4. What is the difference between a margin and cash account?

With a margin account, you have a flexible credit facility that allows you take advantage of investment opportunities, even if the cash is not immediately available. In a cash account, you can only purchase stocks limited by the cash balance you have in your account.

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5. What should I know before using margin?

Borrowing on margin has inherent risks. Funds obtained on margin are considered a loan secured by your portfolio, and the loan must be repaid along with the interest accrued. The amount of your loan is unaffected by fluctuations in the value of your portfolio; however, you may lose more than the collateral value of the stocks in your margin account.

Because of the risks involved, it is important that you fully understand the rules and requirements involved in trading stocks on margin. 

· Margin borrowing increases your level of market risk and is not for everybody.
· All the marginable stocks and cash balance in your account are held as collateral for your margin loan.
· You must repay COL the amount of money you borrowed on margin, regardless of the underlying value of the stocks you purchased.
· Interest will be accrued on your margin loan depending on the daily amount borrowed and will be deducted from your account at the end of every month. COL’s base rate is subject to change without notice.
· You must maintain a minimum amount of equity in your account (see Q6).
· COL can change the margin requirements for any security without prior notice.
· You should maintain a minimum equity percentage to fully utilize the margin facility

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6. Who are eligible to apply for a COL X2 account?

Existing COL customers with a total account equity of at least Php200,000 and above are eligible to apply for the COL X2 account. Total account equity is computed by totaling the market value of all your stocks that are fully paid plus adding remaining cash. A minimum maintaining net equity balance of Fifty Thousand Pesos (Php50,000.00) is required to keep my/our Margin account activated. 

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7. What are considered marginable stocks?

Stocks which are eligible for margin. 

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8. Where can I find the list of marginable stocks?

You can find the list of eligible stocks under the following sections:

  Quotes-> Stock Info-> Stock Symbols 

  Trade/Portfolio-> Portfolio -> List of Marginable Securities

   Trade/Portfolio->Enter Order -> Stock Symbols

The list is as follows:

 

Current list # Stock Code Security Name Marginable Margin Rate % Note 1 AC Ayala Corporation Y 100 - 2 ACEN ACEN CORPORATION Y 100 - 3 AEV Aboitiz Equity Ventures, Y 100 - 4 AGI Alliance Global Group, In Y 100 - 5 ALI Ayala Land, Inc. Y 100 - 6 AP Aboitiz Power Corporation Y 100 - 7 AREIT AREIT, Inc. Y 100 - 8 BDO BDO Unibank, Inc. Y 100 - 9 BLOOM Bloomberry Resorts Corpor Y 100 - 10 BPI Bank of the Philippine Is Y 100 - 11 CEB Cebu Air, Inc. Y 100 - 12 CNPF Century Pacific Food, Inc Y 100 - 13 CNVRG Converge Information and Y 100 - 14 COL COL Financial Group, Inc. Y 100 - 15 CREIT Citicore Energy REIT Corp Y 100 - 16 CTS CTS Global Equity Group, Y 100 - 17 DMC DMCI Holdings, Inc. Y 100 - 18 DNL D&L Industries, Inc. Y 100 - 19 EMI Emperador Inc. Y 100 - 20 FGEN First Gen Corporation Y 100 - 21 FILRT Filinvest REIT Corp. Y 100 - 22 FLI Filinvest Land, Inc. Y 100 - 23 FPH First Philippine Holdings Y 100 - 24 GLO Globe Telecom, Inc. Y 100 - 25 GTCAP GT Capital Holdings, Inc. Y 100 - 26 ICT International Container T Y 100 - 27 JFC Jollibee Foods Corporatio Y 100 - 28 JGS JG Summit Holdings, Inc. Y 100 - 29 LTG LT Group, Inc. Y 100 - 30 MBT Metropolitan Bank & Trust Y 100 - 31 MEG Megaworld Corporation Y 100 - 32 MER Manila Electric Company Y 100 - 33 MONDE Monde Nissin Corporation Y 100 - 34 MREIT MREIT, Inc. Y 100 - 35 MWC Manila Water Company, Inc Y 100 - 36 NIKL Nickel Asia Corporation Y 100 - 37 PGOLD Puregold Price Club, Inc. Y 100 - 38 RCR RL Commercial REIT, Inc. Y 100 - 39 RLC Robinsons Land Corporatio Y 100 - 40 RRHI Robinsons Retail Holdings Y 100 - 41 SCC Semirara Mining and Power Y 100 - 42 SECB Security Bank Corporation Y 100 - 43 SM SM Investments Corporatio Y 100 - 44 SMC San Miguel Corporation Y 100 - 45 SMPH SM Prime Holdings, Inc. Y 100 - 46 TEL PLDT Inc. Y 100 - 47 URC Universal Robina Corporat Y 100 - 48 WLCON Wilcon Depot, Inc. Y 100 -

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9. How do I monitor my ability to buy with margin?

