or Early Finishing Knock-Out Option)            21
                                                                      19.   What is a Knock-In Option? (Including a Late
                                                                            Starting or Early Finishing Knock-In Option)             22
                                                                      20.   What is a Double Knock-Out Option? (Including a Late
                                                                            Starting or Early Finishing Double Knock-Out Option)     24
                                                                      21.   What is a Double Knock-In Option? (Including a Late
                                                                            Starting or Early Finishing Double Knock-In Option)      25
                                                                      22.   What is a Compound Option?                               26

                                                                      General
                                                                      23.   Late Starting and Early Finishing FX Derivatives         28
                                                                      24.   Glossary                                                 29



1
FX Derivatives



1.     General inFormation aBout                                     corresponding Financial instrument: The FX Derivatives are
       FX derivativeS                                                intended to be used as Risk Management Contracts. That is,
                                                                     the relevant FX Derivative is intended to reduce or mitigate
Zero-premium Structured FX derivatives: Typically, you will          Exchange Rate Risk under a Financial Instrument. You should
not pay a Premium for any Structured FX Derivatives. Rather,         advise the Bank if you wish to enter into a FX Derivative
the Bank will determine the rates applicable to a Structured         independently of any Financial Instrument.
FX Derivative (that is, any applicable forward rate and barrier
rate) to create a zero-Premium structure. as described in
the Disclosure Statement, you pay for the FX Derivative by           2.     uSe oF eXampleS in thiS Supplement
accepting the rates quoted by the Bank. Unless specified             FX derivatives are not just for exporters and importers:
otherwise, the “importer” and “exporter” examples given              In this Supplement, the method for calculating amounts
in this Supplement assume that no Premium is payable.                payable by you or the Bank in respect of each FX Derivative
determination of rates: The terms and outcomes of certain            is described by reference to “exporter” or “importer” examples.
FX Derivatives vary depending on whether a Currency                  These examples are included in this Supplement for illustrative
Exchange Rate has traded at or through a specified level.            purposes only and, as described below, the outcomes
as set out in the Disclosure Statement, Currency Exchange            described in this Supplement can apply equally to persons
Rates are not generally regulated in any official manner and         other than exporters and importers. accordingly, persons
are not quoted on any regulated independent exchange.                other than importers and exporters may wish to enter into
accordingly, there is no official published rate which will be       FX Derivatives.
referred to by the Bank to determine whether a Currency              Where an example is given in relation to an exporter, that
Exchange Rate has traded at a particular level or not. The           example would most typically apply to a New Zealand based
Bank will, at its discretion, determine whether a specified          exporter that receives payments in a currency other than
Currency Exchange Rate has traded at a particular level or           New Zealand Dollars but has New Zealand Dollar expenses.
not by referring to various reference sources which show             For example, as an exporter you may be due to be paid
the rates of exchange in the market at a particular time.            US$100,000 in three months time for your goods which have
certain rights and obligations at expiry: The rights and             been sold overseas but you have New Zealand Dollar expenses
obligations in relation to the exchange of currencies on             which are to be satisfied from the proceeds of the US$ income.
the Payment Date under a FX Derivative are determined                However, the exporter examples also apply to other persons
by reference to the Spot Currency Exchange Rate on Expiry            who wish to protect themselves from a strengthening
relative to the Currency Exchange Rate specified in the terms        New Zealand Dollar, such as a New Zealand based investor
of your FX Derivative (e.g. Enhanced Forward Rate, Worst             receiving dividends or redemption proceeds from overseas
Case Rate, adjusted Worst Case Rate or Best Case Rate).              investments, or proceeds from the sale of assets in a foreign
Where the Spot Currency Exchange Rate at Expiry is worse             currency, or any other person who has foreign currency and
for you than the specified Currency Exchange Rate, some              wishes to exchange it for New Zealand Dollars.
FX Derivatives give you the right to elect whether to exchange       Where an example is given in relation to an importer,
currencies on the Payment Date at that Currency Exchange             that example would most typically apply to a New Zealand
Rate. Such rights are described more fully in relation to each       based importer that makes payments in a currency other than
applicable FX Derivative in this Supplement.                         New Zealand Dollars but receives New Zealand Dollar income.
Where the words “unless at Expiry your instructions to the Bank      For example, as an importer you may have agreed to pay
are that you do not wish to exchange the currencies in those         US$100,000 in three months time for goods imported into
circumstances” are used in relation to a FX Derivative in this       New Zealand and you are relying on New Zealand Dollar
Supplement, that FX Derivative provides you with the right to        income to satisfy this payment.
decide whether or not you wish to exchange currencies on the         However, the importer examples also apply to other
Payment Date at the specified Currency Exchange Rate. In these       persons who wish to protect themselves from a weakening
situations the Bank must receive instructions from you by Expiry     New Zealand Dollar, such as a New Zealand based investor
if you do not wish to exchange currencies on the Payment Date.       planning to invest in overseas securities, a person who has
Where you have this right and at Expiry the Spot Currency            agreed to purchase assets or property overseas, or any other
Exchange Rate is worse for you than the specified Currency           person who needs to make payments in a foreign currency in
Exchange Rate, the Bank will always assume that you wish             the future.
to exchange currencies on the Payment Date. If the Bank does         In all cases, the actual effect of a FX Derivative will depend
not receive confirmation from you that you do not wish to            on your particular circumstances, including your tax and
exchange currencies by Expiry the Bank will proceed with             financial status, your organisational structure and your
exchange of currencies at the specified Currency Exchange            views of, and requirements for, risk management. These
Rate on the Payment Date.                                            circumstances may mean that a particular FX Derivative has
net Settlement: You and the Bank may agree that, in relation to      different benefits and exposures to different risks to those
a FX Derivative, instead of exchanging currencies, the value of      described in this Supplement.
each party’s obligations will be determined in a single currency
and the obligations of the parties will be settled on a Net Basis.
                                                                                                                                      2
    structureD FX Derivatives



    3.     What iS a participatinG ForWard?                            > the Spot Currency Exchange Rate is lower than the Worst
                                                                         Case Rate, on the Payment Date you must pay to the Bank
    Like a Forward Exchange Contract, a Participating Forward            an amount of US$ which is equal to the difference between
    can protect from an unfavourable movement in a Currency              the Principal amount of US$ and the Participating amount
    Exchange Rate. However, a Participating Forward has an               of US$, in exchange for the Bank paying to you an amount
    additional feature allowing you to retain the ability to take        of NZ$ (calculated by applying the Worst Case Rate to that
    advantage of a favourable exchange rate movement on a                amount of US$).
    specified percentage of the Principal amount.
                                                                         Foreign currency payment – importer
    In return for the ability to take advantage of a favourable
    Currency Exchange Rate movement on the specified                     an importer may enter into a Participating Forward to protect
    percentage of the Principal amount, the Worst Case Rate              from a fall in a Currency Exchange Rate while retaining the
    is set at a level that is worse for you than if you had instead      ability to benefit from a favourable exchange rate movement
    entered into a comparable Forward Exchange Contract                  in relation to the Participating amount. For the purpose of this
    (i.e. a Forward Exchange Contract for the same Principal             example Currency a is US$ and Currency B is NZ$.
    amount and having the same Trade Date and Payment Date).             If you are an importer and at Expiry:
    entering into a participating Forward                              > the Spot Currency Exchange Rate is equal to or lower than the
    When you enter into a Participating Forward you nominate:            Worst Case Rate, on the Payment Date you must pay to the
                                                                         Bank an amount of NZ$ (calculated by applying the Worst Case
> a Principal amount of a currency (Currency a) that you would           Rate to the Principal amount of US$) in exchange for the Bank
  like to exchange for another currency (Currency B);                    paying to you the Principal amount of US$, unless at Expiry
> a percentage of the Principal amount of Currency a on which            your instructions to the Bank are that you do not wish to
  you wish to be able to take advantage of a favourable exchange         exchange the currencies in those circumstances. If you instruct
  rate movement (the “participating amount”); and                        the Bank that you do not wish to exchange the currencies,
                                                                         no payments are made under the Participating Forward; or
> the Payment Date.
                                                                       > the Spot Currency Exchange Rate is higher than the Worst
    Based on the above, you and the Bank will agree the Worst Case       Case Rate, on the Payment Date you must pay to the Bank an
    Rate to apply to the Participating Forward.                          amount of NZ$ (calculated by subtracting the Participating
    The amount of the two currencies to be exchanged depends             amount of US$ from the Principal amount of US$ and applying
    on the Worst Case Rate and the Spot Currency Exchange Rate           the Worst Case Rate to this amount). In exchange, the Bank will
    at Expiry.                                                           pay to you an amount of US$ which is equal to the difference
                                                                         between the Principal amount and the Participating amount.
    how does a participating Forward work?
                                                                         The Worst Case Rate, Expiry, Payment Date and amounts of
    The way in which a typical Participating Forward operates is         currency to be exchanged will be specified in the terms of the
    described below by reference to examples of how an exporter          Participating Forward.
    and an importer may use a Participating Forward.
                                                                         What are the principal risks of a participating Forward?
    Foreign currency receipt – exporter
                                                                         The risks identified in section 6 of the Disclosure Statement
    an exporter may enter into a Participating Forward to protect        apply to a Participating Forward.
    from a rise in a Currency Exchange Rate while retaining the
    ability to benefit from a favourable exchange rate movement
    in relation to the Participating amount. For the purpose of this     4.     What iS a ratio ForWard?
    example Currency a is US$ and Currency B is NZ$.                     Like a Forward Exchange Contract, a Ratio Forward can protect
    If you are an exporter and at Expiry:                                from an unfavourable movement in a Currency Exchange
                                                                         Rate. However, a Ratio Forward allows you to obtain a better
> the Spot Currency Exchange Rate is equal to or higher than             Currency Exchange Rate (“enhanced Forward rate”) than if
  the Worst Case Rate, on the Payment Date you must pay to the           you had instead entered into a comparable Forward Exchange
  Bank the Principal amount of US$ in exchange for the Bank              Contract (i.e. a Forward Exchange Contract for the same
  paying to you an amount of NZ$ (calculated by applying the             Principal amount and having the same Trade Date and
  Worst Case Rate to the Principal amount of US$), unless at             Payment Date).
  Expiry your instructions to the Bank are that you do not wish to
  exchange the currencies in those circumstances. If you instruct        In return for the Enhanced Forward Rate, until Expiry you
  the Bank that you do not wish to exchange the currencies, no           will have uncertainty in relation to the maximum amount
  payments are made under the Participating Forward; or                  of currency you may be obliged to exchange on the
                                                                         Payment Date.




3
 structureD FX Derivatives



  entering into a ratio Forward                                        If you instruct the Bank that you do not wish to exchange the
                                                                       currencies, no payments are made under the Ratio Forward; or
  When you enter into a Ratio Forward you nominate:
                                                                     > the Spot Currency Exchange Rate is higher than the Enhanced
> a Principal amount of a currency (Currency a) that you               Forward Rate, on the Payment Date you must pay to the Bank
  would like to exchange for another currency (Currency B);            an amount of NZ$ (calculated by applying the Enhanced
> an amount of Currency a which is greater than the Principal          Forward Rate to the Obligated amount of US$) and the Bank
  amount of Currency a (the “obligated amount”); and                   will pay to you the Obligated amount of US$.
> the Payment Date.                                                    The Enhanced Forward Rate, Expiry, Payment Date and
  The Principal amount is typically equal to a portion of your         amounts of currency to be exchanged will be specified
  exposure under the corresponding Financial Instrument,               in the terms of the Ratio Forward.
  while the Obligated amount is typically an amount not                What are the principal risks of a ratio Forward?
  exceeding your maximum exposure under the corresponding
  Financial Instrument.                                                The risks identified in section 6 of the Disclosure Statement
                                                                       apply to a Ratio Forward.
  Based on the above, you and the Bank will agree the Enhanced
  Forward Rate to apply to the Ratio Forward.                          In addition, entering into a Ratio Forward gives rise to the
                                                                       risks that:
  The amount of the two currencies to be exchanged depends
  on the Enhanced Forward Rate and the Spot Currency                 > If the Obligated amount exceeds your maximum exposure
  Exchange Rate at Expiry.                                             under a corresponding Financial Instrument, you will face
                                                                       Exchange Rate Risk in relation to the excess amount of Currency
  how does a ratio Forward work?                                       a that you either pay to the Bank (such as, under the exporter
  The way in which a typical Ratio Forward operates is described       example above) or receive from the Bank (such as, under the
  below by reference to examples of how an exporter and an             importer example above).
  importer may use a Ratio Forward.                                  > Until Expiry there is uncertainty in relation to the maximum
                                                                       amount of currency you may be obliged to exchange on the
  Foreign currency receipt – exporter
                                                                       Payment Date.
  an exporter may enter into a Ratio Forward to protect from         > If the Enhanced Forward Rate is more favourable to you than
  a rise in a Currency Exchange Rate and to obtain an Enhanced         the Spot Currency Exchange Rate at Expiry and the Principal
  Forward Rate. For the purpose of this example Currency a             amount is less than your maximum exposure under the
  is US$ and Currency B is NZ$.                                        corresponding Financial Instrument, this FX Derivative does
  If you are an exporter and at Expiry:                                not mitigate your Exchange Rate Risk in relation to the
                                                                       remaining portion of your exposure under the corresponding
> the Spot Currency Exchange Rate is equal to or higher than the       Financial Instrument.
  Enhanced Forward Rate, on the Payment Date you must pay to
  the Bank the Principal amount of US$ in exchange for the Bank
  paying to you an amount of NZ$ (calculated by applying the           5.     What iS a KnocK-out ForWard?
  Enhanced Forward Rate to the Principal amount of US$), unless        (includinG a late StartinG or early FiniShinG
  at Expiry your instructions to the Bank are that you do not          KnocK-out ForWard)
  wish to exchange the currencies in those circumstances. If
  you instruct the Bank that you do not wish to exchange the           Under a Knock-Out Forward, (unless it is “knocked out” as
  currencies, no payments are made under the Ratio Forward; or         discussed below) you can exchange currencies with the Bank
                                                                       at an agreed Forward Exchange Rate. However, a Knock-Out
> the Spot Currency Exchange Rate is lower than the Enhanced           Forward allows you to obtain a better Forward Exchange Rate
  Forward Rate, on the Payment Date you must pay to the Bank           (“enhanced Forward rate”) than if you had instead entered
  the Obligated amount of US$ and the Bank will pay to you an          into a comparable Forward Exchange Contract (i.e. a Forward
  amount of NZ$ (calculated by applying the Enhanced Forward           Exchange Contract for the same Principal amount and having
  Rate to the Obligated amount of US$).                                the same Trade Date and Payment Date).
  Foreign currency payment – importer                                  In return for the Enhanced Forward Rate, if the Currency
  an importer may enter into a Ratio Forward to protect from           Exchange Rate moves in a way which is unfavourable to you
  a fall in a Currency Exchange Rate and to obtain an Enhanced         and has traded at or through a pre-agreed Currency Exchange
  Forward Rate. For the purpose of this example Currency a is          Rate (“Barrier rate”) during the Barrier Period, the transaction
  US$ and Currency B is NZ$.                                           will be cancelled or “knocked out”.
  If you are an importer and at Expiry:                                entering into a Knock-out Forward
> the Spot Currency Exchange Rate is equal to or lower than the        When you enter into a Knock-Out Forward you nominate:
  Enhanced Forward Rate, on the Payment Date you must pay            > a Principal amount of a currency (Currency a) that you
  to the Bank an amount of NZ$ (calculated by applying the             would like to exchange for another currency (Currency B); and
  Enhanced Forward Rate to the Principal amount of US$) in
  exchange for the Bank paying to you the Principal amount of        > the Payment Date.
  US$, unless at Expiry your instructions to the Bank are that you
  do not wish to exchange the currencies in those circumstances.                                                                          4
    structureD FX Derivatives



