10 April 2024

Tiger Brokers (AU) Pty Limited (“TBAU”) issues exchange traded options, “ETOs” hereunder, to its retail clients. Detailed information is available in the TBAU Exchange Traded Options Product Disclosure Statement, available on under Agreements and Disclosures.

In compliance with our obligations under Part 7.8A of the Corporations Act 2001 (Cth), which relates to the product design and distribution obligations (DDO), TBAU has prepared the following target market determination (TMD) relating to the issue of ETOs to our clients.

This TMD is available to the public free of charge.



Class of retail clients that comprise the target market for this product – s 994B(5)(b)

1. Description of the likely objectives, financial situation and needs of consumers in the target market


Tiger Brokers (AU) Pty Limited (“TBAU”) is an online broker that provides financial product trading services to retail and wholesale clients. We are authorized and regulated by the Australian Securities and Investments Commission (ASIC), with license number 300767 and business office located at Suite 28.01, 25 Bligh Street Sydney, NSW 2000.

TBAU does not employ any advisers or brokers who manage client accounts. Trades are entered by the client or the client’s self-selected financial representative on a personal computer or mobile device and transmitted over the internet to TBAU for execution on various market centers. All trading in a TBAU client account is self-directed by the client. TBAU client service personnel are specifically prohibited from providing any investment or trading or tax advice to clients.

The DDO aims to assist clients to obtain appropriate financial products by requiring product issuers and distributors to have a consumer- centric approach to the design and distribution of financial products.

If you are a retail client, you should refer to the relevant Product Disclosure Statement (PDS) before deciding whether to acquire or continue to hold the relevant product. You can get a copy of the relevant PDS from our website.

You should not base any decision to trade solely on the contents of this TMD. Before deciding to open a trading account, you should read this TMD alongside the PDS and FSG.

Target Market

Given the nature of ETOs offered by TBAU and the associated option trading strategies, the ETO product is suitable to clients who fall within one or more of the categories below:

  • High Risk Tolerance Investors: Clients seeking to make profit via speculative trading; and/or

  • Risk Mitigation Investors: Clients seeking to hedge the potential risk and exposures to the underlying assets and/or other ETOs or financial products from other investments or exposures or seek to lock in a price to purchase or sell underlying investments.

The categories above are not mutually exclusive. That said, the client can fall under one or both categories and it is sufficient for a client to fall within one of the categories above to be within the target market of the ETOs offered by TBAU.

Clients must also meet the following conditions:

  • Clients who are above the age of 18;

  • Clients who have requisite knowledge by declaring they understand the ETO PDS and The ASX Understanding Options Trading booklet and passed the ETO knowledge assessment

  • Clients who either declare they have prior experiences in option trading or confirm they have or will have traded in options in simulated trading environment prior to transitioning to live trading if they only have limited option trading experiences declared.

  • Clients who declare they fit into one of the following categories of Customers seeking to trade options: (a) Risk Mitigation Customers and/or (b) high Risk Tolerance Customers who understand that Options trading involves leverage or gearing which can multiply profits as well as losses

  • Clients who declare they understand ETOs trading involves financial risk with some trades having the potential for significant losses, and have the ability to bear potential losses from Options trading in a way that is consistent with their financial situation

  • Clients who declare they have the necessary financial resources, such as liquid assets and regular income, to manage financial obligations that may arise from trades they undertake including trade settlement and financial obligation

  • Clients who declare they understand market movement and volatility will affect their portfolios and they have the capacity to monitor my options positions and takes actions as required

  • Clients who accept the trading condition that American style put options on international exchange, such as US exchanges, cannot be exercised early

  • Clients who do not seek to write options or use any option strategy that involves writing an option.

