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AMP LIMITED Capital/Financing Update 2013

Nov 13, 2013

64379_rns_2013-11-13_406a32be-b9b4-4d84-b01a-09674cd8fe8b.pdf

Capital/Financing Update

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14 November 2013

Manager Manager ASX Market Announcements Market Information Services Section Australian Securities Exchange New Zealand Stock Exchange Level 4, 20 Bridge Street Level 24, NZX Centre, 11 Cable Street Sydney NSW 2000 Wellington, New Zealand

Announcement No: 42/2013 AMP Limited (ASX/NZX/SGX: AMP) (also for release to AMP Group Finance Services Limited (ASX: AQNHA / NZX: AQN010 / SGX: )

AMP Subordinated Notes 2 - Replacement Prospectus

Please refer to attached documents.

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Public Affairs

T 02 9257 6127 E [email protected] W AMP.com.au/media AMP_AU

AMP Limited Level 24, 33 Alfred Street, Sydney NSW 2000 Australia ABN 49 079 354 519

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AMP Subordinated Notes 2

Prospectus for the issue of subordinated notes

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Joint lead managers

Co-managers

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Structuring adviser

Issuer AMP Limited (ABN 49 079 354 519)

Important notices

About this prospectus

This prospectus relates to the offer by AMP Limited (ABN 49 079 354 519) ( AMP ) of AMP Subordinated Notes 2 ( AMP Notes 2 ) to raise at least $300 million ( Offer ).

This prospectus is dated and was lodged with the Australian Securities and Investments Commission (ASIC) on 14 November 2013 pursuant to section 713(1) of the Corporations Act. This is a replacement prospectus which replaces the prospectus dated 6 November 2013 and lodged with ASIC on that date ( original prospectus ). This prospectus expires on the date which is 13 months after the date of the original prospectus ( Expiry date ) and no AMP Notes 2 will be issued on the basis of this prospectus after the Expiry date.

Neither ASIC nor the Australian Securities Exchange ( ASX ) takes any responsibility for the contents of this prospectus or the merits of the investment to which this prospectus relates.

This prospectus also contains information on an offer ( Reinvestment Offer ) by AMP for Eligible AMP Notes holders to apply to sell to AMP some or all of the Australian dollar tranche of subordinated notes ( A$ AMP Notes ) issued in 2009 by AMP Group Finance Services Limited ( AMPGFS ). Neither AMP nor AMPGFS is providing any investment advice or making any recommendation to Eligible AMP Notes holders in relation to the Reinvestment Offer.

Defined words and expressions

Certain capitalised words and expressions used in this prospectus have defined meanings which are explained in the Glossary in appendix B of this prospectus and in the terms and conditions of AMP Notes 2 as set out in appendix A. If there is any inconsistency in definitions between appendix A and appendix B or other definitions in this prospectus, the definitions in appendix A prevail.

Unless otherwise stated or implied, references to times in this prospectus are to Sydney time.

AMP

AMP Notes 2 are to be issued by AMP, an ASX‑listed company incorporated in Australia. AMP is the non‑operating holding company of Australia and New Zealand’s leading independent wealth management business. References in this prospectus to AMP are to the holding company on a standalone basis and references to the AMP group are to AMP and its controlled entities.

AMP is not a bank or authorised deposit‑taking institution under the Banking Act and is not a life insurer under the Life Insurance Act.

AMP Notes 2 are unsecured and subordinated and may be either Converted into AMP Ordinary Shares or Written-off if a Non-Viability Trigger Event occurs

AMP Notes 2 are subject to investment risk, including possible delays in payment (if the Solvency Condition is not satisfied) and loss of income and principal invested. There is a risk that you may lose some or all of the money you invested in AMP Notes 2, either because a Non‑Viability Trigger Event occurs or on a winding‑up of AMP if there are insufficient assets to satisfy securities and obligations ranking ahead of AMP Notes 2. In either case you will not be repaid any or all of the Face Value and will not receive any or all of the Interest payments due and unpaid at that time. Neither AMP nor any member of the AMP group in any way guarantees the capital value and/or performance of AMP Notes 2 or any particular rate of return.

AMP Notes 2 are unsecured notes for the purposes of section 283BH of the Corporations Act. AMP Notes 2 are issued by AMP under the Trust Deed and Holders have no direct right to claim against AMP except as provided in the Trust Deed (which includes the terms of AMP Notes 2).

AMP Notes 2 are not deposit or policy liabilities of the AMP group and are not protected accounts or policies and are not government guaranteed

AMP Notes 2 are not :

  • deposits or policy liabilities of AMP, AMP Bank Limited ( AMP Bank ), AMP Life Limited ( AMP Life ), The National Mutual Life Association of Australasia Limited ( NMLA ) or any other member of the AMP group

  • protected accounts for the purposes of the depositor protection provisions of the Banking Act or of the financial claims scheme established under the Banking Act

1

AMP Subordinated Notes 2

  • –– guaranteed–or–insured–by–any–government,– government–agency–or–compensation–scheme–of– Australia–or–any–other–jurisdiction,–or

  • –– investments–in–any–superannuation–or–other– fund–managed–by–a–member–of–the–AMP–group.

Exposure Period

The–Corporations–Act–prohibits–AMP–from–accepting– applications–to–subscribe–for–AMP–Notes–2–under–the– original–prospectus–in–the–seven–day–period–after– 6–November–2013,–being–the–date–on–which–the– original–prospectus–was–lodged–with–ASIC–( Exposure Period ).–This–period–may–be–extended–by–ASIC–by–up– to–a–further–seven–days.–This–period–was–to–enable– the–original–prospectus–to–be–examined–by–market– participants–prior–to–the–raising–of–funds.–

How to obtain a prospectus and Application Form

During–the–Offer–Period:

  • –– Eligible–AMP–Notes–holders–will–be–sent–a–paper– copy–of–this–prospectus–with–a–personalised– Application–Form

  • –– Eligible–Securityholders–may–obtain–a–paper– copy–of–this–prospectus–with–a–personalised– Application–Form–(free–of–charge)–by:

  • –– –calling–the–AMP–Notes–2–information– line–on–1300–338–164–(within–Australia),– 0800–444–152–(within–New–Zealand)–or– +61–3–9415–4018–(outside–Australia–and– New–Zealand)–Monday–to–Friday–––8.30am– to–5.30pm–(Sydney–time),–or

The–Corporations–Act–prohibits–any–person–from– passing–the–Application–Form–on–to–another– person–unless–it–is–attached–to–a–paper–copy–of–this– prospectus–or–accompanied–by–the–complete–and– unaltered–electronic–version–of–this–prospectus.

Electronic access to prospectus

This–prospectus–is–available–in–electronic–form–to– Australian–investors–at–ampnotes2.com.au–during– the–Offer–Period.–The–following–conditions–apply–if– this–prospectus–is–accessed–electronically:

  • –– you–must–download–the–prospectus–in–its– entirety–from–ampnotes2.com.au

  • –– the–prospectus–is–only–available–in–electronic– form–to–people–accessing–and–downloading–or– printing–the–electronic–copy–of–the–prospectus–in– Australia–and–is–not–available–to–persons–in–any– other–jurisdictions–(including–the–United–States)– without–the–prior–approval–of–AMP,–and

  • –– if–you–access–an–electronic–copy–of–the– prospectus,–you–should–ensure–that–you– download–and–read–the–entire–prospectus–before– submitting–an–application–for–AMP–Notes–2.

No withdrawal of applications

You–cannot–withdraw–your–application–for–AMP– Notes–2–once–it–has–been–lodged,–except–as– permitted–under–the–Corporations–Act.

  • –– registering–online–to–receive–a–prospectus– at–ampnotes2.com.au–prior–to–the– Opening–Date.

  • –– Applicants–under–the–Broker–Firm–Offer–may– obtain–a–paper–copy–of–this–prospectus,–including– a–Broker–Firm–Application–Form,–from–their– Syndicate–broker–or–may–view–the–prospectus– online–at–ampnotes2.com.au

Applications–for–AMP–Notes–2–under–this–prospectus– may–only–be–made–during–the–Offer–Period,–on–an– Application–Form–(either–electronic–or–paper)–that– is–attached–to–or–accompanying–this–prospectus.– Eligible–AMP–Notes–holders–may–also–apply–online– during–the–Offer–Period–at–ampnotes2.com.au.

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AMP Subordinated Notes 2

continued Important notices

Refunds

If–you–are–not–allocated–any–AMP–Notes–2,–or–you– are–allocated–fewer–AMP–Notes–2–than–the–number– of–AMP–Notes–2–that–you–applied–for,–all–or–some– of–your–application–payment–(as–applicable)–will– be–returned–to–you–(without–interest)–as–soon–as– possible–after–the–Issue–Date.–If–the–Offer–does–not– proceed–for–any–reason,–any–application–payment– you–have–made–will–be–refunded–to–you–(without– interest)–as–soon–as–possible.–No–interest–will–be– payable–on–application–payments.–Refunds–will– be–made–via–direct–credit–(if–AMP–holds–payment– instructions–on–file)–or–by–cheque.

Providing personal information

You–will–be–asked–to–provide–personal–information– to–the–AMP–group–(directly–or–via–its–agents)–if–you– apply–for–AMP–Notes–2.–See–section–10.11–and–AMP’s– privacy–policy–which–is–available–at–amp.com.au–for– information–on–how–AMP–(and–its–agents)–collects,– holds–and–uses–this–personal–information.

Restrictions on distribution

This–prospectus–does–not–constitute–an–offer–in–any– place–in–which,–or–to–any–person–to–whom,–it–would– not–be–lawful–to–make–such–an–offer.–As–at–the–date– of–this–prospectus,–no–action–has–been–taken–to– register–or–qualify–AMP–Notes–2–or–the–Offer–or–to– otherwise–permit–a–public–offering–of–AMP–Notes–2– outside–Australia.

This–prospectus–may–not–be–released–or–distributed– in–the–United–States.–This–prospectus–does–not– constitute–an–offer–to–sell,–or–a–solicitation–of–an– offer–to–buy,–securities–in–the–United–States–or–to,– or–for–the–account–or–benefit–of,–any–US–Person.– Any–securities–described–in–this–document–have– not–been,–and–will–not–be,–registered–under–the–US– Securities–Act–or–with–any–securities–regulatory– authority–of–any–state–or–other–jurisdiction–in–the– United–States,–and–may–not–be–offered–or–sold,– directly–or–indirectly,–within–the–United–States–or– to,–or–for–the–account–or–benefit–of,–US–Persons– except–in–transactions–exempt–from,–or–not–subject– to,–registration–under–the–US–Securities–Act–and– applicable–US–state–securities–laws.

See–section–7.5.1–for–further–information.

Financial information and forward‑looking statements

Section–4–sets–out–the–financial–information–referred– to–in–this–prospectus.–The–basis–of–preparation–of– that–information–is–also–set–out–in–section–4.

All–financial–amounts–contained–in–this–prospectus– are–expressed–in–Australian–dollars–and–rounded– to–the–nearest–million–unless–otherwise–stated.– Any–discrepancies–between–totals–and–sums–of– components–in–tables–contained–in–this–prospectus– are–due–to–rounding.

This–prospectus–contains–forward-looking– statements,–which–are–identified–by–words–such– as–‘may’,–‘could’,–‘believes’,–‘estimates’,–‘expects’,– ‘intends’–and–other–similar–words,–that–involve–risks– and–uncertainties.

Any–forward-looking–statements–are–subject– to–various–risk–factors–that–could–cause–actual– circumstances–or–outcomes–to–differ–materially–from– the–circumstances–or–outcomes–expressed,–implied– or–anticipated–in–these–statements.–Forward-looking– statements–should–be–read–in–conjunction–with– the–risk–factors–as–set–out–in–section–5,–and–other– information–in–this–prospectus.

No representations other than in this prospectus

You–should–rely–only–on–information–in–this– prospectus.–No–person–is–authorised–to–give–any– information–or–to–make–any–representation–in– connection–with–the–Offer–which–is–not–contained–in– this–prospectus.–Any–information–or–representation– not–contained–in–this–prospectus–may–not–be–relied– upon–as–having–been–authorised–by–AMP–or–any– other–member–of–the–AMP–group–in–connection–with– the–Offer.

Except–as–required–by–law,–and–only–to–the–extent– so–required,–none–of–AMP,–any–member–of–the–AMP– group,–or–any–other–person–warrants–or–guarantees– the–future–performance–of–AMP–Notes–2,–AMP,– or–any–return–on–any–investment–made–under– this–prospectus.

Unless–otherwise–indicated,–all–information–in–this– prospectus,–while–subject–to–change–from–time–to– time,–is–current–as–at–the–date–of–this–prospectus.

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AMP Subordinated Notes 2

About the Trustee

The–Trust–Company–(Australia)–Limited–( Trustee ),– and–its–directors,–employees,–officers,–affiliates,– agents,–advisors,–intermediaries–and–related–bodies– corporate–(each–a–‘related–person’):

  • –– have–not–authorised–or–caused–the–issue–or– distribution–of–this–prospectus–and–do–not–make– any–statement–or–purport–to–make–any–statement– in–this–prospectus–or–any–statement–on–which–a– statement–in–this–prospectus–is–based

  • –– do–not–assume–any–responsibility–for–or– make–representations–as–to–the–accuracy–or– completeness–of–any–information–contained–in– this–prospectus

  • –– to–the–maximum–extent–permitted–by–law– expressly–disclaim–all–liability–in–respect–of,–make– no–representation–or–any–statement–regarding,– and–take–no–responsibility–for,–any–part–of–this– prospectus,–or–any–statements–in,–or–omissions– from–this–prospectus,–other–than–in–the–case–of– the–Trustee,–only–references–to–its–name–and–the– statement(s)–and/or–report(s)–(if–any)–specified– below–and–included–in–this–prospectus–with–its– written–consent

  • –– –in–the–case–of–the–Trustee–only,–it–has–given,– and–has–not,–before–the–lodgement–of–this– prospectus–with–ASIC,–withdrawn–its–written– consent–to–be–named–in–this–prospectus–in–the– form–and–content–in–which–it–is–named

  • –– –have–relied–on–AMP–for–the–accuracy–of–the– contents–of–this–prospectus,–and

This prospectus does not provide personal financial product or investment advice – you should seek your own professional investment advice

The–information–in–this–prospectus–does–not–take– into–account–your–investment–objectives,–financial– situation–or–particular–needs–as–an–investor.–You– should–carefully–consider–these–factors–in–light–of– your–personal–circumstances–(including–financial– and–taxation–issues).–See–in–particular–the–risks–set– out–in–section–5.

If–you–do–not–understand–any–part–of–this– prospectus,–or–are–in–any–doubt–as–to–whether–to– invest–in–AMP–Notes–2–or–not,–it–is–recommended– that–you–seek–professional–guidance–from–your– stockbroker,–solicitor,–accountant–or–other– independent–and–qualified–professional–adviser– before–deciding–whether–to–invest.

Enquiries

If–you–are–considering–applying–for–AMP–Notes–2– under–the–Offer,–this–prospectus–is–important–and– should–be–read–in–its–entirety.

If–you–have–any–questions–in–relation–to–the–Offer,– please–call–the–AMP–Notes–2–information–line–on– 1300–338–164–(within–Australia),–0800–444–152– (within–New–Zealand)–or–+61–3–9415–4018–(outside– Australia–and–New–Zealand)–Monday–to–Friday––– 8.30am–to–5.30pm–(Sydney–time).

  • –– –do–not–make–any–representation–or–warranty– as–to–the–performance–of–AMP–Notes–2,–the– payment–of–Interest–or–redemption–of–AMP– Notes–2,–or–the–value–of–any–AMP–Ordinary– Shares–issued–(or–their–proceeds–of–sale)– on–Conversion.

Website

AMP–group–maintains–a–website–at–amp.com.au.– Information–contained–in–or–otherwise–accessible– through–this–or–a–related–website–is–not–a–part–of– this–prospectus.

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AMP Subordinated Notes 2

Table of contents

Importantnotices page1
Chairman’sletter page6
HowtoapplyforAMPSubordinatedNotes2 page7
Keydates page8
Section 1Investmentoverview page9
Section 2AboutAMPSubordinatedNotes2 page28
Section 3AboutAMPandtheAMPgroup page46
Section 4Financialinformation page53
Section 5Investmentrisks page61
Section 6AbouttheReinvestmentOffer page85
Section 7Howtoapply page94
Section 8Australiantaxationsummary page106
Section 9Keypeople,interestsandbenefts page112
Section 10Additionalinformation page121
Appendix ATerms page131
Appendix BGlossary page154
Applicationform page162
Corporatedirectory page166

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AMP Subordinated Notes 2

Chairman’s letter

14–November–2013

Dear–investor,

You–are–invited–to–apply–to–purchase–AMP–Subordinated–Notes–2,–which–are–new,–subordinated–and– unsecured–debt–securities–being–issued–by–AMP.

AMP–Notes–2–are–being–issued–as–part–of–the–AMP–group’s–ongoing–funding–and–capital–management– strategy.–The–funds–raised–by–the–issue–will–further–strengthen–the–AMP–group–capital–base,–meet–general– funding–requirements–and–support–the–refinancing–of–subordinated–debt–of–the–AMP–group,–including–the– AMP–subordinated–notes–issued–in–2009–(AMP–Notes).–AMP–is–looking–to–raise–at–least–A$300m–through– the–issue–of–AMP–Notes–2.

AMP–Notes–2–will–be–Australian–dollar–securities–listed–on–the–Australian–Securities–Exchange.–We–expect– AMP–Notes–2–to–begin–trading–on–19–December–2013.

You–can–apply–to–buy–AMP–Notes–2–with–a–minimum–investment–of–A$5,000.–They–are–designed–to–pay– quarterly,–cumulative–interest–calculated–on–a–floating–rate–basis.–The–interest–rate–will–be–equal–to–the– Market–Rate–plus–a–margin–of–2.65–per–cent,–which–was–determined–under–the–bookbuild.–Interest–will–be– paid–quarterly,–provided–AMP–is–solvent–and–APRA–has–not–determined–that–AMP–is,–or–may–become,–nonviable–(in–which–case–AMP–Notes–2–may–be–converted–into–ordinary–shares–in–AMP–or–written-off).

If–you–hold–A$–AMP–Notes–you–may–be–eligible–to–participate–in–the–Reinvestment–Offer.–Under–this–offer– you–have–the–opportunity–to–sell–some–or–all–of–your–holding–of–A$–AMP–Notes–to–AMP–to–fund–your– subscription–for–AMP–Notes–2.–This–offer–is–outlined–in–section–6–of–this–prospectus.

To–participate–in–this–offer,–please–follow–the–instructions–in–section–7.–If–you–are–applying–directly–we–will– need–to–receive–your–completed–application–by–9–December–2013.–However,–if–you–are–applying–through–a– broker–you–need–to–ask–your–broker–what–you–need–to–do–to–apply.–We–recommend–you–read–the–key–dates– on–page–8.–Please–be–aware–that–we–reserve–the–right–to–close–the–offer–early–and/or–to–scale–it–back.–If–this– happens–we–will–post–information–on–ampnotes2.com.au.

You–should–carefully–read–this–prospectus,–including–section–5,–which–contains–a–summary–of–the–key–risks– associated–with–an–investment–in–AMP–Notes–2,–before–you–decide–to–apply.

Yours–sincerely,

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Peter–Mason–– Chairman

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AMP Subordinated Notes 2

How to apply for AMP Subordinated Notes 2

1

2

Read this prospectus in full

  • –– –If–you–are–considering–applying–for–AMP–Notes–2–under–the–Offer,–this– prospectus–is–important–and–should–be–read–in–its–entirety.

  • –– –In–considering–whether–to–apply–for–AMP–Notes–2,–it–is–important–that–you– consider–all–risks–and–other–information–regarding–an–investment–in–AMP– Notes–2–in–light–of–your–particular–investment–objectives–and–circumstances.

Speak to your professional adviser and consider ASIC guidance for retail investors

  • –– –If–you–are–unsure–whether–to–apply–for–AMP–Notes–2,–you–should–seek– professional–guidance–from–your–stockbroker,–solicitor,–accountant–or–other– independent–and–qualified–professional–adviser–about–the–Offer.

  • –– –ASIC–has–published–guidance–which–may–be–relevant–to–your–consideration–of– AMP–Notes–2;–namely,–information–for–retail–investors–who–are–considering– investing–in–hybrid–securities–called–‘Hybrid–securities–and–notes’–(under–the– heading–‘Complex–investments’–at–moneysmart.gov.au/investing).–– Free–copies–of–the–ASIC–guidance–can–be–obtained–from–ASIC’s–website–at–– moneysmart.gov.au/investing–or–by–calling–ASIC–on–1300–300–630– (from–Australia)–or–+–61–3–5177–3988–(from–outside–Australia).

3

Complete and submit your Application Form and application payment

  • –– –If–you–decide–to–apply–for–AMP–Notes–2,–you–need–to–apply–using–an–Application– Form–(either–electronic–or–paper)–attached–to–or–accompanying–this–prospectus.

  • –– –The–application–process–varies–depending–on–whether–you–participate–in–the– Institutional–Offer,–Broker–Firm–Offer,–Reinvestment–Offer–or–Securityholder– Offer.–See–section–7–for–more–details–on–how–to–apply.

  • –– –If–you–apply–under–the–Reinvestment–Offer–or–Securityholder–Offer,–your– personalised–Application–Form–must–be–received–by–the–Closing–Date–for–the– Offer,–which–is–expected–to–be–9–December–2013.–

  • –– –If–you–apply–under–the–Broker–Firm–Offer,–your–application–must–be–received–by– the–Closing–Date–for–the–Offer,–which–is–expected–to–be 9–December–2013.

  • –– –The–Offer–may–close–early–so–you–are–encouraged–to–consider–submitting–your– application–as–soon–as–possible–after–the–Opening–Date.

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AMP Subordinated Notes 2

Key dates

Dates may change

These–dates–are–indicative–only–and–may–change–without–notice.

AMP–and–the–Joint–lead–managers–may–agree–to–vary–the–timetable,–including–extending–the–Closing–Date,– closing–the–Offer–early–without–notice–or–accepting–late–applications,–whether–generally–or–in–particular– cases,–or–withdrawing–the–Offer–at–any–time–before–AMP–Notes–2–are–issued,–at–their–discretion.

You–are–encouraged–to–apply–as–soon–as–possible–after–the–Opening–Date.

Key dates for the Offer Date
RecorddatefordeterminingEligibleSecurityholders(7.00pmSydneytime) 4November2013
LodgementoftheoriginalprospectuswithASIC 6November2013
Bookbuild 8November2013
AnnouncementoftheMargin 11November2013
LodgementofthisprospectuswithASIC 14November2013
OpeningDatefortheOffer 14November2013
ClosingDatefortheOffer(5.00pmSydneytime) 9December2013
IssueDate 18December2013
AMPNotes2commencetradingonASX(deferredsettlementbasis) 19December2013
HoldingstatementsforAMPNotes2dispatchedby 24December2013
AMPNotes2commencetradingonASX(normalsettlementbasis) 27December2013
Key dates for AMP Notes 2 Date
RecordDateforfirstInterestpayment 10March2014
FirstInterestPaymentDate1 18March2014
FirstdateonwhichAMPmayredeemtheAMPNotes2(atitsdiscretion)2 18December2018
MaturityDate3 18December2023
Key dates for Eligible AMP Notes holders Date
ReinvestmentRecordDatefordeterminingEligibleAMPNotesholdersfor
ReinvestmentOffer(7.00pmSydneytime)		 4November2013
OpeningDatefortheReinvestmentOffer 14November2013
ClosingDatefortheReinvestmentOffer(5.00pmSydneytime) 9December2013
ReinvestmentDateandpaymentdateforAccruedInterestAmount 18December2013
Step-Update(AMPNotes) 15May2014
Maturitydate(AMPNotes) 1April2019

1– –Interest–is–payable–quarterly–in–arrear,–subject–to–satisfaction–of–the–Solvency–Condition–and–provided–that–AMP–Notes–2– are–still–on–issue–at–the–time–and–have–not–been–redeemed–earlier–or,–on–account–of–a–Non-Viability–Trigger–Event,– Converted–or–Written-off.

  • 2– –APRA–must–provide–its–prior–written–approval–for–any–such–redemption.–There–can–be–no–certainty–that–APRA–will–provide– its–approval.

3– –The–Face–Value–is–repayable–subject–to–satisfaction–of–the–Solvency–Condition–and–provided–that–AMP–Notes–2–are–still– on–issue–at–the–time–and–have–not–been–redeemed–earlier–or,–on–account–of–a–Non-Viability–Trigger–Event,–Converted–or– Written-off.

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AMP Subordinated Notes 2

Section 1

Investment overview

This section provides a summary of the key information that may help you assess whether to invest in AMP Subordinated Notes 2. You should read this prospectus in full before deciding to apply for AMP Subordinated Notes 2.

  • 1.1 Key features of the Offer

  • 1.2 Key features of AMP Subordinated Notes 2

  • 1.3 Summary of certain events that may affect what Holders receive and when they receive it

  • 1.4 Key benefits and risks associated with an investment in AMP Subordinated Notes 2

  • 1.5 Key differences between term deposits and AMP Subordinated Notes 2

  • 1.6 Information for holders of A$ AMP Notes

  • 1.7 Information about the Offer

9

AMP Subordinated Notes 2

Section 1 Investment overview

1.1 Key features of the Offer

Topic
What is the Offer?
Who is the Issuer?
What are
AMP Notes 2?		 Summary
TheOfferisfortheissueofAMPNotes2toraiseatleast
$300million.
TheOfferincludestheReinvestmentOffer,underwhichEligible
AMPNotesholdersmayfundtheirsubscriptionforAMPNotes2
bysellingtoAMPsomeoralloftheirA$AMPNotes.
AMPLimitedABN49079354519.
AMPNotes2areunsecuredandsubordinateddebtobligationsof
AMPwhichhavethefollowingfeatures:
> Fully paid–anIssuePriceof$100perAMPNotethatmustbe
paidinfulltoAMPbeforeAMPNotes2areissued.		 Further
information
Section7.1
Section3
Section2

  • Interest –––pay–Interest–quarterly–in–arrear–at–the–Interest–Rate–so– long–as–the–Solvency–Condition–is–satisfied–and–AMP–Notes–2–are– still–on–issue–and–have–not–been–redeemed–earlier–or,–on–account– of–a–Non-Viability–Trigger–Event,–Converted–or–Written-off.

  • Redemption on maturity –––must–be–redeemed–by–AMP– on–the–Maturity–Date–(18–December–2023)–(so–long–as–the– Solvency–Condition–is–satisfied–and–AMP–Notes–2–are–still–on– issue–and–have–not–been–redeemed–earlier–or,–on–account–of–a– Non-Viability–Trigger–Event,–Converted–or–Written-off).–

  • Early redemption ––may–be–redeemed–prior–to–the–Maturity– Date–at–AMP’s–option–on–18–December–2018–(or–any–subsequent– Interest–Payment–Date)–or–if–a–Tax–Event–or–Regulatory–Event– occurs,–in–each–case–subject–to–the–prior–written–approval– of–APRA.–Any–approval–is–at–APRA’s–discretion–and–may–not– be–given.

  • Not guaranteed ––are–not–guaranteed–by,–nor–are–they– deposit–liabilities,–protected–accounts–or–policy–liabilities–of,–or– investments–in–any–superannuation–or–other–fund–managed–by,– any–member–of–the–AMP–group.–They–are–also–not–guaranteed– or–insured–by–any–government,–government–agency–or– compensation–scheme–of–Australia–or–any–other–jurisdiction.

  • Unsecured –––are–not–secured–over–any–of–AMP–group’s–assets.

  • Subordinated ––are–subordinated–in–a–winding-up–of–AMP–to– claims–of–Senior–Creditors.–This–includes–all–liabilities–preferred– by–law–(for–example,–employee–entitlements–and–secured– creditors),–bonds,–notes–and–trade–and–general–creditors.

  • May Convert ––if–a–Non-Viability–Trigger–Event–occurs,–AMP–may– be–required–to–immediately–and–irrevocably–Convert–some–or– all–of–AMP–Notes–2–into–AMP–Ordinary–Shares–(the–number–of– AMP–Ordinary–Shares–into–which–AMP–Notes–2–Convert–will–be– subject–to–the–Maximum–Conversion–Number).–If–AMP–is–unable– for–any–reason–to–Convert–AMP–Notes–2–which–are–required– to–be–Converted,–those–AMP–Notes–2–will–be–immediately–and– irrevocably–Written-off–and–rights–attaching–to–those–AMP– Notes–2–(including–to–payments–of–Interest–and–repayment–of– the–Face–Value)–will–be–terminated.

10

AMP Subordinated Notes 2

Section 1 Investment overview

Topic
Why is
AMP issuing
AMP Notes 2?		 Summary
AMPisissuingAMPNotes2toraisetermsubordinateddebt,a
substantialpartoftheproceedsofwhichitexpectstousetofundTier
2CapitalofoneormoreRegulatedEntitieswithintheAMPgroup.
AMPNotes2andanyregulatorycapitalofAMPhelpstoprotect
AMPgroup’sdepositors,policyholdersandotherseniorcreditors
byprovidingaloss-absorbingcapitalbufferwhichsupportslosses
thatmaybeincurredbytheAMPgroup.
AsubstantialpartoftheproceedsoftheissueofAMPNotes2
isexpectedtobeusedtofundTier2Capitalofoneormore
RegulatedEntitieswithintheAMPgroup.Theremaining
proceedswillbeusedforgeneralcorporate,fundingandcapital
managementpurposes,includingrefinancingAMPNotesissued
byAMPGFS.
ItisAMPGFS’scurrentintentionthatbothA$AMPNotesnotsold
toAMPundertheReinvestmentOfferandNZ$AMPNoteswill,
subjecttoAPRA’sapproval(whichisinitsdiscretionandmay
notbegiven),beredeemedforcashontheStep-UpDate,and
AMPNotesholderswillreceivetheapplicablefacevalueplusany
accruedandunpaidinteresttothatdateperAMPNoteheld.		 Further
information
Section2.5

1.2 Key features of AMP Subordinated Notes 2

Topic
What are the
key features of
AMP Notes 2?		 Summary
ThekeyfeaturesofAMPNotes2aresummarisedinthissection
1.2andexplainedinmoredetailinsection2.
TheTermsofAMPNotes2(setoutinappendixA)arecomplexand
aredesignedtosatisfyAPRA’sdetailedcapitalrequirementswhich
applytothesetypesofinstruments.
TherearetwoimportantconceptswhichHoldersshouldbeaware
ofwhichaffectwhetherHolderswillreceivepaymentsonAMP
Notes2.Theseareasfollows:
> Solvency Condition–Priortoawinding-upofAMP,AMP’s
obligationstomakepaymentsinrespectofAMPNotes2
(includingtopayInterestandtorepaytheFaceValueonearly
redemptionormaturity)areconditionalonAMPbeingSolvent
atthetimeofmakingthepaymentandimmediatelyafter
makingthepayment.‘Solvent’meansthatAMPisabletopayits
debtsastheyfalldueanditsassetsexceeditsliabilities.
> Non-Viability Trigger Event–IfAPRAdeterminesthatAMPis
orwouldbecomenon-viable,AMPmayberequiredtoConvert
someorallofAMPNotes2intoAMPOrdinaryShares(orwhere
AMPisunableforanyreasontoConvertanyAMPNotes2,
thoseAMPNotes2willbeWritten-offandtherightsattaching
tothoseAMPNotes2willbeterminated).IfConversionoccurs,
HolderswillreceiveAMPOrdinarySharesinrespectofsome
orallAMPNotes2thatmaybeworthsignificantlylessthan
theFaceValueofeachAMPNote2held.IfAMPNotes2are
Written-off,yourinvestmentwillbelostandyouwillnot
receiveanycompensation.		 Further
information
Section2

11

AMP Subordinated Notes 2

Section 1 Investment overview

Topic
What Interest is
payable?
Will Interest
always be paid?
Will I get my
capital back?		 Summary
AMPNotes2bearInterestatafloatingrate.Interestispayable
byAMPquarterlyinarrearbeginningon18March2014until
theMaturityDateoranearlierdateonwhichAMPNotes2are
redeemed,ConvertedorWritten-off.PaymentsofInterestare
subjecttosatisfactionoftheSolvencyCondition.
TheInterestRateisdeterminedquarterlyasthesumoftheMarket
RateplustheMargin(expressedasapercentage)perannum.
TheMarginis2.65percentperannum,whichwasdetermined
undertheBookbuild.
ThedatesonwhichInterestispaidarereferredtoas‘Interest
PaymentDates’.
Interestpaymentswillbemadewhollyincashandwillnothave
anyfrankingcreditsattachedtothem.
PaymentsofInterestwillbemadeonlyiftheSolvencyConditionis
satisfiedandAMPNotes2havenotbeenredeemedearlyorhave
notbeenConvertedorWritten-offonaccountofaNon-Viability
TriggerEvent.
IftheSolvencyConditionisnotsatisfiedonaparticularInterest
PaymentDate,Interestwillnotbepaidonthatdate.
AfailuretopayInterestbecauseoftheSolvencyConditionisnot
anEventofDefault.However,anyunpaidInterestamountwill
accrueinterestuntilitispaidandwillbepayableonthefirst
InterestPaymentDateonwhichAMPmaypaytheamountin
compliancewiththeSolvencyCondition.
IfaNon-ViabilityTriggerEventoccurs,someorallAMPNotes2
maybeConvertedorWritten-off.IfAMPNotes2areConvertedor
Written-off,AMP’sobligationtopayInterestonthoseAMPNotes
2willcease.
ThereisnoguaranteethatHolderswillgettheircapitalback.
IftheSolvencyConditionissatisfied,AMPwillredeem
anyoutstandingAMPNotes2ontheMaturityDate,being
18December2023.
OntheMaturityDate,foreachAMPNote2heldbythem,Holders
willreceive:
> theFaceValueplus
> anyaccruedandunpaidInteresttotheMaturityDate.
IftheSolvencyConditionisnotsatisfiedontheMaturityDate,
AMPNotes2willnotberedeemedonthatdatebutwillremain
outstandinguntilpaymentcanbemadeincompliancewiththe
SolvencyCondition.4
IfAMPNotes2havebeenConvertedorWritten-offonaccountof
aNon-ViabilityTriggerEvent,AMP’sobligationtorepaytheFace
ValueaswellastopayInterestonthoseAMPNotes2willcease.		 Further
information
Section2.2
Section2.2
Section2.3

4– Unless–AMP–Notes–2–have–been–Converted–or–Written-off–on–account–of–a–Non-Viability–Trigger–Event.

12

AMP Subordinated Notes 2

Section 1 Investment overview

Topic
Can AMP redeem
AMP Notes 2
early?
In what
circumstances
may AMP Notes 2
Convert into AMP
Ordinary Shares?
What are the
consequences of
Conversion, or a
failure by AMP to
effect Conversion?		 Summary
SubjecttoAPRA’spriorwrittenapproval,AMPmayredeem:
> someorallofAMPNotes2on18December2018andoneach
subsequentInterestPaymentDate
> all,butnotsome,ofAMPNotes2ontheoccurrenceofaTax
EventoraRegulatoryEvent.
IfAMPredeemsAMPNotes2earlyHolderswillberepaidtheFace
Value,togetherwithaccruedandunpaidInterest,andAMPNotes
2willbecancelled.
AMP’sabilitytoredeemAMPNotes2atanytimepriortothe
MaturityDateissubjecttoreceivingAPRA’spriorwrittenapproval.
TherecanbenocertaintythatAPRAwillprovideitspriorwritten
approvaltoanyredemption.
APRAmayrequireAMPtoreplaceAMPNotes2withregulatory
capitalofthesameorbetterquality.Thisisintendedtoprotect
theAMPgroup’spolicyholders,depositorsandothercreditors.
HoldershavenorighttorequestAMPtoredeemAMPNotes2
beforetheMaturityDate.
AMPhasnoobligationtoredeemAMPNotes2priortothe
MaturityDate.
AMPNotes2mayConvertintoAMPOrdinarySharesif
aNon-ViabilityTriggerEventoccurs.Therearenoother
circumstancesinwhichAMPNotes2mayConvert.
ANon-ViabilityTriggerEventbroadlyoccurswhereAPRA
determinesthattheconversionorwrite-offofsomeorallRelevant
SubordinatedInstrumentsisnecessarybecausewithoutthat
conversionorwrite-offorapublicsectorinjectionofcapital,APRA
considersthatAMPwouldbecomenon-viable.
AMPNotes2areRelevantSubordinatedInstrumentsandmay
berequiredtobeConvertedwhereaNon-ViabilityTrigger
Eventoccurs.
AMPisundernoobligationtoHoldersundertheTermstotake
steps(suchasissuingnewAMPOrdinaryShares)toavoidtherisk
ofaNon-ViabilityTriggerEvent.
IfConversionofAMPNotes2doesoccur,HolderswillreceiveAMP
OrdinarySharesinrespectofsomeorallofAMPNotes2thatmay
beworthsignificantlylessthantheFaceValueforeachAMPNote
2heldandHolderswillnotreceiveaccruedbutunpaidInterest.
IncaseswhereAMPispreventedforanyreasonfromConverting
AMPNotes2intoAMPOrdinaryShareswithinfiveBusinessDays
aftertheConversionDate,therightsofHoldersinrespectof
thoseAMPNotes2(includingtopaymentsofaccruedbutunpaid
InterestandrepaymentofFaceValue)willbeimmediatelyand
irrevocablyWritten-offandterminated.Yourinvestmentwillbe
lostandyouwillnotreceiveanycompensation.		 Further
information
Section2.3
Section2.4
Section2.4

13

AMP Subordinated Notes 2

Section 1 Investment overview

Topic
If a Non-Viability
Trigger Event
occurs and
Conversion of
AMP Notes 2 is
required, must
I receive AMP
Ordinary Shares?
How would AMP
Notes 2 rank in
a winding-up
of AMP?		 Summary
AHoldermay,upto15BusinessDaysbeforetheConversion
Date,notifyAMPthatitdoesnotwishtoreceiveAMPOrdinary
SharesonConversion.InsomecasesaHoldermaybeineligibleto
receiveAMPOrdinaryShares.Inthesecircumstancestherelevant
AMPOrdinaryShareswillbeissuedtoaSaleandTransferAgent
onbehalfoftheHolderwhowillselltheAMPOrdinarySharesat
marketvalueandpaytheHoldertheproceedsofthesalenetof
costs,taxesandcharges.
HolderswhodonotwishtoreceiveAMPOrdinarySharesshould
notifyAMPofthisassoonaspossibleaftertheIssueDate,
becauseonceaNon-ViabilityTriggerEventoccurs,Holdersmay
nothaveanopportunitytodoso.
Inawinding-upofAMP,ifAMPNotes2havenotbeenConverted
orWritten-offonaccountofaNon-ViabilityTriggerEvent,AMP
Notes2willrankforpayment:
> aheadoftheclaimsofallholdersofRelevantPerpetualSubordinated
InstrumentsissuedbyAMPandholdersofAMPOrdinaryShares
> equallyamongthemselvesandwiththeclaimsofallholdersof
RelevantTermSubordinatedInstrumentsissuedbyAMP,and
> behindallothercreditorsofAMP,includingdepositorsand
policyholdersoftheAMPgroup.
ThetablebelowillustrateshowAMPNotes2wouldrankona
winding-upofAMPiftheyhavenotbeenConvertedorWritten-off
onaccountofaNon-ViabilityTriggerEventatthetime:
Type
Illustrative examples5
Higher
Ranking
Preferredand
secureddebt
Liabilitiespreferredbylaw
includingemployeeentitlements
andsecuredcreditors
Unsubordinated
andunsecureddebt
Bondsandnotes,tradeand
generalcreditors
RelevantTerm
Subordinated
Instruments
AMP Notes 2 (where not
Converted or Written-off on
account of a Non-Viability
Trigger Event)andotherterm
subordinateddebtrankingequally
withAMPNotes2
RelevantPerpetual
Subordinated
Instruments
Preferencesharesifissuedby
AMPinthefutureandother
instrumentsrankingequally
withpreferencesharesthat
maybeissued
Lowerranking
OrdinaryShares
AMPOrdinaryShares
(including holders of AMP
Notes 2 where AMP Notes 2
are Converted on account of
Non-Viability Trigger Event)		 Further
information
Section2.4
Section2.5
Higher
Ranking
Lowerranking
  • 5– –This–diagram–and–the–descriptions–are–simplified–and–illustrative–only,–and–do–not–include–every–type–of–security–or– obligation–that–may–be–issued–or–entered–into–by–AMP,–or–every–potential–claim–against–AMP–in–a–winding-up–of–AMP.–AMP– will–from–time–to–time–issue–additional–securities–or–incur–other–obligations–that–rank–ahead–of,–equally–with,–or–behind,– AMP–Notes–2.

14

AMP Subordinated Notes 2

Section 1 Investment overview

Topic
Will AMP Notes 2
be quoted on ASX?		 Summary
IfAMPisexperiencingfinancialdifficultiesandisatriskofbeing
wound-up,itislikelythatAPRAwilldeterminethataNon-Viability
TriggerEventhasoccurred,inwhichcaseitislikelythatHolders
willlosesomeoralloftheirinvestmentinAMPNotes2.
IfAMPNotes2arerequiredtobeConvertedonaccountofa
Non-ViabilityTriggerEvent,aHolderwilleitherbecomeaholderof
AMPOrdinaryShares(becausetheirAMPNotes2areConverted)
or,ifAMPisunableforanyreasontoConvertAMPNotes2,have
noclaimagainstAMPoranyothermemberoftheAMPgroup
inrespectoftheirAMPNotes2(becausetheirAMPNotes2are
Written-off).
AMPwillhavetherighttoincurfurtherdebtthatranksinpriority
orequallywithAMPNotes2withoutrequiringtheconsent
ofHolders.
AMPNotes2areclaimsonAMP.AMPisanon-operatingholding
company.Asubstantialmajorityofitsassetsareitsinvestments
inothermembersoftheAMPgroup.Itsclaimsinrespectofthose
investmentsrankbehinddepositors,policyholdersandother
creditorsinawinding-upofthosecompanies.
AMPhasappliedforAMPNotes2tobequotedonASX.IfASXdoes
notgrantpermissionforAMPNotes2tobequoted,AMPNotes2
willnotbeissuedandallapplicationpaymentswillberefunded
(withoutinterest)assoonaspossible.Theyareexpectedtobe
quotedonASXunderthecode‘AMPHA’.
Ifquoted,theymaybeboughtandsoldonASX.
AMPNotes2arenotordinaryshares.Theremayormaynotbe
aliquidmarketforAMPNotes2,whichinturnmayaffectthe
marketpriceofAMPNotes2.		 Further
information
Section2.1

1.3 Summary of certain events that may affect what Holders receive and when they receive it

The–table–below–summarises–certain–events–that–may–affect–what–Holders–receive–in–relation–to–AMP– Notes–2.–The–events–are–subject–to–contingencies–such–as–the–solvency–and/or–non-viability–of–AMP–and,– in–some–cases,–election–by–AMP–and–accordingly,–these–events–may–not–occur.–This–table–lists–certain– events–provided–for–in–the–Terms–of–AMP–Notes–2–but–it–is–not–an–exhaustive–list–of–all–the–events–that–may– affect–what–Holders–receive–in–relation–to–AMP–Notes–2.–For–further–information–on–the–risks–associated– with–an–investment–in–AMP–Notes–2,–see–section–1.4–and–section–5–and–other–matters–referred–to–in– this–prospectus.

15

AMP Subordinated Notes 2

Section 1 Investment overview

==> picture [427 x 54] intentionally omitted <==

----- Start of picture text -----

In what form
Are there What value will will that value Where to
pre-conditions a Holder receive be provided find further
Event When? to the event? per AMP Note 2? to Holders? information?
----- End of picture text -----

Optional 18December2018 Yes.APRA's $100plusthe Cash Section2.3
redemption oranysubsequent approval(i), valueofany
atAMP's Interest AMPgroup accruedand
discretion PaymentDate beingadequately unpaidInterest
capitalised,
AMPbeing
Solventanda
Non-Viability
TriggerEventnot
havingoccurred
Redemptionon 18December2023 Yes.AMPbeing $100plusthe Cash Section2.3
theMaturity Solventanda valueofany
Date Non-Viability accruedand
TriggerEventnot unpaidInterest
havingoccurred
Redemption IfaTaxEvent Yes.APRA’s $100plusthe Cash Section2.3
inother orRegulatory approval(i), valueofany
circumstances Eventoccurs AMPgroup accruedand
atAMP's beingadequately unpaidInterest
discretion capitalised,
AMPbeing
Solventanda
Non-Viability
TriggerEventnot
havingoccurred
Conversion Onthedatea Yes.APRA Avariablevalue, Variable Section2.4
upon Non-Viability determinationof dependingonthe numberof
Non-Viability TriggerEvent non-viabilityand valueoftheAMP AMPOrdinary
TriggerEvent occurs AMPbeingable OrdinaryShares Sharesupto
toConvert attherelevant amaximum
timewhichmay number(ii)
besignificantly
lessthantheFace
ValueofAMP
Notes2.Holders
willnotreceive
accruedbut
unpaidInterest
Write-offupon Attheendofthe Yes.APRA Zero(iii), Notapplicable Section2.4
Non-Viability periodoffive determinationof withoutany
TriggerEvent BusinessDaysafter non-viabilityand compensation
aNon-Viability AMPnotbeing
TriggerEvent abletoConvert
occurs,ifwithin
thosefiveBusiness
Days,AMPis
unableforany
reasontoConvert
theNotes(an
InabilityEvent)

(i)– Holders–should–note–that–any–approval–is–at–APRA’s–discretion–and–may–not–be–given.

(ii)– The–value–a–Holder–will–receive–will–depend–on–the–market–price–of–AMP–Ordinary–Shares–and–the–number–of–AMP– Ordinary–Shares–issued–to–that–Holder–on–Conversion.–Holders–who–have–elected–not–to–receive–AMP–Ordinary–Shares– and–Ineligible–Holders–will–not–receive–AMP–Ordinary–Shares–upon–Conversion,–but–will–instead–receive–the–proceeds–of– the–sale–of–the–AMP–Ordinary–Shares–to–which–they–would–otherwise–have–been–entitled–(provided–that–AMP–is–able–to– Convert–AMP–Notes–2).

(iii)– If–an–AMP–Note–2–is–Written-off,–the–rights–of–the–Holder–(including–to–the–payment–of–Interest–and–Face–Value)–in– relation–to–the–AMP–Note–2–are–immediately–and–irrevocably–Written-off–and–the–Holder–will–lose–all–of–the–money– invested–in–the–AMP–Note–2.

16

AMP Subordinated Notes 2

Section 1 Investment overview

1.4 Key benefits and risks associated with an investment in AMP Subordinated Notes 2

Before–applying–for–AMP–Notes–2,–you–should–consider–whether–AMP–Notes–2–are–a–suitable–investment– for–you.–There–are–risks–involved–with–investing–in–AMP–Notes–2–and–in–AMP.–Many–of–these–risks–are– outside–the–control–of–AMP,–its–directors–and–the–AMP–group.–These–risks–include–those–outlined–in–this– section–1.4–and–in–section–5–and–other–matters–referred–to–in–this–prospectus.–Key–benefits–of–AMP–Notes– 2–are–also–described–in–this–section–1.4.

1.4.1 Key benefits associated with an investment in AMP Subordinated Notes 2

Topic
Key benefits of
AMP Notes 2		 Summary
FloatingrateInterest,beingthesumoftheMarketRateplusthe
Margin(expressedasapercentage)perannum.
TheMarginis2.65percentperannum.
Interestispayableincash.
Interestwillbepaidquarterlyinarrearandiscumulative.
Interestpaymentsarenotdeferrableordiscretionary.However,
Interestisnotpayable(butaccumulates)iftheSolvencyCondition
isnotsatisfiedandisnotpayableatallifAMPNotes2have
beenConvertedorWritten-offonaccountofaNon-Viability
TriggerEvent.
Fixedmaturitydateof18December2023(providedtheSolvency
ConditionissatisfiedonthatdateandAMPNotes2havenotbeen
redeemedearlier,orConvertedorWritten-offonaccountofa
Non-ViabilityTriggerEvent).
AMPNotes2maybeboughtorsoldonASX(subjecttoAMP
Notes2beingquotedonASXandtotheliquidityofthatmarket).
MayprovideHolderswithanopportunitytodiversifytheir
investmentportfolio.		 Further
information
Sections2.1
and2.2

17

AMP Subordinated Notes 2

Section 1 Investment overview

1.4.2 Key risks associated with an investment in AMP Subordinated Notes 2

Topic
AMP Notes 2 are
unsecured and
subordinated,
and are not
guaranteed
All payments
are subject to
the Solvency
Condition being
satisfied and a
Non-Viability
Trigger Event not
having occurred		 Summary
AMPNotes2areunsecuredandsubordinatednotestobeissued
byAMP.
Onawinding-upofAMP,Holderswilllosethemoneyinvested
inAMPNotes2,andanyInterestdueandunpaidatthattime,if
thereareinsufficientassetstosatisfySeniorCreditors.
IfaNon-ViabilityTriggerEventoccursandAMPNotes2are
ConvertedintoAMPOrdinaryShares,Holderswillrankequally
withotherholdersofAMPOrdinaryShares.
HolderswillhavenoclaimagainstAMPifAMPNotes2are
transferredtoaSaleandTransferAgent(exceptarighttoreceive
theproceedsofthesaleoftheirAMPNotes2).
IfAMPisunableforanyreasontoConvertAMPNotes2,those
AMPNotes2willbeimmediatelyandirrevocablyWritten-offand
therightsofHoldersunderthoseAMPNotes2willbeterminated.
AMPNotes2arenotguaranteedby,noraretheydepositliabilities,
protectedaccountsorpolicyliabilitiesof,orinvestmentsin
anysuperannuationorotherfundmanagedby,anymemberof
theAMPgroup.Theyarealsonotguaranteedorinsuredbyany
government,governmentagencyorcompensationschemeof
Australiaoranyotherjurisdiction.
AMPisnotrequiredtomakeanypaymentinrespectof
AMPNotes2ifitwouldnotbeSolventbothatthetimethat
paymentisdueandimmediatelyaftermakingthepayment.
Unpaidamountswillaccrueinterestuntilpaidandwillbepayable
onthefirstdateonwhichAMPmeetstheSolvencyCondition.
InthecaseofunpaidInterestamounts,paymentwillbemade
onthefirstInterestPaymentDateonwhichAMPmeetsthe
SolvencyCondition.
However,ifAMPNotes2havebeenConvertedorWritten-off
onaccountofaNon-ViabilityTriggerEvent,AMP’saccruedand
futureobligationstomakepaymentsinrespectofthoseAMP
Notes2willceaseandHolderswillhavenorightstorecoverany
unpaidamounts.		 Further
information
Section
5.1.1
Section
5.1.2

18

AMP Subordinated Notes 2

Section 1 Investment overview

Topic
Market price of
AMP Notes 2
may fluctuate
Liquidity
Changes in the
Interest Rate
It is not certain
whether or when
AMP Notes 2 will
be redeemed,
Converted or
Written-off
Conversion
following a
Non-Viability
Trigger Event		 Summary
ThepriceatwhichHoldersareabletosellAMPNotes2onASX
isuncertainanditispossiblethatAMPNotes2maytradeata
discounttotheirFaceValue.
ThemarketpriceofAMPNotes2maydeclineduetovarious
factorsincludinginvestorperceptions,Australianandinternational
economicconditions,changesininterestrates,creditmargins,
foreignexchangerates,creditratingsandcapitalmarkets,and
otherfactorsthatmayaffecttheAMPgroup’sfinancialandcapital
position.TheoccurrenceofaNon-ViabilityTriggerEventisalso
likelytocausethemarketpriceofAMPNotes2todecline.
Ifcreditmarketsdeterioratecausingcreditspreadsondebt
securitiestowiden,theMarginpayableonAMPNotes2of2.65per
centperannum(whichwasdeterminedintheBookbuild)willbe
lessattractivetopurchasersofAMPNotes2thanattheIssueDate.
AccordinglythemarketpriceofAMPNotes2mayreducetoreflect
thelowerpricenewinvestorsarewillingtopayforAMPNotes2.
UnlikeAMPOrdinaryShares,AMPNotes2donotallowHoldersto
participateinthegrowthoftheAMPgroup’sbusiness.
ThemarketforAMPNotes2maybevolatileandlessliquidthan
themarketforAMPOrdinaryShares.
HolderswhowishtoselltheirAMPNotes2maybeunabletodo
soatapriceacceptabletothem,oratall,andmaysufferlossas
aresult.
TheInterestRatewillincreaseand/ordecreaseovertimewith
movementsintheMarketRate.
ThereisariskthattheInterestRatemaybecomelessattractive
whencomparedwiththeratesofreturnavailableoncomparable
securities.
Redemption,or,onaccountofaNon-ViabilityTriggerEvent,
ConversionorWrite-off,mayoccurpriortotheMaturityDate
whichmaybedisadvantageousinlightofmarketconditionsorthe
individualcircumstancesofHolders.
IfConversionoccursonaccountofaNon-ViabilityTriggerEvent,
HolderswillreceiveAMPOrdinarySharesthatmaybeworth
significantlylessthantheFaceValueofAMPNotes2.
If,foranyreason,AMPisunabletoConvertAMPNotes2required
tobeConvertedonaccountofaNon-ViabilityTriggerEvent(for
example,duetoAMPthenbeingwound-uporinliquidation
orduetoanyapplicablelaw,anorderofacourtoractionof
anygovernmentauthority),AMPNotes2(includingtheright
topaymentsofaccruedbutunpaidInterestandrepaymentof
FaceValue)willbeimmediatelyandirrevocablyWritten-offand
terminated.Yourinvestmentwillbelostandyouwillnotreceive
anycompensation.		 Further
information
Section
5.1.3
Section
5.1.4
Section
5.1.5
Sections
5.1.6and
5.1.7
Sections
5.1.6and
5.1.7

19

AMP Subordinated Notes 2

Section 1 Investment overview

Topic
AMP may redeem
AMP Notes 2
early in certain
circumstances
Holders have no
right to request
early redemption
or to accelerate
repayment
The price used
to calculate the
number of AMP
Ordinary Shares
to be issued
on Conversion
may not be the
market price
AMP may issue
further securities
Risks associated
with AMP group
generally		 Summary
SubjecttoAPRA’spriorwrittenapproval(whichisinitsdiscretion
andmaynotbegiven)andtosatisfactionoftheSolvency
Condition,AMPmayredeemAMPNotes2earlyon18December
2018oranysubsequentInterestPaymentDate,oronthe
occurrenceofaTaxEventoraRegulatoryEvent.
Theamountreceivedonredemptionmaybelessthanthemarket
valueofAMPNotes2atthattime.
ThetimingofredemptionofAMPNotes2maynotsuityour
financialcircumstancesortaxposition.
Holdershavenorighttorequestorrequireredemption
oracceleraterepaymentoftheirAMPNotes2priortothe
MaturityDate.
PriortotheMaturityDate,unlessAMPelectstoredeemAMP
Notes2(subjecttoAPRA’spriorwrittenapproval),Holderscan
onlyrealisetheirinvestmentinAMPNotes2byasaleonASX.
ThereisariskthattheprevailingmarketpriceonASXwillbe
lessthantheFaceValueofAMPNotes2and/orthatthemarket
forAMPNotes2maynotbeliquid.Brokeragefeesmayalsobe
payablebyHoldersifAMPNotes2aresoldthroughabroker.
ThepriceusedtocalculatethenumberofAMPOrdinaryShares
tobeissuedonConversionmaybedifferenttothemarketprice
ofAMPOrdinarySharesatthetimeofConversionbecausethe
priceusedisbasedontheVWAPduringthefiveBusinessDays
immediatelyprecedingtheConversionDate.Also,theConversion
NumberissubjecttotheMaximumConversionNumber.
ThevalueofAMPOrdinarySharesyoureceivemaythereforebe
significantlylessthanthevalueofthoseAMPOrdinaryShares
basedontheOrdinarySharepriceontheConversionDate.
AMPmayraisefurtherdebtorissuesecuritiesthatrankequally
withoraheadofAMPNotes2.ThismayaffectaHolder’sabilityto
berepaidonawinding-upofAMP.
RisksassociatedwithAMP’sbusinessaresetoutinsection5.2.		 Further
information
Section
5.1.7
Section
5.1.8
Section
5.1.6
Section
5.1.11
Section5.2

1.5 Key differences between term deposits and AMP Subordinated Notes 2

AMP–Notes–2–are–different–from–term–deposits–offered–by–banks.–In–particular,–AMP–Notes–2–are–issued– by–AMP–which–is–the–non-operating–holding–company–of–the–AMP–group.–The–AMP–group–includes– wealth–management–and–wealth–protection–businesses,–a–retail–banking–business,–and–an–international– investment–management–business.–No–member–of–the–AMP–group–guarantees–AMP’s–obligations–in– respect–of,–or–the–investment–performance–of,–AMP–Notes–2.

AMP–Notes–2–are–also–different–from–AMP–Notes,–which–were–issued–in–2009–by–AMP–Group–Finance–Services– Limited.–For–a–summary–of–the–key–differences–between–AMP–Notes–2–and–AMP–Notes,–refer–to–section–6.3.

You–should–consider–these–differences–in–light–of–your–investment–objectives,–financial–situation–and– particular–needs–(including–financial–and–taxation–issues)–before–deciding–to–apply–for–AMP–Notes–2.

20

AMP Subordinated Notes 2

Section 1 Investment overview

The–key–differences–between–term–deposits–and–AMP–Notes–2–are–summarised–in–the–table–below.

==> picture [427 x 21] intentionally omitted <==

----- Start of picture text -----

Term deposits AMP Notes 2
----- End of picture text -----

Issuer
Legal form
Protection under
the Australian
Government Financial
Claims Scheme6
Term
Issuer early
redemption option
Interest rate
Interestpayment
Interest payment
frequency
Interest deferrable
Transferable
Investor's ability to
withdraw or redeem
Ranking
Conversion into
ordinary shares		 Abank,creditunion
orbuildingsociety
(egAMPBank)
Termdeposit
Yes
Atcallorbetweenone
monthandfiveyears
No
Maybefixedorfloating
Cumulative,unfranked
Typicallyendofterm
orperannum
No
No
Yes,subjectto
conditions
SeniortoAMPNotes2
andAMPNotes
No		 AMP
Unsecuredandsubordinateddebtobligation
No
10years7
Yes8,on18December2018andoneach
subsequentInterestPaymentDateandalsoonthe
occurrenceofaTaxEventoraRegulatoryEvent,
withthepriorwrittenapprovalofAPRA(whichisin
itsdiscretionandmaynotbegiven)
Floating
Cumulative,unfranked9
Quarterly
No,butallpayments(includingrepaymentofthe
FaceValue)aresubjecttotheSolvencyCondition
beingsatisfiedandaNon-ViabilityTriggerEvent
nothavingoccurred
Yes–tobequotedonASX
No–canbesoldonASXatprevailingmarketprice,
whichmaybehigherorlowerthanthefacevalue
oftheNotes
> SeniortoAMPOrdinarySharesandRelevant
PerpetualSubordinatedInstruments
> AMPNotes2areclaimsonAMP.AMPisa
non-operatingholdingcompany.Asubstantial
majorityofitsassetsareitsinvestmentsinother
membersoftheAMPgroup.Itsclaimsinrespect
ofitsinvestmentinamemberoftheAMPgroup
rankbehinddepositors,policyholdersandother
creditorsinawinding-upofthatmemberand
AMPwillreceivenoreturninawindingupof
thememberuntilthosecreditorshavefirst
beenpaid.
Yes,followingaNon-ViabilityTriggerEvent
(unlessAMPisunableforanyreasontoConvert
someorallofAMPNotes2,inwhichcasethose
AMPNotes2willbeWritten-off)

6– Up–to–an–amount–of–$250,000,–per–account–holder–per–ADI.

7– –Subject–to–satisfaction–of–the–Solvency–Condition,–possible–early–redemption–by–AMP–in–certain–circumstances–with– APRA’s–approval–and–Conversion–or–Write-off–on–account–of–a–Non-Viability–Trigger–Event.

8– –Subject–to–satisfaction–of–the–Solvency–Condition–and–provided–that–AMP–Notes–2–are–still–on–issue–at–the–time–and–have– not–been–Converted–or–Written-off–on–account–of–a–Non-Viability–Trigger–Event.

9– –If–Converted–to–Ordinary–Shares,–dividends–on–the–Ordinary–Shares–will–be–non-cumulative–and–payable–at–the–discretion– of–the–AMP–board.–Any–dividends–paid–on–Ordinary–Shares–may–be–franked.

21 AMP Subordinated Notes 2

Section 1 Investment overview

1.6 Information for holders of A$ AMP Notes

This–section–1.6–sets–out–information–for–current–holders–of–A$–AMP–Notes,–who–may–be–eligible–to–apply– under–the–Reinvestment–Offer–to–sell–their–A$–AMP–Notes–to–AMP–and–to–have–the–proceeds–(other–than– the–Accrued–Interest–Amount)–reinvested–in–AMP–Notes–2.

Holders–of–the–NZ$–AMP–Notes–are–not–eligible–to–apply–under–the–Reinvestment–Offer.

Topic
What are AMP
Notes?
Will AMP Notes be
redeemed on their
step-up date?
What is the
Reinvestment
Offer?		 Summary
AMPNotesareunsecuredandsubordinateddebtsecuritieswhich
wereissuedbyAMPGroupFinanceServicesLimited(AMPGFS)in2009.
A$AMPNotestradeonASXunderthecode‘AQNHA’andtheNZ$ AMPNotestradeontheNZXunderthecode‘AQN010’.
NZ$AMPNotesarenoteligibleforsaletoAMPunderthe
ReinvestmentOffer.
ItisAMPGFS’scurrentintentionthatbothA$AMPNotesnotsold
toAMPundertheReinvestmentOfferandNZ$AMPNoteswill,
subjecttoAPRA’spriorwrittenapproval(whichisinitsdiscretion
andmaynotbegiven),beredeemedforcashontheStep-UpDate,
andAMPNotesholderswillreceivetheapplicablefacevalueplus
anyaccruedandunpaidInteresttothatdateperAMPNoteheld.
TheReinvestmentOfferisanopportunityforEligibleAMPNotesholders
toapplyforAMPNotes2andtofundtheirsubscriptionforAMPNotes2
bysellingtoAMPsomeoralloftheirA$AMPNotes.OnlyA$AMPNotes
maybesoldtoAMPundertheReinvestmentOffer.HoldersofA$AMP
NotesarenotrequiredtoparticipateintheReinvestmentOffer.
TheReinvestmentOfferisnotasimplerolloverintoasimilar
investment.AMPNotesandAMPNotes2,whilehavinganumber
ofsimilarfeatures,havedifferentbenefitsandrisks,whichmustbe
evaluatedindependently.Thekeydifferencesincludethefollowing:		 Further
information
Section
6.1.1
Section
6.1.1
Sections
6.1.2

  • AMP–Notes–2–are–issued–by–AMP–(which–is–the–parent–entity–of– the–AMP–group),–not–AMPGFS–(which–is–the–primary–finance– subsidiary–of–the–AMP–group)

  • AMP–Notes–2–may–be–Converted–to–AMP–Ordinary–Shares–(or–be– Written-off)–if–a–Non-Viability–Trigger–Event–occurs.–AMP–Notes– do–not–contain–similar–conversion–features

  • the–current–margin–on–AMP–Notes–is–4.75–per–cent.–That–margin– will–increase–to–7.125–per–cent–on–the–Step-Up–Date–if–the–AMP– Notes–are–not–redeemed–at–that–time.–It–is–AMPGFS’s–current– intention–to–redeem–AMP–Notes–still–outstanding–on–the–Step-Up– Date–(subject–to–APRA’s–prior–written–approval,–which–may–not– be–given).–As–a–consequence–of–the–change–in–market–conditions– since–2009–when–the–AMP–Notes–were–issued,–the–Margin–for–AMP– Notes–2–of–2.65–per–cent–is–less–than–the–margin–on–the–AMP–Notes

  • the–Margin–for–AMP–Notes–2–will–not–increase–(ie,–there–will–be– no–‘step-up’–in–the–Margin).–It–will–be–fixed–for–the–life–of–AMP– Notes–2–(unlike–AMP–Notes,–which–have–a–margin–step-up–on–the– Step-Up–Date–if–the–AMP–Notes–are–not–redeemed)–and

  • the–maturity–date–for–AMP–Notes–is–1–April–2019.–The–Maturity– Date–for–AMP–Notes–2–is–18–December–2023.