    Based on the above, you and the Bank will agree an Enhanced             However, if you are an importer and the Spot Currency
    Forward Rate to apply to the Knock-Out Forward as well as a             Exchange Rate does not trade at a rate that is equal to or lower
    Barrier Rate. The Barrier Rate will be a rate which is worse for        than the Barrier Rate at any time during the Barrier Period and
    you than both the Enhanced Forward Rate and the Spot                    at Expiry:
    Currency Exchange Rate on the Trade Date.
                                                                          > the Spot Currency Exchange Rate is equal to or lower than the
    The amount of the two currencies to be exchanged on the                 Enhanced Forward Rate, on the Payment Date you must pay
    Payment Date depends on the Enhanced Forward Rate, the                  to the Bank an amount of NZ$ (calculated by applying the
    Spot Currency Exchange Rate at Expiry and whether the Spot              Enhanced Forward Rate to the Principal amount of US$), in
    Currency Exchange Rate has traded at or through the Barrier             exchange for the Bank paying to you the Principal amount of
    Rate at any time during the Barrier Period.                             US$, unless at Expiry your instructions to the Bank are that you
                                                                            do not wish to exchange the currencies in those circumstances.
    how does a Knock-out Forward work?
                                                                            If you instruct the Bank that you do not wish to exchange the
    The way in which a typical Knock-Out Forward operates is                currencies, no payments are made under the Knock-Out
    described below by reference to examples of how an exporter             Forward; or
    and an importer may use a Knock-Out Forward.                          > the Spot Currency Exchange Rate is higher than the Enhanced
    Foreign currency receipt – exporter                                     Forward Rate, on the Payment Date you must pay to the Bank
                                                                            an amount of NZ$ (calculated by applying the Enhanced
    an exporter may enter into a Knock-Out Forward to obtain                Forward Rate to the Principal amount of US$) in exchange
    an Enhanced Forward Rate and some protection from a rise                for the Bank paying to you the Principal amount of US$.
    in a Currency Exchange Rate provided the Knock-Out Forward
    is not “knocked out”. For the purpose of this example Currency          The Enhanced Forward Rate, Barrier Rate, Expiry, Payment Date
    a is US$ and Currency B is NZ$.                                         and amounts of currency to be exchanged will be specified in
                                                                            the terms of the Knock-Out Forward.
    If you are an exporter and if at any time during the Barrier
    Period the Spot Currency Exchange Rate trades at a rate that            late Starting or early Finishing Knock-out Forward
    is equal to or higher than the Barrier Rate, the transaction will       an additional feature can be added to a Knock-Out Forward,
    be cancelled and there will be no payments made by either               limiting the period of time during which the Barrier Rate will
    party under the Knock-Out Forward.                                      apply. a Knock-Out Forward with this feature may be referred
    However, if you are an exporter and the Spot Currency                   to as either a late Starting Knock-out Forward or an early
    Exchange rate does not trade at a rate that is equal to or higher       Finishing Knock-out Forward. The effect of this feature is
    than the Barrier Rate at any time during the Barrier Period and         discussed further in section 23.
    at Expiry:                                                              What are the principal risks of a Knock-out Forward?
> the Spot Currency Exchange Rate is equal to or higher than the            The risks identified in section 6 of the Disclosure Statement
  Enhanced Forward Rate, on the Payment Date you must pay                   apply to a Knock-Out Forward (including a Late Starting or Early
  to the Bank the Principal amount of US$ in exchange for the               Finishing Knock-Out Forward).
  Bank paying to you an amount of NZ$ (calculated by applying
  the Enhanced Forward Rate to the Principal amount of US$),                In addition, entering into a Knock-Out Forward (including a
  unless at Expiry your instructions to the Bank are that you do            Late Starting or Early Finishing Knock-Out Forward) gives rise
  not wish to exchange the currencies in those circumstances.               to the risks that:
  If you instruct the Bank that you do not wish to exchange               > If the Spot Currency Exchange Rate trades at or through
  the currencies, no payments are made under the Knock-Out                  the Barrier Rate at any time during the Barrier Period, the
  Forward; or                                                               transaction will be cancelled.
> the Spot Currency Exchange Rate is lower than the Enhanced              > Until the earlier of the Spot Currency Exchange Rate trading at
  Forward Rate, on the Payment Date you must pay to the Bank                or through the Barrier Rate and the end of the Barrier Period,
  the Principal amount of US$ in exchange for the Bank paying               there is uncertainty as to whether or not you will have any right
  to you an amount of NZ$ (calculated by applying the Enhanced              or obligation to exchange the currencies at the Enhanced
  Forward Rate to the Principal amount of US$).                             Forward Rate.
    Foreign currency payment – importer
    an importer may enter into a Knock-Out Forward to obtain                6.     What iS a ratio KnocK-out ForWard?
    an Enhanced Exchange Rate and some protection from a fall               (includinG a late StartinG or early FiniShinG ratio
    in a Currency Exchange Rate provided the Knock-Out Forward              KnocK-out ForWard)
    is not “knocked out”. For the purpose of this example Currency
    a is US$ and Currency B is NZ$.                                         a Ratio Knock-Out Forward is the same as a Knock-Out Forward
                                                                            except that one or both of the Enhanced Forward Rate and the
    If you are an importer and if at any time during the Barrier            Barrier Rate may be set at a level that is better for you than if
    Period the Spot Currency Exchange Rate trades at a rate that            you had instead entered into a comparable Knock-Out Forward
    is equal to or lower than the Barrier Rate, the transaction will be     (i.e. a Knock-Out Forward for the same Principal amount and
    cancelled and there will be no payments made by either party            having the same Trade Date and Payment Date).
    under the Knock-Out Forward.
5
 structureD FX Derivatives



  In return for one or both of the Enhanced Forward Rate and            Foreign currency payment – importer
  Barrier Rate being set at a level that is better for you, you may
                                                                        an importer may enter into a Ratio Knock-Out Forward to
  have uncertainty until Expiry in relation to the maximum
                                                                        obtain an Enhanced Forward Rate and some protection from a
  amount of currency you may be obliged to exchange on the
                                                                        fall in a Currency Exchange Rate provided the Ratio Knock-Out
  Payment Date.
                                                                        Forward is not “knocked out”. For the purpose of this example
  entering into a ratio Knock-out Forward                               Currency a is US$ and Currency B is NZ$.
  When you enter into a Ratio Knock-Out Forward you nominate            If you are an importer and if at any time during the Barrier
  the same terms that you nominate when entering into a                 Period the Spot Currency Exchange Rate trades at a rate that
  Knock-Out Forward as well an amount of Currency a which               is equal to or lower than the Barrier Rate, the transaction will be
  is greater than the Principal amount of Currency a (the               cancelled and there will be no payments made by either party
  “obligated amount”).                                                  under the Knock-Out Forward.
  The Principal amount is typically equal to a portion of               However, if you are an importer and the Spot Currency
  your exposure under a corresponding Financial Instrument              Exchange Rate does not trade at a rate that is equal to or lower
  while the Obligated amount is typically an amount not                 than the Barrier Rate at any time during the Barrier Period and
  exceeding your maximum exposure under the corresponding               at Expiry:
  Financial Instrument.
                                                                      > the Spot Currency Exchange Rate is equal to or lower than the
  The amount of the two currencies to be exchanged on the               Enhanced Forward Rate, on the Payment Date you must pay
  Payment Date depends on the Enhanced Forward Rate, the                to the Bank an amount of NZ$ (calculated by applying the
  Spot Currency Exchange Rate at Expiry and whether the Spot            Enhanced Forward Rate to the Principal amount of US$), in
  Currency Exchange Rate has traded at or through the Barrier           exchange for the Bank paying to you the Principal amount of
  Rate at any time during the Barrier Period.                           US$, unless at Expiry your instructions to the Bank are that you
                                                                        do not wish to exchange the currencies in those circumstances.
  how does a ratio Knock-out Forward work?
                                                                        If you instruct the Bank that you do not wish to exchange the
  The way in which a typical Ratio Knock-Out Forward operates           currencies, no payments are made under the Ratio Knock-Out
  is described below by reference to examples of how an                 Forward; or
  exporter and an importer may use a Ratio Knock-Out Forward.         > the Spot Currency Exchange Rate is higher than the Enhanced
  Foreign currency receipt – exporter                                   Forward Rate, on the Payment Date you must pay to the Bank
                                                                        an amount of NZ$ (calculated by applying the Enhanced
  an exporter may enter into a Ratio Knock-Out Forward to               Forward Rate to the Obligated amount of US$) in exchange
  obtain an Enhanced Forward Rate and some protection from a            for the Bank paying to you the Obligated amount of US$.
  rise in a Currency Exchange Rate provided the Ratio Knock-Out
  Forward is not “knocked out”. For the purpose of this example         The Enhanced Forward Rate, Barrier Rate, Expiry, Payment Date
  Currency a is US$ and Currency B is NZ$.                              and amounts of currency to be exchanged will be specified in
                                                                        the terms of the Ratio Knock-Out Forward.
  If you are an exporter and at any time during the Barrier Period
  the Spot Currency Exchange Rate trades at a rate that is equal        late Starting or early Finishing ratio Knock-out Forward
  to or higher than the Barrier Rate, the transaction will be           an additional feature can be added to a Ratio Knock-Out
  cancelled and there will be no payments made by either                Forward, limiting the period of time during which the Barrier
  party under the Ratio Knock-Out Forward.                              Rate will apply. a Ratio Knock-Out Forward with this feature
  However, if you are an exporter and the Spot Currency                 may be referred to as either a late Starting ratio Knock-out
  Exchange rate does not trade at a rate that is equal to or higher     Forward or an early Finishing ratio Knock-out Forward.
  than the Barrier Rate at any time during the Barrier Period and       The effect of this feature is discussed further in section 23.
  at Expiry:                                                            What are the principal risks of a ratio Knock-out Forward?
> the Spot Currency Exchange Rate is equal to or higher than the        The risks identified in section 6 of the Disclosure Statement
  Enhanced Forward Rate, on the Payment Date you must pay               and in this Supplement in relation to a Knock-Out Forward
  to the Bank the Principal amount of US$ in exchange for the           apply to a Ratio Knock-Out Forward (including a Late Starting
  Bank paying to you an amount of NZ$ (calculated by applying           or Early Finishing Ratio Knock-Out Forward).
  the Enhanced Forward Rate to the Principal amount of US$),
  unless at Expiry your instructions to the Bank are that you do        In addition, entering into a Ratio Knock-Out Forward (including
  not wish to exchange the currencies in those circumstances.           a Late Starting or Early Finishing Ratio Knock-Out Forward)
  If you instruct the Bank that you do not wish to exchange the         gives rise to the risks that:
  currencies, no payments are made under the Ratio Knock-Out          > If the Obligated amount exceeds your maximum exposure
  Forward; or                                                           under a corresponding Financial Instrument, you will face
> the Spot Currency Exchange Rate is lower than the Enhanced            Exchange Rate Risk in relation to the excess amount of currency
  Forward Rate, on the Payment Date you must pay to the Bank            that you either pay to the Bank (such as, under the exporter
  the Obligated amount of US$ in exchange for the Bank paying           example above) or receive from the Bank (such as, under the
  to you an amount of NZ$ (calculated by applying the Enhanced          importer example above).
  Forward Rate to the Obligated amount of US$).
                                                                                                                                           6
    structureD FX Derivatives



> There may be uncertainty until Expiry in relation to the                how does a converting Forward work?
  maximum amount of currency you may be obliged to
                                                                          The way in which a typical Converting Forward operates is
  exchange on the Payment Date.
                                                                          described below by reference to examples of how an exporter
> If the Enhanced Forward Rate is more favourable to you than             and an importer may use a Converting Forward.
  the Spot Currency Exchange Rate at Expiry and the Principal
  amount is less than your maximum exposure under the                     Foreign currency receipt – exporter
  corresponding Financial Instrument, this FX Derivative                  an exporter may enter into a Converting Forward to protect
  does not mitigate your Exchange Rate Risk in relation                   from a rise in a Currency Exchange Rate while obtaining the
  to the remaining portion of your exposure under the                     ability to benefit from a favourable movement in a Currency
  corresponding Financial Instrument.                                     Exchange Rate if the Spot Currency Exchange Rate trades at a
                                                                          rate that is equal to or higher than the Barrier Rate during the
    7.     What iS a convertinG ForWard?                                  Barrier Period. For the purpose of this example Currency a is
                                                                          US$ and Currency B is NZ$.
    (includinG a late StartinG or early FiniShinG
    convertinG ForWard)                                                   If you are an exporter and at any time during the Barrier Period
                                                                          the Spot Currency Exchange Rate has traded at a rate that is
    Like a Forward Exchange Contract, a Converting Forward                equal to or higher than the Barrier Rate and at Expiry:
    can protect from an unfavourable movement in a Currency
    Exchange Rate. However, a Converting Forward has an                 > the Spot Currency Exchange Rate is equal to or higher than
    additional feature allowing you to obtain the ability to              the Worst Case Rate, on the Payment Date, you must pay to
    take advantage of a favourable exchange rate movement                 the Bank the Principal amount of US$ in exchange for the Bank
    if the Spot Currency Exchange Rate trades at or through               paying to you an amount of NZ$ (calculated by applying the
    a pre-agreed Currency Exchange Rate (“Barrier rate”)                  Worst Case Rate to the Principal amount of US$), unless at
    during the Barrier Period.                                            Expiry your instructions to the Bank are that you do not wish to
                                                                          exchange the currencies in those circumstances. If you instruct
    In return for the ability to take advantage of a favourable           the Bank that you do not wish to exchange the currencies no
    Currency Exchange Rate movement (provided the Spot                    payments are made under the Converting Forward; or
    Currency Exchange Rate trades at or through the Barrier
    Rate during the Barrier Period), the Worst Case Rate is set         > the Spot Currency Exchange Rate is lower than the Worst Case
    at a level that is worse for you than if you had instead entered      Rate no payments are made under the Converting Forward.
    into a comparable Forward Exchange Contract (i.e. a Forward           However, if you are an exporter and the Spot Currency
    Exchange Contract for the same Principal amount and having            Exchange Rate does not trade at a rate that is equal to or higher
    the same Trade Date and Payment Date).                                than the Barrier Rate at any time during the Barrier Period and
                                                                          at Expiry:
    If the Spot Currency Exchange Rate does not trade at or
    through the Barrier Rate during the Barrier Period you may          > the Spot Currency Exchange Rate is equal to or higher than the
    be required to exchange currencies at the Worst Case Rate             Worst Case Rate, on the Payment Date, you must pay to the
    on the Payment Date.                                                  Bank the Principal amount of US$ in exchange for the Bank
                                                                          paying to you an amount of NZ$ (calculated by applying the
    entering into a converting Forward
                                                                          Worst Case Rate to the Principal amount of US$), unless at
    When you enter into a Converting Forward you nominate:                Expiry your instructions to the Bank are that you do not wish to
                                                                          exchange the currencies in those circumstances. If you instruct
> a Principal amount of a currency (Currency a) that you would
                                                                          the Bank that you do not wish to exchange the currencies no
  like to exchange for another currency (Currency B); and
                                                                          payments are made under the Converting Forward; or
> the Payment Date.
                                                                        > the Spot Currency Exchange Rate is lower than the Worst
    Based on the above, you and the Bank will agree a Worst               Case Rate, on the Payment Date you must pay to the Bank the
    Case Rate to apply to the Converting Forward as well as a             Principal amount of US$ in exchange for the Bank paying to
    Barrier Rate. Typically, the Barrier Rate will be a rate which is     you an amount of NZ$ (calculated by applying the Worst Case
    worse for you than both the Worst Case Rate and the Spot              Rate to the Principal amount of US$).
    Currency Exchange Rate on the Trade Date. However, for
                                                                          Foreign currency payment – importer
    some Converting Forwards the Worst Case Rate and the
    Barrier Rate can be set at the same rate.                             an importer may enter into a Converting Forward to protect
                                                                          from a fall in a Currency Exchange Rate while obtaining the
    The amount of the two currencies to be exchanged on the
                                                                          ability to benefit from a favourable movement in a Currency
    Payment Date depends on the Worst Case Rate, the Spot
                                                                          Exchange Rate if the Spot Currency Exchange Rate trades at
    Currency Exchange Rate at Expiry and whether the Spot
                                                                          a rate that is equal to or lower than the Barrier Rate during the
    Currency Exchange Rate has traded at or through the
                                                                          Barrier Period. For the purpose of this example Currency a is
    Barrier Rate at any time during the Barrier Period.
                                                                          US$ and Currency B is NZ$.




7
 structureD FX Derivatives



  If you are an importer and at any time during the Barrier Period      8.     What iS a Smart ForWard?
  the Spot Currency Exchange Rate has traded at a rate that is
  equal to or lower than the Barrier Rate and at Expiry:                (includinG a late StartinG or early FiniShinG
                                                                        Smart ForWard)
> the Spot Currency Exchange Rate is equal to or lower than
  the Worst Case Rate, on the Payment Date you must pay to the          Like a Forward Exchange Contract, a Smart Forward can protect
  Bank an amount of NZ$ (calculated by applying the Worst Case          from an unfavourable movement in a Currency Exchange Rate.
  Rate to the Principal amount of US$), in exchange for the Bank        However, a Smart Forward has an additional feature allowing
  paying to you the Principal amount of US$, unless at Expiry           you to retain the ability to take advantage of a favourable
  your instructions to the Bank are that you do not wish to             exchange rate movement so long as the Spot Currency
  exchange the currencies in those circumstances. If you instruct       Exchange Rate does not trade at or through a pre-agreed
  the Bank that you do not wish to exchange the currencies no           Currency Exchange Rate (“Barrier rate”) at any time during
  payments are made under the Converting Forward; or                    the Barrier Period.
> the Spot Currency Exchange Rate is higher than the Worst Case         In return for this ability to take advantage of a favourable
  Rate no payments are made under the Converting Forward.               Currency Exchange Rate movement the Worst Case Rate is set
                                                                        at a level that is worse for you than if you had instead entered
  However, if you are an importer and the Spot Currency                 into a comparable Forward Exchange Contract (i.e. a Forward
  Exchange Rate does not trade at a rate that is equal to or lower      Exchange Contract for the same Principal amount and having
  than the Barrier Rate at any time during the Barrier Period and       the same Trade Date and Payment Date).
  at Expiry:
                                                                        If the Spot Currency Exchange Rate trades at or through the
> the Spot Currency Exchange Rate is equal to or lower than the         Barrier Rate at any time during the Barrier Period you may be
  Worst Case Rate, on the Payment Date you must pay to the              obliged to exchange currencies at the Worst Case Rate on the
  Bank an amount of NZ$ (calculated by applying the Worst Case          Payment Date.
  Rate to the Principal amount of US$), in exchange for the Bank
  paying to you the Principal amount of US$, unless at Expiry           entering into a Smart Forward
  your instructions to the Bank are that you do not wish to
                                                                        When you enter into a Smart Forward you nominate:
  exchange the currencies in those circumstances. If you instruct
  the Bank that you do not wish to exchange the currencies no         > a Principal amount of a currency (Currency a) that you would
  payments are made under the Converting Forward; or                    like to exchange for another currency (Currency B); and
> the Spot Currency Exchange Rate is higher than the Worst            > the Payment Date.
  Case Rate, on the Payment Date you must pay to the Bank an            Based on the above, you and the Bank will agree a Worst Case
  amount of NZ$ (calculated by applying the Worst Case Rate to          Rate to apply to the Smart Forward as well as a Barrier Rate. The
  the Principal amount of US$) in exchange for the Bank paying          Barrier Rate will be a rate which is better for you than the Worst
  to you the Principal amount of US$.                                   Case Rate, Forward Exchange Rate and the Spot Currency
  The Worst Case Rate, Barrier Rate, Expiry, Payment Date and           Exchange Rate on the Trade Date.
  amounts of currency to be exchanged will be specified in the
                                                                        The amount of the two currencies to be exchanged on the
  terms of the Converting Forward.
                                                                        Payment Date depends on the Worst Case Rate, the Spot
  late Starting or early Finishing converting Forward                   Currency Exchange Rate at Expiry and whether the Spot
                                                                        Currency Exchange Rate has traded at or through the Barrier
  an additional feature can be added to a Converting Forward,
                                                                        Rate at any time during the Barrier Period.
  limiting the period of time during which the Barrier Rate will
  apply. a Converting Forward with this feature may be referred         how does a Smart Forward work?
  to as either a late Starting converting Forward or an early
                                                                        The way in which a typical Smart Forward operates is described
  Finishing converting Forward. The effect of this feature is
                                                                        below by reference to examples of how an exporter and an
  discussed further in section 23.
                                                                        importer may use a Smart Forward.
  What are the principal risks of a converting Forward?
                                                                        Foreign currency receipt – exporter
  The risks identified in section 6 of the Disclosure Statement
                                                                        an exporter may enter into a Smart Forward to protect from a
  apply to a Converting Forward (including a Late Starting or
                                                                        rise in a Currency Exchange Rate while retaining the ability to
  Early Finishing Converting Forward).
                                                                        benefit from a favourable movement in a Currency Exchange
  In addition, entering into a Converting Forward (including a          Rate (so long as the Spot Currency Exchange Rate does not
  Late Starting or Early Finishing Converting Forward) gives rise       trade at a level that is equal to or lower than the Barrier Rate
  to the risk that, until the earlier of the Spot Currency Exchange     at any time during the Barrier Period). For the purpose of this
  Rate trading at or through the Barrier Rate and the end of the        example Currency a is US$ and Currency B is NZ$.
  Barrier Period, you will have uncertainty as to whether you may
                                                                        If you are an exporter and the Spot Currency Exchange Rate
  be obliged to exchange currencies at the Worst Case Rate on
                                                                        has not traded at a rate that is equal to or lower than the Barrier
  the Payment Date.
                                                                        Rate at any time during the Barrier Period and at Expiry:



                                                                                                                                           8
    structureD FX Derivatives



> the Spot Currency Exchange Rate is equal to or higher than the          However, if you are an importer and the Spot Currency
  Worst Case Rate, on the Payment Date you must pay to the                Exchange Rate has traded at a rate that is equal to or higher
  Bank the Principal amount of US$ in exchange for the Bank               than the Barrier Rate at any time during the Barrier Period and
  paying to you an amount of NZ$ (calculated by applying the              at Expiry:
  Worst Case Rate to the Principal amount of US$), unless at
                                                                        > the Spot Currency Exchange Rate is equal to or lower than the
  Expiry your instructions to the Bank are that you do not wish to
                                                                          Worst Case Rate, on the Payment Date you must pay to the
  exchange the currencies in those circumstances. If you instruct
                                                                          Bank an amount of NZ$ (calculated by applying the Worst Case
  the Bank that you do not wish to exchange the currencies no
                                                                          Rate to the Principal amount of US$) in exchange for the Bank
  payments are made under the Smart Forward; or
                                                                          paying to you the Principal amount of US$, unless at Expiry
> the Spot Currency Exchange Rate is lower than the Worst                 your instructions to the Bank are that you do not wish to
  Case Rate, no payments are made under the Smart Forward.                exchange the currencies in those circumstances. If you instruct
    However, if you are an exporter and the Spot Currency                 the Bank that you do not wish to exchange the currencies no
    Exchange Rate has traded at a rate that is equal to or lower          payments are made under the Smart Forward; or
    than the Barrier Rate at any time during the Barrier Period and     > the Spot Currency Exchange Rate is higher than the Worst
    at Expiry:                                                            Case Rate, on the Payment Date you must pay to the Bank an
> the Spot Currency Exchange Rate is equal to or higher than              amount of NZ$ (calculated by applying the Worst Case Rate to
  the Worst Case Rate, on the Payment Date you must pay to                the Principal amount of US$) in exchange for the Bank paying
  the Bank the Principal amount of US$ in exchange for the Bank           to you the Principal amount of US$.
  paying to you an amount of NZ$ (calculated by applying the              The Worst Case Rate, Barrier Rate, Expiry, Payment Date and
  Worst Case Rate to the Principal amount of US$), unless at              amounts of currency to be exchanged will be specified in the
  Expiry your instructions to the Bank are that you do not wish to        terms of the Smart Forward.
  exchange the currencies in those circumstances. If you instruct
                                                                          late Starting and early Finishing Smart Forward
  the Bank that you do not wish to exchange the currencies no
  payments are made under the Smart Forward; or                           an additional feature can be added to a Smart Forward,
> the Spot Currency Exchange Rate is lower than the Worst                 limiting the period of time during which the Barrier Rate will
  Case Rate, on the Payment Date you must pay to the Bank the             apply. a Smart Forward with this feature may be referred to
  Principal amount of US$ in exchange for the Bank paying to              as either a late Starting Smart Forward or an early Finishing
  you an amount of NZ$ (calculated by applying the Worst Case             Smart Forward. The effect of this feature is discussed further
  Rate to the Principal amount of US$).                                   in section 23.

    Foreign currency payment – importer                                   What are the principal risks of a Smart Forward?

    an importer may enter into a Smart Forward to protect from            The risks identified in section 6 of the Disclosure Statement
    a fall in a Currency Exchange Rate while retaining the ability to     apply to a Smart Forward (including a Late Starting or Early
    benefit from a favourable movement in a Currency Exchange             Finishing Smart Forward).
    Rate (so long as the Spot Currency Exchange Rate does not             In addition, entering into a Smart Forward (including a Late
    trade at a level that is equal to or higher than the Barrier Rate     Starting or Early Finishing Smart Forward) gives rise to the risk
    at any time during the Barrier Period). For the purpose of this       that if the Spot Currency Exchange Rate trades at or through
    example Currency a is US$ and Currency B is NZ$.                      the Barrier Rate at any time during the Barrier Period you may
    If you are an importer and the Spot Currency Exchange Rate            be obliged to exchange currencies at the Worst Case Rate.
    has not traded at a rate that is equal to or higher than the          If you are obliged to exchange currencies in this circumstance,
    Barrier Rate at any time during the Barrier Period and at Expiry:     the Worst Case Rate will be worse for you than the Spot
                                                                          Currency Exchange Rate on Expiry.
> the Spot Currency Exchange Rate is equal to or lower than the
  Worst Case Rate, on the Payment Date you must pay to the
  Bank an amount of NZ$ (calculated by applying the Worst                 9.     What iS a ratio Smart ForWard?
  Case Rate to the Principal amount of US$) in exchange for               (includinG a late StartinG or early FiniShinG ratio
  the Bank paying to you the Principal amount of US$, unless              Smart ForWard)
  at Expiry your instructions to the Bank are that you do not
  wish to exchange the currencies in those circumstances.                 a Ratio Smart Forward is the same as a Smart Forward except
  If you instruct the Bank that you do not wish to exchange the           that one or both of the Worst Case Rate and the Barrier Rate
  currencies no payments are made under the Smart Forward; or             will be set at a level that is better for you than if you had instead
                                                                          entered into a comparable Smart Forward (i.e. a Smart Forward
> the Spot Currency Exchange Rate is higher than the Worst                for the same Principal amount and having the same Trade Date
  Case Rate, no payments are made under the Smart Forward.                and Payment Date).




9
 structureD FX Derivatives



  In return for one or both of the Worst Case Rate and the              > the Spot Currency Exchange Rate is equal to or higher than
  Barrier Rate being set at a level that is better for you, until         the Worst Case Rate, on the Payment Date you must pay to
  Expiry you will have uncertainty in relation to the maximum             the Bank the Principal amount of US$ in exchange for the Bank
  amount of currency you may be obliged to exchange on the                paying to you an amount of NZ$ (calculated by applying the
  Payment Date.                                                           Worst Case Rate to the Principal amount of US$), unless at
                                                                          Expiry your instructions to the Bank are that you do not wish to
  entering into a ratio Smart Forward
                                                                          exchange the currencies in those circumstances. If you instruct
  When you enter into a Ratio Smart Forward you nominate                  the Bank that you do not wish to exchange the currencies no
  the same terms that you nominate when entering into a                   payments are made under the Ratio Smart Forward; or
  Smart Forward as well as an amount of Currency a which                > the Spot Currency Exchange Rate is lower than the Worst
  is greater than the Principal amount of Currency a (the                 Case Rate, on the Payment Date you must pay to the Bank the
  “obligated amount”).                                                    Obligated amount of US$ in exchange for the Bank paying to
  The Principal amount is typically equal to a portion of                 you an amount of NZ$ (calculated by applying the Worst Case
  your exposure under a corresponding Financial Instrument                Rate to the Obligated amount of US$).
  while the Obligated amount is typically an amount not                   Foreign currency payment – importer
  exceeding your maximum exposure under the corresponding
  Financial Instrument.                                                   an importer may enter into a Ratio Smart Forward to protect
                                                                          from a fall in a Currency Exchange Rate while retaining the
  The amount of the two currencies to be exchanged on the                 ability to benefit from a favourable movement in a Currency
  Payment Date depends on the Worst Case Rate, the Spot                   Exchange Rate (so long as the Spot Currency Exchange Rate
  Currency Exchange Rate at Expiry and whether the Spot                   does not trade at a level that is equal to or higher than the
  Currency Exchange Rate has traded at or through the Barrier             Barrier Rate at any time during the Barrier Period). For the
  Rate at any time during the Barrier Period.                             purpose of this example Currency a is US$ and Currency B
  how does a ratio Smart Forward work?                                    is NZ$.

  The way in which a typical Ratio Smart Forward operates is              If you are an importer and the Spot Currency Exchange Rate
  described below by reference to examples of how an exporter             has not traded at a rate that is equal to or higher than the
  and an importer may use a Ratio Smart Forward.                          Barrier Rate at any time during the Barrier Period and at Expiry:

  Foreign currency receipt – exporter                                   > the Spot Currency Exchange Rate is equal to or lower than the
                                                                          Worst Case Rate, on the Payment Date you must pay to the
  an exporter may enter into a Ratio Smart Forward to protect             Bank an amount of NZ$ (calculated by applying the Worst
  from a rise in a Currency Exchange Rate while retaining the             Case Rate to the Principal amount of US$) in exchange for
  ability to benefit from a favourable movement in a Currency             the Bank paying to you the Principal amount of US$, unless at
  Exchange Rate (so long as the Spot Currency Exchange Rate               Expiry your instructions to the Bank are that you do not wish to
  does not trade at a level that is equal to or lower than the            exchange the currencies in those circumstances. If you instruct
  Barrier Rate at any time during the Barrier Period). For the            the Bank that you do not wish to exchange the currencies no
  purpose of this example Currency a is US$ and Currency B                payments are made under the Ratio Smart Forward; or
  is NZ$.
                                                                        > the Spot Currency Exchange Rate is higher than the Worst Case
  If you are an exporter and the Spot Currency Exchange Rate              Rate, no payments are made under the Ratio Smart Forward.
  has not traded at a rate that is equal to or lower than the Barrier
                                                                          However, if you are an importer and the Spot Currency
  Rate at any time during the Barrier Period and at Expiry:
                                                                          Exchange Rate has traded at a rate that is equal to or higher
> the Spot Currency Exchange Rate is equal to or higher than              than the Barrier Rate at any time during the Barrier Period:
  the Worst Case Rate, on the Payment Date you must pay to
                                                                        > the Spot Currency Exchange Rate is equal to or lower than
  the Bank the Principal amount of US$ in exchange for the Bank
                                                                          the Worst Case Rate, on the Payment Date you must pay to the
  paying to you an amount of NZ$ (calculated by applying the
                                                                          Bank an amount of NZ$ (calculated by applying the Worst Case
  Worst Case Rate to the Principal amount of US$), unless at
                                                                          Rate to the Principal amount of US$) in exchange for the Bank
  Expiry your instructions to the Bank are that you do not wish to
                                                                          paying to you the Principal amount of US$, unless at Expiry
  exchange the currencies in those circumstances. If you instruct
                                                                          your instructions to the Bank are that you do not wish to
  the Bank that you do not wish to exchange the currencies no
                                                                          exchange the currencies in those circumstances. If you instruct
  payments are made under the Ratio Smart Forward; or
                                                                          the Bank that you do not wish to exchange the currencies no
> the Spot Currency Exchange Rate is lower than the Worst Case            payments are made under the Ratio Smart Forward; or
  Rate, no payments are made under the Ratio Smart Forward.
                                                                        > the Spot Currency Exchange Rate is higher than the Worst
  However, if you are an exporter and the Spot Currency                   Case Rate, on the Payment Date you must pay to the Bank an
  Exchange Rate has traded at a rate that is equal to or lower            amount of NZ$ (calculated by applying the Worst Case Rate to
  than the Barrier Rate at any time during the Barrier Period and         the Obligated amount of US$) in exchange for the Bank paying
  on Expiry:                                                              to you the Obligated amount of US$.




                                                                                                                                          10
 structureD FX Derivatives



  The Worst Case Rate, Barrier Rate, Expiry, Payment Date and          entering into a Smart Forward plus
  amounts of currency to be exchanged will be specified in the
                                                                       When you enter into a Smart Forward Plus you nominate:
  terms of the Ratio Smart Forward.
  late Starting and early Finishing ratio Smart Forward              > a Principal amount of a currency (Currency a) that you
                                                                       would like to exchange for another currency (Currency B); and
  an additional feature can be added to a Ratio Smart Forward,
                                                                     > the Payment Date.
  limiting the period of time during which the Barrier Rate will
  apply. a Ratio Smart Forward with this feature may be referred       Based on the above, you and the Bank will agree a Worst Case
  to as either a late Starting ratio Smart Forward or an early         Rate, an adjusted Worst Case Rate as well as a Barrier Rate.
  Finishing ratio Smart Forward. The effect of this feature is         The Barrier Rate will be a rate which is better for you than the
  discussed further in section 23.                                     Worst Case Rate, the adjusted Worst Case Rate and the Spot
  What are the principal risks of a ratio Smart Forward?               Currency Exchange Rate at the Trade Date.
  The risks identified in section 6 of the Disclosure Statement        The amount of the two currencies to be exchanged on the
  and in this Supplement in relation to a Smart Forward apply          Payment Date depends on the Worst Case Rate, the adjusted
  to a Ratio Smart Forward (including a Late Starting or Early         Worst Case Rate, the Spot Currency Exchange Rate at Expiry
  Finishing Ratio Smart Forward).                                      and whether the Spot Currency Exchange Rate has traded at or
  In addition, entering into a Ratio Smart Forward (including a        through the Barrier Rate at any time during the Barrier Period.
  Late Starting or Early Finishing Ratio Smart Forward) gives rise     how does a Smart Forward plus work?
  to the risks that:
                                                                       The way in which a typical Smart Forward Plus operates is
> If the Obligated amount exceeds your maximum exposure                described below by reference to examples of how an exporter
  under a corresponding Financial Instrument, you will face            and an importer may use a Smart Forward Plus.
  Exchange Rate Risk in relation to the excess amount of Currency
  a that you either pay to the Bank (such as, under the exporter       Foreign currency receipt – exporter
  example above) or receive from the Bank (such as, under the          an exporter may enter into a Smart Forward Plus to protect from
  importer example above).                                             a rise in a Currency Exchange Rate while retaining the ability to
> Until Expiry there is uncertainty in relation to the maximum         benefit from a favourable movement in a Currency Exchange
  amount of currency you may be obliged to exchange on the             Rate (so long as the Spot Currency Exchange Rate does not
  Payment Date.                                                        trade at a level that is equal to or lower than the Barrier Rate
                                                                       at any time during the Barrier Period). For the purpose of this
> If the amounts of the currencies to be exchanged on the              example Currency a is US$ and Currency B is NZ$.
  Payment Date are determined by reference to the Principal
  amount and the Principal amount is less than your maximum            If you are an exporter and the Spot Currency Exchange Rate
  exposure under the corresponding Financial Instrument,               has not traded at a rate that is equal to or lower than the Barrier
  this FX Derivative will not mitigate your Exchange Rate Risk         Rate at any time during the Barrier Period and at Expiry:
  in relation to the remaining portion of your exposure under
                                                                     > the Spot Currency Exchange Rate is equal to or higher than
  the corresponding Financial Instrument.
                                                                       the Worst Case Rate, on the Payment Date you must pay to
                                                                       the Bank the Principal amount of US$ in exchange for the Bank
  10.    What iS a Smart ForWard pluS?                                 paying to you an amount of NZ$ (calculated by applying the
  (includinG a late StartinG or early FiniShinG Smart                  Worst Case Rate to the Principal amount of US$), unless at
  ForWard pluS)                                                        Expiry your instructions to the Bank are that you do not wish to
                                                                       exchange the currencies in those circumstances. If you instruct
  Like a Smart Forward, a Smart Forward Plus can protect from          the Bank that you do not wish to exchange the currencies no
  an unfavourable movement in a Currency Exchange Rate                 payments are made under the Smart Forward Plus; or
  and allows you to retain the ability to take advantage of
  a favourable exchange rate movement so long as the Spot            > the Spot Currency Exchange Rate is lower than the Worst Case
  Currency Exchange Rate does not trade at or through                  Rate, no payments are made under the Smart Forward Plus.
  a pre-agreed Currency Exchange Rate (“Barrier rate”)                 However, if you are an exporter and the Spot Currency Exchange
  at any time during the Barrier Period.                               Rate has traded at a rate that is equal to or lower than the
                                                                       Barrier Rate at any time during the Barrier Period and at Expiry:
  However, a Smart Forward Plus has an additional feature that
  allows you to exchange currencies at a Currency Exchange Rate      > the Spot Currency Exchange Rate is equal to or higher than
  that is better than the Worst Case Rate (“adjusted Worst case        the adjusted Worst Case Rate, on the Payment Date you must
  rate”) if the Spot Currency Exchange Rate trades at or through       pay to the Bank the Principal amount of US$ in exchange for
  the Barrier Rate during the Barrier Period.                          the Bank paying to you an amount of NZ$ (calculated by
  In return for the adjusted Worst Case Rate, one or both of the       applying the adjusted Worst Case Rate to the Principal
  Barrier Rate and the Worst Case Rate is set at a level that is       amount of US$), unless at Expiry your instructions to the
  worse for you than if you had instead entered into a comparable      Bank are that you do not wish to exchange the currencies
  Smart Forward (i.e. a Smart Forward for the same Principal           in those circumstances. If you instruct the Bank that you do
  amount and having the same Trade Date and Payment Date).             not wish to exchange the currencies no payments are made
                                                                       under the Smart Forward Plus; or
11
 structureD FX Derivatives