Likely purposes and objectives

Those Clients who satisfy the above criteria may wish to trade in ETOs for one or more of the following purposes:

  • speculative trading

  • hedging (including hedging exposure to underlying assets and/or hedging positions taken in relation to other ETOs or financial products)

Likely financial situations

  • Speculative trading: have the ability, including necessary financial resources, such as liquid assets and regular income, to manage their financial obligations and bear the potential loss, without materially impacting their standard of living

  • Hedging: have the existing or forthcoming exposures which the clients need to hedge

Likely needs

  • Speculative trading: seek higher return with corresponding higher risk

  • Hedging: protect previous gains or mitigate against potential future losses and/or lower the economic exposure to the underlying assets

Liquidity needs

ETO trading is generally settled on T+1, which means clients should have the ability to meet the outstanding settlement obligations and not require proceeds from the sales to be settled earlier than T+1. Clients shall also be aware of the liquidity risk defined in the PDS. Under certain market conditions, it could become difficult or impossible to trade ETOs or the trade may be filled at an unfavorable price.

Investment timeframe

There is no recommended or set investment timeframe for option trading. The investment timeframe will vary vastly among investors, which may depend upon, among other factors, their purposes of trading, investment strategies and/or exposures to be hedged.

While the ETOs generally have limited life spans, the time to expiry set by the Exchanges does not necessarily, and often does not, equate to clients’ investment timeframe. When ETO’s time to expiry is different to clients’ intended investment timeframe, clients could choose to close the position, subject to liquidity, any time prior to the expiry or roll the option position out to a later expiration date by closing the existing one and opening a new one to meet their intended investment timeframe.

Clients shall be aware of the time decay impact. That is, when time draws closer to expiry, the time value of the option declines and it does not decay at a constant rate but becomes more rapid towards expiry.

Retail clients for whom our products are unsuitable

Our products are generally unsuitable for the following classes of retail clients

  • Clients who are natural persons below the age of 18

  • Clients who do not understand the risks of ETOs as applicable to their proposed trading

  • Clients who do not have sufficient option trading experiences are not willing to trade in simulated trading environment prior to living trading

  • Clients who cannot bear the consequence of potential losses without material impact on their standard of living

  • Clients who seek to earn additional income (option premium) by selling(writing) options over the underlying assets

  • Clients who seek to exercise American style put options on international exchange early

  • Clients who have low levels of financial literacy and technological literacy

  • Clients who reside in a country which restricts or prohibits in trading in ETOs

2. Description of ETOs (including its key attributes)

ETOs have the following key attributes:

  • ETOs are a type of derivative giving the buyer (the taker) the right, but not the obligation, to buy or sell the underlying product at a specified price on or before a specified date. On the opposite side, the seller (the writer), has the obligation to perform the contract, that is, either buy or sell the underlying product.

  • The terms and specifications of ETOs (other than the premium) are determined by the relevant exchange.

  • ETOs have a limited life span and their value erodes the closer it reaches its expiry date.

  • The value of ETOs will fluctuate depending on a range of factors, including the price, volatility, remaining to expiry date, interest rates, dividends, exchange rates and general risks applicable to markets.

  • Since ETOs are an international product, client obligations and contract requirements for each contract may differ.

TBAU currently only offers buying options to open and selling options to close, which is known as level 1 ETOs. Clients are unable to sell/write options to open.

 American style put options currently offered by TBAU can be ONLY exercised on expiry and NOT before.

 American style call options currently offered by TBAU may be exercised on expiry or early exercised prior to the close of the LAST trading day BEFORE the expiration day.

3. Explanation of why ETOs, including its key attributes, is likely to be consistent with the likely objectives, financial situation and needs of consumers in the target market

  • ETOs are complex and may potentially be leveraged instruments depending on several factors including the trading strategies employed. Accordingly, they are only appropriate for experienced or knowledgeable traders who have the ability to bear some losses.

  • Under certain conditions, such as an absence or reduction in the number of willing buyers and sellers in the ETO market or underlying market, it may become difficult or impossible to close out an open ETO position, potentially leading to significant losses.

  • ETOs can be used for a variety of purposes, including hedging, speculation, diversification and generating trading profits, hence consumers with these investment objectives will likely be within the target market.

  • Given that ETOs are often used for speculation, some clients trading ETOs will incur losses while others incur profits. These losses and gains are amplified because ETOs are leveraged instruments. Accordingly, consumers with a conservative risk appetite are likely outside of the target market for ETOs.