  • NZ$–AMP–Notes–are–not–eligible–for–sale–to–AMP–under–the– Reinvestment–Offer.–

22

AMP Subordinated Notes 2

Section 1 Investment overview

Topic
What are the
terms of the
Reinvestment
Offer?
Who may
participate in the
Reinvestment
Offer?
What are the
options available
to Eligible AMP
Notes holders?		 Summary
EligibleAMPNotesholderswhodecidetoparticipateinthe
ReinvestmentOfferwillselltheirA$AMPNotestoAMPfor$100
plustheAccruedInterestAmountperA$AMPNotesoldtoAMP
(see‘IfIelecttoparticipateintheReinvestmentOffer,whatprice
willIreceiveformyA$AMPNotes?’,below).
IftheOfferproceeds,EligibleAMPNotesholderswhoparticipate
intheReinvestmentOfferwillreceiveanallocationinpriorityover
SecurityholderApplicantsforeachA$AMPNotesoldtoAMP.
TobeeligibletoparticipateintheReinvestmentOffer,youmust:
> bearegisteredholderofA$AMPNotestradingonASXonthe
ReinvestmentRecordDate,being7.00pm(Sydneytime)on
4November2013
> beshownontheregisterashavinganaddressinAustralia(or
anotherjurisdictiontowhichAMPdeterminedtoextendthe
ReinvestmentOffer),and
> notbeintheUnitedStates,aUSPerson,actingasa
nomineefor,orfortheaccountorbenefitof,aUSPerson,
orotherwisepreventedfromreceivingtheReinvestment
OfferorAMPNotes2underthelawsofanyjurisdiction,as
determinedbyAMP(Eligible AMP Notes holder).
NZ$AMPNotesarenoteligibleforsaletoAMPunderthe
ReinvestmentOffer.
IfyouareanEligibleAMPNotesholder,youhaveanumberof
optionsavailabletoyou.Youmay:
1.applyundertheReinvestmentOffertosellallofyourA$ AMPNotestofundyoursubscriptionforAMPNotes2
2.applyundertheReinvestmentOffertosellonlysomeofyour
A$AMPNotestoAMPtofundallorpart(asapplicable)ofyour
subscriptionforAMPNotes2
3.applyundertheReinvestmentOffertosellallyourA$AMP
NotestofundyoursubscriptionforAMPNotes2andapply
foradditionalAMPNotes2
4.sellyourA$AMPNotesonmarketandusetheproceedsas
youdetermine(whichmayincludebuyingAMPNotes2but
withnopriorityinallocationofAMPNotes2)
5.applyundertheSecurityholderOfferandfundyoursubscription
incash,or
6.takenoaction.
IfyouarenotanEligibleAMPNotesholder,youarelimitedtothe
lastthreeoptionssetoutabove.		 Further
information
Section
6.1.2
Section
6.1.3
Section6.2
Seethe
tablein
section
6.2which
details
these
options

23

AMP Subordinated Notes 2

Section 1 Investment overview

Topic
If I elect to
participate in the
Reinvestment
Offer, what price
will I receive
for my A$ AMP
Notes?
Will Eligible AMP
Notes holders
receive a priority
allocation of AMP
Notes 2?		 Summary
IfyouparticipateintheReinvestmentOfferyouwillsellyourA$ AMPNotestoAMPfor$100plustheAccruedInterestAmountper
A$AMPNotesold.
TheAccruedInterestAmountwillbepaidtoyouincompensation
fortheinterestyouwouldhavereceivedforthe33dayperiod
from(andincluding)15November2013to(butexcluding)the
IssueDate.Itwillbecalculatedforthat33dayperiodonthesame
basisasotherinterestpaymentsinrespectoftheAMPNotes.The
interestratewillbethemarketrateapplicabletotheAMPNotes
on15November2013plusamarginof4.75percent.Assuminga
marketrateon15November2013of2.58percentperannum,the
AccruedInterestAmountwouldbe$0.6626perA$AMPNote.
IfyouareaholderofA$AMPNoteson7November2013,
regardlessofwhetheryouparticipateintheReinvestmentOffer,
youwillstillreceiveinterestfortheinterestperiodcommencing
on(andincluding)15August2013andendingon(butexcluding)
15November2013inanamountof$1.8572perA$AMPNote.
IfyouareanEligibleAMPNotesholderandyouparticipateinthe
ReinvestmentOfferyouwillreceiveanallocationinpriorityover
SecurityholderApplicantsforeachA$AMPNotesoldtoAMP
undertheReinvestmentOfferiftheOfferproceeds.
EligibleAMPNotesholderswhoparticipateintheReinvestment
OfferandapplyforadditionalAMPNotes2willbetreatedas
SecurityholderApplicantsinrespectoftheirapplicationfor
additionalAMPNotes2whichmeansthatbroadly,theywillnot
receiveapriorityallocation.		 Further
information
Section
6.1.4
Section
6.1.4

24

AMP Subordinated Notes 2

Section 1 Investment overview

Topic
What are the risks
associated with
participating in
the Reinvestment
Offer?
What happens to
A$ AMP Notes not
sold to AMP under
the Reinvestment
Offer and NZ$
AMP Notes?		 Summary
TherisksofparticipatingintheReinvestmentOfferincludethe
risksrelatedtoinvestinginAMPNotes2.
It is important to note that participation in the Reinvestment
Offer may not be appropriate or economically advantageous for
Eligible AMP Notes holders.
ThepricepaidtoanEligibleAMPNotesholderperA$AMPNote
(being$100plustheAccruedInterestAmount)maybelessthan
themarketvalueofanA$AMPNote.AnEligibleAMPNotesholder
mightbeeconomicallybetteroffsellingtheirA$AMPNoteson
marketandsubscribingforAMPNotes2incash.However,ifthis
optionisselected,theEligibleAMPNotesholderwouldnothave
anallocationinpriorityoverSecurityholderApplicants,which
isavailabletoEligibleAMPNotesholderswhoparticipateinthe
ReinvestmentOfferprovidedthattheOfferproceeds.
InelectingtoparticipateintheReinvestmentOffer,anEligible
AMPNotesholderwillgiveupthehighermarginitwouldhave
enjoyedifitsA$AMPNotesremainedoutstandingandwillnot
becompensatedforgivingupthathighermargin.Themarginon
AMPNotesismuchhigherthanthemarginonAMPNotes2and
willincreaseontheStep-UpDateifAMPNotesarenotredeemed
onthatdate.ItisAMPGFS’scurrentintentiontoredeemall
outstandingAMPNotesontheStep-UpDate(seebelow).
IfAMPNotesarenotredeemedontheStep-UpDate,themargin
willstepupandthatmayresultintheAMPNotestradingata
highervalue.InelectingtoparticipateintheReinvestmentOffer,
EligibleAMPNotesholderswillnothavetheopportunitytosellat
thatpossiblehighervalue.
TheA$AMPNotesnotsoldtoAMPundertheReinvestmentOffer
willremainoutstandinguntilredeemedbyAMPGFS.AMPGFS
currentlyintendstoredeemalloutstandingAMPNotes(including
A$AMPNotesnotsoldtoAMPundertheReinvestmentOfferand
NZ$AMPNotes),ontheStep-UpDate.Anysuchredemptionis
subjecttothetermsofAMPNotes,includingthatthepriorwritten
approvalofAPRAhasbeenobtainedandthatAMPGFSremains
solvent.APRAapprovalhasnotyetbeensoughtorobtainedand
AMPNotesholdersshouldnotassumethatAPRA’sapprovalwill
begiven.		 Further
information
Sections5
and6.4
Section
6.1.4

If–AMP–Notes–are–redeemed–on–the–Step-Up–Date,–AMPGFS–will– redeem–AMP–Notes–for–the–applicable–face–value–plus–any–accrued– interest–as–at–that–date–per–AMP–Note–held–and–you–will–not–receive– any–interest–on–AMP–Notes–after–the–Step-Up–Date.

If–for–any–reason–redemption–of–AMP–Notes–does–not–occur–on–the– Step-Up–Date–(including–for–failure–to–obtain–the–requisite–APRA– approval),–AMP–Notes–will–remain–on–issue–following–the–Step-Up– Date–and–holders–will–be–entitled–to–a–step-up–margin–of–150–per– cent–of–the–initial–margin–(ie,–the–margin–will–increase–from–4.75–per– cent–to–7.125–per–cent).

25

AMP Subordinated Notes 2

Section 1 Investment overview

Topic
What are
the taxation
consequences of
participating in
the Reinvestment
Offer?		 Summary
AsummaryoftheAustraliantaxationconsequencesforEligible
AMPNotesholdersofparticipatingintheReinvestmentOfferis
setoutinsection8.
Youshouldobtainyourowntaxadviceregardingtheimplications
ofparticipatingintheReinvestmentOfferbecauseactualtax
consequencesofparticipationmaydifferdependingonyour
individualcircumstances.		 Further
information
Section8

1.7 Information about the Offer

Topic
How is the Offer
structured and
who can apply?
When is the Offer
Period?
Is there a
minimum amount
to be raised?
Is the Offer
underwritten?
Is there a
minimum
application size?
Is brokerage
or stamp duty
payable?
What are
the taxation
consequences
of participating
in the Offer and
Reinvestment
Offer?		 Summary
TheOffercomprises:
> aReinvestment OffermadetoEligibleAMPNotesholders
> aBroker Firm OffermadetoAustralianresidentretailand
high-net-worthclientsofSyndicatebrokers
> aSecurityholder OffermadetoEligibleSecurityholders,and
> anInstitutional OffermadetocertainInstitutionalInvestors.
TheOfferopenedon14November2013andisexpectedtoclose
on9December2013.
Yes.TheOfferisfortheissueofAMPNotes2toraiseatleast
$300million.
No.
Yes.Yourapplicationmustbeforaminimumof50AMPNotes2
($5,000).
Ifyourapplicationisformorethan50AMPNotes2,thenyoumust
applyinmultiplesof10AMPNotes2($1,000)afterthat.
TheserequirementsdonotapplytoEligibleAMPNotesholders,
whomayapplyforasmallernumberofAMPNotes2incertain
circumstances.Seesection6.2forfurtherdetails.
Nobrokerageorstampdutyispayablebyyouonyourapplication
forAMPNotes2.Youmayberequiredtopaybrokerageifyousell
yourAMPNotes2onASXafterAMPNotes2havebeenquoted
onASX.
AgeneraldescriptionoftheAustraliantaxationconsequencesof
investinginAMPNotes2andoftheReinvestmentOfferissetout
insection8.
ThetaxationconsequencesofinvestinginAMPNotes2and
ofparticipatingintheReinvestmentOfferwilldependonyour
individualcircumstances.Youshouldobtainyourowntaxation
advicebeforeyouinvestin,holdordisposeofAMPNotes2.		 Further
information
Section7
Keydates
Sections6
and7
Section10.6
Section7.3
Section
7.3.3
Section8

26

AMP Subordinated Notes 2

Section 1 Investment overview

Topic
How will I receive
confirmation of
my allocation
of AMP Notes 2
prior to receiving
my holding
statement?
Where can I find
more information
about this
prospectus and
the Offer?		 Summary
AMPwillannouncethebasisofallocationofAMPNotes2by
placingadvertisementsinmajornationalandmetropolitan
newspapersinAustraliaonorbefore18December2013.
IfyouhaveappliedundertheReinvestmentOfferorthe
SecurityholderOfferyoushouldcalltheAMPNotes2information
lineon1300338164(withinAustralia),0800444152(withinNew
Zealand)or+61394154018(outsideAustraliaandNewZealand)
tofindoutyourallocation.
IfyouhaveappliedundertheBrokerFirmOffer(whichincludes
EligibleAMPNotesholdersparticipatingintheReinvestmentOffer
throughaSyndicatebroker)youshouldcontactyourSyndicate
brokertofindoutyourallocation.
IfyouhaveanyquestionsinrelationtotheOffer,pleasecallthe
AMPNotes2informationlineon1300338164(withinAustralia),
0800444152(withinNewZealand)or+61394154018(outside
AustraliaandNewZealand)MondaytoFriday–8.30amto5.30pm
(Sydneytime).
IfyouareanapplicantundertheBrokerFirmOffer,youshould
contactyourSyndicatebroker.		 Further
information
Section7.4
Section7

27

AMP Subordinated Notes 2

Section 2

About AMP Subordinated Notes 2

This section is intended to provide information about the key features of AMP Subordinated Notes 2. Where indicated, more detailed information is provided in other sections of this prospectus.

  • 2.1 Key features of AMP Subordinated Notes 2

  • 2.2 Interest

  • 2.3 Repayment of Face Value

  • 2.4 Consequences of a Non-Viability Trigger Event

  • 2.5 Ranking, Events of Default and regulatory treatment 2.6 Other important matters

28

AMP Subordinated Notes 2

Section 2 About AMP Subordinated Notes 2

2.1 Key features of AMP Subordinated Notes 2

AMP–Notes–2–are–subordinated–and–unsecured–notes–to–be–issued–by–AMP–which–are–scheduled–to–mature– on–18–December–2023.[10] –AMP–Notes–2–entitle–Holders–to–receive–floating–rate–Interest,–payable–quarterly– in–arrear–for–the–term–of–AMP–Notes–2.[11]

Topic
AMP Notes 2
Face Value
Offer size
Term
ASX quotation		 Summary
AMPNotes2aresubordinatedandunsecurednotesissuedbyAMP.
TheFaceValueofeachAMPNote2is$100.
Atleast$300million.
AMPwillredeemAMPNotes2ontheMaturityDate,being
18December2023.13
AMPhasappliedforAMPNotes2tobequotedonASXandthey
areexpectedtotradeunderASXcode‘AMPHA’.		 Further
information12
Clause1.1
Clause1.3
Clause5.1
Section7.5.4
Clause1.7

2.2 Interest

AMP–Notes–2–entitle–Holders–to–receive–floating–rate,–cumulative–Interest,–payable–quarterly–in–arrear,– until–the–Maturity–Date.––AMP’s–obligation–to–pay–Interest–is–subject–to–the–Solvency–Condition–and–will– terminate–if–AMP–Notes–2–have–been–redeemed–earlier–or,–on–account–of–a–Non-Viability–Trigger–Event,– Converted–or–Written-off.

Topic
When Interest will
be paid		 Summary
TheInterestPaymentDatesare18March,18June,18September
and18Decemberineachyear,commencingon18March2014
toandincludingtheMaturityDate(orsuchearlierdateonwhich
AMPNotes2areredeemed).IfanyofthesedatesisnotaBusiness
Day,thentheInterestPaymentDatewillbethenextBusiness
Day(providedthatthefinalInterestPaymentDatefallsona
redemptiondateortheMaturityDate).		 Further
information
Clauses3.1
and13.2

10– –Subject–to–satisfaction–of–the–Solvency–Condition–(described–in–Section–2.2)–and–provided–that–AMP–Notes–2–are–still– on–issue–at–the–time–and–have–not–been–redeemed–earlier–or,–on–account–of–a–Non-Viability–Trigger–Event–(described–in– Section–2.4),–Converted–or–Written-off.

11– See–footnote–10.

12– Clauses–can–be–found–in–the–Terms–at–appendix–A.

13– See–footnote–10.

29

AMP Subordinated Notes 2

Section 2 About AMP Subordinated Notes 2

Topic
Interest Rate
Market Rate		 Summary
TheInterestRatewillbecalculatedasfollows:
InterestRate=MarketRate+Margin,where:
Market Rateistheaveragemid-rateforbankbillshavingatenor
of90daysdisplayedonReuterspage‘BBSW’(oranypagewhich
replacesthatpage)onthefirstBusinessDayoftherelevant
InterestPeriodand
Marginis2.65percentasdeterminedundertheBookbuild.
Asanexample,assumingtheMarketRateforthefirstInterest
Periodis2.58percentperannumandtheMarginis2.65percent
perannum,thentheInterestRateforthatInterestPeriodwould
becalculatedasfollows:
MarketRate
2.58%perannum
plusMargin
2.65%perannum
IllustrativeInterestRate=
5.23%perannum
TheInterestRateisafloatingratebecauseitdependsontheMarket
RateforeachInterestPeriod.ThismeansthattheInterestRatefor
oneperiodcanbedifferenttotheInterestRateforanotherperiod.
TheMarketRateisakeybenchmarkinterestrateforthe
Australianmoneymarket.Itiscurrentlybasedonanaverageof
ratesobtainedfromapprovedtradingvenuesbytheAustralian
FinancialMarketsAssociationastheratesatwhichcertainbanks
arepreparedtolendshort-termcashtoeachotherbybuyingbank
billshavingatenorof90days.Thisratechangestoreflectsupply
anddemandwithinthecashandcurrencymarkets.
TheMarketRateisdisplayedonReuterspage‘BBSW’(orany
pagewhichreplacesthatpage)onthefirstBusinessDayofeach
relevantInterestPeriod.
ThegraphbelowillustratesthemovementintheMarketRateover
thelast10years.Therateon1November2013was2.58percent
perannum.14
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
Nov
2003
Nov
2013
Nov
2012
Nov
2011
Nov
2010
Nov
2009
Nov
2008
Nov
2007
Nov
2006
Nov
2005
Nov
2004		 Further
information
Clause3.2
Clause3.2

The–above–graph–is–for–illustrative–purposes–only–and–does–not– indicate,–guarantee–or–forecast–the–actual–Market–Rate–for–the–first– or–subsequent–Interest–Periods,–which–may–be–higher–or–lower.

14– –Before–27–September–2013,–the–rates–used–in–the–calculation–of–the–Market–Rate–were–obtained–not–from–approved–trading– venues–but–from–certain–banks–elected–to–the–BBSW–panel–maintained–by–the–Australian–Financial–Markets–Association.

30

AMP Subordinated Notes 2

Section 2 About AMP Subordinated Notes 2

Topic
Calculation of
Interest
Solvency
Condition
No franking
credits		 Summary
InterestforeachInterestPeriodwillbecalculatedusingthe
followingformula:
Interest =
Interest Ratex$100xN
365
where:
Interest RateistheMarketRate+Margin
(expressedasapercentageperannum)and
NmeansthenumberofdaysintheInterestPeriodcalculatedin
accordancewiththeTerms.
Followingtheformulaabove,iftheInterestRatewas5.23per
centperannumandthefirstInterestPeriodwas90days,thenthe
InterestonanAMPNote2forthefirstInterestPeriodwouldbe
calculatedasfollows:
IllustrativeInterestRate
5.23%perannum
MultipliedbytheFaceValue
x$100.00
Multipliedbythenumberof
daysintheInterestPeriod
x90
Dividedby365
÷365
IllustrativeInterestforthefirst
InterestPeriodperAMPNote2
$1.29
Theaboveexampleisforillustrativepurposesonlyanddoesnot
indicate,guaranteeorforecasttheactualInterestforthefirstor
anysubsequentInterestPeriod.ActualInterestmaybehigheror
lowerthanthisexample.TheInterestRateforthefirstInterest
PeriodwillbesetontheIssueDate.
AMP’sobligationstomakepayments(includingpaymentsofInterest
andrepaymentoftheFaceValue)inrespectofAMPNotes2are
conditionalontheSolvencyCondition.TheSolvencyConditionisthat:
> AMPisabletopayitsdebtswhentheyfalldue,and
> AMP’sassetsexceeditsliabilities,
atthetimeofthepaymentandimmediatelyaftermaking
thepayment.
Accordingly,iftheSolvencyConditionisnotsatisfiedona
particularInterestPaymentDate,Interestwillnotbepaid.
IfAMPdoesnotmakeapaymentbecausetheSolvencyCondition
isnotsatisfied,suchnon-paymentdoesnotconstituteanEventof
Default.However,anyunpaidamountsofInterestwillaccrueinterest
untilthedateofpaymentandwillbepayableonthefirstInterest
PaymentDateonwhichAMPsatisfiestheSolvencyCondition.
InterestwillceasetobepayableifAMPNotes2havebeen
ConvertedorWritten-offonaccountofaNon-ViabilityTrigger
Event.ThisincludesanyInterestthathasnotbeenpaidbecauseof
theSolvencyCondition.
Interestpaymentswillbemadewhollyincashandwillnothave
anyfrankingcreditsattachedtothem.		 Further
information
Clause4.1
Clause2.2
Clause10.6

31

AMP Subordinated Notes 2

Section 2 About AMP Subordinated Notes 2

2.3 Repayment of Face Value

On–the–Maturity–Date–(scheduled–to–be–18–December–2023)–AMP–must–repay–to–Holders–the–Face–Value– plus–any–accrued–and–unpaid–Interest–for–the–period–up–to–and–including–the–Maturity–Date–for–each– AMP–Note–2–they–hold.–At–AMP’s–option–in–certain–circumstances–AMP–may–repay–Holders–early.–AMP’s– obligation–to–repay–is–subject–to–the–Solvency–Condition–and–will–terminate–if–AMP–Notes–2–are,–on– account–of–a–Non-Viability–Trigger–Event,–Converted–or–Written-off.

Topic
Maturity Date
Early redemption		 Summary
TheMaturityDateisscheduledtobe18December2023.
OntheMaturityDateAMPmustredeemeachAMPNote2for:
> theFaceValue,plus
> anyaccruedandunpaidInterestontheAMPNote2uptoand
includingtheMaturityDate.15
SubjecttoAPRA’spriorwrittenapproval(whichisinitsdiscretion
andmaynotbegiven),AMPmayelecttoredeem:
> someorallofAMPNotes2on18December2018orany
subsequentInterestPaymentDate,or
> all(butnotsome)ofAMPNotes2followingaTaxEventora
RegulatoryEvent.
IfAMPelectstoredeemAMPNotes2intheabovecircumstances,
HolderswillreceiveforeachAMPNote2:		 Further
information
Clause5.1
Clauses5.2,
5.3,5.5,13.2

  • the–Face–Value–plus–

  • any–accrued–but–unpaid–Interest–on–the–AMP–Note–2–up–to–and– including–the–early–redemption–date,

provided–the–Solvency–Condition–is–satisfied.

A– Tax Event –will–occur–if,–as–a–result–of–any–change–in,–or–amendment–to,– the–laws–in–force–in–Australia,–or–any–change–in–their–application–or–official– or–judicial–interpretation,–which–becomes–effective–after–the–Issue–Date:–

  • payment–of–Interest–on–AMP–Notes–2–is–not,–or–may–not–be,–allowed–as– a–deduction–for–AMP’s–Australian–income–tax–liability–calculation,–or–

  • there–is–a–risk–that–AMP–would–be–exposed–to–other–adverse–tax– consequences–in–relation–to–AMP–Notes–2.–

  • A Regulatory Event means–broadly–that:

  • as–a–result–of–a–change–in,–or–amendment–to,–applicable–law,–or– any–change–in–their–application–or–official–or–judicial–interpretation– (together,–a– Change ),–which–Change–becomes–effective–after–the– Issue–Date,–additional–requirements–would–be–imposed–on–the– Issuer–in–respect–of–the–AMP–Notes–2–which–the–directors–of–AMP– determine–in–their–absolute–discretion–to–be–unacceptable

  • following–a–notification–from,–or–announcement–or–determination– by,–APRA,–the–directors–of–AMP–determine–in–their–absolute– discretion–that–APRA–objects,–or–will–object,–to–AMP–group–using– or–having–used,–the–proceeds–of–the–issue–of–some–or–all–of–the– AMP–Notes–2–to–fund–Tier–2–Capital–of–a–Regulated–Entity–within– the–AMP–group,–other–than–where–that–event–is–a–result–of–the– implementation–of–the–changes–to–the–supervision–of–conglomerate– groups,–in–the–form–proposed–by–APRA–as–at–the–Issue–Date.

15– –Subject–to–satisfaction–of–the–Solvency–Condition–(described–in–Section–2.2)–and–provided–that–AMP–Notes–2–are–still–on–issue–at–the–time– and–have–not–been–redeemed–earlier–or,–on–account–of–a–Non-Viability–Trigger–Event–(described–in–Section–2.4),–Converted–or–Written-off.

32

AMP Subordinated Notes 2

Section 2 About AMP Subordinated Notes 2

Topic
Early redemption
(continued)
No early
redemption
AMP may
purchase AMP
Notes 2 on ASX		 Summary
AMPmayonlyelecttoredeemAMPNotes2onaccountofaTax
EventorRegulatoryEventifitdidnotexpectontheIssueDate
thattheeventwouldoccur.Certainchangestothesupervision
ofconglomerategroupsarecurrentlyproposed,asdescribedin
section2.5below.Theimplementationofthesechangesinthe
formproposedbyAPRAasattheIssueDatewillnotgiverisetoa
RegulatoryEvent.However,incertaincircumstances,iffollowing
anotificationfrom,orannouncementordeterminationbyAPRA,
thedirectorsofAMPsubsequentlydeterminethatAPRAobjects,or
willobject,toAMPgroupusing,orhavingused,theproceedsofthe
issueofsomeoralloftheAMPNotes2tofundTier2Capitalofa
RegulatedEntitywithintheAMPgroup(otherthanwherethatevent
isaresultoftheimplementationofthechangestothesupervisionof
conglomerategroupsintheformproposedbyAPRAasattheIssue
Date),AMPmaydecidethataRegulatoryEventhasoccurred.
AMPmayonlyelecttoredeemAMPNotes2ifAPRAhasgiven
priorwrittenapprovalandifeither:
> priortoorconcurrentlywithredemption,AMPreplacesAMP
Notes2withRelevantTermSubordinatedInstrumentsorAMP
OrdinarySharesandthereplacementisdoneunderconditions
thataresustainablefortheincomecapacityoftheAMPgroup,or
> AMPobtainsconfirmationfromAPRAthatAPRAissatisfied,
havingregardtothecapitalpositionoftheAMPgroup,that
AMPdoesnothavetoreplaceAMPNotes2.
HoldersshouldnotexpectthatAPRA’sapprovalwillbegivenfor
anyearlyredemptionofAMPNotes2.AnyapprovalisinAPRA’s
discretionandmaynotbegiven.
AMPNotes2willnotberedeemedifontheredemptiondatethe
SolvencyConditionisnotsatisfiedorifonorbeforethatdate
AMPNotes2havebeenConvertedorWritten-offonaccountofa
Non-ViabilityTriggerEvent.
HolderscannotrequestthatAMPNotes2beredeemedpriorto
theMaturityDate.
SubjecttoAPRA'spriorwrittenapproval,AMPoranyofitsRelated
EntitiesmaypurchaseAMPNotes2intheopenmarketatanytime
andatanyprice.HoldersshouldnotexpectthatAPRA’sapproval
willbegivenforanypurchaseofAMPNotes2.		 Further
information
Clauses5.2,
5.3,5.5
Clause5.7
Clause5.9

2.4 Consequences of a Non‑Viability Trigger Event

AMP–may–be–required–to–Convert–AMP–Notes–2–into–AMP–Ordinary–Shares–if–a–Non-Viability–Trigger–Event– occurs.–This–feature–is–required–to–be–included–so–that–AMP–may–use–the–proceeds–of–the–issue–of–AMP– Notes–2–to–fund–Tier–2–Capital–of–one–or–more–Regulated–Entities–within–the–AMP–group.–The–occurrence– of–a–‘Non-Viability–Trigger–Event’–may–require–the–Conversion–of–some–or–all–of–AMP–Notes–2–into– AMP–Ordinary–Shares.–

Conversion–in–these–circumstances–is–likely–to–occur–during–a–time–of–financial–difficulty–for–the–AMP– group.–Depending–on–the–market–price–of–AMP–Ordinary–Shares–at–the–relevant–time,–on–Conversion,– Holders–will–receive–AMP–Ordinary–Shares–which–may–be–worth–significantly–less–than–the–Face–Value–of–

33

AMP Subordinated Notes 2

Section 2 About AMP Subordinated Notes 2

AMP–Notes–2–and–Holders–may–suffer–a–loss–as–a–consequence.–The–calculations–set–out–on–pages–37–38– are–illustrative–only–and–designed–to–demonstrate–the–potential–number–and–value–of–AMP–Ordinary– Shares–that–a–Holder–would–receive–on–Conversion.

If–a–Holder’s–AMP–Notes–2–cannot–be–Converted–for–any–reason,–the–Holder’s–rights–(including–to–the– payment–of–Interest–and–the–repayment–of–Face–Value)–in–relation–to–AMP–Notes–2–will–be–immediately– and–irrevocably–Written-off–and–terminated.–Holders–will–lose–all–of–their–money–invested–in–AMP–Notes–2– if–AMP–Notes–2–are–Written-off.

Topic
Non-Viability
Trigger Event
What are Relevant
Subordinated
Instruments?		 Summary
ANon-ViabilityTriggerEventoccurswhenAPRAprovidesawritten
determination(a‘Non-ViabilityDetermination’)toAMPthatthe
conversionorwrite-offofsomeorallRelevantSubordinated
Instruments(whichincludesAMPNotes2)isnecessarybecause:
> withouttheconversionorwrite-off,or
> withoutapublicsectorinjectionofcapitalinto,orequivalent
capitalsupportwithrespectto,AMP
APRAconsidersthatAMPwouldbecomenon-viable.
AMPisundernoobligationtoHoldersundertheTermstotake
steps(suchasissuingnewAMPOrdinaryShares)toavoidtherisk
ofaNon-ViabilityTriggerEventoccurring.
IfaNon-ViabilityTriggerEventoccurs,AMPmustconvertorwrite-off:
> allRelevantSubordinatedInstruments(includingAMPNotes2),
or
> anamountoftheRelevantSubordinatedInstrumentsifAPRA
issatisfiedthatconversionorwrite-offofthatamountwillbe
sufficienttoensurethatAMPdoesnotbecomenon-viable.
WhereAPRAdoesnotrequireallRelevantSubordinated
Instruments(includingAMPNotes2)tobeconvertedor
written-off,whetherandtowhatextentAMPNotes2must
beConvertedwilldependonwhatactionAMPmusttakeon
accountoftheNon-ViabilityTriggerEvent,asdescribedbelow.
RelevantSubordinatedInstrumentsincludeAMPNotes2and
othercapitalinstrumentsoftheAMPgroup(towhichAMPisa
party)forwhichAMPhasreceivedconfirmationfromAPRAthat
APRAdoesnotobjecttotheAMPgroupusingtheproceedsofthe
issueoftheinstrumenttofundTier1CapitalorTier2Capitalof
aRegulatedEntitywithintheAMPgroupthat,inaccordancewith
theirtermsorbyoperationoflaw,arecapableofbeingconverted
orwritten-offwhereAPRAdeterminesthataNon-ViabilityTrigger
Eventhasoccurred.
Asatthedateofthisprospectus,nomemberoftheAMPgroup
hasoutstandingRelevantSubordinatedInstruments,and
whenAMPNotes2areissuedtheywillbetheonlyRelevant
SubordinatedInstrumentsofAMPonissue.Thereisnoobligation
onanymemberoftheAMPgrouptoissueanyRelevant
SubordinatedInstrumentortomaintainonissueanyRelevant
SubordinatedInstrumentsthatitmaydecidetoissueinthefuture.		 Further
information
Clause6.1
Definition
of‘Relevant
Subordinated
Instruments’
inClause
13.2

34

AMP Subordinated Notes 2

Section 2 About AMP Subordinated Notes 2

Topic
Definition of
‘non-viability’
What action must
AMP take upon
the occurrence of
a Non-Viability
Trigger Event?		 Summary
WhetheraNon-ViabilityTriggerEventwilloccurisatthediscretion
ofAPRA.
APRAhasnotgivenanyguidanceastohowitwoulddetermine
non-viabilityandhasindicatedthatitwillnotpublishfurther
guidanceontheparametersusedtodeterminenon-viability.Asat
thedateofthisprospectus,APRAhasnotmadeadeterminationof
non-viability.Therequirementtoincludenon-viabilitytriggerevents
incapitalinstrumentswasintroducedonlyon1January2013.
Non-viabilitycouldbeexpectedtoincludeseriousimpairmentof
theAMPgroup’sfinancialpositionandsolvency,butmaynotbe
confinedtosolvencymeasuresandcapitalratiosandmayinclude
othermatters,suchasliquidity.
IfaNon-ViabilityTriggerEventoccurs,AMPmust
immediatelydetermine:
> theamountofAMPNotes2thatwillbeConvertedandthe
amountofotherRelevantSubordinatedInstrumentsthatwill
beconvertedintoAMPOrdinarySharesorwritten-offtosatisfy
APRAthatAMPwillnolongerbe,orwillnotbecome,non-viable,
and
> theidentityofHoldersatthetimethattheConversionisto
takeeffect.
IfAPRArequiresallRelevantSubordinatedInstruments(including
AMPNotes2)tobeconvertedorwritten-offonaccountofthe
Non-ViabilityTriggerEvent,allAMPNotes2arerequiredto
beConverted.
IfonlyanamountofRelevantSubordinatedInstrumentsisrequired
tobeconverted,AMPwillfirstconvertorwrite-offallRelevant
PerpetualSubordinatedInstrumentsbeforeConvertingtheAMP
Notes2,andifconversionorwrite-offofRelevantPerpetual
SubordinatedInstrumentsisnotsufficienttosatisfyAPRAthat
AMPwouldnotbecomenon-viableandprovidedthatAPRAhas
notwithdrawntheNon-ViabilityDeterminationasaresultofthe
conversionorwrite-offoftheRelevantPerpetualSubordinated
Instruments,AMPwillconvertsomeorallofAMPNotes2andwill
convertorwrite-offotherRelevantTermSubordinatedInstruments
inanamountwhich,whenaddedtotheamountofRelevant
PerpetualSubordinatedInstrumentsconvertedorwritten-off,will
satisfyAPRAthatAMPwouldnotbecomenon-viable.Solongas
AMPhasnoRelevantPerpetualSubordinatedInstrumentsonissue,
ifaNon-ViabilityTriggerEventoccurs,someorallofAMPNotes2
wouldberequiredtobeConvertedandsomeorallofotherRelevant
TermSubordinatedInstruments(ifanyareonissueatthetime)
wouldbeconvertedorwritten-off.		 Further
information
Clause6.1
Clause6.2

In–Converting–AMP–Notes–2–or–converting–or–writing-off–other– Relevant–Term–Subordinated–Instruments,–AMP–will–endeavour–to– treat–Holders–of–AMP–Notes–2–and–holders–of–other–Relevant–Term– Subordinated–Instruments–on–an–approximately–proportionate– basis,–but–may–discriminate–to–take–account–of–the–effect– on–marketable–parcels–of–AMP–Notes–2–and–other–logistical– considerations–and–the–need–to–effect–Conversion–immediately.

35

AMP Subordinated Notes 2

Section 2 About AMP Subordinated Notes 2

Topic
When will AMP
Notes 2 Convert
to AMP Ordinary
Shares following
a Non-Viability
Trigger Event?
Conversion
Number		 Summary
IfAMPisrequiredtoConvertAMPNotes2,itwilldosoonthe
ConversionDate.
> TheConversionDateisthedateoftheNon-ViabilityTrigger
Event.ThisisthedateonwhichAPRAprovidesaNon-Viability
Determination.
> Conversionwillbeimmediateandirrevocable.
> ThenumberofAMPOrdinarySharesthatHoldersreceiveupon
ConversionoftheirAMPNotes2istheConversionNumber
(seebelowforcalculation).
FromtheConversionDate,AMPwilltreatHoldersinrespectof
AMPNotes2requiredtobeConvertedashavingbeenissued
theConversionNumberofAMPOrdinaryShares.AMPexpects
anyASXtradesinAMPNotes2thathavenotsettledonthe
dateaNon-ViabilityTriggerEventoccurswillcontinuetosettle
inaccordancewiththenormalASXT+3settlement,although
AMPexpectsthesellerwillbetreatedashavingdelivered,and
thebuyerwillbetreatedashavingacquired,theConversion
NumberofAMPOrdinarySharesintowhichAMPNotes2have
beenConvertedasaresultoftheoccurrenceoftheNon-Viability
TriggerEvent.
Further,AMPmaymakesuchdecisionswithrespecttothe
identityofHoldersasattheConversionDateasmaybenecessary
ordesirabletoensurethattheConversionoccursinanorderly
manner,includingdisregardinganytransfersofAMPNotes2that
havenotbeensettledorregisteredatthattime.
AMPmustgiveHoldersnoticeassoonaspracticableaftera
Non-ViabilityTriggerEventhasoccurred,includingdetailsofthe
numberofAMPNotes2Converted.
OnConversion,HolderswillreceivetheConversionNumberof
AMPOrdinaryShares.TheConversionNumberofAMPOrdinary
SharesmaybeworthsignificantlylessthantheFaceValueof
AMPNotes2andaHoldermaysufferalossasaconsequence
ofConversion.
TheConversionNumberiscalculatedbasedonadiscountedfive
BusinessDayVWAP,subjecttotheConversionNumberbeingno
greaterthantheMaximumConversionNumber.Theformulafor
thiscalculationisasfollows:
Conversion
=
$100
Number
0.99xVWAP
where:
> VWAPisthevolumeweightedaveragepriceofAMPOrdinary
SharesduringtheperiodoffiveBusinessDaysonwhichtrading
inAMPOrdinarySharestookplaceimmediatelybefore(butnot
including)theConversionDate.
> The0.99factorisappliedtoVWAPtoprovideasmallbufferto
VWAPsinceAMPOrdinarySharesmaynotbeabletobesoldat
VWAP.Thisisafeatureofrecentsimilarsecuritiesinthemarket.		 Further
information
Clause6.2
Clause7.1

36

AMP Subordinated Notes 2

Section 2 About AMP Subordinated Notes 2

Topic
Conversion
Number
(continued)		 Summary
TheMaximumConversionNumber16iscalculatedinaccordance
withthefollowingformula:
Maximum
Conversion=
$100
Number
Issue Date VWAPx0.20
where:
> Issue Date VWAPistheaverageofthevolumeweighted
averagepriceofAMPOrdinarySharesduringtheperiodof20
BusinessDaysonwhichtradinginAMPOrdinarySharestook
placeimmediatelybefore(butnotincluding)theIssueDate.
Illustrative example of Conversion
BelowisanexampleofhowtheConversionNumber(and
MaximumConversionNumber)iscalculated,basedonan
assumedIssueDateVWAPandahypotheticalAMPOrdinaryShare
priceatthedateofaNon-ViabilityTriggerEvent.		 Further
information
Clause7.1

  • Maximum Conversion Number: –This–will–be–calculated–as–at–the– date–of–issue–of–AMP–Notes–2.–Assuming–an–Issue–Date–VWAP–of– $4.50,–the–Maximum–Conversion–Number–will–be–111.11–(being– $100–/–(0.2–x–$4.50)).–This–Issue–Date–VWAP–is–indicative–only.–The– actual–Issue–Date–VWAP–will–be–calculated–based–on–the–average– of–the–daily–volume–weighted–average–price–of–AMP–Ordinary– Shares–during–the–20–Business–Days–on–which–trading–in–AMP– Ordinary–Shares–took–place–immediately–preceding–but–not– including–the–Issue–Date.

  • Conversion Number: –The–AMP–Ordinary–Share–price–at–the–time– of–a–Non-Viability–Trigger–Event–is–likely–to–reflect–significant– operating–and/or–financial–distress–of–the–AMP–group.–For– indicative–purposes,–assuming–the–VWAP–at–the–date–of–the– Non-Viability–Trigger–Event–is–$0.40,–the–Conversion–Number–is– 252.53–(being–$100–/–(0.99–x–$0.40)).–The–actual–VWAP–on–the– date–of–a–Non-Viability–Trigger–Event–will–be–calculated–based–on– the–average–of–the–daily–volume–weighted–average–price–of–AMP– Ordinary–Shares–during–the–five–Business–Days–prior–to–the–date– of–the–Non-Viability–Trigger–Event.

  • Number of AMP Ordinary Shares issued to Holders: –Since– the–Conversion–Number–exceeds–the–Maximum–Conversion– Number–in–the–example,–Holders–would–receive–the–Maximum– Conversion–Number–(being–111.11–AMP–Ordinary–Shares–for– each–AMP–Note–2).

16– –The–inclusion–of–the–Maximum–Conversion–Number–in–the–Terms–is–a–requirement–of–APRA’s–prudential–standards–in– relation–to–Tier–2–Capital–and–is–included–in–order–for–the–AMP–Notes–2–to–be–Relevant–Term–Subordinated–Instruments.– It–must–be–(and–is)–set–so–as–not–to–exceed–the–price–of–AMP–Notes–2–at–the–Issue–Date–divided–by–20–per–cent–of–the– Ordinary–Share–price–as–at–the–Issue–Date.

37

AMP Subordinated Notes 2

Section 2 About AMP Subordinated Notes 2

Topic
Conversion
Number
(continued)		 Summary
Conversion Number
Formula $100
0.99xVWAP
Assumption VWAPatdateofNon-
ViabilityTriggerEvent
of$0.40(i)pershare
Calculation $100
0.99x0.40
Output 252.53
Number
of AMP
Ordinary
Shares

Based–on–the–above–illustrative–examples,–the–table–below– illustrates–that–a–Holder–of–100–AMP–Notes–2–would–suffer–a–loss–of– $5,556–if–they–made–an–initial–$10,000–investment.

==> picture [259 x 248] intentionally omitted <==

----- Start of picture text -----

Initial investment After Conversion
Type–of–
AMP–Notes–2 AMP–Ordinary–Shares
security–held
Number–of–
securities– 100 11,111
held
Security–
$100 $0.40
price [(i)]
Value–of–
$10,000 $4,444
securities
$5,556–(assuming–that–
the–Notes–are–Converted–
$0–(assuming–that– ––if–AMP–is–unable–to–
the–Holder–sells– Convert–the–AMP–Notes–2–
Loss–to–
AMP–Notes–2–on– following–a–Non-Viability–
Holder [(ii)]
market–at–their– Trigger–Event,–AMP–Notes–2–
Face–Value) will–be–Written-off–and–
the–Holder–will–lose–all–of–
its–investment)
----- End of picture text -----

(i)– –AMP–Ordinary–Share–price–of–$0.40–is–for–illustrative–purposes–only.– The–actual–AMP–Ordinary–Share–price–may–be–less–than–this.

(ii)––This–does–not–take–into–account–any–costs,–charges–or–taxes–incurred– by–a–Holder–on–the–sale–of–its–AMP–Notes–2–or–AMP–Ordinary–Shares– (including–brokerage–fees,–if–applicable).

38

AMP Subordinated Notes 2

Section 2 About AMP Subordinated Notes 2

Topic
Adjustments to
the Issue Date
VWAP
Will you suffer
loss if AMP Notes
2 are Converted
into AMP Ordinary
Shares?
What happens
if AMP is unable
to Convert AMP
Notes 2 (ie, an
Inability Event
occurs)?		 Summary
TheIssueDateVWAP(and,asaconsequence,theMaximum
ConversionNumber),willbeadjustedtoreflectaconsolidation,
divisionorreclassificationofAMP’ssharecapitalandprorata
bonusissuesofAMPOrdinaryShares,assetoutintheTerms(but
notothertransactions,includingrightsissues,whichmayaffect
thecapitalofAMP).TheTermsdonotprohibitorlimitAMP’srights
toenterintotransactionsaffectingitscapital.
However,noadjustmentwillbemadetotheIssueDateVWAP
wheresuchadjustment(roundedifapplicable)wouldbelessthan
1percentoftheIssueDateVWAPthenineffect.
Yes,itislikelythatyouwillsufferlossifyourAMPNotes2are
Converted.TheAMPOrdinarySharesyoureceivemaybeworth
significantlylessthanyourinitialinvestment,andyouwillno
longerreceiveInterestpayments.
TheamountofyourlosswilldependonthepriceandConversion
NumberofAMPOrdinarySharesyoureceive,andthatConversion
NumberissubjecttotheMaximumConversionNumber,which
dependsontheAMPOrdinarySharepriceasattheIssueDateof
AMPNotes2.
Youwillnotbecompensatedforanylossyousufferasaresultof
someorallofyourAMPNotes2beingConverted.
IfAMPNotes2arerequiredtobeConvertedfollowinga
Non-ViabilityTriggerEvent,butAMPispreventedbyapplicable
law,ororderofanycourt,oractionofanygovernmentauthority
(includingregardingtheinsolvency,winding-uporotherexternal
administrationofAMP)oranyotherreasonfromConvertingAMP
Notes2(anInabilityEvent),andtheInabilityEventsubsistsfor
fiveBusinessDaysaftertheConversionDate,AMPNotes2will
beWritten-off.AnInabilityEventistakentosubsistiftheIssuer
receiveslegaladvicetothateffectfromareputablelegalcounsel
(buttheobtainingofadvicemustnotdelayorimpedeWrite-off).
ThismeansthatHolders’rights(includingtothepaymentof
InterestandFaceValue)inrelationtoAMPNotes2willbe
immediatelyandirrevocablyWritten-offandterminated.
Thoselawsandthegroundsonwhichacourtorgovernment
authoritymaymakeorderspreventingtheConversionofAMP
Notes2maychange.TheremaybeotherreasonswhyAMPis
preventedfromConvertingtheAMPNotes2intoAMPOrdinary
Shares,including,butnotlimitedto,operationalimpediments,
lossofrecordsandforcemajeure.		 Further
information
Clauses7.4,
7.5,7.6,7.7
Clause7
Clause6.3

39

AMP Subordinated Notes 2

Section 2 About AMP Subordinated Notes 2

Topic
Can Holders elect
not to receive
AMP Ordinary
Shares?
Ineligible Holders
What happens
when shares are
issued to a Sale
and Transfer
Agent?		 Summary
AHoldermaynotifyAMPthatitdoesnotwishtoreceiveAMP
OrdinarySharesasaresultofConversion.Noticemaybegivenat
anytimeonoraftertheIssueDatebutnotlessthan15Business
DayspriortotheConversionDate.
IftheHolder’sAMPNotes2arerequiredtobeConverted,such
Holder’srightswillbeimmediatelyandirrevocablyterminatedon
theConversionDateandtheConversionNumberofAMPOrdinary
ShareswillbeissuedtoaSaleandTransferAgentwhowillatthe
firstopportunityselltheAMPOrdinarySharesatmarketvalueand
paytheproceeds(netofbrokerage,costs,taxesandcharges)to
theHolder.
HolderswhodonotwishtoreceiveAMPOrdinarySharesshould
notifyAMPofthisassoonaspossibleaftertheIssueDate,
becauseonceaNon-ViabilityTriggerEventoccurs,Holdersmay
nothaveanopportunitytodoso.
IneligibleHoldersareingeneralterms:
> HolderswhoareprohibitedunderAustralianlawfrombeing
offered,holdingoracquiringAMPOrdinaryShares(forexample,
underchapter6oftheCorporationsActorundertheForeign
AcquisitionsandTakeoversAct),and
> ForeignHolders.
ForeignHoldersareHolderswhoseaddressintheRegisterisa
placeoutsideAustraliaorwhoAMPotherwisebelievesmaynotbe
aresidentofAustraliawhereAMPisnotsatisfiedthatthelawsof
theHolder’scountryofresidencewouldpermittheofferto,orthe
holdingoracquisitionofAMPOrdinarySharesby,theHolder.
IfAMPNotes2thatareheldbyanIneligibleHolderarerequired
tobeConverted,suchHolder’srightswillbeimmediatelyand
irrevocablyterminatedontheConversionDateandtheConversion
NumberofAMPOrdinaryShareswillbeissuedtoaSaleand
TransferAgentwhowillatthefirstopportunityselltheAMP
OrdinarySharesatmarketvalueandpaytheproceeds(netof
brokerage,costs,taxesandcharges)totheHolder.
IfAMPisunableforanyreasontoissueAMPOrdinaryShares
toaSaleandTransferAgentwithinfiveBusinessDaysafterthe
ConversionDate,thentherightsofHoldersoftherelevantAMP
Notes2willbeimmediatelyandirrevocablyterminated.
AMPhasnoliabilitytorelevantHoldersfortheactsofanySale
andTransferAgentappointedtosellAMPOrdinarySharesupon
theoccurrenceofaNon-ViabilityTriggerEventandhasno,nor
owesany,dutiesinconnectionwithanysuchsaleandhasno
responsibilityforanycosts,losses,liabilities,expenses,demandsor
claimswhichariseasaresultofsuchsale.		 Further
information
Clause7.10
Clause7.10
Clause7.10

40

AMP Subordinated Notes 2

Section 2 About AMP Subordinated Notes 2

2.5 Ranking, Events of Default and regulatory treatment

AMP–Notes–2–are–subordinated,–unsecured–obligations–of–AMP,–a–non-operating–holding–company.–They– are–not–guaranteed–by–any–member–of–the–AMP–group–and–have–very–limited–events–of–default.–They–are– term–subordinated–debt–instruments,–a–substantial–part–of–the–proceeds–of–which–the–AMP–group–expects– to–use–to–fund–Tier–2–Capital–of–one–or–more–Regulated–Entities–within–the–AMP–group.

Topic
AMP Notes 2 are
unsecured
Ranking in a
winding-up
of AMP		 Summary
AMPNotes2arenotsecuredovertheassetsofanymemberofthe
AMPgroup.
AMPNotes2arenotguaranteedandarenotdepositliabilities
ofAMPBankoranyothermemberoftheAMPgroupandare
notpolicieswithorpolicyliabilitiesofanymemberoftheAMP
groupforthepurposesoftheLifeInsuranceAct.Theyarealsonot
investmentsinanysuperannuationorotherfundmanagedbya
memberoftheAMPgroup.
Inawinding-upofAMP(ifAMPNotes2havenotbeenConverted
orWritten-offonaccountofaNon-ViabilityTriggerEvent),AMP
Notes2rankforpayment:
> aheadoftheclaimsofallholdersofRelevantPerpetual
SubordinatedInstrumentsissuedbyAMPandaheadofthe
claimsofholdersofAMPOrdinaryShares
> equallyamongthemselves
> equallywiththeclaimsofallholdersofRelevantTerm
SubordinatedInstrumentsissuedbyAMP,and
> behindallothercreditorsofAMP,includingdepositorsand
policyholdersoftheAMPgroup.
IfAMPNotes2arerequiredtobeConvertedorWritten-offon
accountofaNon-ViabilityTriggerEventthepositionofaHolderin
respectofthoseAMPNotes2willbeasfollows:
> ifthoseAMPNotes2areConverted,theHolderwillbecomea
holderofAMPOrdinaryShares,inwhichcasetheAMPOrdinary
SharesreceivedmaybeworthsignificantlylessthantheFace
ValueofAMPNotes2held,andtheHolderwillrankforpayment
onawinding-upofAMPequallywithotherholdersofAMP
OrdinaryShares,		 Further
information
Clauses1.1,
2.4
Section
5.1.1
Clause2.1

  • if–the–AMP–Ordinary–Shares–to–which–it–would–have–been–entitled– upon–Conversion–are–issued–to–a–Sale–and–Transfer–Agent,–either– because–the–Holder–is–an–Ineligible–Holder–or–the–Holder–elected– not–to–receive–AMP–Ordinary–Shares,–the–Holder–will–have–the–right– to–receive–the–cash–proceeds–(net–of–brokerage,–costs,–taxes–and– charges)–of–the–sale–of–the–AMP–Ordinary–Shares–on–market–and– will–have–no–claim–against–AMP–or–any–other–member–of–the–AMP– group–in–respect–of–those–AMP–Notes–2,–or

  • if–AMP–is–unable–for–any–reason–to–Convert–those–AMP–Notes–2– within–five–Business–Days–after–the–Conversion–Date,–AMP–Notes– 2–will–be–Written-off–and–the–Holder–will–have–no–claim–against– AMP–or–any–other–member–of–the–AMP–group–in–respect–of–their– AMP–Notes–2.

41

AMP Subordinated Notes 2

Section 2 About AMP Subordinated Notes 2

Topic
Ranking in a
winding-up of
AMP (continued)
Events of Default		 Summary
Refertothetableonpage14,‘HowwouldAMPNotes2rankin
awinding-upofAMP?’foranillustrationofhowtheclaimsof
HoldersofAMPNotes2wouldrankuponawinding-upofAMP.
AMPNotes2areclaimsonAMP.AMPisanon-operatingholding
company.Asubstantialmajorityofitsassetsareitsinvestments
inothermembersoftheAMPgroup.Itsclaimsinrespectofthose
investmentsrankbehinddepositors,policyholdersandother
creditorsinawinding-upofthosecompanies.
AnEventofDefaultwilloccurifeither:
> AMPfailstopayanyamountofprincipalorInterestwithin
14daysoftheduedateforpayment,or
> acourtorderismade,oreffectiveresolutionispassed,forthe
winding-upofAMP(unlessinrelationtoacorporaterestructure
approvedbyaSpecialResolutionoftheHoldersorinwhich
thesurvivingentityassumesAMP’sobligationsinrespectof
AMPNotes2).		 Further
information
Clause8

Non-payment–because–the–Solvency–Condition–has–not–been– satisfied–does–not–constitute–an–Event–of–Default–and–the–Trustee– may–not–institute–proceedings–for–payment–of–an–amount–that–is– unpaid–due–to–the–Solvency–Condition.

In–the–case–of–an–Event–of–Default–relating–to–unpaid–Interest–or– principal,–the–Trustee–may,–at–its–discretion–and–without–further– notice,–bring–proceedings–to:

  • recover–any–due–and–payable–but–unpaid–amount–on– AMP–Notes–2–(subject–to–the–Solvency–Condition),

  • obtain–a–court–order–for–specific–performance–of–any–other– obligation–in–respect–of–AMP–Notes–2,–or

  • institute–proceedings–for–the–winding-up–of–AMP.

In–the–case–of–an–Event–of–Default–where–a–court–order–is–made– or–effective–resolution–is–passed–for–the–winding-up–of–AMP,–the– Trustee–may,–at–its–discretion,–declare–by–notice–to–AMP–that–the– Face–Value–of–each–AMP–Note–2–(together–with–accrued–and–unpaid– Interest)–is–payable–but–payment–is–subject–to–the–claims–of–all– Senior–Creditors–being–first–paid–in–full.

The–Trustee–is–not–bound–to–take–any–action–under–the–Trust–Deed– unless–directed–to–do–so–by–a–Holder–Resolution–or–so–requested–in– writing–by–Holders–of–at–least–15–per–cent–of–the–aggregate–Face– Value–of–all–AMP–Notes–2–outstanding–and–it–is–indemnified–and– secured–for–its–costs–to–its–reasonable–satisfaction.

Holders–are–not–entitled–to–directly–proceed–against–AMP–to–enforce– any–right–or–remedy–except–in–limited–circumstances.

The–Trustee–may–not–exercise–any–other–remedies–as–a–consequence– of–an–Event–of–Default–other–than–as–specified.

The–Trustee–may–not–institute–proceedings–for–payment–of–Interest– that–is–unpaid–due–to–the–Solvency–Condition.

42

AMP Subordinated Notes 2

Section 2 About AMP Subordinated Notes 2

Topic
Regulatory capital
Regulatory
treatment of
AMP Notes 2		 Summary
Anybusinessrequirescapitaltosupportitsincome-generating
activitiesinitschosenindustry.
APRA’sprudentialstandardsaimtoensurethatbanks,lifeinsurers,
superannuationtrusteesandgroupsofbanks,lifeinsurersand
superannuationtrusteesheadedbyanauthorisednon-operating
holdingcompany,suchastheAMPgroup,maintainadequatecapital
tosupporttherisksassociatedwiththeiractivities.APRAhasdetailed
guidelinesandrestrictionsonthetypesofcapitalinstrumentsthatare
permittedtoformthecapitalbase.Thetypesofcapitaldeemedeligible
forinclusioninthecapitalbasearereferredtoasregulatorycapital.
APRAcurrentlyclassifiesregulatorycapitalintotwotiersforits
supervisorypurposes—referredtoasTier1CapitalandTier2Capital.
Tier1Capitalisgenerallyconsideredfromtheperspectiveofa
financialinstitutiontobeahigherqualitycapitalandiscomprisedof:
> CommonEquityTier1Capital,and
> AdditionalTier1Capital.
Tier2Capitalrepresentsotherelementswhichfallshortofsome
ofthecharacteristicsofTier1Capitalbutwhichcontributetothe
overallstrengthoftheregulatedcompanyasagoingconcern.
InMay2013,APRAreleaseditsdraftcapitaladequacyprudential
standardswhichwillapplytoAMPasaconglomerategroup(tobe
knownasa‘Level3group’).Itisexpectedthatthecapitalstandards
willbebasedonaCommonEquityTier1Capitalregime,which
meansthateligiblecapitalforthepurposesofthosestandards
willberequiredtobeintheformofcommonequityonly,subject
totransitionalarrangementsconfirmedbyAPRA(thetransitional
arrangementswhichwillapplytoAMParedescribedbelowunder
“RegulatorytreatmentofAMPNotes2”).Implementationofthe
newcapitalstandardsisexpectedon1January2015.
APRAhasadvisedthat,giventheproposedchangestothesupervision
ofconglomerategroups,AMPNotes2willnotconstituteTier2
CapitaloftheAMPgroupbutAPRAdoesnotobjecttotheAMP
groupusingtheproceedsoftheirissuetofundTier2Capitalofoneor
moreRegulatedEntitieswithintheAMPgroup.AMPexpectstouse
asubstantialpartoftheproceedsofissueforthatpurposeandthe
remainingproceedswillbeusedforgeneralcorporate,fundingand
capitalmanagementpurposes,includingrefinancingAMPNotes.
TotheextentthatAMPNotes2arenotusedtofundTier2Capitalof
RegulatedEntitieswithintheAMPgroup,buttorefinancetheexisting
AMPNotesissuedbyAMPGFS,thisamountwillbesubjecttothetransition
arrangementsapprovedbyAPRAontheexistingAMPNotes,being:		 Further
information
  • 100%–recognition–as–eligible–regulatory–capital–of–the–AMP–group– up–to–30–April–2014;–and

> 50%–recognition–as–eligible–regulatory–capital–of–the–AMP–group– up–to–30–April–2015,–with–zero–recognition–after–this–date. AMP–does–not–expect–the–implementation–of–the–changes–to–the– supervision–of–conglomerate–groups–in–the–form–proposed–by–APRA– as–at–the–Issue–Date–will–mean–that–the–AMP–group–will–not–be–able– to–use–the–proceeds–of–the–issue–of–AMP–Notes–2–to–fund–one–or–more– Regulated–Entities–within–the–AMP–group.

43

AMP Subordinated Notes 2

Section 2 About AMP Subordinated Notes 2

2.6 Other important matters

Topic
Manner of
payments
Trustee and
Trust Deed
AMP may issue
further securities
No voting rights
for Holders		 Summary
InterestispayablebyAMPtoHoldersinAustraliandollarsandwill
bepaidinAustraliandollarsbydirectcreditintotheirnominated
bankaccountsorbysuchothermannerthatAMPdecides.
HoldersmustnotifybankaccountdetailstotheRegistrynolater
thantheRecordDate.
WhereapaymentcannotbemadebyAMP,forexample,because
aHolderhasnotprovidedbankaccountdetails,theamountofthe
incompletepaymentwillbeheldinanon-interestbearingdeposit
accountwithabankselectedbyAMPandappliedinaccordance
withtheTerms.Paymentsmadetoabankaccountinaplace
wherebanksarenotopenonthatdaywillbepaidonthefirst
followingdayonwhichthebanksareopeninthatplace,without
additionalpaymentinrespectofthedelay.
NeitherAMPnoranyHolderhasarighttosetoffanyamounts,
mergeaccountsorexerciseanyotherrightstheeffectofwhichis
ormaybetoreduceanyamountpayablebytheIssuerinrespect
ofAMPNotes2heldbytheHolderorbytheHoldertoAMP.
Interestmayalsobepaid,atAMP’soption,bychequeandsentby
prepaidposttotheaddressoftheHolderintheRegister.
AMPhasappointedaTrusteeasrequiredbychapter2Lofthe
CorporationsAct.TheTrusteeholdscertainrightsinrelationto
AMPNotes2ontrustforHoldersundertheTrustDeed.Incertain
circumstances,theTrusteewillactonbehalfofHolders.
TheTrusteeholdsontrustfortheHolderstherighttoenforce
anyobligationsofAMPundertheTermsandtheTrustDeed.The
TrusteewillbeentitledtotakeanyactionagainstAMPtoenforce
anyobligationsofAMP,subjecttotheTermsandTrustDeed.
AcopyoftheTrustDeedcanbeobtainedfromamp.com.au.
AMPmayfromtimetotime,withouttheconsentoftheHolders,
issuesecuritiesrankingequallywithAMPNotes2(onthesame
termsorotherwise)orrankinginpriorityorjuniortoAMPNotes2.
AHolderhasnorighttoparticipateintheissueofanysharesor
anyothersecuritiesofanykindofAMPotherthanonConversion
inaccordancewiththeTerms.
Holdershavenorighttoreceivenoticeoforvoteatanymeetingof
membersofAMP.		 Further
information
Clauses
2.1(e),10
Section10.5
andthe
TrustDeed
Clause12.8
Clause
1.8(a)

44

AMP Subordinated Notes 2

Section 2 About AMP Subordinated Notes 2

Topic
Alteration of the
Terms and the
Trust Deed
Taxation
implications
of investing in
AMP Notes 2
Brokerage fees
and stamp duty		 Summary
AMPmay,withtheapprovaloftheTrustee,butwithoutthe
consentofHolders,altertheTrustDeedortheTermsiftheIssuer
isoftheopinionthatsuchalterationisofaformalortechnicalor
minornature,madetocureanyambiguityorcorrectanyobvious
error,necessarytocomplywithapplicablelawsortomaintain
quotationoftheAMPNotes2onASXorotherwisenotmaterially
prejudicialtotheinterestsoftheHoldersasawhole.Inthecase
ofalterationsmadetocomplywithapplicablelawsortomaintain
quotationofAMPNotes2onASXandalterationsnototherwise
materiallyprejudicialtotheinterestsofHoldersasawhole,
AMPmustprovidetotheTrusteeanopinionoflegaladvisersof
recognisedstandinginNewSouthWalesconfirmingthatthe
alterationisnotmateriallyprejudicialtotheinterestsofthe
Holdersasawhole.
AMPcanalsoaltertheTrustDeedortheTermswiththeapproval
oftheTrusteeandtherequisitemajorityofHolders.The
majoritymaybe50percentor75percent,dependingonthe
circumstancesandineachcaseasdeterminedinaccordancewith
theTrustDeed.
APRA’spriorwrittenapprovaltoaltertheTrustDeedandthe
TermsisrequiredwheretheamendmentmaycauseAPRAto
objecttoAMPgroupusing,orhavingused,theproceedsofthe
issueofsomeoralloftheAMPNotes2tofundTier2Capitalofa
RegulatedEntitywithintheAMPgroup.
ThetaxationimplicationsofinvestinginAMPNotes2willdepend
onaninvestor’sindividualcircumstances.Prospectiveinvestors
shouldobtaintheirowntaxationadvice.
AgeneraloutlineoftheAustraliantaxationimplicationsis
includedintheAustraliantaxationsummaryinsection8.
Non-AustralianHoldersshouldnotbesubjecttoAustralian
incometaxinrespectofInterestpaymentsreceivedontheir
AMPNotes2.ThisisonthebasisthatAMPintendstosatisfythe
requirementsofsection128FoftheAustralianTaxActinrespect
ofInterestpaidonAMPNotes2(seeSection8).
NobrokerageorstampdutyispayablebyHoldersonapplications
forAMPNotes2.Holdersmayhavetopaybrokerageonany
subsequenttransferofAMPNotes2onASXafterquotation.		 Further
information
Clauses
12.3,12.4,
12.5
Section8

45

AMP Subordinated Notes 2

Section 3

About AMP and the AMP group

This section sets out information about the activities, and financial performance and position of AMP (the Issuer of AMP Subordinated Notes 2) and its controlled entities, together the AMP group.

3.1 Introduction 3.2 Overview of the AMP group 3.3 Financial summary for the half-year ended 30 June 2013 3.4 Simplified corporate structure 3.5 The AMP group operational structure 3.6 Business lines 3.7 Strategy 3.8 Regulation

46

AMP Subordinated Notes 2

Section 3 About AMP and the AMP group

3.1 Introduction

AMP–Limited–is–a–non-operating–holding– company.–As–such–a–substantial–majority–of–its– assets–are–investments–in–its–subsidiaries.

AMP–Limited–and–its–controlled–entities–together– form–the–AMP–group,–the–leading–independent– wealth–management–group–in–Australia–and– New–Zealand.–

AMP–Limited–is–listed–on–ASX–under–ASX–code– ‘AMP’–and–the–New–Zealand–Stock–Exchange–under– the–NZX–code–‘AMP’.–It–has–a–market–capitalisation– of–$14.0–billion–as–at–1–November–2013,–ranking–it– among–the–20–largest–ASX-listed–companies.

On–15–August–2013,–AMP–announced–the– appointment–of–Craig–Meller–to–the–role–of– Chief–Executive–Officer–and–Managing–Director,– effective–1–January–2014.–Craig–Meller–replaces– Craig–Dunn–who–will–retire–from–AMP–following– six–years–as–Chief–Executive–Officer–and–Managing– Director–and–13–years–with–the–company.–Craig– Meller–joined–AMP–in–2001–and–has–since–held– a–number–of–senior–roles–including–Managing– Director,–AMP–Financial–Services.–

More–information–about–the–AMP–group–can–be– found–at–amp.com.au.

3.2 Overview of the AMP group

The–AMP–group–provides:

  • –– financial–advice

  • –– superannuation,–retirement–income–and– investments–products–for–individuals

  • –– –superannuation–services–for–businesses

  • –– –administration,–banking–and–investment– services–for–self-managed–super–funds

  • –– –income–protection,–disability–and– life–insurance

  • –– –selected–retail–banking–products,–and–

  • –– –investments–including–shares–and,– fixed–income.–

It–serves–over–five–million–retail–customers–in– Australia–and–New–Zealand–and–its–investment– management–business,–AMP–Capital,–also–serves– clients–in–Asia,–Europe,–the–Middle–East–and–North– America.–At–30–June–2013,–the–AMP–group–had– around–5,700–employees,–4,300–aligned–and– employed–advisers–and–planners,–and–assets– under–management–( AUM )–of–A$179–billion.

As–at–the–date–of–this–prospectus,–AMP–group–is:

  • –– the–leading–provider–of–financial–advice,– superannuation,–and–personal–insurance–in– Australia[17] ,–and

  • –– the–leading–provider–of–corporate–super–and– retail–managed–funds–in–New–Zealand–and– one–of–the–largest–KiwiSaver–Scheme–and–life– insurance–providers–in–that–market.[18]

3.3 Financial summary for the half‑year ended 30 June 2013

The–following–summarises–the–AMP–group’s– results–for–the–half-year–ended–30–June–2013:

  • –– 1H13–net–profit–attributable–to–shareholders– of–AMP–of–A$393–million–and–underlying– profit[19––] of–A$440–million–

  • –– Australian–wealth–management–net–cash– flows[20] –of–A$1.4–billion

  • –– Well–capitalised,–to–support–business–growth– and–regulatory–change:

    • –– A$1.7–billion–surplus–capital–above– minimum–regulatory–requirements,– up–A$331–million–on–1–January–2013– post-LAGIC–capital–position

  • –– Interim–dividend–of–11.5–cents–per–share,– franked–to–70–per–cent–(payout–ratio–of– 77–per–cent–of–underlying–profit)

  • –– AFS–value–of–risk–new–business–down– A$43–million–on–1H12–to–A$69–million.

  • 17– –‘Financial–advice’–––Money–Management–(July–2013),–‘superannuation’–and–‘personal–insurance’–––Plan–for–Life–(June–2013)

  • 18– –‘Corporate–Super’–––Eriksens–Master–Trust–Survey–June–2013;–‘retail–managed–funds’–and–‘KiwiSaver–Scheme’–––FundSource– Trends–&–Market–Composition–Report–June–2013;–‘life–insurance’–––Financial–Services–Council–Market–Share–Reporting–June–2013

  • 19– –Underlying–profit–is–AMP’s–key–measure–of–business–profitability,–as–it–smooths–investment–market–volatility–stemming– from–shareholder–assets–invested–in–investment–markets–and–aims–to–reflect–the–trends–in–the–underlying–business– performance–of–the–AMP–group.