> the Spot Currency Exchange Rate is lower than the adjusted          late Starting or early Finishing Smart Forward plus
  Worst Case Rate, on the Payment Date you must pay to the
                                                                      an additional feature can be added to a Smart Forward Plus,
  Bank the Principal amount of US$ in exchange for the Bank
                                                                      limiting the period of time during which the Barrier Rate will
  paying to you an amount of NZ$ (calculated by applying the
                                                                      apply. a Smart Forward Plus with this feature may be referred
  adjusted Worst Case Rate to the Principal amount of US$).
                                                                      to as either a late Starting Smart Forward plus or an early
  Foreign currency payment – importer                                 Finishing Smart Forward plus. The effect of this feature is
  an importer may enter into a Smart Forward Plus to protect          discussed further in section 23.
  from a fall in a Currency Exchange Rate while retaining the         What are the principal risks of a Smart Forward plus?
  ability to benefit from a favourable movement in a Currency
  Exchange Rate (so long as the Spot Currency Exchange Rate           The risks identified in section 6 of the Disclosure Statement
  does not trade at a level that is equal to or higher than the       apply to the Smart Forward Plus (including a Late Starting
  Barrier Rate at any time during the Barrier Period). For the        or Early Finishing Smart Forward Plus).
  purpose of this example Currency a is US$ and Currency B            In addition, entering into a Smart Forward Plus (including a
  is NZ$.                                                             Late Starting or Early Finishing Smart Forward Plus) gives rise
  If you are an importer and the Spot Currency Exchange Rate          to the risk that if the Spot Currency Exchange Rate trades at or
  has not traded at a rate that is equal to or higher than the        through the Barrier Rate at any time during the Barrier Period
  Barrier Rate at any time during the Barrier Period and at Expiry:   you may be obliged to exchange currencies at the adjusted
                                                                      Worst Case Rate. If you are obliged to exchange currencies in
> the Spot Currency Exchange Rate is equal to or lower than the       this circumstance, the adjusted Worst Case Rate will be worse
  Worst Case Rate, on the Payment Date you must pay to the            for you than the Spot Currency Exchange Rate on Expiry.
  Bank an amount of NZ$ (calculated by applying the Worst
  Case Rate to the Principal amount of US$) in exchange for the
  Bank paying to you the Principal amount of US$, unless at           11.    What iS a ratio Smart ForWard pluS?
  Expiry your instructions to the Bank are that you do not wish to    (includinG a late StartinG or early FiniShinG ratio
  exchange the currencies in those circumstances. If you instruct     Smart ForWard pluS)
  the Bank that you do not wish to exchange the currencies no
  payments are made under the Smart Forward Plus; or                  a Ratio Smart Forward Plus is the same as a Smart Forward Plus
                                                                      except that one or more of the Worst Case Rate, adjusted Worst
> the Spot Currency Exchange Rate is higher than the Worst Case       Case Rate and the Barrier Rate will be set at a level that is better
  Rate, no payments are made under the Smart Forward Plus.            for you than if you had instead entered into a comparable
  However, if you are an importer and the Spot Currency               Smart Forward Plus (i.e. a Smart Forward Plus for the same
  Exchange Rate has traded at a rate that is equal to or higher       Principal amount and having the same Trade Date and
  than the Barrier Rate at any time during the Barrier Period         Payment Date).
  and at Expiry:                                                      In return for one or more of the Worst Case Rate, adjusted
> the Spot Currency Exchange Rate is equal to or lower than the       Worst Case Rate and the Barrier Rate being set at a level that is
  adjusted Worst Case Rate, on the Payment Date you must pay          better for you, until Expiry you will have uncertainty in relation
  to the Bank an amount of NZ$ (calculated by applying the            to the maximum amount of currency you may be obliged to
  adjusted Worst Case Rate to the Principal amount of US$) in         exchange on the Payment Date.
  exchange for the Bank paying to you the Principal amount of         entering into a ratio Smart Forward plus
  US$, unless at Expiry your instructions to the Bank are that you
  do not wish to exchange the currencies in those circumstances.      When you enter into a Ratio Smart Forward Plus you
  If you instruct the Bank that you do not wish to exchange the       nominate the same terms that you nominate when entering
  currencies no payments are made under the Smart Forward             into a Smart Forward Plus as well as an amount of Currency
  Plus; or                                                            a which is greater than the Principal amount of Currency a
                                                                      (the “obligated amount”).
> the Spot Currency Exchange Rate is higher than the adjusted
  Worst Case Rate, on the Payment Date you must pay to the            The Principal amount is typically equal to a portion of
  Bank an amount of NZ$ (calculated by applying the adjusted          your exposure under a corresponding Financial Instrument
  Worst Case Rate to the Principal amount of US$) in exchange         while the Obligated amount is typically an amount not
  for the Bank paying to you the Principal amount of US$.             exceeding your maximum exposure under the corresponding
  The Worst Case Rate, adjusted Worst Case Rate, Barrier              Financial Instrument.
  Rate, Expiry, Payment Date and amounts of currency to               The amount of the two currencies to be exchanged on the
  be exchanged will be specified in the terms of the Smart            Payment Date depends on the Worst Case Rate, the adjusted
  Forward Plus.                                                       Worst Case Rate, the Spot Currency Exchange Rate at Expiry
                                                                      and whether the Spot Currency Exchange Rate has traded at or
                                                                      through the Barrier Rate at any time during the Barrier Period.




                                                                                                                                       12
 structureD FX Derivatives



  how does a ratio Smart Forward plus work?                               If you are an importer and the Spot Currency Exchange Rate
                                                                          has not traded at a rate that is equal to or higher than the
  The way in which a typical Ratio Smart Forward Plus operates
                                                                          Barrier Rate at any time during the Barrier Period and at Expiry:
  is described below by reference to examples of how an
  exporter and an importer may use a Ratio Smart Forward Plus.          > the Spot Currency Exchange Rate is equal to or lower than the
                                                                          Worst Case Rate, on the Payment Date you must pay to the
  Foreign currency receipt – exporter
                                                                          Bank an amount of NZ$ (calculated by applying the Worst
  an exporter may enter into a Smart Forward Plus to protect              Case Rate to the Principal amount of US$) in exchange for the
  from a rise in a Currency Exchange Rate while retaining the             Bank paying to you the Principal amount of US$, unless at
  ability to benefit from a favourable movement in a Currency             Expiry your instructions to the Bank are that you do not wish to
  Exchange Rate (so long as the Spot Currency Exchange Rate               exchange the currencies in those circumstances. If you instruct
  does not trade at a level that is equal to or lower than the            the Bank that you do not wish to exchange the currencies no
  Barrier Rate at any time during the Barrier Period). For the            payments are made under the Ratio Smart Forward Plus; or
  purpose of this example Currency a is US$ and Currency B              > the Spot Currency Exchange Rate is higher than the Worst
  is NZ$.                                                                 Case Rate, no payments are made under the Ratio Smart
  If you are an exporter and the Spot Currency Exchange Rate              Forward Plus.
  has not traded at a rate that is equal to or lower than the Barrier     However, if you are an importer and the Spot Currency
  Rate at any time during the Barrier Period and at Expiry:               Exchange Rate has traded at a rate that is equal to or higher
> the Spot Currency Exchange Rate is equal to or higher than              than the Barrier Rate at any time during the Barrier Period
  the Worst Case Rate, on the Payment Date you must pay to the            and at Expiry:
  Bank the Principal amount of US$ in exchange for the Bank             > the Spot Currency Exchange Rate is equal to or lower than the
  paying to you an amount of NZ$ (calculated by applying the              adjusted Worst Case Rate, on the Payment Date you must pay
  Worst Case Rate to the Principal amount of US$), unless at              to the Bank an amount of NZ$ (calculated by applying the
  Expiry your instructions to the Bank are that you do not wish to        adjusted Worst Case Rate to the Principal amount of US$) in
  exchange the currencies in those circumstances. If you instruct         exchange for the Bank paying to you the Principal amount of
  the Bank that you do not wish to exchange the currencies no             US$, unless at Expiry your instructions to the Bank are that you
  payments are made under the Ratio Smart Forward Plus; or                do not wish to exchange the currencies in those circumstances.
> the Spot Currency Exchange Rate is lower than the Worst                 If you instruct the Bank that you do not wish to exchange the
  Case Rate, no payments are made under the Ratio Smart                   currencies no payments are made under the Ratio Smart
  Forward Plus.                                                           Forward Plus; or
  However, if you are an exporter and the Spot Currency                 > the Spot Currency Exchange Rate is higher than the adjusted
  Exchange Rate has traded at a rate that is equal to or lower            Worst Case Rate, on the Payment Date, you must pay to the
  than the Barrier Rate at any time during the Barrier Period and         Bank an amount of NZ$ (calculated by applying the adjusted
  at Expiry:                                                              Worst Case Rate to the Obligated amount of US$) in exchange
                                                                          for the Bank paying to you the Obligated amount of US$.
> the Spot Currency Exchange Rate is equal to or higher than the
  adjusted Worst Case Rate, on the Payment Date you must pay              late Starting or early Finishing ratio Smart Forward plus
  to the Bank the Principal amount of US$ in exchange for the             an additional feature can be added to a Ratio Smart Forward
  Bank paying to you an amount of NZ$ (calculated by applying             Plus, limiting the period of time during which the Barrier Rate
  the adjusted Worst Case Rate to the Principal amount of US$),           will apply. a Ratio Smart Forward Plus with this feature may be
  unless at Expiry your instructions to the Bank are that you do          referred to as either a late Starting ratio Smart Forward plus
  not wish to exchange the currencies in those circumstances.             or an early Finishing ratio Smart Forward plus. The effect of
  If you instruct the Bank that you do not wish to exchange               this feature is discussed further in section 23.
  the currencies no payments are made under the Ratio Smart
  Forward Plus; or                                                        What are the principal risks of a ratio Smart Forward plus?
> the Spot Currency Exchange Rate is lower than the adjusted              The risks identified in section 6 of the Disclosure Statement and
  Worst Case Rate, on the Payment Date you must pay to the                in this Supplement in relation to a Smart Forward Plus apply to
  Bank the Obligated amount of US$ in exchange for the Bank               a Ratio Smart Forward Plus (including a Late Starting or Early
  paying to you an amount of NZ$ (calculated by applying the              Finishing Ratio Smart Forward Plus).
  adjusted Worst Case Rate to the Obligated amount of US$).               In addition, entering into a Ratio Smart Forward Plus (including
  Foreign currency payment – importer                                     a Late Starting or Early Finishing Ratio Smart Forward Plus)
                                                                          gives rise to the risks that:
  an importer may enter into a Ratio Smart Forward Plus to
  protect from a fall in a Currency Exchange Rate while retaining       > If the Obligated amount exceeds your maximum exposure
  the ability to benefit from a favourable movement in a                  under a corresponding Financial Instrument, you will face
  Currency Exchange Rate (so long as the Spot Currency                    Exchange Rate Risk in relation to the excess amount of Currency
  Exchange Rate does not trade at a level that is equal to or             a that you either pay to the Bank (such as, under the exporter
  higher than the Barrier Rate at any time during the Barrier             example above) or receive from the Bank (such as, under the
  Period). For the purpose of this example Currency a is US$              importer example above) under the Ratio Smart Forward Plus.
  and Currency B is NZ$.
13
 structureD FX Derivatives



> Until Expiry there is uncertainty in relation to the maximum           how does a Smart Forward combo work?
  amount of currency you may be obliged to exchange on the
                                                                         The way in which a typical Smart Forward Combo operates is
  Payment Date.
                                                                         described below by reference to examples of how an exporter
> If the amounts of the currencies to be exchanged on the                and an importer may use a Smart Forward Combo.
  Payment Date are determined by reference to the Principal
  amount and the Principal amount is less than your maximum              Foreign currency receipt – exporter
  exposure under the corresponding Financial Instrument, this            an exporter may enter into a Smart Forward Combo to protect
  FX Derivative will not mitigate your Exchange Rate Risk in             from a rise in a Currency Exchange Rate while retaining the
  relation to the remaining portion of your exposure under               ability to benefit from a favourable exchange rate movement
  the corresponding Financial Instrument.                                in relation to the Participating amount (so long as the Spot
                                                                         Currency Exchange Rate does not trade at a level that is equal
  12.    What iS a Smart ForWard comBo?                                  to or lower than the Barrier Rate at any time during the Barrier
                                                                         Period). For the purpose of this example Currency a is US$ and
  (includinG a late StartinG or early FiniShinG Smart                    Currency B is NZ$.
  ForWard comBo)
                                                                         If you are an exporter and the Spot Currency Exchange Rate
  Like a Forward Exchange Contract, a Smart Forward Combo                has not traded at a rate that is equal to or lower than the Barrier
  can protect from an unfavourable movement in a Currency                Rate at any time during the Barrier Period and at Expiry:
  Exchange Rate. However, a Smart Forward Combo has an
  additional feature allowing you to retain the ability to take        > the Spot Currency Exchange Rate is equal to or higher than
  advantage of a favourable exchange rate movement on a                  the Worst Case Rate, on the Payment Date you must pay to
  specified percentage of the Principal amount, so long as the           the Bank the Principal amount of US$ in exchange for the Bank
  Spot Currency Exchange Rate does not trade at or through               paying to you an amount of NZ$ (calculated by applying the
  a pre-agreed Currency Exchange Rate (“Barrier rate”) at any            Worst Case Rate to the Principal amount of US$), unless at
  time during the Barrier Period.                                        Expiry your instructions to the Bank are that you do not wish to
                                                                         exchange the currencies in those circumstances. If you instruct
  In return for this ability to take advantage of a favourable           the Bank that you do not wish to exchange the currencies no
  Currency Exchange Rate movement the Worst Case Rate is set             payments are made under the Smart Forward Combo; or
  at a level that is worse for you than if you had instead entered
  into a comparable Forward Exchange Contract (i.e. a Forward          > the Spot Currency Exchange Rate is lower than the Worst
  Exchange Contract for the same Principal amount and having             Case Rate, on the Payment Date you must pay to the Bank an
  the same Trade Date and Payment Date).                                 amount of US$ which is equal to the difference between the
                                                                         Principal amount of US$ and the Participating amount of US$,
  If the Spot Currency Exchange Rate trades at or through the            in exchange for the Bank paying to you an amount of NZ$
  Barrier Rate at any time during the Barrier Period you may be          (calculated by applying the Worst Case Rate to that amount
  required to exchange the Principal amount at the Worst Case            of US$).
  Rate on the Payment Date.
                                                                         However, if you are an exporter and the Spot Currency Exchange
  entering into a Smart Forward combo                                    Rate has traded at a rate that is equal to or lower than the Barrier
                                                                         Rate at any time during the Barrier Period and at Expiry:
  When you enter into a Smart Forward Combo you nominate:
                                                                       > the Spot Currency Exchange Rate is equal to or higher than
> a Principal amount of a currency (Currency a) that you
                                                                         the Worst Case Rate, on the Payment Date you must pay to
  would like to exchange for another currency (Currency B);
                                                                         the Bank the Principal amount of US$ in exchange for the Bank
> a percentage of the Principal amount of Currency a on which            paying to you an amount of NZ$ (calculated by applying the
  you wish to be able to take advantage of a favourable exchange         Worst Case Rate to the Principal amount of US$), unless at
  rate movement (the “participating amount”); and                        Expiry your instructions to the Bank are that you do not wish to
> the Payment Date.                                                      exchange the currencies in those circumstances. If you instruct
                                                                         the Bank that you do not wish to exchange the currencies no
  Based on the above, you and the Bank will agree a Worst Case           payments are made under the Smart Forward Combo; or
  Rate to apply to the Smart Forward Combo as well as a Barrier
  Rate. The Barrier Rate will be a rate which is better for you than   > the Spot Currency Exchange Rate is lower than the Worst
  the Worst Case Rate and the Spot Currency Exchange Rate on             Case Rate, on the Payment Date you must pay to the Bank the
  the Trade Date.                                                        Principal amount of US$ in exchange for the Bank paying to
                                                                         you an amount of NZ$ (calculated by applying the Worst Case
  The amount of the two currencies to be exchanged on the                Rate to the Principal amount of US$).
  Payment Date depends on the Worst Case Rate, the Spot
  Currency Exchange Rate at Expiry and whether the Spot
  Currency Exchange Rate has traded at or through the Barrier
  Rate at any time during the Barrier Period.




