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Important information

Swap Disclosures and Notifications

 

The information on this Website is for the attention of Macquarie Bank Limited and Macquarie Energy LLC (each and together “Macquarie”) counterparties that are not a swap dealer, major swap participant, security-based swap dealer or major security-based swap participant. It is being provided in connection with Macquarie’s obligations, as a “swap dealer” registered with the U.S. Commodity Futures Trading Commission ("CFTC"), to deliver certain pre-trade disclosures to our counterparties who are entering into a “Transaction” with Macquarie, as defined in the ISDA DF Disclosure discussed below in Material Risk Disclosures.

Some of the information may not apply to you if you are NOT a U.S. person (unless you are guaranteed by a U.S. person or an Affiliate Conduit, all terms as defined by applicable law) entering into swaps with Macquarie Bank Limited or if you are not a swap customer of Macquarie Energy LLC.

References to “you” or “your” herein refer only to the reader to the extent that the reader is a counterparty to whom Macquarie is required to make this disclosure.

In addition to the disclosures on this Website, certain disclosures are included in counterparty relationship documentation that we may have with you.

By transacting with Macquarie, you are deemed to acknowledge that you have read and accepted the information provided on this Website. The information on this Website may be updated from time to time and so we encourage you to review the content prior to entering into any Transaction.

Macquarie Relationship Manager

Macquarie values its relationship with you. If you have any questions about the information provided in this Website, please contact your Macquarie relationship manager.


Concerns

While we hope that your relationship with Macquarie is positive and beneficial to you, in the event that you experience concerns related to your swap Transactions, you may also reach out to the following Macquarie contacts with respect to any swap-related complaints:

Macquarie Bank Limited:Macquarie Energy LLC:
Macquarie Bank Limited:
Name/Department: Complaints Officer
Macquarie Energy LLC:
Name/Department: Complaints Officer
Macquarie Bank Limited:
Address: Macquarie Bank Limited, GPO Box 4294, SYDNEY NSW 1164
Macquarie Energy LLC:
Address: One Allen Center, 500 Dallas Street, Suite 3300 Houston, Texas 77002
Macquarie Bank Limited:
Macquarie Energy LLC:
Macquarie Bank Limited:
Macquarie Energy LLC:


Material Economic Terms

The terms provided in the below templates are being disclosed to you to satisfy our obligation, to make certain pre-trade disclosures pursuant to 17 CFR § 23.431(a)(2). With respect to each referenced swap type, the terms set out in the templates constitute material characteristics that would generally apply to any Transaction of that type that we would execute with you. To the extent that the provisions of any specific trade would differ from the generally applicable terms or if any additional deal-specific terms exist, such specific provisions will be disclosed to you in a trade specific pre-trade disclosure, which should be viewed by you as the controlling pre-trade disclosure with respect to those provisions. The terms of any Transaction that you and we enter into will continue to be documented in a post-trade written confirmation or other agreement evidencing the Transaction.

Before entering into any Transaction, you should conduct a thorough and independent evaluation of all the terms and risks of the Transaction in light of your particular circumstances and the nature and extent of your exposure to, and willingness to incur, risk. You can evaluate the material risks that will apply to all standard Transactions entered into with us by reviewing the ISDA DF Disclosure at the links below under “Material Risk Disclosures”. You should also consider whether the Transaction is appropriate for you in light of your experience, objectives, financial and operational resources and other relevant circumstances. Unless expressly agreed in writing, we are not providing you with legal, financial, tax, accounting or other advice in connection with any Transaction.


Material Risk Disclosures

The General Disclosure document and each of the Product-Specific Disclosure documents below (the "ISDA DF Disclosure") are provided pursuant to 17 CFR § 23.431(a)(1). The format and content of the ISDA DF Disclosure was developed by a group of industry participants in the over-the-counter derivatives market, coordinated by the International Swaps & Derivatives Association, Inc. ("ISDA"). The ISDA DF Disclosure will apply to all standard Transactions between you and Macquarie and may discuss product types or features that are not relevant to your Transaction. Where more specific disclosures of material risks may be necessary with respect to a Transaction between you and Macquarie in addition to the ISDA DF Disclosure, you will be provided with alternative (or supplementary) disclosures suitable for such Transactions.


Pre-trade Mid-market Mark

The pre-trade mid-market mark that Macquarie is required to provide pursuant to 17 CFR § 23.431(a)(3) is determined by Macquarie (in its sole discretion) based on market-standard discounted cash flow methodologies combined with market-standard net-present-value (NPV) derivative valuation models. Macquarie’s valuation models may use spot, forward and/or volatility values and may take into account past, present and future market conditions.