  • 20– –AFS–cashflows–reflect–amounts–paid–to–or–received–from–customers,–their–employers–or–super–funds–into–AMP’s–wealth– management,–wealth–protection–or–mature–products.–AFS–cashflows–are–shown–gross–of–fees–and–taxes.

47

AMP Subordinated Notes 2

Section 3 About AMP and the AMP group

==> picture [427 x 21] intentionally omitted <==

----- Start of picture text -----

Key performance measures 1H 13 FY 12
----- End of picture text -----

Key performance measures 1H 13 FY 12
NetprofitattributabletoshareholdersofAMP
Underlyingprofit21
Cost-to-incomeratio
AustralianFinancialServicesnetcashflows
TotalretailnetcashflowsonAMPplatforms
TotalAustralianwealthmanagementnetcashflows
AMPCapitalexternalnetcashflows22
AFSvalueofrisknewbusiness
Statutoryreturnonequity
Underlyingreturnonequity		 A$393m
A$440m
48.6%
A$862m
A$1,296m
A$1,383m
(A$2,070m)
A$69m
10.0%
11.2%		 A$689m
A$950m
47.6%
A$308m
A$952m
A$821m
(A$1,784m)
A$203m
9.2%
12.7%

21– –Underlying–profit–is–AMP’s–key–measure–of–business–profitability,–as–it–smooths–investment–market–volatility–stemming– from–shareholder–assets–invested–in–investment–markets–and–aims–to–reflect–the–trends–in–the–underlying–business– performance–of–the–AMP–group.

22– –AMP–Capital–cash–flows–reflect–amounts–paid–to–or–received–from–customers–into–AMP–Capital–products.–AMP–Capital– cash–flows–are–shown–net–of–fees–and–taxes.

3.4 Business update

On–25–October–2013,–AMP–Limited–reported–its– third–quarter–cashflows–and–provided–an–update–on– its–Wealth–Protection–business–for–the–third–quarter– to–30–September–2013.–AMP–reported–experience– losses–for–Q3–13–of–$24–million–compared–with–Q3– 12–experience–losses–of–$37–million.

AMP–has–brought–forward–its–year-end–review–of– experience–for–those–product–areas–that–have–the– potential–to–impact–the–FY–13–operating–results.– While–this–review–is–yet–to–be–completed,–AMP– expects–to–revise–its–incurred–but–not–reported– reserves–for–the–group–insurance–business–and–its– best–estimate–lapse–assumptions–for–the–NMLA– income–protection–book,–which–are–expected–to– have–a–negative–impact–on–both–the–Q4–and–the– FY–13–operating–results.

The–trend–in–lapse–experience–in–the–NMLA– income–protection–book–has–continued–to–worsen–

in–Q3–13–and–as–a–result–AMP–will–strengthen–its– lapse–assumptions–as–part–of–its–year-end–review.

In–total,–these–two–adjustments–are–expected– to–result–in–$55–to–$65–million–reduction–in– AMP’s–operating–results–for–Q4–13,–in–addition– to–any–further–experience–outcomes–in–the– fourth–quarter.

Further–changes–in–assumptions–across–the–life– insurance–portfolio–are–likely–at–31–December– 2013–which–could–lead–to–adjustments–to–the– embedded–value–of–the–business–but–are–not– expected–to–impact–the–FY–13–operating–results.

AMP–regards–improving–the–performance–of–the– Wealth–Protection–business–as–one–of–its–highest– priorities–and–continues–to–implement–short–and– medium–term–actions–to–improve–claims–and– lapse–experience.

48

AMP Subordinated Notes 2

Section 3 About AMP and the AMP group

3.5 Simplified corporate structure

A–simplified–structure–of–the–AMP–group–is–as–follows:

==> picture [426 x 243] intentionally omitted <==

----- Start of picture text -----

AMP Limited
(Issuer)
AMP Bank Ltd AMP Group Holdings Ltd
AMP Group Finance
AMP Holdings Ltd Services Ltd
National Mutual Funds AMP Life Ltd The National Mutual Life AMP Capital
Management (Global) Ltd Association of Australasia Ltd Holdings Ltd
----- End of picture text -----*

  • *– –AMP–Capital–Holdings–Limited–is–owned–85–per–cent–by–AMP–Holdings–Ltd–and–15–per–cent–by–Mitsubishi–UFJ–Trust–and– Banking–Corporation–(MUTB)–as–part–of–the–strategic–business–and–capital–alliance–between–AMP–Capital–and–MUTB.

A–number–of–intermediary–holding–companies–and–other–companies–not–relevant–to–AMP–Notes–2–have– been–excluded–from–the–simplified–structure–chart.

3.6 The AMP group operational structure

AMP–group–has–significant–operations–in– investment–management,–financial–advice,– wealth–protection–and–wealth–management– including–a–small–banking–operation.–AMP–group– currently–has–two–primary–business–units:

  • –– AMP–Financial–Services–(AFS)–provides–a– range–of–products–and–services–including– financial–advice,–retail–banking,–insurance,– superannuation–and–funds–administration– in–Australia–and–New–Zealand,–primarily– distributed–through–the–AMP–group’s–aligned– self-employed–financial–advisers,–and–

  • –– AMP–Capital–is–a–diversified–investment– manager,–managing–investments–across–major– asset–classes–including–equities,–fixed–interest,– property,–infrastructure,–multi-manager–and– multi-asset–funds.–On–30–June–2013–AMP–Capital– had–assets–under–management–of–A$131–billion.

With–effect–from–1–January–2014,–AFS–will–cease– to–be–a–business–unit–in–its–own–right.–After–this– time–the–business–lines–making–up–AFS–(Wealth– Management,–Wealth–Protection,–Mature–and– New–Zealand)–will–continue–to–be–reported– separately.–In–addition,–AMP–Bank–will–be–split–out– of–Wealth–Management.

The–business–units–have–access–to–the–AMP– group’s–shared–support–functions–and–the– structure–is–overseen–by–group–management.

3.7 Business lines

3.7.1 AMP Financial Services

AFS–provides–customers–in–Australia–and–New– Zealand–with–financial–planning–and–advice,– superannuation,–retirement–income–and– other–investment–products–for–individuals,– superannuation–services–for–businesses,–income– protection,–disability–and–life–insurance–and– selected–banking–products.–These–products– and–services–are–primarily–provided–through–

49 AMP Subordinated Notes 2

Section 3 About AMP and the AMP group

a–network–of–around–4,300–self-employed– financial–advisers,–as–well–as–through–extensive– relationships–with–independent–financial–advisers.

AFS–has–four–divisions:

  • –– Australian–Wealth–Management–( WM )

  • –– Australian–Wealth–Protection–( WP )

  • –– –Mature–( Mature ),–and

  • –– –New–Zealand–( AFS NZ ).

Australian Wealth Management

WM–provides–customers–with–financial–planning– services–(through–aligned–and–owned–advice– businesses),–platform–(including–self-managed– super–fund–( SMSF ))–administration,–unit-linked– superannuation,–retirement–income–and– managed–investment–products.–Superannuation– products–include–personal–and–employer– sponsored–plans.

The–primary–AFS–distribution–channels–include– AMP–Financial–Planning–( AMPFP ),–Hillross–and– Charter–Financial–Planning,–with–a–number– of–other–distribution–channels–including–ipac– group–advisers,–Tynan–Mackenzie–and–Genesys– group–advisers.

WM–currently–includes–AMP–Bank,–which–is–a– direct–Australian–bank–providing–retail–banking– services–with–a–core–focus–on–high–quality– residential–lending.–AMP–Bank–had–approximately– 100,000–customers,–a–mortgage–book–of– A$12.8–billion–and–a–deposit–book–of–A$8.1–billion– at–30–June–2013.

AMP–Bank–distributes–its–retail–banking–services– to–the–Australian–market,–via–direct–and–third– party–channels–and–seeks–to–leverage–the–AMP– group’s–substantial–network–of–financial–advisers.– AMP–Bank’s–current–product–range–includes–fixed– and–variable–rate–mortgage–loans,–lines–of–credit,– practice–loans–to–financial–advisers,–term–and– at-call–savings–and–investment–accounts,–cash– management,–and–transaction–accounts.

AMP–Group–Holdings–Limited–has–provided–an– unconditional–and–irrevocable–guarantee–in– favour–of–the–creditors–of–AMP–Bank–pursuant–to–a– Guarantee–Deed–Poll–dated–10–April–2008.

Australian Wealth Protection

WP–comprises–personal–and–group–term,– disability–and–income–protection–insurance– products.–Products–can–be–bundled–with–a– superannuation–product–or–held–independently– of–superannuation.

Mature

The–Mature–business–is–the–largest–closed–life– insurance–business–in–Australia.–Mature–AUM– supports–capital–guaranteed–products–(75–per–cent)– and–market–linked–products–(25–per–cent).–Mature– products–include–whole-of-life,–endowment,– investment–linked,–investment–account,– retirement–savings–account,–eligible–rollover– fund–(ERF),–annuities,–insurance–bonds,–personal– superannuation–and–guaranteed–savings–accounts.– All–products–in–Mature–are–closed–to–new–business– with–the–exception–of–the–AMP–branded–ERF.

New Zealand

AFS–NZ–provides–tailored–financial–products–and– solutions–to–New–Zealanders–through–the–largest– network–of–accredited–financial–advisers–in–New– Zealand.–AFS–NZ–comprises–a–risk–insurance– business–(both–contemporary–and–mature)– and–a–growing–wealth–management–business– driven–by–KiwiSaver.–AFS–NZ’s–risk–business– is–the–second–largest–by–market–share–and–is– complemented–by–the–industry’s–largest–wealth– management–business.–

3.7.2 AMP Capital

AMP–Capital–is–one–of–Asia–Pacific’s–largest– diversified–investment–managers,–managing– $131–billion–in–assets–for–domestic–and– international–investors.–Through–a–team–of– in-house–investment–professionals–and–a–carefully– selected–global–network–of–investment–partners,– AMP–Capital–invests–in–equities,–fixed–interest,– property,–infrastructure,–multi-manager–and– multi-asset–funds.–AMP–Capital–also–provides– commercial,–industrial–and–retail–property– management–services.–AMP–Capital–has– established–operations–in–Australia–and–New– Zealand–and–a–growing–international–presence– with–offices–in–Bahrain,–China,–Hong–Kong,–India,– Japan,–Luxembourg,–the–United–Kingdom–and–the– United–States,–allowing–it–to–source–competitive– offshore–opportunities.

In–March–2012,–AMP–Capital–formed–a–strategic– business–and–capital–alliance–with–a–leading– Japanese–bank,–Mitsubishi–UFJ–Trust–and– Banking–Corporation.–The–alliance–has–enhanced– AMP–Capital’s–growth–opportunities–in–Asia– and–significantly–expanded–its–distribution– capabilities–in–Japan.–MUTB–holds–a–15–per– cent–minority–interest–in–AMP–Capital–Holdings– Limited,–the–parent–company–of–the–AMP–Capital– group–of–companies.

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Section 3 About AMP and the AMP group

3.8 Strategy

The–AMP–group–is–capitalising–on–its–strengthened– competitive–position–following–the–merger–with– the–Australian–and–New–Zealand–business–of– AMP–AAPH–(formerly–known–as–AXA–Asia–Pacific– Holdings)–to–help–it–better–deliver–on–its–promise:– helping–people–own–tomorrow.–

The–AMP–group–continues–to–investigate–and– assess–a–range–of–corporate–initiatives–consistent– with–its–strategic–priorities–both–domestically– and–internationally–as–they–arise,–including– acquisitions,–divestments,–mergers,–joint–ventures– and–strategic–alliances–(which,–if–completed,– could–have–a–material–impact–on–the–AMP– group).–The–AMP–group–also–continues–to–explore– opportunities–for–further–organic–growth–in– existing–and–related–businesses–as–an–avenue–of– growth–and–diversification.

The–AMP–group’s–strategic–priorities–are–to– continue–investment–in:

> Reshaping the Australian business

With–the–integration–of–AXA–largely–complete,– the–AMP–group–is–now–increasing–the–scale– and–pace–of–change–in–its–Australian–business– to–better–respond–to–changing–consumer– behaviour–and–on-going–margin–pressures.– In–1H13,–the–AMP–group–created–the–new–role– of–Chief–Customer–Officer,–reporting–to–the– CEO–to–lead–this–work.

In–addition,–the–AMP–group–is–putting–in– place–a–new–three-year–business–efficiency– program–to–redirect–investment–to–where– customers–value–it–most,–as–well–as–reduce– the–AMP–group’s–overall–cost–base.–Savings–are– expected–to–come–from:

  • –– rationalising–product–duplication–and– construction–to–better–utilise–scale

  • –– increased–use–of–cloud–computing

  • –– automation,–including–increased– self-service–opportunities–for–customers

  • –– improving–back–office–efficiency,–and

  • –– greater–office–space–efficiency.

One-off–costs–for–the–program–will–be–funded– through–a–combination–of–future–retained– earnings,–capital–surplus–and–the–dividend– reinvestment–program.

  • New domestic growth opportunities, such as AMP SMSF, the Horizons Academy and the North platform

The–AMP–group–continues–to–invest–in–areas– where–it–sees–profitable–growth,–such–as– SMSF.–After–a–year–in–operation,–its–AMP– SMSF–business–is–one–of–the–leaders–in–the– Australian–SMSF–administration–market.

The–AMP–Horizons–Academy–continues–to– successfully–recruit,–train–and–educate–new– advisers.–More–than–600–financial–advisers– have–graduated–from–the–program–since– it–began–in–2007.–In–1H13,–the–Academy– welcomed–two–new–intakes–to–the–program.–

The–AMP–group–continued–to–upgrade–its– popular–North–platform–during–1H13,–with– its–cash–flows–almost–tripling–over–1H12–to– $1.9–billion.

> Targeted international expansion through AMP Capital

AMP–Capital’s–key–priorities–are–to–generate– revenue–growth–through:

  • –– delivering–outstanding–investment– outcomes–to–clients

  • –– building–a–differentiated–client–experience– by–driving–strong–client–engagement

  • –– –partnering–effectively–with–AFS–to–deliver– investment–solutions–for–retail,–SMSF–and– corporate–super–customers

  • –– –expanding–the–global–pension–fund–client– base,–and

  • –– –building–preferential–distribution– partnerships–in–select–Asian–markets,– particularly–Japan–and–China.–

At–1H13,–7–per–cent–of–AMP–Capital’s–AUM– was–sourced–from–international–investors.– This–includes–A$5.6–billion–it–manages–for– clients–in–Japan.–AMP–Capital’s–business– alliance–with–MUTB–has–helped–expand–its– distribution–reach–in–Japan.–

AMP–continues–to–explore–opportunities– internationally–through–acquisitions–and– alliances–(which,–if–completed,–could–have– a–material–impact–on–the–AMP–group).–In– addition–to–its–business–alliance–in–Japan– with–MUTB,–AMP–has–a–particular–focus– on–opportunities–to–partner–in–investment–

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Section 3 About AMP and the AMP group

management–and–pensions–in–China,–where– AMP–has–had–a–presence–since–1997–and– has–a–continuing–strategic–relationship–with– China–Life.–In–September–2013,–AMP–Capital– announced–a–China–funds–management–joint– venture–with–China–Life.–The–joint–venture– company,–China–Life–AMP–Asset–Management– Company–Limited,–will–offer–retail–and– institutional–investors–in–China–access–to– leading–investment–solutions,–initially–in– domestic–listed–equities–and–fixed–income.

3.9 Regulation

As–a–provider–of–banking,–life–insurance–and– superannuation–products,–the–AMP–group–is– subject–to–ongoing–oversight–by–financial–services– regulators–in–the–markets–in–which–it–operates.

The–principal–regulators–that–supervise–and– regulate–the–activities–of–the–AMP–group–and– the–activities–of–the–businesses–and–funds–that– members–of–the–AMP–group–manage–are–APRA,– RBA,–ASIC,–ASX,–ACCC–and–AUSTRAC.

3.9.1 Australia

APRA

APRA–regulates–companies–operating–in–the– Australian–financial–services–industry.–APRA–has– established–prudential–standards–for–all–general– insurers,–banks–and–life–insurance–companies–and,– as–at–the–date–of–this–prospectus,–is–in–the–process– of–developing–standards–for–conglomerate–groups– (due–for–implementation–in–January–2015).

From–1–January–2013,–the–AMP–group–was– required–to–comply–with–the–Basel–III–framework– (for–Australian–authorised–deposit-taking– institutions)–and–APRA’s–revised–capital–standards– for–regulated–general–insurers–and–life–insurers,– known–as–‘LAGIC’.–

The–Basel–III–reforms–included–stricter–eligibility– criteria–for–capital–instruments,–introduction–of– capital–conservation–and–counter-cyclical–buffers.– The–LAGIC–reforms–are–aimed–at–improving–the– risk–sensitivity–of–capital–standards.

Under–the–revised–capital–standards,–APRA– classifies–regulatory–capital–into–two–tiers.– Tier–1–Capital–represents–‘going-concern–capital’– and–comprises–the–highest–quality–capital–

elements.–It–is–divided–into–Common–Equity– Tier–1–Capital–and–Additional–Tier–1–Capital.– Common–Equity–Tier–1–Capital–is–recognised– from–the–perspective–of–a–financial–institution– as–the–highest–quality–component–of–capital.– Common–Equity–Tier–1–Capital–comprises– paid-up–ordinary–shares,–retained–earnings,– other–disclosed–reserves–permitted–for–inclusion– by–APRA–and–certain–other–items–permitted–by– APRA–less–regulatory–adjustments–applied–in–the– calculation–of–Common–Equity–Tier–1–Capital.– The–components–of–Tier–1–Capital–that–are–not– common–equity–and–which–do–not–satisfy–all– of–the–criteria–for–inclusion–in–Common–Equity– Tier–1–Capital–are–referred–to–as–Additional–Tier–1– Capital.–Tier–2–Capital–represents–other–elements– which–fall–short–of–some–of–the–characteristics– of–Tier–1–Capital–but–which–contribute–to–the– overall–strength–of–the–regulated–company–as–a– going–concern.

The–capital–standards–being–developed– for–conglomerate–groups–are–expected–to– be–implemented–on–1–January–2015.–Draft– standards–have–been–released–covering– capital–management,–group–governance,–risk– management–and–risk–exposures.–It–is–expected– that–the–capital–standards–will–be–based–on–a– Common–Equity–Tier–1–Capital–regime,–which– means–that–eligible–capital–for–the–purposes–of– those–standards–will–be–required–to–be–in–the–form– of–common–equity–only,–subject–to–transitional– arrangements–confirmed–by–APRA–(which–are– described–in–section–2.5).

3.9.2 New Zealand

Reserve Bank of New Zealand

The–Reserve–Bank–of–New–Zealand–regulates– the–AMP–group’s–life–insurance–businesses– in–New–Zealand.–Regulations–in–relation–to– these–businesses–have–been–significantly– revised–in–recent–years,–including–new–licensing– requirements,–required–capital–methodologies– and–reinsurance–purchase–requirements–(up–to–a– 1-in-1,000–year–event).

The–new–regulations–are–expected–to–have– limited–impact–on–the–AMP–group’s–New–Zealand– business–as–existing–governance–frameworks– have–been–adopted–for–consistency–with–the–new– regulatory–requirements–in–effect.

52

AMP Subordinated Notes 2

Section 4

Financial information

This section sets out information about the financial condition of AMP and the AMP group.

  • 4.1 Introduction

  • 4.2 Basis of preparation

  • 4.3 Summary and selected financial information of AMP group

  • 4.4 Selected information of AMP Ltd parent entity (standalone) 4.5 Capital management

53

AMP Subordinated Notes 2

Section 4 Financial information

4.1 Introduction

This–section–sets–out–information–about–the–financial–condition–of–AMP–and–the–AMP–group.–The– information–provided–to–you–includes:–

  • –– summary–financial–and–capital–information–for–the–AMP–group

  • –– pro–forma–financial–information–demonstrating–the–effect–of–the–Offer–on–the–AMP–group

  • –– summary–financial–information–for–AMP–on–a–standalone–basis,–and

  • –– –pro–forma–capital–information–demonstrating–the–effect–of–the–Offer–on–the–AMP–group.

4.2 Basis of preparation

This–section–provides–summary–actual–historical–financial–and–capital–information–and–summary–pro– forma–financial–and–capital–information–for–AMP–and–the–AMP–group.–The–pro–forma–financial–and– capital–information–has–been–included–to–illustrate–the–financial–and–capital–position–as–at–30–June–2013,– assuming–AMP–Notes–2–were–issued–on–that–date,–together–with–a–reinvestment–of–20–per–cent[23] –of–A$– AMP–Notes.–

The–AMP–group–summary–actual–financial–information–presented–in–this–section–has–been–extracted– from–the–AMP–group’s–reviewed–consolidated–half-yearly–financial–report–for–the–half-year–ended– 30–June–2013–and–the–audited–annual–financial–report–for–the–year–ended–31–December–2012–including–the– comparatives–for–the–year–ended–31–December–2011.–Where–required,–prior–periods–have–been–restated–to– be–consistent–with–current–accounting–policies.–These–reports–are–available–at–amp.com.au.

The–pro–forma–financial–information–of–AMP–has–been–derived–from–the–AMP–group’s–consolidated– statement–of–financial–position–presented–in–its–financial–report–for–the–half-year–ended–30–June–2013– under–AMP–accounting–policies,–after–adjusting–for–pro–forma–transactions–to–reflect–the–impact–of–the– completion–of–the–Offer.

The–financial–and–capital–information–has–been–prepared–in–accordance–with–the–measurement–and– recognition–principles,–but–not–all–of–the–presentation–and–disclosure–requirements,–of–the–Australian– Accounting–Standards,–the–Company’s–accounting–policies–and–APRA’s–prudential–standards.–The– presentation–currency–of–the–summary–financial–and–capital–information–is–Australian–dollars.

Investors–should–note–that–past–performance–is–not–a–reliable–indicator–of–future–performance.

23– –This–assumption–is–AMP’s–best–estimate–of–participation–in–the–Reinvestment–Offer,–having–regard–to–AMP’s– understanding–of–the–results–of–similar–reinvestment–offers–for–Australian–retail–regulatory–capital–securities–in–light–of– the–features–and–circumstances–of–the–Reinvestment–Offer.

54

AMP Subordinated Notes 2

Section 4 Financial information

4.3 Summary and selected financial information of AMP group

4.3.1 Historical statement of comprehensive income

==> picture [427 x 59] intentionally omitted <==

----- Start of picture text -----

Restated [(i)] Restated [(i)]
12 months to 12 months to 6 months to
31 Dec 2011 31 Dec 2012 30 Jun 2013
$m $m $m
----- End of picture text -----

Income and expenses of shareholders, policyholders,
external unitholders and non-controlling interests
Lifeinsurancepremiumandrelatedrevenue 1,877 2,218 1,103
Feerevenue 1,962 2,252 1,166
Otherrevenue 378 696 317
Investmentgainsand(losses) 1,548 12,258 6,488
Shareofprofitor(loss)ofassociatesaccountedforusing
theequitymethod		 4 5 7
Lifeinsuranceclaimsandrelatedexpenses (1,790) (2,048) (1,006)
Operatingexpenses (3,437) (4,202) (1,957)
Financecosts (917) (889) (392)
Movementinexternalunitholderliabilities 225 (969) (733)
Changeinpolicyholderliabilities
–lifeinsurancecontracts 25 (934) 16
–investmentcontracts 868 (7,000) (4,236)
Incometax(expense)credit 4 (688) (328)
Profit for theperiod 747 699 445
Profit attributable to shareholders of AMP Limited 759 689 393
Profit(loss)attributabletonon-controllinginterests (12) 10 52
Profit for theperiod 747 699 445

(i)– Prior–periods–have–been–restated–retrospectively–for–changes–in–Accounting–Standards–adopted–in–2013:–

––––As–a–result–of–adopting–AASB–10–Consolidated–Financial–Statements,–several–entities–previously–not–consolidated–are– now–assessed–to–be–controlled–by–the–AMP–group–and–have–been–consolidated–into–the–results–of–the–AMP–group–from– 1–January–2013,–with–retrospective–adjustments–for–2012–and–2011.–In–accordance–with–the–transition–requirements– of–AASB–10,–a–number–of–entities–have–been–treated–as–acquired–on–31–December–2011,–which–resulted–in–a–gain–on– acquisition–of–$81m–after–tax.

––––AASB–119–Employee–Benefits–requires–investment–income–of–defined–benefit–plans–to–be–allocated–between–Profit– or–loss–and–Other–comprehensive–income.–From–1–January–2013,–with–retrospective–adjustments–for–2012–and–2011,– the–revised–AASB119–has–changed–the–method–in–which–investment–income–is–allocated–between–Profit–or–loss–and– Other–comprehensive–income–but–does–not–change–Total–comprehensive–income.

55

AMP Subordinated Notes 2

Section 4 Financial information

==> picture [427 x 64] intentionally omitted <==

----- Start of picture text -----

Restated Restated
12 months to 12 months to 6 months to
31 Dec 2011 31 Dec 2012 30 Jun 2013
Other comprehensive income $m $m $m
----- End of picture text -----

Items that may be reclassified subsequently to
profit or loss
Available-for-salefinancialassets
–gainsand(losses)infairvalueofavailable-for-sale
financialassets		 – 5 2
– 5 2
Cashflowhedges
–gainsand(losses)infairvalueofcashflowhedges (34) (44) (5)
–incometax(expense)credit 11 13 2
–transferredtoprofitfortheperiod 16 20 13
–transferredtoprofitfortheperiod–incometax
(expense)credit		 (5) (6) (5)
(12) (17) 5
Exchangedifferenceontranslationofforeignoperations
–exchangegains(losses) 3 30 45
–transferredtoprofitfortheperiod 2 3 –
–transferredtoprofitfortheperiod–incometax
(expense)credit		 – (1) –
5 32 45
Revaluationofhedgeofnetinvestments
–gainsand(losses)infairvalueofhedgeofnet
investments		 3 (1) (2)
–transferredtoprofitfortheperiod–gross – (3) –
–transferredtoprofitfortheperiod–incometax
(expense)credit		 – 1 –
3 (3) (2)
Items that will not be reclassified subsequently to
profit or loss
Definedbenefitplans
–actuarialgainsand(losses) (163) 73 109
–incometax(expense)credit 49 (22) (33)
(114) 51 76
Owner-occupiedpropertyrevaluation
–gains(losses)invaluationofowner-occupiedproperty 9 12 10
–incometax(expense)credit (1) (1) (1)
8 11 9
Other comprehensive income for theperiod (110) 79 135
Total comprehensive income for theperiod 637 778 580
Total comprehensive income attributable to
shareholders of AMP Limited		 649 768 528
Totalcomprehensiveincome(loss)attributableto
non-controllinginterests		 (12) 10 52
Total comprehensive income for theperiod 637 778 580

56

AMP Subordinated Notes 2

Section 4 Financial information

4.3.2 Historical and pro-forma statement of financial position

==> picture [427 x 58] intentionally omitted <==

----- Start of picture text -----

Restated [(i)] Restated [(i) ] As at Pro-forma
As at As at 30 Jun As at
31 Dec 2011 31 Dec 2012 2013 Adjustments [(ii)] 30 Jun 2013
$m $m $m $m $m
----- End of picture text -----

Assets
Cashandcashequivalents 4,816 4,388 5,111 252 5,363
Receivables 2,316 2,077 2,485 – 2,485
Currenttaxassets 248 22 68 – 68
Inventoriesandotherassets 294 210 215 – 215
Investmentsinfinancialassets 90,682 101,132 103,241 – 103,241
Investmentproperties 7,424 6,508 6,678 – 6,678
Investmentsinassociatesaccounted
forusingtheequitymethod		 115 81 89 – 89
Property,plantandequipment 1,016 1,040 1,026 – 1,026
Deferredtaxassets 1,125 1,217 1,161 – 1,161
Intangibles 4,677 4,502 4,427 – 4,427
Assetsofdisposalgroups – 187 37 – 37
Total assets of shareholders of
AMP Limited, policyholders,
external unitholders and		 112,713 121,364 124,538 252 124,790
non-controlling interests
Liabilities
Payables 2,332 2,288 2,109 – 2,109
Currenttaxliabilities 86 82 229 – 229
Provisions 584 614 537 – 537
Otherfinancialliabilities 2,607 2,337 2,637 – 2,637
Borrowings 12,373 12,362 13,182 – 13,182
Subordinateddebt 949 1,111 1,120 252 1,372
Deferredtaxliabilities 961 1,425 1,538 – 1,538
Externalunitholderliabilities 8,126 9,702 8,763 – 8,763
Lifeinsurancecontractliabilities 24,399 25,055 24,796 – 24,796
Investmentcontractliabilities 52,940 58,385 61,472 – 61,472
Definedbenefitplanliabilities 370 286 171 – 171
Liabilitiesofdisposalgroups – 74 5 – 5
Total liabilities of shareholders
of AMP Limited, policyholders,
external unitholders and		 105,727 113,721 116,559 252 116,811
non-controlling interests
Net assets of shareholders of AMP
Limited and non-controlling interests		 6,986 7,643 7,979 – 7,979
Equity
Contributedequity 9,074 9,333 9,486 – 9,486
Reserves (2,540) (2,157) (2,087) – (2,087)
Retainedearnings 364 332 448 – 448
Total equity of shareholders of
AMP Limited		 6,898 7,508 7,847 – 7,847
Non-controllinginterests 88 135 132 132
Total equity of shareholders of AMP
Limited and non-controlling interests		 6,986 7,643 7,979 – 7,979

(i)– Prior–periods–have–been–restated–retrospectively–for–changes–in–Accounting–Standards–adopted–in–2013.–As–a–result–of– adopting–AASB–10–Consolidated–Financial–Statements,–several–entities–previously–not–consolidated–are–now–assessed– to–be–controlled–by–the–AMP–group–and–have–been–consolidated–into–the–results–of–the–AMP–group–from–1–January– 2013,–with–retrospective–adjustments–for–2012–and–2011.

(ii)– These–adjustments–assume–a–$300m–Offer–and–that–holders–of–20%–in–aggregate–of–the–face–value–of–the– A$–AMP–Notes–will–participate–in–the–Reinvestment–Offer,–less–transaction–fees.–The–actual–rate–of–participation–may– be–higher–or–lower–than–this–assumption.–Assuming–a–$300m–Offer,–if–the–participation–rate–is–higher–than–20%–the– adjustment–will–be–lower,–and–if–it–is–lower–than–20%–the–adjustment–will–be–higher.

57

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Section 4 Financial information

4.3.3 Historical reconciliation of segment profit after tax

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----- Start of picture text -----

Restated [(i)] Restated [(i)]
12 months to 12 months to 6 months to
31 Dec 2011 31 Dec 2012 30 Jun 2013
$m $m $m
----- End of picture text -----

Reconciliation of segmentprofit after tax
AustralianWealthManagement 322 347 196
AustralianWealthProtection 215 190 64
AustralianMature 153 167 85
AMPFinancialServicesNewZealand 76 73 46
AMPFinancialServices 766 777 391
AMPCapital 83 99 51
Business unit operating earnings 849 876 442
Groupofficecosts (59) (66) (32)
Total operating earnings 790 810 410
Underlyinginvestmentincome 183 226 66
Interestexpenseoncorporatedebt (82) (86) (36)
AMPLimitedtaxlossrecognition 16 – –
Underlying Profit 907 950 440
Otheritems 16 21 (5)
AMPAAPHintegrationcosts (105) (128) (31)
AmortisationofAMPAAPHacquiredintangibleassets (75) (99) (47)
Profit before market adjustments and accounting 743 744 357
mismatches
Marketadjustment–investmentincome (50) (12) 3
Marketadjustment–annuityfairvalue 13 (9) 10
Marketadjustment–riskproducts 53 (4) 5
Accountingmismatches – (30) 18
Profit attributable to shareholders of AMP Limited 759 689 393

(i)– Prior–periods–have–been–restated–retrospectively–for–changes–in–Accounting–Standards–adopted–in–2013.–Refer–to– footnote–to–Statement–of–comprehensive–income–for–further–details.

4.4 Selected information of AMP Ltd parent entity (standalone)

4.4.1 Historical statement of comprehensive income

12 months to
31 Dec 2011
$m		 12 months to
31 Dec 2012
$m		 6 months to
30 Jun 2013
$m
Income and expenses
Servicefeerevenuefromsubsidiaries 16 12 6
Dividendsfromsubsidiaries 280 295 1,244
Interestrevenue 3 2 1
Operatingexpenses (16) (13) (7)
Incometax(expense)credit 69 5 2
Profit for theperiod 352 301 1,246
Other comprehensive income for theperiod – – –
Total comprehensive income for theperiod 352 301 1,246

58

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4.4.2 Historical and pro forma condensed statement of financial position

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----- Start of picture text -----

Pro-forma
As at As at As at As at
31 Dec 2011 31 Dec 2012 30 Jun 2013 Adjustments [(i)] 30 Jun 2013
$m $m $m $m $m
----- End of picture text -----

Assets
Advancestosubsidiaries 767 620 1,604 – 1,604
Othercurrentassets 4 60 6 300 306
Investmentinsubsidiaries 10,807 10,807 10,807 – 10,807
Othernon-currentassets 333 65 62 – 62
Total assets 11,911 11,552 12,479 300 12,779
Liabilities
Currentliabilities 279 63 34 – 34
Non-currentliabilities 2 2 2 300 302
Total liabilities 281 65 36 300 336
Net assets 11,630 11,487 12,443 – 12,443
Equity
Contributedequity 9,297 9,610 9,685 – 9,685
Reserve 10 15 16 – 16
Retainedearnings 2,323 1,862 2,742 – 2,742
Total equity 11,630 11,487 12,443 – 12,443

(i)– Transaction–costs–are–paid–by–AMP–Finance–Services.–Therefore,–the–subordinated–debt–is–recognised–gross–(ie–$300m)– by–AMP–Ltd–Parent–entity–(standalone).

4.5 Capital management

The–AMP–group–holds–capital–to–protect–customers,–creditors–and–shareholders–against–unexpected–losses.– AMP’s–businesses–and–the–AMP–group–maintain–capital–targets–(target–surplus),–reflecting–their–material– risks–(including–financial–risk,–insurance–and–product–risk–and–operational–risk)–and–AMP–group’s–risk–appetite.– The–target–surplus–is–a–management–guide–to–the–level–of–excess–capital–that–the–AMP–group–seeks–to–carry– to–reduce–the–risk–of–breaching–minimum–regulatory–requirements–(MRR).–In–addition,–the–participating– business–of–the–life–insurance–companies–are–managed–to–target–a–very–high–level–of–confidence–that–the– business–is–self-supporting–and–that–there–are–sufficient–assets–to–support–policyholder–liabilities.

The–main–MRR–for–AMP–group–arise–from:

  • –– AMP–Life–and–NMLA–––capital–adequacy–requirements–as–specified–under–the–APRA–Life–Insurance– Prudential–Standards

  • –– AMP–Bank–––capital–requirements–as–specified–under–the–APRA–ADI–Prudential–Standards

  • –– AMP–Capital–and–other–ASIC–regulated–businesses–––capital–requirements–under–AFSL.

In–addition–to–managing–the–level–of–capital–resources,–the–AMP–group–also–aims–to–optimise–the–mix– of–capital–resources–to–minimise–the–cost–of–capital–and–maximise–shareholder–value.–The–AMP–group’s– capital–management–plan–forms–part–of–the–broader–strategic–planning–process.

The–AMP–group’s–capital–resources–include–ordinary–equity–and–interest-bearing–liabilities.–The–AMP–group– excludes–the–interest–bearing–liabilities–of–its–banking–subsidiary,–AMP–Bank,–life–insurance–subsidiaries– (AMP–Life–and–NMLA)–and–controlled–investment–subsidiaries–and–trusts–from–the–AMP–group–capital– resources.–Included–within–interest-bearing–liabilities–are–subordinated–debt–instruments–that–qualify–as– regulatory–capital–under–APRA’s–prudential–standards.

59

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As–at–30–June–2013–the–shareholder–regulatory–capital–resources–above–MRR–were–$1,703–million– (pro–forma–LAGIC–31–December–2012:–$1,372–million).–Shareholder–regulatory–capital–resources–above– MRR–will–vary–throughout–the–year–due–to–various–factors–including–investment–market–movements,– changes–to–experience–and–assumptions,–dividend–payments–and–the–retention–of–profits.–

AMP–Notes–2–will–not–be–recognised–as–regulatory–capital–of–AMP–for–APRA–purposes,–subject–to–the– transitional–arrangements–described–in–section–2.5.–This–is–consistent–with–the–draft–prudential–standards– issued–in–May–2013–relating–to–the–supervision–of–conglomerate–groups.–The–issue–of–AMP–Notes–2–and– the–Reinvestment–Offer–illustrated–in–the–table–below–will,–net–of–transaction–costs,–reduce–AMP–group’s– regulatory–capital.

AMP–expects–that–a–substantial–part––of–the–proceeds–of–the–issue–of–AMP–Notes–2–will–be–used–to–fund– Tier–2–Capital–of–one–or–more–Regulated–Entities–within–the–AMP–group.–This–will–reduce–MRR–and–increase– shareholder–regulatory–capital–resources–above–MRR.––

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----- Start of picture text -----

Pro forma LAGIC [(i)] Pro-forma
As at As at As at
31 Dec 2012 30 Jun 2013 Adjustment 30 Jun 2013
$m $m $m $m
----- End of picture text -----

AMPShareholderequity(ii) 7,744 7,955 – 7,955
AllowablehybridTier1instruments – – – –
Lessgoodwillandotherintangibles(iii) (3,808) (3,807) (8) (3,815)
Lessotherdeductions(iv) (1,867) (1,858) – (1,858)
Common Equity Tier 1 Capital 2,069 2,290 (8) 2,282
AMPNotes(v) 296 296 (40) 256
AMPNotes2 – – 300 300
Othersubordinateddebt 583 683 – 683
Term subordinated debt 879 979 260 1,239
AMPNotes2(noteligibleasregulatory
capitalatAMPgroup)(vi)		 – – (260) (260)
Total regulatory capital 2,948 3,269 (8) 3,261
Totalcapitalresources 9,323 9,634 260 894
Intangibles (3,808) (3,807) (8) (3,815)
Tangiblecapitalresources 5,515 5,827 252 6,079
Seniordebt (700) (700) – (700)
AMPNotes2(noteligibleasregulatory
capitalatAMPgroup)		 – – (260) (260)
Otherdeductions(iv) (1,867) (1,858) – (1,858)
Regulatorycapitalresources 2,948 3,269 (8) 3,261
Shareholderminimumregulatorycapital
requirements(MRR)		 1,576 1,566 – 1,566
Shareholder regulatory capital
resources above MRR		 1,372 1,703 (8) 1,695

(i)– 31–December–2012–capital–position–shown–after–allowing–for–the–impact–of–LAGIC,–for–illustrative–purposes,– which–applied–from–1–January–2013–and–reduced–surplus–capital–by–$272–million.–

(ii)– –Shown–after–accounting–mismatches,–cash–flow–hedges–reserves,–and–other–adjustments.–

(iii)– –Intangibles–include–transaction–costs.–

(iv)– –Other–deductions–include–LAGIC–regulatory–adjustments–and–AMP–Bank–securitisation–deductions.–

(v)– Participation–in–the–Reinvestment–Offer–is–estimated–at–$40m,–being–20%–of–the–face–value–of–the–A$–AMP–Notes.–The– actual–rate–of–participation–may–be–higher–or–lower–than–this–assumption.–Assuming–a–$300m–Offer,–if–the–participation– rate–is–higher–than–20%–the–adjustment–will–be–lower,–and–if–it–is–lower–than–20%–the–adjustment–will–be–higher.

(vi)– To–the–extent–AMP–Notes–2–are–not–used–to–fund–the–refinancing–of–the–AMP–Notes,–they–will–not–count–towards–AMP– group’s–regulatory–capital–base.

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Section 5

Investment risks

By investing in AMP Subordinated Notes 2 you will be exposed to risks associated with AMP, AMP group’s business and AMP Subordinated Notes 2.

This section of the prospectus will help you understand some of the risks associated with an investment in AMP Subordinated Notes 2. Section 5.1 describes some of the risks that are specific to AMP Subordinated Notes 2 and section 5.2 describes some of the risks that relate to an investment in AMP and the AMP group. Many of these risks are outside the control of AMP and its directors. It is important that you consider whether an investment in AMP Subordinated Notes 2 is suitable for you before applying for AMP Subordinated Notes 2.

  • 5.1 Risks associated with investing in AMP Subordinated Notes 2

  • 5.2 Risks associated with AMP and the AMP group 5.3 Risks relating to the merger of AMP with AMP AAPH’s Australian businesses

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5.1 Risks associated with investing in AMP Subordinated Notes 2

5.1.1 AMP Subordinated Notes 2 are unsecured and subordinated obligations

AMP–Notes–2–are–unsecured–and–subordinated– notes–to–be–issued–by–AMP.

AMP–Notes–2–are–not–secured–over–any–of–the– AMP–group’s–assets.–They–are–not–deposit– liabilities–of–AMP–Bank–or–any–other–member–of– the–AMP–group–and–are–not–policies–with–any– member–of–the–AMP–group–for–the–purposes– of–the–Life–Insurance–Act.–They–are–also–not– investments–in–any–superannuation–or–other–fund– managed–by–a–member–of–the–AMP–group.

AMP–Notes–2–are–claims–on–AMP.–AMP–is–a– non-operating–holding–company.–A–substantial– majority–of–its–assets–are–its–investments–in– other–members–of–the–AMP–group.–Its–claims– in–respect–of–those–investments–rank–behind– depositors,–policyholders–and–other–creditors–in– a–winding-up–of–those–companies.–Holders–have– no–claim–on–any–other–members–of–the–AMP– group–for–payment–of–any–amount–in–respect–of– AMP–Notes–2.–

On–a–winding-up–of–AMP–(if–a–Non-Viability– Trigger–Event–has–not–occurred),–AMP–Notes– 2–rank–for–payment–behind–Senior–Creditors.– Holders–will–lose–the–money–invested–in–AMP– Notes–2,–and–any–Interest–due–and–unpaid–at–that– time,–if–there–are–insufficient–assets–to–satisfy– Senior–Creditors–in–a–winding-up–of–AMP.–

If–a–Non-Viability–Trigger–Event–occurs–and–AMP– Notes–2–are–Converted,–Holders–will–rank–equally– with–other–holders–of–AMP–Ordinary–Shares–for– the–return–of–any–surplus–assets–in–a–winding-up– of–AMP–after–payment–of–all–creditors–and–holders– of–any–preference–shares.–If–the–AMP–Ordinary– Shares–to–which–certain–Holders–would–have–been– entitled–upon–Conversion–are–issued–to–a–Sale–and– Transfer–Agent,–because–the–Holders–are–either– Ineligible–Holders–or–they–elected–not–to–receive– AMP–Ordinary–Shares,–such–Holders–will–have–the– right–to–receive–the–cash–proceeds–of–the–sale–of– the–AMP–Ordinary–Shares–on–market,–and–will– have–no–claim–against–AMP–or–any–other–member– of–the–AMP–group–in–respect–of–their–AMP–Notes–

2.–If–AMP–Notes–2–are–unable–to–be–Converted– for–any–reason,–they–will–be–immediately–and– irrevocably–Written-off–and–the–rights–of–Holders– under–AMP–Notes–2–will–be–terminated–and– Holders–will–have–no–claim–on–the–assets–of–AMP– or–any–other–member–of–the–AMP–group.

5.1.2 All payments on AMP Subordinated Notes 2 are subject to satisfaction of the Solvency Condition

All–of–AMP’s–obligations–to–make–payments– in–respect–of–AMP–Notes–2–are–subject–to–the– Solvency–Condition–being–satisfied.

If–the–Solvency–Condition–is–not–satisfied,–that–is,– if–AMP–is–not–able–to–pay–its–debts–as–they–become– due–and–payable–and–AMP’s–assets–do–not– exceed–its–liabilities–both–at–the–time–of–making– the–payment–and–immediately–after–making– the–payment,–no–payment–will–be–made.–AMP’s– failure–to–pay–will–not–be–an–Event–of–Default–and– any–unpaid–amount–will–accrue–interest–until–it– is–paid–and–will–be–payable–on–the–first–Interest– Payment–Date–(in–the–case–of–Interest)–or–the– first–date–(in–the–case–of–any–other–amount)–on– which–AMP–may–pay–the–amount–in–compliance– with–the–Solvency–Condition.–However,–if–a– Non-Viability–Trigger–Event–occurs–and–AMP–is– required–to–Convert–or–Write-off–AMP–Notes–2,– AMP’s–accrued–and–future–obligations–to–make– payments–in–respect–of–the–AMP–Notes–2–which– are–required–to–be–Converted–or–Written-off–will– cease,–in–which–case,–Holders–will–have–no–rights– to–recover–any–unpaid–amounts.

5.1.3 Market price of AMP Subordinated Notes 2

The–market–price–of–AMP–Notes–2–may–fluctuate– due–to–various–factors,–including–investor– perceptions,–Australian–and–international– economic–conditions,–changes–in–interest–rates,– credit–margins,–foreign–exchange–rates,–credit– ratings–and–capital–markets,–and–other–factors–that– may–affect–the–AMP–group’s–financial–performance– and–capital–position.–There–is–a–risk–that–one–or– more–of–these–factors–will–cause–the–market–value– of–AMP–Notes–2–to–decline–and–trade–at–a–market– price–below–the–Face–Value.–The–occurrence–of–a– Non-Viability–Trigger–Event–is–also–likely–to–cause– the–market–price–of–AMP–Notes–2–to–decline.

If–credit–spreads–on–debt–securities–widen,–the– Margin–payable–on–AMP–Notes–2–(which–is–

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Section 5 Investment risks

2.65–per–cent–per–annum–as–determined–in–the– Bookbuild)–will–be–less–attractive–to–purchasers–– of–AMP–Notes–2–than–at–the–Issue–Date.– Accordingly,–the–market–price–of–AMP–Notes– 2–may–reduce–to–reflect–the–lower–price–new– investors–are–willing–to–pay–for–AMP–Notes–2–– given–the–below-market–margin.–

The–market–price–of–AMP–Notes–2–may–be–more– sensitive–to–changes–in–interest–rates–and–credit– spreads–than–the–price–of–AMP–Ordinary–Shares–or– comparable–securities–issued–by–members–of–the– AMP–group–or–other–entities.

As–a–result,–Holders–who–wish–to–sell–their–AMP– Notes–2–before–the–Maturity–Date–may–incur– loss–if–AMP–Notes–2–trade–at–a–market–price– below–the–amount–at–which–AMP–Notes–2–were– acquired.–AMP–is–unable–to–forecast–or–guarantee– the–market–price–of–AMP–Notes–2.–Unlike–AMP– Ordinary–Shares,–AMP–Notes–2–do–not–provide– a–material–exposure–to–growth–in–the–AMP– group’s–business.

5.1.4 Liquidity

Although–AMP–intends–to–have–AMP–Notes–2– quoted–on–ASX,–there–is–no–guarantee–that–a– liquid–market–will–develop–for–AMP–Notes–2.– Any–market–for–AMP–Notes–2–may–be–less–liquid– than–the–market–for–AMP–Ordinary–Shares–or– comparable–securities–issued–by–members–of– the–AMP–group–or–other–entities–and–may–be– volatile.–The–market–price–of–AMP–Notes–2–is–likely– to–fluctuate–and,–if–you–wish–to–sell–or–otherwise– transfer–your–AMP–Notes–2,–you–may–be–unable– to–do–so–at–an–acceptable–price,–or–at–all,–if– insufficient–liquidity–exists–in–the–market–for–AMP– Notes–2.–You–may–suffer–loss–as–a–result.

5.1.5 Changes in the Interest Rate

The–Interest–Rate–is–calculated–for–each–Interest– Period–by–reference–to–the–Market–Rate–(being– the–average–of–rates–obtained–from–approved– trading–venues–by–the–Australian–Financial– Markets–Association–as–the–rates–at–which–certain– banks–are–prepared–to–lend–short-term–cash–to– each–other),–which–is–influenced–by–a–number–of– factors–and–varies–over–time.–The–Interest–Rate– will–fluctuate–and–may–increase–or–decrease–over– time–as–a–result–of–movements–in–the–Market– Rate–(see–section–2.2).–AMP–does–not–control– the–Market–Rate–nor–the–means–by–which–it–is– determined,–which–may–change.

As–the–Interest–Rate–fluctuates,–there–is–a–risk–that– it–may–become–less–attractive–when–compared– to–the–rates–of–return–available–on–comparable– securities–issued–by–AMP,–other–members–of–the– AMP–group–or–other–entities.

5.1.6 Conversion on account of a Non-Viability Trigger Event

If–a–Non-Viability–Trigger–Event–occurs,– AMP–may–be–required–to–immediately–and– irrevocably–Convert–some–or–all–AMP–Notes–2– into–AMP–Ordinary–Shares–in–accordance–with–a– Non-Viability–Determination.–This–could–be–at– any–time.–Accordingly,–any–such–Conversion–on– account–of–a–Non-Viability–Trigger–Event–may– occur–on–dates–not–previously–contemplated– by–Holders,–which–may–be–disadvantageous–in– light–of–market–conditions–or–their–individual– circumstances–and–may–not–coincide–with–their– individual–preference–in–terms–of–timing.

Non-Viability Trigger Event

A–Non-Viability–Trigger–Event–occurs–when– APRA–provides–a–written–determination–to–AMP– that–the–conversion–or–write-off–of–Relevant– Subordinated–Instruments–(which–may–include– some–or–all–of–AMP–Notes–2)–in–accordance–with– their–terms–or–by–operation–of–law–is–necessary– because–either:

  • –– without–the–conversion–or–write-off,–or

  • –– without–a–public–sector–injection–of–capital– into,–or–equivalent–capital–support–with– respect–to,–AMP,–

APRA–considers–that–AMP–would–become– non-viable.

Whether–a–Non-Viability–Trigger–Event–will–occur– is–at–the–discretion–of–APRA.–APRA–has–not–given– any–guidance–as–to–how–it–would–determine– non-viability–and–has–indicated–that–it–will–not– publish–further–guidance–on–the–parameters– used–to–determine–non-viability.–As–at–the– date–of–this–prospectus,–APRA–has–not–made–a– determination–of–non-viability.–The–requirements– to–include–non-viability–trigger–events–in–capital– instruments–were–introduced–only–on–1–January– 2013.–Non-viability–could–be–expected–to–include– serious–impairment–of–AMP–and–AMP–group’s– financial–position–and–insolvency,–but–may–not– be–confined–to–solvency–or–capital–measures– and–capital–ratios–and–may–include–other–

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Section 5 Investment risks

matters,–such–as–liquidity.–APRA’s–position–on– these–matters–may–change–over–time.–As–the– occurrence–of–a–Non-Viability–Trigger–Event–is–at– the–discretion–of–APRA,–there–can–be–no–assurance– given–as–to–the–factors–and–circumstances–that– might–give–rise–to–a–Non-Viability–Trigger–Event.

Non-viability–may–be–significantly–impacted–by–a– number–of–factors,–including–factors–which–affect– the–business,–operation–and–financial–condition– of–members–of–the–AMP–group.–For–instance,– systemic–and–non-systemic–macro-economic,– environmental–and–operational–factors,–globally– and–in–Australia–and–New–Zealand–may–affect–the– viability–of–AMP.–

AMP–is–under–no–obligation–to–Holders–under– the–Terms–to–take–steps–(such–as–issuing–new– AMP–Ordinary–Shares)–to–avoid–the–risk–of–a– Non-Viability–Trigger–Event.

If–only–an–amount–of–Relevant–Subordinated– Instruments–is–required–to–be–converted,–AMP– will–determine–the–amount–of–AMP–Notes–2– which–will–be–Converted–and–other–Relevant– Subordinated–Instruments–which–will–be– converted–or–written-off–as–follows:

  • –– first,–AMP–will–convert–or–write-off–all– Relevant–Perpetual–Subordinated–Instruments– before–Converting–the–AMP–Notes–2;–and–

  • –– –second,–if–conversion–or–write-off–of–Relevant– Perpetual–Subordinated–Instruments–is–less– than–the–amount–sufficient–to–satisfy–APRA– that–AMP–would–not–become–non-viable–(and– provided–that–APRA–has–not–withdrawn–the– Non-Viability–Determination–as–a–result–of– the–conversion–or–write-off–of–the–Relevant– Perpetual–Subordinated–Instruments),–AMP– will–Convert–some–or–all–of–AMP–Notes–2–and– will–convert–or–write-off–other–Relevant–Term– Subordinated–Instruments–in–an–amount– which,–when–added–to–the–amount–of– Relevant–Perpetual–Subordinated–Instruments– converted–or–written-off,–will–satisfy–APRA.–

AMP–currently–has–no–Relevant–Perpetual– Subordinated–Instruments–on–issue–and–has–no– obligation–to–issue–any.–If–AMP–does–issue–any– Relevant–Perpetual–Subordinated–Instruments,– it–has–no–obligation–to–keep–them–on–issue–while– AMP–Notes–2–are–outstanding.–This–means–that,– if–a–Non-Viability–Trigger–Event–occurs,–some–or– all–of–the–AMP–Notes–2–would–be–required–to–be– Converted–and–some–or–all–of–the–other–Relevant–

Term–Subordinated–Instruments–(if–any–are– on–issue–at–the–time)–would–be–required–to–be– converted–or–written-off.

In–Converting–AMP–Notes–2–or–converting–or– writing-off–other–Relevant–Term–Subordinated– Instruments,–AMP–will–endeavour–to–treat–Holders– and–holders–of–other–Relevant–Term–Subordinated– Instruments–on–an–approximately–proportionate– basis,–but–may–discriminate–to–take–account–of– the–effect–on–marketable–parcels–of–AMP–Notes–2– and–other–logistical–considerations–and–the–need– to–effect–Conversion–immediately.–The–exercise– of–this–power–to–discriminate–may–adversely– affect–Holders.–

Effect of a Non-Viability Trigger Event

If–a–Non-Viability–Trigger–Event–occurs:–

  • –– AMP–must–immediately–Convert–the–relevant– amount–of–AMP–Notes–2–on–issue–(if–required– to–Convert–any–AMP–Notes–2)–into–the– Conversion–Number–of–AMP–Ordinary–Shares.– If–AMP–is–unable–to–Convert–AMP–Notes–2– within–five–Business–Days–after–the–date–on– which–the–Non-Viability–Trigger–Event–occurs,– the–AMP–Notes–2–will–be–Written-off

  • –– from–the–date–the–Non-Viability–Trigger–Event– occurs,–AMP–will–treat–Holders–as–having– been–issued–the–Conversion–Number–of–AMP– Ordinary–Shares.–AMP–expects–any–ASX–trades– in–AMP–Notes–2–that–have–not–settled–on–the– date–a–Non-Viability–Trigger–Event–occurs–will– continue–to–settle–in–accordance–with–the– normal–ASX–T+3–settlement,–although–AMP– expects–the–seller–will–be–treated–as–having– delivered,–and–the–buyer–will–be–treated–as– having–acquired,–the–Conversion–Number–of– AMP–Ordinary–Shares–into–which–AMP–Notes– 2–have–been–Converted–as–a–result–of–the– occurrence–of–the–Non-Viability–Trigger–Event

  • –– alternatively,–AMP–may–immediately–seek– a–trading–halt–to–prevent–further–trading–in– AMP–Notes–2–on–ASX,–and–if–ASX–permits,–may– refuse–to–register–transfers–of–AMP–Notes– 2–that–have–not–settled—this–may–result–in– disruption–or–failures–in–trading–or–dealings–in– AMP–Notes–2–(which–may–cause–a–Holder–to– suffer–loss)

  • –– AMP–may–make–such–decisions–with–respect– to–the–identity–of–Holders–as–at–the–Conversion– Date–as–may–be–necessary–or–desirable–to–

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ensure–Conversion–occurs–in–an–orderly– manner,–including–disregarding–any–transfers– of–AMP–Notes–2–that–have–not–been–settled–or– registered–at–that–time

  • –– Holders–will–not–receive–prior–notice–of–the– Conversion–or–have–any–rights–to–vote–in– respect–of–any–Conversion

  • –– –the–AMP–Ordinary–Shares–issued–on– Conversion–following–a–Non-Viability–Trigger– Event–may–not–be–quoted–at–the–time–of–issue,– or–at–all.

Conversion following a Non-Viability Trigger Event

The–number–of–AMP–Ordinary–Shares–that–a– Holder–will–receive–on–Conversion–following– a–Non-Viability–Trigger–Event–is–calculated– in–accordance–with–the–Conversion–Number– formula,–which–provides–for–a–calculation– based–on–a–discounted–five–Business–Day– VWAP–but–cannot–be–more–than–the–Maximum– Conversion–Number.

So,–this–will–result–in–a–Holder–receiving–AMP– Ordinary–Shares–that–may–be–worth–significantly– less–than–the–Face–Value–of–AMP–Notes–2–and–the– Holder–suffering–loss–as–a–result.–This–is–because:

  • –– the–number–of–AMP–Ordinary–Shares–a–Holder– may–receive–on–Conversion–is–limited–to–the– Maximum–Conversion–Number–and–this– number–of–AMP–Ordinary–Shares–may–have–a– value–of–less–than–the–Face–Value

  • –– the–number–of–AMP–Ordinary–Shares–is– calculated–by–reference–to–the–price–of–AMP– Ordinary–Shares–in–the–five–Business–Days– on–which–trading–in–AMP–Ordinary–Shares– took–place–immediately–preceding–(but–not– including)–the–Conversion–Date–which–may– differ–from–the–AMP–Ordinary–Share–price–on– or–after–that–date

  • –– the–AMP–Ordinary–Shares–may–not–be–listed.– The–AMP–Ordinary–Shares–may–not–be–able– to–be–sold–at–prices–representing–their–value– based–on–the–VWAP.–In–particular,–VWAP– prices–will–be–based–wholly–or–partly–on– trading–days–which–occurred–before–the– Non-Viability–Trigger–Event

  • –– as–noted–in–section–2.4,–the–Maximum– Conversion–Number–may–be–adjusted– to–reflect–a–consolidation,–division–or– reclassification,–or–pro–rata–bonus–issues,–

of–AMP–Ordinary–Shares.–However,–no– adjustment–will–be–made–to–it–on–account– of–other–transactions–which–may–affect–the– price–of–AMP–Ordinary–Shares,–including–for– example–rights–issues,–returns–of–capital,– buy-backs–or–special–dividends.–The–Terms– do–not–limit–the–transactions–that–AMP–may– undertake–with–respect–to–its–share–capital– and–any–such–action–may–increase–the–risk– that–Holders–receive–only–the–Maximum– Conversion–Number–and–so–may–adversely– affect–the–position–of–Holders.

Inability Event

Following–a–Non-Viability–Trigger–Event,–if– AMP–is–required–to–Convert–AMP–Notes–2–but– is–prevented–by–applicable–law–or–order–of–any– court–or–action–of–any–government–authority– (including–regarding–the–insolvency,–winding-up– of–AMP–or–other–external–administration–of–AMP)– or–any–other–reason–from–Converting–AMP–Notes– 2–(an–Inability–Event),–and–the–Inability–Event–is– subsisting–and–Conversion–has–not–been–effected– within–five–Business–Days–of–the–Conversion–Date,– AMP–Notes–2–will–not–be–Converted.–Instead,–the– rights–of–the–Holder,–including–to–any–accrued– or–future–payment–of–Interest–and–repayment– of–Face–Value,–in–relation–to–such–AMP–Notes–2– will–be–immediately–and–irrevocably–Written-off– and–terminated–and–Holders–will–suffer–loss–as–a– result.–Holders–will–not–be–compensated–for–any– loss–suffered.

Those–laws–and–the–grounds–on–which–a–court– or–government–authority–may–make–orders– preventing–the–Conversion–of–AMP–Notes–2– may–change–and–the–change–may–be–adverse– to–the–interests–of–Holders.–There–may–be–other– reasons–why–AMP–is–prevented–from–Converting– the–Notes–into–AMP–Ordinary–Shares,–including,– but–not–limited–to,–operational–impediments,– loss–of–records,–disruption–in–the–markets–and– force–majeure.

An–Inability–Event–is–taken–to–have–occurred–and– be–subsisting–if–the–Issuer–receives–advice–to–that– effect–from–reputable–legal–counsel–(but–the– obtaining–of–advice–must–not–delay–or–impede– Write-off).

Consequences of holding AMP Ordinary Shares

AMP–Ordinary–Shares–are–a–different–type–of– investment–to–AMP–Notes–2.–Dividends–are– payable–at–the–absolute–discretion–of–AMP–and–

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the–amount–of–each–dividend–is–discretionary– (ie,–not–subject–to–a–formula).–In–a–winding-up– of–AMP,–claims–of–holders–of–AMP–Ordinary– Shares–rank–behind–claims–of–holders–of–all–other– securities–and–debts–of–AMP.–The–market–price– of–AMP–Ordinary–Shares–may–be–more–sensitive– than–that–of–AMP–Notes–2–to–changes–in–AMP’s– performance,–operational–issues–and–other– business–issues.

5.1.7 AMP may redeem AMP Subordinated Notes 2 early in certain circumstances

AMP–may–(subject–to–APRA’s–prior–written– approval,–which–is–in–its–discretion–and–may–not– be–given)–elect–to–redeem:–

  • –– some–or–all–of–AMP–Notes–2–on–18–December– 2018–or–any–subsequent–Interest–Payment– Date,–or–

  • –– all–(but–not–some)–of–AMP–Notes–2–upon–the– occurrence–of–a–Tax–Event–or–a–Regulatory– Event–(if–AMP–did–not–expect–on–the–Issue– Date–that–the–event–would–occur).–

AMP–Notes–2–will–be–redeemed–at–their–Face– Value–of–$100–per–AMP–Note–2–(plus–any–accrued– and–unpaid–Interest).–There–is–a–risk–that–the– amount–received–on–redemption–may–be–less–than– the–then–current–market–value–of–AMP–Notes–2.– The–timing–of–any–redemption–may–not–accord– with–a–Holder’s–individual–financial–circumstances– or–tax–position.–

5.1.8 No rights for Holders to request or require redemption or acceleration of repayment

Holders–have–no–right–to–request–or–require– redemption–or–to–accelerate–repayment–of–their– AMP–Notes–2–prior–to–the–Maturity–Date–(except– where–an–order–has–been–made–or–an–effective– resolution–passed–for–the–winding-up–of–AMP).– Therefore,–prior–to–the–Maturity–Date,–unless–AMP– elects–to–redeem–AMP–Notes–2–(subject–to–APRA’s– prior–written–approval,–which–is–in–its–discretion– and–may–not–be–given),–Holders–can–only–realise– their–investment–in–AMP–Notes–2–by–selling–them– at–the–prevailing–market–price–on–ASX.–There–is– a–risk–that–the–prevailing–market–price–will–be– less–than–the–Face–Value–of–AMP–Notes–2–and/ or–that–the–market–for–AMP–Notes–2–may–not–be– liquid.–AMP–does–not–guarantee–that–you–will– be–able–to–sell–your–AMP–Notes–2–on–ASX–at–an–

acceptable–price,–or–at–all.–You–may–also–have– to–pay–brokerage–fees–if–your–AMP–Notes–2–are– sold–through–a–broker.–You–may–suffer–a–loss–as– a–result.

5.1.9 Restriction on Holders’ enforcement rights

Enforcement–of–Holders’–rights–requires–the– taking–of–action–by–the–Trustee.–The–Trustee–is– not–bound–to–take–any–action–under–the–Trust– Deed–unless–it–is–directed–to–do–so–in–writing–by– Holders–of–at–least–15–per–cent–of–the–aggregate– Face–Value–of–all–AMP–Notes–2–outstanding–or– by–a–Holder–Resolution–and–it–is–indemnified– and–secured–for–its–costs–to–its–reasonable– satisfaction.–A–Holder–has–no–direct–right–of–claim– against–AMP–in–respect–of–AMP–Notes–2–unless– the–Trustee–fails–to–take–action–within–14–days– of–becoming–bound–to–do–so,–and–that–failure– is–continuing.

5.1.10 AMP may fail to pay Face Value, Interest or other amounts

There–is–a–risk–that–AMP–may–not–pay–when– scheduled–or–default–on–payment–of–some–or– all–of–the–Face–Value,–Interest–or–other–amounts– payable–on–AMP–Notes–2.–If–AMP–does–not–pay–the– amount–owing,–Holders–may–lose–some–or–all–of– the–money–invested–in–AMP–Notes–2.

The–remedies–of–the–Holders–in–the–event–of– non-payment–are–limited.–Failure–to–pay–because– the–Solvency–Condition–is–not–satisfied–is–not–an– Event–of–Default.

If–an–amount–is–not–paid–when–the–Solvency– Condition–is–satisfied,–that–is–an–Event–of–Default– and–the–Trustee–may–institute–proceedings:

  • –– for–the–recovery–of–the–amount–then–due–and– payable–but–unpaid

  • –– to–obtain–a–court–order–for–specific– performance,–or

  • –– to–institute–proceedings–for–the–winding-up– of–AMP.

The–Trustee–and–Holders–are–not–entitled– to–accelerate–payment–on–account–of–such– non-payment–or–other–breach–by–AMP–of– its–obligations.

There–is–a–risk–that–the–entire–amount–owed–may– not–be–recovered–even–if–the–Trustee–institutes– proceedings–against–AMP.–Further,–although–the–

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Terms–may–specify–certain–remedies–(for–example,– seeking–an–order–for–the–winding-up–of–AMP),–the– grant–of–those–remedies–may–be–in–the–discretion– of–the–court,–and–as–such–may–not–be–granted.–

5.1.11 Future issues or redemptions of securities by AMP

AMP–Notes–2–do–not–in–any–way–restrict–AMP– and–other–AMP–group–entities–from–issuing– further–securities–or–from–incurring–further– indebtedness–at–any–time.–AMP’s–obligations– under–AMP–Notes–2–rank–subordinate–and–junior– in–a–winding-up–of–AMP–to–AMP’s–obligations– to–Senior–Creditors,–including–holders–of–senior– ranking–securities–and–instruments.–Any–return– of–capital–to–Holders–and–the–market–price–or– liquidity–of–AMP–Notes–2–may–be–affected–by–an– increase–in–senior–or–equal–ranking–creditors.