                                                                                                                                           14
 structureD FX Derivatives



  Foreign currency payment – importer                                       What are the principal risks of a Smart Forward combo?
  an importer may enter into a Smart Forward Combo to protect               The risks identified in section 6 of the Disclosure Statement
  from a fall in a Currency Exchange Rate while retaining the               apply to a Smart Forward Combo (including a Late Starting
  ability to benefit from a favourable exchange rate movement               or Early Finishing Smart Forward Combo).
  in relation to the Participating amount (so long as the Spot
                                                                            In addition, entering into a Smart Forward Combo (including
  Currency Exchange Rate does not trade at a level that is equal
                                                                            a Late Starting or Early Finishing Smart Forward Combo) gives
  to or higher than the Barrier Rate at any time during the Barrier
                                                                            rise to the risk that if the Spot Currency Exchange Rate trades
  Period). For the purpose of this example Currency a is US$ and
                                                                            at or through the Barrier Rate at any time during the Barrier
  Currency B is NZ$.
                                                                            Period you may be obliged to exchange currencies at the
  If you are an importer, and the Spot Currency Exchange Rate               Worst Case Rate. If you are obliged to exchange currencies
  has not traded at a rate that is equal to or higher than the              in this circumstance, the Worst Case Rate will be worse for
  Barrier Rate at any time during the Barrier Period and at Expiry:         you than the Spot Currency Exchange Rate on Expiry.
> the Spot Currency Exchange Rate is equal to or lower than the
  Worst Case Rate, on the Payment Date you must pay to the                  13.    What iS a Smart ForWard pluS (aWcr)?
  Bank an amount of NZ$ (calculated by applying the Worst
                                                                            (includinG a late StartinG or early FiniShinG Smart
  Case Rate to the Principal amount of US$) in exchange for
                                                                            ForWard pluS (aWcr))
  the Bank paying to you the Principal amount of US$, unless at
  Expiry your instructions to the Bank are that you do not wish to          a Smart Forward Plus (aWCR) is similar to a Smart Forward
  exchange the currencies in those circumstances. If you instruct           Plus in that currencies may be exchanged at either a Worst
  the Bank that you do not wish to exchange the currencies no               Case Rate or an adjusted Worst Case Rate (that is, a Currency
  payments are made under the Smart Forward Combo; or                       Exchange Rate that is better for you than the Worst Case Rate).
> the Spot Currency Exchange Rate is higher than the Worst                  However, the circumstances in which each rate can apply are
  Case Rate, on the Payment Date you must pay to the Bank an                different. That is, under a Smart Forward Plus (aWCR):
  amount of NZ$ (calculated by subtracting the Participating              > if the Spot Currency Exchange Rate does not trade at or
  amount of US$ from the Principal amount of US$ and applying               through the Barrier Rate during the Barrier Period you will be
  the Worst Case Rate to this amount). In exchange the Bank will            able to exchange currencies at the adjusted Worst Case Rate
  pay to you an amount of US$ which is equal to the difference              on the Payment Date (as opposed to the Worst Case Rate which
  between the Participating amount and the Principal amount.                would apply in these circumstances under a Smart Forward
  However, if you are an importer and the Spot Currency Exchange            Plus); and
  Rate has traded at a rate that is equal to or higher than the Barrier   > if the Spot Currency Exchange Rate trades at or through the
  Rate at any time during the Barrier Period and at Expiry:                 Barrier Rate at any time during the Barrier Period you may be
> the Spot Currency Exchange Rate is equal to or lower than                 obliged to exchange currencies at the Worst Case Rate on the
  the Worst Case Rate, on the Payment Date you must pay to the              Payment Date (as opposed to the adjusted Worst Case Rate
  Bank an amount of NZ$ (calculated by applying the Worst Case              which would apply in these circumstances under a Smart
  Rate to the Principal amount of US$) in exchange for the Bank             Forward Plus).
  paying to you the Principal amount of US$, unless at Expiry               entering into a Smart Forward plus (aWcr)
  your instructions to the Bank are that you do not wish to
                                                                            When you enter into a Smart Forward Plus (aWCR) you nominate:
  exchange the currencies in those circumstances. If you instruct
  the Bank that you do not wish to exchange the currencies no             > a Principal amount of a currency (Currency a) that you
  payments are made under the Smart Forward Combo; or                       would like to exchange for another currency (Currency B); and
> the Spot Currency Exchange Rate is higher than the Worst                > the Payment Date.
  Case Rate, on the Payment Date you must pay to the Bank an                Based on the above, you and the Bank will agree a Worst Case
  amount of NZ$ (calculated by applying the Worst Case Rate to              Rate, an adjusted Worst Case Rate as well as a Barrier Rate.
  the Principal amount of US$) in exchange for the Bank paying
  to you the Principal amount of US$.                                       The Barrier Rate will be a rate which is better for you than the
                                                                            Worst Case Rate, the adjusted Worst Case Rate and the Spot
  The Worst Case Rate, Barrier Rate, Expiry, Payment Date and
                                                                            Currency Exchange Rate at the Trade Date.
  amounts of currency to be exchanged will be specified in the
  terms of the Smart Forward Combo.                                         The amount of the two currencies to be exchanged on the
                                                                            Payment Date depends on the Worst Case Rate, the adjusted
  late Starting or early Finishing Smart Forward combo
                                                                            Worst Case Rate, the Spot Currency Exchange Rate at Expiry
  an additional feature can be added to a Smart Forward Combo,              and whether the Spot Currency Exchange Rate has traded at or
  limiting the period of time during which the Barrier Rate will            through the Barrier Rate at any time during the Barrier Period.
  apply. a Smart Forward Combo with this feature may be
  referred to as either a late Starting Smart Forward combo
  or an early Finishing Smart Forward combo. The effect of
  this feature is discussed further in section 23.


15
 structureD FX Derivatives



  how does a Smart Forward plus (aWcr) work?                              Foreign currency payment – importer
  The way in which a typical Smart Forward Plus (aWCR)                    an importer may enter into a Smart Forward Plus (aWCR)
  operates is described below by reference to examples of                 to protect from a fall in a Currency Exchange Rate while
  how an exporter and an importer may use a Smart Forward                 retaining the ability to benefit from a favourable movement
  Plus (aWCR).                                                            in a Currency Exchange Rate (so long as the Spot Currency
                                                                          Exchange Rate does not trade at a level that is equal to or
  Foreign currency receipt – exporter
                                                                          higher than the Barrier Rate at any time during the Barrier
  an exporter may enter into a Smart Forward Plus (aWCR)                  Period). For the purpose of this example Currency a is US$
  to protect from a rise in a Currency Exchange Rate while                and Currency B is NZ$.
  retaining the ability to benefit from a favourable movement
                                                                          If you are an importer and the Spot Currency Exchange Rate
  in a Currency Exchange Rate (so long as the Spot Currency
                                                                          has not traded at a rate that is equal to or higher than the Barrier
  Exchange Rate does not trade at a level that is equal to or
                                                                          Rate at any time during the Barrier Period and at Expiry:
  lower than the Barrier Rate at any time during the Barrier
  Period). For the purpose of this example Currency a is US$            > the Spot Currency Exchange Rate is equal to or lower than the
  and Currency B is NZ$.                                                  adjusted Worst Case Rate, on the Payment Date you must pay
                                                                          to the Bank an amount of NZ$ (calculated by applying the
  If you are an exporter and the Spot Currency Exchange Rate
                                                                          adjusted Worst Case Rate to the Principal amount of US$) in
  has not traded at a rate that is equal to or lower than the Barrier
                                                                          exchange for the Bank paying to you the Principal amount of
  Rate at any time during the Barrier Period and at Expiry:
                                                                          US$, unless at Expiry your instructions to the Bank are that you
> the Spot Currency Exchange Rate is equal to or higher than the          do not wish to exchange the currencies in those circumstances.
  adjusted Worst Case Rate, on the Payment Date you must pay              If you instruct the Bank that you do not wish to exchange the
  to the Bank the Principal amount of US$ in exchange for the             currencies no payments are made under the Smart Forward
  Bank paying to you an amount of NZ$ (calculated by applying             Plus (aWCR); or
  the adjusted Worst Case Rate to the Principal amount of US$),         > the Spot Currency Exchange Rate is higher than the adjusted
  unless at Expiry your instructions to the Bank are that you do          Worst Case Rate, no payments are made under the Smart
  not wish to exchange the currencies in those circumstances.             Forward Plus (aWCR).
  If you instruct the Bank that you do not wish to exchange the
  currencies no payments are made under the Smart Forward                 However, if you are an importer and the Spot Currency
  Plus (aWCR); or                                                         Exchange Rate has traded at a rate that is equal to or higher
                                                                          than the Barrier Rate at any time during the Barrier Period
> the Spot Currency Exchange Rate is lower than the adjusted              and at Expiry:
  Worst Case Rate, no payments are made under the Smart
  Forward Plus (aWCR).                                                  > the Spot Currency Exchange Rate is equal to or lower than
                                                                          the Worst Case Rate, on the Payment Date you must pay to
  However, if you are an exporter and the Spot Currency Exchange
                                                                          the Bank an amount of NZ$ (calculated by applying the Worst
  Rate has traded at a rate that is equal to or lower than the
                                                                          Case Rate to the Principal amount of US$) in exchange for the
  Barrier Rate at any time during the Barrier Period and at Expiry:
                                                                          Bank paying to you the Principal amount of US$, unless at
> the Spot Currency Exchange Rate is equal to or higher than the          Expiry your instructions to the Bank are that you do not wish to
  Worst Case Rate, on the Payment Date you must pay to the                exchange the currencies in those circumstances. If you instruct
  Bank the Principal amount of US$ in exchange for the Bank               the Bank that you do not wish to exchange the currencies no
  paying to you an amount of NZ$ (calculated by applying the              payments are made under the Smart Forward Plus (aWCR); or
  Worst Case Rate to the Principal amount of US$), unless at            > the Spot Currency Exchange Rate is higher than the Worst
  Expiry your instructions to the Bank are that you do not wish to        Case Rate, on the Payment Date you must pay to the Bank an
  exchange the currencies in those circumstances. If you instruct         amount of NZ$ (calculated by applying the Worst Case Rate to
  the Bank that you do not wish to exchange the currencies no             the Principal amount of US$) in exchange for the Bank paying
  payments are made under the Smart Forward Plus (aWCR); or               to you the Principal amount of US$.
> the Spot Currency Exchange Rate is lower than the Worst                 The Worst Case Rate, adjusted Worst Case Rate, Barrier
  Case Rate, on the Payment Date you must pay to the Bank the             Rate, Expiry, Payment Date and amounts of currency to be
  Principal amount of US$ in exchange for the Bank paying to              exchanged will be specified in the terms of the Smart Forward
  you an amount of NZ$ (calculated by applying the Worst Case             Plus (aWCR).
  Rate to the Principal amount of US$).
                                                                          late Starting or early Finishing Smart Forward plus (aWcr)
                                                                          an additional feature can be added to a Smart Forward Plus
                                                                          (aWCR), limiting the period of time during which the Barrier
                                                                          Rate will apply. a Smart Forward Plus (aWCR) with this feature
                                                                          may be referred to as either a late Starting Smart Forward
                                                                          plus (aWcr) or an early Finishing Smart Forward plus (aWcr).
                                                                          The effect of this feature is discussed further in section 23.



                                                                                                                                            16
 structureD FX Derivatives



  What are the principal risks of a Smart Forward plus (aWcr)?        > the Spot Currency Exchange Rate is lower than the Worst Case
                                                                        Rate but higher than the Best Case Rate, no payments are made
  The risks identified in section 6 of the Disclosure Statement
                                                                        under the FX Collar; or
  apply to the Smart Forward Plus (aWCR) (including a Late
  Starting or Early Finishing Smart Forward Plus (aWCR)).             > the Spot Currency Exchange Rate is equal to or lower than the
                                                                        Best Case Rate, on the Payment Date you must pay to the Bank
  In addition, entering into a Smart Forward Plus (aWCR)                the Principal amount of US$ in exchange for the Bank paying
  (including a Late Starting or Early Finishing Smart Forward Plus      to you an amount of NZ$ (calculated by applying the Best Case
  (aWCR)) gives rise to the risk that if the Spot Currency Exchange     Rate to the Principal amount of US$).
  Rate trades at or through the Barrier Rate at any time during the
  Barrier Period you may be obliged to exchange currencies at           Foreign currency payment – importer
  the Worst Case Rate. If you are obliged to exchange currencies        an importer may enter into a FX Collar to protect from a fall
  in this circumstance, the Worst Case Rate will be worse for you       in a Currency Exchange Rate while retaining the ability to
  that the Spot Currency Exchange Rate on Expiry.                       benefit from a favourable movement in a Currency Exchange
                                                                        Rate up to the Best Case Rate. For the purpose of this example
  14.    What iS a FX collar?                                           Currency a is US$ and Currency B is NZ$.
  a FX Collar can protect from an unfavourable movement in a            If you are an importer and at Expiry:
  Currency Exchange Rate while allowing you to take advantage
                                                                      > the Spot Currency Exchange Rate is equal to or lower than
  of a favourable exchange rate movement, to the Best Case Rate.
                                                                        the Worst Case Rate, on the Payment Date you must pay to
  In return for the ability to take advantage of a favourable           the Bank an amount of NZ$ (calculated by applying the Worst
  exchange rate movement the Worst Case Rate is generally set           Case Rate to the Principal amount of US$) in exchange for the
  at a level that is worse for you than if you had instead entered      Bank paying to you the Principal amount of US$, unless at
  into a comparable Forward Exchange Contract (i.e. a Forward           Expiry your instructions to the Bank are that you do not wish to
  Exchange Contract for the same Principal amount and having            exchange the currencies in those circumstances. If you instruct
  the same Trade Date and Payment Date).                                the Bank that you do not wish to exchange the currencies no
  entering into a FX collar                                             payments are made under the FX Collar; or
                                                                      > the Spot Currency Exchange Rate is higher than the Worst Case
  When you enter into a FX Collar you nominate:
                                                                        Rate but lower than the Best Case Rate, no payments are made
> a Principal amount of a currency (Currency a) that you                under the FX Collar; or
  would like to exchange for another currency (Currency B); and
                                                                      > the Spot Currency Exchange Rate is equal to or higher than the
> the Payment Date.                                                     Best Case Rate, on the Payment Date you must pay to the Bank
  Based on the above, you and the Bank will agree a Worst               an amount of NZ$ (calculated by applying the Best Case Rate to
  Case Rate and a Best Case Rate to apply to the FX Collar.             the Principal amount of US$) in exchange for the Bank paying
                                                                        to you the Principal amount of US$.
  The amount of the two currencies to be exchanged on the
  Payment Date depends on the Worst Case Rate, the Best Case            The Worst Case Rate, Best Case Rate, Expiry, Payment Date and
  Rate and the Spot Currency Exchange Rate at Expiry.                   amounts of currency to be exchanged will be specified in the
                                                                        terms of the FX Collar.
  how does a FX collar work?
                                                                        What are the principal risks of a FX collar?
  The way in which a typical FX Collar operates is described
  below by reference to examples of how an exporter and an              The risks identified in section 6 of the Disclosure Statement
  importer may use a FX Collar.                                         apply to a FX Collar.
  Foreign currency receipt – exporter
                                                                        15.    What iS a ratio collar?
  an exporter may enter into a FX Collar to protect from a rise
  in a Currency Exchange Rate while retaining the ability to            a Ratio Collar can protect from an unfavourable movement
  benefit from a favourable movement in a Currency Exchange             in a Currency Exchange Rate while allowing you to take
  Rate down to the Best Case Rate. For the purpose of this              advantage of a favourable exchange rate movement to the
  example Currency a is US$ and Currency B is NZ$.                      Best Case Rate. In addition, a Ratio Collar allows you to obtain
                                                                        either a better Worst Case Rate, Best Case Rate (or both) than
  If you are an exporter and at Expiry:                                 if you had instead entered into a comparable FX Collar (i.e. a
> the Spot Currency Exchange Rate is equal to or higher than            FX Collar for the same Principal amount and having the same
  the Worst Case Rate, on the Payment Date you must pay to              Trade Date and Payment Date).
  the Bank the Principal amount of US$ in exchange for the Bank
                                                                        In return for one or both of the Worst Case Rate and the Best
  paying to you an amount of NZ$ (calculated by applying the
                                                                        Case Rate being set at a level which is better for you, until
  Worst Case Rate to the Principal amount of US$), unless at
                                                                        Expiry you will have uncertainty in relation to the maximum
  Expiry your instructions to the Bank are that you do not wish to
                                                                        amount of currency you may be obliged to exchange on the
  exchange the currencies in those circumstances. If you instruct
                                                                        Payment Date.
  the Bank that you do not wish to exchange the currencies no
  payments are made under the FX Collar; or

17
 structureD FX Derivatives



  entering into a ratio collar                                          If you are an importer and at Expiry:
  When you enter into a Ratio Collar you nominate:                    > the Spot Currency Exchange Rate is equal to or lower than
                                                                        the Worst Case Rate, on the Payment Date you must pay to
> a Principal amount of a currency (Currency a) that you would
                                                                        the Bank an amount of an amount of NZ$ (calculated by
  like to exchange for another currency (Currency B);
                                                                        applying the Worst Case Rate to the Principal amount of US$)
> an amount of Currency a which is greater than the Principal           in exchange for the Bank paying to you the Principal amount of
  amount of Currency a (the “obligated amount”); and                    US$, unless at Expiry your instructions to the Bank are that you
> the Payment Date.                                                     do not wish to exchange the currencies in those circumstances.
                                                                        If you instruct the Bank that you do not wish to exchange the
  The Principal amount is typically equal to a portion of your          currencies no payments are made under the Ratio Collar; or
  exposure under the corresponding Financial Instrument,
  while the Obligated amount is typically an amount not               > the Spot Currency Exchange Rate is higher than the Worst Case
  exceeding your maximum exposure under the corresponding               Rate but lower than the Best Case Rate, no payments are made
  Financial Instrument.                                                 under the Ratio Collar; or

  Based on the above, you and the Bank will agree a Worst             > the Spot Currency Exchange Rate is equal to or higher than the
  Case Rate and a Best Case Rate to apply to the Ratio Collar.          Best Case Rate, on the Payment Date you must pay to the Bank
                                                                        an amount of NZ$ (calculated by applying the Best Case Rate to
  The amount of the two currencies to be exchanged on the               the Obligated amount of US$) in exchange for the Bank paying
  Payment Date depends on the Worst Case Rate, the Best                 to you the Obligated amount of US$.
  Case Rate and the Spot Currency Exchange Rate at Expiry.
                                                                        The Worst Case Rate, Best Case Rate, Expiry, Payment Date and
  how does a ratio collar work?                                         amounts of currency to be exchanged will be specified in the
                                                                        terms of the Ratio Collar.
  The way in which a typical Ratio Collar operates is described
  below by reference to examples of how an exporter and an              What are the principal risks of a ratio collar?
  importer may use a Ratio Collar.
                                                                        The risks identified in section 6 of the Disclosure Statement
  Foreign currency receipt – exporter                                   apply to a Ratio Collar.
  an exporter may enter into a Ratio Collar to protect from             In addition, entering into a Ratio Collar gives rise to the risks that:
  a rise in a Currency Exchange Rate while retaining the ability
                                                                      > If the Obligated amount exceeds your maximum exposure
  to benefit from a favourable movement in a Currency Exchange
                                                                        under a corresponding Financial Instrument, you will face
  Rate down to the Best Case Rate. For the purpose of this example
                                                                        Exchange Rate Risk in relation to the excess amount of Currency
  Currency a is US$ and Currency B is NZ$.
                                                                        a that you either pay to the Bank (such as, under the exporter
  If you are an exporter and at Expiry:                                 example above) or receive from the Bank (such as, under the
                                                                        importer example above).
> the Spot Currency Exchange Rate is equal to or higher than
  the Worst Case Rate, on the Payment Date you must pay to            > Until Expiry there is uncertainty in relation to the maximum
  the Bank the Principal amount of US$ in exchange for the Bank         amount of currency you may be obliged to exchange on the
  paying to you an amount of NZ$ (calculated by applying the            Payment Date.
  Worst Case Rate to the Principal amount of US$), unless at          > If the amounts of the currencies to be exchanged on the
  Expiry your instructions to the Bank are that you do not wish to      Payment Date are determined by reference to the Principal
  exchange the currencies in those circumstances. If you instruct       amount and the Principal amount is less than your maximum
  the Bank that you do not wish to exchange the currencies no           exposure under the corresponding Financial Instrument, this
  payments are made under the Ratio Collar; or                          FX Derivative will not mitigate your Exchange Rate Risk in
> the Spot Currency Exchange Rate is lower than the Worst Case          relation to the remaining portion of your exposure under
  Rate but higher than the Best Case Rate, no payments are made         the corresponding Financial Instrument.
  under the Ratio Collar; or
> the Spot Currency Exchange Rate is equal to or lower than the         16.    What iS a Smart collar?
  Best Case Rate, on the Payment Date you must pay to the Bank          (includinG a late StartinG or early FiniShinG
  the Obligated amount of US$ in exchange for the Bank paying           Smart collar)
  to you an amount of NZ$ (calculated by applying the Best Case
  Rate to the Obligated amount of US$).                                 a Smart Collar can protect from an unfavourable movement in a
                                                                        Currency Exchange Rate while allowing you to take advantage of
  Foreign currency payment – importer                                   a favourable exchange rate movement to a pre-agreed Currency
  an importer may enter into a Ratio Collar to protect from             Exchange Rate (“Barrier rate”). However, if the Spot Currency
  a fall in a Currency Exchange Rate while retaining the ability to     Exchange Rate trades at or through the Barrier Rate at any time
  benefit from a favourable movement in a Currency Exchange             during the Barrier Period, a Best Case Rate will apply to the Smart
  Rate up to the Best Case Rate. For the purpose of this example        Collar and you will only be able to take advantage of a favourable
  Currency a is US$ and Currency B is NZ$.                              exchange rate movement to this level.