  • Level 1 ETOs are likely to be consistent with speculative trading and hedging because ETOs offer high risk tolerance investor the potential for enhanced return with corresponding higher risk and offer risk mitigation investors the ability to economically protect or lock in any previous profits or forthcoming profits from exposure to an underlying asset and/or protect against future loss. For instance, through buying a put option on an underlying asset, clients may attempt to profit from the downward market movements. In scenarios where clients already maintain a long exposure to the same underlying asset, the resultant exposure and prospective profit derived from the put option can serve to mitigate any potential losses incurred from the existing long position.

Conditions and restrictions relating to the distribution of this product – s 994B(5)(c)

4. Outline of the conditions and restrictions relating to distribution of ETOs

The products are distributed by TBAU and various third parties who may be involved in the distribution of the products, including various introducing brokers (each a Distributor, and together, the Distributors).

TBAU as the distributor

Any distribution of ETOs by TBAU directly to clients will need to ensure that ETOs are only issued to clients who are reasonably likely to be within the target market. The following controls are in place:

  • TBAU’s website provides clients with easy access to FAQs, PDS, TMD, and the link to educational materials, which helps clients to assess if the product is consistent with their objectives, needs and financial situations.

  • ETO is generally not marketed alone but as an addition to the branding awareness or other products offerings and/or the message is generally limited to the scope of informing recipients regarding the offering availability. The disclaimer will emphasize that option trading carries a high level of risk and may not be suitable for all investors.

  • ETO trading requires an additional activation step, which not only requires clients to take and pass the knowledge test but also brings forward the followings to clients’ attention prior to the trading application:

1. Specific and limited option function and offering

2. A requirement to read and understand TMD, PDS and education materials

3. suitable client categories

4. Significant high risk in nature

  • Representatives are reminded not to offer or solicit clients to trade ETOs and the correspondence shall be limited to factual information and technical support and no advice is provided. Staff are provided with ongoing training and are subject to regular compliance review.

3rd party distributor:

TBAU takes due skill and care in choosing suitable distributors. 3rd party distributor must be a regulated person under Corporation Act S994A(1). All distributors must complete the compliance and regulator action questionnaire during the onboarding process, which will be used, among other information, to assess their eligibility to become TBAU’s distributors.

Distributors are obligated to take reasonable steps that will or are reasonably likely to result in the distribution of the financial products being consistent with the TMD. Distributors are required to:

  • Ensure the distribution method or channel is reasonably likely to be consistent with the target market;

  • Put in place effective governance arrangements to allow for an appropriate degree of control and oversight over the distribution process;

  • Implement a process which identifies changes that may impact on the effectiveness of governance arrangements to ensure they remain effective;

  • Eliminate or manage the risk incentives may influence behaviors that could result in distribution being inconsistent with the TMD;

  • Ensure that remuneration and incentives for distribution/sales staff will not result in distribution being inconsistent with the TMD;

  • Ensure staff involved in distribution receive sufficient training;

  • Submit all marketing and promotional materials to TBAU for review and approval prior to the release.

TBAU will seek regular data from 3rd party distributors to ensure that the distributors are complying with the requirement to distribute TBAU’s ETOs only to persons within the target market. TBAU requires distributors to report:

  • the complaints and feedbacks received about the product within 10 business days after the end of each quarter

  • Significant dealings: as soon as practicable and in any event within 10 business days after becoming aware

5. Explanation of why these distribution conditions and restrictions will make it more likely that the consumers who acquire the ETOs are in the target market

TBAU as the distributor

  • The Website provides clients with multiple ways to easily access the required information to assess if the product is consistent with their personal objectives, needs and financial situations.

  • The marketing restrictions in place effectively limits ETO’s potential exposures to the general public, which, therefore, reduces the likelihood of being read by potential clients who are less likely to be within in the target market as a message of solicitation, invitation, or recommendations to trade ETO. ETO’s high risk in nature and not being suitable to all investors addressed in disclaimers serve as an additional alert of reminding recipients regarding the limited target market.

  • Setting up a separate trading permission process for ETO is consistent with the fact that not all clients will be within the target market.

