Collateral Margining 

For those new client's who do not wish to establish a credit limit, they may seek to utilise the Bank's Collateral Margining facility. Collateral Margining allows you to enter into agricultural swap transactions with the Bank by using an Australian dollar cash deposit as security. This facility is available for any client who is classified as a Wholesale client as defined by the Corporations Act 2001.

The main benefits of using Collateral Margining are:

• You can easily establish an ongoing arrangement with the Bank which will allow you to enter into Agricultural Swaps by posting cash cover as security. Cash cover is calculated based on a short term peak exposure, keeping your initial cash commitment low.
• A competitive high yielding interest rate is paid on cash balances held by the Bank in a Cash Deposit Account.
• There is no minimum deposit amount required to establish a Collateral Margining facility.
• Margin calls are based on the daily mark-to-market price of the underlying commodity at close of business.

The main risks of using Collateral Margining involve:

• If you do not respond immediately to margin calls made by the Bank (either on the Initial or Variation Margins), the Bank has the right to close out all your swap transactions. Any loss to the Bank will be debited to your Cash Deposit Account.
• The initial margin amount may be recalculated by the Bank. If so, the Bank may make a margin call and you will need to top-up the Initial Margin by paying further cash into your Cash Deposit Account.
• The Bank is under no obligation to repay any cash deposited in the Cash Deposit Account while there is money outstanding under any of your swap transactions. If you request the return of surplus cash deposited in the Cash Deposit Account, the Bank may, at its discretion, return some of the surplus amounts to you.

Click here to view the Collateral Margining brochure. 

Important information about advice
As this advice has been prepared without considering your objectives, financial situation or needs, you should, before acting on the advice, consider its appropriateness to your circumstances. View our Financial Services Guide (PDF 59kb).

View our Product Disclosure Statement (PDS) for Agricultural Swaps (PDF 248kb) issued by the Commonwealth Bank of Australia, and consider it before making any decision about the product.