                                                                                                                                             18
 structureD FX Derivatives



  In return for this ability to take advantage of a favourable            However, if you are an exporter and at any time during the
  exchange rate movement the Worst Case Rate is set at a level            Barrier Period the Spot Currency Exchange Rate has traded at a
  that is worse for you than if you had instead entered into              rate that is equal to or lower than the Barrier Rate and at Expiry:
  a comparable Forward Exchange Contract (i.e. a Forward
                                                                        > the Spot Currency Exchange Rate is equal to or higher than
  Exchange Contract for the same Principal amount and
                                                                          the Worst Case Rate, on the Payment Date you must pay to
  having the same Trade Date and Payment Date).
                                                                          the Bank the Principal amount of US$ in exchange for the Bank
  entering into a Smart collar                                            paying to you an amount of NZ$ (calculated by applying the
                                                                          Worst Case Rate to the Principal amount of US$), unless at
  When you enter into a Smart Collar you nominate:
                                                                          Expiry your instructions to the Bank are that you do not wish to
> a Principal amount of a currency (Currency a) that you                  exchange the currencies in those circumstances. If you instruct
  would like to exchange for another currency (Currency B); and           the Bank that you do not wish to exchange the currencies no
> the Payment Date.                                                       payments are made under the Smart Collar; or

  Based on the above, you and the Bank will agree a Worst Case          > the Spot Currency Exchange Rate is lower than the Worst Case
  Rate and a Best Case Rate to apply to the Smart Collar as well          Rate but higher than the Best Case Rate, no payments are made
  as a Barrier Rate. The Barrier Rate will be a rate which is better      under the Smart Collar; or
  for you than the Worst Case Rate, Best Case Rate, Forward             > the Spot Currency Exchange Rate is equal to or lower than the
  Exchange Rate and the Spot Currency Exchange Rate on the                Best Case Rate, you must pay to the Bank the Principal amount
  Trade Date.                                                             of US$ in exchange for the Bank paying to you an amount of
                                                                          NZ$ (calculated by applying the Best Case Rate to the Principal
  The amount of the two currencies to be exchanged on the
                                                                          amount of US$).
  Payment Date depends on the Worst Case Rate, the Best Case
  Rate, and the Spot Currency Exchange Rate at Expiry and                 Foreign currency payment – importer
  whether the Spot Currency Exchange Rate has traded at or                an importer may enter into a Smart Collar to protect from
  through the Barrier Rate at any time during the Barrier Period.         a fall in a Currency Exchange Rate while retaining the ability to
  how does a Smart collar work?                                           benefit from a favourable movement in a Currency Exchange
                                                                          Rate up to the Barrier Rate. However, if the Spot Currency
  The way in which a typical Smart Collar operates is described           Exchange Rate trades at a level that is equal to or higher than
  below by reference to examples of how an exporter and an                the Barrier Rate at any time during the Barrier Period the best
  importer may use a Smart Collar.                                        Currency Exchange Rate that the importer can obtain is the
  Foreign currency receipt – exporter                                     Best Case Rate. For the purpose of this example Currency a
                                                                          is US$ and Currency B is NZ$.
  an exporter may enter into a Smart Collar to protect from
  a rise in a Currency Exchange Rate while retaining the ability to       If you are an importer and the Spot Currency Exchange Rate has
  benefit from a favourable movement in a Currency Exchange               not traded at a rate that is equal to or higher than the Barrier
  Rate down to the Barrier Rate. However, if the Spot Currency            Rate at any time during the Barrier Period and at Expiry:
  Exchange Rate trades at a level that is equal to or lower than        > the Spot Currency Exchange Rate is equal to or lower than
  the Barrier Rate at any time during the Barrier Period, the best        the Worst Case Rate, on the Payment Date you must pay to the
  Currency Exchange Rate that the exporter can obtain is the              Bank an amount of NZ$ (calculated by applying the Worst Case
  Best Case Rate. For the purpose of this example Currency a              Rate to the Principal amount of US$) in exchange for the Bank
  is US$ and Currency B is NZ$.                                           paying to you the Principal amount of US$, unless at Expiry
  If you are an exporter and the Spot Currency Exchange Rate              your instructions to the Bank are that you do not wish to
  does not trade at a rate that is equal to or lower than the Barrier     exchange the currencies in those circumstances. If you instruct
  Rate at any time during the Barrier Period and at Expiry:               the Bank that you do not wish to exchange the currencies no
                                                                          payments are made under the Smart Collar; or
> the Spot Currency Exchange Rate is equal to or higher than
  the Worst Case Rate, on the Payment Date you must pay to              > the Spot Currency Exchange Rate is higher than the Worst
  the Bank the Principal amount of US$ in exchange for the Bank           Case Rate, no payments are made under the Smart Collar.
  paying to you an amount of NZ$ (calculated by applying the              However, if you are an importer and at any time during the
  Worst Case Rate to the Principal amount of US$), unless at              Barrier Period the Spot Currency Exchange Rate has traded at a
  Expiry your instructions to the Bank are that you do not wish to        rate that is equal to or higher than the Barrier Rate and at Expiry:
  exchange the currencies in those circumstances. If you instruct
  the Bank that you do not wish to exchange the currencies no           > the Spot Currency Exchange Rate is equal to or lower than
  payments are made under the Smart Collar; or                            the Worst Case Rate, on the Payment Date you must pay to the
                                                                          Bank an amount of NZ$ (calculated by applying the Worst Case
> the Spot Currency Exchange Rate is lower than the Worst Case            Rate to the Principal amount of US$) in exchange for the Bank
  Rate, no payments are made under the Smart Collar.                      paying to you the Principal amount of US$, unless at Expiry
                                                                          your instructions to the Bank are that you do not wish to
                                                                          exchange the currencies in those circumstances. If you instruct
                                                                          the Bank that you do not wish to exchange the currencies no
                                                                          payments are made under the Smart Collar; or

19
 structureD FX Derivatives



> the Spot Currency Exchange Rate is higher than the Worst Case         The amount of the two currencies to be exchanged on the
  Rate but lower than the Best Case Rate, no payments are made          Payment Date depends on the Worst Case Rate, the Best Case
  under the Smart Collar; or                                            Rate, the Spot Currency Exchange Rate at Expiry and whether
> the Spot Currency Exchange Rate is equal to or higher than            the Spot Currency Exchange Rate has traded at or through the
  the Best Case Rate, you must pay to the Bank an amount of             Barrier Rate at any time during the Barrier Period.
  NZ$ (calculated by applying the Best Case Rate to the Principal       how does a ratio Smart collar work?
  amount of US$) in exchange for the Bank paying to you the
  Principal amount of US$.                                              The way in which a typical Ratio Smart Collar operates is
                                                                        described below by reference to examples of how an exporter
  The Worst Case Rate, Best Case Rate, Barrier Rate, Expiry,            and an importer may use a Ratio Smart Collar.
  Payment Date and amounts of currency to be exchanged
  will be specified in the terms of the Smart Collar.                   Foreign currency receipt – exporter

  late Starting or early Finishing Smart collar                         an exporter may enter into a Ratio Smart Collar to protect from
                                                                        a rise in a Currency Exchange Rate while retaining the ability to
  an additional feature can be added to a Smart Collar, limiting        benefit from a favourable movement in a Currency Exchange
  the period of time during which the Barrier Rate will apply.          Rate down to the Barrier Rate. However, if the Spot Currency
  a Smart Collar with this feature may be referred to as either         Exchange Rate trades at a level that is equal to or lower than
  a late Starting Smart collar or an early Finishing Smart collar.      the Barrier Rate at any time during the Barrier Period, the best
  The effect of this feature is discussed further in section 23.        Currency Exchange Rate that the exporter can obtain is the
  What are the principal risks of a Smart collar?                       Best Case Rate. For the purpose of this example Currency a
                                                                        is US$ and Currency B is NZ$.
  The risks identified in section 6 of the Disclosure Statement
  apply to a Smart Collar (including a Late Starting or Early           If you are an exporter and the Spot Currency Exchange Rate
  Finishing Smart Collar).                                              does not trade at a rate that is equal to or lower than the Barrier
                                                                        Rate at any time during the Barrier Period and at Expiry:
  In addition, entering into a Smart Collar (including a Late
  Starting or Early Finishing Smart Collar) gives rise to the risk    > the Spot Currency Exchange Rate is equal to or higher than
  that if the Spot Currency Exchange Rate trades at or through          the Worst Case Rate, on the Payment Date you must pay to
  the Barrier Rate at any time during the Barrier Period you may        the Bank the Principal amount of US$ in exchange for the Bank
  be obliged to exchange the Principal amount at the Best               paying to you an amount of NZ$ (calculated by applying the
  Case Rate. If you are obliged to exchange currencies in this          Worst Case Rate to the Principal amount of US$), unless at
  circumstance, the Best Case Rate will be worse for you than           Expiry your instructions to the Bank are that you do not wish to
  the Spot Currency Exchange Rate on Expiry.                            exchange the currencies in those circumstances. If you instruct
                                                                        the Bank that you do not wish to exchange the currencies no
                                                                        payments are made under the Ratio Smart Collar; or
  17.    What iS a ratio Smart collar?
                                                                      > the Spot Currency Exchange Rate is lower than the Worst Case
  (includinG a late StartinG or early FiniShinG ratio                   Rate, no payments are made under the Ratio Smart Collar.
  Smart collar)
                                                                        However, if you are an exporter and at any time during the
  a Ratio Smart Collar is the same as a Smart Collar except that        Barrier Period the Spot Currency Exchange Rate has traded
  one or more of the Worst Case Rate, Best Case Rate and the            at a rate that is equal to or lower than the Barrier Rate and
  Barrier Rate will be set at a level that is better for you than       at Expiry:
  if you had instead entered into a comparable Smart Collar
                                                                      > the Spot Currency Exchange Rate is equal to or higher than
  (i.e. a Smart Collar for the same Principal amount and having
                                                                        the Worst Case Rate, on the Payment Date you must pay to the
  the same Trade Date and Payment Date).
                                                                        Bank the Principal amount of US$ in exchange for the Bank
  In return for one or more of the Worst Case Rate, Best Case Rate      paying to you an amount of NZ$ (calculated by applying the
  and the Barrier Rate being set at a level that is better for you,     Worst Case Rate to the Principal amount of US$), unless at
  until Expiry you will have uncertainty in relation to the maximum     Expiry your instructions to the Bank are that you do not wish to
  amount of currency you may be obliged to exchange on the              exchange the currencies in those circumstances. If you instruct
  Payment Date.                                                         the Bank that you do not wish to exchange the currencies no
                                                                        payments are made under the Ratio Smart Collar; or
  entering into a ratio Smart collar
                                                                      > the Spot Currency Exchange Rate is lower than the Worst
  When you enter into a Ratio Smart Collar you nominate the             Case Rate but higher than the Best Case Rate, no payments
  same terms that you nominate when entering into a Smart               are made under the Ratio Smart Collar; or
  Collar as well as an amount of Currency a which is greater than
  the Principal amount of Currency a (the “obligated amount”).        > the Spot Currency Exchange Rate is equal to or lower than
                                                                        the Best Case Rate, on the Payment Date you must pay to the
  The Principal amount is typically equal to a portion of               Bank the Obligated amount of US$ in exchange for the Bank
  your exposure under a corresponding Financial Instrument              paying to you an amount of NZ$ (calculated by applying the
  while the Obligated amount is typically an amount not                 Best Case Rate to the Obligated amount of US$).
  exceeding your maximum exposure under the corresponding
  Financial Instrument.

                                                                                                                                        20
 structureD FX Derivatives



  Foreign currency payment – importer                                late Starting or early Finishing ratio Smart collar
  an importer may enter into a Ratio Smart Collar to protect         an additional feature can be added to a Ratio Smart Collar,
  from a fall in a Currency Exchange Rate while retaining the        limiting the period of time during which the Barrier Rate will
  ability to benefit from a favourable movement in a Currency        apply. a Ratio Smart Collar with this feature may be referred
  Exchange Rate up to the Barrier Rate. However, if the Spot         to as either a late Starting ratio Smart collar or an early
  Currency Exchange Rate trades at a level that is equal to or       Finishing ratio Smart collar. The effect of this feature is
  higher than the Barrier Rate at any time during the Barrier        discussed further in section 23.
  Period the best Currency Exchange Rate that the importer
                                                                     What are the principal risks of a ratio Smart collar?
  can obtain is the Best Case Rate. For the purpose of this
  example Currency a is US$ and Currency B is NZ$.                   The risks identified in section 6 of the Disclosure Statement
                                                                     and in this Supplement in relation to Smart Collars apply to a
  If you are an importer and the Spot Currency Exchange
                                                                     Ratio Smart Collar (including a Late Starting or Early Finishing
  Rate has not traded at a rate that is equal to or higher than
                                                                     Ratio Smart Collar).
  the Barrier Rate at any time during the Barrier Period and
  at Expiry:                                                         In addition, entering into a Ratio Smart Collar (including a Late
                                                                     Starting or Early Finishing Ratio Smart Collar) gives rise to the
> the Spot Currency Exchange Rate is equal to or lower than
                                                                     risks that:
  the Worst Case Rate, on the Payment Date you must pay to
  the Bank an amount of NZ$ (calculated by applying the Worst      > If the Obligated amount exceeds your maximum exposure
  Case Rate to the Principal amount of US$) in exchange for the      under a corresponding Financial Instrument, you will face
  Bank paying to you the Principal amount of US$, unless at          Exchange Rate Risk in relation to the excess amount of
  Expiry your instructions to the Bank are that you do not wish      Currency a that you either pay to the Bank (such as, under
  to exchange the currencies in those circumstances. If you          the exporter example above) or receive from the Bank
  instruct the Bank that you do not wish to exchange the             (such as, under the importer example above).
  currencies no payments are made under the Ratio Smart            > Until Expiry there is uncertainty in relation to the maximum
  Collar; or                                                         amount of currency you may be obliged to exchange on the
> the Spot Currency Exchange Rate is higher than the                 Payment Date.
  Worst Case Rate, no payments are made under the Ratio            > If the amounts of the currencies to be exchanged on the
  Smart Collar.                                                      Payment Date are determined by reference to the Principal
  However, if you are an importer and at any time during the         amount and the Principal amount is less than your maximum
  Barrier Period the Spot Currency Exchange Rate has traded          exposure under the corresponding Financial Instrument, this
  at a rate that is equal to or higher than the Barrier Rate and     FX Derivative will not mitigate your Exchange Rate Risk in
  at Expiry:                                                         relation to the remaining portion of your exposure under the
                                                                     corresponding Financial Instrument.
> the Spot Currency Exchange Rate is equal to or lower than
  the Worst Case Rate, on the Payment Date you must pay to
  the Bank an amount of NZ$ (calculated by applying the Worst
  Case Rate to the Principal amount of US$) in exchange for the
  Bank paying to you the Principal amount of US$, unless at
  Expiry your instructions to the Bank are that you do not wish
  to exchange the currencies in those circumstances. If you
  instruct the Bank that you do not wish to exchange the
  currencies no payments are made under the Ratio Smart
  Collar; or
> the Spot Currency Exchange Rate is higher than the Worst
  Case Rate but lower than the Best Case Rate, no payments
  are made under the Ratio Smart Collar; or
> the Spot Currency Exchange Rate is equal to or higher than
  the Best Case Rate, on the Payment Date you must pay to the
  Bank an amount of NZ$ (calculated by applying the Best Case
  Rate to the Obligated amount of US$) in exchange for the
  Bank paying to you the Obligated amount of US$.
  The Worst Case Rate, Best Case Rate, Barrier Rate, Expiry,
  Payment Date and amounts of currency to be exchanged
  will be specified in the terms of the Smart Collar.