You can use your Portfolio Page to monitor your margin balances:

a. Buying Power Cash is the maximum value or amount you can buy of non-marginable stocks or amount withdrawable in cash.

b. Buying Power with Margin is the maximum cash value or amount you can buy of marginable stocks. 

c. Net Cash is the total amount you still have in your account or if negative is the amount borrowed on margin.

For each of the above three items it will be displayed in its Actual and Available values. The Actual value shows the base value on hand before accounting for any open orders; while Available value shows your new balance net of any funds appropriated for any pending orders.

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10. What shares of stock and how many shares can I buy using my COL X2 account?

You can buy ANY stock listed in the PSE, including IPO’s, in an amount that would not cause your equity percentage to drop below 50%. However buying marginable stocks grants you the ability to purchase more stocks using credit. Each marginable stock has its own margin rating built in by perceived risk, which controls the percentage multiplier effect to determine its marginable value. Thus a 100% margin rating into the stock grants you the ability to use 100% of its doubling capacity. A 50% margin rate grants only half of the doubling rate.

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11. What is Equity Percentage?

Equity Percentage shows the percentage share of ownership you have over your accounts market value. Thus an Equity Percentage of 70% shows that you own 70% of your account’s market value while the balance of 30% is on margin (borrowed funds). 

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12.What if my Equity Percentage falls below 50%?

If your equity percentage falls below 50%, your ability to purchase more stocks is halted up until this percentage can be raised back to over 50%. This condition will trigger a Margin Alert via email and a notification in your Trade/Portfolio section which informs you that your equity percentage has fallen below 50%.

If your equity percentage falls below 42.857% a Margin Call will be issued. 

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13. What is a Margin Call?

A Margin Call is an important notice that requires the account holder to promptly (within 5 calendar days) bring the account’s equity percentage above 50%. The account holder may deposit additional funds, deposit marginable stocks or sell stocks to raise the equity percentage back to the required level. Should the account holder fail to comply, COL then reserves the right to sell stocks in one’s account (not limited to those purchased on margin) as it sees fit to bring the account’s equity percentage above 50%. 

If your equity percentage falls below 33.33%, your COL X2 account is automatically suspended and you will receive a notification of a Margin Suspension.

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14. What is Margin Suspension?

A Margin Suspension is set off when one’s equity percentage falls below 33.33% and this triggers the end of all margin privileges and returns an account back to a cash account status. At the same time, it also requires the account holder to immediately payoff one’s margin loan within 24-hours by depositing additional funds and/or marginable stocks or sell stocks. Should the account holder fail to comply, COL then reserves the right to sell stocks in your account (not limited to those purchased on margin) as it sees fit to cover the margin loan. An accounts margin facility will thereby remain suspended until one re-applies for the facility.

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15 .How can I reactivate my COL X2 account?

You will need to reapply for your COL X2 account to be reinstated by filling up a “Margin Reactivation Form” which you can download from the websites Homepage under Forms and submit the original signed form to the COL Business Center for evaluation. Remember you must meet the initial margin requirement of Php200,000 to re-apply. 

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16. Can I still view the site and trade while my COL X2 account is suspended?

Yes, you can still view the site and trade using your COL account but your account will just be treated as a regular cash account. 

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17. How are the interest charges computed?

The interest charges are accrued based on the prevailing interest rate, mandated by COL. The daily interest charge is based on the daily credit utilized multiplied by the interest rate per month divided by 30 days plus vat of 12%.

Formula:

Interest charge = (Daily Credit Utilized x (Monthly Interest Rate/30)) + 12% VAT 

The interest charges will be posted and deducted monthly and reflected in your monthly statement of account.

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18. What is an example of using the COL X2 account?

Let’s say you have a Total Equity of Php200,000 in your COL X2 account (This represents Php100,000 in cash and a market value of Php100,000 in Marginable stocks).

For every peso value in total equity, COL X2 will give you the equivalent amount as your additional buying power. Therefore, you can now purchase any stock as long as you maintain an Equity Percentage of 50%+.

For this example, you will have an additional buying power of as much as Php200,000.00.

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19. How do I apply for a margin account?

All you need to do is to follow these 3 steps:

i. Request a copy or Download the Terms and Conditions of the COL Margin Facility Agreement (2 copies). 

ii. Print and sign off on two (2) copies the COL Margin Facility Agreement

iii. Send the two (2) original signed COL Margin Facility Agreements to: COL Financial Group, Inc. 24th Floor, East Tower, Tektite Towers, Exchange Road, Ortigas Center, Pasig City 1605 Philippines 

iv. The application for margin will be subject for approval.

Once approved, your COL X2 account will be available within 24 hours. Once you receive an email confirmation from us, you can now view your new “Buying Power” by clicking on the Portfolio section of your Trade & Portfolio page and begin using this facility.

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20. Who can I contact for assistance?

You may contact our Customer Service Hotline at +(632)6515888 or email at helpdesk@colfinancial.com

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