AMP–and–other–members–of–the–AMP–group–may– in–the–future–issue–securities–that:

  • –– rank–for–payments–of–principal–or–interest– (including–on–the–winding-up–of–AMP)–equal– with,–behind–or–ahead–of–AMP–Notes–2

  • –– have–the–same–or–different–maturities–as– AMP–Notes–2

  • –– have–the–same–or–different–dividend,– interest–or–distribution–rates–as–those–for– AMP–Notes–2,–and

  • –– have–the–same–or–different–terms–and– conditions–as–AMP–Notes–2.

An–investment–in–AMP–Notes–2–carries–no–right– to–participate–in–any–future–issue–of–securities– (whether–equity,–subordinated–or–senior–debt–or– otherwise)–by–AMP–other–than–to–be–issued–AMP– Ordinary–Shares–on–Conversion–in–accordance– with–the–Terms.

No–prediction–can–be–made–as–to–the–effect,–if– any,–that–any–future–issue–of–securities–by–AMP– may–have–on–the–market–price–or–liquidity–of– AMP–Notes–2–or–the–likelihood–of–AMP–making– payments–on–AMP–Notes–2.

AMP–Notes–2–do–not–restrict–any–member–of–the– AMP–group–from–redeeming,–buying–back–or– undertaking–a–reduction–of–capital–or–otherwise– repaying–its–other–securities–(whether–existing– securities–or–those–that–may–be–issued–in–the– future).–AMP–may–redeem–AMP–Notes–2–on–the– occurrence–of–a–Tax–Event–or–a–Regulatory–Event– or–on–18–December–2018–or–any–subsequent– Interest–Payment–Date.–Any–redemption–is–subject–

to–the–prior–written–approval–of–APRA.–Approval–is– in–the–discretion–of–APRA–and–may–not–be–given.

Similarly,–AMP–Notes–2–do–not–restrict–the–AMP– group–from–issuing,–or–entering–into–agreements– for–the–issue–of,–AMP–Ordinary–Shares–at–any–price.– Any–such–issues–may–affect–the–market–price–of– AMP–Ordinary–Shares–which–in–turn–may–affect– the–amount–of–any–loss–incurred–by–Holders–if– AMP–Notes–2–are–required–to–be–Converted–into– AMP–Ordinary–Shares.

An–investment–in–AMP–Notes–2–carries–no–right– to–be–redeemed–or–otherwise–repaid–at–the–same– time–as–AMP–redeems,–or–otherwise–repays,– holders–of–other–securities–(whether–equity,– subordinated–or–senior–debt–or–otherwise).

5.1.12 Exposure to the AMP group’s financial performance and position

If–the–AMP–group’s–financial–performance–or– position–declines,–or–if–market–participants– anticipate–that–it–may–decline,–an–investment–in– AMP–Notes–2–could–decline–in–value.–Accordingly,– when–you–evaluate–whether–to–invest–in–AMP– Notes–2–you–should–carefully–evaluate–the– investment–risks–associated–with–an–investment– in–AMP–and–the–AMP–group–(see–section–5.2).

5.1.13 Changes to credit ratings

AMP–and–AMP–group’s–cost–of–funds,–margins,– access–to–capital–markets–and–competitive– position–and–other–aspects–of–its–performance– may–be–affected–by–their–credit–ratings–(including– any–long-term–credit–ratings–or–the–ratings– assigned–to–any–class–of–AMP’s–securities).–Credit– rating–agencies–may–withdraw,–revise–or–suspend– credit–ratings–or–change–the–methodology–by– which–securities–are–rated.–Such–changes–could– adversely–affect–the–market–price,–liquidity–and– performance–of–AMP–Notes–2.–

5.1.14 Regulatory classification and prudential supervision

APRA–has–advised–that,–given–the–proposed– changes–to–the–supervision–of–conglomerate– groups,–AMP–Notes–2–will–not–constitute–Tier–2– Capital–of–the–AMP–group–but–that–it–does–not– object–to–the–AMP–group–using–the–proceeds–of– their–issue–to–fund–Tier–2–Capital–of–one–or–more– Regulated–Entities–within–the–AMP–group.–AMP– expects–to–use–a–substantial–part–of–the–proceeds– of–issue–for–that–purpose.–

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However,–in–certain–circumstances,–if–following– a–notification–from,–or–announcement–or– determination–by–APRA,–the–directors–of–AMP– subsequently–determine–that–APRA–objects,–or– will–object,–to–AMP–group–using,–or–having–used,– the–proceeds–of–the–issue–of–some–or–all–of–the– AMP–Notes–2–to–fund–Tier–2–Capital–of–a–Regulated– Entity–within–the–AMP–group–(other–than–where– that–event–is–a–result–of–the–implementation–of– the–changes–to–the–supervision–of–conglomerate– groups–in–the–form–proposed–by–APRA–as–at–the– Issue–Date),–AMP–may–decide–that–a–Regulatory– Event–has–occurred.–A–Regulatory–Event–may– also–occur–if–additional–requirements–which– the–directors–determine–to–be–unacceptable–are– imposed–on–AMP–in–respect–of–AMP–Notes–2.– AMP–may–then–elect,–at–its–option,–to–redeem–all– (but–not–some)–AMP–Notes–2–on–issue–(subject– to–APRA’s–prior–written–approval–and–so–long– as–AMP–did–not–expect–on–the–Issue–Date–that– the–event–would–occur).–Certain–changes–to–the– supervision–of–conglomerate–groups–are–currently– proposed–as–described–in–section–2.5–above.–The– implementation–of–these–changes–in–the–form– proposed–by–APRA–as–at–the–Issue–Date–will–not– give–rise–to–a–Regulatory–Event.–

Any–such–redemption–is–at–AMP’s–option–and– may–occur–on–dates–not–previously–contemplated– by–Holders,–which–may–be–disadvantageous–in– light–of–market–conditions–or–their–individual– circumstances–and–may–not–coincide–with–their– individual–preference–in–terms–of–timing.–This–also– means–that–the–period–for–which–Holders–will–be– entitled–to–the–benefit–of–the–rights–attaching–to– AMP–Notes–2–(such–as–Interest)–is–unknown.–

The–fact–that–a–Regulatory–Event–occurs–does– not–affect–the–Terms–and–in–particular,–does–not– affect–the–circumstances–where–the–AMP–Notes– 2–are–required–to–be–Converted–or–Written-off–if–a– Non-Viability–Trigger–Event–occurs.

As–a–prudentially–regulated–entity–AMP–and– other–AMP–group–entities–are–subject–to–the– requirements–of,–among–other–things,–the– Banking–Act–and–Life–Insurance–Act–and–APRA’s– prudential–standards.–The–Banking–Act–and–Life– Insurance–Act–include–certain–powers–which–APRA– may–exercise–in–a–manner–that–may–be–adverse– to–Holders,–including–powers–to–direct–AMP– group–entities–not–to–pay–or–transfer–any–amount– to–any–person–or–to–conduct–its–business–in–a– particular–way.

5.1.15 Australian tax consequences

A–general–outline–of–the–tax–consequences–of– investing–in–AMP–Notes–2–for–certain–potential– investors–who–are–Australian–residents–for–tax– purposes–is–set–out–in–the–Australian–taxation– summary–in–section–8.–This–discussion–is–in– general–terms–and–is–not–intended–to–provide– specific–advice–addressing–the–circumstances–of– any–particular–potential–investor.

Accordingly,–potential–investors–should–seek– independent–advice–concerning–their–own– individual–tax–position.–

If,–as–a–result–of–any–change–in,–or–amendment–to,– the–laws–in–force–in–Australia,–or–any–change–in– their–application–or–judicial–interpretation,–which– becomes–effective–after–the–Issue–Date:

  • –– payment–of–Interest–on–AMP–Notes–2–is–not,–or– may–not–be,–allowed–as–a–deduction–for–AMP’s– Australian–income–tax–liability–calculation,–or

  • –– there–is–a–risk–that–AMP–would–be–exposed– to–other–adverse–tax–consequences–(other– than–the–payment–of–Additional–Amounts)–in–– relation–to–AMP–Notes–2.

AMP–may–elect–to–redeem–all–(but–not–some)–of– AMP–Notes–2–(subject–to–APRA’s–prior–written– approval–and–so–long–as–AMP–did–not–expect–on– the–Issue–Date–that–the–event–would–occur)––– see–section–2.3.

5.1.16 Alteration of Terms

Subject–to–the–Terms–and–complying–with–the– Corporations–Act–and–all–other–applicable–laws,– AMP–may,–with–the–approval–of–the–Trustee,–alter– the–Terms–without–the–approval–of–Holders–in– certain–circumstances.–The–circumstances–include– where–the–alteration–is–of–a–formal–or–technical– or–minor–nature,–made–to–cure–any–ambiguity–or– correct–any–obvious–error,–necessary–to–comply– with–applicable–laws–or–to–maintain–quotation–of– AMP–Notes–2–on–ASX–or–otherwise–not–materially– prejudicial–to–the–interests–of–the–Holders–as–a– whole.–In–the–case–of–alterations–made–to–comply– with–applicable–laws–or–to–maintain–quotation– of–AMP–Notes–2–on–ASX–and–alterations–not– otherwise–materially–prejudicial–to–the–interests–of– the–Holders–as–a–whole,–AMP–must–provide–to–the– Trustee–an–opinion–of–independent–legal–advisers– of–recognised–standing–in–New–South–Wales– confirming–that–such–alteration–is–not–materially– prejudicial–to–the–interests–of–Holders–as–a–whole.–

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AMP–may–also–alter–the–Terms–with–the–approval–of– the–Trustee–and–the–requisite–majority–of–Holders.– The–majority–may–be–50–per–cent–or–75–per–cent,– depending–on–the–circumstances–and–in–each–case– as–determined–in–accordance–with–the–Trust–Deed.– Alterations–under–these–powers–are–binding–on–all– Holders–despite–the–fact–that–a–Holder–may–not– agree–with–the–alteration.

Any–alteration–which–may–cause–APRA–to–object– to–AMP–group–using,–or–having–used,–the–proceeds– of–the–issue–of–some–or–all–of–the–AMP–Notes–2–to– fund–Tier–2–Capital–of–a–Regulated–Entity–within– the–AMP–group,–is–subject–to–the–prior–written– consent–of–APRA.

5.1.17 Holders may be subject to FATCA withholding and information reporting

It–is–possible–that,–in–order–to–comply–with– FATCA,–AMP–(or–if–AMP–Notes–2–are–held–through– another–financial–institution,–such–other–financial– institution)–may–be–required–(pursuant–to–an– agreement–with–the–United–States–Internal– Revenue–Service–( IRS )–or–under–applicable–law)– to–request–certain–information–from–Holders– or–beneficial–owners–of–AMP–Notes–2,–which– information–may–be–provided–to–the–IRS,–and–to– withhold–US–tax–on–some–portion–of–payments– made–after–31–December–2016–with–respect–to– AMP–Notes–2–if–such–information–is–not–provided– or–if–payments–are–made–to–certain–foreign– financial–institutions–that–have–not–entered–into– a–similar–agreement–with–the–IRS–(and–are–not– otherwise–required–to–comply–with–the–FATCA– regime–under–applicable–laws–or–are–otherwise– exempt–from–complying–with–the–requirement– to–enter–into–a–FATCA–agreement–with–the– IRS).–If–AMP–or–any–other–person–is–required–to– withhold–amounts–under–or–in–connection–with– FATCA–from–any–payments–made–in–respect–of– AMP–Notes–2,–Holders–and–beneficial–owners–of– AMP–Notes–2–will–not–be–entitled–to–receive–any– gross–up–or–additional–amounts–to–compensate– them–for–that–withholding.–This–description–is– based–on–guidance–issued–to–date–by–the–IRS,– including–recently–finalised–regulations.–Future– guidance–may–affect–the–application–of–FATCA– to–AMP–Notes–2,–including–but–not–limited–to,– the–proposed–Intergovernmental–Agreement– ( IGA )–between–Australia–and–the–United–States.– The–requirements–of–FATCA–may–not–impact– on–all–Holders–in–the–same–way.–Holders–should–

obtain–their–own–advice–about–the–requirements– of–FATCA.–

5.1.18 Shareholding limits

The–Financial–Sector–(Shareholdings)–Act–restricts– ownership–by–people–(together–with–their– associates)–of–banks–and–life–insurers–and–their– holding–companies,–which–includes–AMP,–to–a–15– per–cent–stake.–A–shareholder–may–apply–to–the– Australian–Treasurer–to–extend–their–ownership– beyond–15–per–cent,–but–approval–will–not–be– granted–unless–the–Treasurer–is–satisfied–that–a– holding–by–that–person–of–greater–than–15–per– cent–is–in–the–national–interest.

Mergers,–acquisitions–and–divestments–of– Australian–public–companies–listed–on–ASX– (such–as–AMP)–are–regulated–by–detailed–and– comprehensive–legislation–and–the–rules– and–regulations–of–ASX.–These–provisions– include–restrictions–on–the–acquisition–and– sale–of–relevant–interests–in–certain–shares– in–an–Australian–listed–company–under–the– Corporations–Act–and–a–requirement–that– acquisitions–of–certain–interests–in–Australian– listed–companies–by–foreign–interests–are– subject–to–review–and–approval–by–the–Treasurer.– In–addition,–Australian–law–also–regulates– acquisitions–which–would–have–the–effect,–or–be– likely–to–have–the–effect,–of–substantially–lessening– competition–in–a–market.

If–any–applicable–limit–on–shareholding–would–be– exceeded–by–a–Holder–when–AMP–Notes–2–are– issued–on–Conversion,–the–Holder–will–be–ineligible– to–receive–the–AMP–Ordinary–Shares–and–the–AMP– Ordinary–Shares–to–which–it–would–have–been– entitled–will–be–issued–to–a–Sale–and–Transfer– Agent,–who–will–sell–them–at–market–value–and– pay–the–proceeds–(less–costs)–to–the–Holder.–

Holders–should–take–care–to–ensure–that–by– acquiring–any–AMP–Notes–2–(taking–into–account– any–AMP–Ordinary–Shares–into–which–they–may– Convert),–Holders–do–not–breach–any–applicable– restrictions–on–ownership.

5.1.19 No rights if control of AMP is acquired

If–a–person–or–persons–acquire–control–of–AMP– the–Terms–do–not–provide–any–right–or–remedy– for–the–Holders–on–account–of–that–acquisition– occurring.–Further,–the–acquisition–of–AMP–may– result–in–AMP–Ordinary–Shares–no–longer–being–

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quoted–on–ASX.–If–after–that–has–occurred–a– Non-Viability–Trigger–Event–occurs,–the–number–of– AMP–Ordinary–Shares–issued–on–Conversion–will– reflect–the–VWAP–for–the–period–of–five–Business– Days–on–which–the–AMP–Ordinary–Shares–were– last–traded–on–ASX.–This–may–be–well–before–the– Non-Viability–Trigger–Event–and–accordingly–the– value–of–the–Conversion–Number–of–AMP–Ordinary– Shares–when–issued–may–be–very–different–to–the– value–based–on–that–VWAP.–This–may–adversely– affect–the–position–of–Holders.

5.2 Risks associated with AMP and the AMP group

Set–out–in–this–section–5.2–are–specific–risks– associated–with–AMP–and–the–AMP–group.–AMP’s– business–is–subject–to–risks–that–can–adversely– impact–its–business,–results–of–operations,– financial–condition–and–future–performance.– These–risks–are–relevant–to–an–investment–in–AMP– Notes–2–as–AMP’s–ability–to–fulfil–its–obligation– under,–or–in–respect–of,–AMP–Notes–2–(including– AMP’s–ability–to–pay–principal–and–Interest)–and– the–value–of–your–investment,–will–depend–on–the– results–of–operations,–financial–condition–and– future–performance–of–AMP–and–the–AMP–group– regardless–of–whether–AMP–Notes–2–remain–in– force,–are–Converted–or–Written-off.–The–risks– and–uncertainties–described–below–are–not–the– only–ones–AMP–may–face.–Additional–risks–and– uncertainties–that–AMP–is–not–aware–of,–or–that– AMP–currently–deems–to–be–immaterial,–may–also– become–important–factors–that–affect–AMP.

Set–out–below–are–risks–associated–with–the– AMP–group–and–the–wealth–management–and– banking–industry.

5.2.1 Financial risk

Investment returns

A–significant–proportion–of–the–AMP–group’s– profits–are–derived–from–investment–returns– (both–income–and–net–realised–and–unrealised– capital–gains–or–losses)–in–the–non–investmentlinked–statutory–funds–of–the–wholly-owned– life–companies–of–AMP–including–AMP–Life– and–NMLA.–Investment–returns–are–shared– between–shareholders–and–policyholders–in– accordance–with–the–Life–Insurance–Act–and– other–legislation–regarding–the–allocation–and–

distribution–of–profits–of–statutory–funds.–The– underperformance–of–investments–could–have– a–material–adverse–impact–on–the–financial– performance–and–position–of–the–AMP–group–and– may–result–in–the–need–for–additional–capital–to– support–the–AMP–group’s–businesses.

Some–products–both–within–and–outside–of–the– life–companies–have–investment–guarantees– and–whilst–these–are–monitored–and–managed,– significant–market–movements,–including–those– related–to–the–interest–rates–and–on-going–periods– of–high–volatility,–could–have–a–material–impact– on–the–financial–performance–and–position–of–the– AMP–group.

Investment–performance–also–affects–the–level– of–investment–return–on–shareholders’–funds– and–seed–pool–assets–and–in–turn–the–financial– performance–and–position–of–the–AMP–group–and– the–level–of–capital–available–to–support–the–AMP– group’s–businesses.–Funds,–including–shareholders’– funds,–are–invested–in–a–variety–of–investments– which–are–linked–to–the–performance–of–a–variety– of–asset–classes,–including,–but–not–limited–to,– cash,–Australian–and–international–equities,–fixed– interest,–property,–infrastructure–and–private– equity.–Funds,–including–shareholders’–funds,–may– also–be–invested–in–unlisted–assets–(including– seed–pool–assets–acquired–to–’seed’–or–test–new– funds–or–opportunities)–for–which–valuations– may–not–be–readily–available.–Determining–the– valuations–of–unlisted–assets–may–be–subjective– in–nature–and–is–difficult–in–times–of–volatility–and– reduced–liquidity.

Changes–in–the–value–of,–or–income–received– from,–these–investments,–including–as–a–result– of–changes–in–valuations–or–the–valuation– methodology–of–unlisted–assets,–may–have– a–materially–adverse–impact–on–the–financial– performance–and–position–of–the–AMP–group– and–may–affect–the–level–of–capital,–liquidity–and– funding–required–to–support–the–AMP–group’s– businesses.–In–periods–of–extreme–volatility–the– values–of–these–assets–are–subject–to–greater– change–and–uncertainty.

Investment performance

Demand–for–the–AMP–group’s–financial–products– and–services–is–affected–by–the–investment– performance–of–a–number–of–entities–within–the– AMP–group,–including–AMP–Capital,–relative–to–the– investment–performance–of–its–peers–or–market–

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returns–more–generally.–If–AMP–Capital–or–other– investment–managers–contracted–by–the–AMP– group–underperform–peer–investment–managers– and/or–the–market–more–generally–for–a–prolonged– period,–the–demand–for–the–AMP–group’s–financial– products–and–services,–particularly–financial– products–where–the–investments–are–managed– by–AMP–Capital,–may–reduce–materially.–To–the– extent–that–this–risk–materialises,–it–may–have– a–material–adverse–impact–on–the–financial– performance–and–position–of–the–AMP–group.–

Fee–income–on–the–investment-linked–business– and–investment-management–business–of–the– AMP–group–is–primarily–based–on–the–level–of– assets–under–management–and–investment– performance.–A–deterioration–in–investment– performance–may–lead–to–a–decline–in–assets– under–management–and–a–decline–in–fee–income– including–performance–and–transaction–fees,– which–may–have–an–adverse–impact–on–the– financial–performance–and–position–of–the– AMP–group.

Funding and liquidity risk

‘Funding–risk’–relates–to–the–risk–of–one–or–more– of–the–AMP–group’s–sources–of–funding–being– reduced–or–eliminated–or–a–significant–increase– in–the–cost–of–funding–through–either–a–systemic– or–company-specific–event.–‘Liquidity–risk’–is–the– risk–that–the–AMP–group–fails–to–meet–its–payment– obligations,–which–may–arise–as–a–result–of–a– mismatch–between–those–payment–obligations– and–the–AMP–group’s–access–to–liquid–assets,– adequate–funding–on–acceptable–terms,–or–cash– flows–generated–by–its–businesses.–

If–the–AMP–group’s–current–sources–of–funding– prove–insufficient,–it–may–be–forced–to–seek– alternative–funding–which–may–not–be–available– on–acceptable–terms–or–at–all.–The–availability–of– such–funding,–and–the–terms–on–which–it–may– be–made–available,–will–depend–on–a–number– of–factors,–including–market–conditions,–the– availability–of–credit,–the–AMP–group’s–credit– ratings–and–credit–market–capacity.–

These–funding–risks–may–arise–due–to–an–increased– cost–of–funding,–reduced–availability–of–credit– and–capital,–a–decline–in–asset–values,–or–reduced– financial–performance–of–these–assets–or–funds,– and/or–a–downgrade–in–the–credit–rating–of–any– member–of–the–AMP–group–(in–particular,–AMP,– AMP–Life,–NMLA–and–AMP–Bank).–An–inability–to–

manage–the–funding–risks–for–the–AMP–group– may–result–in–forced–asset–sales–or–default,– which–could–adversely–impact–the–AMP–group’s– reputation,–brand,–and–banking–and–debt– market–relationships.–

A–deterioration–of–financial–market–conditions– may–also–have–a–material–adverse–impact–on–the– financial–performance–and–position–of–the–AMP– group,–and–its–ability–to–perform–its–obligations–in– respect–of–AMP–Notes–2,–including–the–payment– of–Interest–and–principal.–

Business–entities–owned–as–investments–by– AMP–Life,–NMLA–and/or–funds–managed–by– AMP–Capital,–may–breach–or–risk–breaching– their–loan–and–other–debt–covenants.–In–the– event–of–breach–the–financiers–have–the–ability– to–demand–immediate–repayment–of–the–debt– and–enforce–their–other–rights,–which–may–give– rise–to–the–funding–risks–described–above.–To– the–extent–those–circumstances–arise,–this–may– have–a–material–adverse–impact–on–the–financial– performance–and–position–of–the–AMP–group.

Interest rate risk

‘Interest–rate–risk’–is–the–risk–of–financial–loss– arising–from–adverse–fluctuations–in–interest– rates,–and–may–have–a–material–adverse–impact– on–the–financial–performance–and–position–of–the– AMP–group.–

Fluctuations–in–interest–rates–can–impact:

  • –– the–rate–at–which–certain–liabilities–are– discounted,–causing–the–liabilities–in–respect– of–certain–products,–including–annuities,– defined–benefit–obligations–and–other–capital– guaranteed–and–non-investment–linked– products–to–vary

  • –– the–investment–returns–on–the–AMP–group’s– shareholders–funds–and–the–AMP–Life–and– NMLA–investment–portfolios

  • –– the–fair–value–of–investment–guarantees– the–AMP–group–has–issued–in–respect–of–its– products,–as–well–as–the–asset–and–financial– instrument–values–backing–these–products

  • –– AMP–Bank’s–financial–condition–through– the–bank’s–net–interest–income–and–the– level–of–other–interest–sensitive–income–and– operating–expenses,–as–well–as–the–underlying– value–of–the–bank’s–assets,–liabilities,–and– off-balance-sheet–instruments–and

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  • –– the–carrying–value–of–implicit–deferred– acquisition–costs,–and

  • –– the–AMP–group’s–funding–costs.

Low–interest–rates–may–result–in–lower– investment–returns–for–the–AMP–group.–To–the– extent–the–benefits–payable–to–holders–of–non– investment-linked–products–are–greater–than–the– return–that–the–AMP–group–receives–from–the– relevant–underlying–investments,–the–AMP–group– is–exposed–to–loss–and–the–need–for–increased– capital–requirements.–

The–AMP–group–currently–manages–interest–rate– risk–through–hedging–arrangements.–Disruptions– in–financial–markets–may–affect–the–availability– of–hedging,–and–even–if–available,–hedging–may– become–more–expensive–or–be–provided–on– unfavourable–terms,–which–may–have–a–material– adverse–impact–on–the–financial–performance–and– position–of–the–AMP–group.

trading–relationships.–Credit–risk–also–arises–in– relation–to–exposures–from–deposits–and–debt– securities,–futures–and–options–broker–clearers,– OTC–derivative–counterparties,–and–loans–to– non-wholly–owned–subsidiaries–including–AMP– Capital–and–loans–to–joint–ventures–including– Super–IQ–Pty–Limited.–While–the–AMP–group– utilises–mechanisms–to–mitigate–a–number–of– those–exposures,–including–collateral–and–netting– agreements,–there–can–be–no–assurance–that– these–arrangements–fully–limit–those–exposures.

The–annuity–portfolio–is–managed–with–fixed– interest–assets–matched–to–expected–annuity– cash–outflows.–The–AMP–group–is–exposed–to– credit–risk,–including–the–risk–of–widening–credit– spreads–on–the–portfolio–of–fixed–income–assets.–

To–the–extent–that–any–of–the–above–risks–arise,– this–may–have–a–material–adverse–impact–on– the–financial–performance–and–position–of–the– AMP–group.

Credit risk

Credit–risk–is–the–risk–that–default–by–a– counterparty–will–result–in–a–financial–loss–to– the–AMP–group.–Although–credit–risk–exists–in– most–parts–of–the–AMP–group,–including–for– derivative–contracts–used–to–protect–the–AMP– group’s–capital–position–from–investment–market– volatility,–the–risk–before–hedging–is–inherently– likely–to–be–greatest–in–AMP–Bank–and–the–AMP– Life–and–NMLA–investment–portfolios.–A–default– by–a–counterparty–can–impact–the–AMP–group’s– financial–position–and–performance–and–the–level– of–capital–supporting–the–AMP–group’s–businesses– and–can–also–impact–investments–of–AMP–Life–and– funds–managed–by–AMP–Capital,–which–may–have– a–material–adverse–impact–on–the–AMP–group’s– reputation,–management–fee–income,–other–asset– values,–financial–performance–and–position.–

Credit–risk–is–a–significant–risk–for–AMP–Bank–and– arises–primarily–from–AMP–Bank’s–residential– lending–activities–and–to–a–lesser–extent,– practice–finance–loans.–Practice–finance–loans– are–secured–against–the–assets–of–the–underlying– financial–planning–practices.–The–risk–arises– from–the–likelihood–that–some–customers– and–counterparties–will–be–unable–to–honour– their–obligations–to–AMP–Bank,–including–the– repayment–of–loans–and–interest.

Credit–risk–is–a–significant–risk–in–relation– to–the–AMP–group’s–extensive–banking–and–

Foreign exchange risk

Foreign–exchange–risk–is–the–risk–of–the–AMP–group– sustaining–loss–through–adverse–movements–in– exchange–rates.–Such–losses–can–affect–the–AMP– group’s–financial–position–and–performance,–and– the–level–of–capital–supporting–the–AMP–group’s– businesses.–From–an–operational–perspective,– the–AMP–group–faces–exposure–to–foreign– exchange–risks–through–direct–foreign–income– and–expenses,–the–settlement–of–foreign–currency– denominated–assets–and–liabilities,–seed–pool– investments–within–AMP–Capital,–and–earnings– from–non-Australian–subsidiaries.–

Foreign–exchange–losses–can–impact–the–liquidity– of–funds–when–rolling–hedge–contracts,–as–well–as– the–investments–of–AMP–Life,–NMLA–and–funds– managed–by–AMP–Capital,–which–in–turn–may– have–a–material–adverse–impact–the–AMP–group’s– reputation,–management–fee–income,–other–asset– values,–financial–performance–and–position.

Defined benefit fund

The–AMP–group’s–defined–benefit–superannuation– funds–are–required–to–pay–certain–benefits– even–if–those–benefits–exceed–the–returns–from– the–relevant–investments,–exposing–the–AMP– group–to–loss,–and–reducing–the–level–of–capital– available–to–support–its–business–units.–Defined– benefit–liabilities–are–discounted–using–a–blend– between–Australian–Government–bonds–and–

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State–Government–bonds.–A–reduction–in–the–rate– at–which–defined–benefit–liabilities–are–discounted– may–have–a–material–adverse–impact–on–the–AMP– group’s–financial–performance–and–position,– including–the–capital–position.

The–defined–benefit–superannuation–funds–are– presently–in–deficit,–as–defined–under–relevant– accounting–standards.–This–deficit–and–the– potential–future–funding–requirements,–may– be–adversely–impacted–by–investment–returns,– adverse–movements–in–interest–rates,–or–adverse– member–experience,–including–that–related– to–longevity.–

Derivative instruments

Interest–rate,–currency–and–equity–market– fluctuations–could–have–a–material–adverse– effect–on–the–values–of–derivative–instruments– used–by–the–AMP–group–to–hedge–its–debt–and– capital–position,–protect–investments–and–create– exposure–to–specific–asset–classes.–The–AMP–group– is–required–to–recognise–certain–movements–in–the– market–value–derivative–instruments,–which–can– give–rise–to–accounting–gains–or–losses.–In–the–case– of–derivative–instruments–used–to–hedge–debt–and– capital–positions–or–to–protect–investments,–those– accounting–gains–or–losses–should–in–the–ordinary– course–of–events–reverse–over–time.

Accounting mismatches

Investment–performance–may–have–a–material– adverse–effect–on–the–level–of–accounting– mismatches–and–the–financial–performance– and–position–of–the–AMP–group.–Accounting– mismatches–arise–because–the–recognition–and– measurement–rules–for–certain–policyholder– assets–differ–from–the–recognition–and– measurement–rules–for–the–liability–to– policyholders–in–respect–of–the–same–assets.– These–mismatches–result–in–policyholder–asset– movements,–affecting–the–net–profit–after– accounting–mismatches–and–increased–volatility– of–the–reported–profit–that–may–reverse–over–time.

Accounting policies

The–accounting–policies–and–methods–that–the– AMP–group–applies–are–fundamental–to–how–it– records–and–reports–its–financial–position–and– the–results–of–its–operations.–Management–must– exercise–judgement–in–selecting–and–applying– many–of–these–accounting–policies–and–methods–

so–that–they–not–only–comply–with–generally– accepted–accounting–policies–and–methods,–but– they–also–reflect–the–most–appropriate–manner– in–which–to–record–and–report–on–the–financial– position–and–results–of–operations.–However,– these–accounting–policies–may–be–applied– inaccurately,–resulting–in–a–misstatement–of– financial–position–and–results–of–operations.– In–some–cases,–management–must–select–an– accounting–policy–or–method–from–two–or–more– alternatives,–any–of–which–might–comply–with– generally–accepted–accounting–principles–and– be–reasonable–under–the–circumstances,–yet– might–result–in–reporting–materially–different– outcomes–than–would–have–been–reported–under– another–alternative.

The–AMP–group’s–accounting–policies–and– methods–may–change–from–time–to–time–with– changes–in–accounting–standards–and–regulation.– Accounting–policy–changes–that–result–in–a– reclassification–of–assets–between–tangible–and– intangible–assets–could–have–a–material–adverse– impact–on–the–AMP–group’s–capital–position.

Purchase and sale of financial advisory books of business

Certain–Australian–financial–services–licensees– within–the–AMP–group–may–be–required–to–buy– a–financial–advisory–business–or–register–of– clients–from–authorised–representatives–within– the–licensees’–network–based–on–a–pre-agreed– formula,–typically–when–the–owner–of–the– financial–advisory–business–permanently–leaves– the–industry.–Following–the–introduction–of–the– Future–of–Financial–Advice–( FOFA )–regulatory– changes,–registers–with–trailing–commission– entitlements–on–certain–products–may–not–be– able–to–be–on-sold–in–certain–circumstances.–The– new–Federal–Government–is–aware–of–industry– concerns–about–this–issue–and–is–considering–its– position–as–part–of–a–general–examination–of–the– FOFA–regulations.–In–addition,–the–regulatory– changes–could–result–in–businesses–having–lower– values–over–time.–These–businesses–or–books– of–business–may–not–be–able–to–be–on-sold–or– on-sold–at–the–same–or–higher–value,–which–may– have–a–material–adverse–impact–on–the–financial– performance–and–position–of–the–AMP–group.–The– FOFA–and–Stronger–Super–regulatory–changes–may– also–accelerate–the–decision–of–some–financial– advisors–to–leave–the–industry–and–therefore–

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increases–the–risk–of–larger–numbers–of–financial– advisors–selling–their–businesses–or–books–of– business–back–to–the–AMP–licensees.

5.2.2 Regulatory risk

Changes in government policy, legislation or regulation

The–AMP–group–provides–life–insurance,– investment–and–superannuation–products,– and–financial–planning,–banking–products–and– services.–Providers–and–distributors–of–these– products–and–services–in–Australia–are–subject–to– various–legislative–and–prudential–requirements,– including–the–Corporations–Act,–the–Life–Insurance– Act,–the–Banking–Act,–the–Superannuation– Industry–(Supervision)–Act–and–the–National– Consumer–Credit–Protection–Act.–This–regulatory– regime–is–complex–and–is–presently–undergoing– change,–including–the–FOFA–regulatory–changes,– the–Stronger–Super–regulatory–changes,–the–new– APRA–prudential–standard–for–superannuation– funds,–and–FATCA.

Under–the–FOFA–regulatory–changes,–regulatory– changes–have–been–implemented–by–the– Government–covering–financial–advisers,–fund– managers–and–product–issuers.–The–FOFA– regulatory–changes–include–a–ban–on–certain– commissions–and–volume–based–payments–to– financial–advisers–and–a–new–statutory–best– interest–duty–on–financial–advisers.–There–are– also–bans–on–fund–managers–paying–platform– operators–volume-based–shelf-space–fees.– Legislation–to–implement–the–FOFA–regulatory– changes–began–to–take–effect–on–1–July–2012,– until–mandatory–compliance–began–on–1–July– 2013–for–all–obligations.–As–the–AMP–group– has–the–largest–financial–planning–network– in–Australia,–any–further–significant–changes– in–or–application–of–government–policy–or– legislation–in–relation–to–advice–on–and–dealing– in–life–insurance,–superannuation,–managed– investments–and–bank–deposits–and–mortgages– may–materially–impact–the–AMP–group’s–strategy– and–operating–performance.

The–Stronger–Super–regulatory–changes–seek–to– implement–the–outcomes–of–the–Government’s– review–into–the–governance,–efficiency,–structure– and–operation–of–Australia’s–superannuation– system,–including–a–proposed–replacement– product–for–default–superannuation–(known– as–MySuper),–enhanced–duties–for–trustees–of–

superannuation–funds,–and–new–processes–in– relation–to–the–administration–and–consolidation– of–superannuation–accounts.–Significant–parts– of–the–Stronger–Super–regulatory–changes–were– passed–into–law–by–Parliament–in–December– 2012–and–have–been–progressively–implemented– from–1–July–2013.–Further–draft–legislation– on–the–administration–and–consolidation–of– superannuation–accounts–is–expected–to–be– released–in–the–future,–though–the–timing–is– presently–unknown.

As–reported–in–our–half-year–results:

  • –– the–one–off–cost–to–the–AMP–group–of– implementing–the–FOFA,–Stronger–Super– and–other–present–regulatory–changes–is– expected–to–be–A$75–million–after–tax,–of– which–A$59–million–was–provisioned–in–2012.– However,–the–final–costs–may–vary–from–this– depending–on–the–final–legislation,–regulatory– guidance,–market–practice–and–the–future– competitive–landscape

  • –– it–is–anticipated–that–the–FOFA–and–Stronger– Super–legislation–will–adversely–impact– the–profit–margins–of–AMP–group’s–wealth– management–business.

In–addition,–the–potential–impact–of–FOFA–and– Stronger–Super–may–include–a–reduction–in– adviser–productivity,–a–greater–loss–of–advisers– due–to–retirements–from–the–industry,–increased– numbers–of–books–of–financial–advisory– businesses–for–sale–by–AMP,–higher–operating– costs,–declining–new–business–volumes,–higher– cash–outflows–and–greater–capital–requirements.

Providers–and–distributors–of–wealth–

management–and–wealth–protection–products–are– also–subject–to–varying–legislative–and–regulatory– requirements–in–New–Zealand.–The–New–Zealand– financial–services–industry–is–undergoing– significant–legislative–and–regulatory–reform–at– present.–The–Financial–Advisers–Act,–the–Financial– Service–Providers–(Registration–and–Dispute– Resolution)–Act,–the–Reserve–Bank–Amendment– Act,–the–Anti-Money–Laundering–and–Countering– Financing–of–Terrorism–Act,–the–Insurance– (Prudential–Supervision)–Act–and–the–Financial– Markets–Conduct–Act–have–been–enacted–in–New– Zealand.–Prudential–supervision–of–insurance– providers–became–effective–in–March–2012–in– New–Zealand–when–the–Reserve–Bank–of–New– Zealand–began–to–issue–licenses–to–insurers–which–

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include–capital–and–statutory–fund–requirements.– In–addition,–the–new–securities–markets–regulator,– the–Financial–Markets–Authority,–is–actively– monitoring–and–overseeing–the–offer–of–securities– to–the–public–and–the–provision–of–financial–advice.– The–significant–changes–in–the–financial–services– regulatory–reform–has–increased–the–compliance– burden–for–the–AMP–group–companies–operating– in–New–Zealand.

The–AMP–group–also–operates–in–a–number–of– other–jurisdictions–in–addition–to–Australia–and– New–Zealand.–Its–businesses–are–affected–by– changes–to–the–regulatory–framework–in–those– jurisdictions,–as–well–as–the–cost–of–complying– with–regulation–that–has–extra-territorial– applications–such–as–the–United–Kingdom–Bribery– Act,–FATCA,–Dodd-Frank–and–other–reforms.–

The–AMP–group–is–subject–to–oversight–by– regulators–regarding–its–compliance–with– legislative–and–regulatory–requirements.–The– regulators–include,–among–others,–APRA,–RBA,– ASX,–ASIC,–ATO–and–AUSTRAC.–If–the–AMP–group– does–not–meet–the–requirements–of–regulators,–it– may–suffer–penalties,–such–as–fines–or–obligations– to–pay–compensation,–the–cancellation–or– suspension–of–its–authority–to–conduct–business,– or–a–requirement–to–hold–a–greater–level–of– capital–to–support–its–business.–Non-compliance– with–regulations–may–also–give–rise–to–adverse– publicity–for–the–AMP–group.–The–AMP–group– cannot–predict–the–impact–of–future–legislation– and–regulatory–change–on–its–business.–However,– as–the–amount–and–complexity–of–regulation– increases,–so–may–the–cost–of–compliance–and–the– risk–of–non-compliance.

Certain–entities–within–the–AMP–group–are– required–to–meet–the–capital–and–liquidity– standards–prescribed–by–APRA–and–other– regulators.–There–are–a–number–of–regulatory– capital–reviews–implemented–and–some–are– underway–which–impact–the–businesses–of– those–entities.

The–increased–capital–requirements–within–the– life–insurance–companies–are–primarily–driven–by– greater–requirements–relating–to–asset–stresses,– more–onerous–requirements–for–operational–risk,– revised–treatment–of–excess–policyholder–capital– and–more–onerous–treatment–of–deferred–tax– assets.–These–effects–are–partially–offset–by–a– reduction–in–insurance–risk–capital.–LAGIC–also–

introduced–Common–Equity–Tier–1,–Tier–1–and– Tier–2–definitions–to–life–insurers.–

The–Reserve–Bank–of–New–Zealand–is–due–to–issue– revised–solvency–standards–in–the–first–quarter–of– 2014–for–the–country’s–life–insurance–companies.– The–AMP–group–is–exempt–from–the–solvency– requirements–on–the–basis–of–its–requirement–to– comply–with–APRA–solvency–standards.

APRA–has–finalised–thirteen–prudential–standards– for–superannuation–funds–which–will–commence– on–1–July–2013.–All–trustees–of–superannuation– funds–will–be–required–to–comply–with–the– standards,–which–cover–a–range–of–obligations– including–director’s–duties–and–personal–liability,– the–new–default–superannuation–product,– MySuper,–insurance–and–operational–risk– financial–requirements.

Effective–1–November–2012,–ASIC–implemented– new–capital–requirements–for–Responsible– Entities–(REs)–of–registered–schemes.–The–new– requirements–introduced–uncapped–revenue– based–capital–requirements–for–REs–which–could– increase–the–capital–requirements–up–to–10%–of– the–RE’s–gross–revenue.

The–banking–activities–of–AMP–Bank–are–subject–to– prudential–regulations–and–supervision–by–APRA.–

APRA–has–announced–that–it–supports–the–Basel– Committee–on–Banking–Supervision’s–Basel–III– framework–and–as–a–result–has–released–new– prudential–standards–for–Australian–authorised– deposit-taking–institutions.–The–new–standards,– as–they–relate–to–capital,–came–into–effect–on– 1–January–2013,–subject–to–various–transitional– arrangements.–On–6–May–2013,–APRA–released–its– second–consultation–package–on–Basel–III–liquidity– reforms,–which–are–expected–to–be–in–place–by– 1–January–2015.–

AMP–Bank–has–agreed–transition–arrangements– with–APRA–in–line–with–Basel–III–requirements–on– its–subordinated–debt–instruments–outstanding– at–31–December–2012.–

AMP–Bank’s–business–and–earnings–are–affected– by–the–fiscal–or–other–policies–adopted–by– various–regulatory–authorities–of–the–Australian– government.–The–requirement–to–maintain– certain–levels–of–Tier–1–and–Tier–2–eligible– capital–affects–the–level–of–lending–activity,–or– alternatively,–requires–the–issue–of–additional– equity–capital–or–subordinated–debt,–which–

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would–also–serve–as–additional–sources–of–funds– for–AMP–Bank.–Any–change–in–regulation,–or–in–its– interpretation,–including–changes–that–increase– the–requirements–of–regulatory–capital–or–impact– the–regulatory–capital–resources,–could–have–a– material–adverse–impact–on–AMP–Bank’s–financial– performance–and–position.

APRA–is–developing–a–supervision–framework– for–conglomerate–groups.–These–standards–are– expected–to–be–implemented–on–1–January–2015.– Draft–standards–have–been–released–covering– capital–management,–group–governance,–risk– management–and–risk–exposures.–It–is–expected– that–the–capital–standards–will–be–based–on–a– Common–Equity–Tier–1–Capital–regime,–which– means–that–eligible–capital–for–the–purposes–of– those–standards–will–be–required–to–be–in–the–form– of–common–equity–only,–subject–to–transitional– arrangements–confirmed–by–APRA.–Under–those– transitional–arrangements,–AMP–Notes–and– other–term–subordinated–debt–currently–held– at–the–AMP–group–level–will–continue–to–be–100– per–cent–recognised–as–eligible–capital–under–the– revised–standards,–until–the–earlier–of–the–relevant– instrument’s–first–call–date–or–March–2016.–It–is– possible–that–the–new–supervision–framework– for–conglomerate–groups–will–impact–the–level– and–nature–of–regulatory–capital–resources– attributed–to–the–AMP–group’s–capital,–particularly– its–subordinated–debt–(as–detailed–earlier),–and– the–level–of–capital–requirements.–Increased– regulation–in–this–area,–including–the–introduction– of–internal–capital–adequacy–assessment–process– requirements,–may–also–increase–the–cost–of– compliance–and–the–risk–of–non-compliance–for– the–AMP–group.

Any–significant–change,–whether–or–not–related– to–the–prudential–framework–for–conglomerate– groups,–in–the–standards–prescribed–by–regulators– may–have–a–significant–impact–on–the–financial– performance–and–position–of–AMP–group,–and– the–level–of–capital–required–to–support–the– AMP–group’s–business–units.–It–is–possible–that– global–events–could–result–in–further–changes–to– requirements–prescribed–by–regulators.–In–certain– circumstances,–APRA–or–other–regulators–may– require–AMP–and–Regulated–Entities–of–the–AMP– group–to–hold–a–greater–level–of–capital–to–support– its–business–and/or–require–those–entities–not–to– pay–dividends–or–restrict–the–amount–of–dividends– that–can–be–paid,–by–them,–including–dividends– paid–by–AMP.–The–results–of–the–above–regulatory–

changes–may–require–the–AMP–group–to–revise– and/or–withdraw–its–range–of–products–and/ or–services,–change–its–premiums,–fees–and/or– charges,–redesign–its–technology–or–other–systems– incurring–significant–expense,–retrain–its–staff–and– planners,–pay–additional–tax,–hold–more–capital– or–incur–other–costs.–The–AMP–group–continues– to–work–through–the–impacts–of–these–changes– as–they–occur,–however–these–changes–may–still– have–a–material–adverse–impact–on–the–financial– performance–and–position–of–the–AMP–group.

Change of Federal Government, September 2013

It–is–expected–that–the–new–Coalition–Government– during–its–first–term–will–seek–to–implement– a–financial–system–inquiry–and–also–publish–a– comprehensive–white–paper–on–potential–tax– reform.–The–findings–and–recommendations–of– the–financial–system–inquiry–and–the–tax–white– paper–may–have–an–impact–on–the–activities–and– operations–of–the–AMP–group.–The–results–of–the– financial–system–inquiry–and–tax–white–paper–may– require–the–AMP–group–to–revise–and/or–withdraw– its–range–of–products–and/or–services,–change– its–premiums,–fees–and/or–charges,–redesign–its– technology–or–other–systems,–which–may–result– in–the–AMP–group–incurring–significant–expense– and–having–to–retrain–its–staff–and–planners,–pay– additional–tax,–hold–more–capital–and–perhaps– incur–other–costs.–The–AMP–group–will–work– through–the–impacts–of–any–relevant–changes– as–they–occur,–however–these–changes–may–still– have–a–material–adverse–impact–on–the–financial– performance–and–position–of–the–AMP–group.

Tax laws

Australian–tax–law–is–frequently–being–changed,– both–prospectively–and–retrospectively.–Of– particular–relevance–to–the–AMP–group–are– expected–future–changes–to–tax–law–affecting–the– superannuation–and–financial–services–industries,– following–a–number–of–recent–Australian– Government–reviews–(including–the–Henry– Review).–Significant–recent–tax–law–changes–and– current–proposals–for–further–reforms–give–rise– to–risks,–as–the–status–and–precise–scope–of–many– new–and–proposed–tax–laws–is–not–yet–known.

There–are–risks–that–any–changes–to–the–tax– law,–including–the–current–rate–of–company– income–tax,–may–both–impact–on–demand– for–financial–products–and–services–and–also–

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impact–on–shareholder–returns–and–the–level–of– dividend–franking.

The–ATO,–as–part–of–its–ordinary–processes–in– reviewing–large–business–taxpayers,–takes– into–account–their–size–and–complexity.–The– AMP–group,–as–a–large–and–complex–group,– can–be–expected–to–be–subject–to–a–high–level– of–review–by–the–ATO–in–respect–of–ongoing– taxation–compliance.

Changes–to–the–taxation–of–life–insurance– businesses–in–New–Zealand,–which–will–impact– AFS–NZ–from–1–July–2015,–are–expected–to–result– in–a–material–increase–in–the–amount–of–corporate– tax–paid–by–AFS–NZ.–These–changes–apply–to–all–life– insurance–companies–in–New–Zealand–and–are–not– specific–to–AFS–NZ.–If–the–change–had–applied–for– the–half-year–ended–30–June–2013,–the–additional– tax–payable–by–the–AMP–group–would–have– been–NZ$10.8m.

5.2.3 Product risk

Demand for financial products and services

Demand–for–the–AMP–group’s–financial–products– and–services–is–affected–by–changes–in–economic– conditions,–investment–markets,–investor– sentiment,–customer–preferences,–regulation,– tax–law–and–legislation.–The–global–financial–crisis– saw–a–deterioration–in–market–values–across– most–asset–classes–as–well–as–a–slowdown–in–the– growth–of–the–global–economy.–Although–the– Australian–investment–market–has–generally– improved–since–then,–local–economic–conditions– and–investment–markets–remain–susceptible–to– global–economic–and–market–uncertainty.–Any– deterioration–in–investment–markets,–investor– sentiment–or–economic–conditions–in–the–AMP– group’s–core–markets–may–lead–to–reductions–in– new–business–sales,–and–therefore–reduced–cash– flows,–which–may–have–an–adverse–impact–on–the– overall–financial–performance–and–position–of–the– AMP–group.

Adverse impact on product margins

Product–margins–across–the–AMP–group– may–be–adversely–impacted–by–a–number–of– factors,–including:

  • –– the–introduction–of–lower-priced–products–in– response–to–competitive–dynamics–leading–to– margin–compression–as–customers–transfer–to– lower–margin–products

  • –– an–increase–in–funding–costs,–particularly– within–the–AMP–Bank–business

  • –– changes–to–product–offering–and–the–mix– of–assets–under–management,–particularly– within–the–AMP–Capital–business–where– greater–demand–for–passive–relative–to– active–management,–greater–allocation–to– cash–and–fixed–income–assets–and–greater– use–of–external–fund–managers–may–lead–to– margin–compression

  • –– changes–to–the–distribution–of–products,– including–greater–use–of–external–distribution– channels–such–as–brokers

  • –– increased–lapse–experience

  • –– regulatory–change,–including–FOFA–and– Stronger–Super

  • –– changing–consumer–behaviour

  • –– higher–rates–of–inflation.

These–factors–may–have–a–material–impact–on–the– overall–financial–performance–and–position–of–the– AMP–group.–

Claims and persistency experience risk

AMP–Life–and–NMLA–issue–insurance–policies– covering–mortality,–morbidity–and–longevity– risk–under–which–they–are–exposed–to–the–risk–of– insurance–claims–by–policyholders–( claims risk )–and– the–risk–of–policyholders–cancelling–or–allowing– their–policies–to–lapse–( persistency risk ).–Actual– experience–on–claims–and–persistency–may–differ– from–the–experience–assumed–when–issuing– policies.–This–may–be–due–to–(but–not–limited–to)– deterioration–in–persistency–or–claims,–impacts– of–pandemics,–natural–disasters–or–worsening–in– general–economic–conditions.–AMP–may–reinsure– against–these–risks,–however,–reinsurance–is–subject– to–availability–and–appropriate–commercial–terms.

The–AMP–group–maintains–liabilities–for–future– policy–benefits–and–unpaid–claims–in–its–life– insurance–business.–The–calculation–of–policy– liabilities–depends–on–estimates–of–expected– future–revenue,–expenses–and–claims.–These– estimates–use–assumptions–of–future–mortality,– morbidity,–persistency,–investment–returns,– expenses–and–inflation–rates.–The–assumptions– are–based–on–actuarial–and–statistical–information– and–consideration–of–the–facts–and–circumstances– known–at–a–given–point–in–time.–Although–the– AMP–group–maintains–assets–in–excess–of–policy–

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liabilities–based–on–best-estimate–assumptions,– actual–results–and–conditions–may–be–different– from–those–assumed.–

As–a–result–of–the–inherent–uncertainties–in– assessing–claims–experience–and–policy–liabilities,– there–can–be–no–certainty–that–the–ultimate– costs–will–not–materially–exceed–those–supported– by–the–AMP–group’s–calculated–liabilities.–Any– actual–differences,–or–any–assumption–changes,– may–result–in–a–material–adverse–impact–on–the– financial–performance–and–position–and–level–of– capital–of–the–AMP–group.

Deferred–Acquisition–Costs–(DAC)–represents–the– upfront–cost–associated–with–acquiring–new–risk– insurance–business–(including–planner–payments,– controllable–costs–and–stamp–duty).–As–at–30– June–2013,–DAC–represented–$2.23–billion–of– total–capital–resources.–If–lapse–rates–on–policies– associated–with–DAC–were–to–increase,–DAC–may– be–written–down.–This–could–have–a–material– adverse–impact–on–the–financial–performance–and– position–of–the–AMP–group.

Income–protection–and–total–and–permanent– disability–(TPD)–claims–typically–increase–in– periods–of–higher–unemployment–and/or–when– small–to–medium–enterprises–are–under–stress.– The–AMP–group,–and–the–broader–industry,–has– recently–observed–an–increase–in–the–frequency– and–cost–of–claims–in–income–protection–and–TPD– due–to–these–factors.

As–of–30–June–2013,–experience–losses–in–Australia– were–A$33–million–in–1H13–compared–with–an– experience–gain–of–A$6–million–in–1H12.–In–New– Zealand,–the–experience–gain–for–1H13–was–A$1– million,–unchanged–from–1H12.–Performance– reflected–challenging–external–cyclical–and– structural–factors.–External–factors–driving– persistency–and–claims–risks–include–cost–of–living– pressures–and–unemployment–levels–as–well–as– customers–changing–policies–more–frequently,– impacting–traditional–remuneration–structures.–

AMP–recently–reported–its–third–quarter–cashflows– for–2013–and–provided–an–update–on–its–Wealth– Protection–business–which–included–an–expected– $55–to–$65–million–reduction–in–AMP’s–operating– results–for–Q4–2013.–See–section–3.4–for–further– information.

To–the–extent–that–any–of–the–above–risks–arise,– this–may–result–in–a–material–adverse–impact–on– the–financial–performance–and–position–of–the– AMP–group.

Estimation of claims provisions

Claims–costs–in–excess–of–provisions–for–insurance– liabilities–could–have–a–material–adverse– impact–on–the–AMP–group’s–business,–financial– performance,–liquidity,–capital–resources–and– financial–condition.–Provisions–for–insurance– liabilities–include,–but–are–not–limited–to,– provisions–for–claims–on–total–and–permanent– disability–products–and–income–protection– products,–for–which–the–AMP–group–experienced– increased–claims–during–1H13.

The–AMP–group’s–provisions–for–insurance– liabilities–may–prove–to–be–inadequate–to–cover– its–ultimate–liability–for–policies–written–by–its–life– insurance–businesses.–Within–its–life–insurance– subsidiaries,–the–AMP–group–maintains–provisions– for–future–claims,–maintenance–expenses– and–adviser–remuneration.–The–estimation– of–provisions–does–not–represent–an–exact– calculation–of–liability,–but–rather–a–best–estimate.– These–estimates–are–based–on–actuarial–and– statistical–methodologies–on–the–basis–of–facts– and–circumstances–known–at–a–given–time–and– estimates–of–trends–into–the–future.–Actual–future– events–and–conditions–may–result–in–the–current– estimates–of–claims–costs–being–inadequate.– Moreover,–additional–costs–of–claims,–including– claims–inflation–and–costs–arising–from–changes–in– the–legal–environment,–the–type–or–magnitude–of– which–management–cannot–foresee,–may–emerge– in–the–future.

In–addition,–insurance–liabilities–include–an–explicit– allowance–for–the–value–of–future–profits–which– will–be–released–gradually–over–the–lifetime– of–the–insurance–business.–Any–deterioration– in–the–future–outlook–of–for–future–profits– will–be–reflected–in–updated–best–estimate– assumptions–and–will–lead–to–a–reduction–in– the–future–profit–margins–(and–hence–reduced– future–reported–profits).–If–the–future–profit– margins–are–insufficient–then–the–change–in– best–estimate–assumptions–will–lead–to–future– losses–being–recognised–immediately–which–will– negatively–impact–the–financial–performance– and–position–of–the–AMP–group–and–may–require– additional–capital.–

Redemption and rebalancing risks

Redemption–risks–are–the–risks–associated–with– the–AMP–group’s–ability–to–meet–customer– requests–for–redemption–from–investments,–

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retail–deposits,–superannuation–or–pension–funds– or–from–the–surrender–of–life–insurance–policies.– The–impact–of–these–risks–varies–depending–upon– the–nature–and–governing–terms–of–the–relevant– investment,–the–arrangements–with–the–customer– and–the–assets–in–which–the–fund–is–invested–or– which–back–the–policy–liability.

Non-investment linked products

Holders–of–certain–policies–within–the–AMP–group– may–surrender–their–policy–in–return–for–a–lump– sum–payment.–The–AMP–group–holds–assets–to– meet–the–policy–liabilities–as–they–are–expected– to–fall–due.–To–surrender–a–policy,–generally–the– policyholder–is–required–to–have–held–that–policy– for–a–specified–minimum–period–of–time–and–may– have–to–accept–a–lower–value–than–the–maturity– value.–In–some–instances,–the–AMP–group–has– the–right–to–amend–surrender–values,–subject–to– meeting–minimum–statutory–requirements.

For–certain–investments,–capital–guarantees– will–apply,–and–surrender–values–may–at–times– exceed–the–value–of–the–assets–backing–these– investments,–which–could–result–in–a–material– adverse–impact–on–the–financial–performance– and–position–and–level–of–capital–of–the–AMP– group.–The–extent–of–this–adverse–impact–may–be– greater–if,–in–order–to–meet–redemption–requests,– the–AMP–group–is–forced–to–dispose–of–assets,– particularly–illiquid–assets,–in–a–short–timeframe,– resulting–in–assets–being–sold–below–their–fair– value–under–normal–market–conditions.–

For–funds–and–assets–in–highly–liquid–markets,–the– redemption–requests–can–usually–be–met–through– asset–sales.–For–funds–and–assets–in–illiquid– markets–(for–example,–high–yield–debt,–property– and–mortgage–funds),–asset–sales–can–be–more– difficult–to–achieve,–particularly–at–short–notice,– and–may–result–in–the–asset–being–sold–below–its– fair–value–under–normal–market–conditions.–In– extreme–circumstances,–it–may–not–be–possible–to– sell–certain–assets–at–short–notice.–Such–outcomes– could–have–a–material–adverse–impact–on–the– investment–returns–of–the–relevant–policyholders– or–investors.–This,–in–turn,–may–have–a–material– adverse–impact–on–the–financial–position–and– performance–of–the–AMP–group.

To–the–extent–that–the–AMP–group–believes–it– cannot–meet–redemption–requests–through– asset–sales,–it–will–usually–suspend–or–defer– redemptions–(where–it–has–the–right–to–do–so)– to–allow–sufficient–time–to–complete–the–asset– sales–necessary–to–meet–the–requests.–From– 2008,–the–AMP–group–has–taken–action–to–defer– redemptions–for–certain–high–yield–debt,–property– and–mortgage–funds.

The–suspension–or–deferral–of–redemptions–and– subsequent–sale–of–assets,–especially–below– their–fair–value,–may–impact–the–AMP–group’s– reputation,–reduce–management–fee–income– and–other–asset–values–and–have–a–material– adverse–impact–on–the–financial–performance–and– position–of–the–AMP–group.

5.2.4 Economic risk

Investment-linked products

Policyholders–or–investors–in–investment–linked– products–may–seek–to–redeem–some–or–all–of– their–investments.

In–order–to–satisfy–these–redemptions,–the–AMP– group,–as–the–manager–of–the–investments,– may–be–required–to–sell–assets–underlying–the– policyholder’s–or–investor’s–investment.–

During–certain–periods,–as–was–the–case–in–the– global–financial–crisis,–some–asset–classes–may– be–subject–to–a–higher–level–of–redemptions–than– historically–had–been–the–case–(for–example,– high–yield–debt,–property–and–mortgage–funds).–– Furthermore,–to–the–extent–that–AMP–group– passes–on–the–costs–associated–with–Stronger– Super–to–customers,–this–may–increase–the–risk– of–redemptions.–

Global market and economic environment

The–financial–performance–of–the–AMP–group–is– significantly–affected–by–changes–in–investment– markets,–market–volatility–and–economic– conditions–both–globally–and–in–its–primary– markets,–Australia–and–New–Zealand.–These– changes–may–materially–influence:–

  • –– the–operating–margins–of–the–AMP–group’s– businesses–and–the–demand–for–its–financial– products–and–services

  • –– the–performance–of–the–various–investment– funds–operated–or–managed–within–those– businesses–

  • –– the–value–of–investments–supporting– shareholders’–funds–and–investments–held–on– behalf–of–clients

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  • –– the–level–of–new–business–and–withdrawals:

  • –– the–availability–and–cost–of–credit–and–the– debt–funding–requirements–of–the–AMP– group,–its–businesses–and–the–various– funds–operated–by–its–businesses

  • –– the–level–of–capital–required–within–the– AMP–group,–and

  • –– the–joint–venture–with–MUTB–increases–the– AMP–Capital’s–reliance–on–funds–sourced– from–offshore–investors,–exposing–the– AMP–group–to–a–risk–of–an–outflow–of–these– funds–in–times–of–economic–uncertainty.

These–risks–may–have–an–adverse–impact–on–the– overall–financial–performance–and–position–of–the– AMP–group.

Systemic shocks in relation to Australian, New Zealand or other financial systems

A–major–systemic–shock–could–occur–which– causes–an–adverse–impact–on–the–Australian,–New– Zealand–or–other–financial–systems.–The–financial– services–industry–and–capital–markets–have–been,– and–may–continue–to–be,–adversely–affected–by– continuing–market–volatility–and–global–economic– conditions.–There–is–an–increased–focus–on–the– potential–for–sovereign–debt–defaults–and/or– significant–bank–failures,–which–has–exacerbated– these–conditions.–There–can–be–no–certainty– that–market–disruptions,–including–the–increased– cost–of–funding–for–certain–governments,–will– not–spread,–nor–can–there–be–any–assurance–that– future–assistance–packages,–will–be–available,–or– sufficiently–robust–to–address–any–further–market– contagion,–which–could–negatively–impact–the– AMP–group.–

Any–such–market–disruptions–could–adversely– impact–financial–institutions–such–as–the–AMP– group–because–consumer–and–business–spending– may–decrease,–unemployment–may–rise–and– demand–for–the–services–the–AMP–group–provides– may–decline,–thereby–reducing–its–earnings.–These– events–could–also–affect–the–ability–of–the–AMP– group’s–counterparties–to–meet–their–obligations,– causing–AMP–to–incur–credit–losses.–These– events–could–also–result–in–the–undermining–of– confidence–in–the–financial–system,–reducing– liquidity–and–impairing–AMP–group’s–access–to– funding–and–impairing–AMP–group’s–customers– and–counterparties–and–their–businesses.–To–the– extent–that–these–risks–eventuate,–this–could–have–

a–material–adverse–impact–on–the–overall–financial– performance–and–position–of–the–AMP–group.

Contagion risk

Contagion–risk–is–the–risk–that–concerns–about,– or–default–by,–one–or–more–financial–institutions– could–lead–to–market-wide–liquidity–problems,– losses–or–defaults–by–other–institutions.–This–risk– arises–in–part–because–of–the–inter-relationships– between–many–financial–institutions–(including– the–AMP–group)–and–is–heightened–in–times– of–significant–volatility–in–the–finance–sector– and–capital–markets.–Contagion–risk–may–have– an–adverse–impact–on–the–overall–financial– performance–and–position–of–the–AMP–group.

5.2.5 Strategic risk

Strategic risk

‘Strategic–risk’–is–the–risk–associated–with–the– competitive–positioning–of–the–business,–and– the–AMP–group’s–ability–to–respond–in–a–timely– manner–to–changes–in–its–competitive–landscape– and–protect–the–value–of–the–AMP–brand.– Examples–of–strategic–risks–includes–competitor– disruption,–changing–customer–preferences,–and– changing–political–and–regulatory–environments.– The–AMP–board–sets–the–overall–strategic– direction–of–AMP–and–the–AMP–group–as–part–of– the–strategic–planning–process.

Failure to adequately anticipate and respond to regulatory change

Failure–to–adequately–anticipate–and–respond–to– regulatory–change–due–to–complexity,–volume– and–lack–of–clarity–may–result–in–higher–costs,– sub-optimal–processes–and–an–inefficient– business–response.–This–in–turn–could–have–a– material–adverse–impact–on–the–financial–position,– performance–and–reputation–of–the–AMP–group.

Brand and reputation

The–AMP–brand–is–highly–recognisable–in– Australia–and–New–Zealand–and–has–achieved– leading–brand–awareness–in–both–countries– over–many–years.–Although–difficult–to–measure,– a–diminution–in–corporate–reputation–can– contribute–to–lower–new–business–sales,–reduced– inflows–of–investment–funds,–greater–outflows– and,–ultimately,–reduced–financial–performance– and–position.

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Loss of financial advisers

The–AMP–group–has–the–largest–financial–advice– network–in–Australia–and–New–Zealand.–In– addition–to–support–services–provided–by–the–AMP– group–to–its–planners–and–planning–practices,–the– AMP–group–provides–practice–loans–to–certain– planners–and–planning–practices–and–also–invests– in–planning–practices.–Failure–to–attract–or–retain– planners,–could–have–a–material–adverse–impact– on–the–financial–performance–and–position–of–the– AMP–group.

The–introduction–of–FOFA–and–Stronger–Super– has–heightened–the–risk–of–retaining–AMP–group’s– financial–advisers.–Furthermore,–the–retention– arrangements–put–in–place–with–certain–AXA– financial–advisers–following–the–AMP-AXA–merger– are–due–to–expire–in–2014.

Inability of the business to adapt to competitor-driven change

The–wealth–management–industry–in–which– the–AMP–group–operates–in–Australia–and–New– Zealand,–and–the–banking–industry–in–which– AMP–Bank–operates,–is–becoming–increasingly– competitive.–Factors–contributing–to–this–include– entry–of–new–participants,–development–of– alternative–distribution–methods–and–increased– diversification–of–product–mix–by–major– competitors.–Responses–to–increased–competition– may–include–lower–prices,–increased–costs–(such– as–marketing),–reduced–persistency,–higher– redemptions,–more–aggressive–risk–taking–(such– as–higher–benefit–levels–in–risk–products)–or–a– combination–of–these,–which–may–have–a–material– adverse–impact–on–the–financial–performance–and– position–of–the–AMP–group.

Inability of the business model to adjust to changing customer needs

Customer–preferences–continue–to–change–rapidly– in–the–current–financial–services–environment,– driven–in–particular–by–advances–in–technology– and–competitive–dynamics.–The–failure–of–the– AMP–group–to–adapt–its–capabilities–and–operating– model–in–order–to–remain–relevant–to–customers,– within–a–rapidly–changing–environment,–may– impact–new–business–and–retention–of–existing– business,–resulting–in–lower–than–anticipated– revenues–and–profits.–This–could–have–a–material– adverse–impact–on–the–financial–performance–and– position–of–the–AMP–group.