21
  eXotic FX options



  18.    What iS a KnocK-out option?                                   However, if the Spot Currency Exchange rate has not traded
                                                                       at a rate that is at or through the Barrier Rate at any time during
  (includinG a late StartinG or early FiniShinG                        the Barrier Period and at Expiry:
  KnocK-out option)
                                                                     > the Spot Currency Exchange Rate is equal to or higher than
  Like a Currency Option, a Knock-Out Option can (unless it has        the Strike Price, the Option Buyer may exercise the Knock-Out
  been “knocked out” as discussed below) offer the Option Buyer        Call or (if automatic exercise applies and the conditions to the
  protection from an unfavourable movement in a Currency               automatic exercise of the Knock-Out Call have been satisfied)
  Exchange Rate, while retaining the ability to take advantage         the Knock-Out Call will be automatically exercised. If the
  of a favourable exchange rate movement. However, if the Spot         Knock-Out Call is exercised, on the Payment Date the Option
  Currency Exchange Rate trades at or through a pre-agreed             Buyer must pay to the Option Seller the Principal amount of
  Currency Exchange Rate (“Barrier rate”) during the Barrier           US$ in exchange for the Option Seller paying to the Option
  Period, the Currency Option will be cancelled or “knocked out”.      Buyer an amount of NZ$ (calculated by applying the Strike
  The Premium payable for a Knock-Out Option will always be            Price to the Principal amount of US$); or
  less than the Premium payable for a comparable Currency            > the Spot Currency Exchange Rate is lower than the Strike Price,
  Option (i.e. a Currency Option having the same Principal             the Knock-Out Call need not be exercised or, if automatic
  amount, Strike Price, Trade Date and Payment Date).                  exercise applies, the Knock-Out Call will not be exercised,
  There are two forms of a Knock-Out Option, a “Knock-Out Call”        and the only amount the Option Buyer will have paid to the
  and a “Knock-Out Put”.                                               Option Seller is the Premium required to be paid under the
                                                                       terms of the Option.
  entering into a Knock-out option
                                                                       how does a Knock-out put work?
  When entering into a Knock-Out Option the Option
                                                                       The way in which a typical Knock-Out Put operates is described
  Buyer nominates:
                                                                       below by reference to an example of how an importer may use
> a Principal amount of a currency (Currency a) to be exchanged        a Knock-Out Put.
  for another currency (Currency B);
                                                                       Foreign currency payment – importer
> the Strike Price;
                                                                       an importer may buy a Knock-Out Put to obtain protection from
> the Barrier Rate (which may be higher or lower than the Spot         a fall in a Currency Exchange Rate (provided the Knock-Out Put
  Currency Exchange Rate on the Trade Date); and                       is not “knocked out”) and to pay a lower Premium than would be
> the Payment Date.                                                    payable under a comparable Currency Option. For the purposes
                                                                       of this example Currency a is US$ and Currency B is NZ$.
  Based on the above, a Premium to be paid by the Option Buyer
  is agreed.                                                           The Option Buyer agrees to pay a Premium to the Option Seller.
                                                                       The Premium will be payable on the date or dates specified in
  how does a Knock-out call work?
                                                                       the terms of the Knock-Out Put.
  The way in which a typical Knock-Out Call operates is described
                                                                       If the Spot Currency Exchange Rate has traded at a rate that
  below by reference to an example of how an exporter may use
                                                                       is at or through the Barrier Rate at any time during the Barrier
  a Knock-Out Call.
                                                                       Period, the transaction will be cancelled and there will be no
  Foreign currency receipt – exporter                                  payments made by either party under the Knock-Out Put, other
                                                                       than the Premium required to be paid under the terms of the
  an exporter may buy a Knock-Out Call to obtain protection
                                                                       Knock-Out Put.
  from a rise in a Currency Exchange Rate (provided the Knock-
  Out Call is not “knocked out”) and to pay a lower Premium            However, if the Spot Currency Exchange Rate has not traded
  than would be payable under a comparable Currency Option.            at a rate that is at or through the Barrier Rate at any time during
  For the purposes of this example Currency a is US$ and               the Barrier Period and at Expiry:
  Currency B is NZ$.
                                                                     > the Spot Currency Exchange Rate is equal to or lower than
  The Option Buyer agrees to pay a Premium to the Option Seller.       the Strike Price, the Option Buyer may exercise the Knock-Out
  The Premium will be payable on the date or dates specified in        Put or (if automatic exercise applies and the conditions to
  the terms of the Knock-Out Call.                                     the automatic exercise of the Knock-Out Put have been
                                                                       satisfied) the Knock-Out Put will be automatically exercised.
  If the Spot Currency Exchange Rate has traded at a rate that
                                                                       If the Knock-Out Put is exercised, on the Payment Date the
  is at or through the Barrier Rate at any time during the Barrier
                                                                       Option Buyer must pay to the Option Seller an amount of
  Period, the transaction will be cancelled and there will be
                                                                       NZ$ (calculated by applying the Strike Price to the Principal
  no payments made by either party under the Knock-Out
                                                                       amount of US$), in exchange for the Option Seller paying to
  Call, other than the Premium required to be paid under the
                                                                       Option Buyer the Principal amount of US$; or
  terms of the Knock-Out Call.




                                                                                                                                        22
  eXotic FX options



> the Spot Currency Exchange Rate is higher than the Strike             entering into a Knock-in option
  Price, the Knock-Out Put need not be exercised or, if automatic
                                                                        When entering into a Knock-In Option the Option
  exercise applies, the Knock-Out Put will not be exercised, and
                                                                        Buyer nominates:
  the only amount the Option Buyer will have paid to the Option
  Seller is the Premium required to be paid under the terms of        > a Principal amount of a currency (Currency a) to be exchanged
  the Option.                                                           for another currency (Currency B);
  The Strike Price, Barrier Rate, Premium, Expiry, Payment Date       > the Strike Price;
  and amounts of currency to be exchanged will be specified           > the Barrier Rate (which may be higher or lower than the Spot
  in the terms of the Knock-Out Option.                                 Currency Exchange Rate on the Trade Date);
  late Starting or early Finishing Knock-out calls and                > the Payment Date.
  Knock-out puts
                                                                        Based on the above, a Premium to be paid by the Option Buyer
  an additional feature can be added to a Knock-Out Option,             is agreed.
  limiting the period of time during which the Barrier Rate will
  apply. a Knock-Out Call with this feature may be referred to          how does a Knock-in call work?
  as either a late Starting Knock-out call or an early Finishing        The way in which a typical Knock-In Call operates is described
  Knock-out call. a Knock-Out Put with this feature may be              below by reference to an example of how an exporter may use
  referred to as either a late Starting Knock-out put or an early       a Knock-In Call.
  Finishing Knock-out put. The effect of this feature is discussed
  further in section 23.                                                Foreign currency receipt – exporter

  What are the principal risks of a Knock-out call or a                 an exporter may buy a Knock-In Call to obtain protection from
  Knock-out put?                                                        a rise in a Currency Exchange Rate (provided the Knock-In
                                                                        Call is “knocked in”) and to pay a lower Premium than would
  The risks identified in section 6 of the Disclosure Statement         be payable under a comparable Currency Option. For the
  apply to a Knock-Out Option (including a Late Starting or Early       purposes of this example Currency a is US$ and Currency B
  Finishing Knock-Out Option).                                          is NZ$.
  In addition, entering into a Knock-Out Option (including a Late       The Option Buyer agrees to pay a Premium to the Option Seller.
  Starting or Early Finishing Knock-Out Option) gives rise to the       The Premium will be payable on the date or dates specified in
  risks that:                                                           the terms of the Knock-In Call.
> If the Spot Currency Exchange Rate trades at or through the           If the Spot Currency Exchange Rate has not traded at a rate that
  Barrier Rate at any time during the Barrier Period the                is at or through the Barrier Rate at any time during the Barrier
  transaction will be cancelled.                                        Period, there will be no payments made by either party under
> Until the earlier of the Spot Currency Exchange Rate trading          the Knock-In Call, other than the Premium required to be paid
  at or through the Barrier Rate and the end of the Barrier Period,     under the terms of the Knock-In Call.
  there is uncertainty as to whether the Option Buyer will have         However, if the Spot Currency Exchange Rate has traded at a
  the right to exchange the currencies at the Strike Price on the       rate that is at or through the Barrier Rate at any time during the
  Payment Date.                                                         Barrier Period and at Expiry:
                                                                      > the Spot Currency Exchange Rate is equal to or higher than
  19.    What iS a KnocK-in option?                                     the Strike Price, the Option Buyer may exercise the Knock-In
  (includinG a late StartinG or early FiniShinG                         Call or (if automatic exercise applies and the conditions to the
  KnocK-in option)                                                      automatic exercise of the Knock-In Call have been satisfied)
                                                                        the Knock-In Call will be automatically exercised. If the Knock-In
  Like a Currency Option, a Knock-In Option can (if it is “knocked
                                                                        Call is exercised, on the Payment Date the Option Buyer must
  in” as discussed below) offer the Option Buyer protection
                                                                        pay to the Option Seller the Principal amount of US$ in
  from an unfavourable movement in a Currency Exchange Rate,
                                                                        exchange for the Option Seller paying to the Option Buyer
  while retaining the ability to take advantage of a favourable
                                                                        an amount of NZ$ (calculated by applying the Strike Price
  exchange rate movement. However, the Option will only
                                                                        to the Principal amount of US$); or
  become exercisable if the Spot Currency Exchange Rate trades
  at or through a pre-agreed Currency Exchange Rate (“Barrier         > the Spot Currency Exchange Rate is lower than the Strike Price,
  rate”) during the Barrier Period. That is, the transaction must       the Knock-In Call need not be exercised or, if automatic exercise
  be “knocked in”.                                                      applies, the Knock-In Call will not be exercised, and the only
                                                                        amount the Option Buyer will have paid to the Option Seller
  The Premium payable for a Knock-In Option will always be less         is the Premium required to be paid under the terms of
  than the Premium payable for a comparable Currency Option             the Option.
  (i.e. a Currency Option having the same Principal amount,
  Strike Price, Trade Date and Payment Date).
  There are two forms of a Knock-In Option, a “Knock-In Call”
  and a “Knock-In Put”.

23
  eXotic FX options



  how does a Knock-in put work?                                          What are the principal risks of a Knock-in call or a
                                                                         Knock-in put?
  The way in which a typical Knock-In Put operates is described
  below by reference to an example of how an importer may use            The risks identified in section 6 of the Disclosure Statement
  a Knock-in Put.                                                        apply to a Knock-In Option (including a Late Starting or Early
                                                                         Finishing Knock-In Option).
  Foreign currency payment – importer
                                                                         In addition, entering into a Knock-In Option (including a Late
  an importer may buy a Knock-In Put to obtain protection
                                                                         Starting or Early Finishing Knock-In Option) gives rise to the
  from a fall in a Currency Exchange Rate (provided the Knock-In
                                                                         risks that:
  Put is “knocked in”) and to pay a lower Premium than would
  be payable under a comparable Currency Option. For the               > If the Spot Currency Exchange Rate does not trade at or
  purposes of this example Currency a is US$ and Currency B              through the Barrier Rate at any time during the Barrier Period,
  is NZ$.                                                                the Option will not be exercisable and the Option Buyer has
                                                                         no right to exchange the Principal amount at the Strike Price
  The Option Buyer agrees to pay a Premium to the Option Seller
                                                                         on the Payment Date.
  to purchase the Knock-In Put. The Premium will be payable on
  the date or dates specified in the terms of the Knock-In Put.        > Until the earlier of the Spot Currency Exchange Rate trading
                                                                         at or through the Barrier Rate and the end of the Barrier Period,
  If the Spot Currency Exchange Rate has not traded at a rate            there is uncertainty as to whether the Option Buyer will have
  that is at or through the Barrier Rate at any time during the          the right to exchange the currencies at the Strike Price on the
  Barrier Period there will be no payments made by either party          Payment Date.
  under the Knock-In Put, other than the Premium required to be
  paid under the terms of the Knock-In Put.
                                                                         20. What iS a douBle KnocK-out option?
  However, if the Spot Currency Exchange Rate has traded at a
  rate that is at or through the Barrier Rate at any time during the     (includinG a late StartinG or early FiniShinG douBle
  Barrier Period and at Expiry:                                          KnocK-out option)

> the Spot Currency Exchange Rate is equal to or lower than              Like a Currency Option, a Double Knock-Out Option can (unless
  the Strike Price, the Option Buyer may exercise the Knock-In           it is “knocked out” as discussed below) offer the Option Buyer
  Put or (if automatic exercise applies and the conditions to the        protection from an unfavourable movement in a Currency
  automatic exercise of the Knock-In Put have been satisfied) the        Exchange Rate, while retaining the ability to take advantage
  Knock-In Put will be automatically exercised. If the Knock-In Put      of a favourable exchange rate movement. However, if the Spot
  is exercised, on the Payment Date the Option Buyer must pay to         Currency Exchange Rate trades at or through one or both of
  the Option Seller an amount of NZ$ (calculated by applying the         the two pre-agreed Currency Exchange Rates (“Barrier rates”)
  Strike Price to the Principal amount of US$), in exchange for the      during the Barrier Period, the transaction will be cancelled or
  Option Seller paying to the Option Buyer the Principal amount          “knocked out”.
  of US$; or                                                             The Premium payable for a Double Knock-Out Option will
> the Spot Currency Exchange Rate is higher than the Strike Price,       always be less than the Premium payable for a comparable
  the Knock-In Put need not be exercised or, if automatic exercise       Currency Option (i.e. a Currency Option having the same
  applies, the Knock-In Put will not be exercised, and the only          Principal amount, Strike Price, Trade Date and Payment Date).
  amount the Option Buyer will have paid to the Option Seller is         There are two forms of a Double Knock-Out Option, a “Double
  the Premium required to be paid under the terms of the Option.         Knock-Out Call” and a “Double Knock-Out Put”.
  The Strike Price, Barrier Rate, Expiry, Payment Date, Premium
                                                                         entering into a double Knock-out option
  and amounts of currency to be exchanged will be specified in
  the terms of the Knock-In Option.                                      When entering into a Double Knock-Out Option the Option
                                                                         Buyer nominates:
  late Starting or early Finishing Knock-in calls and Knock-in puts
                                                                       > a Principal amount of a currency (Currency a) to be exchanged
  an additional feature can be added to a Knock-In Option,
                                                                         for another currency (Currency B);
  limiting the period of time during which the Barrier Rate will
  apply. a Knock-In Call with this feature may be referred to          > the Strike Price;
  as either a late Starting Knock-in call or an early Finishing        > the Barrier Rates (the “upper Barrier rate” and the “lower
  Knock-in call. a Knock-In Put with this feature may be referred        Barrier rate”); and
  to as either a late Starting Knock-in put or an early Finishing
  Knock-in put. The effect of this feature is discussed further in     > the Payment Date.
  section 23.                                                            Based on the above, a Premium to be paid by the Option Buyer
                                                                         is agreed.




                                                                                                                                          24
  eXotic FX options



  how does a double Knock-out call work?                                  The Option Buyer agrees to pay a Premium to the Option Seller
                                                                          to purchase the Double Knock-Out Put. The Premium will be
  The way in which a typical Double Knock-Out Call operates
                                                                          payable on the date or dates specified in the terms of the
  is described below by reference to an example of how an
                                                                          Double Knock-Out Put.
  exporter may use a Double Knock-Out Call.
                                                                          If the Spot Currency Exchange Rate has traded at a rate that is
  Foreign currency receipt – exporter
                                                                          equal to or higher than the Upper Barrier Rate or at a rate that is
  an exporter may buy a Double Knock-Out Call to obtain                   equal to or lower than the Lower Barrier Rate at any time during
  protection from a rise in a Currency Exchange Rate (provided            the Barrier Period, the transaction will be cancelled and there
  the Double Knock-Out Call is not “knocked out”) and to pay              will be no payments made by either party under the Double
  a lower Premium than would be payable under a comparable                Knock-Out Put, other than the Premium required to be paid
  Currency Option. For the purposes of this example Currency a            under the terms of the Double Knock-Out Put.
  is US$ and Currency B is NZ$.
                                                                          However, if the Spot Currency Exchange Rate has not traded
  The Option Buyer agrees to pay a Premium to the Option Seller           at a rate that is equal to or higher than the Upper Barrier Rate
  to purchase the Double Knock-Out Call. The Premium will be              or at a rate that is equal to or lower than the Lower Barrier Rate
  payable on the date or dates specified in the terms of the              at any time during the Barrier Period and at Expiry:
  Double Knock-Out Call.
                                                                        > the Spot Currency Exchange Rate is equal to or lower than the
  If the Spot Currency Exchange Rate has traded at a rate that is         Strike Price, the Option Buyer may exercise the Double Knock-
  equal to or higher than the Upper Barrier Rate or at a rate that is     Out Put or (if automatic exercise applies and the conditions
  equal to or lower than the Lower Barrier Rate at any time during        to the automatic exercise of the Double Knock-Out Put have
  the Barrier Period, the transaction will be cancelled and there         been satisfied) the Double Knock-Out Put will be automatically
  will be no payments made by either party under the Double               exercised. If the Double Knock-Out Put is exercised, on the
  Knock-Out Call, other than the Premium required to be paid              Payment Date the Option Buyer must pay to the Option Seller
  under the terms of the Double Knock-Out Call.                           an amount of NZ$ (calculated by applying the Strike Price to
                                                                          the Principal amount of US$), in exchange for the Option Seller
  However, if the Spot Currency Exchange Rate has not traded
                                                                          paying to the Option Buyer the Principal amount of US$; or
  at a rate that is equal to or higher than the Upper Barrier Rate
  or at a rate that is equal to or lower than the Lower Barrier Rate    > the Spot Currency Exchange Rate is higher than the Strike
  at any time during the Barrier Period and at Expiry:                    Price, the Double Knock-Out Put need not be exercised or,
                                                                          if automatic exercise applies, the Double Knock-Out Put will
> the Spot Currency Exchange Rate is equal to or higher than              not be exercised, and the only amount the Option Buyer will
  the Strike Price, the Option Buyer may exercise the Double              have paid to the Option Seller is the Premium required to be
  Knock-Out Call or (if automatic exercise applies and the                paid under the terms of the Option.
  conditions to the automatic exercise of the Double Knock-Out
  Call have been satisfied) the Double Knock-Out Call will be             The Strike Price, Barrier Rates, Expiry, Payment Date, Premium
  automatically exercised. If Double Knock-Out Call is exercised,         and amounts of currency to be exchanged will be specified in
  on the Payment Date the Option Buyer must pay to the Option             the terms of the Double Knock-Out Option.
  Seller the Principal amount of US$ in exchange for the Option           late Starting or early Finishing double Knock-out calls and
  Seller paying to the Option Buyer an amount of NZ$ (calculated          double Knock-out puts
  by applying the Strike Price to the Principal amount of US$); or
                                                                          an additional feature can be added to a Double Knock-Out
> the Spot Currency Exchange Rate is lower than the Strike                Option, limiting the period of time during which the Barrier
  Price, the Double Knock-Out Call need not be exercised or, if           Rates will apply. a Double Knock-Out Call with this feature
  automatic exercise applies, the Double Knock-Out Call will not          may be referred to as either a late Starting double Knock-out
  be exercised, and the only amount the Option Buyer will have            call or an early Finishing double Knock-out call. a Double
  paid to the Option Seller is the Premium required to be paid            Knock-Out Put with this feature may be referred to as either
  under the terms of the Option.                                          a late Starting double Knock-out put or an early Finishing
  how does a double Knock-out put work?                                   double Knock-out put. The effect of this feature is discussed
                                                                          further in section 23.
  The way in which a typical Double Knock-Out Put operates
  is described below by reference to an example of how an                 What are the principal risks of a double Knock-out call or
  importer may use a Double Knock-Out Put.                                a double Knock-out put?
  Foreign currency payment – importer                                     The risks identified in section 6 of the Disclosure Statement
                                                                          apply to a Double Knock-Out Option (including a Late Starting
  an importer may buy a Double Knock-Out Put to obtain
                                                                          or Early Finishing Double Knock-Out Option).
  protection from a fall in a Currency Exchange Rate (provided
  the Double Knock-Out Put is not “knocked out”) and to pay
  a lower Premium than would be payable under a comparable
  Currency Option. For the purposes of this example Currency a
  is US$ and Currency B is NZ$.