The pre-trade mid-market mark will be provided either (1) in writing via electronic mail to your Dodd-Frank disclosure email address or (2) orally over the phone and followed up with a post-trade written confirmation to your Dodd-Frank disclosure email address (provided that you have agreed to receive oral disclosures under the relevant Master ISDA Agreement).

You should not regard any pre-trade mid-market mark that we provide to be an offer to enter into or terminate the relevant swap at that value or price.  Unless otherwise indicated, all pre-trade mid-market marks are provided in U.S. Dollars.

A swap’s value may not be readily observable in the market and is therefore often subjective. Accordingly, Macquarie’s pre-trade mid-market mark may vary significantly from the mid-market mark provided by other market participants for a swap.  To the extent that such marks may be based on inputs or information obtained from external sources, Macquarie believes any such sources to be reliable but makes no representations or warranties with respect to the accuracy, reliability, or completeness of such data or information, or the resulting mid-market mark. Swap prices will also differ among swap participants based on the various factors used by market participants in quoting and executing swaps, such as costs to cover the Transaction risk, profits, credit spreads, underlying volatility, and credit support terms.

Macquarie makes no representations or warranties to you that the prices at which Macquarie offers or values swaps are the best prices available in the marketplace.  You may wish to seek representative quotations from other participants in the relevant market to compare prices or to determine the intrinsic or current market value of a particular swap.

Furthermore, Macquarie makes no representations or warranties that any such pre-trade mid-market marks are suitable for complying with any financial or tax reporting obligation, determining net asset value, computing any tax liability or any other purpose, matters which you should discuss with your own financial, legal, tax, accounting and other professional advisors and, except as otherwise agreed, Macquarie disclaims any liability for any such use or reliance thereon, whether losses or damages are direct, indirect, incidental or consequential, even if Macquarie is advised of their possibility.

Macquarie reserves its right not to disclose confidential, proprietary information about any model it may use to prepare the pre-trade mid-market mark.  The pre-trade mid-market mark does not include amounts for profit, credit reserve, hedging, funding, liquidity, or any other costs or adjustments.  It may not be the price at which you or Macquarie would agree to replace or terminate the swap.  Margin calls related to swaps may be based on considerations other than the pre-trade mid-market mark.  The pre-trade mid-market mark may not be the value of the swap that is marked on Macquarie’s books.


Post-trade Daily Mark Statements

Macquarie provides counterparties that fall within the scope of the applicable rules with a post-trade daily mid-market mark for all uncleared swaps on a daily basis pursuant to 17 CFR § 23.431(d). For any swap that is cleared, you may request a daily mark statement from the appropriate derivatives clearing organization.

Macquarie will provide a daily mark statement via electronic mail to you for any existing swap (as defined by applicable law) you have entered into with Macquarie that falls within the scope of Macquarie’s obligations as a swap dealer.  The post-trade daily mark statement may not be a complete record of all your transactions with Macquarie as it only reflects those Transactions that fall within the scope of the rules.

Macquarie calculates the daily mark(s) as of the close of business on the prior day on which commercial banks were open for general business in New York, New York (including dealings in foreign exchange and foreign currency deposits). Unless otherwise indicated, all daily marks are provided in U.S. Dollars.

The swap values set forth in the daily mark statement to you are stated from your perspective, therefore providing the indicative value of a particular swap to you.

Macquarie (in its sole discretion) determines the mid-market mark of the swap based on market-standard discounted cash flow methodologies combined with market-standard net-present-value (NPV) derivative valuation models. Macquarie’s valuation models may use spot, forward and/or volatility values and may take into account past, present and future market conditions. A swap’s value may not be readily observable in the market and is therefore often subjective. Accordingly, Macquarie’s daily mark may vary significantly from the daily mark provided by other market participants for a swap. To the extent that such marks may be based on inputs or information obtained from external sources, Macquarie believes any such sources to be reliable but makes no representations or warranties with respect to the accuracy, reliability, or completeness of such data or information, or the resulting daily mark. Swap prices will also differ among swap participants based on the various factors used by market participants in quoting and executing swaps, such as costs to cover the transaction risk, profits, credit spreads, underlying volatility, and credit support terms.

Macquarie makes no representations or warranties to you that the prices at which Macquarie offers or values swaps are the best prices available in the marketplace. You may wish to seek representative quotations from other participants in the relevant market to compare prices or to determine the intrinsic or current market value of a particular swap.