Corporate transactions

The–AMP–group–at–times,–evaluates–and–may– undertake–a–range–of–initiatives,–including– acquisitions,–divestments,–mergers,–joint– ventures–and–strategic–alliances.–These–strategic– initiatives–can–be–complex–and–costly–and–may– require–AMP–to–comply–with–additional–local– or–foreign–regulatory–requirements–which– may–carry–additional–risks.–These–decisions– may,–for–a–variety–of–reasons,–not–deliver–the– anticipated–positive–business–results–and–could– have–a–material–adverse–impact–on–the–business,– prospects,–engagement–with–regulators,–financial– performance–or–position–of–the–AMP–group.

Contingent liability for disposed businesses

The–AMP–group–has–disposed–of–a–number–of– businesses–and–portfolios–to–third–parties.–The– sale–agreements–for–these–disposals–typically– provide–for–warranties–and–indemnification–for– specified–periods–in–relation–to–certain–matters– concerning–the–businesses–and–portfolios– disposed.–While–the–AMP–group–has–no– knowledge–that–it–has–any–liability–under–these– warranty–and–indemnity–arrangements–which–is– not–appropriately–provided–for,–the–possibility–of– liability–may–arise–and–any–such–liability–may–be– material–and–may–have–a–material–adverse–impact– on–the–financial–performance–and–position–and– level–of–capital–of–the–AMP–group.

5.2.6 Operational, legal and compliance risks

Operational risk

‘Operational–risk’–is–the–risk–of–loss–resulting– from–inadequate–or–failed–internal–processes,– people–and–systems–or–from–external–events.– This–includes–legal–and–compliance–risk,–including– adherence–to–internal–policies–and–industry– standards,–but–excludes–reputational–risk.

Operational–exposures–relevant–to–the–industry– in–which–the–AMP–group–operates–relate–to– information–technology,–human–resources,– internal–and–external–fraud,–project–management,– outsourcing,–business–continuity,–product– administration,–unit–pricing,–business–processes,– and–the–introduction–of–new–products.–The– AMP–group–operational–risk–profile–reflects– these–exposures,–as–well–as–including–exposures– related–to–the–quality–of–financial–planning– advice–and–the–management–of–change.–Further–

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detail–on–outsourcing–risk,–technology–risk,– cyber-security–and–loss–of–personnel–are–provided– separately–below.

The–financial–statements–of–the–AMP–group– contain–provisions–for–some–of–these–risks–and– generally–disclose–certain–contingent–liabilities– in–accordance–with–applicable–accounting– standards.–Given–the–inherent–uncertainty–in– predicting–the–outcome–of–events–that–may–occur– in–the–future,–there–can–be–no–assurance–that–such– provisions–or–disclosure–adequately–address–all– outcomes–that–may–arise–in–the–future.

Failure of risk management strategies

AMP–has–implemented–risk–management– strategies–and–internal–controls–involving– processes–and–procedures–intended–to–identify,– monitor–and–mitigate–the–risks–to–which–it– is–subject,–including–liquidity–risk,–credit–risk,– market–risk,–compliance–risk,–conduct–risk–and– operational–risk,–all–of–which–are–important– to–the–AMP–group’s–reputation.–However,– there–are–inherent–limitations–with–any–risk– management–framework–as–there–may–exist,–or– emerge–in–the–future,–risks–that–the–AMP–group– has–not–anticipated–or–identified.–If–any–of–the– AMP–group’s–risk–management–processes–and– procedures–prove–ineffective–or–inadequate,–or– are–otherwise–not–appropriately–implemented,– this–could–have–a–material–adverse–impact–on– the–financial–performance–and–position–of–the– AMP–group.

Failure to comply with regulatory and legislative requirements

The–financial–services–industry–both–globally– and–in–Australia–and–New–Zealand–continues– to–undergo–a–significant–level–of–regulatory– change,–to–which–the–AMP–group–continues–to– respond–and–adjust–its–business–model.–Any– failure–to–comply–with–regulatory–and–legislative– requirements–due–to–the–volume–and–complexity– of–regulatory–change,–may–result–in–breaches,– fines,–regulatory–action–or–reputational–impacts,– which–could–in–turn,–have–a–material–impact– on–the–financial–performance,–position–and– reputation–of–the–AMP–group.

The–AMP–group–has–the–largest–financial–advice– network–in–Australia–and–AMP–Capital–offers–its– financial–products–and–services–to–retail–investors– in–Australia–and–New–Zealand,–and–to–institutional–

investors–throughout–the–world.–AMP–group–has– training,–supervision–and–compliance–processes– in–place–across–all–of–its–businesses,–including–its– advice–network–and–AMP–Capital.–Despite–the– resources–allocated–to–compliance–within–AMP,– there–is–a–risk–that–advisers–or–AMP–group–entities– may–not–comply–with–the–law–when–providing– products–or–services–to–clients–or–investors.– Those–clients–and–investors–may–sue–AMP–for– losses–suffered–by–them–as–a–consequence–of– any–such–non-compliance–with–law.–The–risk–of– non-compliance–is–heightened–when–new–law–or– regulations–are–introduced,–such–as–the–recent– FOFA–regulatory–changes.–If–compensation– of–clients–or–investors–was–required–in–these– circumstances,–there–may–be–a–material–impact– on–the–overall–financial–performance–and–position– of–the–AMP–group–if–such–payments–were–not– covered–by–the–professional–indemnity–insurance– which–the–AMP–group–has–in–place.

Failure to deliver change effectively

The–AMP–group–is–currently–undergoing–a–material– level–of–business,–operational,–and–regulatory– change,–including–embarking–upon–a–three–year– efficiency–program–to–drive–earnings–growth– and–improved–returns.–While–the–AMP–group–has– progressed–its–detailed–planning,–there–remains– a–risk–that–unforeseen–issues–may–arise,–resulting– in–lower–efficiency–and/or–growth–returns.–In– addition,–failure–to–deliver–change–effectively–may– result–in–the–failure–of–the–AMP–group–to–achieve– its–future–growth–and–strategic–objectives,–which– in–turn–could–have–a–material–impact–on–the– future–financial–performance–and–position–of–the– AMP–group.

Legal proceedings and other contingent liabilities

In–the–course–of–its–operations,–the–AMP–group–is– involved–in–disputes–and–litigation.–Any–material– or–costly–dispute–or–litigation–involving–the– AMP–group–(including–the–litigation–described– below)–could–have–a–material–adverse–impact–on– the–financial–performance–and–position–of–the– AMP–group.

In–2002–litigation–regarding–a–product–known– as–‘prosperity–bonds’–was–brought–by–a–group– of–investors–against–NMLA–(an–entity–which– became–part–of–the–AMP–group–when–the– transactions–to–allow–the–merger–between–AMP–

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and–the–Australian–and–New–Zealand–businesses– of–AMP–AAPH–Limited–(formerly–known–as–AXA– Asia–Pacific–Holdings–Limited)–were–completed).– One–of–the–original–plaintiff’s–claims–remains– outstanding.–NMLA–believes–that–either–the– remaining–plaintiff’s–claims–will–fail–or,–if–it–has– any–exposure–to–the–plaintiff,–this–will–be–for– a–non-material–amount.–However,–should–its– view–be–incorrect–and–a–final–determination–is– eventually–made–in–favour–of–the–plaintiff–for– a–material–amount,–this–could–have–a–material– adverse–impact–on–the–financial–performance–and– position–of–the–AMP–group.

Outsourcing risk

‘Outsourcing’–involves–an–organisation–entering– into–an–agreement–with–another–party–(including– a–related–company)–to–perform,–on–a–continuing– basis,–a–business–activity–that–currently–is,–or– could–be,–undertaken–within–that–organisation.– ‘Offshoring’–is–the–practice–of–outsourcing– business–activities–to–a–service–provider–located–in– another–country–or–where–material–elements–of– the–service–are–provided–from–another–country.

While–AMP–requires–that–all–material–outsource– arrangements–are–structured,–managed–and– controlled–in–such–a–manner–that–its–market– reputation,–service–to–customers,–financial– performance–and–obligations–to–regulators–are– enhanced–or–preserved,–there–remains–a–risk–that– these–arrangements–might–fail.

Technology risk

Technology–plays–an–increasingly–important–role– in–the–delivery–of–financial–services–to–customers– in–a–cost–effective–manner.–The–AMP–group’s– ability–to–compete–effectively–in–the–future–will,– in–part,–be–driven–by–our–ability–to–maintain–an– appropriate–technology–platform–(including– execution–of–new–developments),–for–the– efficient–delivery–of–its–products–and–services.– Consequently,–there–is–a–risk–that–these,–or–the– services–the–AMP–group–uses–or–is–dependent– upon,–might–fail.

Most–of–the–AMP–group’s–daily–operations–are– computer-based–and–information–technology– systems–are–essential–to–maintaining–effective– communications–with–customers.–The–exposure– to–systems–risks–includes–the–complete–or–partial– failure–of–information–technology–systems–or– data–centre–infrastructure,–the–inadequacy–of–

internal–and–third-party–information–technology– systems–due–to,–among–other–things,–failure–to– keep–pace–with–industry–developments–and–the– capacity–of–the–existing–systems–to–effectively– accommodate–growth–and–integrate–existing–and– future–acquisitions–and–alliances.

To–manage–these–risks,–the–AMP–group–has– disaster–recovery–and–information–technology– governance–in–place.–However,–any–failure– of–these–systems–could–result–in–business– interruption,–loss–of–customers,–financial– compensation,–damage–to–reputation–and/or– a–weakening–of–the–AMP–group’s–competitive– position,–which–could–adversely–impact–its– business–and–have–a–material–adverse–effect– on–the–AMP–group’s–financial–condition–and– operations.–In–addition,–the–AMP–group–must– update–and–implement–new–information– technology–systems,–in–part–to–assist–it–to– satisfy–regulatory–demands,–ensure–information– security,–enhance–computer-based–services– for–its–customers–and–integrate–the–various– segments–of–its–business.–A–failure–to–implement– these–projects–effectively–or–execute–them– efficiently,–could–lead–to–increased–project–costs,– delays–in–the–ability–to–comply–with–regulatory– requirements,–failure–of–information–security– controls–or–a–decrease–in–the–AMP–group’s–ability– to–service–its–customers.

Cyber-security

The–AMP–group’s–systems–are–at–increasing–risk– from–cyber-attacks.–Cyber–attackers–include– organised–crime–syndicates,–hacker–activists– and–state-based–cyber–espionage,–all–of–which– use–techniques–including–hacking,–malicious– software,–phishing–and–other–forms–of–social– engineering.–Failure–to–effectively–mitigate–the– risk–from–cyber-attacks–could–have–a–material– adverse–impact–on–the–AMP–group’s–financial– performance–and–position.

Loss of personnel

The–AMP–group–has–a–large–base–of–qualified–and– experienced–personnel.–The–AMP–group’s–future– success–will–depend–on–its–continued–ability–to– attract–and–retain–highly–skilled–and–qualified– personnel.–There–can–be–no–assurance–that–key– personnel–will–continue–to–be–employed–by,–or– contracted–to,–the–AMP–group–or–that–the–AMP– group–will–be–able–to–attract–and–retain–qualified– personnel–in–the–future.–Failure–to–retain–or–

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attract–key–personnel–could–have–a–material– adverse–impact–on–the–AMP–group’s–business,– reputation,–financial–performance–and–position.

5.2.7 Additional risks relating to the Issuer

AMP–is–a–holding–company.–A–substantial–majority– of–its–assets–are–investments–in–the–subsidiaries– of–the–AMP–group.–The–ability–of–those–members– of–the–AMP–group–to–pay–dividends–and/or– repay–inter-company–loans–from–AMP–may– be–limited–by–various–regulatory,–contractual,– legal–and–tax–constraints–or–the–AMP–group’s– existing–contractual–agreements.–If–as–a–result–of– these–restrictions,–AMP–is–unable–to–receive–the– continued–transfer–of–income–or–funding–to–it– from–the–relevant–members–of–the–AMP–group–or– the–repayment–of–loans,–this–may–materially–and– adversely–impair–AMP’s–ability–to–pay–dividends,– and–to–service–and–repay–its–debt–obligations,– including–in–respect–of–AMP–Notes–2.

5.3 Risks relating to the merger of AMP with AMP AAPH’s Australian businesses

any–liability–under–these–warranty–and–indemnity– provisions–(which–is–not–appropriately–provided– for),–the–possibility–of–liability–may–arise.–Any– such–liability–under–the–transaction–documents– relating–to–the–merger–may–be–material–and–may– have–a–material–adverse–impact–on–the–financial– performance–and–position–of–the–AMP–group.

5.3.2 Exposure to AXA SA counterparty risk

The–AMP–group’s–acquisition–of–AMP–AAPH’s– Australian–and–New–Zealand–businesses–exposes– the–AMP–group–to–AXA–SA–Group–counterparty– risk.–In–particular,–under–the–transaction– documents–relating–to–the–merger,–the–AMP– group–is–relying–on–the–AXA–SA–Group–to–perform– various–obligations–including,–but–not–limited–to,– providing–various–warranties–and–indemnities–to– AMP.–Failure–by–the–AXA–SA–Group–to–perform–its– obligations–may–subsequently–have–a–material– adverse–impact–on–the–financial–performance–and– position–of–the–AMP–group.

From–30–March–2011–to–1–April–2011,–AMP,– AMP–AAPH–(formerly–known–as–AXA–AsiaPacific–Holdings)–and–AXA–SA–(a–French–global– investment,–retirement–and–insurance–group)– completed–a–number–of–transactions–to–allow–the– merger–of–AMP–and–AMP–AAPH’s–Australian–and– New–Zealand–businesses–and–the–sale–of–AMP– AAPH’s–Asian–business–to–AXA.

5.3.1 Contingent liabilities under merger transaction documents

The–AMP–group–is–required–to–comply–with–a– number–of–obligations–under–the–transaction– documents–relating–to–the–merger–and,–while– it–intends–to–comply–with–those–obligations,–to– the–extent–that–it–may–breach–those–obligations,– including–because–of–matters–outside–the–control– of–the–AMP–group,–the–possibility–of–liability– for–that–breach–may–arise.–The–transaction– documents–relating–to–the–merger–also–contain– limited–warranties–and–indemnities–given–by–AMP– to–AXA–SA–and–AMP–AAPH–in–relation–to–certain– matters.–While–AMP–has–no–knowledge–that–it–has–

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About the Reinvestment Offer

This section provides information on the Reinvestment Offer, which is an opportunity for Eligible AMP Notes holders to apply for AMP Subordinated Notes 2 and to fund their subscription for AMP Subordinated Notes 2 by selling to AMP some or all of their A$ AMP Notes.

  • 6.1 Overview

  • 6.2 What are the options available to Eligible AMP Notes holders?

  • 6.3 What are the key differences between AMP Notes and AMP Subordinated Notes 2?

  • 6.4 What are the risks associated with participating in the Reinvestment Offer?

  • 6.5 What are the risks associated with not participating in the Reinvestment Offer?

  • 6.6 What will happen if the Reinvestment Offer does not proceed?

  • 6.7 Is brokerage or stamp duty payable?

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6.1 Overview

6.1.1 What are AMP Notes?

AMP–Notes–are–unsecured–and–subordinated– debt–securities–which–were–issued–by–AMPGFS–in– 2009.–The–Australian–dollar–tranche–of–AMP–Notes– (A$–AMP–Notes)–trades–on–ASX–under–the–code– ‘AQNHA’–and–the–New–Zealand–dollar–tranche– of–AMP–Notes–(NZ$–AMP–Notes)–trades–on–the– NZX–under–the–code–‘AQN010’.–The–NZ$–AMP– Notes–are–not–eligible–for–sale–to–AMP–under–the– Reinvestment–Offer.

It–is–AMPGFS’s–current–intention–that–the–A$–AMP– Notes–not–sold–to–AMP–under–the–Reinvestment– Offer–and–the–NZ$–AMP–Notes,–will,–subject–to– APRA’s–approval–(which–is–in–its–discretion–and– may–not–be–given),–be–redeemed–for–cash–on–15– May–2014–(being–the–Step-Up–Date),–and–AMP– Notes–holders–will–receive–the–applicable–face– value–plus–any–accrued–and–unpaid–interest–to– that–date–per–AMP–Note–held.

6.1.2 What is the Reinvestment Offer?

The–Reinvestment–Offer–is–an–option–available– to–Eligible–AMP–Notes–holders–to–apply–for– AMP–Notes–2–and–to–fund–their–subscription–for– AMP–Notes–2–by–selling–to–AMP–some–or–all–of– their–A$–AMP–Notes.–Only–A$–AMP–Notes–may–be– sold–to–AMP–under–the–Reinvestment–Offer.–

The–Reinvestment–Offer–is–not–a–simple–rollover– into–a–similar–investment.–AMP–Notes–and– AMP–Notes–2,–while–having–a–number–of–similar– features,–have–different–benefits–and–risks,– which–must–be–evaluated–independently.–The–key– differences–include:

  • –– AMP–Notes–2–are–issued–by–AMP–(which–is–the– parent–entity–of–the–AMP–group),–not–AMPGFS– (which–is–the–primary–finance–subsidiary–of– the–AMP–group)

  • –– AMP–Notes–2–may–be–Converted–to–AMP– Ordinary–Shares–(or–be–Written-off)–if–a– Non-Viability–Trigger–Event–occurs

  • –– the–current–margin–on–AMP–Notes–is–4.75–per– cent.–That–margin–will–increase–to–7.125–per– cent–on–the–Step-Up–Date–if–the–AMP–Notes– are–not–redeemed–at–that–time–(although–it– is–AMP’s–current–intention–to–redeem–AMP– Notes–still–outstanding–on–the–Step-Up–Date,– subject–to–APRA’s–prior–written–approval).–

As–a–consequence–of–the–change–in–market– conditions–since–2009–when–the–AMP–Notes– were–issued,–the–Margin–for–AMP–Notes–2–of– 2.65–per–cent–is–less–than–the–margins–on–the– AMP–Notes

  • –– the–Margin–for–AMP–Notes–2–will–not–increase– (ie,–there–will–be–no–‘step-up’–in–the–Margin).–It– will–be–fixed–for–the–life–of–AMP–Notes–2,–and

  • –– the–maturity–date–for–AMP–Notes–is–1–April– 2019.–The–Maturity–Date–for–AMP–Notes–2–is– 18–December–2023.

Under–the–Reinvestment–Offer,–Eligible–AMP– Notes–holders–who–wish–to–apply–for–AMP–Notes– 2–may–fund–their–subscription–for–AMP–Notes–2– by–selling–to–AMP–some–or–all–of–their–A$–AMP– Notes.–Eligible–AMP–Notes–holders–who–elect–to– participate–in–the–Reinvestment–Offer–will–sell– their–A$–AMP–Notes–to–AMP–for–$100–plus–the– Accrued–Interest–Amount–per–A$–AMP–Note–sold.– $100–of–the–proceeds–of–the–sale–will–be–applied– to–fund–the–subscription–for–an–AMP–Note–2–and– the–participating–Eligible–AMP–Notes–holder–will– receive–an–amount–per–A$–AMP–Note–sold–equal– to–the–Accrued–Interest–Amount–in–compensation– for–the–interest–they–would–have–received–for–the– 33–day–period–from–(and–including)–15–November– 2013–to–(but–excluding)–the–Issue–Date.–Eligible– AMP–Notes–holders–who–participate–in–the– Reinvestment–Offer–will–receive–an–allocation–in– priority–over–Securityholder–Applicants–for–each– A$–AMP–Note–sold–to–AMP–if–the–Offer–proceeds.

Eligible–AMP–Notes–holders–who–participate–in– the–Reinvestment–Offer–and–apply–for–additional– AMP–Notes–2–will–be–treated–as–Securityholder– Applicants–in–respect–of–their–application–for– additional–AMP–Notes–2,–which–means–that,– broadly,–they–will–not–receive–a–priority–allocation.

6.1.3 Am I eligible to participate in the Reinvestment Offer?

To–be–eligible–to–participate–in–the–Reinvestment– Offer,–you–must:

  • –– be–a–registered–holder–of–A$–AMP–Notes– trading–on–ASX–on–the–Reinvestment–Record– Date–(being–7.00pm–(Sydney–time)–on– 4–November–2013)

  • –– be–shown–on–the–register–as–having–an–address– in–Australia–(or–another–jurisdiction–to–which– AMP–determines–to–extend–the–Reinvestment–

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Offer),–and–

  • –– must–not–be–in–the–United–States,–a–US–Person,– acting–as–a–nominee–for,–or–for–the–account– or–benefit–of,–a–US–Person,–or–otherwise– prevented–from–receiving–the–Reinvestment– Offer–or–AMP–Notes–2–under–the–laws–of–any– jurisdiction–as–determined–by–AMP.–

NZ$ AMP Notes are not eligible for sale to AMP under the Reinvestment Offer.

6.1.4 What is the purpose of the Reinvestment Offer, and what are its terms?

The–purpose–of–the–Reinvestment–Offer–is–to– allow–Eligible–AMP–Notes–holders–to–sell–their– A$–AMP–Notes–to–AMP–to–fund–their–subscription– for–AMP–Notes–2.

Participation in the Reinvestment Offer may not be appropriate or economically advantageous for Eligible AMP Notes holders

Eligible–AMP–Notes–holders–who–decide–to– participate–in–the–Reinvestment–Offer–will–sell– some–or–all–of–their–A$–AMP–Notes–to–AMP–for– $100–plus–the–Accrued–Interest–Amount–per– A$–AMP–Note.–$100–of–the–proceeds–of–the–sale– will–be–applied–to–fund–the–subscription–for–an– AMP–Note–2.–The–Accrued–Interest–Amount–will– be–paid–to–you–in–compensation–for–the–interest– you–would–have–received–for–the–33–day–period– from–(and–including)–15–November–2013–to–(but– excluding)–the–Issue–Date.–It–will–be–calculated– for–that–33–day–period–on–the–same–basis–as– other–interest–payments–in–respect–of–the–AMP– Notes.–The–interest–rate–will–be–the–market–rate– applicable–to–the–AMP–Notes–on–15–November– 2013–plus–a–margin–of–4.75–per–cent.–The–Accrued– Interest–Amount–will–be–paid–in–cash–into–the– bank–accounts–of–Eligible–AMP–Notes–holders– who–elect–to–participate–in–the–Reinvestment– Offer.–Assuming–a–market–rate–on–15–November– 2013–of–2.58–per–cent–per–annum,–the–Accrued– Interest–Amount–would–be–$0.6626–per–A$–AMP– Note.–Regardless–of–whether–Eligible–AMP–Notes– holders–participate–in–the–Reinvestment–Offer,–if– they–hold–an–A$–AMP–Note–on–7–November–2013,– they–will–still–receive–interest–for–the–interest– period–commencing–on–(and–including)–15–August– 2013–and–ending–on–(but–excluding)–15–November– 2013–in–an–amount–of–$1.8572–per–A$–AMP–Note.

As–at–the–close–of–trading–on 1–November 2013– the–market–price–per–A$–AMP–Note–was–$102.10.– The–market–price–of–AMP–Notes–is–affected– by–a–number–of–factors,–including–the–accrual– of–interest–on–AMP–Notes,–the–liquidity–of–the– market,–and–market–perception–of–the–margin– paid–on–the–security–and–the–term–for–which–it– is–likely–to–be–paid,–compared–to–comparable– alternative–investments.–Since–the–margin–on– AMP–Notes–(4.75–per–cent)–is–much–higher–than– the–Margin–on–AMP–Notes–2–of–2.65–per–cent,–the– market–price–of–A$–AMP–Notes–may–be–greater– than–the–price–offered–to–Eligible–AMP–Notes– holders–under–the–Reinvestment–Offer,–and– as–a–consequence–Eligible–AMP–Notes–holders– who–wish–to–use–their–A$–AMP–Notes–to–fund– a–subscription–for–AMP–Notes–2–may–be–better– off–selling–their–A$–AMP–Notes–on–market–rather– than–participating–in–the–Reinvestment–Offer.–If– you–sell–your–A$–AMP–Notes–on–market–and–use– the–proceeds–to–apply–for–AMP–Notes–2,–you–will– not–have–the–same–allocation–in–priority–over– Securityholder–Applicants–as–if–you–participated– in–the–Reinvestment–Offer–(see–below–under– Option–5–in–section–6.2).–Also,–if–you–sell–your–AMP– Notes–on–market–you–may–have–to–pay–brokerage– (see–section–6.7–below)–and–your–ability–to–sell– and–the–price–at–which–you–sell–your–AMP–Notes– depends–on–the–liquidity–of–the–market–and–the– trading–price–at–that–time.

The–key–differences–between–AMP–Notes–and– AMP–Notes–2–are–set–out–in–section–6.3.–It–is– AMPGFS’s–current–intention–that–A$–AMP–Notes– not–sold–to–AMP–under–the–Reinvestment–Offer– and–NZ$–AMP–Notes–will,–subject–to–APRA’s–prior– written–approval,–be–redeemed–for–cash–on– the–Step-Up–Date,–and–AMP–Notes–holders–will– receive–the–applicable–face–value–plus–any–accrued– and–unpaid–interest–to–that–date–per–AMP–Note– held.–As–at–the–date–of–this–prospectus,–neither– AMP–nor–AMPGFS–has–sought–APRA’s–approval– for–the–redemption–of–AMP–Notes–which–are–not– acquired–in–the–Reinvestment–Offer.–Any–approval– is–in–APRA’s–discretion–and–may–not–be–given.

If–for–any–reason–redemption–of–AMP–Notes–does– not–occur–on–the–Step-Up–Date–(including–for– failure–to–obtain–the–requisite–APRA–approval),– AMP–Notes–will–remain–on–issue–immediately– following–the–Step-Up–Date–and–entitle–holders– to–a–step-up–margin–of–150–per–cent–of–the–initial– margin–(ie,–from–4.75–per–cent–to–7.125–per–cent).–

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Section 6 About the Reinvestment Offer

In–electing–to–participate–in–the–Reinvestment– Offer,–Eligible–AMP–Notes–holders–will–give–up– the–higher–margin–they–would–have–enjoyed–if– AMP–Notes–are–not–redeemed–on–the–Step-Up– Date–and–remain–outstanding.–In–addition,–the–

step–up–in–the–margin–would–result–in–the–AMP– Notes–trading–at–a–higher–value.–In–electing–to– participate–in–the–Reinvestment–Offer,–Eligible– AMP–Notes–holders–will–not–have–the–opportunity– to–sell–at–that–possible–higher–value.

6.2 What are the options available to Eligible AMP Notes holders?

Topic
Option 1 –Applyunder
theReinvestmentOffer
tosellallofyourA$ AMPNotestofund
yoursubscriptionfor
AMPNotes2
Option 2 –Applyunder
theReinvestmentOffer
tosellonlysomeof
yourA$AMPNotesto
fundyoursubscription
forAMPNotes2		 What action should Eligible AMP Notes holders take to implement their
preferred option?
IfyouareanEligibleAMPNotesholder,youmaysellalloftheA$AMPNotes
youheldontheReinvestmentRecordDatetoAMPtofundyoursubscription
forAMPNotes2.
Tochoosethisoption,youmustselect‘OptionA–FullReinvestment’onyour
personalisedpaperoronlineReinvestmentForm.
IfyouholdagreaterorlessernumberofA$AMPNotesthanshownonthe
personalisedReinvestmentForm,andyouselectthefullreinvestmentoption,
youwillbetakentohaveappliedforthesaletoAMPofthelowerofthe
numberofA$AMPNotesspecifiedonyourpersonalisedReinvestmentForm
andthenumberofA$AMPNotesregisteredinyournameontheClosingDate
oftheOffer,expectedtobe9December2013.
IfyouareanEligibleAMPNotesholder,youmaychoosetosellonlysomeof
theA$AMPNotesyouheldontheReinvestmentRecordDatetoAMPtofund
yoursubscriptionforAMPNotes2.
Tochoosethisoption,youmustselect‘OptionB–PartialReinvestment’and
specifythenumberofA$AMPNotestobesoldtoAMPonyourpersonalised
paperoronlineReinvestmentForm.
Ifyouown50A$AMPNotesorfewer,youmustapplytosellallofyour
A$AMPNotestoAMPtoparticipateintheReinvestmentOffer.Ifyouown
morethan50A$AMPNotes,youmustapplytosellaminimumof50A$AMP
NotestoAMPtoparticipateintheReinvestmentOffer.
IfyouholdalessernumberofA$AMPNotesthanyouelecttoselltoAMP
onyourpersonalisedReinvestmentForm,youwillbetakentohaveapplied
forthesaleofthelowerofthenumberofA$AMPNotesyouheldonthe
ReinvestmentRecordDateandthenumberofA$AMPNotesregisteredin
yournameontheClosingDateoftheOffer,expectedtobe9December2013.

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Topic
Option 3 –Applyunder
theReinvestmentOffer
tosellallofyourA$ AMPNotestofundyour
subscriptionforAMP
Notes2andapplyfor
additionalAMPNotes2
Option 4 –Sellyour
A$AMPNotes
onmarket
Option 5 –Applyunder
theSecurityholder
Offerandfundyour
subscriptionincash		 What action should Eligible AMP Notes holders take to implement their
preferred option?
SeeOption1inrelationtoapplyingundertheReinvestmentOffertosellallof
yourA$AMPNotestofundyoursubscriptionforAMPNotes2.
YoumayalsoapplyformoreAMPNotes2thanthenumberofA$AMPNotes
youheldontheReinvestmentRecordDate.
Tochoosethisoption,youmustspecifythenumberofadditionalAMPNotes2
youwishtoapplyforonthepersonalisedpaperoronlineReinvestmentForm.
ApplicationsforadditionalAMPNotes2mustbeforaminimumof50AMP
Notes2($5,000)andafterthatinmultiplesof10AMPNotes2($1,000).
YouarerequiredtoencloseanapplicationpaymentfortheadditionalAMP
Notes2appliedfor.Applicationpaymentsmustbemadebycheque,bank
draft,moneyorderorBPAY®(seesection7.3forfurtherdetails).
IfyouapplyforadditionalAMPNotes2youwillbetreatedasaSecurityholder
ApplicantinrespectofyourapplicationforadditionalAMPNotes2.
ThismeansbroadlyinrespectofadditionalAMPNotes2youwillnot
receiveapriorityallocation.IfthereisexcessdemandforAMPNotes2,your
applicationforadditionalAMPNotes2maybescaledback(seesection7.4.2
forfurtherdetails).
YoumaychoosetosellordisposeofyourA$AMPNotesonmarket(inwhich
case,youmayhavetopaybrokerage)attheprevailingmarketprice,which
maybehigherorlowerthan$100(beingthepriceyouwouldreceiveifyou
weretosellallyourA$AMPNotestoAMPthroughtheReinvestmentOffer)
andusetheproceedsasyoudetermine,whichmayincludebuyingAMPNotes
2.Tochoosethisoption,youshouldcontactyourbroker.
IfyousellyourA$AMPNotesonmarketandusetheproceedstoapply
forAMPNotes2,youwillnothavethesamepriorityallocationasifyou
participatedintheReinvestmentOffer(ie,EligibleAMPNotesholders
whoparticipateintheReinvestmentOfferhaveallocationinpriorityover
SecurityholderApplicantsforeachA$AMPNotesoldtoAMPiftheOffer
proceeds).ThemarketpriceofAMPNotesissubjecttochangefromtimeto
time.Asatthecloseoftradingon1November2013,themarketpriceperA$ AMPNotewas$102.10.Up-to-dateinformationaboutthemarketpriceofA$ AMPNotescanbeobtainedfromasx.com.au(ASXcode‘AQNHA’).
IfyousellyourAMPNotesonmarketyoumayhavetopaybrokerageandyour
abilitytosellandthepriceatwhichyousellyourAMPNotesdependsonthe
liquidityofthemarketandthetradingpriceatthattime.
YoumaychoosetoapplyforAMPNotes2undertheSecurityholderOfferand
payforthemincashratherthansellinganyofyourA$AMPNotestoAMPto
fundyoursubscriptionforAMPNotes2.
Tochoosethisoption,youmustspecifythenumberofAMPNotes2youwish
toapplyforinstep3ofyourpersonalisedpaperoronlineReinvestmentForm.
Ifyoudothis,youwillnothavethesamepriorityallocationasifyou
participatedintheReinvestmentOffer(ie,EligibleAMPNotesholderswho
participateintheReinvestmentOfferwillreceiveanallocationinpriority
overSecurityholderApplicantsforeachA$AMPNotesoldtoAMPiftheOffer
proceeds).However,ifyouapplyundertheSecurityholderOffer,youwillnot
havethesamepriority.

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What action should Eligible AMP Notes holders take to implement their Topic preferred option?

Option 6 – You–are–not–required–to–participate–in–the–Reinvestment–Offer,–Securityholder– Take–no–action– Offer–or–to–sell–your–A$–AMP–Notes–on–market–and–as–such,–you–are–not–required– to–take–any–action.

See–section–6.1.4–for–an–explanation–of–AMPGFS’–intentions–in–relation–to–A$– AMP–Notes–which–are–not–sold–to–AMP–under–the–Reinvestment–Offer.–

If–AMPGFS–redeems–your–A$–AMP–Notes–on–the–Step-Up–Date–(which–is–subject– to–APRA’s–approval,–which–may–not–be–given),–you–will–receive–$100–plus– accrued–interest–as–at–that–date,–so–long–as–the–solvency–condition–under–the– terms–of–the–AMP–Notes–is–satisfied.

6.2.1 I am an Eligible AMP Notes holder and a client of a Syndicate broker. What should I do?

If–you–are–an–Eligible–AMP–Notes–holder–and–an– Australian–resident–retail–or–high-net-worth–client– of–a–Syndicate–broker,–you–may–apply–for–AMP– Notes–2–through–the–Reinvestment–Offer–under– the–Broker–Firm–Offer.–You–should–contact–your– Syndicate–broker–for–instructions–on–how–to–apply– under–the–Broker–Firm–Offer.

6.2.2 I am an ineligible holder of the A$ AMP Notes. What are my options?

If–you–are–a–holder–of–the–A$–AMP–Notes– with–a–registered–address–outside–Australia– on–the–Reinvestment–Record–Date–(or–you– otherwise–do–not–fulfil–the–requirements–set– out–in–section–6.1.3),–then–you–are–ineligible–to– participate–in–the–Reinvestment–Offer.–In–these– circumstances,–you–are–limited–to–Options–4–or–6– in–the–table–in–section–6.2.

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6.3 What are the key differences between AMP Notes and AMP Subordinated Notes 2?

There–are–a–number–of–key–differences–between–AMP–Notes–and–AMP–Notes–2.–Participation–in–the– Reinvestment–Offer–may–not–be–appropriate–or–economically–advantageous–for–Eligible–AMP–Notes–holders– (see–section–6.1.4).–If–AMP–Notes–are–not–redeemed–on–the–Step-Up–Date,–the–margin–will–step–up–and–that– may–result–in–the–AMP–Notes–trading–at–a–higher–value.–In–electing–to–participate–in–the–Reinvestment–Offer,– the–Eligible–AMP–Notes–holders–will–not–have–the–opportunity–to–sell–at–that–possible–higher–value.–

A–comparison–of–the–key–features–of–AMP–Notes–and–AMP–Notes–2–is–set–out–in–summary–form–below.– These–comparisons–are–not–intended–to–be–exhaustive.–

==> picture [427 x 21] intentionally omitted <==

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A$ AMP Notes AMP Notes 2
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Issuer
Guarantor
Legal form
Protection under
the Australian
Government
Financial Claims
Scheme
Issue Price
Term
Issuer early
redemption
option
Margin
Interest rate /
dividend rate
Step up margin
Interest / dividend
payment
Interest / dividend
payment dates
Payment deferral
Transferable
Investor's ability
to withdraw or
redeem
Ranking
Loss absorption
on a Non-Viability
Trigger Event		 AMPGroupFinanceServicesLimited
AMPGroupHoldingsLimited
Unsecuredandsubordinated
debtobligation
No
$100perAMPNote
10years,maturing1April2019
Yes,withthepriorwrittenapprovalof
APRA(whichisinitsdiscretionandmay
notbegiven),on15May2014(Step-Up
Date)oranysubsequentinterest
paymentdate,oninterestpayment
datesifataxevent,regulatoryeventor
changeofcontroloccurs
4.75%
Floating
To150%ofinitialmarginon15May
2014(ie,from4.75%to7.125%)
Cumulative,unfranked
Quarterly
No,subjecttothesolvencycondition
Yes–quotedonASX
No
Subordinatedtoseniorcreditors
No		 AMP
None
Unsecuredandsubordinated
debtobligation
No
$100perAMPNote2
10years,maturing18December2023
Yes,withthepriorapprovalofAPRA
(whichisinitsdiscretionandmaynotbe
given),on18December2018andoneach
subsequentInterestPaymentDate,and
alsoontheoccurrenceofaTaxEventora
RegulatoryEvent
2.65%
Floating
None
Cumulative,unfranked
Quarterly
No,subjecttotheSolvencyConditionand
Non-ViabilityTriggerEvent
Yes–tobequotedonASX
No
SubordinatedtoSeniorCreditors
Yes.FollowingaNon-ViabilityTrigger
Event,AMPmayberequiredtoConvert
AMPNotes2intoAMPOrdinaryShares
andifitisunableforanyreasonto
ConverttheNotestheywillbeWritten-off

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6.4 What are the risks associated with participating in the Reinvestment Offer?

If–you–are–an–Eligible–AMP–Notes–holder–and– you–participate–in–the–Reinvestment–Offer,–you– will–receive–an–allocation–of–AMP–Notes–2–in– priority–over–Securityholder–Applicants.–As–such,– you–will–be–subject–to–the–risks–associated–with– an–investment–in–AMP–Notes–2–and–in–AMP,– many–of–which–are–outside–the–control–of–AMP– and–other–members–of–the–AMP–group.–These– risks–are–outlined–in–section–5–and–should–be– considered–before–you–apply–to–participate–in–the– Reinvestment–Offer.

It is important to note that participation in the Reinvestment Offer may not be appropriate or economically advantageous for Eligible AMP Notes holders. See section 6.1.4 for further details.

In–electing–to–participate–in–the–Reinvestment– Offer,–if–the–Offer–proceeds,–Eligible–AMP–Notes– holders–will–give–up–the–higher–margin–they– would–have–enjoyed–if–the–AMP–Notes–are–not– redeemed.–That–margin–(4.75–per–cent)–is–much– higher–than–the–Margin–on–AMP–Notes–2–(2.65– per–cent).–Further,–if–for–any–reason–AMP–Notes– are–not–redeemed–on–the–Step-Up–Date–(including– for–failure–to–obtain–the–requisite–APRA–approval– as–described–in–section–6.1.4),–that–margin–would– increase–from–4.75–per–cent–to–7.125–per–cent.–

Once–you–apply–to–participate–in–the– Reinvestment–Offer,–you–will–not–be–able–to–sell– your–A$–AMP–Notes–on–market.–If–you–apply–to– participate–in–the–Reinvestment–Offer,–it–is–your– responsibility–to–ensure–that–you–do–not–sell–or– dispose–of–any–of–those–A$–AMP–Notes–in–respect– of–which–you–have–applied–to–participate,–other– than–as–part–of–the–Reinvestment–Offer.

extent–the–required–number–of–A$–AMP–Notes– is–not–available–on–the–Closing–Date–of–the– Reinvestment–Offer.

Once–you–have–submitted–an–Application–Form– under–the–Reinvestment–Offer,–you–will–not–be– able–to–successfully–deal–with–those–A$–AMP– Notes–unless–the–holding–lock–which–will–be– placed–on–those–A$–AMP–Notes–is–released–(which– will–only–occur–if–the–Offer–does–not–proceed).

6.5 What are the risks associated with not participating in the Reinvestment Offer?

There–is–a–risk–that,–if–you–do–not–elect–to– participate–in–the–Reinvestment–Offer–and– you–continue–to–hold–your–A$–AMP–Notes,–the– market–for–AMP–Notes–that–remains–outstanding– will–be–less–liquid–as–a–result–of–the–purchase– by–AMP–of–other–A$–AMP–Notes–under–the– Reinvestment–Offer.

If–you–do–not–elect–to–participate–in–the– Reinvestment–Offer–but–apply–for–AMP–Notes–2– under–the–Securityholder–Offer,–you–will–not–have– the–same–priority–allocation–as–if–you–participated– in–the–Reinvestment–Offer.–However,–you–will–be– treated–as–a–Securityholder–Applicant–in–respect– of–your–application–for–additional–AMP–Notes–2– and–will–not–receive–a–priority–allocation.

A$–AMP–Notes–not–sold–to–AMP–under–the– Reinvestment–Offer–will–remain–outstanding– until–redeemed–by–AMPGFS.–Redemption–of–AMP– Notes–before–their–stated–maturity–is–subject–to– the–terms–of–AMP–Notes,–including–that–the–prior– written–approval–of–APRA–has–been–obtained–and– that–AMPGFS–remains–solvent.–Please–see–section– 6.1.4–above.

If–you–apply–to–participate–in–the–Reinvestment– Offer–you–are–taken–to–agree–to–a–holding–lock– being–placed–on–the–A$–AMP–Notes–you–have– elected–to–sell,–pending–completion–of–the– Reinvestment–Offer—but–it–is–your–obligation–to– ensure–that–you–do–not–transfer–those–A$–AMP– Notes.–If–you–do,–the–number–of–AMP–Notes–2– you–may–be–allocated–will–be–reduced–to–the–

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6.6 What will happen if the Reinvestment Offer does not proceed?

If–you–elect–to–participate–in–the–Reinvestment– Offer–but–the–Offer–(including–the–Reinvestment– Offer)–does–not–proceed,–those–A$–AMP–Notes– that–you–elected–to–sell–to–AMP–to–fund–a– subscription–for–AMP–Notes–2–will–be–released– from–the–holding–lock–as–soon–as–practicable.– Once–released,–you–can–sell–your–A$–AMP–Notes– on–ASX–at–the–prevailing–market–price–subject– to–the–liquidity–of–that–market.–Any–application– payment–in–respect–of–additional–AMP–Notes– 2–will–be–refunded–to–you.–No–interest–will–be– payable–by–AMP–on–any–application–payment– received–from–AMP–Notes–holders.

A$–AMP–Notes–not–sold–to–AMP–under–the– Reinvestment–Offer–(and–not–sold–on–the–ASX)–will– remain–outstanding–until–redeemed–by–AMPGFS.–

The–risks–of–not–participating–(which–are– explained–in–section–6.5)–also–apply–in– circumstances–where–the–Reinvestment–Offer– does–not–proceed.

6.7 Is brokerage or stamp duty payable?

No–brokerage–or–stamp–duty–is–payable–on–the– sale–of–your–A$–AMP–Notes–to–AMP–under–the– Reinvestment–Offer–or–your–application–for– AMP–Notes–2.

AMP–Notes–holders–who–choose–to–sell–their–AMP– Notes–on–market–may–be–required–to–pay–any– applicable–brokerage.

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How to apply

This section provides information about the Offer, including how to apply. The key dates in relation to the Offer are outlined on page 8.

7.1 The Offer 7.2 Obtaining a prospectus and Application Form 7.3 Applying for AMP Subordinated Notes 2 7.4 Bookbuild and allocation policy 7.5 Other information 7.6 Enquiries

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7.1 The Offer

The–Offer–comprises:

  • –– a–Reinvestment–Offer–to–Eligible– AMP–Notes–holders

  • –– a–Securityholder–Offer–to–Eligible– Securityholders–

  • –– a–Broker–Firm–Offer–to–Australian–resident– retail–and–high-net-worth–clients–of– Syndicate–brokers,–and

  • –– an–Institutional–Offer–to–certain–Institutional– Investors–invited–to–bid–for–AMP–Notes–2– under–the–Bookbuild.

7.2 Obtaining a prospectus and Application Form

During–the–Exposure–Period,–an–electronic– version–of–the–original–prospectus–(without– an–Application–Form)–was–available–to–eligible– investors–at–ampnotes2.com.au.–Application– Forms–were–not–made–available–until–after–the– Exposure–Period.–

During–the–Offer–Period,–an–electronic–version– of–this–prospectus–with–an–Application–Form–

is–available–at–ampnotes2.com.au–and–may–be– available–through–your–Syndicate–broker.–You–can– also–request–a–free–paper–copy–of–this–prospectus– and–an–Application–Form–by–calling–the–AMP– Notes–2–Offer–information–line–on–1300–338–164– (within–Australia),–0800–444–152–(within–New– Zealand)–or–+61–3–9415–4018–(outside–Australia– and–New–Zealand)–Monday–to–Friday–––8.30am–to– 5.30pm–(Sydney–time).–

Eligible–AMP–Notes–holders–and–Eligible– Securityholders–will–also–have–access–to–download– an–electronic–version–of–this–prospectus–and– a–personalised–Application–Form–through– ampnotes2.com.au.

The–Corporations–Act–prohibits–any–person–from– passing–the–Application–Form–on–to–another– person–unless–it–is–attached–to,–or–accompanied– by,–a–paper–copy–of–this–prospectus–or–the– complete–and–unaltered–electronic–version–of– this–prospectus.

Applications–will–only–be–considered–where– applicants–have–applied–pursuant–to–an– Application–Form–(either–electronic–or–paper)–that– was–attached–to,–or–accompanied–by,–a–copy–of– this–prospectus,–and–have–provided–an–application– payment–(where–required).

7.3 Applying for AMP Subordinated Notes 2

Reinvestment Offer

Who may apply Eligible–AMP–Notes–holders When to apply Completed–Reinvestment–Forms,–and–if–you–are–applying–for–more–AMP–Notes–2– than–the–number–of–AMP–Notes–that–you–hold,–application–payments,–must–be– received–by–the–Registry–by–the–Closing–Date–for–the–Offer,–which–is–expected–to– be–5.00pm–(Sydney–time)–on–9–December–2013.

If–you–are–a–client–of–a–Syndicate–broker,–you–should–contact–your–Syndicate– broker–for–information–about–participating–in–the–Reinvestment–Offer.

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Reinvestment Offer (continued)

How to apply using a
paper Application Form
How to apply online
Minimum application
amount		 FollowtheinstructionssetoutinthepaperReinvestmentFormwhichwillbe
mailedtoyouwithacopyofthisprospectus.
Youcanalsorequestanadditionalpapercopyoftheprospectusandyour
personalisedReinvestmentFormbycallingtheAMPNotes2information
lineon1300338164(withinAustralia),0800444152(withinNewZealand)
or+61394154018(outsideAustraliaandNewZealand)MondaytoFriday–
8.30amto5.30pm(Sydneytime)duringtheOfferPeriod.
Aseparateapplicationpaymentisonlyrequiredifyouchoosetoapplyfor
moreAMPNotes2thanthenumberofA$AMPNotesregisteredinyour
nameontheReinvestmentRecordDate.Inthisinstance,yourcompleted
ReinvestmentFormmustbeaccompaniedbyanapplicationpayment.
ApplicationpaymentsforapplicationsusingapaperReinvestmentFormcan
onlybemadebycheque(s),bankdraft(s)and/ormoneyorder(s)inAustralian
dollarsdrawnonanAustralianbranchofafinancialinstitution.Itshouldbe
madepayableto‘AMPNotes2Offer’andifyouaremakingapaymentby
cheque,itmustbecrossed‘NotNegotiable’.
IfyouwishtomakeyourpaymentbyBPAY®,youneedtoapplyonline.
CompleteyourpersonalisedReinvestmentFormonlinebyvisitingampnotes2.
com.auandfollowingtheinstructions.YouwillneedyourSRNorHIN.
IfyouareapplyingforadditionalAMPNotes2,youmustmakeyour
applicationpaymentbyBPAY®.Otherwise,noapplicationpaymentisnecessary
astheproceedsofthesaleofyourA$AMPNotes(excepttheAccruedInterest
Amount)willbereinvesteddirectlyinAMPNotes2.
IfyouareaclientofaSyndicatebroker,youshouldseekinstructionsfromyour
Syndicatebrokerorcontrollingparticipantastohowtoapply.
ThereisnominimumnumberofA$AMPNotesthatyoumustholdtobeable
toparticipateintheReinvestmentOffer.
YoumayapplyinrespectofsomeorallofyourA$AMPNotes,exceptthatif
youwishtoparticipateintheReinvestmentOfferand:

  • you–hold–50–A$–AMP–Notes–or–fewer,–you–must–apply–to–reinvest–all–your– AMP–Notes–in–AMP–Notes–2,–and

  • you–hold–more–than–50–A$–AMP–Notes,–you–must–apply–for–a–minimum– number–of–50–AMP–Notes–2–($5,000).

If–you–apply–to–participate–in–the–Reinvestment–Offer–and–apply–to–sell–all–of– your–A$–AMP–Notes–and–you–wish–to–apply–for–additional–AMP–Notes–2,–you– must–apply–for–a–minimum–of–50–additional–AMP–Notes–2–($5,000)–and–after– that–in–multiples–of–10–AMP–Notes–2–($1,000).

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Securityholder Offer

Who may apply
When to apply
How to apply using a
paper Application Form
How to apply online
Minimum application
amount
Broker Firm Offer
Who may apply
When to apply
How to apply
Minimum application
amount		 EligibleSecurityholders,beingbroadlyregisteredholdersofAMPOrdinary
SharesorEligibleAMPNotesholders.
CompletedApplicationFormsandapplicationpaymentsmustbereceivedby
theRegistrybytheClosingDatefortheOffer,whichisexpectedtobe5.00pm
(Sydneytime)on9December2013.
FollowtheinstructionssetoutinthepaperSecurityholderApplicationForm
whichwillbemailedtoyouwithacopyofthisprospectus.
EligibleAMPNotesholderscanapplyundertheSecurityholderOfferusing
theirReinvestmentForm.
Youcanalsorequestanadditionalpapercopyoftheprospectusandyour
personalisedApplicationFormbycallingtheAMPNotes2informationlineon
1300338164(withinAustralia),0800444152(withinNewZealand)or+613
94154018(outsideAustraliaandNewZealand)MondaytoFriday–8.30amto
5.30pm(Sydneytime)duringtheOfferPeriod.
ApplicationpaymentsforapplicationsusingapaperApplicationFormcanonly
bemadebycheque(s),bankdraft(s)and/ormoneyorder(s)inAustraliandollars
drawnonanAustralianbranchofafinancialinstitution.Itshouldbemade
payableto‘AMPNotes2Offer’andifyouaremakingapaymentbycheque,it
mustbecrossed‘NotNegotiable’.
IfyouwishtomakeyourpaymentbyBPAY®,youneedtoapplyonline.
CompleteyourpersonalisedApplicationFormonlinebyvisitingampnotes2.
com.auandfollowingtheinstructions.YouwillneedyourSRNorHIN
(holdernumber).
YoumustmakeyourapplicationpaymentbyBPAY®.
Applicationsmustbeforaminimumof50AMPNotes2($5,000)andafter
thatinmultiplesof10AMPNotes2($1,000).
Australianresidentretailorhigh-net-worthclientsofSyndicatebrokers.
CompletedBrokerFirmApplicationFormsand,whereapplicable,application
payments,mustbereceivedbyyourSyndicatebrokerintimeforthemto
processyourapplicationonyourbehalfbytheClosingDatefortheOffer,
whichisexpectedtobe5.00pm(Sydneytime)on9December2013.
YoumustcontactyourSyndicatebrokerdirectlyforinstructionsonhowto
participateintheBrokerFirmOffer.
ContactyourSyndicatebrokerforinstructionsonhowtoapplyunderthe
BrokerFirmOffer.
Applicationsmustbeforaminimumof50AMPNotes2($5,000)andafter
thatinmultiplesof10AMPNotes2($1,000).
IfyouareanEligibleAMPNotesholderwhoisalsoaclientofaSyndicate
broker,theminimumapplicationamountrequirementsapplicabletothe
ReinvestmentOfferapply(seeabove).

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7.3.1 Applying under the Institutional Offer

The–Institutional–Offer–was–available–to– Institutional–Investors–(provided–that–such– investors–were–not–in–the–United–States,–US– Persons–or–acting–for–the–account–or–benefit–of– any–US–Person)–who–were–invited–by–the–Joint– lead–managers–to–bid–for–AMP–Notes–2–in–the– Bookbuild–conducted–on–8–November–2013.–

Application–and–settlement–procedures–for– Institutional–Investors–will–be–advised–by–the–Joint– lead–managers.–

7.3.2 Where to send your completed Application Forms and application payment (if you are not applying online or under the Broker Firm Offer)

Unless–you–are–applying–under–the–Broker–Firm– Offer–or–you–are–applying–online,–you–should– return–your–completed–Application–Form–and– application–payment–(if–any)–in–the–reply–paid– envelope–supplied–or–to–the–address–below–so– that–they–are–received–by–the–Registry–before–the– Closing–Date–for–the–Offer,–which–is–expected–to– be–5.00pm–(Sydney–time)–on–9–December–2013.

AMP Notes 2 Offer – Reinvestment Offer

c/-–Computershare–Investor–Services– GPO–Box–2115– Melbourne–VIC–3001

AMP Notes 2 Offer – Securityholder Offer c/-–Computershare–Investor–Services– GPO–Box–505– Melbourne–VIC–3001

7.3.3 Brokerage and stamp duty

No–brokerage–or–stamp–duty–is–payable–on–your– application–for–AMP–Notes–2.–You–may–have– to–pay–brokerage,–but–will–not–have–to–pay–any– stamp–duty,–on–any–later–sale–of–your–AMP–Notes– 2–on–ASX–after–AMP–Notes–2–have–been–quoted– on–ASX.

7.3.4 Application payments held on trust

All–application–payments–received–before–AMP– Notes–2–are–issued–will–be–held–by–AMP–on–trust–in– an–account–established–solely–for–the–purposes–of– depositing–application–payments–received.–After– AMP–Notes–2–are–issued–to–successful–applicants,– the–application–payments–held–on–trust–will– be–payable–to–AMP.

7.3.5 Refunds

If–you–are–not–allotted–any–AMP–Notes–2,–or–are– allotted–fewer–AMP–Notes–2–than–the–number– you–applied–for–as–a–result–of–a–scale–back,–all–or– some–of–your–application–payment–(as–applicable)– will–be–refunded–(without–interest)–as–soon–as– practicable–after–the–Issue–Date.

If–you–have–applied–for–AMP–Notes–2–and–the– Offer–does–not–proceed–for–any–reason,–you– will–have–your–application–payment–refunded– (without–interest)–as–soon–as–practicable.–Refunds– will–be–made–via–direct–credit–if–AMP–holds– instructions–on–file–or–by–cheque.

Please–note–that–Application–Forms–and– application–payments–will–not–be–accepted–at–any– other–address–(including–AMP’s–registered–office– or–any–other–AMP–office).

If–you–are–applying–under–the–Broker–Firm–Offer,– you–should–contact–your–Syndicate–broker–about– where–to–lodge–your–application.–

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7.4 Bookbuild and allocation policy

7.4.1 Bookbuild

The–Bookbuild–was–a–process–conducted–by–the–Joint–lead–managers–before–the–Opening–Date.–In–this– process,–the–Bookbuild–participants–were–invited–to–lodge–bids–for–a–number–of–AMP–Notes–2.–On–the–basis– of–those–bids,–the–Joint–lead–managers–and–AMP,–by–mutual–agreement,–determined–the–Margin–and–the– firm–allocations–to–Bookbuild–participants,–being–Syndicate–brokers–and–certain–Institutional–Investors.

AMP–increased–the–size–of–the–Offer–following–the–close–of–the–Bookbuild–from–$200–million–to–at–least– $300–million.

7.4.2 What is the allocation policy?

Institutional
Offer
Broker Firm
Offer
Reinvestment
Offer		 AllocationstoInstitutionalInvestorswereagreedbytheJointleadmanagersandAMP
followingcompletionoftheBookbuild.
AllocationstoSyndicatebrokerswereagreedbytheJointleadmanagersandAMP
followingcompletionoftheBookbuild.
AllocationstoapplicantsundertheBrokerFirmOffer(includingapplicantswhoapply
toparticipateintheReinvestmentOfferthroughtheBrokerFirmOffer)byaSyndicate
brokerareatthediscretionofthatSyndicatebroker.
AllocationsundertheReinvestmentOffer(otherthanthroughtheBrokerFirmOffer)
willbedeterminedbyAMPinconsultationwiththeJointleadmanagersafterthe
ClosingDate.
IfthereisexcessdemandforAMPNotes2afterallocationstoBookbuildparticipants,
applicantsundertheReinvestmentOffer(otherthanthroughtheBrokerFirmOffer)
willreceiveanallocationinpriorityoverSecurityholderApplicantsforeachA$AMP
NotesoldtoAMPiftheOfferproceeds.
AMPreservestherighttoscalebackapplicationsundertheReinvestmentOffer(other
thanthroughtheBrokerFirmOffer).AnyscalebackwillbeannouncedonASXonthe
dayAMPNotes2commencetradingonadeferredsettlementbasis,whichisexpected
tobe19December2013.
EligibleAMPNotesholderswhoapplyforadditionalAMPNotes2willbetreatedas
SecurityholderApplicantsinrespectoftheirapplicationforadditionalAMPNotes2.
ThismeansbroadlythatinrespectoftheadditionalAMPNotes2theywillnotreceive
apriorityallocation.ForfulldetailsoftheallocationpolicyinrelationtoSecurityholder
Applicants,seebelow.
EligibleAMPNotesholdersaretakentoagreetoaholdinglockbeingplacedon
thoseAMPNotesappliedtobesoldtoAMPundertheReinvestmentOffer,pending
completionoftheReinvestmentOffer.IfyoutransferanysuchAMPNotes,thenumber
ofAMPNotes2youwillbeallocatedwillbereducedtotheextenttherequirednumber
ofAMPNotesarenotheldbyyouontheClosingDate.
NoassuranceisgiventhatanyapplicantundertheReinvestmentOfferwhoappliesfor
AMPNotes2willreceiveanallocation,althoughallocationsundertheReinvestment
OfferwillbemadeinpriorityovertheSecurityholderOffer.

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Securityholder Allocations–for–the–Securityholder–Offer–will–be–determined–by–AMP–in–consultation– Offer with–the–Joint–lead–managers–after–the–Closing–Date.– AMP–Notes–2–will–be–allocated–to–Bookbuild–participants–and–applicants–under–the– Reinvestment–Offer–(other–than–through–the–Broker–Firm–Offer)–in–priority–over– Securityholder–Applicants. AMP–has–absolute–discretion–to–determine–the–method–of–allocation–to– Securityholder–Applicants. AMP–reserves–the–right–to–scale–back–applications–from–Securityholder–Applicants.–Any– scale–back–will–be–announced–on–ASX–on–the–day–AMP–Notes–2–commence–trading–on–a– deferred–settlement–basis,–which–is–expected–to–be–19–December–2013.– AMP–(at–its–discretion–and–in–consultation–with–the–Joint–lead–managers)–reserves–the– right–to:

> allocate–to–any–Securityholder–Applicant–all–AMP–Notes–2–for–which–they–have–applied

  • reject–any–application–by–a–Securityholder–Applicant,–or

> allocate–to–any–Securityholder–Applicant–a–lesser–number–of–AMP–Notes–2–than–that– applied–for,–including–less–than–the–minimum–application–of–AMP–Notes–2,–or–none– at–all. No–assurance–is–given–that–any–Securityholder–Applicant–who–applies–for–AMP–Notes–2– will–receive–an–allocation.

7.4.3 How will the final allocation policy be announced?

Institutional Allocations–to–Institutional–Investors–were–advised–to–those–investors–under–the– Offer Bookbuild. Broker Firm Allocations–to–Syndicate–brokers–were–advised–to–those–brokers–under–the–Bookbuild.– Offer Applicants–under–the–Broker–Firm–Offer–will–also–be–able–to–confirm–their–allocation– through–the–Syndicate–broker–from–whom–they–received–their–allocation. However,–if–you–sell–AMP–Notes–2–before–receiving–a–holding–statement,–you–do–so–at– your–own–risk,–even–if–you–confirmed–your–allocation–through–a–Syndicate–broker. Reinvestment Applicants–in–the–Reinvestment–Offer–or–Securityholder–Offer–will–be–able–to–call–the– Offer and AMP–Notes–2–Offer–information–line–on–1300–338–164–(within–Australia),–0800–444–152– Securityholder (within–New–Zealand)–or–+61–3–9415–4018–(outside–Australia–and–New–Zealand)–Monday– Offer to–Friday–––8.30am–to–5.30pm–(Sydney–time)–to–confirm–their–allocations.–It–is–expected– that–this–information–will–be–advertised–in–The–Sydney–Morning–Herald,–The–Age,–The– Australian–and–The–Australian–Financial–Review–on–or–about–18–December–2013.

However,–if–you–sell–AMP–Notes–2–before–receiving–a–holding–statement,–you–do–so– at–your–own–risk,–even–if–you–obtained–details–of–your–holding–by–calling–the–AMP– Notes–2–information–line–on–1300–338–164–(within–Australia),–0800–444–152–(within– New–Zealand)–or–+61–3–9415–4018–(outside–Australia–and–New–Zealand)–Monday–to– Friday–––8.30am–to–5.30pm–(Sydney–time).

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7.5 Other information

7.5.1 Restrictions on distribution

No–action–has–been–taken–to–register–or–qualify– this–prospectus,–AMP–Notes–2,–the–Offer–or– Reinvestment–Offer–or–otherwise–to–permit–a– public–offering–of–AMP–Notes–2–in–any–jurisdiction– outside–Australia.

The–distribution–of–this–prospectus–(including– an–electronic–copy)–outside–Australia–may–be– restricted–by–law.–If–you–come–into–possession– of–this–prospectus–outside–Australia–then–you– should–seek–advice–on,–and–observe,–any–such– restrictions.–Any–failure–to–comply–with–such– restrictions–may–violate–securities–laws.–This– prospectus,–the–Offer–and–the–Reinvestment– Offer–do–not–constitute–an–offer–or–invitation– in–any–jurisdiction–in–which,–or–to–any–person–to– whom,–it–would–not–be–lawful–to–make–such–an– offer–or–invitation.

This–prospectus–(including–an–electronic–copy)– may–not–be–distributed–or–released,–in–whole–or– in–part,–in–the–United–States.–Neither–AMP–Notes– 2–nor–the–AMP–Ordinary–Shares–have–been–or–will– be–registered–under–the–US–Securities–Act–or–the– securities–laws–of–any–state–or–other–jurisdiction– of–the–United–States,–and–they–may–not–be– offered–or–sold–within–the–United–States–or–to,–or– for–the–account–or–benefit–of,–US–Persons–except– in–transactions–exempt–from,–or–not–subject–to,– registration–under–the–US–Securities–Act–and– applicable–US–state–securities–laws.–AMP–Notes–2– are–being–offered–in–the–Offer–and–Reinvestment– Offer–solely–outside–the–United–States–pursuant– to–Regulation–S–under–the–US–Securities–Act.

Any–offer,–sale–or–resale–of–AMP–Notes–2–in– the–United–States–by–a–dealer–(whether–or–not– participating–in–the–Offer–or–the–Reinvestment– Offer)–may–violate–the–registration–requirements– of–the–US–Securities–Act.

Subject–to–AMP’s–approval,–AMP–Notes–2–may–be– offered–in–certain–permitted–jurisdictions–outside– Australia–under–the–Institutional–Offer–where– such–offer–is–made,–and–accepted,–in–accordance– with–the–laws–of–such–jurisdictions.

Each–person–submitting–an–Application–Form–will– be–deemed–to–have–acknowledged–that–they–are– aware–of–the–restrictions–referred–to–in–this–section– 7.5.1–and–to–have–represented–and–warranted–that– they–are–able–to–apply–for–and–acquire–AMP–Notes–2– in–compliance–with–those–restrictions.

Hong Kong

This–prospectus–may–only–be–distributed–to,– accessed–and–read–by–persons–in–Hong–Kong– who–are–‘professional–investors’–as–defined–in– the–Securities–and–Futures–Ordinance–(Cap.–571)– of–Hong–Kong–and–any–rules–made–under–that– Ordinance–or–otherwise.

No–AMP–Notes–2–can–be–offered–or–sold–in– Hong–Kong,–by–means–of–any–document,–other– than–(a)–to–“professional–investors”–as–defined– in–the–Securities–and–Futures–Ordinance–and– any–rules–made–under–that–Ordinance;–or–(b)–in– other–circumstances–which–do–not–result–in–this– document–being–a–‘prospectus’–as–defined–in–the– Companies–Ordinance–(Cap.–32)–of–Hong–Kong–or– which–do–not–constitute–an–offer–to–the–public– within–the–meaning–of–that–Ordinance.

There–will–be–no–issue,–whether–in–Hong–Kong–or– elsewhere,–of–any–advertisement,–invitation–or– document–relating–to–the–AMP–Notes–2,–which–is– directed–at,–or–the–contents–of–which–are–likely–to– be–accessed–or–read–by,–the–public–of–Hong–Kong– (except–if–permitted–to–do–so–under–the–securities– laws–of–Hong–Kong)–other–than–with–respect–to– AMP–Notes–2–which–are–or–are–intended–to–be– disposed–of–only–to–persons–outside–Hong–Kong–or– only–to–“professional–investors”–as–defined–in–the– Securities–and–Futures–Ordinance–and–any–rules– made–under–that–Ordinance.

New Zealand

The–offer–of–AMP–Notes–2–under–the–Institutional– Offer–was–made–only–to–New–Zealand-resident– investors–whose–principal–business–is–the– investment–of–money–or–who,–in–the–course–of– and–for–the–purposes–of–their–business,–habitually– invest–money–within–the–meaning–of–section–3(2) (a)(ii)–of–the–Securities–Act–(New–Zealand).

The–Reinvestment–Offer,–the–Securityholder– Offer–and–the–Broker–Firm–Offer–are–not–available– in–New–Zealand.–This–prospectus–and–the– information–contained–in–or–accompanying– this–prospectus–are–not,–and–are–under–no– circumstances–to–be–construed–as,–an–offer–of– securities–to–any–person–who–is–a–member–of–the– public–in–New–Zealand–for–subscription–in–terms– of–the–Securities–Act–(New–Zealand).