  1. Clients will be reminded regarding ETO’s limited target market and high risk in nature at the start of the process.

  2. Clients are mandated to disclose their level of experience in option trading. Those with limited exposure to option trading are subject to additional cautionary measures, wherein they are once again apprised of the high risk and complex nature of the ETOs. Furthermore, such clients are advised to engage in simulated trading environments to familiarize themselves with the ETOs before committing capital to live trading. Clients must confirm their completion or intent to engage in simulated trading prior to transitioning to live trading.

  3. The A knowledge test is implemented, which helps helpful for TBAU and clients to ascertain if clients have certain basic but key understanding towards the nature of the product. Clients can attempt the assessment up to 3 times per day and will need to wait at least 24 hours to re-read PDS, TMD and other educational materials before they can apply again. This is, which is consistent with the requirement that clients shall have the requisite knowledge of ETOs.

  • The restrictions placed on the content and nature of the correspondence with clients are believed to reduce the likelihood of introducing ETOs to clients not within the target market because there may not be sufficient information provided by clients for representatives to assess if the client is likely to be within the target market. The training and compliance review will help representatives improve their understanding towards the product, which is another reasonable step taken to improve the distribution of ETOs within the target market.

3rd party distributor:

  • The compliance due diligence check during the selection process is helpful for TBAU to assess if the distributor has sound and solid compliance framework. TBAU has placed contractual obligations on third party distributors that they must have established, implemented and maintained appropriate procedures, processes and controls with a view to ensuring that ETOs are distributed in accordance with this TMD. TBAU has a high degree of control over the distribution in that TBAU applies the same stringent marketing review criteria on distributor’s promotional material and all clients will be subject to the same ETO trading activation process as direct clients.


6. Outline of the events and circumstances that would reasonably indicate to TBAU that the TMD for ETOs is no longer appropriate (i.e. "review triggers" – s 994B(5)(d)

Review Triggers when:

  • There are significant dealings in issuing ETOs, which are not consistent with the target market or this TMD. This trigger occurs where significant distribution is occurring outside the target market, and does not refer to any one particular dealing in ETOs

  • Distributor has reported a large volume of complaints related to ETOs

  • TBAU has received a large volume of complaints in relation to ETOs, indicating that the nature and risks of ETOs are not well understood

  • Significant compensation paid out in relation to ETOs

  • TBAU has made known of a material number of clients who suffered financial hardship due to ETO trading

  • TBAU has detected significant issues with the distribution of ETOs through monitoring of our day-today activities, or the monitoring and supervision of our Distributors

  • Material changes to key attributes, fund investment objective and/or fees

  • Key attributes have not performed as disclosed by a material degree and for a material period

  • The use of Product Intervention Powers, regulator orders or directions that affects the product

7. The period of time between the start of the day this TMD is made and the day that the first periodic review of the TMD will conclude – s 994B(5)(e)

The first periodic review of this TMD will occur in January 2023.

8. The period of time between the conclusion of a periodic review of the TMD and the start of the next periodic review – s 994B(5)(f)

TBAU will review the appropriateness of its target market on an annual basis

Reporting period for reporting information about the number of complaints about the product – s 994B(5)(g)

9. The reporting period in which the distributors of TBAU's financial products are required to provide information about the number of complaints received about the product

TBAU will require that Distributors report information about the number and nature of complaints received about the product and whether any persons not in the target market were distributed TBAU issued ETOs, within 10 business days after the end of each quarter.

Information Sharing

10. Outline of the kinds of information that TBAU will require from distributors to promptly identify that the TMD for ETOs is no longer appropriate – s 994B(5)(h)

Complaint: the number, nature, resolution and compensation of complaints about spot FX contracts

Feedback: client feedback about the spot FX contract product and / or the target market

Significant dealings:

  • details and reasons why it is considered as the significant dealings;

  • how it was identified

  • steps taken or to be taken to persons affected

  • steps taken or to be taken to stop it happening again

11. The distributors that will be required to provide the information specified above

– s 994B(5)(h)(i)

TBAU will require all of the above data from all Distributors. No party may engage in the distribution of TBAU’s ETOs unless they have entered into a service level agreement with us.

12. The reporting period for the relevant distributors to provide the information specified above – s 994B(5)(h)(ii)

Complaint: Quarterly

Feedback: Quarterly

Significant dealing: as soon as practicable and in any event within 10 business days after becoming aware.