Furthermore, Macquarie makes no representations or warranties that daily marks are suitable for complying with any financial or tax reporting obligation, determining net asset value, computing any tax liability or any other purpose, which are matters you should discuss with your own financial, legal, tax, accounting and other professional advisors and, except as otherwise agreed, Macquarie disclaims any liability for any such use or reliance thereon, whether losses or damages are direct, indirect, incidental or consequential, even if Macquarie is advised of their possibility.

Macquarie reserves its right not to disclose confidential, proprietary information about any model it may use to prepare the daily mark. The daily mark does not include amounts for profit, credit reserve, hedging, funding, liquidity, or any other costs or adjustments.  It may not be the price at which you or Macquarie would agree to replace or terminate the swap.  Margin calls related to swaps may be based on considerations other than the daily mark. The daily mark may not be the value of the swap that is marked on Macquarie’s books.


Conflicts of Interest

Types of conflicts of interests relevant to swap Transactions generally are noted in the General Disclosure Statement provided above in the Material Risk Disclosures. Where more specific disclosures of material incentives and conflicts of interest are required with respect to a Transaction between you and Macquarie, you will be provided with disclosures for the relevant Transaction.


Scenario Analysis

With respect to any Transaction that is not “available for trading” as determined by applicable CFTC regulation, prior to a Transaction, you may request and consult on the design of a scenario analysis to allow you to assess your potential exposure in connection with such Transaction in accordance with 17 CFR § 23.431(b).


ISDA DF Protocol Adherence

The External Business Conduct rules impose a number of obligations on swap dealers like Macquarie, which require them to collect a significant amount of information and representations from their customers. ISDA has designed a protocol process to facilitate this and to avoid your having to provide the same documentation to multiple swap dealers.

In addition to a master agreement, Macquarie counterparties are required to complete

  • the ISDA August 2012 DF Protocol (“August Protocol”) adherence process, if CFTC External Business conduct rules apply and the terms have not otherwise been incorporated into counterparty relationship documentation. Comprehensive information regarding the August Protocol can be found at http://www2.isda.org/functional-areas/protocol-management/protocol/8, and
  • the ISDA March 2013 DF Protocol (“March Protocol”) if the terms have not otherwise been incorporated into counterparty relationship documentation.  Comprehensive information regarding the DF Protocol 2 can be found at https://www.isda.org/protocol/isda-march-2013-df-protocol.

To assist you with the matching process on the ISDA/Markit web interface for August Protocol adherence, please note that Macquarie has obtained the following CICIs:

Macquarie EntityCICI
Macquarie Entity
Macquarie Bank Limited
CICI
4ZHCHI4KYZG2WVRT8631
Macquarie Entity
Macquarie Energy LLC
CICI
7RRRJ3GCZYRPG40G8T11

You may also contact your Macquarie relationship manager or send an email to CGMLegalDocumentationAmericas@macquarie.com with any questions you may have about the documentation requirements.


Portfolio Reconciliation

Macquarie is required to establish, maintain and follow policies and procedures to engage in portfolio reconciliation of swaps with each of its counterparties affected by Dodd-Frank rules. Portfolio reconciliation benefits both parties by establishing a process to address any discrepancies in their books and records concerning swap transactions: swap portfolio data is shared (either by one party or both parties) and the parties will then consult to resolve any identified differences in material terms and valuations.

If you are a Macquarie counterparty which has not yet agreed in writing on the terms of portfolio reconciliation with Macquarie, then we request that you consider doing so by selecting Schedule 4 of the March Protocol and choosing to either “review” or “exchange” portfolio data. A counterparty that elects to “review” portfolio data sent to it by Macquarie may identify any discrepancy with the information in its own books and records and consult with Macquarie to resolve the differences. If “exchange” is selected, then both parties will send portfolio data to each other and compare this information with their books and records.

If you would like more information concerning portfolio reconciliation, please contact your Macquarie relationship manager or email cogmodotcregrecon@macquarie.com.


Telephone Conversation Recordings

Macquarie is required under the CFTC rules to record telephone conversations with customers relating to any proposed swap transaction or related cash or forward transaction. By transacting with Macquarie and to the extent permitted by applicable law, you are deemed to have consented and obtained any necessary consent from those individuals communicating with Macquarie on your behalf (whether employees, contractors, agents or others) to such recording and to the submission of such recording as evidence in any legal proceedings, or to any regulator, court or other authority to whom Macquarie may be required by law to provide. Macquarie cannot execute a trade order left by a customer over voicemail as it is not an acceptable form of communication for swap dealing activity. If you leave an order over voicemail, Macquarie will follow up with you via a recorded telephone line or another approved form of electronic or written communication.