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Singapore

This–prospectus–and–any–other–materials–relating– to–the–AMP–Notes–2–have–not–been,–and–will– not–be,–lodged–or–registered–as–a–prospectus– in–Singapore–with–the–Monetary–Authority–of– Singapore–under–the–Securities–and–Futures–Act,– Cap.–289–of–Singapore–(the–SFA).–Accordingly,– this–prospectus–and–any–other–document–or– materials–in–connection–with–the–offer–or–sale,– or–invitation–for–subscription–or–purchase,–of– AMP–Notes–2,–may–not–be–issued,–circulated–or– distributed,–nor–may–AMP–Notes–2–be–offered–or– sold,–or–be–made–the–subject–of–an–invitation–for– subscription–or–purchase,–whether–directly–or– indirectly,–to–persons–in–Singapore–except–(a)–to–an– ‘institutional–investor’–(as–defined–in–section–4A– of–the–SFA)–pursuant–to–section–274–of–the–SFA;–(b)– to–a–‘relevant–person’–(as–defined–in–section–275(2)– of–the–SFA)–pursuant–to–section–275(1)–of–the–SFA,– or–any–person–pursuant–to–an–offer–referred–to– in–section–275(1A)–of–the–SFA,–and–in–accordance– with–the–conditions–specified–in–section–275– of–the–SFA;–or–(c)–otherwise–pursuant–to,–and–in– accordance–with–the–conditions–of,–any–other– applicable–provision–of–the–SFA.–

This–prospectus–has–been–given–to–you–on–the– basis–that–you–are:–(1)–an–‘institutional–investor’– (as–defined–in–section–4A–of–the–SFA)–or–(2)–a– ‘relevant–person’–(as–defined–in–section–275(2)– of–the–SFA);–or–(3)–a–person–subject–to–an–offer– referred–to–in–section–275(1A)–of–the–SFA.–In–the– event–that–you–are–not–an–investor–falling–within– any–of–the–categories–set–out–above,–please– return–this–document–immediately.–You–may–not– forward–or–circulate–this–prospectus–to–any–other– person–in–Singapore.

Where–the–AMP–Notes–2–are–acquired–by–persons– who–are–relevant–persons–specified–in–section–276– of–the–SFA,–namely:

  • –– a–corporation–(which–is–not–an–accredited– investor–(as–defined–in–section–4A–of–the– SFA))–the–sole–business–of–which–is–to–hold– investments–and–the–entire–share–capital–of– which–is–owned–by–one–or–more–individuals,– each–of–whom–is–an–accredited–investor,–or

  • –– a–trust–(where–the–trustee–is–not–an–accredited– investor)–whose–sole–purpose–is–to–hold– investments–and–each–beneficiary–of–the–trust– is–an–individual–who–is–an–accredited–investor,

the–shares,–debentures–and–units–of–shares– and–debentures–of–that–corporation–or–the– beneficiaries’–rights–and–interest–(howsoever– described)–in–that–trust–shall–not–be–transferred– within–six–months–after–that–corporation–or–that– trust–has–acquired–the–AMP–Notes–2–pursuant– to–an–offer–made–under–section–275–of–the– SFA–except:–

  • –– to–an–“institutional–investor”–(under–section– 274–of–the–SFA)–or–to–a–“relevant–person”–as– defined–in–section–275(2)–of–the–SFA,–or–any– person–pursuant–to–an–offer–that–is–made–on– terms–that–such–shares,–debentures–and–units– of–shares–and–debentures–of–that–corporation– or–such–rights–or–interest–in–that–trust–are– acquired–at–a–consideration–of–not–less–than– S$200,000–(or–its–equivalent–in–a–foreign– currency)–for–each–transaction,–whether– such–amount–is–to–be–paid–for–in–cash–or–by– exchange–of–securities–or–other–assets–and– further–for–corporations,–in–accordance–with– the–conditions–specified–in–section–275(1A)–of– the–SFA–

  • –– where–no–consideration–is–or–will–be–given–for– the–transfer

  • –– where–the–transfer–is–by–operation–of–law

  • –– as–specified–in–section–276(7)–of–the–SFA,–or–

  • –– as–specified–in–regulation–32–of–the–Securities– and–Futures–(Offer–of–Investments)– (Shares–and–Debentures)–Regulation–2005– of–Singapore.

Switzerland

AMP–Notes–2–do–not–constitute–a–Collective– Investment–Schemes–Unit–within–the–meaning–of– the–Swiss–Federal–Act–on–Collective–Investment– Schemes–( CISA ).–Accordingly,–holders–of–AMP– Notes–2–do–not–benefit–from–the–investor– protection–under–the–CISA–or–the–approval– or–supervision–by–the–Swiss–Financial–Market– Supervisory–Authority–( FINMA ).

This–document–does–not–constitute–an–issue– prospectus–pursuant–to–article–652a–or–article–1156– of–the–Swiss–Code–of–Obligations–nor–a–simplified– prospectus–pursuant–to–article–5–of–the–CISA.– Accordingly,–AMP–Notes–2–may–not–be–offered– to–the–public–in–or–from–Switzerland,–but–only–to– institutional–investors–as–defined–in–article–10,– paragraph–3–of–the–CISA,–who–do–not–subscribe–for– AMP–Notes–2–with–a–view–to–distribution.

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The–investors–will–be–individually–approached– by–the–Joint–lead–managers–from–time–to–time.– This–prospectus–is–personal–to–each–offeree–and– does–not–constitute–an–offer–to–any–person.–This– prospectus–may–only–be–used–by–those–qualified– investors–to–whom–it–has–been–handed–out–in– connection–with–the–Offer–and–may–neither– directly–nor–indirectly–be–distributed–or–made– available–to–other–persons–without–the–express– consent–of–the–Joint–lead–managers.–It–may–not–be– used–in–connection–with–any–other–offer–and–shall– in–particular–not–be–copied–and/or–distributed–to– the–public–in–Switzerland.

United States of America

This–prospectus–does–not–constitute–an–offer–to– sell,–or–a–solicitation–of–an–offer–to–buy,–securities– in–the–United–States–or–to,–or–for–the–account–or– benefit–of,–any–US–Person.–AMP–Notes–2–have–not– been,–and–will–not–be,–registered–under–the–US– Securities–Act–or–the–securities–laws–of–any–state– or–other–jurisdiction–of–the–United–States,–and– may–not–be–offered–or–sold,–directly–or–indirectly,– within–the–United–States–or–to,–or–for–the–account– or–benefit–of,–US–Persons–except–in–transactions– exempt–from,–or–not–subject–to,–registration– under–the–US–Securities–Act–and–applicable–US– state–securities–law.–AMP–Notes–2–are–being– offered–and–sold–solely–outside–the–United– States–pursuant–to–Regulation–S–under–the–US– Securities–Act.

Each–applicant,–and–any–persons–for–whose– benefit–such–applicant–is–applying,–and–each– person–to–whom–the–Institutional–Offer–is–made– under–this–prospectus,–by–accepting–delivery– of–this–prospectus–or–AMP–Notes–2,–will–have– represented,–agreed–and–acknowledged–that:

  • –– AMP–Notes–2–have–not–been,–and–will–not–be,– registered–under–the–US–Securities–Act–or–with– any–securities–authority–in–any–state–or–other– jurisdiction–of–the–United–States

  • –– any–AMP–Notes–2–it–acquires–in–the–Offer–or– the–Reinvestment–Offer–will–be–acquired–in– an–offshore–transaction–outside–the–United– States–in–compliance–with–the–requirements– of–Regulation–S

  • –– it–will–not–offer,–sell,–pledge–or–transfer–any– AMP–Notes–2–in–the–United–States–or–to,–or– for–the–account–or–benefit–of,–any–US–Person,– except–in–a–transaction–exempt–from,–or–not– subject–to,–the–registration–requirements–of– the–US–Securities–Act–and–any–applicable–laws– US–state–securities–laws

  • –– it–has–not–and–will–not–send–the–prospectus– and–any–Application–Form,–or–any–other– material–relating–to–the–Offer–to–any–person–in– the–United–States–or–to,–or–for–the–account–or– benefit–of,–any–US–Person

  • –– AMP,–the–Joint–lead–managers–and–others– will–rely–upon–the–truth–and–accuracy–of– these–representations,–agreements–and– acknowledgements,–and

  • –– if–any–of–the–foregoing–representations,– agreements–and–acknowledgements–are–no– longer–accurate,–it–will–promptly–notify–AMP,– and–if–it–is–acquiring–any–AMP–Notes–2–as– fiduciary–or–agent–for–one–or–more–accounts,–it– has–full–power–to–make–these–representations,– agreements–and–acknowledgements–on– behalf–of–each–such–account.

7.5.2 Application to ASX for quotation of AMP Subordinated Notes 2

AMP–has–applied–to–ASX–for–AMP–Notes–2– to–be–quoted–on–ASX.–If–ASX–does–not–grant– permission–for–AMP–Notes–2–to–be–quoted–within– three–months–after–the–date–of–the–original– prospectus,–AMP–Notes–2–will–not–be–issued– and–all–application–payments–will–be–refunded– (without–interest)–to–applicants–as–soon–as– practicable.–AMP–Notes–holders–who–have–applied– to–participate–in–the–Reinvestment–Offer–will– not–receive–AMP–Notes–2–and–will–retain–their– AMP–Notes.

7.5.3 CHESS and issuer sponsored holdings

AMP–has–applied–for–AMP–Notes–2–to–participate– in–CHESS.–No–certificates–will–be–issued–for–AMP– Notes–2.–AMP–expects–that–Holding–statements– for–issuer–sponsored–holders–and–confirmations– for–CHESS–holders–are–expected–to–be–despatched– to–successful–applicants–by–24–December–2013.

  • –– it–is–not–in–the–United–States,–it–is–not–a–US– Person,–and–it–is–not–acting–for–the–account–or– benefit–of–any–US–Person

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7.5.4 Deferred settlement trading and selling on market

It–is–expected–that–AMP–Notes–2–will–begin– trading–on–ASX–on–a–deferred–settlement–basis– on–19–December–2013–under–ASX–code–‘AMPHA’.– Trading–is–expected–to–continue–on–that–basis– until–27–December–2013,–when–it–is–anticipated– that–trading–of–AMP–Notes–2–will–begin–on–a– normal–settlement–basis.–Deferred–settlement– will–occur–as–a–consequence–of–trading–which– takes–place–before–Holding–statements–are– despatched–to–successful–applicants.

You–are–responsible–for–confirming–your–holding– before–trading–in–AMP–Notes–2.–If–you–are–a– successful–applicant–and–sell–your–AMP–Notes–2– before–receiving–your–Holding–statement,–you–do– so–at–your–own–risk.

You–may–call–the–AMP–Notes–2–information–line– on–1300–338–164–(within–Australia),–0800–444–152– (within–New–Zealand)–or–+61–3–9415–4018– (outside–Australia–and–New–Zealand)–Monday–to– Friday–––8.30am–to–5.30pm–(Sydney–time)–or–your– Syndicate–broker,–after–the–Issue–Date–to–enquire– about–your–allocation.

7.5.5 Provision of bank account details for Interest

All–holders–of–AMP–Notes–2–will–be–paid– Interest–by–direct–credit–into–a–nominated– Australian–financial–institution–account.–AMP–is–a– mandatory–direct–credit–company,–as–outlined–in– AMP’s–constitution.

7.5.6 Provision of TFN or ABN for Australian tax residents

An–applicant–is–not–required–to–quote–a–TFN–(or– in–certain–circumstances–an–ABN)–or–proof–of– exemption;–however,–if–an–applicant–does–not– quote–a–TFN,–ABN–or–proof–of–exemption,–AMP– will–be–required–to–withhold–Australian–taxation– at–the–maximum–marginal–tax–rate–including–the– Medicare–Levy–(currently–46.5–per–cent)–from–any– Interest–payable–on–AMP–Notes–2–and–remit–the– amount–withheld–to–the–ATO.–A–withholding–rate–of– 47–per–cent–will–apply–to–payments–of–Interest–made– on–or–after–1–July–2014.–This–takes–into–account–the– increase–in–the–Medicare–Levy–as–a–result–of–the– introduction–of–DisabilityCare.–A–general–outline–of– the–Australian–taxation–implications–of–investing–in– AMP–Notes–2–is–included–in–the–Australian–taxation– summary–in–section–8.

7.5.7 Discretion regarding the Offer

AMP–reserves–the–right–not–to–proceed–with,–and– may–withdraw,–the–Offer–at–any–time–before–the– issue–of–AMP–Notes–2–to–successful–applicants.

If–the–Offer–does–not–proceed,–application– payments–will–be–refunded–without–interest.– Eligible–AMP–Notes–holders–who–have–applied– to–participate–in–the–Reinvestment–Offer–will– not–receive–AMP–Notes–2–and–will–retain–their– A$–AMP–Notes.

AMP–and–the–Joint–lead–managers–also–reserve– the–right–to–close–the–Offer–or–any–part–of–it– early,–extend–the–Offer–or–any–part–of–it,–accept– late–applications–or–bids–either–generally–or–in– particular–cases,–reject–any–application–or–bid,–or– allocate–to–any–applicant–or–bidder–fewer–AMP– Notes–2–than–applied–or–bid–for.–This–is–at–AMP’s– discretion,–and–AMP–is–under–no–obligation–to– exercise–that–discretion–in–any–particular–case.

Investors–should–also–note–that–no–cooling-off– rights–(whether–by–law–or–otherwise)–apply–to– an–application–for–AMP–Notes–2.–This–means– that,–in–most–circumstances,–applicants–may–not– withdraw–their–applications–once–submitted.–

7.6 Enquiries

7.6.1 General enquiries

You–can–call–the–AMP–Notes–2–Offer–information– line–on–1300–338–164–(within–Australia),– 0800–444–152–(within–New–Zealand)–or– +61–3–9415–4018–(outside–Australia–and–New– Zealand)–Monday–to–Friday–––8.30am–to–5.30pm– (Sydney–time)–if–you:

  • –– have–further–questions–on–how–to–apply–for– AMP–Notes–2

  • –– require–assistance–to–complete–your– Application–Form

  • –– require–additional–copies–of–this–prospectus– and–Application–Forms

  • –– are–a–NZ$–AMP–Notes–holder–and–therefore–are– ineligible–to–participate–in–the–Reinvestment– Offer–and/or–apply–under–the–Offer,–or

  • –– have–any–other–questions–about–the–Offer.

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If–you–are–unclear–in–relation–to–any–matter– relating–to–the–Offer–or–are–uncertain–whether– AMP–Notes–2–are–a–suitable–investment–for–you,– you–should–consult–your–stockbroker,–solicitor,– accountant–or–other–independent–and–qualified– professional–adviser.

7.6.2 Applicants under the Broker Firm Offer

If–you–have–further–questions–about–the–Offer–or– your–application–under–the–Broker–Firm–Offer,–call– your–Syndicate–broker.

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Australian taxation summary

This section includes a summary of the Australian tax consequences of investing in AMP Subordinated Notes 2.

If you are considering applying for AMP Subordinated Notes 2, it is important that you understand the taxation consequences of investing in AMP Subordinated Notes 2. You should read the Australian taxation summary in this section, and discuss the taxation consequences with your tax adviser, financial adviser or other professional adviser, before deciding whether to invest

8.1 Introduction

8.2 Australian Income Tax

8.3 Australian Interest Withholding Tax

8.4 Eligible AMP Notes holders participating in the Reinvestment Offer 8.5 Other Australian Tax Matters

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8.1 Introduction

This–summary–of–the–Australian–tax–consequences– is–based–on–the–Income–Tax–Assessment–Acts–of– 1936–and–1997–(together,– Australian Tax Act ),–the– Taxation–Administration–Act–1953,–the–A–New– Tax–System–(Goods–and–Services–Tax)–Act–1999– ( GST Act )–and–any–relevant–regulations,–rulings–or– judicial–or–administrative–pronouncements,–at–the– date–of–this–prospectus.–

This–summary–applies–to–Holders–that–are:

  • –– residents–of–Australia–for–tax–purposes–that– do–not–hold–their–AMP–Notes–2–in–the–course– of–carrying–on–a–business–outside–of–Australia,– and–non-residents–of–Australia–for–tax– purposes–that–hold–their–AMP–Notes–2–in–the– course–of–carrying–on–a–business–at–or–through– a–permanent–establishment–in–Australia– ( Australian Holders ),–and

  • –– non-residents–of–Australia–for–tax–purposes– that–do–not–acquire–their–AMP–Notes–2–in– the–course–of–carrying–on–a–business–at–or– through–a–permanent–establishment–in– Australia,–and–Australian–tax–residents–that– acquire–their–AMP–Notes–2–in–the–course–of– carrying–on–a–business–outside–of–Australia– ( Non-Australian Holders ).

This–summary–also–addresses–the–Australian–tax– consequences–for–Eligible–AMP–Notes–holders– who–participate–in–the–Reinvestment–Offer.–

This–summary–is–not–exhaustive–and,–in–particular,– does–not–deal–with–the–position–of–certain–classes– of–Holders–(including,–without–limitation,–dealers– in–securities,–custodians–or–other–third–parties– who–hold–AMP–Notes–2–on–behalf–of–any–person)– or–persons–holding–interests–in–AMP–Notes–2– through–such–persons.–

This–summary–is–not–intended–to–be,–nor–should– it–be–construed–as–legal–or–tax–advice–to–any– particular–holder–of–AMP–Notes–2.–Each–Holder– should–seek–professional–tax–advice–in–relation–to– their–particular–circumstances.

8.2 Australian Income Tax

8.2.1 Interest payments

Australian–Holders–will–be–required–to–include–any– Interest–in–respect–of–their–AMP–Notes–2–in–their– Australian–assessable–income.

Whether–the–Interest–should–be–recognised–as– assessable–income–on–a–realisation–or–accruals– basis–will–depend–on–the–individual–circumstances– of–the–Australian–Holder–(see–also–the–‘ taxation of financial arrangements ’–summary–below).

Non-Australian–Holders–should–not–be–subject– to–Australian–income–tax–in–respect–of–Interest– payments–received–on–their–AMP–Notes–2.– This–is–on–the–basis–that–AMP–intends–to–satisfy– the–requirements–of–section–128F–of–the– Australian–Tax–Act–in–respect–of–Interest–paid– on–AMP–Notes–2–(see–summary–below).–

8.2.2 Gain on disposal or redemption of AMP Subordinated Notes 2

Australian–Holders–will–be–required–to–include–any– gain–or–loss–on–disposal–or–redemption–of–AMP– Notes–2–in–their–assessable–income.–Depending– on–the–circumstances–of–the–Australian–Holder,– either–the–rules–relating–to–‘traditional–securities’– (in–sections–26BB–and–70B–of–the–Australian–Tax– Act)–or–‘taxation–of–financial–arrangements’–(see– summary–below)–should–apply.

For–the–purpose–of–calculating–an–Australian– Holder’s–gain–or–loss–on–disposal–or–redemption–of– AMP–Notes–2:

  • –– the–cost–of–an–AMP–Note–2–should–generally– be–its–Issue–Price–for–Holders–who–acquire– AMP–Notes–2–under–this–prospectus

  • –– the–proceeds–from–a–disposal–will–generally–be– the–gross–amount–received–by–the–Holder–in– respect–of–the–disposal–of–AMP–Notes–2,–and

  • –– if–the–AMP–Notes–2–are–redeemed–by–AMP,– the–proceeds–from–the–redemption–may–be– taken–to–exclude–any–parts–of–the–redemption– amount–paid–to–Holders–that–are–referable– to–any–accrued–and–unpaid–Interest–on–AMP– Notes–2.–Those–Interest–amounts–may–be– treated–in–the–same–manner–as–Interest– payments–received–during–the–term–of– AMP–Notes–2.–Again,–Holders–should–seek– their–own–taxation–advice–in–relation–to–the– application–of–the–Australian–Tax–Act–to–their– particular–circumstances.

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Non-Australian–Holders–should–not–be–subject– to–Australian–income–tax–on–gains–made–on–the– disposal–or–redemption–of–AMP–Notes–2,–provided:

  • –– if–the–Non-Australian–Holder–is–not–a–resident– of–a–country–with–which–Australia–has–entered– into–a–comprehensive–double–tax–treaty––– such–gains–do–not–have–an–Australian–source,– or

  • –– if–the–Non-Australian–Holder–is–a–resident–of– a–country–with–which–Australia–has–entered– into–a–comprehensive–double–tax–treaty–––the– Non-Australian–Holder–is–fully–entitled–to–the– benefits–of–the–double–tax–treaty.

A–gain–arising–on–the–sale–of–AMP–Notes–2–by–a– Non-Australian–Holder–to–another–Non-Australian– Holder–where–AMP–Notes–2–are–sold–outside– Australia–and–all–negotiations–are–conducted,– and–documentation–executed,–outside– Australia–should–not–be–regarded–as–having–an– Australian–source.

If–a–gain–realised–by–a–Non-Australian–Holder–is– subject–to–Australian–income–tax–then,–it–should– be–taxed–as–ordinary–income–and–not–as–a–capital– gain.–Again,–depending–on–the–circumstances– of–the–Non-Australian–Holder,–either–the–rules– relating–to–‘traditional–securities’–or–‘taxation–of– financial–arrangements’–should–apply.

8.2.3 No gain on Conversion of AMP Subordinated Notes 2

Holders–(whether–an–Australian–Holder–or–a– Non-Australian–Holder)–should–not–make–any– taxable–gain–or–loss–if–AMP–Notes–2–are–Converted– into–AMP–Ordinary–Shares.–This–is–because– any–gain–or–loss–on–the–Conversion–should–be– disregarded–under–the–Australian–Tax–Act.

AMP–Ordinary–Shares–acquired–as–a–consequence– of–the–Conversion–should–generally–be–treated– as–having–a–cost–base–and–reduced–cost–base–for– Australian–capital–gains–tax–( CGT )–purposes–equal– to–the–cost–base–of–AMP–Notes–2–at–the–time–of– Conversion.–For–Australian–CGT–purposes,–the– acquisition–date–of–the–AMP–Ordinary–Shares– should–generally–be–the–time–of–Conversion.–This– will–be–relevant–in–the–event–that–the–Holder– subsequently–disposes–of–the–AMP–Ordinary– Shares.–In–the–case–of–a–Holder–who–is–not–a– resident–of–Australia–for–tax–purposes,–any–capital– gain–or–loss–made–by–that–Holder–from–any– subsequent–disposal–of–AMP–Ordinary–Shares–

is–likely–to–be–disregarded–for–Australian–CGT– purposes.–This–is–because–the–AMP–Ordinary– Shares–are–not–likely–to–be–‘taxable–Australian– property’–(as–defined–under–the–Australian–Tax– Act)–at–the–time–of–disposal.–

8.3 Australian Interest Withholding Tax

8.3.1 Interest Withholding Tax

For–Australian–interest–withholding–tax–( IWT )– purposes,–‘interest’–is–defined–in–section– 128A(1AB)–of–the–Australian–Tax–Act–to–include– amounts–in–the–nature–of,–or–in–substitution–for,– interest–and–certain–other–amounts.–The–Interest– paid–on–AMP–Notes–2–should–be–‘interest’–as– defined–in–the–Australian–Tax–Act.–

Australian–Holders–should–not–be–subject–to– Australian–IWT–in–respect–of–Interest–payments– on–AMP–Notes–2.

Non-Australian–Holders–may–be–subject–to– Australian–IWT–at–a–rate–of–10–per–cent–of–the– gross–amount–of–Interest–paid–by–AMP–to–the– Non-Australian–Holder–unless–an–exemption– is–available.

8.3.2 Section 128F exemption from IWT

An–exemption–from–IWT–is–available–in–respect–of– Interest–paid–on–AMP–Notes–2–if–the–requirements– of–section–128F–of–the–Australian–Tax–Act– are–satisfied.–

AMP–intends–to–issue–AMP–Notes–2–in–a–manner– which–will–satisfy–the–requirements–of–section– 128F–of–the–Australian–Tax–Act.

In–broad–terms,–the–requirements–are–as–follows:

  • 1.– AMP–is–a–resident–of–Australia–and–a–company– (as–defined–in–section–128F(9)–of–the– Australian–Tax–Act)–when–it–issues–AMP–Notes– 2–and–when–interest–is–paid,–and

  • 2.– –AMP–Notes–2–are–issued–in–a–manner–which– satisfies–the–‘public–offer’–test–in–section–128F– of–the–Australian–Tax–Act.–

In–relation–to–AMP–Notes–2,–there–are–five– principal–methods–of–satisfying–the–public–offer– test.–In–summary,–the–five–methods–are:

  • –– offers–to–10–or–more–unrelated–financiers,–or– securities–dealers–or–entities–that–carry–on–the– business–of–investing–in–securities

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  • –– offers–to–100–or–more–investors–of–a– certain–type

  • –– offers–of–listed–AMP–Notes–2

  • –– offers–via–publicly–available–information– sources,–or

  • –– offers–to–a–dealer,–manager–or–underwriter– who–offers–to–sell–AMP–Notes–2–within–30–days– by–one–of–the–preceding–methods.

  • 3.– AMP–does–not–know,–or–have–reasonable– grounds–to–suspect,–at–the–time–of–issue,–that– AMP–Notes–2–(or–interests–in–those–AMP–Notes– 2)–were–being,–or–would–later–be,–acquired,– directly–or–indirectly,–by–an–‘associate’–of–AMP,– except–as–permitted–by–section–128F(5)–of–the– Australian–Tax–Act–(see–below),–and

  • 4.– –at–the–time–of–the–payment–of–Interest,–AMP– does–not–know,–or–have–reasonable–grounds– to–suspect,–that–the–payee–is–an–‘associate’–of– AMP,–except–as–permitted–by–section–128F(6)– of–the–Australian–Tax–Act–(see–below).

An–‘associate’–of–AMP–for–the–purposes–of–section– 128F–of–the–Australian–Tax–Act–includes,–when– AMP–is–not–a–trustee:–

  • –– a–person–or–entity–which–holds–more–than–50– per–cent–of–the–voting–shares–of,–or–otherwise– controls,–AMP–

  • –– an–entity–in–which–more–than–50–per–cent– of–the–voting–shares–are–held–by,–or–which–is– otherwise–controlled–by,–AMP–

  • –– a–trustee–of–a–trust–where–AMP–is–capable–of– benefiting–(whether–directly–or–indirectly)– under–that–trust,–and–

  • –– a–person–or–entity–who–is–an–‘associate’–of– another–person–or–company–which–is–an– ‘associate’–of–AMP–under–any–of–the–foregoing.

However,–for–the–purposes–of–sections–128F(5)– and–(6)–of–the–Australian–Tax–Act–(see–paragraphs– (iii)–and–(iv)–above)–an–‘associate’–of–AMP–does–not– include–a–Non-Australian–Holder–that–is–acting–in– the–capacity–of:

  • –– in–the–case–of–section–128F(5)–only,–a–dealer,– manager–or–underwriter–in–relation–to–the– placement–of–the–relevant–AMP–Notes–2,–or–a– clearing–house,–custodian,–funds–manager–or– responsible–entity–of–a–registered–managed– investment–scheme–(for–the–purposes–of–the– Corporations–Act),–or–

  • –– in–the–case–of–section–128F(6),–a–clearing– house,–paying–agent,–custodian,–funds– manager,–responsible–entity–of–a–registered– managed–investment–scheme–(for–the– purposes–of–the–Corporations–Act).–

8.3.3 Exemptions under certain double tax conventions

Exemptions–from–IWT–are–also–available–for– certain–non-residents–of–Australia–under–double– tax–conventions.

The–Australian–government–has–signed–new–or– amended–double–tax–conventions–( New Treaties )– with–a–number–of–countries–(each–a– Specified Country ).–

Broadly,–the–New–Treaties–effectively–prevent–IWT– applying–to–interest–derived–by:

  • –– the–governments–of–the–Specified–Countries– and–certain–governmental–authorities–and– agencies–in–a–Specified–Country,–and

  • –– a–‘financial–institution’–resident–in–a–Specified– Country–which–is–unrelated–to–and–dealing– wholly–independently–with–AMP.–The–term– ‘financial–institution’–refers–to–either–a–bank– or–any–other–enterprise–which–substantially– derives–its–profits–by–carrying–on–a–business– of–raising–and–providing–finance.–However,– interest–paid–under–a–back-to-back–loan–or–an– economically–equivalent–arrangement–will–not– qualify–for–this–exemption.

The–Australian–Federal–Treasury–maintains–a– listing–of–Australia’s–double–tax–conventions–which– provides–details–of–country,–status,–withholding–tax– rate–limits–and–Australian–domestic–implementation.– This–listing–is–available–to–the–public–at–the–Federal– Treasury’s–Department–website.–

8.3.4 Payment of additional amounts

As–set–out–in–more–detail–in–clause–11–of–the– Terms,–if–AMP–is–at–any–time–compelled–or– authorised–by–law–to–deduct–or–withhold–an– amount–in–respect–of–any–Australian–withholding– taxes–imposed–or–levied–by–the–Australian– Government–in–respect–of–AMP–Notes–2,–AMP– must,–subject–to–certain–exemptions–contained– in–clause–11.3–of–the–Terms,–pay–such–additional– amounts–as–may–be–necessary–in–order–to–ensure– that–the–net–amounts–received–by–the–Holders– of–those–AMP–Notes–2–after–such–deduction–or– withholding–are–equal–to–the–respective–amounts– which–would–have–been–received–had–no–such– deduction–or–withholding–been–required.

109 AMP Subordinated Notes 2

Section 8 Australian taxation summary

8.4 Eligible AMP Notes holders participating in the Reinvestment Offer

Eligible–AMP–Notes–holders–have–the–option–to– participate–in–the–Reinvestment–Offer.–This–will–be– undertaken–by–AMP–acquiring–AMP–Notes–from– Eligible–AMP–Notes–holders–with–the–proceeds–of– sale–being–applied–to–acquire–AMP–Notes–2.

The–following–income–tax–consequences–will– generally–apply–for–Eligible–AMP–Notes–holders– who–participate–in–the–Reinvestment–Offer.–This– summary–applies–to–Eligible–AMP–Notes–holders– that–are:

  • –– residents–of–Australia–for–tax–purposes–that– do–not–hold–their–AMP–Notes–in–the–course–of– carrying–on–a–business–outside–of–Australia,– and–non-residents–of–Australia–for–tax– purposes–that–hold–their–AMP–Notes–in–the– course–of–carrying–on–a–business–at–or–through– a–permanent–establishment–in–Australia– ( Australian Eligible AMP Notes holders ),–and

  • –– non-residents–of–Australia–for–tax–purposes– that–do–not–acquire–their–AMP–Notes–in–the– course–of–carrying–on–a–business–at–or–through– a–permanent–establishment–in–Australia,–and– Australian–tax–residents–that–acquire–their– AMP–Notes–in–the–course–of–carrying–on–a– business–outside–of–Australia–( Non-Australian Eligible AMP Notes holders ).

This–summary–does–not–deal–with–Eligible–AMP– Notes–holders–who–are–in–the–business–of–dealing– or–trading–in–securities.

8.4.1 Australian income tax

Australian–Eligible–AMP–Notes–holders–who– participate–in–the–Reinvestment–Offer–will–be– required–to–include–any–gain–or–loss–on–the– disposal–of–their–AMP–Notes–in–their–assessable– income.–The–Accrued–Interest–Amount–received– in–respect–of–their–AMP–Notes–should–be–taken– into–account–in–determining–the–amount–of–the– gain–or–loss.–Depending–on–the–circumstances–of– the–Australian–Eligible–AMP–Notes–holders,–either– the–rules–relating–to–‘traditional–securities’–or– ‘taxation–of–financial–arrangements’–should–apply.–

Non-Australian–Eligible–AMP–Notes–holders– should–not–be–subject–to–Australian–income– tax–on–gains–made–on–the–disposal–of–their– AMP–Notes,–provided:

  • –– if–the–Non-Australian–Eligible–AMP–Notes– holder–is–not–a–resident–of–a–country–with–which– Australia–has–entered–into–a–comprehensive– double–tax–treaty–––such–gains–do–not–have– an–Australian–source.–Non-Australian–Eligible– AMP–Notes–holders–should–seek–their–own– taxation–advice–in–relation–to–the–application–of– the–Australian–source–rules–to–their–particular– circumstances,–or

  • –– if–the–Non-Australian–Holder–is–a–resident–of– a–country–with–which–Australia–has–entered– into–a–comprehensive–double–tax–treaty–––the– Non-Australian–Holder–is–fully–entitled–to–the– benefits–of–the–double–tax–treaty.

If–a–gain–realised–by–a–Non-Australian–Eligible– AMP–Notes–holder–is–subject–to–Australian–income– tax,–it–should–be–taxed–as–ordinary–income–and– not–as–a–capital–gain.–Again,–depending–on–the– circumstances–of–the–Non-Australian–Eligible– AMP–Notes–holder,–either–the–rules–relating–to– ‘traditional–securities’–or–‘taxation–of–financial– arrangements’–should–apply.

The–Accrued–Interest–Amount–may–be–regarded– as–an–amount–in–substitution–for–interest.–In–that– case,–Non-Australian–Eligible–AMP–Notes–holders– should–not–generally–be–subject–to–Australian– income–tax–on–the–Accrued–Interest–Amount– received–in–respect–of–their–AMP–Notes.–This– assumes–that–Australian–residents–acting–through– a–foreign–permanent–establishment–will–be–able– to–take–advantage–of–a–branch–profits–exemption– from–Australian–income–tax–after–taking–into– account–their–personal–circumstances.

The–proceeds–from–the–sale–of–AMP–Notes–that– are–applied–to–acquire–AMP–Notes–2–will–be– included–in–the–cost–of–AMP–Notes–2–for–the– purposes–of–determining–any–future–gain–or–loss– on–their–disposal,–redemption–or–Conversion– (see–above).–

8.4.2 Australian IWT

Australia–IWT–should–not–be–payable–in–relation–to– the–Accrued–Interest–Amount–paid–in–respect–of– the–AMP–Notes.–This–is–on–the–basis–that–the–issue– of–the–AMP–Notes–satisfies–the–requirements–of– the–public–offer–exemption–in–section–128F.

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Section 8 Australian taxation summary

8.5 Other Australian Tax Matters

Under–Australian–laws–as–presently–in–effect:

  • –– taxation of financial arrangements –––Division– 230–of–the–Australian–Tax–Act–contains–tax– timing–rules–for–certain–taxpayers–to–bring– to–account–gains–and–losses–from–‘financial– arrangements’.–The–rules–do–not–alter–the–rules– relating–to–the–imposition–of–IWT–nor–override– the–IWT–exemption–available–under–section– 128F–of–the–Australian–Tax–Act.–

A–number–of–elective–tax–timing–methods–are– available–under–Division–230.–If–none–of–the– tax–timing–elections–are–made,–the–default– accruals/realisation–methods–should–apply–to– the–taxpayer.–Under–the–default–methods,–if–the– gains–or–losses–from–a–financial–arrangement– are–sufficiently–certain,–they–should–be–brought– to–account–for–tax–on–an–accruals–basis.– Otherwise,–they–should–be–brought–to–account– for–tax–when–they–are–realised.–

Division–230–does–not–apply–to–certain– taxpayers–or–in–respect–of–certain–short–term– ‘financial–arrangements’.–Division–230–should– not,–for–example,–generally–apply–to–Holders–of– AMP–Notes–2–which–are–individuals–and–certain– other–entities–(eg–certain–superannuation– entities–and–managed–investment–schemes)– which–do–not–meet–various–turnover–or–asset– thresholds,–unless–they–make–an–election– that–the–rules–apply–to–their–‘financial– arrangements’.–Potential–Holders–should–seek– their–own–tax–advice–regarding–their–own– personal–circumstances–as–to–whether–such–an– election–should–be–made.

  • –– death duties –––no–AMP–Notes–2–will–be–subject– to–death,–estate–or–succession–duties–imposed– by–Australia,–or–by–any–political–subdivision–or– authority–therein–having–power–to–tax,–if–held– at–the–time–of–death–

  • –– stamp duty and other taxes –––no– ad valorem stamp,–issue,–registration–or–similar–taxes–are– payable–in–Australia–on–the–issue,–transfer–or– redemption–of–any–AMP–Notes–2.–The–same– position–applies–to–transactions–concerning– AMP–Notes–under–the–Reinvestment–Offer

  • –– TFN/ABN withholding –––withholding–tax–is– presently–imposed–at–the–rate–of–46.5–per– cent–on–the–payment–of–interest–on–certain– registered–securities–unless–the–relevant–payee–

has–quoted–an–Australian–tax–file–number– (TFN),–(in–certain–circumstances)–an–Australian– Business–Number–(ABN)–or–proof–of–some–other– exception–(as–appropriate).–A–withholding– rate–of–47–per–cent–will–apply–to–payments–of– interest–made–on–or–after–1–July–2014

Assuming–the–requirements–of–section–128F– of–the–Australian–Tax–Act–are–satisfied–with– respect–to–AMP–Notes–2,–then–withholding–will– not–apply–to–payments–to–a–Non-Australian– Holder.–Payments–to–Australian–Holders–in– respect–of–AMP–Notes–2–may–be–subject–to– a–withholding–where–the–Australian–Holder– does–not–quote–a–TFN,–ABN–or–provide–proof–of– an–appropriate–exemption–(as–appropriate)

  • –– additional withholdings from certain payments to non-residents –––the– Governor-General–may–make–regulations– requiring–withholding–from–certain–payments– to–non-residents–of–Australia–(other–than– payments–of–interest–and–other–amounts– which–are–already–subject–to–the–current– IWT–rules–or–specifically–exempt–from–those– rules).–Regulations–may–only–be–made–if–the– responsible–Minister–is–satisfied–the–specified– payments–are–of–a–kind–that–could–reasonably– relate–to–assessable–income–of–foreign– residents.–The–possible–application–of–any–future– regulations–to–the–proceeds–of–any–sale–of–AMP– Notes–2–will–need–to–be–monitored–by–Holders

  • –– garnishee directions by the Commissioner of Taxation –––the–Commissioner–may–give–a– direction–requiring–AMP–to–deduct–from–any– payment–to–a–Holder–any–amount–in–respect–of– Australian–tax–payable–by–the–Holder.–If–AMP– is–served–with–such–a–direction,–then–AMP–will– comply–with–that–direction–and–will–make–any– deduction–required–by–that–direction–

  • –– supply withholding tax –––payments–in– respect–of–AMP–Notes–2–can–be–made–free–and– clear–of–any–‘supply–withholding–tax’,–and–

  • –– goods and services tax –––neither–the–issue– nor–receipt–of–AMP–Notes–2–will–give–rise–to– a–liability–for–GST–in–Australia–on–the–basis– that–the–supply–of–AMP–Notes–2–will–comprise– either–an–input–taxed–financial–supply–or–(in– the–case–of–an–offshore–subscriber)–a–GST-free– supply.–Furthermore,–neither–the–payment– of–Face–Value–or–Interest–by–AMP,–nor–the– disposal–of–AMP–Notes–2,–would–give–rise–to– any–GST–liability–in–Australia.

111 AMP Subordinated Notes 2

Section 9

Key people, interests and benefits

This section provides information about the AMP board, the interests of people involved in the Offer and any benefits they may receive.

9.1 AMP board 9.2 Interests and benefits 9.3 Expenses of the Offer

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Section 9 Key people, interests and benefits

9.1 AMP board

Director/position

==> picture [103 x 94] intentionally omitted <==

Peter Mason AM Non-Executive Chairman

BCom–(Hons),–MBA,–– Hon.DBus–(UNSW),–FAICD.

Experience, qualifications and expertise

Peter–was–appointed–to–the–AMP–board–in–October–2003–and–assumed–the– role–of–Chairman–in–September–2005.–He–is–a–member–of–the–People–and– Remuneration–Committee–and–the–Nomination–Committee.

Peter–has–40–years–experience–in–investment–banking–and–is–currently–a– Senior–Advisor–to–UBS–Investment–Bank.–He–was–Chairman–of–J.P.–Morgan– Chase–Bank–in–Australia–from–2000–2005.

Prior–to–this–he–was–Chairman–and–Chief–Executive–of–Schroders–Australia– Limited–and–Group–Managing–Director–of–Schroders’–investment–banking– businesses–in–the–Asia–Pacific–region.–He–was–a–member–of–the–Council–of– the–University–of–New–South–Wales–for–13–years,–a–Director–of–the–Children’s– Hospital–in–Sydney–for–12–years–and–Chairman–of–the–Children’s–Hospital– Fund–for–eight–years.–In–1995,–Peter–was–appointed–a–member–of–the–Order–of– Australia–for–his–contribution–to–the–Children’s–Hospital.

Listed directorships

  • Chairman–of–David–Jones–Limited–(appointed–as–a–Director–from– November–2007–and–Chairman–from–January–2013)

  • Director–of–Singapore–Telecommunications–Limited–(appointed– September–2010)

Other directorships/appointments

  • Director–of–the–University–of–New–South–Wales–Foundation

  • Chairman–of–the–UBS–Australia–Foundation–Pty–Limited

  • Director–of–Taylors–Wines–Pty–Limited

  • Chairman–of–the–Centre–for–International–Finance–and–Regulation

  • > Trustee–of–the–Sydney–Opera–House–Trust

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Section 9 Key people, interests and benefits

Director/position

==> picture [103 x 91] intentionally omitted <==

Craig Dunn Chief Executive Officer and Managing Director

(will–be–retiring–on– 31–December–2013)

BCom,–FCA.–

Experience, qualifications and expertise

Craig–was–appointed–Chief–Executive–Officer–(CEO)–and–Managing–Director–in– January–2008.–He–has–been–a–Director–of–AMP–Life–Limited–since–April–2002,– a–Director–of–AMP–Capital–Holdings–Limited–since–January–2008–and–was– appointed–to–The–National–Mutual–Life–Association–of–Australasia–Limited– (NMLA)–Board–in–March–2011.

Prior–to–becoming–CEO,–Craig–was–Managing–Director,–AMP–Financial–Services– from–2002–2007.–He–joined–AMP–in–January–2000–and–has–held–a–number–of– senior–roles,–including–Managing–Director–of–AMP–Bank–Limited–and–Director,– Office–of–the–CEO.

Before–joining–AMP,–Craig–was–CEO–of–a–Malaysia-based–insurance–company,– a–joint–venture–of–Colonial–Limited.–He–worked–for–KPMG–throughout–Europe– and–in–Indonesia–before–joining–Colonial.

Listed directorships

  • Within–the–three–years–immediately–before–the–end–of–the–last–financial– year,–Craig–served–as–a–director–of–AMP–Capital–Investors–Limited– (responsible–entity–of–AMP–Capital–China–Growth–Fund,–a–managed– investment–scheme–listed–on–ASX)–(2008–December–2011).

Other directorships/appointments

  • Advisory–Board–Member–with–the–Australian–Government’s–Financial– Literacy–Foundation

  • Member–of–the–Australian–Government’s–Financial–Services– Advisory–Committee

  • Leaders–Forum–Member–of–the–Australian–Institute–for–Population– Ageing–Research

  • Panel–Member–of–the–Australian–Financial–Centre–Taskforce

  • Executive–Member–of–the–Australia–Japan–Business– Co-operation–Committee

==> picture [103 x 94] intentionally omitted <==

Craig Meller ( Incoming Chief Executive Officer and Managing Director from–1–January–2014) BSc(Hons),–ARCS

Craig–was–appointed–Managing–Director–of–AMP’s–largest–business,–AMP– Financial–Services,–on–15–October–2007.–He–will–join–the–AMP–board–as–an– Executive–Director–from–1–January–2014,–when–he–takes–over–the–role–of–AMP– group–Chief–Executive–Officer–and–Managing–Director–from–Craig–Dunn.

Craig–started–with–AMP–group’s–United–Kingdom–business–in–2001–before– coming–to–Australia–in–2002–to–take–up–the–role–of–Managing–Director,–AMP– Banking.–He–moved–to–the–role–of–Director–of–Product–Manufacturing–in–2003– prior–to–moving–to–his–current–role.

Craig–started–his–career–at–Lloyds–TSB–in–the–UK–where–he–spent–more–than– 14–years–working–across–the–business–in–a–number–of–management–roles.– From–1998–he–worked–at–Virgin–Direct–where–he–was–Managing–Director– from–1999–2001.

Other directorships/appointments

  • Deputy–Chairman–of–the–Financial–Services–Council

  • Chairman–of–the–Financial–Services–Council–Advice–Committee

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Section 9 Key people, interests and benefits

Director/position

==> picture [103 x 96] intentionally omitted <==

Patricia (Patty) Akopiantz Non-Executive Director BA,–MBA

Experience, qualifications and expertise

Patty–was–appointed–to–the–AMP–board–and–the–People–and–Remuneration– Committee–in–March–2011.–She–was–appointed–a–Director–of–AMP–Bank– Limited–in–November–2011,–a–member–of–its–Audit–Committee–in–June–2012– and–as–Chairman–of–that–Audit–Committee–in–February–2013.

Patty–has–over–25–years’–senior–management–and–consultancy–experience,– primarily–in–the–retail–and–consumer–industries–both–in–Australia–and– overseas.–Over–the–last–13–years,–she–has–served–on–numerous–boards– including–AXA–Asia–Pacific–Holdings–Limited–and–Coles–Group–Limited.–In– 2003,–she–was–awarded–a–Centenary–Medal–for–services–to–Australian–society– in–business–leadership.–She–has–an–MBA–from–Harvard–Business–School.

Listed directorships

  • Within–the–three–years–immediately–before–the–end–of–the–last–financial–year,– Patty–served–as–a–Director–of–AXA–Asia–Pacific–Holdings–Limited–(April–2006– March–2011)–and–Wattyl–Limited–(September–2005–September–2010).

Other directorships/appointments

  • Director–of–the–NSW–State–Library–Foundation

  • Member–of–Chief–Executive–Women

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Richard (Rick) Allert AO Non-Executive Director FCA.–

Rick–was–appointed–to–the–AMP–board–and–the–Audit–Committee–in–March– 2011.–He–was–appointed–a–Director–of–AMP–Bank–Limited–and–a–member–of– its–Audit–Committee–in–August–2013.

Rick–has–over–40–years–of–senior–business–appointments–including,–Chairman–of– AXA–Asia–Pacific–Holdings–Limited,–Chairman–of–Tourism–Australia,–Chairman– of–Coles–Group–Limited,–Chairman–of–Southcorp–Limited,–Chairman–of–Voyages– Hotels–and–Resorts–and–President–of–the–National–Heart–Foundation.–In–1997,– Rick–was–appointed–a–member–of–the–Order–of–Australia–for–his–service–to– business–and–the–community,–particularly–through–his–work–with–the–National– Heart–Foundation.–In–2003,–Rick–was–awarded–a–Centenary–Medal–for–service– to–Australian–society–through–rail–transport,–business–and–taxation.–In–2007,–he– was–appointed–an–Officer–of–the–Order–of–Australia–for–service–to–the–business– sector–through–leadership–and–promotion–of–corporate–social–responsibility,– and–to–the–community–through–involvement–with–and–support–for–a–range–of– artistic,–charitable–and–educational–organisations.

Listed directorships

  • Chairman–of–Western–Desert–Resources–Limited–(appointed–January–2011)

> Director–of–Genesee–&–Wyoming–Inc.–(appointed–July–2011)

Within–the–three–years–immediately–before–the–end–of–the–last–financial– year,–Rick–served–as–a–Director–of–AXA–Asia–Pacific–Holdings–Limited– (September–1995–March–2011,–Chairman–from–April–2000)–and–as–Deputy– Chairman–of–Gerard–Lighting–Group–Limited–(March–2010–October–2012).

Other directorships/appointments

  • Chairman–of–the–Aboriginal–Foundation–of–South–Australia–Inc

  • Deputy–Chairman–of–Cavill–Power–Products–Pty–Limited

  • Director–of–Genesee–&–Wyoming–Australia–Pty–Limited

  • Director–of–RG–&–RT–Trott–Pty–Limited

  • Chairman–of–Ikara–Wilpena–Enterprises–Pty–Ltd–and–Wilpena–Pound– Aerodrome–Services–Pty–Ltd

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Director/position

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Catherine Brenner Non-Executive Director BEc,–LLB,–MBA

Experience, qualifications and expertise

Catherine–was–appointed–to–the–AMP–board–in–June–2010.–She–was–appointed– to–the–AMP–Life–Board–in–May–2009–and–became–Chairman–in–May–2011.– Catherine–is–a–member–(and–former–Chairman)–of–the–AMP–Life–Limited– Audit–Committee.–She–was–appointed–Chairman–of–The–National–Mutual– Life–Association–of–Australasia–Limited–(NMLA)–Board–and–a–member–of–the– NMLA–Audit–Committee–in–March–2011.–

Catherine–is–a–former–Managing–Director,–Investment–Banking–at–ABN–AMRO– where–she–held–various–senior–roles.–Prior–to–this–she–was–a–corporate–lawyer.

Listed directorships

  • Director–of–Boral–Limited–(appointed–September–2010)

> Director–of–Coca-Cola–Amatil–Limited–(appointed–April–2008)

Within–the–three–years–immediately–before–the–end–of–the–last–financial–year,– Catherine–served–as–a–Director–of–Centennial–Coal–Company–Limited–– (2005–September–2010).

Other directorships/appointments

  • Trustee–of–the–Sydney–Opera–House–Trust

  • Council–Member–of–Chief–Executive–Women

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Brian Clark Non-Executive Director

DSc.–

Brian–was–appointed–to–the–AMP–board–in–January–2008.–He–is–a–member–of– the–Nomination–Committee–and–the–People–and–Remuneration–Committee.– Brian–is–Chairman–of–the–AMP–Capital–Holdings–Limited–Board–and–a–member– of–its–Audit–Committee.

Brian–spent–10–years–in–a–variety–of–senior–executive–roles–at–Vodafone– internationally,–most–recently–in–the–United–Kingdom–as–Group–Human– Resources–Director.–He–was–Chief–Executive–Officer–(CEO)–of–Vodafone’s– Australian–business–as–well–as–CEO–of–the–Asia–Pacific–region,–based–in–Tokyo.– Before–joining–Vodafone,–Brian–spent–three–years–as–CEO–of–Telkom–SA–Ltd,– in–South–Africa.–Brian–has–degrees–in–physics–and–mathematics–from–the– University–of–Pretoria,–and–has–completed–the–Advanced–Management– Program–at–the–Harvard–Business–School.

Listed directorships

  • Director–of–Boral–Limited–(appointed–May–2007)

Within–the–three–years–immediately–before–the–end–of–the–last–financial–year,– Brian–served–as–Chairman–of–AMP–Capital–Investors–Limited–(responsible– entity–of–AMP–Capital–China–Growth–Fund,–a–managed–investment–scheme– listed–on–ASX)–(2008–December–2011).

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Director/position

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Paul Fegan Non-Executive Director MBA.–

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Simon McKeon AO Non-Executive Director BCom,–LLB,–FAICD.–

Experience, qualifications and expertise

Paul–was–appointed–to–the–AMP–board–in–August–2009.–He–was–appointed–to–the– Audit–Committee–in–November–2009–and–became–Chairman–of–that–Committee–in– December–2010.–Paul–was–Chairman–of–AMP–Bank–Limited–from–May–2012–February– 2013–and–served–as–a–Director–on–that–board–from–April–2010–February–2013.

Paul–has–over–30–years’–experience–in–the–financial–services–industry.–He–was– appointed–Chief–Financial–Officer–of–Genworth–Australia–in–January–2013.–Paul– was–Group–Managing–Director,–Strategy–and–Corporate–Services–with–Telstra– from–February–2011–January–2012–and–was–the–Chief–Executive–Officer–(CEO)– of–St.George–Bank–from–November–2007–and–CEO–and–Managing–Director–from– February–2008–until–its–merger–with–Westpac–Banking–Corporation–in–December– 2008.–He–was–also–a–Director–of–St.George’s–funds–administration–subsidiary,– Asgard–Wealth–Solutions.–Prior–to–joining–St.George,–Paul–was–based–in–the–UK– as–Chief–Operating–Officer–of–Yorkshire–Bank.–He–held–director–positions–in–both– Yorkshire–Bank–and–Clydesdale–Bank–and–a–series–of–senior–appointments–with– National–Australia–Bank–in–Australia,–the–US,–Hong–Kong,–the–UK–and–Ireland.

Simon–was–appointed–to–the–AMP–board–in–March–2013.–He–was–appointed–to– the–Audit–Committee–in–May–2013.–Simon–was–appointed–a–Director–of–AMP– Capital–Holdings–Limited–and–a–member–of–its–Audit–Committee–in–May–2013.– Simon–is–Executive–Chairman–of–the–Macquarie–Group’s–Melbourne–office,– and–has–been–a–mergers–and–acquisitions–specialist.–He–was–the–Chairman–of– MYOB–Limited–from–2006–2009–and–has–held–a–wide–range–of–public–sector– and–not-for-profit–directorships.–In–2011,–Simon–was–named–Australian–of– the–Year–and–in–2012,–he–was–appointed–an–Officer–of–the–Order–of–Australia– for–distinguished–service–to–business–and–commerce–through–leadership– and–advisory–roles,–and–to–the–community–as–a–supporter–of–national–and– international–charitable,–educational–and–sporting–organisations.

Other directorships/appointments

  • Chairman–of–CSIRO

  • Director–of–Global–Poverty–Project–Inc.

  • Chairman–of–Global–Poverty–Project–Australia

  • Director–of–Red–Dust–Role–Models

  • Chairman–of–Business–for–Millennium–Development

  • Chairman–of–In2Science

  • Member–of–the–Big–Issue–advisory–board

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John Palmer ONZM Non-Executive Director BAgrSc,–Hon–DCom,– FNZID.

John–was–appointed–to–the–AMP–board–in–July–2007.–He–is–Chairman–of–the– People–and–Remuneration–Committee.–John–has–been–a–Director–of–the–AMP– Life–Board–since–May–2004.–He–was–appointed–to–The–National–Mutual–Life– Association–of–Australasia–Limited–Board–in–March–2011.–

John–has–extensive–experience–as–a–director–and–chairman–of–companies–in–the– agricultural–and–finance–sectors.–He–has–a–track–record–of–successfully–leading–change– and–reconstruction–of–diverse–corporates–in–marketing,–agribusiness–and–aviation.

In–1998–John–received–the–Bledisloe–Cup–for–outstanding–contribution–to–the– New–Zealand–fruit–industry.–In–1999–he–was–awarded–with–an–Officer–of–the–New– Zealand–Order–of–Merit–(ONZM)–for–service–to–the–New–Zealand–kiwifruit–industry.

Listed directorships

  • Director–of–Air–New–Zealand–Limited–(appointed–November–2001)

Other directorships/appointments

  • –Chairman–of–Rabobank–New–Zealand–Limited

  • Director–of–Rabobank–Australia–Limited

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Director/position

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Peter Shergold AC Non-Executive Director BA–(Hons),–MA,–PhD,– FAICD.––

Experience, qualifications and expertise

Peter–was–appointed–to–the–AMP–board–in–May–2008.–He–was–appointed–to– the–Audit–Committee–and–has–been–a–Director–of–the–AMP–Life–Board–since– August–2008.–Peter–is–also–a–member–of–the–AMP–Life–Audit–Committee.– He–was–appointed–to–The–National–Mutual–Life–Association–of–Australasia– Limited–Board–in–March–2011–and–is–a–member–of–its–Audit–Committee.–

Peter–is–Chancellor–and–Chair–of–the–board–of–trustees–of–the–University–of– Western–Sydney.–He–serves–on–a–wide–range–of–private–sector,–government–and– not-for-profit–boards.–Previously,–Peter–served–as–Secretary–of–the–Department– of–the–Prime–Minister–and–Cabinet–for–five–years,–Chief–Executive–Officer– (CEO)–of–the–Aboriginal–and–Torres–Strait–Islander–Commission,–Public–Service– Commissioner,–Secretary–of–the–Department–of–Employment,–Workplace– Relations–and–Small–Business,–and–Secretary–of–the–Department–of–Education,– Science–and–Training.–He–was–appointed–a–Member–of–the–Order–of–Australia– in–1996,–awarded–a–Centenary–Medal–in–2003–and–made–a–Companion–of–the– Order–of–Australia–in–2007–for–public–service.

Other directorships/appointments

  • Director–of–Corrs–Chambers–Westgarth

  • Chairman–of–Quintessence–Labs–Pty–Limited

  • Chairman–of–the–National–Centre–for–Vocational–Education–Research

  • Director–of–the–General–Sir–John–Monash–Foundation

  • Director–of–Veda–Advantage–Limited

  • Chairman–of–the–NSW–Public–Service–Commission–Advisory–Board

  • Deputy–Chair–of–the–Sydney–Writers’–Festival

  • Chairman–of–the–Aged–Care–Reform–Implementation–Council

  • Director–of–the–Queensland–Public–Sector–Renewal–Board

9.2 Interests and benefits

9.2.1 Directors

The–directors–as–at–the–date–of–the–original–prospectus–had–the–following–relevant–interests–in–issued–securities– of–AMP:

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----- Start of picture text -----

Number of AMP Number of options/rights Number of
Directors Ordinary Shares over AMP Ordinary Shares AMP Notes
----- End of picture text -----

PeterMason
CraigDunn
PatriciaAkopiantz
RichardAllert
CatherineBrenner
BrianClark
PaulFegan
JohnPalmer
SimonMcKeon
PeterShergold
CraigMeller		 595,242
558,497
28,746
92,330
58,610
68,940
41,387
88,399
56,067
55,495
96,207		 Nil
3,040,206
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
1,575,341		 Nil
1,000
Nil
Nil
Nil
980
Nil
Nil
Nil
Nil
Nil

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Section 9 Key people, interests and benefits

Other–than–as–set–out–in–this–prospectus,–no– director–or–proposed–director–of–AMP–holds,–at–the– time–of–lodgement–of–this–prospectus–with–ASIC,– or–has–held–in–the–two–years–before–lodgement–of– this–prospectus–with–ASIC,–an–interest–in:

  • –– the–formation–or–promotion–of–AMP

  • –– the–Offer,–or

  • –– any–property–acquired–or–proposed–to–be– acquired–by–AMP–in–connection–with–the– formation–or–promotion–of–AMP–or–the–Offer.

Other–than–as–set–out–in–this–prospectus,–no– amount–(whether–in–cash,–AMP–Ordinary–Shares– or–otherwise)–has–been–paid–or–agreed–to–be– paid,–nor–has–any–benefit–been–given–or–agreed– to–be–given,–to–any–director–or–proposed–director– of–AMP:

  • –– to–induce–a–person–to–become,–or–qualify–as,–a– director,–or

  • –– for–services–provided–by–a–director–or– proposed–director–in–connection–with–the– formation–or–promotion–of–AMP–or–the–Offer.–

Directors’ fees

AMP’s–constitution–contains–provisions–about– the–remuneration–of–the–directors–of–AMP.–

As–remuneration–for–their–services–as–directors,– the–non-executive–directors–are–paid–an–amount– of–remuneration–determined–by–the–AMP–Board,– subject–to–a–maximum–annual–aggregate–amount– determined–by–shareholders–in–general–meeting.– The–maximum–annual–aggregate–amount–has– been–set–at–$3,850,000.–All–directors–are–entitled– to–reimbursement–of–reasonable–out-of-pocket– expenses.–Paul–Fegan–and–Simon–McKeon–will–be– paid–$20,000–plus–superannuation–each–for–the– additional–services–performed–as–members–of–the– due–diligence–committee–for–the–Offer.

The–remuneration–of–the–managing–director–and– AMP–chief–executive–officer–is–fixed–by–the–AMP– board.–The–remuneration–may–consist–of–salary,– bonuses–or–any–other–elements–but–must–not– be–a–commission–on–or–percentage–of–operating– revenue.–As–announced–by–AMP–to–ASX–on–15– August–2013,–in–connection–with–Craig–Meller’s– appointment–as–AMP–managing–director–and– chief–executive–officer–(effective–1–January–2014),– the–components–of–Craig–Meller’s–remuneration– will–be–as–follows:–

  • –– fixed–remuneration–(comprising–regular–cash– payments,–any–salary–sacrifice–items–and– superannuation)–of–$1,600,000–per–annum,– which–is–to–be–reviewed–annually

  • –– Craig–Meller–will–be–eligible–for–discretionary– annual–short–term–incentives.–The–initial– annual–short–term–incentive–opportunity–is– between–0–per–cent–and–200–per–cent–of–Craig– Meller’s–fixed–remuneration.–Sixty–per–cent– (60–per–cent)–of–any–short–term–incentive– awarded–will–be–paid–in–cash–following–the– end–of–the–performance–year,–with–payment– of–the–other–forty–per–cent–(40–per–cent)– deferred–for–two–years–into–rights–to–AMP– Ordinary–Shares,–and

  • –– Craig–Meller–will–be–eligible–for–an–annual–long– term–incentive–award–in–accordance–with–the– AMP–Limited–Equity–Incentive–Plan–(which– is–described–in–AMP’s–2012–Annual–Report).– The–amount–and–terms–of–grants–will–be– determined–by–the–AMP–board–in–its–discretion– and–will–be–subject–to–any–necessary– regulatory–approvals–and–any–necessary– or–appropriate–shareholder–approvals.–If– shareholder–approval–is–sought–but–not– obtained–for–a–long–term–incentive–award,– Craig–Meller–may–be–paid–a–cash–equivalent.

9.2.2 Interests and benefits of advisers

UBS–has–acted–as–the–structuring–adviser–for– the–Offer,–and–each–of–Commonwealth–Bank,– J.P.–Morgan–and–UBS,–have–acted–as–Joint–lead– managers–to–the–Offer,–in–respect–of–which– they–will–receive–fees–from–AMP.–The–estimated– aggregate–fees–payable–by–AMP–to–the–Joint–lead– managers–are–approximately–$7–million–(exclusive– of–GST),–making–certain–assumptions–as–to–the– allocations–of–AMP–Notes–2–between–the–Broker– Firm–Offer,–Institutional–Offer,–Reinvestment– Offer–and–Securityholder–Offer.–The–aggregate– fees–include–a–structuring–fee–payable–to–UBS– and–a–joint–lead–manager–fee–split–amongst–the– Joint–lead–managers–proportionally–based–on– allocations–to–each–Joint–lead–manager–and–its– affiliated–brokers–(1.00%–of–the–allocation).–The– Joint–lead–managers–will–also–share–equally–an– institutional–selling–fee–from–AMP–of–0.5%–of– the–institutional–allocation.–AMP–will–also–pay– (through–UBS–as–settlement–agent)–a–broker– allocation–selling–fee–of–1.00%–of–the–relevant–

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Section 9 Key people, interests and benefits

allocation–for–each–broker–not–affiliated–to–a–Joint– lead–manager.

Under–the–Offer–Management–Agreement,–the– Joint–lead–managers–may–pay–selling–fees–on– behalf–of–AMP–to–Australian–financial–services– licensees–or–representatives–of–Australian– financial–services–licensees–( Brokers )–in–certain– circumstances,–including–where–AMP–Notes– 2–were–allocated–to–a–Broker–for–allocation–to– another–person.–Under–the–Offer–Management– Agreement,–the–amount–of–the–fee–payable–to– those–Brokers–may–not–exceed–1.00%–of–the– amount–which–is–equal–to–the–number–of–AMP– Notes–2–which–are–allocated–to–the–relevant– Broker–multiplied–by–$100.–Brokers–may–in–turn– rebate–fees–to–other–Brokers.–The–amount–of–the– fee–paid–to–such–other–Broker–by–the–first–Broker– may–not–exceed–1.00%–of–the–amount–which–is– equal–to–the–number–of–Notes–which–are–allocated– to–such–other–Broker–multiplied–by–$100.–AMP– will–pay–a–stamping–fee–of–1.00%–of–the–value–of– applications–accepted–under–the–Securityholder– Offer–up–to–a–maximum–of–$500–per–application.– This–fee–is–inclusive–of–any–applicable–GST–and– will–only–be–paid–to–brokers–and–advisers–who– include–their–stamp–or–adviser–code–on–the– accepted–application.–AMP–reserves–the–right–to– aggregate–applications–that–appear–to–be–multiple– applications–from–the–same–applicant.

The–Joint–lead–managers–are–responsible–for– paying,–on–behalf–of–AMP,–all–selling–fees–and– other–amounts–payable–to–the–Syndicate– brokers–and–other–adviser–groups–under– the–Offer.–Brokers–and–adviser–groups–may– on-pay–some–or–all–of–these–amounts–to–their– individual–representatives.

King–&–Wood–Mallesons–has–acted–as–AMP’s– Australian–legal–and–tax–adviser–in–relation– to–the–Offer–and–has–prepared–the–Australian– taxation–summary–in–section–8.–In–respect– of–this–work,–King–&–Wood–Mallesons–will– be–paid–approximately–$635,000–(excluding– disbursements–and–GST)–for–work–performed–by–it– until–the–date–of–the–original–prospectus.–Further– amounts–may–be–paid–to–King–&–Wood–Mallesons– in–accordance–with–its–time-based–charges.

of–this–prospectus.–Further–amounts–may–be– paid–to–Ernst–&–Young–in–accordance–with–its– time-based–charges.

Except–as–set–out–in–this–prospectus,–no:

  • –– person–named–in–this–prospectus–as– performing–a–function–in–a–professional,– advisory–or–other–capacity–in–connection– with–the–preparation–or–distribution–of–this– prospectus,–or

  • –– Joint–lead–manager,–

holds–at–the–time–of–lodgement–of–this–prospectus– with–ASIC,–or–has–held–in–the–two–years–before– lodgement–of–this–prospectus–with–ASIC,–an– interest–in:

  • –– the–formation–or–promotion–of–AMP

  • –– the–Offer,–or

any–property–acquired–or–proposed–to–be–acquired– by–AMP–in–connection–with–the–formation–or– promotion–of–AMP–or–the–Offer,–nor–has–anyone– paid–or–agreed–to–pay–or–given–or–agreed–to–give– any–benefit–to–such–persons–in–connection–with– the–formation–or–promotion–of–AMP–or–the–Offer.– Other–than–as–set–out–in–this–prospectus,–no– such–person–has–been–paid–or–agreed–to–be–paid– any–amount,–nor–has–any–benefit–been–given– or–agreed–to–be–given,–to–any–such–persons–for– services–provided–by–them,–in–connection–with– the–formation–or–promotion–of–AMP,–or–the–Offer.