25
  eXotic FX options



  In addition, entering into a Double Knock-Out Option (including     The Option Buyer agrees to pay a Premium to the Option Seller
  a Late Starting or Early Finishing Double Knock-Out Option)         to purchase the Double Knock-In Call. The Premium will be
  gives rise to the risks that:                                       payable on the date or dates specified in the terms of the
                                                                      Double Knock-In Call.
> If the Spot Currency Exchange Rate trades at or through
  a Barrier Rate at any time during the Barrier Period, the           If the Spot Currency Exchange Rate has not traded at a rate
  transaction will be cancelled.                                      that is equal to or higher than the Upper Barrier Rate or at a rate
> Until the earlier of the Spot Currency Exchange Rate trading        that is equal to or lower than the Lower Barrier Rate at any time
  at or through a Barrier Rate and the end of the Barrier Period,     during the Barrier Period there will be no payments made by
  there is uncertainty as to whether the Option Buyer will have       either party under the Double Knock-In Call, other than the
  the right to exchange the currencies at the Strike Price on the     Premium required to be paid under the terms of the Double
  Payment Date.                                                       Knock-In Call.
                                                                      The Double Knock-In Call becomes exercisable when the Spot
  21.    What iS a douBle KnocK-in option?                            Currency Exchange Rate first trades at a rate that is equal to or
                                                                      higher than the Upper Barrier Rate or at a rate that is equal to
  (includinG a late StartinG or early FiniShinG douBle                or lower than the Lower Barrier Rate during the Barrier Period.
  KnocK-in option)                                                    If the Double Knock-In Call becomes exercisable and at Expiry:
  Like a Currency Option, a Double Knock-In Option can (if it       > the Spot Currency Exchange Rate is equal to or higher than
  is “knocked in” as discussed below) offer the Option Buyer          the Strike Price, the Option Buyer may exercise the Double
  protection from an unfavourable movement in a Currency              Knock-In Call or (if automatic exercise applies and the
  Exchange Rate, while retaining the ability to take advantage        conditions to the automatic exercise of the Double Knock-In
  of a favourable exchange rate movement. However, the Option         Call have been satisfied) the Double Knock-In Call will be
  will only be exercisable if the Spot Currency Exchange Rate         automatically exercised. If the Double Knock-In Call is exercised,
  trades at or through one of the two pre-agreed Currency             on the Payment Date the Option Buyer must pay to the Option
  Exchange Rates (“Barrier rates”) during the Barrier Period.         Seller the Principal amount of US$ in exchange for the Option
  That is, the transaction must be “knocked in”.                      Seller paying to the Option Buyer an amount of NZ$ (calculated
  The Premium payable for a Double Knock-In Option will always        by applying the Strike Price to the Principal amount of US$); or
  be less than the Premium payable for a comparable Currency        > the Spot Currency Exchange Rate is lower than the Strike Price,
  Option (i.e. a Currency Option having the same Principal            the Double Knock-In Call need not be exercised or, if automatic
  amount, Strike Price, Trade Date and Payment Date).                 exercise applies, the Double Knock-In Call will not be exercised,
  There are two forms of a Double Knock-In Option, a “Double          and the only amount the Option Buyer will have paid to the
  Knock-In Call” and a “Double Knock-In Put”.                         Option Seller is the Premium required to be paid under the
                                                                      terms of the Option.
  entering into a double Knock-in option
                                                                      how does a double Knock-in put work?
  When entering into a Double Knock-In Option the Option
                                                                      The way in which a typical Double Knock-In Put operates
  Buyer nominates:
                                                                      is described below by reference to an example of how an
> a Principal amount of a currency (Currency a) to be exchanged       importer may use a Double Knock-In Put.
  for another currency (Currency B);
                                                                      Foreign currency payment – importer
> the Strike Price;
                                                                      an importer may buy a Double Knock-In Put to obtain some
> the Barrier Rates (the “upper Barrier rate” and the “lower          protection from a fall in a Currency Exchange Rate (provided
  Barrier rate”); and                                                 the Double Knock-In Put is “knocked in”) and to pay a lower
> the Payment Date.                                                   Premium than would be payable under a comparable Currency
                                                                      Option. For the purposes of this example Currency a is US$ and
  Based on the above, a Premium to be paid by the Option Buyer
                                                                      Currency B is NZ$.
  is agreed.
                                                                      The Option Buyer agrees to pay a Premium to the Option Seller
  how does a double Knock-in call work?
                                                                      to purchase the Double Knock-In Put. The Premium will be
  The way in which a typical Double Knock-In Call operates            payable on the date or dates specified in the terms of the
  is described below by reference to an example of how an             Double Knock-In Put.
  exporter may use a Double Knock-In Call.
                                                                      If the Spot Currency Exchange Rate has not traded at a rate
  Foreign currency receipt – exporter                                 that is equal to or higher than the Upper Barrier Rate or at a rate
                                                                      that is equal to or lower than the Lower Barrier Rate at any time
  an exporter may buy a Double Knock-In Call to obtain
                                                                      during the Barrier Period there will be no payments made by
  protection from a rise in a Currency Exchange Rate (provided
                                                                      either party under the Double Knock-In Put, other than the
  the Double Knock-In Call is “knocked in”) and to pay a lower
                                                                      Premium required to be paid under the terms of the Double
  Premium than would be payable under a comparable Currency
                                                                      Knock-In Put.
  Option. For the purposes of this example Currency a is US$ and
  Currency B is NZ$.

                                                                                                                                      26
  eXotic FX options



  However, the Double Knock-In Put becomes exercisable                    22. What iS a compound option?
  when the Spot Currency Exchange Rate first trades at a rate
  that is equal to or higher than the Upper Barrier Rate or at a rate     a Compound Option is an Option to purchase a Currency
  that is equal to or lower than the Lower Barrier Rate during the        Option (“underlying currency option”) with a pre-agreed
  Barrier Period. If the Double Knock-In Put becomes exercisable          Strike Price on a date in the future.
  and at Expiry:                                                          The buyer of the Compound Option pays an initial Premium
> the Spot Currency Exchange Rate is equal to or lower than the           (“initial premium”) for the right to purchase the Underlying
  Strike Price, the Option Buyer may exercise the Double Knock-In         Currency Option on a future date.
  Put or (if automatic exercise applies and the conditions to the         The Initial Premium is less than the Premium payable for a
  automatic exercise of the Double Knock-In Put have been                 comparable Currency Option (i.e. a Currency Option having the
  satisfied) the Double Knock-In Put will be automatically                same Principal amount, Strike Price, Trade Date and Payment
  exercised. If the Double Knock-In Put is exercised, on the              Date). If the buyer of the Compound Option exercises the right
  Payment Date the Option Buyer must pay to the Option Seller             to purchase the Underlying Currency Option an additional
  an amount of NZ$ (calculated by applying the Strike Price to the        Premium will be payable (“exercise premium”). The aggregate
  Principal amount of US$), in exchange for the Option Seller             of the Initial Premium and Exercise Premium (“total premium”)
  paying to the Option Buyer the Principal amount of US$; or              will be greater than the Premium payable for a comparable
> the Spot Currency Exchange Rate is higher than the Strike               Currency Option.
  Price, the Double Knock-In Put need not be exercised or,                entering into a compound option
  if automatic exercise applies, the Double Knock-In Put
  New Zealand will not be exercised, and the only amount                  When entering into a Compound Option the Option Buyer
  the Option Buyer will have paid to the Option Seller is the             nominates:
  Premium required to be paid under the terms of the Option.            > a Principal amount of a currency (Currency a) to be exchanged
  The Strike Price, Barrier Rates, Expiry, Payment Date, Premium          for another currency (Currency B);
  and amounts of currency to be exchanged will be specified in          > the Strike Price;
  the terms of the Double Knock-In Option.
                                                                        > the date on which the right to purchase the Underlying
  late Starting or early Finishing double Knock-in calls and              Currency Option can be exercised (the “compound option
  double Knock-in puts                                                    exercise date”);
  an additional feature can be added to a Double Knock-In               > the Expiry of the Underlying Currency Option; and
  Option, limiting the period of time during which the Barrier
                                                                        > the Payment Date.
  Rates will apply. a Double Knock-In Call with this feature may
  be referred to as either a late Starting double Knock-in call           Based on the above, the Initial Premium and the Exercise
  or an early Finishing double Knock-in call. a Double Knock-In           Premium to be paid by the Option Buyer are agreed.
  Put with this feature may be referred to as either a late Starting      Compound Options come in two forms, a “Compound Call”
  double Knock-in put or an early Finishing double Knock-in               and a “Compound Put”.
  put. The effect of this feature is discussed further in section 23.
                                                                          how does a compound call work?
  What are the principal risks of a double Knock-in call or a
  double Knock-in put?                                                    The way in which a typical Compound Call operates is
                                                                          described below by reference to an example of how an
  The risks identified in section 6 of the Disclosure Statement           exporter may use a Compound Call.
  apply to a Double Knock-In Option (including a Late Starting or
  Early Finishing Double Knock-In Option).                                Foreign currency receipt – exporter
  In addition, entering into a Double Knock-In Option (including a        an exporter may buy a Compound Call to obtain protection
  Late Starting or Early Finishing Double Knock-In Option) gives          from a future rise in a Currency Exchange Rate. For the
  rise to the risks that:                                                 purposes of this example Currency a is US$ and Currency B
                                                                          is NZ$.
> If the Spot Currency Exchange Rate does not trade at or
  through a Barrier Rate at any time during the Barrier Period,           You will pay the Initial Premium to the Bank to purchase the
  the Option will not be exercisable and the Option Buyer has             Compound Call. The Initial Premium will be payable on the
  no right to exchange the Principal amount at the Strike Price           date or dates specified in the terms of the Compound Call.
  on the Payment Date.                                                    If you wish to exercise your right to purchase the Underlying
> Until the earlier of the Spot Currency Exchange Rate trading at         Currency Option you must give notice to the Bank on the
  or through a Barrier Rate and the end of the Barrier Period,            Compound Option Exercise Date. If you exercise this right
  there is uncertainty as to whether the Option Buyer will have           you will be obliged to pay the Exercise Premium to the Bank on
  the right to exchange the currencies at the Strike Price on the         the date or dates specified in the terms of the Compound Call.
  Payment Date.




27
  eXotic FX options



  If you do not exercise your right to purchase the Underlying         If you have exercised your right to purchase the Underlying
  Currency Option the only amount you will have paid to the            Currency Option and at Expiry:
  Bank is the Initial Premium.
                                                                     > the Spot Currency Exchange Rate is equal to or lower than
  If you have exercised your right to purchase the Underlying          the Strike Price, you may exercise the Underlying Currency
  Currency Option and at Expiry:                                       Option or (if automatic exercise applies and the conditions
                                                                       to the automatic exercise of the Underlying Currency Option
> the Spot Currency Exchange Rate is equal to or higher than
                                                                       have been satisfied) the Underlying Currency Option will be
  the Strike Price, you may exercise the Underlying Currency
                                                                       automatically exercised. If the Underlying Currency Option is
  Option or (if automatic exercise applies and the conditions
                                                                       exercised, on the Payment Date you must pay to the Bank an
  to the automatic exercise of the Underlying Currency Option
                                                                       amount of NZ$ (calculated by applying the Strike Price to the
  have been satisfied) the Underlying Currency Option will be
                                                                       Principal amount of US$), in exchange for the Bank paying to
  automatically exercised. If the Underlying Currency Option is
                                                                       you the Principal amount of US$; or
  exercised, on the Payment Date you must pay to the Bank the
  Principal amount of US$ in exchange for the Bank paying to         > the Spot Currency Exchange Rate is higher than the Strike Price,
  you an amount of NZ$ (calculated by applying the Strike Price        the Underlying Currency Option need not be exercised or, if
  to the Principal amount of US$); or                                  automatic exercise applies, the Underlying Currency Option
                                                                       will not be exercised. The only amount that you will have paid
> the Spot Currency Exchange Rate is lower than the Strike Price,
                                                                       to the Bank is the Total Premium required to be paid under the
  the Underlying Currency Option need not be exercised or, if
                                                                       terms of the Compound Put.
  automatic exercise applies, the Underlying Currency Option
  will not be exercised, and the only amount you will have paid        The Strike Price, Compound Option Exercise Date, Initial
  to the Bank is the Total Premium required to be paid under the       Premium, Exercise Premium, Expiry, Payment Date and
  terms of the Compound Call.                                          amounts of currency to be exchanged will be specified
                                                                       in the terms of the Compound Put.
  how does a compound put work?
                                                                       What are the principal risks of a compound call or a
  The way in which a typical Compound Put operates is described
                                                                       compound put?
  below by reference to an example of how an importer may use
  a Compound Put.                                                      The risks identified in section 6 of the Disclosure Statement
                                                                       apply to a Compound Option.
  Foreign currency payment – importer
  an importer may buy a Compound Put to obtain protection
  from a future fall in a Currency Exchange Rate. For the purposes
  of this example Currency a is US$ and Currency B is NZ$.
  You will pay the Initial Premium to the Bank to purchase the
  Compound Put. The Initial Premium will be payable on the date
  or dates specified in the terms of the Compound Put.
  If you wish to exercise your right to purchase the Underlying
  Currency Option you must give notice to the Bank on the
  Compound Option Exercise Date. If you exercise this right you
  will be obliged to pay the Exercise Premium to the Bank on the
  date or dates specified in the terms of the Compound Put.
  If you do not exercise your right to purchase the Underlying
  Currency Option the only amount you will have paid to the
  Bank is the Initial Premium.




                                                                                                                                       28
  FX Derivatives



  23. late StartinG and early FiniShinG                                 When you enter into a Late Starting or Early Finishing
      FX derivativeS                                                    FX Derivative you nominate the same terms that you
                                                                        nominate when entering into that FX Derivative as well
  The following FX Derivatives can be either “Late Starting”            as the Barrier Period. The effect of the Barrier Period
  or “Early Finishing”, which is a feature that allows you to limit     feature on the Forward Exchange Rate(s) and/or Barrier
  the period of time during which the Barrier Rate will apply           Rate will depend on the length of the Barrier Period and
  (“Barrier period”) to that FX Derivative:                             the FX Derivative itself.
> Knock-Out Forward                                                     Other than having a specified Barrier Period, the payment
> Ratio Knock-Out Forward                                               obligations and (unless stated otherwise in relation to a
                                                                        particular FX Derivative) risks of a Late Starting or Early
> Converting Forward                                                    Finishing FX Derivative are no different to the same FX
> Smart Forward                                                         Derivative without the Barrier Period feature. accordingly,
> Ratio Smart Forward                                                   all risks relevant to the particular FX Derivative are also
                                                                        applicable to a Late Starting and Early Finishing FX Derivative
> Smart Forward Plus                                                    of the same type.
> Ratio Smart Forward Plus
> Smart Forward Combo                                                   24. GloSSary
> Smart Forward Plus (aWCR)
                                                                        Barrier           the period of time during which a Barrier
> Smart Collar                                                          period:           rate (if any) applies to a FX Derivative. the
> Ratio Smart Collar                                                                      applicable Barrier period will be equal to the
                                                                                          term unless the relevant FX Derivative is a Late
> Knock-Out Option                                                                        starting or early Finishing FX Derivative. For
> Knock-In Option                                                                         Late starting or early Finishing FX Derivatives
> Double Knock-Out Option                                                                 see section 23.

> Double Knock-In Option                                                BeSt              the most favourable currency exchange rate
                                                                        caSe rate:        at which you may or must exchange currencies
  For both a Late Starting and Early Finishing FX Derivative,
                                                                                          under a FX Derivative as agreed at the time the
  the Barrier Period will always be shorter than the Term, in that:
                                                                                          FX Derivative is entered into.
> for a Late Starting FX Derivative, the Barrier Period will start
  on a date after the Trade Date and will finish at Expiry; and         eXpiration        a date specified in the terms of a Markets
                                                                        date:             product on which a currency exchange
> for an Early Finishing FX Derivative, the Barrier Period                                rate will be determined for the purposes of
  will start on the Trade Date and will finish on a date prior                            calculating payments (if any) to be made on
  to Expiry.                                                                              the payment Date for that Markets product.
  However, in return for the ability to nominate a Barrier
  Period, one or more of the exchange rates applicable to               eXpiration        a time specified in the terms of a Market
  the FX Derivative (e.g. the Worst Case Rate, adjusted Worst           time:             product at which a currency exchange
  Case Rate, Best Case Rate or Enhanced Forward Rate) and/or                              rate will be determined for the purposes
  Barrier Rate applicable to the FX Derivative will be adjusted.                          of calculating payments (if any) to be made
  For example:                                                                            on the payment Date for that Markets product.
                                                                                          For FX Derivatives involving nZ$ this will
> if limiting the Barrier Period reduces the period of time                               typically be 3.00pm Wellington time.
  that your rights under the FX Derivative may be adversely
  affected by the Spot Currency Exchange Rate trading at                eXpiry:           the expiration time on the expiration Date as
  or through a Barrier Rate, one or more of the applicable                                specified in the terms of a Markets product.
  exchange rates referred to above and/or the Barrier Rate
                                                                        term:             the period from (and including) the date on
  will be set at a level that is worse for you than if the Barrier
                                                                                          which you and the Bank enter into the Markets
  Period was equal to the Term; and
                                                                                          product to (and including) expiry.
> if limiting the Barrier Period reduces the period of time that your
  rights under the FX Derivative may be beneficially affected by        trade date:       the time and date on which you enter into the
  the Spot Currency Exchange Rate trading at or through a Barrier                         transaction with the Bank.
  Rate, one or more of the applicable exchange rates referred to        WorSt             the least favourable currency exchange rate
  above and/or the Barrier Rate will be set at a level that is better   caSe rate:        at which you may or must exchange currencies
  for you than if the Barrier Period was equal to the Term.                               under a FX Derivative as agreed at the time the
                                                                                          FX Derivative is entered into.




29
anZ national Bank limited anZacc1387 07/10




                                             anz.co.nz

								
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