9.3 Expenses of the Offer

The–total–expenses–of–the–Offer–will–be–paid– out–of–the–proceeds–of–the–Offer.–Assuming–the– Offer–raises–$300–million,–then–the–net–proceeds– of–the–Offer–are–expected–to–be–$292–million– and–the–total–expenses–of–the–Offer–(including– fees–payable–to–the–Joint–lead–managers,–legal,– accounting,–tax,–marketing,–administrative– fees,–as–well–as–printing,–advertising–and–other– expenses–related–to–this–prospectus–and–the– Offer)–are–expected–to–be–$8–million.–All–of–these– expenses–have–been,–or–will–be,–borne–by–AMP.

Ernst–&–Young–has–provided–due–diligence– services–in–relation–to–the–Offer.–In–respect–of–this– work,–Ernst–&–Young–will–be–paid–approximately– $135,000–(excluding–disbursements–and–GST)– for–work–performed–by–it–up–until–the–date–

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Section 10

Additional information

This section provides information about a number of other matters including those not covered elsewhere in this prospectus.

  • 10.1 Reporting and disclosure obligations

  • 10.2 Availability of documents

  • 10.3 Rights and liabilities attaching to AMP Subordinated Notes 2

  • 10.4 Rights and liabilities attaching to AMP Ordinary Shares

  • 10.5 Summary of the Trust Deed

  • 10.6 Summary of the Offer Management Agreement

  • 10.7 Consents

  • 10.8 ASX confirmation

  • 10.9 ASIC modification

  • 10.10 Acknowledgements

  • 10.11 Privacy

  • 10.12 Statement of directors

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Section 10 Additional information

10.1 Reporting and disclosure obligations

AMP–is–admitted–to–the–official–list–of–ASX–and– is–a–disclosing–entity–for–the–purposes–of–the– Corporations–Act.–As–a–disclosing–entity,–it–is– subject–to–regular–reporting–and–disclosure– obligations–under–the–Corporations–Act–and–ASX– Listing–Rules.–These–include–the–preparation– of–yearly–and–half-yearly–financial–statements,– a–report–on–the–operations–of–the–AMP–group– during–the–relevant–period–and–an–audit–or–review– report–by–its–auditor.–

Copies–of–these–and–other–documents–lodged– with–ASIC–may–be–obtained–from–or–inspected–at– an–ASIC–office.

AMP–has–an–obligation–under–ASX–Listing–Rules– (subject–to–certain–exceptions)–to–notify–ASX– immediately–of–any–information–concerning–it– of–which–it–becomes–aware,–which–a–reasonable– person–would–expect–to–have–a–material–effect–on– the–price–or–value–of–its–quoted–securities.

10.2 Availability of documents

AMP–will–provide–a–copy–of–any–of–the–following– documents–free–of–charge–to–any–person–upon– their–request–during–the–Offer–Period:

  • –– the–annual–financial–report–for–the–year–ended– 31–December–2012–and–the–half-year–financial– report–for–the–half-year–ended–30–June–2013– lodged–with–ASIC–by–AMP

  • –– any–continuous–disclosure–notices–given–by– AMP–in–the–period–after–the–lodgement–of–the– financial–report–of–AMP–for–the–year–ended–31– December–2012–and–before–lodgement–of–this– prospectus–with–ASIC,–and

  • –– the–constitution–of–AMP.

During–the–Offer–Period,–you–can–obtain–a–copy– of–the–above–documents–free–of–charge–at–– amp.com.au/shareholdercentre–or–by–written– request–to–AMP–(addressed–to–‘AMP–group– investor–relations’)–at–the–address–set–out–in–the– corporate–directory–at–the–end–of–this–prospectus.–

10.3 Rights and liabilities attaching to AMP Subordinated Notes 2

The–rights–and–liabilities–attaching–to–AMP– Notes–2–are–contained–in–the–Trust–Deed–(which– incorporates–the–Terms).–The–Terms–are–set–out– in–full–in–appendix–A–of–this–prospectus–and–the– Trust–Deed–is–summarised–in–section–10.5.–AMP– must–provide–a–copy–of–the–Trust–Deed–to–a– Holder–on–request.

Rights–and–liabilities–attaching–to–AMP–Notes–2– may–also–arise–under–the–Corporations–Act,– ASX–Listing–Rules,–the–constitution–of–AMP–and– other–laws.–

10.4 Rights and liabilities attaching to AMP Ordinary Shares

Holders–will–receive–AMP–Ordinary–Shares–if– Conversion–occurs–following–a–Non-Viability– Trigger–Event,–unless–an–Inability–Event–subsists.– The–rights–and–liabilities–attaching–to–the–AMP– Ordinary–Shares–are–set–out–in–the–constitution–of– AMP–and–are–also–regulated–by–the–Corporations– Act,–ASX–Listing–Rules–and–the–general–law.

This–section–10.4–briefly–summarises–the–key– rights–attaching–to–the–AMP–Ordinary–Shares.–It– is–not–intended–to–be–an–exhaustive–summary– of–the–rights–and–obligations–of–holders–of–AMP– Ordinary–Shares.–Investors–who–wish–to–inspect– AMP’s–constitution–may–do–so–requesting–a–copy– as–provided–under–section–10.2.

10.4.1 Dividends

Holders–of–AMP–Ordinary–Shares–are–entitled–to– receive–such–dividends–on–AMP–Ordinary–Shares– as–may–be–determined–by–the–directors–of–AMP–in– their–discretion.–Dividends–are–payable–to–holders– of–AMP–Ordinary–Shares–in–proportion–to–the– amount–paid–on–the–AMP–Ordinary–Shares–that– they–hold.–

Dividends–must–only–be–paid–in–accordance– with–applicable–laws–and–AMP’s–constitution.– Under–the–Corporations–Act,–as–at–the–date–of– this–prospectus,–AMP–is–restricted–from–paying– dividends–unless:

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  • –– AMP’s–assets–exceed–its–liabilities–immediately– before–the–dividend–is–declared–and–the–excess– is–sufficient–for–the–payment–of–the–dividend

  • –– the–payment–of–the–dividend–is–fair–and– reasonable–to–AMP’s–shareholders–as–a–whole,– and

  • –– the–payment–of–the–dividend–does–not– materially–prejudice–AMP’s–ability–to–pay– its–creditors.

AMP–may–also–be–restricted–from–paying– dividends–on–AMP–Ordinary–Shares–by–prudential– standards–of–APRA,–or–potentially–in–particular– circumstances–by–the–terms–of–certain–of–its– regulatory–capital–instruments.

10.4.2 Meetings and voting rights

Holders–of–AMP–Ordinary–Shares–are–entitled– to–receive–notice–of,–attend–and–vote–at–general– meetings–of–AMP.–Each–holder–of–an–Ordinary– Share–present–at–a–general–meeting–(whether–in– person–or–by–proxy–or–representative)–is–entitled– to–one–vote–on–a–show–of–hands–or–one–vote–for– each–Ordinary–Share–held–(or–a–fraction–of–a–vote– in–proportion–to–the–amount–paid–up–on–that– Ordinary–Share)–on–a–poll.

10.4.3 Winding-up of AMP

Subject–to–the–preferential–entitlement–(if–any)– of–preference–shareholders,–on–a–winding-up–of– AMP,–holders–of–AMP–Ordinary–Shares–are–entitled– to–participate–equally–in–the–distribution–of–assets– of–AMP–(both–capital–and–surplus),–subject–to–any– amounts–unpaid–on–the–Ordinary–Share.

10.4.4 Transfers

Transfers–of–AMP–Ordinary–Shares–are–not– effective–until–registered.–Subject–to–ASX–Listing– Rules,–AMP–may–refuse–to–register–a–transfer–of– AMP–Ordinary–Shares–without–giving–any–reasons.– However,–ASX–Listing–Rules–substantially–restrict– when–AMP–may–refuse–to–register–a–transfer.

Unless–otherwise–required–by–law,–AMP–is–not– required–to–recognise–any–interest–in–AMP– Ordinary–Shares–other–than–the–interest–of– registered–holders–of–AMP–Ordinary–Shares.

10.4.5 Issue of further AMP Ordinary Shares

The–directors–control–the–issue–of–AMP–Ordinary– Shares.–Subject–to–the–Corporations–Act,–the–

directors–of–AMP–may–issue–further–AMP–Ordinary– Shares,–redeemable–preference–shares–and–bonus– shares–for–no–consideration,–and–grant–options– over–AMP–Ordinary–Shares,–on–terms–as–they– think–fit.

10.5 Summary of the Trust Deed

AMP–has–entered–into–a–Trust–Deed–dated–on– or–about–the–date–of–this–prospectus–with–the– Trustee.–The–following–is–a–summary–only–of–the– principal–provisions–of–the–Trust–Deed.

10.5.1 Appointment of Trustee

The–Trustee–has–been–appointed–under–the– Trust–Deed–and–holds–the–following–on–trust–for– the–Holders–and–itself–in–accordance–with–the– Trust–Deed:

  • –– the–right–to–enforce–AMP’s–duty–to–repay– under–AMP–Notes–2

  • –– the–right–to–enforce–AMP’s–obligation–to–pay– all–other–amounts–payable–under–AMP–Notes–2–

  • –– the–right–to–enforce–any–other–duties–or– obligations–that–AMP–has–under–the–Terms,– under–the–Trust–Deed,–to–the–Holders–under– the–Trust–Deed–or–under–Chapter–2L–of–the– Corporations–Act

  • –– the–amount–of–$10,–and

  • –– any–other–property–held–by–the–Trustee–on– the–trust–established–under–the–Trust–Deed– (including,–without–limitation,–the–benefit–of– any–covenants,–undertakings,–representations,– warranties,–rights,–powers,–benefits–or– remedies–in–favour–of–the–Trustee–under–the– Trust–Deed).

10.5.2 Undertakings and covenants of AMP

AMP–has–undertaken–to–the–Trustee,–subject–to– any–obligation–of–AMP–to–Convert–or–Write-off– AMP–Notes–2,–to–pay–the–amounts–due–and– payable–in–respect–of–each–AMP–Note–2–under–and– in–accordance–with–the–Trust–Deed.–The–Trustee– directs–AMP–to–pay–such–amounts–directly–to– Holders,–except–that–payments–must–be–made– to–the–Trustee–if–an–Event–of–Default–under– AMP–Notes–2–has–occurred–and–is–subsisting,–a– receiver–or–manager–has–been–appointed–to–AMP,– AMP–is–directed–by–the–Trustee–to–do–so–or–AMP–

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advises–the–Trustee–that–it–is–not–likely–to–meet–its– obligations–under–the–Trust–Deed.

AMP–makes–covenants–with–the–Trustee–for– the–benefit–of–the–Holders–to–comply–with–its– obligations–under–the–Terms–and–Chapter–2L–and– section–318–of–the–Corporations–Act.

10.5.3 Enforcement

The–Trustee–must–take–action–following–an–Event– or–Default–or–to–enforce–the–terms–of–the–Trust– Deed–(which–includes–the–Terms–of–AMP–Notes–2)– if–the–following–conditions–are–met:–

  • –– the–Trustee–is–requested–to–take–action–by– Holders–who–hold–in–aggregate–15–per–cent– or–more–of–the–Face–Value–of–all–AMP–Notes–2– then–outstanding–or–by–a–Holder–Resolution–

  • –– the–Trustee–is–indemnified–to–its–reasonable– satisfaction–against–all–actions,–proceedings,– claims–and–demands–to–which–the–Trustee– may–be–liable–by–taking–such–action,–all– costs–which–the–Trustee–may–incur–in–taking– action–and–all–management–time–spent–by– employees–of–the–Trustee–in–relation–to–such– action–(the–Trustee–is–not–entitled–to–be– indemnified–by–any–Holder–personally),–and

  • –– the–action–is–permitted–under–the–Trust–Deed.

No–Holder–is–entitled–to–proceed–directly–against– AMP–to–enforce–any–right–or–remedy–under–or–in– respect–of–any–AMP–Note–2–unless–the–Trustee,– having–become–bound–so–to–proceed,–fails–to–do– so–within–14–days–and–the–failure–is–continuing,–in– which–case–any–Holder–may–institute–proceedings– against–AMP–for–the–relevant–remedy–to–the–same– extent–that–the–Trustee–would–have–been–entitled– to–do–so.

10.5.4 Sale of AMP Ordinary Shares on Conversion of AMP Subordinated Notes 2

Under–the–Terms–of–AMP–Notes–2,–if–a–Holder– has–elected–not–to–receive–AMP–Ordinary–Shares– on–Conversion–of–AMP–Notes–2,–or–a–Holder–is–an– Ineligible–Holder–(including–a–Foreign–Holder),– the–AMP–Ordinary–Shares–to–be–issued–to–such– Holder–on–Conversion–of–AMP–Notes–2–will–be– issued–to–a–Sale–and–Transfer–Agent,–who–will–sell– them–at–market–value–and–pay–the–proceeds–(less– costs)–to–the–Holder.–The–Trustee–is–not–liable–to– any–Holder–for–the–acts–of–any–Sale–and–Transfer– Agent–appointed–to–sell–the–AMP–Ordinary–Shares–

and–has–no–duties–in–connection–with–any–such– sale–and–no–responsibility–for–any–costs,–losses,– liabilities,–expenses,–demands–or–claims–which– arise–as–a–result–of–such–sale.

10.5.5 Liability

Except–to–the–extent–arising–as–a–result–of–the– Trustee’s–fraud,–gross–negligence–or–wilful–default– or–breach–of–section–283DA(a),–(b)–or–(c)–of–the– Corporations–Act–( Trustee Default ),–the–Trustee– is–not–liable–to–AMP–or–any–other–person–in–any– capacity–other–than–as–trustee–of–the–Trust–and– the–Trustee’s–liability–is–further–limited–to–the– assets–of–the–Trust–available–to–indemnify–the– Trustee–for–the–liability.

10.5.6 Fees and expenses

AMP–will–pay–the–Trustee–fees–as–agreed–between– AMP–and–the–Trustee.–AMP–will–also–pay,–on– demand,–the–Trustee’s–reasonable–expenses– incurred–in–connection–with–execution–of–the– Trust–Deed–and–related–expenses,–losses–and– expenses–incurred–in–connection–with–exercising,– enforcing–or–preserving–rights–under–the–Trust– Deed–(or–attempting–to–do–so),–losses–and– expenses–incurred–or–which–arise–out–of–or–in– the–course–of–acting–as–Trustee–and–reasonable– expenses–incurred–as–the–result–of–the–occurrence– of–an–Event–of–Default.–

10.5.7 Retirement and removal

The–Trustee–may–retire–at–any–time–by–giving– notice–to–AMP–at–least–60–days–before–the–date– it–wants–to–retire–or–any–other–period–which–is– agreed–by–AMP–and–the–Trustee.

AMP–may–remove–the–Trustee–at–any–time–by– giving–at–least–60–days’–notice–to–the–Trustee–(or– such–other–period–as–AMP–and–the–Trustee–may– agree)–in–certain–circumstances,–including–where– the–Trustee–is–in–material–breach–of–its–obligations– under–the–Trust–Deed,–a–Trustee–Default–(as– defined–in–section–10.5.5–above)–has–occurred–and– is–continuing,–the–Trustee–ceases–or–has–ceased– to–carry–on–business–or–the–Trustee–is–placed–in– liquidation–or–is–wound-up–or–dissolved.–AMP– may–also–remove–the–Trustee–if–authorised–or– requested–to–do–so–by–a–meeting–of–the–Holders.–

The–removal–or–retirement–of–the–Trustee–does– not–take–effect–until–the–appointment–of–a– new–trustee–is–effective.–AMP–has–the–power–to– appoint–a–new–trustee.

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10.5.8 Meetings

By–a–Holder–Resolution,–Holders–have–the–power– to–approve–certain–alterations–to–the–Trust–Deed– and–to–give–directions–to–the–Trustee–as–to–the– performance–of–its–duties–under–the–Trust–Deed– and–the–Terms–of–AMP–Notes–2.–By–a–Special– Resolution,–Holders–may–approve–the–release–of– the–Trustee–from–liability–for–something–done–or– omitted–to–be–done,–approve–any–act–taken–by– the–Trustee–or–approve–certain–alterations–to–the– Trust–Deed–which–are–required–to–be–approved– by–Special–Resolution.–Holder–Resolutions–and– Special–Resolutions–may–be–passed–either–in– meetings–of–Holders–or–by–postal–ballot–or–written– resolution.–Resolutions–proposed–in–meetings–of– Holders–must–be–passed–by–the–requisite–majority– of–the–persons–voting–on–a–show–of–hands–or,–if–a– poll–is–demanded,–then–by–a–majority–consisting– of–at–least–the–requisite–majority–of–the–votes–cast. On–a–show–of–hands,–every–Holder–who–is–present– has–one–vote,–and–on–a–poll–every–Holder–who–is– present–has–one–vote–for–every–AMP–Note–2–with– respect–to–which–it–is–the–registered–holder.––If–the– meeting–is–by–postal–ballot–or–written–resolution– then–the–resolution–must–be–passed–by–Holders– representing–(in–aggregate)–at–least–the–requisite– majority–of–the–principal–amount–outstanding–of– the–AMP–Notes–2.

  • –– exercise–reasonable–diligence–to– ascertain–whether:

  • –– –the–property–of–AMP–that–is–or–should–be– available–will–be–sufficient–to–repay–the– amounts–lent–by–Holders–in–respect–of– AMP–Notes–2–when–it–becomes–due,–and

  • –– AMP–has–breached–the–Terms–of–AMP– Notes–2,–the–Trust–Deed–or–the–provisions– of–Chapter–2L–of–the–Corporations–Act,–and–

  • –– do–everything–in–its–power–to–ensure–that– AMP–remedies–any–breach–known–to–the– Trustee–of–the–Terms–of–AMP–Notes–2,–the– Trust–Deed–or–the–provisions–of–Chapter–2L–of– the–Corporations–Act,–unless–the–Trustee–is– satisfied–that–the–breach–will–not–materially– prejudice–Holders’–interests.–

10.5.10 Receipt of moneys

All–moneys–that–are–received–by–the–Trustee–under– the–Trust–Deed–will–be–applied–first–in–payment–of– any–amounts–owing–to–the–Trustee–in–connection– with–the–Trust–Deed–and–secondly,–in–or–towards– payment–of–all–amounts–due–but–unpaid–under– AMP–Notes–2–to–the–relevant–Holders.–The–balance– (if–any)–of–the–money–remaining–after–those– payments–will–be–returned–to–AMP.

10.5.11 Notices

A–meeting–of–Holders–may–be–convened–at–any– time–by–either–the–Trustee–or–AMP.–AMP–must–call– a–meeting–of–Holders–(or–the–relevant–Holders)– on–request–in–writing–of–Holders–who–together– hold–10–per–cent–or–more–of–the–aggregate–Face– Value–of–all–AMP–Notes–2–to–consider–the–financial– statements–that–were–laid–before–the–last–annual– general–meeting–of–AMP–or–to–give–the–Trustee– directions.–The–Trustee–must–call–a–meeting–of– Holders–as–soon–as–is–reasonably–practicable–after– becoming–aware–that–an–Event–of–Default.

10.5.9 No monitoring obligations

The–Trustee–is–not–responsible–for–monitoring– compliance–by–AMP–with–its–covenants–and– obligations–under–the–Trust–Deed–or–any–other– activities–or–status–of–AMP–including–taking–steps– to–ascertain–whether–there–has–occurred–or–is– likely–to–occur–any–Non-Viability–Trigger–Event–or– Inability–Event.–This–is–subject–to–certain–statutory– duties–imposed–on–the–Trustee–under–Chapter–2L– of–the–Corporations–Act,–including–that–it–must:–

The–Trust–Deed–contains–provisions–for–the–giving– of–notices,–including–in–the–case–of–the–giving– of–notices–to–Holders–by–AMP,–by–publication– in–a–national–newspaper,–or–on–the–ASX–and–on– AMP’s–website.

10.6 Summary of the Offer Management Agreement

10.6.1 Overview

AMP–and–the–Joint–lead–managers–signed–the– Offer–Management–Agreement–on–6–November– 2013.–Under–the–Offer–Management–Agreement,– AMP–appointed–UBS,–Commonwealth–Bank–and– J.P.–Morgan–as–Joint–lead–managers–of–the–Offer.– The–following–is–a–summary–of–the–principal– provisions–of–the–Offer–Management–Agreement. Under–the–Offer–Management–Agreement,–the– Joint–lead–managers–have–agreed–to–manage– the–Offer,–including–the–Bookbuild–and–related–

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allocation–process–for–the–Offer–and–to–provide– settlement–support–for–the–settlement–obligations– of–successful–applicants–under–the–Bookbuild.

10.6.2 Fees

The–estimated–aggregate–fees–payable–by– AMP–to–the–Joint–lead–managers–under–the– Offer–Management–Agreement–are–set–out–in– section–9.2.2.–The–actual–amount–payable–will–not– be–known–until–the–allocation–of–AMP–Notes–2– under–the–Offer.–In–addition,–AMP–must–reimburse– each–Joint–lead–manager–for–reasonable–expenses,– including–reasonable–legal–and–travel–costs,–incurred– by–the–Joint–lead–managers–in–relation–to–the–Offer.

10.6.3 Representations and warranties

Customary–and–usual–representations–and– warranties–are–given–by–the–parties–in–relation– to–matters–such–as–the–power–to–enter–into–the– Offer–Management–Agreement–and–corporate– authority.–AMP–gives–a–number–of–further– representations–and–warranties,–including–that– this–prospectus–and–the–related–public–documents– will–not–contain–any–untrue,–inaccurate,– misleading–or–deceptive–statements–or–omissions.

10.6.4 Indemnity

Subject–to–certain–exclusions–relating–to,–amongst– other–things,–fraud,–negligence,–material–breach– of–law–(not–caused–or–contributed–to–by–AMP)– or–wilful–default–of–an–indemnified–party–(or– the–Joint–lead–manager–which–the–indemnified– party–is–associated–or–any–other–associated– indemnified–party),–AMP–indemnifies–the–Joint– lead–managers–and–certain–affiliated–parties– against–losses–incurred–or–suffered–directly–or– indirectly–in–connection–with–the–Offer–or–the– Offer–Management–Agreement.–

10.6.5 Termination

Any/each–Joint–lead–manager–may–terminate– its–obligations–under–the–Offer–Management– Agreement–on–the–occurrence–of–a–number– of–customary–termination–events,–including– (among–others):

  • –– –a–credit–rating–downgrade–of–AMP

  • –– –certain–breaches–of–the–Offer– Management–Agreement

  • –– –AMP–withdraws–this–prospectus–or–the–Offer,– and

  • –– –trading–of–Ordinary–Shares–is–suspended–for– a–certain–period–of–time,–or–Ordinary–Shares– cease–to–be–quoted–on–ASX.

Certain–other–termination–events–will–only– give–rise–to–a–right–to–terminate–if–it–is–in–the– reasonable–opinion–of–the–Joint–lead–manager– that–the–event–has–had–or–is–likely–to–have–a– material–adverse–effect–on–the–Offer–or–give–rise– to–a–contravention–of,–or–liability–to–a–Joint–lead– manager,–under–applicable–laws.–If–termination– occurs,–the–Joint–lead–manager–who–terminates– (or–each–Joint–lead–manager)–will–no–longer–be–a– lead–manager–and–will–not–be–obliged–to–provide– settlement–support–for–the–Bookbuild.

Under–the–Offer–Management–Agreement,–if– one–Joint–lead–manager–terminates,–each–other– Joint–lead–manager–may–give–notice–in–writing–to– AMP–and–the–terminating–Joint–lead–manager(s)– stating–whether–it–will–also–terminate–or–whether– it–will–assume–the–rights–and–obligations–of–the– terminating–Joint–lead–manager(s).–

10.7 Consents

Except–as–set–out–below,–each–of–the–parties– referred–to–in–the–following–table:

  • –– has–given–and–has–not,–before–the–lodgement– of–this–prospectus–with–ASIC,–withdrawn– its–written–consent–to–be–named–in–this– prospectus–in–the–form–and–context–in–which– it–is–named

  • –– has–not–made–any–statement–in–this–prospectus– or–any–statement–on–which–a–statement–made– in–this–prospectus–is–based,–and

  • –– does–not–cause–or–authorise–the–issue–of–the– prospectus,–and–to–the–maximum–extent– permitted–by–law,–expressly–disclaims–and– takes–no–responsibility–for–any–statements–in– or–omissions–from–this–prospectus.

  • –– –a–specified–fall–in–the–S&P/ASX–200–index

  • –– –ASIC–issues–a–stop–order–in–relation–to– this–prospectus

  • –– –ASX–refuses–to–quote–AMP–Notes–2–on–ASX

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King–&–Wood–Mallesons–has–given–and–has–not,– before–the–lodgement–of–this–prospectus–with– ASIC,–withdrawn–its–written–consent–for–the– inclusion–of–statements–based–on–statements– made–by–it,–consisting–of–the–Australian–taxation– summary–in–section–8–in–the–form–and–context–in– which–it–appears–in–section–8.

The–Trust–Company–(Australia)–Limited–is–acting– as–trustee–for–Holders–under–the–Trust–Deed.–

10.8 ASX confirmation

ASX–has–classified–AMP–Notes–2–as–‘debt– securities’–for–the–purposes–of–ASX–Listing–Rules– and–has–confirmed,–in–relation–to–the–Offer,–that:

  • –– ASX–Listing–Rule–7.1–has–been–waived–to– permit–AMP–to–issue–AMP–Ordinary–Shares– following–a–Non-Viability–Trigger–Event– in–accordance–with–the–Terms–without– shareholder–approval

  • –– ASX–Listing–Rule–10.11–has–been–waived–to– the–extent–necessary–to–permit–directors–of– AMP–and–certain–related–persons–(being–the– spouses,–parents,–children–and–associates–of– directors–of–AMP)–to–acquire–AMP–Ordinary– Shares–following–a–Non-Viability–Trigger–Event– without–shareholder–approval

  • –– ASX–Listing–Rule–3.20.2–will–not–apply–to– the–Conversion–of–AMP–Notes–2–following–a– Non-Viability–Trigger–Event,–and

  • –– the–timetable–for–the–Offer–is–acceptable.–

ASX–has–also–provided–in–principle–approval– of–the–quotation–of–AMP–Notes–2–and–has– agreed–to–allow–AMP–Notes–2–to–trade–on–a– deferred–settlement–basis–for–a–short–time– following–the–issue–of–AMP–Notes–2–(subject–to– certain–conditions).

ASX–has–also–confirmed,–in–relation–to–the– Reinvestment–Offer,–that–the–timetable–for–the– Reinvestment–Offer–is–acceptable.

10.9 ASIC modification

ASIC–has–granted–relief–from–the–provisions– of–Division–5A–of–Part–7.9–of–the–Corporations– Act–relating–to–unsolicited–offers–for–AMP–to– conduct–the–Reinvestment–Offer–(subject–to– certain–conditions).

10.10 Acknowledgements

Each–person–who–applies–to–participate–in–the– Offer–or–submits–an–Application–Form–and/or– application–payment–will–be–deemed–to–have:

  • –– acknowledged–having–personally–received–a– paper–or–electronic–copy–of–the–prospectus– (and–any–supplementary–or–replacement– document)–accompanying–the–Application– Form–and–having–read–them–all–in–full

  • –– acknowledged–that–the–applicant(s)– understand–the–Terms–and–have–had–an– opportunity–to–consider–the–suitability–of– an–investment–in–AMP–Notes–2–with–their– professional–advisers

  • –– agreed–to–be–bound–by–the–Terms–and–the– terms–and–conditions–of–the–Offer–(and–the– Reinvestment–Offer,–in–the–case–of–Eligible– AMP–Notes–holders)–and–on–Conversion–of– AMP–Notes–2,–agrees–to–become–a–member– of–AMP–and–to–be–bound–by–the–terms–of– AMP’s–constitution

  • –– declared–that–all–details–and–statements– in–their–Application–Form–are–complete– and–accurate

  • –– consented–to–the–use–and–disclosure–of– the–applicant’s(s’)–personal–information–as– described–in–section–10.11,–and–understood– and–agreed–that–the–use–and–disclosure–of–the– applicant’s(s’)–personal–information–applies–to– any–personal–information–collected–by–AMP–

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and–any–entity–in–the–AMP–group–in–the–course– of–the–applicant’s(s’)–relationship–with–AMP– and–any–entity–in–the–AMP–group

  • –– declared–that–the–applicant(s),–if–a–natural– person,–is/are–over–18–years–of–age

  • –– acknowledged–that–once–AMP–or–the–Registry– receives–an–Application–Form–it–may–not–be– withdrawn,–except–as–allowed–by–law

  • –– acknowledged–that,–in–some–circumstances,– AMP–may–not–pay–Interest–or–any–other– amount–payable–on–AMP–Notes–2

  • –– applied–for–the–number–of–AMP–Notes–2–at– the–Australian–dollar–amount–shown–on–the– Application–Form

  • –– agreed–to–being–allocated–the–number– of–AMP–Notes–2–applied–for–(or–a–lower– number–allocated–in–a–way–described–in–this– prospectus),–or–no–AMP–Notes–2–at–all

  • –– authorised–AMP–and–the–Joint–lead–managers– and–their–respective–officers–or–agents,–to– do–anything–on–the–applicant’s(s’)–behalf– necessary–for–AMP–Notes–2–to–be–allocated– to–the–applicant(s),–including–to–act–on– instructions–received–by–the–Registry–upon– using–the–contact–details–in–the–Application– Form,–and–in–the–case–of–Eligible–AMP– Notes–holders–applying–to–participate–in– the–Reinvestment–Offer,–to–take–any–action– necessary–to–effect–the–sale–of–the–AMP–Notes– under–the–Reinvestment–Offer–to–AMP,–the– application–of–the–sale–proceeds–of–A$–AMP– Notes–in–AMP–Notes–2–and–the–allotment–of– AMP–Notes–2

  • –– in–the–case–of–Eligible–AMP–Notes–holders– applying–under–the–Reinvestment–Offer,– agreed–that–all–binding–instructions–between– Eligible–AMP–Notes–holders–and–AMPGFS– will–from–the–Issue–Date,–be–deemed–(except– to–the–extent–determined–by–AMP–in–its– sole–discretion)–to–be–a–similarly–binding– instruction–to,–and–accepted–by,–AMP–in– respect–of–the–AMP–Notes–2–issued–to–that– Eligible–AMP–Notes–holder–under–the–Offer– until–that–instruction–is–revoked–or–amended,– and–only–to–the–extent–those–instructions– are–not–inconsistent–with–any–other–current– instructions–notified–to–AMP

  • –– acknowledged–that–if–the–amount–of–any– cheque,–bank–draft–or–money–order–is– insufficient–to–pay–for–the–number–of–AMP–

  • Notes–2–that–the–applicant(s)–has–applied–for,– or,–if–there–are–insufficient–funds–held–in–a– relevant–account–to–cover–a–cheque–that–the– applicant(s)–have–drawn,–then–AMP–may,–in– consultation–with–the–Joint–lead–managers– determine–that–you–have–applied–for–such– lower–number–of–AMP–Notes–2–as–the– applicant’s(s’)–cleared–application–payment– will–pay–for–(in–multiples–of–10–AMP–Notes–2)– and–the–applicant’s(s’)–will–be–deemed–to–have– specified–that–number–in–the–applicant’s(s’)– Application–Form.–If–the–applicant(s)–provide– a–cheque,–bank–draft–or–money–order–for–an– amount–that–is–not–in–multiples–of–10–AMP– Notes–2,–AMP–will–round–down–the–dollar– amount–of–AMP–Notes–2–that–the–applicant(s)– are–applying–for–to–the–next–lowest–multiple– of–10–AMP–Notes–2

  • –– acknowledged–that–the–information–contained– in–this–prospectus–(or–any–supplementary–or– replacement–document)–is–not–investment– advice–or–a–recommendation–that–AMP–Notes– 2–are–suitable–for–the–applicant(s),–given–the– applicant’s(s’)–investment–objectives,–financial– situation–or–particular–needs

  • –– declared–that–the–applicant(s)–is–an–Australian– resident–or–otherwise–a–person–to–whom–the– Offer–can–be–made,–and–AMP–Notes–2–issued,– in–accordance–with–section–7.5

  • –– acknowledged–that–AMP–Notes–2–have–not– been,–and–will–not–be,–registered–under– the–US–Securities–Act–or–pursuant–to–the– securities–laws–of–any–other–jurisdiction– outside–Australia

  • –– represented–and–warranted–that–the– applicant(s)–is–not–in–the–United–States–or–any– other–place–outside–Australia–and–is–not–a–US– Person–(or–acting–for–the–account–or–benefit– of–a–US–Person),–and–the–applicant(s)–will–not– offer,–sell,–pledge–or–transfer–any–AMP–Notes–2– in–the–United–States–or–to,–or–for–the–account– or–benefit–of,–any–US–Person

  • –– represented–and–warranted–that–if–the– applicants–(or–any–person–for–whom–the– applicants–is–acquiring–AMP–Notes–2)–is–in– Singapore,–the–applicants–(and–any–such– person)–is–an–‘institutional–investor’–or–a– ‘relevant–person’–(as–such–terms–are–defined– in–the–Securities–and–Futures–Act–of–Singapore– (SFA))–and–will–acquire–AMP–Notes–2–in– accordance–with–applicable–provisions–of–

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the–SFA–and–acknowledged–that–the–offer–of– AMP–Notes–2–is–subject–to–the–restrictions– (including–selling–restrictions)–set–out–in– section–276–of–the–SFA

  • –– represented–and–warranted–that–the–laws–of– any–other–place,–including–the–restrictions– set–out–in–section–7.5–of–this–prospectus,– do–not–prohibit–the–applicant(s)–from–being– given–the–prospectus–(or–any–supplementary– or–replacement–prospectus)–or–making–an– application–or–being–issued–with–AMP–Notes– 2,–and

  • –– acknowledged–that–AMP–Notes–2–are–not– protected–accounts–or–deposit–liabilities–or– policy–liabilities–of–AMP–or–any–member–of–the– AMP–group–and–are–not–protected–accounts– under–the–Banking–Act–or–policies–with–any– member–of–the–AMP–group–under–the–Life– Insurance–Act–and–that–investments–are– subject–to–investment–risk,–including–possible– delays–in–repayment–and–loss–of–income–and– principal–invested–and–that–AMP–does–not– in–any–way–guarantee–or–stand–behind–the– capital–value–or–performance–of–AMP–Notes–2.–

10.11 Privacy

Your–privacy–is–important–to–AMP–and–the– AMP–group.–The–Registry–has–been–engaged–to– maintain–the–Register–on–behalf–of–AMP–and–the– AMP–group.–If–you–apply–for–AMP–Notes–2,–you–will– be–asked–to–provide–personal–information–to–AMP– or–its–agents,–including–the–Registry.–The–primary– purpose–of–collecting–personal–information–about– you–is–to–enable–your–application–to–be–assessed– and–processed–and–to–register–you–as–a–Holder,–to– communicate–with–you–and–service–your–needs– as–a–Holder,–to–provide–facilities–and–services– that–you–request–and–to–carry–out–appropriate– administration–of–your–investment.–To–do–that,– AMP–may–disclose–your–personal–information– to–its–agents,–contractors–or–third–party–service– providers–to–whom–AMP–outsources–services– such–as–mailing,–printing–and–registry–functions– in–connection–with–the–administration–of–the– Register–and–AMP–activities–applicable–to–you–as– a–Holder.–

AMP–may–also–disclose–your–personal–information– to–related–companies–within–the–AMP–group–or– to–their–agents,–contractors–or–third–party–service– providers.–Your–personal–information–may–also–

be–disclosed–to–ASX–and–anyone–you–authorise.– However,–all–of–these–parties–are–bound–by–the– same–privacy–policy–as–AMP.–Personal–information– is–collected–in–accordance–with–the–Privacy–Act– and–AMP’s–privacy–policy.

Your–personal–information–may–be–used–by–the– AMP–group–for–related–purposes,–such–as–keeping– you–informed–about–the–AMP–group’s–business– activities,–progress–and–development,–other– members–of–the–AMP–group–and–their–businesses– and–bring–to–your–attention–a–range–of–products– and–services–offered–by–AMP–or–other–members– of–the–AMP–group.–These–may–include–investment,– retirement,–financial–planning,–banking,–credit,– life–and–general–insurance–products–and– enhanced–customer–services–that–may–be–made– available–through–the–AMP–group.–If–you–do–not– consent–to–AMP–using–or–disclosing–your–personal– information–in–your–capacity–as–Holder,–please– let–us–know–by–contacting–the–Registry.–It–is– important–that–you–contact–AMP–or–the–Registry– because,–by–investing–in–AMP,–you–will–be–taken–to– have–consented–to–these–uses–and–disclosures.

Company–and–tax–law–requires–some–personal– information–to–be–collected.–The–personal– information–that–AMP–and–the–Registry–collect– is–necessary–for–the–proper–and–effective– management–of–your–holding–of–AMP–Notes–2.– If–you–do–not–provide–complete–and–accurate– information–when–requested,–your–application– may–not–be–able–to–be–processed–efficiently,–if– at–all.

The–Corporations–Act–provides–that–any–person– may–inspect–a–register–of–securityholders–and– obtain–copies–of–the–register–of–securityholders.– Under–the–Privacy–Act,–you–may–request–access–to– your–personal–information–held–by–or–on–behalf– of–AMP.–You–can–request–access–to–your–personal– information–or–obtain–further–information–about– the–management–of–your–personal–information– by–contacting–the–Registry–or–AMP.–When–seeking– access–to–your–personal–information–an–identity– verification–process–is–undertaken.–AMP’s–privacy– policy–sets–out–the–AMP–group’s–policies–on– management–of–personal–information.–AMP’s– privacy–policy–is–available–at–amp.com.au.

If–you–think–AMP’s–records–of–your–personal– information–are–incorrect–or–out–of–date,–it–is– important–that–you–contact–AMP–so–that–your– records–can–be–corrected.–You–may–(subject– to–permitted–exceptions)–access–the–personal–

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information–AMP–holds–on–you–at–any–time–by– contacting–AMP–in–writing.–AMP–may–charge–a–fee– for–such–access.–

You–may–choose–not–to–give–your–personal– information–or–to–limit–the–information–you– provide–to–AMP.–Depending–on–the–type–of– information–you–withhold,–AMP–may–not–be–able– to–process–your–Application–efficiently–(if–at–all),–or– make–payments–to–you.

10.12 Statement of directors

This–prospectus–is–authorised–by–each–director– who–consents,–and–who–has–not–withdrawn–their– consent,–to–its–lodgement–with–ASIC–and–its–issue.

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Appendix A

Terms

If there is any inconsistency between the Terms and any other statement in this prospectus, the Terms prevail.

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1 Form of Notes

1.1 Constitution under Trust Deed

AMP–Notes–2–(the– Notes )–are–unsecured,– subordinated–debt–obligations–of–the–Issuer– constituted–by,–and–owing–under,–the–Trust–Deed.

1.2 Form

The–Notes–are–issued–in–registered–form–by–entry– in–the–Register.–

1.3 Face Value

The–Notes–have–a–Face–Value–of–A$100.00–and–are– issued–fully–paid.

1.4 Currency

The–Notes–are–denominated–in–Australian–dollars.

1.5 Clearing system

The–Notes–will–be–entered–into–and–dealt–with–in– CHESS.–For–so–long–as–the–Notes–remain–in–CHESS,– the–rights–of–a–person–holding–an–interest–in–the– Notes–are–subject–to–the–rules–and–regulations– of–CHESS–but–without–affecting–any–Term–which– may–cause–APRA–to–object–to–AMP–group–using,– or–having–used,–the–proceeds–of–the–issue–of–some– or–all–of–the–Notes–to–fund–Tier–2–Capital–of–a– Regulated–Entity–within–the–AMP–group.

1.6 No certificates

No–certificates–will–be–issued–to–Holders–unless– the–Issuer–determines–that–certificates–should–be– available–or–are–required–by–any–applicable–law.

1.7 ASX quotation

The–Issuer–must–use–all–reasonable–endeavours– and–furnish–all–such–documents,–information–and– undertakings–as–may–be–reasonably–necessary– in–order–to–procure–that–the–Notes–are,–and–until– Redeemed,–Converted–or–Written-off–remain,– quoted–on–ASX.

1.8 No other rights

The–Notes–confer–no–rights–on–a–Holder:

  • a)– to–vote–at–any–meeting–of–shareholders–of– the–Issuer;

  • b)– to–subscribe–for–new–securities–or–to–participate– in–any–bonus–issues–of–securities–of–the–Issuer;–or–

  • c)– to–otherwise–participate–in–the–profits–or– property–of–the–Issuer,–

except–as–set–out–in–these–Terms–or–the–Trust–Deed.

2 Status and subordination

2.1 Subordination

  • a)– The–Notes–constitute–direct–and– unsecured–subordinated–obligations–of–the– Issuer,–ranking:

  • i)– ahead–of–the–claims–of–all–Junior– Subordinated–Creditors;

  • ii)– equally–without–any–preference– among–themselves;

  • iii)– equally–with–the–claims–of–all–Pari–Passu– Subordinated–Creditors;–and

  • iv)– behind–the–claims–of–Senior–Creditors.

  • b)– –The–claims–of–Holders–against–the–Issuer–in– respect–of–Notes–will,–in–a–winding-up–of–the– Issuer,–be–subordinated–in–right–of–payment–to– the–claims–of–all–Senior–Creditors.

  • c)– –Each–Holder–must–not,–and–is–taken–to–have– waived,–to–the–fullest–extent–permitted–by– law,–any–right–to,–prove–in–a–winding-up–of–the– Issuer–as–a–creditor–in–respect–of–the–Notes– so–as–to–diminish–any–distribution,–dividend– or–payment–that–any–Senior–Creditor–would– otherwise–receive.

  • d)– –No–Holder–may–exercise–its–voting–rights– (as–a–creditor–in–respect–of–the–Notes)–in–a– winding-up–of–the–Issuer–so–as–to–defeat–the– subordination–in–this–clause–2.

  • e)– –Neither–the–Issuer–nor–any–Holder–shall–be– entitled–to–set-off–any–amounts,–merge– accounts–or–exercise–any–other–rights–the– effect–of–which–is–or–may–be–to–reduce–any– amount–payable–by–the–Issuer–in–respect–of– the–Notes–held–by–the–Holder–or–by–the–Holder– to–the–Issuer–(as–applicable).

  • f)– –For–the–avoidance–of–doubt,–all–amounts– payable–under–these–Terms–are–subject–to– clause–2.2.

2.2 Solvency test

When–the–Issuer–is–not–in–a–winding-up:

  • a)– no–amount–is–due–and–payable–by–the–Issuer– in–respect–of–the–Notes–unless,–at–the–time–of,– and–immediately–after,–the–payment,–the–Issuer– is–Solvent–( Solvency Condition ).–A–certificate– signed–by–two–directors–or–a–director–and–a– secretary–of–the–Issuer–is–sufficient–evidence–as– to–whether–or–not–the–Issuer–is–Solvent–unless–it– is–proved–to–be–incorrect;–and

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  • b)– if–all–or–any–part–of–an–amount–that–otherwise– would–be–due–and–payable–under–these–Terms– is–not–due–and–payable–because–at–the–time– of,–and–immediately–after,–the–payment–the– Issuer–would–not–be–Solvent–then,–subject– to–clause–3.3,–Holders–have–no–claim–or– entitlement–in–respect–of–such–non-payment– and–such–non-payment–does–not–constitute– an–Event–of–Default.

2.3 No consent of Senior Creditors

Nothing–in–this–clause–2–shall–be–taken–to–require– the–consent–of–any–Senior–Creditor–to–any– amendment–of–these–Terms.

2.4 Not liabilities of AMP Bank Limited; not policies under Life Insurance Act

The–Notes–are–not:

  • a)– deposits–with,–nor–deposit–liabilities–of,–AMP– Bank–Limited–(ABN–15–079–804–676)–or–any– other–member–of–the–AMP–group–for–the– purposes–of–the–Banking–Act;–

  • b)– protected–accounts–for–the–purposes–of– the–depositor–protection–provisions–of–the– Banking–Act–or–the–financial–claims–scheme– established–under–the–Banking–Act;

  • c)– policies–with–any–member–of–the–AMP–group– for–the–purposes–of–the–Life–Insurance–Act;–

  • d)– guaranteed–or–insured–by–the–Australian– Government–or–under–any–compensation– scheme–of–the–Australian–Government,–or– by–any–other–government,–under–any–other– compensation–scheme–or–by–any–government– agency–or–any–other–party;–nor

  • e)– investments–in–any–superannuation–or– other–fund–managed–by–a–member–of–the– AMP–Group.

Interest–is–payable–in–arrear–on–each–Interest– Payment–Date.

3.2 Interest Rate determination

The–Interest–Rate–payable–in–respect–of–a–Note– must–be–calculated–by–the–Issuer–in–accordance– with–these–Terms.

The–Interest–Rate–applicable–to–a–Note–for–each– Interest–Period–is–calculated–according–to–the– following–formula:

Interest Rate = Market Rate + Margin

and–expressed–as–a–percentage–per–annum,– where:

Market Rate –means,–for–the–Interest–Period,– the–average–mid-rate–for–Bills–having–a–tenor– of–90–days–as–displayed–on–the–“BBSW”–page–of– the–Reuters–Monitor–System–(or–its–successor– or–replacement–page)–on–the–first–Business–Day– of–the–Interest–Period.–However,–if–the–average– mid-rate–is–not–displayed–by–10:16–am–on–that– day,–or–if–it–is–displayed–but–the–Issuer–determines– that–there–is–an–obvious–error–in–that–rate,– Market Rate –means–the–rate–determined–by–the– Issuer–in–good–faith–at–approximately–10:30–am– on–that–day,–having–regard,–to–the–extent–possible,– to–the–rates–otherwise–bid–and–offered–for–bank– accepted–Bills–of–that–tenor–at–or–around–that–time– (including–any–displayed–on–the–“BBSY”–or–“BBSW”– page–of–the–Reuters–Monitor–System);

Bill –has–the–meaning–given–in–the–Bills–of– Exchange–Act–1909–(Cth)–of–Australia–and–a– reference–to–the–acceptance–of–a–Bill–is–to–be– interpreted–in–accordance–with–that–Act;–and

Margin means–the–rate–(expressed–as–a– percentage–per–annum)–determined–under– the–Bookbuild.–

3.3 Cumulative Interest

2.5 Unsecured Notes

The–Notes–are–unsecured–notes–for–the–purposes– of–section–283BH–of–the–Corporations–Act.

3 Interest

3.1 Interest

Each–Note–bears–interest–( Interest )–on–its–Face– Value–from–(and–including)–its–Issue–Date–to–(but– excluding)–its–Maturity–Date–or–any–Redemption– Date–at–the–Interest–Rate.–

Provided–that–a–Note–has–not–been–Redeemed,– Converted–or–Written-off:

  • a)– –Interest–shall–accrue–at–the–Interest–Rate–in–the– manner–provided–in–this–clause–3–on:

  • i)– any–amount–of–principal–which–is–not–paid– by–virtue–of–clause–2.2(a);–and

  • ii)– any–amount–of–principal,–the–payment–of– which–is–improperly–withheld–or–refused– when–due–and–payable;

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  • b)– –any–amount–of–Interest–which–is–not–paid–by– virtue–of–clause–2.2(a),–or–payment–of–which–is– improperly–withheld–or–refused–when–due–and– payable,–accumulates–and–accrues–Interest–at– the–Interest–Rate–(as–if–it–were–an–amount–of– Face–Value)–as–provided–in–this–clause–3;–and–

  • c)– –any–amounts–not–paid–by–virtue–of–clause– 2.2(a)–and–any–amount–accumulating–under– this–clause–3.3–remains–a–debt–owing–and–is– due–and–payable:–

  • i)– in–the–case–of–Interest,–on–the–first–Interest– Payment–Date;–and

  • ii)– in–the–case–of–any–other–amount,–on–the– first–date,–

on–which–amounts–may–be–paid–in–compliance– with–the–Solvency–Condition.–

4 General provisions applicable to Interest

4.1 Calculation of Interest amount

The–Issuer–must,–as–soon–as–practicable–after– calculating–the–Interest–Rate–in–relation–to–each– Interest–Period–for–each–Note,–calculate–the– amount–of–Interest–payable–for–the–Interest– Period–in–respect–of–the–Face–Value–of–each–Note.–

The–amount–of–Interest–payable–on–each–Note–for– an–Interest–Period–is–calculated–according–to–the– following–formula:

Interest Rate x Face Value x N Interest payable = 365

where:

N –means,–in–respect–of:

  • a)– the–first–Interest–Payment–Date–in–respect–of–a– Note,–the–number–of–days–from,–and–including,– its–Issue–Date–to,–but–excluding,–that–first– Interest–Payment–Date;–and

  • b)– each–subsequent–Interest–Payment–Date,– the–number–of–days–from,–and–including,–the– preceding–Interest–Payment–Date–to,–but– excluding,–that–Interest–Payment–Date–or,– in–the–case–of–the–last–Interest–Period,–the– Maturity–Date–or–Redemption–Date.–

4.2 Notification of Interest Rate, Interest payable and other items

  • a)– In–relation–to–each–Interest–Period,–the–Issuer– must–notify–the–Trustee,–the–Registrar–and– ASX–(and–any–other–stock–exchange–or–other– relevant–authority–on–which–the–Notes–are– quoted)–of–the–Interest–Rate–and–the–amount– of–Interest–payable–on–each–Note.

  • b)– The–Issuer–must–give–notice–under–this–clause– 4.2–as–soon–as–practicable–after–it–makes–its– calculations–and,–in–any–event,–by–no–later– than–the–fourth–day–of–the–relevant–Interest– Period.–

  • c)– The–Issuer–may–amend–its–calculation–of–any– amount–(or–make–appropriate–alternative– arrangements–by–way–of–adjustment)–as–a– result–of–the–extension–or–reduction–of–an– Interest–Period–without–prior–notice,–but–must– notify–the–Trustee,–the–Registrar,–ASX–and– any–other–stock–exchange–or–other–relevant– authority–on–which–the–Notes–are–quoted– promptly–after–so–doing.

4.3 Determination final

The–determination–by–the–Issuer–of–all–amounts– and–rates–to–be–calculated–or–determined–by–it– under–these–Terms–is,–in–the–absence–of–manifest– or–proven–error,–final–and–binding–on–the–Issuer,– the–Trustee,–the–Registrar–and–each–Holder.

4.4 Calculations

For–the–purposes–of–any–calculations–required– under–these–Terms:

  • a)– all–percentages–resulting–from–the– calculations–must–be–rounded,–if–necessary,–to– the–nearest–ten-thousandth–of–a–percentage– point–(with–0.00005%–being–rounded–up–to– 0.0001%);

  • b)– all–figures–must–be–rounded–to–four–decimal– places–(with–0.00005–being–rounded–up–to– 0.0001);–and–

  • c)– all–amounts–that–are–due–and–payable–must– be–rounded–to–the–nearest–one–Australian– cent–(with–0.5–of–a–cent–being–rounded–up–to– 1–cent).

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5 Redemption and purchase

5.1 Scheduled Redemption

The–Issuer–shall–Redeem–each–Note–on–the– Maturity–Date–by–payment–of–its–Face–Value– (together–with,–pursuant–to–clause–4,–any–Interest– accrued–to–(but–excluding)–the–Maturity–Date)– unless:

  • a)– the–Note–has–been–previously–Redeemed;

  • b)– the–Note–has–been–purchased–by–the–Issuer– and–cancelled;–or

  • c)– it–has–been–Converted–or–Written-off.

5.2 Early Redemption: Tax Event or Regulatory Event

If–a–Tax–Event–or–Regulatory–Event–occurs,–the– Issuer–may,–subject–to–clause–5.5,–Redeem–all–(but– not–some)–Notes–by–payment–of–their–Face–Value– (together–with,–pursuant–to–clause–4,–any–Interest– accrued–to–(but–excluding)–the–Redemption–Date).

5.3 Early Redemption of a Note at the option of the Issuer

Subject–to–clause–5.5,–the–Issuer–may–Redeem– all–or–some–of–the–Notes–on–18–December–2018– or–on–an–Interest–Payment–Date–occurring– after–that–date–by–payment–of–their–Face–Value– (together–with,–pursuant–to–clause–4,–any–Interest– accrued–on–those–Notes–to–(but–excluding)–the– Redemption–Date).

5.4 Partial Redemptions

If–only–some–of–the–Notes–are–to–be–Redeemed– under–clause–5.3,–the–Notes–to–be–Redeemed– will–be–specified–in–the–notice–given–under– clause–5.5–(a)–and–selected:

  • a)– in–a–manner–that–is,–in–the–opinion–of–the– Issuer,–fair–and–reasonable;–and

  • b)– in–compliance–with–any–applicable–law,– directive–or–requirement–of–ASX–(and–any– other–stock–exchange–or–other–relevant– authority–on–which–the–Notes–are–quoted).

5.5 Notice of early Redemption; supporting opinions; consent of APRA

  • a)– The–Issuer–must–give–at–least–15–Business–Days– (and–no–more–than–45–Business–Days)–notice– to–the–Trustee,–the–Registrar,–the–Holders–and– ASX–(and–any–other–stock–exchange–or–other–

relevant–authority–on–which–the–Notes–are– quoted)–of–any–early–Redemption–of–Notes–in– accordance–with–this–clause–5.–Such–notice– must–be–given–in–accordance–with–the–Trust– Deed–and–specify–the–Redemption–Date,– which–must–be–a–Business–Day.

  • b)– Before–the–Issuer–gives–the–notice–under– clause–5.5(a),–it–must–have–received:

  • i)– in–the–case–of–a–Tax–Event,–a–supporting– opinion–of–reputable–legal–counsel–or– other–tax–adviser–in–Australia–experienced– in–such–matters,–in–relation–to–such–Tax– Event;–and

  • ii)– in–the–case–of–a–Regulatory–Event,–a– supporting–opinion–of–reputable–legal– counsel–in–Australia–experienced–in–such– matters,–or–confirmation–from–APRA,–in– relation–to–such–Regulatory–Event.

  • c)– –The–Issuer–may–only–Redeem–Notes–under– clause–5.2–if–the–Issuer–did–not–expect–the–Tax– Event–or–Regulatory–Event–to–occur–as–at–the– Issue–Date.–

  • d)– –The–Issuer–may–only–Redeem–Notes–under– clause–5.2–or–5.3–if:

  • i)– either:

    • –A)– –prior–to–or–concurrently–with– Redemption,–the–Issuer–replaces–the– Notes–with–Relevant–Subordinated– Instruments–or–Ordinary–Shares– and–the–replacement–is–done–under– conditions–that–are–sustainable–for–the– income–capacity–of–the–AMP–Group;–or–

    • B)– –the–Issuer–obtains–confirmation–from– APRA–that–APRA–is–satisfied,–having– regard–to–the–capital–position–of–the– AMP–group,–that–the–Issuer–does–not– have–to–replace–the–Notes;–and

  • ii)– –APRA–has–given–its–prior–written–approval– of–the–Redemption.–

Holders should note that any approval is at APRA’s discretion and may not be given.

  • e)– –Any–Redemption–under–this–clause–5–is–subject– to–clause–2.2.

5.6 Effect of notice of Redemption

Any–notice–of–Redemption–given–under–this–clause– 5–is–irrevocable.

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5.7 No Holder option for early Redemption

A–Holder–cannot–require–the–Issuer–or–any–other– person–to–Redeem–(or–otherwise–purchase)–a–Note– prior–to–the–Maturity–Date.

5.8 Late payment

If–an–amount–is–not–paid–under–this–clause–5– when–due,–then–Interest–continues–to–accrue– on–the–unpaid–amount–(both–before–and–after– any–demand–or–judgment)–in–accordance–with– clause–3.3.

5.9 Purchase

  • a)– The–Issuer–or–any–of–its–Related–Entities–may,– subject–to–prior–written–approval–having–been– obtained–from–APRA,–at–any–time–purchase– Notes–in–the–open–market–or–otherwise–and–at– any–price.

  • b)– Notes–purchased–under–this–clause–5.9–may– be–held–or–resold–at–the–discretion–of–the– purchaser,–and,–if–the–purchaser–is–the–Issuer,– cancelled,–subject–to–compliance–with–any– applicable–law–or–requirement–of–ASX–(and–any– stock–exchange–or–other–relevant–authority– on–which–the–Notes–are–quoted)–and–provided– that–APRA–has–given–its–prior–written–approval– of–the–purchase–and–cancellation.

6 Conversion on Non‑Viability Trigger Event

6.1 Non-Viability Trigger Event

  • a)– –A– Non-Viability Trigger Event –occurs–when– APRA–provides–a–written–determination–to– the–Issuer–that–the–conversion–or–write-off– of–Relevant–Subordinated–Instruments–in– accordance–with–their–terms–or–by–operation– of–law–is–necessary–because:

  • i)– without–the–conversion–or–write-off,–APRA– considers–that–the–Issuer–would–become– non-viable;–or

  • ii)– without–a–public–sector–injection–of–capital– into,–or–equivalent–capital–support–with– respect–to,–the–Issuer,–APRA–considers–that– the–Issuer–would–become–non-viable.

  • A–determination–by–APRA–under–this–clause–

  • 6.1(a)–is–a– Non-Viability Determination .

  • b)– –If–a–Non-Viability–Trigger–Event–occurs,–the– Issuer–must–convert–or–write-off:

  • i)– all–Relevant–Subordinated–Instruments;–or

  • ii)– an–amount–of–the–Relevant–Subordinated– Instruments–if–APRA–is–satisfied–that– conversion–or–write-off–of–that–amount– will–be–sufficient–to–ensure–that–the–Issuer– does–not–become–non-viable.

6.2 Consequences of a Non-Viability Trigger Event

  • a)– If–a–Non-Viability–Trigger–Event–occurs:

  • i)– on–that–date,–whether–or–not–that–day–is–a– Business–Day–(the– Conversion Date ),–the– Issuer–must–immediately–determine–in– accordance–with–APRA’s–determination– under–clause–6.1:

    • A)– –the–amount–of–Notes–that–will–be– Converted–and–the–amount–of–other– Relevant–Subordinated–Instruments– which–will–be–converted–or–written-off;– and

    • B)–– –the–identity–of–the–Holders–at–the– time–that–the–Conversion–is–to–take– effect–on–that–date–(and–in–making– that–determination,–the–Issuer–may– make–any–decisions–with–respect–to–the– identity–of–the–Holders–at–that–time– as–may–be–necessary–or–desirable–to– ensure–Conversion–occurs–in–an–orderly– manner,–including–disregarding–any– transfers–of–Notes–that–have–not–been– settled–or–registered–at–that–time);

  • ii)– –subject–only–to–clause–6.3–and–despite–any– other–provision–in–these–Terms,–on–the– Conversion–Date–the–relevant–amount–of– Notes–will–be–Converted,–and–the–relevant– amount–of–other–Relevant–Subordinated– Instruments–will–be–converted–or– written-off,–in–each–case–immediately– and–irrevocably;–and

  • iii)– –the–Issuer–must–give–notice–of–the– Non-Viability–Trigger–Event–(a– Non-Viability Trigger Event Notice )–to–Holders–and– the–Trustee–as–soon–as–practicable–that– Conversion–has–occurred–which–notice–must– state–the–Conversion–Date,–the–amount–of– Notes–Converted–and–the–relevant–amount– of–Relevant–Subordinated–Instruments– converted–or–written-off.

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  • b)– –If–in–accordance–with–clause–6.1–the–Issuer– is–required–to–convert–only–an–amount–of– Relevant–Subordinated–Instruments,–the– Issuer–will–determine–the–amount–of–Notes– which–will–be–Converted–and–other–Relevant– Subordinated–Instruments–which–will–be– converted–or–written-off–as–follows:

  • i)– first,–the–Issuer–will–convert–or–write-off– all–Relevant–Perpetual–Subordinated– Instruments–before–Converting–the–Notes;

  • ii)– second,–if–conversion–or–write-off– of–Relevant–Perpetual–Subordinated– Instruments–is–less–than–the–amount– sufficient–to–satisfy–APRA–that–the–Issuer– would–not–become–non-viable–(and– provided–that–APRA–has–not–withdrawn– the–Non-Viability–Determination–as–a– result–of–the–conversion–or–write-off–of– the–Relevant–Perpetual–Subordinated– Instruments),–the–Issuer–will–Convert–some– or–all–of–the–Notes–and–the–Issuer–will– convert–or–write-off–other–Relevant–Term– Subordinated–Instruments–in–an–aggregate– amount–which–when–added–to–the–amount– of–Relevant–Perpetual–Subordinated– Instruments–converted–or–written-off–will– satisfy–APRA–that–the–Issuer–would–not– become–non-viable;–and

  • iii)– in–Converting–the–relevant–Notes–or– converting–or–writing-off–other–Relevant– Term–Subordinated–Instruments–the– Issuer–will–endeavour–to–treat–Holders– and–holders–of–other–Relevant–Term– Subordinated–Instruments–on–an– approximately–proportionate–basis,–but– may–discriminate–to–take–account–of–the– effect–on–marketable–parcels–and–other– logistical–considerations–and–the–need–to– effect–the–Conversion–immediately.

  • c)– –None–of–the–following–shall–prevent,–impede– or–delay–the–Conversion–of–Notes–as–required– by–this–clause–6.2:

  • i)– any–failure–or–delay–in–the–conversion– or–write-off–of–any–other–Relevant– Subordinated–Instruments;

  • ii)– any–failure–or–delay–in–giving–a– Non-Viability–Trigger–Event–Notice;

  • iii)– any–failure–or–delay–in–quotation–of– the–Ordinary–Shares–to–be–issued– on–Conversion;

  • iv)– any–decision–as–to–the–identity–of–Holders– whose–Notes–are–to–be–Converted–in– accordance–with–clause–6.2(a)(i)(B);–or

  • v)– any–requirement–to–select–or–adjust–the– amount–of–Notes–to–be–Converted–in– accordance–with–clause–6.2(b)(iii).

  • d)– –From–the–Conversion–Date,–but–subject–to– clause–6.3–and–clause–12.2(b),–the–Issuer–shall– treat–the–Holder–in–respect–of–the–Notes–as–the– holder–of–the–Conversion–Number–of–Ordinary– Shares–and–will–take–all–such–steps,–including– updating–any–of–its–registers,–required–to– record–the–Conversion.

6.3 Write-off on inability of the Issuer to Convert

  • a)– Notwithstanding–any–other–provisions–of– these–Terms,–if–an–Inability–Event–has–occurred– and–is–subsisting–and–Conversion–of–any–Notes– has–not–been–effected–within–5–Business–Days– of–the–Conversion–Date,–then–to–the–extent– the–Inability–Event–prevents–the–Conversion–of– any–Notes,–Conversion–of–those–Notes–will–not– occur–but–instead–the–relevant–Holder’s–rights– (including–to–payment–of–Interest–and–Face– Value)–in–relation–to–such–Notes,–and–to–be– issued–with–Ordinary–Shares,–are–immediately– and–irrevocably–written-off–and–terminated– (“ Written-off ”).–

  • b)– The–Issuer–may,–but–is–not–required–to,–seek– advice–from–reputable–legal–counsel–as–to– whether–an–Inability–Event–has–occurred–and–is– subsisting.–An–Inability–Event–is–taken–to–have– occurred–and–subsist–if–the–Issuer–receives– advice–to–that–effect–from–such–counsel.–The– seeking–of–advice–by–the–Issuer–under–this– clause–6.3(b)–shall–not–delay–or–impede–the– Write-off–of–the–Notes–when–required–under– clause–6.3(a).

  • c)– The–Issuer–must–give–notice–to–Holders–if– Conversion–has–not–occurred–by–operation– of–this–clause–6.3–but–failure–to–give–that– notice–shall–not–affect–the–operation–of–this– clause–6.3.

6.4 Consent to receive Ordinary Shares and other acknowledgements

Subject–to–clause–6.3,–each–Holder–irrevocably:

  • a)– –upon–receipt–of–the–Conversion–Number–of– Ordinary–Shares–following–Conversion–of–

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Notes–in–accordance–with–this–clause–6–and– clause–7,–consents–to–becoming–a–member– of–the–Issuer–and–agrees–to–be–bound–by– the–constitution–of–the–Issuer,–in–each– case–in–respect–of–Ordinary–Shares–issued– on–Conversion;

  • b)– –acknowledges–and–agrees–that,–unless– it–has–given–notice–in–accordance–with– clause–7.10–that–it–does–not–wish–to–receive– Ordinary–Shares–as–a–result–of–Conversion,– it–is–obliged–to–accept–Ordinary–Shares–on– Conversion–notwithstanding–anything–that– might–otherwise–affect–a–Conversion–of– Notes–including:

  • i)– any–change–in–the–financial–position–of– the–Issuer–or–the–AMP–group–since–the– Issue–Date;

  • ii)– it–being–impossible–or–impracticable–to–list– the–Ordinary–Shares–on–the–ASX;–

  • iii)– it–being–impossible–or–impracticable– to–sell–or–otherwise–dispose–of–the– Ordinary–Shares;

  • iv)– any–disruption–to–the–market–or–potential– market–for–Ordinary–Shares–or–capital– markets–generally;

  • v)– any–breach–by–the–Issuer–of–any–obligation– in–connection–with–the–Notes;–or

  • vi)– the–occurrence–of–a–Regulatory–Event;

  • c)– acknowledges–and–agrees–that:

  • i)– Conversion–is–not–subject–to–any– conditions–other–than–those–expressly– provided–for–in–this–clause–6–and–clause–7;

  • ii)– Conversion–must–occur–immediately–on– the–Conversion–Date–and–that–may–result– in–disruption–or–failures–in–trading–or– dealings–in–the–Notes;

  • iii)– it–will–not–have–any–rights–to–vote–in– respect–of–any–Conversion;–and–

  • iv)– notwithstanding–clause–7.9,–Ordinary– Shares–issued–on–Conversion–may–not–be– quoted–at–the–time–of–Conversion–or–at–all;

  • d)– –acknowledges–and–agrees–that–where–clause– 6.3–applies,–no–other–conditions–or–events–will– affect–the–operation–of–that–clause–and–it–will– not–have–any–rights–to–vote–in–respect–of–any– termination–under–that–clause;

  • e)– –acknowledges–and–agrees–that–it–has–no–right–to– determine–whether–Notes–are–Converted;–and

  • f)– –acknowledges–and–agrees–that–it–has–no– remedies–on–account–of–the–failure–of–the– Issuer–to–issue–Ordinary–Shares–in–accordance– with–this–clause–6–other–than,–subject–to– clause–6.3,–to–seek–specific–performance–of–the– Issuer’s–obligation–to–issue–Ordinary–Shares.

6.5 No Conversion at the option of Holders

Holders–do–not–have–a–right–to–request– Conversion–of–their–Notes–at–any–time.

7 Conversion Mechanics

7.1 Conversion

  • a)– On–the–Conversion–Date,–subject–to–clauses– 6.3–and–7.10,–the–following–shall–occur:

The–Issuer–shall–allot–and–issue–the–Conversion– Number–of–Ordinary–Shares–to–the–Holders–for– each–such–Note–held–by–the–Holder.

The–Conversion–Number–will–be–calculated– by–the–Issuer–in–accordance–with–the– following–formula:

Conversion Number –for– Face–Value = each–Note 0.99–x–VWAP subject–to–the–Conversion–Number– being–no–greater–than–the–Maximum– Conversion–Number.

where:–

VWAP –(expressed–in–dollars–and–cents)–means– the–VWAP–during–the–VWAP–Period;–and

Maximum Conversion Number –means– a–number–calculated–according–to–the– following–formula:

Maximum– Face–Value Conversion–Number[=] 0.20–x–Issue–Date–VWAP

  • b)– –Each–Holder’s–rights–in–relation–to–each–Note– that–is–being–Converted–as–determined–in– accordance–with–clauses–6.2(a)–and–6.2(b)–will– be–immediately–and–irrevocably–terminated– for–an–amount–equal–to–the–Face–Value–and– the–Issuer–will–apply–the–Face–Value–of–each– Note–by–way–of–payment–for–the–subscription– for–the–Ordinary–Shares–to–be–allotted–and– issued–under–clause–7.1(a).–Each–Holder–is– taken–to–have–irrevocably–directed–that–any– amount–payable–under–this–clause–7.1–is–to–be– applied–as–provided–for–in–this–clause–7.1–and– Holders–do–not–have–any–right–to–payment–in– any–other–way.

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  • c)– –If–the–total–number–of–Ordinary–Shares–to–be– allotted–and–issued–in–respect–of–a–Holder’s– aggregate–holding–of–Notes–includes–a– fraction–of–an–Ordinary–Share,–that–fraction–of– an–Ordinary–Share–will–be–disregarded.

  • d)– –Subject–to–clause–7.10,–where–Notes–are– Converted,–the–Issuer–will–allot–and–issue– the–Ordinary–Shares–to–the–Holder–on–the– basis–that–a–Holder’s–name,–address–and– security–account–details–in–CHESS–set–out–in– the–Register–(or,–if–not–set–out–in–the–Register,– otherwise–held–by–the–Registrar)–are:

  • i)– the–name–and–address–for–entry–into– any–register–of–title–and–receipt–of–any– certificate–or–holding–statement–in– respect–of–any–Ordinary–Shares–issued–on– Conversion;–and

  • ii)– the–account–to–which–the–Ordinary–Shares– issued–on–Conversion–are–to–be–credited,–

unless–a–Holder–has–notified–the–Issuer–of–a– different–name,–address–or–account–details,– together–with–such–other–information–as–is– reasonably–requested–by–the–Issuer,–which– notice–may–be–given–at–any–time–on–or–after– the–Issue–Date–and–no–less–than–15–Business– Days–prior–to–the–Conversion–Date.

7.2 Adjustments to VWAP generally

For–the–purposes–of–calculating–VWAP–under– clause–7.1:

  • a)– –where,–on–some–or–all–of–the–Business–Days–in– the–relevant–VWAP–Period,–Ordinary–Shares– have–been–quoted–on–ASX–as–cum–dividend– or–cum–any–other–distribution–or–entitlement– and–Notes–will–be–Converted–into–Ordinary– Shares–after–that–date–and–those–Ordinary– Shares–will–no–longer–carry–that–dividend–or– that–other–distribution–or–entitlement,–then– the–VWAP–on–the–Business–Days–on–which– those–Ordinary–Shares–have–been–quoted– cum–dividend–or–cum–any–other–distribution– or–entitlement–will–be–reduced–by–an–amount– ( Cum Value )–equal–to:

  • i)– in–the–case–of–a–dividend–or–other– distribution,–the–amount–of–that–dividend–or– other–distribution–including,–if–the–dividend– or–distribution–is–franked,–the–amount–that– would–be–included–in–the–assessable–income– of–a–recipient–of–the–dividend–or–distribution– who–is–a–natural–person–resident–in–Australia– under–the–Tax–Legislation;

  • ii)– in–the–case–of–any–entitlement–that–is–not– a–dividend–or–other–distribution–for–which– adjustment–is–made–under–clause–7.2(a) (i)–which–is–traded–on–ASX–on–any–of–those– Business–Days,–the–volume–weighted– average–price–of–all–such–entitlements– sold–on–ASX–during–the–VWAP–Period– on–the–Business–Days–on–which–those– entitlements–were–traded–(excluding– trades–of–the–kind–that–would–be–excluded– in–determining–VWAP–under–the–definition– of–that–term);–or

  • iii)– in–the–case–of–other–entitlements–for– which–adjustment–is–not–made–under– clause–7.2(a)(i)–or–clause–7.2(a)(ii),–the– value–of–the–entitlement–as–reasonably– determined–by–the–Issuer;–and

  • b)– –where,–on–some–or–all–of–the–Business–Days– in–the–VWAP–Period,–Ordinary–Shares–have– been–quoted–as–ex–dividend–or–ex–any–other– distribution–or–entitlement,–and–Notes–will–be– Converted–into–Ordinary–Shares–which–would– be–entitled–to–receive–the–relevant–dividend,– distribution–or–entitlement,–the–VWAP–on– the–Business–Days–on–which–those–Ordinary– Shares–have–been–quoted–ex–dividend–or–ex– any–other–distribution–or–entitlement–will–be– increased–by–the–Cum–Value.

7.3 Adjustments to VWAP for capital reconstruction

  • a)– –Where–during–the–relevant–VWAP–Period– there–is–a–change–to–the–number–of–Ordinary– Shares–on–issue–because–the–Ordinary–Shares– are–reconstructed,–consolidated,–divided–or– reclassified–(in–a–manner–not–involving–any– cash–payment–to–or–by–holders–of–Ordinary– Shares)–( Reclassification )–into–a–lesser–or– greater–number,–the–daily–VWAP–for–each–day– in–the–VWAP–Period–which–falls–before–the– date–on–which–trading–in–Ordinary–Shares–is– conducted–on–a–post–Reclassification–basis– will–be–adjusted–by–multiplying–the–VWAP– applicable–on–the–Business–Day–immediately– before–the–date–of–any–such–Reclassification– by–the–following–formula:

A

B

where:

A –means–the–aggregate–number–of– Ordinary–Shares–immediately–before–the– Reclassification;–and

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B means–the–aggregate–number–of–Ordinary– Shares–immediately–after–the–Reclassification.

  • b)– –Any–adjustment–made–by–the–Issuer–in– accordance–with–clause–7.3(a)–will–be– effective–and–binding–on–Holders–under– these–Terms–and–these–Terms–will–be– construed–accordingly.

7.4 Adjustments to Issue Date VWAP generally

For–the–purposes–of–determining–the–Issue–Date– VWAP–under–clause–7.1,–adjustments–will–be– made–in–accordance–with–clauses–7.2–and–7.3– during–the–VWAP–Period–for–the–Issue–Date–VWAP.– On–and–from–the–Issue–Date,–adjustments–to–the– Issue–Date–VWAP:

  • a)– may–be–made–by–the–Issuer–in–accordance–with– clauses–7.5,–7.6–and–7.7;–and

  • b)– if–so–made,–will–be–effective–and–binding–on– Holders–under–these–Terms–and–these–Terms– will–be–construed–accordingly.

7.5 Adjustments to Issue Date VWAP for bonus issues

  • a)– –Subject–to–clauses–7.5(b)–and–7.5(c),–if–the–Issuer– makes–a–pro-rata–bonus–issue–of–Ordinary– Shares–to–holders–of–Ordinary–Shares–generally– (in–a–manner–not–involving–any–cash–payment– to–or–by–holders–of–Ordinary–Shares),–the–Issue– Date–VWAP–will–be–adjusted–immediately–in– accordance–with–the–following–formula:

V = Vo x RD / (RD + RN)

where:

V –means–the–Issue–Date–VWAP–applying– immediately–after–the–application–of– this–formula;

Vo –means–the–Issue–Date–VWAP–applying– immediately–prior–to–the–application–of– this–formula;

RD –means–the–number–of–Ordinary–Shares– on–issue–immediately–prior–to–the–allotment– of–new–Ordinary–Shares–pursuant–to–the– bonus–issue;–and

RN means–the–number–of–Ordinary–Shares– issued–pursuant–to–the–bonus–issue.

  • b)– –Clause–7.5(a)–does–not–apply–to–Ordinary– Shares–issued–as–part–of–a–bonus–share–plan,– employee–or–executive–share–plan,–executive– option–plan,–share–top–up–plan,–share–purchase– plan–or–a–dividend–reinvestment–plan.

  • c)– –For–the–purposes–of–this–clause–7.5,–an– issue–will–be–regarded–as–a–bonus–issue– notwithstanding–that–the–Issuer–does–not– make–offers–to–some–or–all–holders–of–Ordinary– Shares–with–registered–addresses–outside– Australia,–where–the–issue–on–such–terms–is–in– compliance–with–the–ASX–Listing–Rules.

  • d)– –No–adjustments–to–the–Issue–Date–VWAP–will– be–made–under–this–clause–7.5–for–any–offer–of– Ordinary–Shares–not–covered–by–clause–7.5(a),– including–a–rights–issue–or–other–essentially– pro–rata–issue.–The–fact–that–no–adjustment–is– made–for–an–issue–of–Ordinary–Shares–except– as–covered–by–clause–7.5(a)–shall–not–in–any– way–restrict–the–Issuer–from–issuing–Ordinary– Shares–at–any–time–on–such–terms–as–it–sees– fit–nor–be–taken–to–constitute–a–modification– or–variation–of–rights–or–privileges–of–Holders– or–otherwise–requiring–any–consent–or– concurrence–of–the–Holders.

7.6 Adjustments to Issue Date VWAP for capital reconstruction

  • a)– –If–at–any–time–after–the–Issue–Date–there–is– a–change–to–the–number–of–Ordinary–Shares– on–issue–because–of–a–Reclassification–(in–a– manner–not–involving–any–cash–payment–to–or– by–holders–of–Ordinary–Shares)–into–a–lesser–or– greater–number,–the–Issue–Date–VWAP–will–be– adjusted–by–multiplying–the–Issue–Date–VWAP– applicable–on–the–Business–Day–immediately– before–the–date–of–any–such–Reclassification– by–the–following–formula:

A

B

where:

A –means–the–aggregate–number–of–Ordinary– Shares–on–issue–immediately–before–the– Reclassification;–and

B –means–the–aggregate–number–of–Ordinary– Shares–on–issue–immediately–after–the– Reclassification.

  • b)– –Each–Holder–acknowledges–that–the–Issuer– may–consolidate,–divide–or–reclassify– securities–so–that–there–is–a–lesser–or–greater– number–of–Ordinary–Shares–at–any–time–in–its– absolute–discretion–without–any–such–action– constituting–a–modification–or–variation–of– rights–or–privileges–of–Holders–or–otherwise– requiring–any–consent–or–concurrence.

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7.7 No adjustment to Issue Date VWAP in certain circumstances

Despite–the–provisions–of–clauses–7.5–and–7.6,– no–adjustment–will–be–made–to–the–Issue–Date– VWAP–where–any–such–adjustment–(rounded–if– applicable)–would–be–less–than–one–per–cent–of–the– Issue–Date–VWAP–then–in–effect.

7.8 Announcement of adjustments to Issue Date VWAP

The–Issuer–may–determine–an–adjustment–to– the–Issue–Date–VWAP–under–clauses–7.5–and–7.6.– Such–an–adjustment–will–be–notified–to–ASX–and– the–Holders–(an–“ Adjustment Notice ”)–within– 10–Business–Days–of–the–Issuer–determining– the–adjustment.–The–adjustment–set–out–in–the– Adjustment–Notice–will–be–final–and–binding.

7.9 Status and listing of Ordinary Shares

  • a)– The–Issuer–agrees–that–Ordinary–Shares–issued– on–Conversion–will–rank–equally–with–all–other– fully–paid–Ordinary–Shares.

  • b)– The–Issuer–agrees–to–use–all–reasonable– endeavours–to–list–the–Ordinary–Shares–issued– on–Conversion–on–ASX.

7.10 Conversion where the Holder does not wish to receive Ordinary Shares or is an Ineligible Holder

  • a)– If–Notes–are–required–to–be–Converted–and:

  • i)– the–Holder–has–notified–the–Issuer–that–it– does–not–wish–to–receive–Ordinary–Shares– as–a–result–of–Conversion,–which–notice– may–be–given–at–any–time–on–or–after–the– Issue–Date–and–no–less–than–15–Business– Days–prior–to–the–Conversion–Date;–or–

  • ii)– the–Holder–is–an–Ineligible–Holder,–

then,–on–the–Conversion–Date,–the–Holder’s– rights–(including–to–payments–of–Interest–or– Additional–Amounts,–or–the–repayment–of– principal)–in–relation–to–each–such–Note–being– Converted–are–immediately–and–irrevocably– terminated–and–the–Issuer–will–issue–the– Conversion–Number–of–Ordinary–Shares–to– one–or–more–Sale–and–Transfer–Agents–for– no–additional–consideration–and–on–terms– that–at–the–first–opportunity–the–Sale–and– Transfer–Agent–will–sell–the–Ordinary–Shares– at–market–value–and–pay–the–Proceeds–to–the– relevant–Holder.

  • b)– –If–an–Inability–Event–has–occurred–and–is– subsisting–and–the–Conversion–of–Notes– to–which–this–clause–7.10–applies–fails–to– take–effect–within–five–Business–Days,–then– Holders’–rights–will–be–immediately–and– irrevocably–terminated–in–accordance–with– clause–6.3.

  • c)– –The–Issuer–has–no–liability–to–a–Holder–for– the–acts–of–any–Sale–and–Transfer–Agent– appointed–to–sell–the–Ordinary–Shares–upon– the–occurrence–of–a–Non-Viability–Trigger– Event–and–has–no,–nor–owes–any,–duties–in– connection–with–any–such–sale–and–has–no– responsibility–for–any–costs,–losses,–liabilities,– expenses,–demands–or–claims–which–arise–as–a– result–of–such–sale.–

7.11 No right of Holders to require Conversion

No–Notes–can,–or–will,–be–Converted–at–the–option– of–a–Holder.

7.12 Conversion if amounts not paid

For–the–avoidance–of–doubt,–Conversion–may– occur–even–if–an–amount–is–not–paid–to–a–Holder–as– a–consequence–of–clause–2.2.

7.13 Conversion after winding-up commences

If–a–Non-Viability–Trigger–Event–occurs,–then– Conversion–shall–occur–(subject–to–clause–6.3)–in– accordance–with–clauses–6–and–7–notwithstanding– that–an–order–is–made–by–a–court,–or–an–effective– resolution–is–passed,–for–the–winding-up–of– the–Issuer.

8 Events of Default

8.1 Events of Default

An– Event of Default –occurs–in–relation–to–the– Notes–if:

  • a)– subject–to–clause–2.2,–the–Issuer–fails–to–pay– any–amount–of–principal–or–Interest–within–14– days–of–the–due–date–for–payment;–or

  • b)– an:–

  • i)– order–is–made–by–a–court–and–the–order–is– not–successfully–appealed–or–permanently– stayed–within–60–days–of–the–making–of– the–order,–or

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ii)– –an–effective–resolution–is–passed,–

for–the–winding-up–of–the–Issuer,–in–each– case–other–than–for–the–purposes–of–a– consolidation,–amalgamation,–merger–or– reconstruction–which–has–been–approved–by–a– Special–Resolution–of–the–Holders–or–in–which– the–surviving–entity–has–assumed–or–will– assume–expressly–or–by–law–all–obligations–of– the–Issuer–in–respect–of–the–Notes.–

8.2 Notification

If–an–Event–of–Default–occurs,–the–Issuer–must,– promptly–after–becoming–aware–of–it,–notify–the– Trustee–and–the–Registrar–of–the–occurrence–of– that–Event–of–Default–(specifying–details–of–it)– and–use–its–reasonable–endeavours–to–promptly– notify–the–Holders–and–ASX–(and–other–any–stock– exchange–or–other–relevant–authority–on–which– the–Notes–are–quoted)–of–the–occurrence–of–that– Event–of–Default.

8.3 Enforcement

  • a)– –At–any–time–after–an–Event–of–Default–occurs– and–continues–unremedied,–the–Trustee–may,– at–its–discretion:

  • –i)– –in–the–case–of–an–Event–of–Default–under– clause–8.1(a),–without–further–notice,– bring–proceedings:

    • A)– –to–recover–any–amount–then–due–and– payable–but–unpaid–on–the–Notes– (subject–to–clause–2.2);

    • B)– –to–obtain–a–court–order–for–specific– performance–of–any–other–obligation–in– respect–of–the–Notes;–or

    • C)– –institute–proceedings–for–the– winding-up–of–the–Issuer;–or

  • ii)– –in–the–case–of–an–Event–of–Default–under– clause–8.1(b),–declare–by–notice–to–the– Issuer–that–the–Face–Value–of–each–Note– (together–with–all–Interest–accrued–but– unpaid–to–the–date–for–payment)–is–payable– on–a–date–specified–in–the–notice–and,– subject–to–clause–2.1,–may–prove–in–the– winding-up–of–the–Issuer–for–that–amount,– but–may–take–no–further–action–to–enforce– the–obligations–of–the–Issuer–for–payment– of–any–principal–or–Interest–in–respect–of– the–Notes.–For–the–avoidance–of–doubt,–the– Trustee–may–not–make–such–a–declaration–

(or–prove–in–any–such–winding-up)–when– Interest–is–not–paid–by–virtue–of–the– circumstances–set–out–in–clause–2.2.

–The–Trustee–may–not–exercise–any–other– remedies–(including–any–right–to–sue–for– damages–which–has–the–same–economic– effect–as–acceleration)–as–a–consequence– of–an–Event–of–Default–or–other–default– other–than–as–specified–in–this–clause–8.3.

  • b)– –Without–prejudice–to–clause–8.3(a)(i),–if–the– Issuer–breaches–any–of–its–obligations–under– the–Trust–Deed–(other–than–any–obligation–for– the–payment–of–any–principal–or–Interest–in– respect–of–the–Notes),–the–Trustee–may,–at–its– discretion–and–without–further–notice,–bring– such–proceedings–as–it–may–think–fit–to–enforce– such–obligations.–The–Issuer–shall–not,–as–a– result–of–the–bringing–of–any–such–proceedings,– be–obliged–to–pay–any–sums–representing–or– measured–by–reference–to–principal–or–Interest– on–the–Notes–sooner–than–the–same–would– otherwise–have–been–payable–by–it.

  • c)– –The–Trustee–shall–not–be–bound–to–take–any– of–the–actions–referred–to–in–paragraphs–(a) (i)–or–(a)(ii)–above–to–enforce–the–obligations– of–the–Issuer–in–respect–of–the–Notes–or–any– other–proceedings–or–action–pursuant–to–or– in–connection–with–the–Trust–Deed–or–the– Notes–unless:–

  • i)– it–shall–have–been–so–directed–by–a– Holder–Resolution–or–so–requested–in– writing–by–the–Holders–of–at–least–15%– of–the–aggregate–Face–Value–of–all–Notes– outstanding;–and–

  • ii)– it–shall–have–been–indemnified–and/or– secured–for–all–Costs–it–may–incur–including– legal–Costs–on–a–solicitor–and–own–client– basis–(by–way–of–advance–payment–or– otherwise)–to–its–satisfaction.

  • d)– –No–Holder–shall–be–entitled–to–proceed–directly– against–the–Issuer–to–enforce–any–right–or– remedy–under–or–in–respect–of–any–Note– unless–the–Trustee,–having–become–bound–to– proceed,–fails–to–do–so–within–14–days–and–the– failure–is–continuing,–in–which–case–any–Holder– may–itself–institute–proceedings–against–the– Issuer–for–the–relevant–remedy–to–the–same– extent–(but–not–further–or–otherwise)–that–the– Trustee–would–have–been–entitled–to–do–so.

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9 Title and transfer of Notes

9.1 Title

Title–to–Notes–passes–when–details–of–the–transfer– are–entered–in–the–Register.–

9.2 Effect of entries in Register

Each–entry–in–the–Register–in–respect–of–a– Note–constitutes:

  • a)– an–unconditional–and–irrevocable–undertaking– by–the–Issuer–to–the–Holder–to–pay–principal,– Interest–and–any–other–amount–subject–to,–and– in–accordance–with,–these–Terms;–and

  • b)– an–entitlement–to–the–other–benefits–given– to–Holders–under–these–Terms–and–the–Trust– Deed–in–respect–of–the–Note.

9.3 Register conclusive as to ownership

Entries–in–the–Register–in–relation–to–a–Note– constitute–conclusive–evidence–that–the–person– so–entered–is–the–absolute–owner–of–the–Note– subject–to–correction–for–fraud–or–error.–

9.4 Non-recognition of interests

Except–as–required–by–law,–the–Issuer,–the–Trustee– and–the–Registrar–must–treat–the–person–whose– name–is–entered–in–the–Register–as–the–holder– of–a–Note–as–the–absolute–owner–of–that–Note.– This–clause–9.4–applies–whether–or–not–a–Note–is– overdue–and–despite–any–notice–of–ownership,– trust–or–interest–in–the–Note.

9.5 Joint holders

Where–two–or–more–persons–are–entered–in–the– Register–as–the–joint–holders–of–a–Note–then–they– are–taken–to–hold–the–Note–as–joint–tenants–with– rights–of–survivorship,–but–the–Registrar–is–not– bound–to–register–more–than–four–persons–as–joint– holders–of–any–Note.

9.6 Transfers in whole

Notes–may–be–transferred–in–whole–but–not– in–part.

9.7 Transfer

A–Holder–may,–subject–to–this–clause–9.7,–transfer– any–Notes:

  • a)– by–a–proper–ASTC–transfer–according–to–the– ASTC–Settlement–Rules;

  • b)– by–a–proper–transfer–under–any–other– computerised–or–electronic–system–recognised– by–the–Corporations–Act;

  • c)– under–any–other–method–of–transfer–which– operates–in–relation–to–the–trading–of– securities–on–any–securities–exchange–outside– Australia–on–which–Notes–are–quoted;–or

  • d)– by–any–proper–or–sufficient–instrument–of– transfer–of–marketable–securities–under– applicable–law.

The–Issuer–must–not–charge–any–fee–on–the– transfer–of–a–Note.

9.8 Market obligations

The–Issuer–must–comply–with–all–Applicable– Regulations–and–any–other–relevant–obligations– imposed–on–it–in–relation–to–the–transfer–of– a–Note.

9.9 Issuer may request holding lock or refuse to register transfer

If–Notes–are–quoted–on–ASX,–and–if–permitted– to–do–so–by–the–ASX–Listing–Rules–and–the– Corporations–Act,–the–Issuer–may:

  • a)– request–the–CS–Facility–Operator–or–the– Registrar,–as–the–case–may–be,–to–apply– a–holding–lock–to–prevent–a–transfer–of– Notes–approved–by–and–registered–on–the– CS–Facility’s–electronic–sub-register–or– Notes–registered–on–an–issuer-sponsored– sub-register,–as–the–case–may–be;–or

  • b)– refuse–to–register–a–transfer–of–Notes.

9.10 Issuer must request holding lock or refuse to register transfer

  • a)– The–Issuer–must–request–the–CS–Facility– Operator–or–the–Registrar,–as–the–case–may– be,–to–apply–a–holding–lock–to–prevent–a– transfer–of–Notes–approved–by–and–registered– on–the–CS–Facility’s–electronic–sub-register– or–Notes–registered–on–an–issuer-sponsored– sub-register,–as–the–case–may–be,–if–the– Corporations–Act,–the–ASX–Listing–Rules–or–the– terms–of–a–Restriction–Agreement–require–the– Issuer–to–do–so.

  • b)– The–Issuer–must–refuse–to–register–any–transfer– of–Notes–if–the–Corporations–Act,–the–ASX– Listing–Rules–or–the–terms–of–a–Restriction– Agreement–require–the–Issuer–to–do–so.

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  • c)– During–a–breach–of–the–ASX–Listing–Rules– relating–to–Restricted–Securities,–or–a–breach– of–a–Restriction–Agreement,–the–Holder–of–the– Restricted–Securities–is–not–entitled–to–any– Interest–(or–other–distribution–on),–or–voting– rights–in–respect–of,–the–Restricted–Securities.–

9.11 Notice of holding locks and refusal to register transfer

If,–in–the–exercise–of–its–rights–under–clauses–9.9– and–9.10,–the–Issuer–requests–the–application–of– a–holding–lock–to–prevent–a–transfer–of–Notes–or– refuses–to–register–a–transfer–of–Notes,–it–must,– within–5–Business–Days–after–the–date–the–holding– lock–is–requested–or–the–refusal–to–register–a– transfer,–give–written–notice–of–the–request–or– refusal–to–the–Holder,–to–the–transferee–and–the– broker–lodging–the–transfer,–if–any.–Failure–to–give– such–notice–does–not,–however,–invalidate–the– decision–of–the–Issuer.–

9.12 Delivery of instrument

If–an–instrument–is–used–to–transfer–Notes– according–to–clause–9.7,–it–must–be–delivered–to– the–Registrar,–together–with–such–evidence–(if–any)– as–the–Registrar–reasonably–requires–to–prove–the– title–of–the–transferor–to,–or–right–of–the–transferor– to–transfer,–the–Notes.

9.13 Refusal to register

The–Issuer–may–only–refuse–to–register–a– transfer–of–any–Notes–if–such–registration– would–contravene–or–is–forbidden–by–Applicable– Regulation–or–the–Terms.

If–the–Issuer–refuses–to–register–a–transfer,–the– Issuer–must–give–the–lodging–party–notice–of–the– refusal–and–the–reasons–for–it–within–five–Business– Days–after–the–date–on–which–the–transfer–was– delivered–to–the–Registrar.

9.14 Transferor to remain Holder until registration

A–transferor–of–a–Note–remains–the–Holder– in–respect–of–that–Note–until–the–transfer–is– registered–and–the–name–of–the–transferee–is– entered–in–the–Register.

9.15 Effect of transfer

Upon–registration–and–entry–of–the–transferee–in– the–Register–the–transferor–ceases–to–be–entitled–to– future–benefits–under–Trust–Deed–in–respect–of–the– transferred–Notes–and–the–transferee–becomes–so– entitled–in–accordance–with–clause–9.2.

9.16 Estates

A–person–becoming–entitled–to–a–Note–as–a– consequence–of–the–death–or–bankruptcy–of– a–Holder–or–of–a–vesting–order–or–a–person– administering–the–estate–of–a–Holder–may,–upon– producing–such–evidence–as–to–that–entitlement– or–status–as–the–Registrar–considers–sufficient,– transfer–the–Note–or,–if–so–entitled,–become– registered–as–the–holder–of–the–Note.

9.17 Transfer of unidentified Notes

Where–the–transferor–executes–a–transfer–of– less–than–all–Notes–registered–in–its–name,–and– the–specific–Notes–to–be–transferred–are–not– identified,–the–Registrar–may–register–the–transfer– in–respect–of–such–of–the–Notes–registered–in–the– name–of–the–transferor–as–the–Registrar–thinks–fit,– provided–the–aggregate–of–the–Face–Value–of–all– the–Notes–registered–as–having–been–transferred– equals–the–aggregate–of–the–Face–Value–of–all–the– Notes–expressed–to–be–transferred–in–the–transfer.

10 Payments

10.1 Summary of payment provisions

Payments–in–respect–of–Notes–will–be–made–in– accordance–with–this–clause–10.

10.2 Payments subject to law

All–payments–are–subject–to–applicable–law,–but– without–prejudice–to–the–provisions–of–clause–11.

10.3 Payments on Business Days

If–a–payment:

  • a)– is–due–on–a–Note–on–a–day–which–is–not–a– Business–Day–then–the–due–date–for–payment– will–be–postponed–to–the–first–following–day– that–is–a–Business–Day;–or

  • b)– is–to–be–made–to–an–account–on–a–Business– Day–on–which–banks–are–not–open–for–general– banking–business–in–the–place–in–which–the– account–is–located,–then–the–due–date–for– payment–will–be–the–first–following–day–on– which–banks–are–open–for–general–banking– business–in–that–place,

and–in–either–case,–the–Holder–is–not–entitled–to– any–additional–payment–in–respect–of–that–delay.

Nothing–in–this–clause–applies–to–any–payment– referred–to–in–clause–7.1(b),–which–occurs–on–the– Conversion–Date–as–provided–in–clause–7.1.

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10.4 Payment of principal

Payments–of–principal–will–be–made–to–each– person–registered–at–10:00–am–on–the–payment– date–as–the–holder–of–a–Note.

10.5 Payment of Interest

Payments–of–Interest–in–respect–of–a–Note–will– be–made–to–each–person–registered–at–the–close– of–business–on–the–Record–Date–as–the–holder–of– that–Note.

10.6 Payments to accounts

Monies–payable–by–the–Issuer–to–a–Holder–may–be– paid–in–any–manner–in–which–cash–may–be–paid– as–the–Issuer–decides,–including–by–any–method– of–direct–credit–determined–by–the–Issuer–to–the– Holder–or–Holders–shown–on–the–Register–or–to– such–person–or–place–directed–by–them.

10.7 Payments by cheque

The–Issuer–may–decide–that–payments–in–respect– of–the–Note–will–be–made–by–cheque–sent–by– prepaid–post–on–the–payment–date,–at–the–risk– of–the–registered–Holder,–to–the–Holder–(or–to– the–first–named–joint–holder–of–the–Note)–at–its– address–appearing–in–the–Register–at–the–close– of–business–on–the–Record–Date.–Cheques–sent– to–the–nominated–address–of–a–Holder–will–be– taken–to–have–been–received–by–the–Holder–on–the– payment–date–and,–no–further–amount–will–be– payable–by–the–Issuer–in–respect–of–the–Notes–as–a– result–of–the–Holder–not–receiving–payment–on–the– due–date.

10.8 Unsuccessful attempts to pay

Subject–to–applicable–law–and–the–ASX–Listing– Rules,–where–the–Issuer:–

  • a)– decides–that–an–amount–is–to–be–paid–to–a– Holder–by–a–method–of–direct–credit–and–the– Holder–has–not–given–a–direction–as–to–where– amounts–are–to–be–paid–by–that–method;

  • b)– attempts–to–pay–an–amount–to–a–Holder– by–direct–credit,–electronic–transfer–of– funds–or–any–other–means–and–the–transfer– is–unsuccessful;–

  • c)– has–made–reasonable–efforts–to–locate–a– Holder–but–is–unable–to–do–so;–or

  • d)– has–issued–a–cheque–which–has–not–been– presented–within–six–months–of–its–date,–then– the–Issuer–may–cancel–such–cheque,–

then,–in–each–case,–the–amount–is–to–be–held–by– the–Issuer–for–the–Holder–in–a–non-interest–bearing– deposit–with–a–bank–selected–by–the–Issuer–until– the–Holder–or–any–legal–personal–representative– of–the–Holder–claims–the–amount–or–the–amount– is–paid–by–the–Issuer–according–to–the–legislation– relating–to–unclaimed–moneys.

10.9 Payment to joint Holders

A–payment–to–any–one–of–joint–Holders–will– discharge–the–Issuer’s–liability–in–respect–of– the–payment.

11 Taxation

11.1 No set-off, counterclaim or deductions

All–payments–in–respect–of–the–Notes–must–be– made–in–full–without–set-off–or–counterclaim,–and– without–any–withholding–or–deduction–in–respect– of–Taxes,–unless–prohibited–by–law.

11.2 Withholding tax

Subject–to–clause–11.3,–if–a–law–requires–the–Issuer– to–withhold–or–deduct–an–amount–in–respect–of– Taxes–from–a–payment–in–respect–of–the–Notes– such–that–the–Holder–would–not–actually–receive– on–the–due–date–the–full–amount–provided–for– under–the–Notes,–then:

  • a)– the–Issuer–agrees–to–deduct–the–amount–for– the–Taxes–(and–any–further–withholding–or– deduction–applicable–to–any–further–payment– due–under–paragraph–(b)–below);–and

  • b)– if–the–amount–deducted–or–withheld–is–in– respect–of–Taxes–imposed–within–Australia,– the–amount–payable–is–increased–so–that,– after–making–the–deduction–and–further– deductions–applicable–to–additional–amounts– payable–under–this–clause–11.2,–each–Holder–is– entitled–to–receive–(at–the–time–the–payment– is–due)–the–amount–it–would–have–received– if–no–deductions–or–withholdings–had–been– required–to–be–made.

11.3 Withholding tax exemptions

No–Additional–Amounts–are–payable–under– clause–11.2(b)–in–respect–of–any–Note:

  • a)– to,–or–to–a–third–party–on–behalf–of,–a–Holder– who–is–liable–to–such–Taxes–in–respect–of– such–Note–by–reason–of–the–person–having– some–connection–with–Australia–other–than–

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the–mere–holding–of–such–Note–or–receipt–of– payment–in–respect–of–the–Note–provided– that–a–Holder–shall–not–be–regarded–as–having– a–connection–with–Australia–for–the–reason– that–the–Holder–is–a–resident–of–Australia– within–the–meaning–of–the–Tax–Legislation– where,–and–to–the–extent–that,–such–taxes–are– payable–by–reason–of–section–128B(2A)–of–the– Tax–Legislation;–

  • b)– to,–or–to–a–third–party–on–behalf–of,–a–Holder– who–could–lawfully–avoid–(but–has–not– so–avoided)–such–Taxes–by–complying–or– procuring–that–any–third–party–complies–with– any–statutory–requirements–or–by–making– or–procuring–that–any–third–party–makes–a– declaration–of–non-residence–or–similar–case– for–exemption–to–any–tax–authority;

  • c)– to,–or–to–a–third–party–on–behalf–of,–a–Holder– who–is–an–Offshore–Associate–and–not– acting–in–the–capacity–of–a–clearing–house,– paying–agent,–custodian,–funds–manager–or– responsible–entity–of–a–registered–scheme– within–the–meaning–of–the–Corporations–Act;– or

  • d)– to,–or–to–a–third–party–on–behalf–of–an– Australian–resident–Holder–or–a–non-resident– Holder–carrying–on–business–in–Australia–at–or– through–a–permanent–establishment–of–the– non-resident–in–Australia,–if–the–Holder–has– not–supplied–an–appropriate–tax–file–number,– an–Australian–business–number–or–other– exemption–details.

11.4 FATCA

The–Issuer–may–withhold–or–make–deductions– from–payments–or–from–the–issue–of–Ordinary– Shares–to–a–Holder–where–it–is–required–to–do–so– under–or–in–connection–with–FATCA,–or–where– it–has–reasonable–grounds–to–suspect–that–the– Holder–or–a–beneficial–owner–of–Notes–may– be–subject–to–FATCA,–and–may–deal–with–such– payment,–and–any–Ordinary–Shares–in–accordance– with–FATCA.–If–any–withholding–or–deduction– arises–under–or–in–connection–with–FATCA,–the– Issuer–will–not–be–required–to–pay–any–further– amounts–and–the–Issuer–will–not–be–required–to– issue–any–further–Ordinary–Shares–on–account– of–such–withholding–or–deduction–or–otherwise– reimburse–or–compensate,–or–make–any–payment– to,–a–Holder–or–a–beneficial–owner–of–Notes–for–or–

in–respect–of–any–such–withholding–or–deduction.– A–dealing–with–such–payment–and–any–Ordinary– Shares–in–accordance–with–FATCA–satisfies–the– Issuer’s–obligations–to–that–Holder–to–the–extent– of–the–amount–of–that–payment–or–issue–of– Ordinary–Shares.

12 General

12.1 Time limit for claims

A–claim–against–the–Issuer–for–a–payment–under– a–Note–is–void–unless–made–within–10–years–(in– the–case–of–principal)–or–5–years–(in–the–case–of– Interest–and–other–amounts)–from–the–date–on– which–payment–first–became–due.

12.2 Voting

  • a)– The–Trust–Deed–contains–provisions–for– convening–meetings–of–the–Holders–to– consider–any–matter–affecting–their–interests– including–certain–variations–of–these–Terms– which–require–the–consent–of–the–Holders.

  • b)– A–Holder–has–no–right–to–attend–or–vote–at– any–general–meeting–of–the–shareholders–of– the–Issuer.–

12.3 Alterations without consent

At–any–time–and–from–time–to–time,–but–subject– to–compliance–with–the–Corporations–Act–and–all– other–applicable–laws,–the–Issuer–may,–with–the– approval–of–the–Trustee–(such–approval–not–to–be– unreasonably–withheld–or–delayed),–but–without– the–consent–of–the–Holders,–alter–these–Terms–if– the–Issuer–is–of–the–opinion–that–such–alteration–is:

  • a)– of–a–formal–or–technical–or–minor–nature;–

  • b)– made–to–cure–any–ambiguity–or–correct–any– manifest–error;–

  • c)– necessary–or–expedient–for–the–purpose–of– enabling–the–Notes–to–be:–

  • i)– listed–for–quotation,–or–to–retain–quotation,– on–any–securities–exchange;–or–

  • ii)– offered–for–subscription–or–for–sale–under– the–laws–for–the–time–being–in–force–in– any–place;

  • d)– necessary–to–comply–with:

  • i)– the–provisions–of–any–statute–or–the– requirements–of–any–statutory–authority;– or

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  • ii)– the–ASX–Listing–Rules–or–the–listing–or– quotation–requirements–of–any–securities– exchange–on–which–the–Issuer–may– propose–to–seek–a–listing–or–quotation–of– the–Notes;–or

  • e)– –in–any–other–case,–not–materially–prejudicial–to– the–interests–of–the–Holders–as–a–whole,

provided–that,–in–the–case–of–an–alteration– pursuant–to–paragraph–(c),–(d)–or–(e),–the–Issuer– has–provided–to–the–Trustee–an–opinion–of– independent–legal–advisers–of–recognised– standing–in–New–South–Wales–that–such– alteration–is–otherwise–not–materially–prejudicial– to–the–interests–of–Holders–as–a–whole.–

For–the–purposes–of–determining–whether–an– alteration–is–not–materially–prejudicial–to–the– interests–of–Holders–as–a–whole,–the–taxation– and–regulatory–capital–consequences–to–a–Holder– (or–any–class–of–Holders)–and–other–special– consequences–or–circumstances–which–are– personal–to–a–Holder–(or–any–class–of–Holders)–do– not–need–to–be–taken–into–account–by–the–Issuer–or– its–legal–advisers.–

12.4 Alteration with consent

At–any–time–and–from–time–to–time,–but–subject– to–compliance–with–the–Corporations–Act–and– all–other–applicable–laws,–the–Issuer–may,–with– the–approval–of–the–Trustee–(such–approval–not– to–be–unreasonably–withheld–or–delayed),–alter– these–Terms:

  • a)– except–as–otherwise–provided–in–paragraphs– (b),–(c)–and–(d)–below,–if–such–alteration–is– authorised–by–a–Holder–Resolution;–

  • b)– in–the–case–of–an–alteration–to–this–clause–12.4– or–any–clause–of–the–Trust–Deed–providing–for– Holders–to–give–a–direction–to–the–Trustee–by– a–Special–Resolution,–if–a–Special–Resolution–is– passed–in–favour–of–such–alteration;–

  • c)– in–the–case–of–an–alteration–to–the–Meeting– Provisions–and–to–which–this–clause–12.4–does– not–apply,–if–a–Special–Resolution–is–passed–in– favour–of–such–alteration;–and

  • d)– otherwise–in–accordance–with–the–Trust–Deed.

12.5 Consents

Prior–to–any–alteration–under–this–clause–12,–the– Issuer–must–obtain–any–consent–needed–to–the– alteration–and,–in–particular,–any–alteration–which–

may–cause–APRA–to–object–to–AMP–group–using,–or– having–used,–the–proceeds–of–the–issue–of–some–or– all–of–the–AMP–Notes–2–to–fund–Tier–2–Capital–of–a– Regulated–Entity–within–the–AMP–group,–is–subject– to–the–prior–written–consent–of–APRA.

12.6 Interpretation

In–this–clause–12,–“ alter ”–includes–modify,–cancel,– amend,–waive–or–add–to,–and–“ alteration ”–has–a– corresponding–meaning.

12.7 Notices

The–Trust–Deed–contains–provisions–for–the–giving– of–notices.

12.8 Further issues

The–Issuer–may–from–time–to–time,–without– the–consent–of–any–Holder,–issue–any–securities– ranking–equally–with–the–Notes–(on–the–same– terms–or–otherwise)–or–ranking–in–priority–or– junior–to–the–Notes,–or–incur–or–guarantee–any– indebtedness–upon–such–terms–as–it–may–think–fit– in–its–sole–discretion.

12.9 Governing law

These–Terms–and–the–Notes–are–governed–by–the– laws–in–force–in–New–South–Wales.

13 Interpretation and definitions

13.1 Interpretation

In–these–Terms,–except–where–the–context– otherwise–requires:

  • a)– the–singular–includes–the–plural–and–vice–versa,– and–a–gender–includes–other–genders;

  • b)– another–grammatical–form–of–a–defined–word– or–expression–has–a–corresponding–meaning;

  • c)– a–reference–to–a–document–includes–all– schedules–or–annexes–to–it;

  • d)– a–reference–to–a–clause–or–paragraph–is–to–a– clause–or–paragraph–of–these–Terms;

  • e)– a–reference–to–a–document–or–instrument– includes–the–document–or–instrument–as– novated,–altered,–supplemented–or–replaced– from–time–to–time;

  • f)– a–reference–to–“ Australia ”–includes–any– political–sub-division–or–territory–in–the– Commonwealth–of–Australia;

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  • g)– a–reference–to–“ Australian dollars ”,–“ A$ ”–or– “ Australian cent ”–is–a–reference–to–the–lawful– currency–of–Australia;

  • h)– a–reference–to–time–is–to–Sydney,– Australia–time;

  • i)– other–than–in–relation–to–a–Non-Viability– Trigger–Event–and–a–Conversion–on–a– Conversion–Date–and–as–provided–in–the– definition–of–Maturity–Date,–if–these–Terms– require–an–event–to–occur–on–a–Business–Day,– and–the–date–specified–by–these–Terms–for–the– occurrence–of–that–event–is–not–a–Business–Day,– then–that–event–is–taken–to–occur–on–the–next– Business–Day–following–that–date;

  • j)– a–reference–to–a–person–includes–a–reference– to–the–person’s–executors,–administrators,– successors–and–permitted–assigns– and–substitutes;

  • k)– a–reference–to–a–person–includes–a–natural– person,–partnership,–body–corporate,– association,–governmental–or–local–authority– or–agency–or–other–entity;

  • l)– a–reference–to–a–statute,–ordinance,–code,–rule,– directive–or–law–(however–described)–includes– regulations–and–other–instruments–under–it–and– consolidations,–amendments,–re-enactments– or–replacements–of–any–of–them;

  • m)–the–meaning–of–general–words–is–not–limited– by–specific–examples–introduced–by–including,– for–example–or–similar–expressions;

  • n)– any–agreement,–representation–or–warranty– by–two–or–more–parties–(including–where– two–or–more–persons–are–included–in–the– same–defined–term)–binds–them–jointly– and–severally;

  • o)– an–Event–of–Default–is–subsisting–if–it–has–not– been–remedied–or–waived–in–writing;–

  • p)– headings–(including–those–in–brackets–at–the– beginning–of–paragraphs)–are–for–convenience– only–and–do–not–affect–the–interpretation–of– these–Terms;

  • q)– if–the–principal–securities–exchange–on–which– Ordinary–Shares–are–listed–becomes–other– than–ASX,–unless–the–context–otherwise– requires,–a–reference–to–ASX–shall–be–read–as–a– reference–to–that–principal–securities–exchange– and–a–reference–to–the–ASX–Listing–Rules,–ASX– Settlement–Rules–or–any–term–defined–in–any– such–rules,–shall–be–read–as–a–reference–to–

the–corresponding–rules–of–that–exchange–or– corresponding–defined–terms–in–such–rules–(as– the–case–may–be);

  • r)– any–provisions–which–refer–to–the– requirements–of–APRA–or–any–other–prudential– regulatory–requirements–will–apply–to–the– Issuer–only–if–the–Issuer–is–an–entity–subject– to–regulation–and–supervision–by–APRA–at–the– relevant–time;

  • s)– any–provisions–which–require–APRA’s–consent– or–approval–(written–or–otherwise)–will–apply– only–if–APRA–requires–that–such–consent–or– approval–be–given–at–the–relevant–time;–

  • t)– any–provisions–in–these–Terms–requiring–the– prior–approval–of–APRA–for–a–particular–course– of–action–to–be–taken–by–the–Issuer–do–not– imply–that–APRA–has–given–its–consent–or– approval–to–the–particular–action–as–of–the– Issue–Date–or–that–it–will–at–any–time–give–its– consent–or–approval–to–the–particular–action;– and

  • u)– a–reference–to–the–’conversion’–of–a–Relevant– Capital–Instrument–includes–an–exchange–or– other–method–by–which–holders–come–to–be– issued–with–Ordinary–Shares–in–place–of–the– Relevant–Capital–Instrument–.

13.2 Definitions

In–these–Terms,–these–meanings–apply–unless–the– contrary–intention–appears:

Additional Amount –means–an–additional–amount– payable–by–the–Issuer–under–clause–11.2(b);

AMP group –means–AMP–Limited–and–its– controlled–entities;

Applicable Regulations –means–such–provisions– of–the–ASX–Listing–Rules,–the–ASTC–Settlement– Rules,–the–Corporations–Act–and–any–regulations– or–rules–pursuant–under–or–pursuant–to–any–such– provisions–as–may–be–applicable–to–the–transfer;

APRA –means–the–Australian–Prudential– Regulation–Authority;

ASTC –means–the–ASX–Settlement–Pty–Limited– (ABN–49–008–504–532);

ASTC Settlement Rules –means–the–operating– rules–of–ASTC;

ASX –means–ASX–Limited–(ABN–98–008–624–691)– or–the–securities–market–operated–by–it,–as–the– context–requires;

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ASX Listing Rules –means–the–listing–rules–of–ASX; Banking Act means–the–Banking–Act–1959– of–Australia;

Bill has–the–meaning–given–in–clause–3.2;

Bookbuild –means–the–process–conducted–prior– to–the–opening–of–the–Offer–whereby–certain– investors–and–brokers–lodge–bids–for–Notes–and,– on–the–basis–of–those–bids,–the–Issuer–determines– the–Margin–and–announces–its–determination–of– the–Margin–prior–to–the–opening–of–the–Offer; Business Day –means:

  • a)– a–day–which–is–a–business–day–within–the– meaning–of–the–ASX–Listing–Rules;–and

  • b)– for–the–purposes–of–calculation–or–payment– of–Interest–or–any–other–amount,–a–day–on– which–banks–are–open–for–business–in–Sydney,– New–South–Wales;

CHESS –means–the–Clearing–House–Electronic– Sub-register–System–operated–by–ASTC–or–any– other–applicable–securities–trading–and/or– clearance–system–on–which–the–Notes–are–lodged– and–traded;

Conglomerates Proposal –means–the–proposal– for–the–definition–of–eligible–capital–held–by–a– conglomerate–group–contained–in–the–discussion– paper–issued–by–APRA–dated–9–May–2013–(as– supplemented–by–any–further–publications–by– APRA–as–at–the–Issue–Date)–and–any–prudential– standards–applicable–to–the–AMP–group– implementing–that–proposal–(including–any–made– after–the–Issue–Date–to–the–extent–that–they– reflect–the–proposal–as–at–the–Issue–Date);

Conversion –means–the–conversion–of–all–or–some– Notes–into–the–Conversion–Number–of–Ordinary– Shares–in–accordance–with–and–subject–to–clauses– 6–and–7.–“ Convert ”,–“ Converting ”–and–“ Converted ”– bear–the–corresponding–meanings;

Conversion Date –has–the–meaning–specified–in– clause–6.2(a)(i);

Conversion Number –has–the–meaning–specified–in– clause–7.1(a);

Corporations Act –means–the–Corporations–Act– 2001–of–Australia;

Costs –includes–costs,–charges–and–expenses;

CS Facility –has–the–same–meaning–as–“prescribed– CS–Facility”–in–the–Corporations–Act;

CS Facility Operator –means–the–operator–of–a– CS–Facility;

Cum Value has–the–meaning–specified–in– clause–7.2(a);

Directors –means–some–of–all–of–the–directors–of– the–Issuer–acting–as–a–board;

Event of Default –means–the–happening–of–any– event–set–out–in–clause–8.1;

Face Value –means–the–principal–amount–of–each– Note,–being–A$100.00;

FATCA –means–the–Foreign–Account–Tax– Compliance–Act–provisions,–sections–1471– through–1474–of–the–United–States–Internal– Revenue–Code–(including–any–regulations–or– official–interpretations–issued,–agreements– entered–into–or–non-US–laws–enacted–with– respect–to–those–provisions);

Foreign Holder –means–a–Holder:–

  • a)– whose–address–in–the–Register–is–a–place– outside–Australia;–or–

  • b)– who–the–Issuer–otherwise–believes–may–not– be–a–resident–of–Australia–and–the–Issuer–is– not–satisfied–that–the–laws–of–the–Holder’s– country–of–residence–would–permit–the–offer– to,–or–the–holding–or–acquisition–of–Ordinary– Shares–by,–the–Holder–(but–the–Issuer–will–not– be–bound–to–enquire–into–those–laws),–either– unconditionally–or–after–compliance–with– conditions–which–the–Issuer,–in–its–absolute– discretion,–regards–as–acceptable–and–not– unduly–onerous;

Holder –means,–in–respect–of–a–Note,–the–person– whose–name–is–entered–on–the–Register–as–the– holder–of–that–Note;

Holder Resolution –means:

  • a)– a–resolution–passed–at–a–meeting–of–Holders– of–the–Notes,–duly–called–and–held–under–the– Meeting–Provisions:

  • i)– by–at–least–50%–of–the–persons–voting–on– a–show–of–hands–(unless–paragraph–(b)– below–applies);–

  • ii)– if–a–poll–is–duly–demanded,–then–by–a– majority–consisting–of–at–least–50%–of–the– votes–cast;–or

  • b)– –if–the–meeting–is–by–postal–ballot–or–written– resolution–under–the–Meeting–Provisions,– then–by–Holders–representing–(in–aggregate)– at–least–50%–of–the–principal–amount– outstanding–of–all–of–the–Notes;

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Inability Event –means–the–Issuer–is–prevented–by– applicable–law,–or–order–of–any–court,–or–action–of– any–government–authority–(including–regarding– the–insolvency,–winding-up–or–other–external– administration–of–the–Issuer)–or–any–other–reason– from–Converting–the–Notes;

Ineligible Holder –means:

  • a)– a–Holder–who–is–prohibited–or–restricted–by– any–applicable–law–or–regulation–in–force– in–Australia–(including–but–not–limited–to– Chapter–6–of–the–Corporations–Act,–the–Foreign– Acquisitions–and–Takeovers–Act–1975–of– Australia,–the–Financial–Sector–(Shareholdings)– Act–1998–of–Australia,–Part–IV–of–the– Competition–and–Consumer–Act–2010–of– Australia–and–the–Insurance–Acquisitions–and– Takeovers–Act–1991–of–Australia)–from–being– offered,–holding–or–acquiring–Ordinary–Shares– (provided–that–if–the–relevant–prohibition– or–restriction–only–applies–to–the–Holder–in– respect–of–some–of–its–Notes,–it–shall–only–be– treated–as–an–Ineligible–Holder–in–respect–of– those–Notes–and–not–in–respect–of–the–balance– of–its–Notes).–The–Issuer–shall–be–entitled– to–treat–a–Holder–as–not–being–an–Ineligible– Holder–unless–the–Holder–has–otherwise– notified–it–after–the–Issue–Date–and–prior–to– the–Conversion–Date;–or–

  • b)– a–Foreign–Holder;

Insurance Act –means–the–Insurance–Act–1973– of–Australia;

Interest –has–the–meaning–given–in–clause–3.1;–

Interest Payment Date –means,–in–respect–of–a– Note,–18–March,–18–June,–18–September–and–18– December–in–each–year–and–the–Maturity–Date– or–a–Redemption–Date–with–the–first–Interest– Payment–Date–being–18–March–2014.–If–any–of– these–dates–is–not–a–Business–Day,–the–Interest– Payment–Date–is–the–following–Business–Day,– provided–that–the–final–Interest–Payment–Date– falls–on–the–Redemption–Date–or–the–Maturity– Date–(as–adjusted–if–that–day–is–not–a–Business– Day)–(as–the–case–may–be);

Interest Period –means,–for–a–Note,–each–period– beginning–on–(and–including)–an–Interest–Payment– Date–and–ending–on–(but–excluding)–the–next– Interest–Payment–Date.–However:

  • a)– the–first–Interest–Period–commences–on–(and– includes)–the–Issue–Date;–and

  • b)– the–final–Interest–Period–ends–on–(but– excludes)–the–Maturity–Date–or–the– Redemption–Date;

Interest Rate –means,–in–respect–of–an–Interest– Period,–for–a–Note,–the–interest–rate–(expressed–as– a–percentage–per–annum)–payable–in–respect–of– that–Note–calculated–or–determined–in–accordance– with–clause–3.2;

Issue Date –means,–in–respect–of–a–Note,–the–date– on–which–that–Note–is–issued;

Issue Date VWAP –means–the–VWAP–during–the– period–of–20–Business–Days–on–which–trading– in–Ordinary–Shares–took–place–immediately– preceding–but–not–including–the–Issue–Date,–as– adjusted–in–accordance–with–clause–7;

Issuer –means–AMP–Limited–(ABN–49–079–354–519);

Junior Subordinated Creditors –means–in–respect– of–the–Notes,–creditors–of–the–Issuer–whose–claims– against–the–Issuer–arise–under–instruments–issued– by–the–Issuer–as–Relevant–Perpetual–Subordinated– Instruments–or–whose–claims–are–in–respect–of– a–shareholding–including–the–claims–described– in–section–563AA–and–in–section–563A–of–the– Corporations–Act;

Life Insurance Act –means–the–Life–Insurance–Act– 1995–of–Australia;

Margin –means–the–margin–determined–in– accordance–with–clause–3.2;

Market Rate –has–the–meaning–given–in–clause–3.2;

Maturity Date –means–18–December–2023–or–if– that–day–is–not–a–Business–Day,–the–preceding– Business–Day;

Maximum Conversion Number –has–the–meaning– given–in–clause–7.1(a);

Meeting Provisions –means–the–provisions–for– meetings–of–the–Holders–set–out–in–schedule–4–to– the–Trust–Deed;

Non-Viability Determination –has–the–meaning– given–in–clause–6.1(a);

Non-Viability Trigger Event has–the–meaning– specified–in–clause–6.1(a);

Non-Viability Trigger Event Notice –has–the– meaning–specified–in–clause–6.2(a)(iii);

Note –has–the–meaning–given–in–clause–1.1;

Offer means–the–invitation–under–the–Prospectus– made–by–the–Issuer–for–persons–to–subscribe– for–Notes;

150

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Appendix A Terms

Offshore Associate –means–an–associate–(as– defined–in–section–128F–of–the–Tax–Legislation)–of– the–Issuer–that–is–either:

  • a)– a–non-resident–of–Australia–which–does–not– acquire–the–Notes–in–carrying–on–a–business– at–or–through–a–permanent–establishment–in– Australia;–or

  • b)– a–resident–of–Australia–that–acquires–the–Notes– in–carrying–on–a–business–at–or–through–a– permanent–establishment–outside–Australia;

Ordinary Share –means–a–fully–paid–ordinary–share– in–the–capital–of–the–Issuer;

Pari Passu Subordinated Creditors –means– creditors–of–the–Issuer–(other–than–Holders)– whose–claims–against–the–Issuer–arise–under– instruments–issued–by–the–Issuer–as–Relevant– Term–Subordinated–Instruments;

Proceeds –means–the–net–proceeds–of–a–sale–of– Ordinary–Shares–actually–received–by–the–Sale– and–Transfer–Agent–calculated–after–deduction– of–any–applicable–brokerage,–stamp–duty–and– other–taxes–and–charges,–including–the–Sale– and–Transfer–Agent’s–reasonable–out–of–pocket– Costs–properly–incurred–by–or–on–its–behalf–in– connection–with–such–sale–from–the–sale–price–of– the–Ordinary–Shares;

Prospectus –means–the–prospectus–relating–to– the–offer–of–AMP–Subordinated–Notes–2–dated– on–or–about–6–November–2013–published– by–the–Issuer–and–any–supplementary–or– replacement–prospectus;

Prudential Standards –means–the–prudential– standards–and–guidelines–of–APRA–applicable–to– the–AMP–group–and–to–entities–within–the–AMP– group–from–time–to–time;

Reclassification –has–the–meaning–given–in– clause–7.3(a);

Record Date –means,–for–payment–of–Interest:

  • a)– subject–to–paragraph–(b)–below,–the–date– which–is–eight–calendar–days–before–the– applicable–Interest–Payment–Date;–or

  • b)– such–other–date–as–is–determined–by–the–Issuer– in–its–absolute–discretion–and–communicated– to–ASX–not–less–than–eight–calendar–days– before–the–Record–Date–which–would–have– been–determined–under–paragraph–(a)–above;– or

  • c)– such–other–date–as–may–be–required–by,–or– agreed–with,–ASX;

Redemption –means–the–redemption–of–a–Note–in– accordance–with–clause–5–and–the–words

Redeem ,– Redeemable –and– Redeemed –bear–their– corresponding–meanings;

Redemption Date –means,–in–respect–of–a–Note,– the–date,–other–than–the–Maturity–Date,–on–which– the–Note–is–Redeemed–in–whole;

Register –means–the–register–of–Holders– (established–and–maintained–under–clause–13–of– the–Trust–Deed)–and,–where–appropriate,–the–term– Register–includes:

  • a)– a–sub-register–maintained–by–or–for–the–Issuer– under–the–Corporations–Act,–the–ASX–Listing– Rules–or–ASTC–Settlement–Rules;–and

  • b)– any–branch–register;

Registrar –means–Computershare–Investor– Services–Pty–Limited–(ABN–48–078–279–277)–or–any– other–person–appointed–by–the–Issuer–to–maintain– the–Register–and–perform–any–payment–and–other– duties–as–specified–in–that–agreement;

Regulated Entity –means–an–authorised– deposit-taking–institution–under–the–Banking– Act,–a–registered–life–insurance–company–under– the–Life–Insurance–Act–or–other–prudentially– regulated–entity;

Regulatory Event –means:

  • a)– as–a–result–of–a–change–in,–or–amendment– to,–applicable–law,–or–any–change–in–their– application–or–official–or–judicial–interpretation– (together,–a– Change ),–which–Change–becomes– effective–after–the–Issue–Date,–additional– requirements–would–be–imposed–on–the–Issuer– in–respect–of–the–Notes–which–the–Directors– determine–in–their–absolute–discretion–to–be– unacceptable;–or–

  • b)– following–a–notification–from,–or– announcement–or–determination–by,–APRA,– the–Directors–determine–in–their–absolute– discretion–that–APRA–objects,–or–will–object,–to– AMP–group–using–or–having–used,–the–proceeds– of–the–issue–of–some–or–all–of–the–Notes–to– fund–Tier–2–Capital–of–a–Regulated–Entity– within–the–AMP–group,–other–than–where–that– event–is–a–result–of–the–implementation–of–the– Conglomerates–Proposal;

151 AMP Subordinated Notes 2

Appendix A Terms

Related Entity –means–in–respect–of–the–Issuer,– any–parent–entity–of–the–Issuer–or–any–entity–over– which–the–Issuer–or–any–parent–entity–of–the–Issuer– exercises–control–or–significant–influence,–as– determined–by–APRA–from–time–to–time;

Relevant Perpetual Subordinated Instrument

means–a–perpetual–subordinated–instrument:–

  • a)– to–which–the–Issuer–is–a–party;–

  • b)– for–which–the–Issuer–has–received– confirmation–in–writing–from–APRA–that,–as– at–the–date–of–its–issue,–APRA–does–not–object– to–the–AMP–group–using–the–proceeds–of–the– issue–of–the–instrument–to–fund–Tier–1–Capital– of–a–Regulated–Entity–within–the–AMP–group;– and

  • c)– which,–in–accordance–with–its–terms–or– by–operation–of–law,–is–capable–of–being– converted–into–Ordinary–Shares–or–written-off– where–APRA–makes–a–determination–as– referred–to–in–clause–6.1(a);

Relevant Subordinated Instruments –means– Relevant–Perpetual–Subordinated–Instruments– and–Relevant–Term–Subordinated–Instruments; Relevant Term Subordinated Instrument –means– a–term–subordinated–instrument:–

  • a)– to–which–the–Issuer–is–a–party;

  • b)– for–which–the–Issuer–has–received– confirmation–in–writing–from–APRA–that,–as– at–the–date–of–its–issue,–APRA–does–not–object– to–the–AMP–group–using–the–proceeds–of–the– issue–of–the–instrument–to–fund–Tier–2–Capital– of–a–Regulated–Entity–within–the–AMP–group;– and–

  • c)– which,–in–accordance–with–its–terms–or– by–operation–of–law,–is–capable–of–being– converted–into–Ordinary–Shares–or–written-off– where–APRA–makes–a–determination–as– referred–to–in–clause–6.1(a),

and–includes–AMP–Notes–2;

Restriction Agreement means–an–agreement– which–is–required–to–be–concluded–under–Chapter– 9–of–the–ASX–Listing–Rules–or–is–voluntarily– concluded–between–the–Issuer–and–one–or– more–Holders;

Restricted Securities –has–the–same–meaning–as– in–the–ASX–Listing–Rules–and–extends–to–Notes– which–are–subject–to–voluntary–restrictions– by–agreement–between–the–Issuer–and–one–or– more–Holders;

Sale and Transfer Agent –means–each–nominee–(who– cannot–be–a–member–of–the–AMP–group–or–a–Related– Entity–of–the–Issuer)–appointed–by–the–Issuer–under– a–facility–established–for–the–sale–or–transfer–of– Ordinary–Shares–issued–on–Conversion–on–behalf–of:

  • a)– Holders–who–do–not–wish–to–receive–Ordinary– Shares–on–Conversion;–or–

  • b)– Holders–who–are–Ineligible–Holders,

in–accordance–with–clause–7.10.–For–the–avoidance– of–doubt–the–Issuer–may–appoint–more–than– one–Sale–and–Transfer–Agent–in–respect–of–the– Conversion–of–Notes;

Senior Creditors –means–all–creditors–of–the–Issuer– other–than:

  • a)– Holders;

  • b)– Pari–Passu–Subordinated–Creditors;–and

  • c)– Junior–Subordinated–Creditors;–

Solvency Condition –has–the–meaning–given–in– clause–2.2;

  • a–person–is Solvent –if:

  • a)– it–is–able–to–pay–its–debts–when–they–fall–due;– and–

  • b)– its–assets–exceed–its–liabilities,

in–each–case,–determined–on–an–unconsolidated– stand-alone–basis;

Special Resolution –means:

  • a)– –a–resolution–passed–at–a–meeting–of–the– Holders–duly–called–and–held–under–the– Meeting–Provisions:

  • i)– by–at–least–75%–of–the–persons–voting–on– a–show–of–hands–(unless–paragraph–(b)– below–applies);–or

  • ii)– if–a–poll–is–duly–demanded,–then–by–a– majority–consisting–of–at–least–75%–of–the– votes–cast;–or

  • b)– –a–resolution–passed–by–postal–ballot–or–written– resolution–under–the–Meeting–Provisions,– then–by–Holders–representing–(in–aggregate)– at–least–75%–of–the–principal–amount– outstanding–of–all–of–the–Notes;

Taxes –means–taxes,–levies,–imposts,–charges–and– duties–(including–stamp–and–transaction–duties)– imposed–by–any–authority–together–with–any– related–interest,–penalties,–fines–and–expenses–in– connection–with–them,–except–if–imposed–on,–or– calculated–having–regard–to,–the–net–income–of– the–Holder;–

152

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Appendix A Terms

Tax Event –means–that,–as–a–result–of–any–change– in,–or–amendment–to,–the–laws–in–force–in– Australia,–or–any–change–in–their–application–or– official–or–judicial–interpretation,–which–change– becomes–effective–after–the–Issue–Date:

  • a)– –payment–of–Interest–on–the–Notes–is–not,–or– may–not,–be–allowed–as–a–deduction–for–the– purposes–of–the–Issuer’s–Australian–income–tax– liability–calculation;–or

  • b)– there–is–a–risk–that–the–Issuer–would–be– exposed–to–other–adverse–tax–consequences– (other–than–the–Issuer–being–required–to– pay–an–Additional–Amount)–in–relation–to– the–Notes;–

Tax Legislation –means:

  • a)– the–Income–Tax–Assessment–Act–1936–of– Australia,–the–Income–Tax–Assessment– Act–1997–of–Australia–or–the–Taxation– Administration–Act–1953–of–Australia–(and–a– reference–to–any–section–of–the–Income–Tax– Assessment–Act–1936–includes–a–reference–to– that–section–as–rewritten–in–the–Income–Tax– Assessment–1997);–

VWAP –means–the–average–of–the–daily–volume– weighted–average–prices–of–Ordinary–Shares– traded–on–ASX–during–the–relevant–VWAP–Period,– subject–to–any–adjustments–made–under–clause– 7–(such–average–being–rounded–to–the–nearest– full–cent)–but–does–not–include–any–“Crossing”– transacted–outside–the–“Open–Session–State”–or– any–“Special–Crossing”–transacted–at–any–time,– each–as–defined–in–the–ASX–Settlement–Operating– Rules,–or–any–overseas–trades–pursuant–to–the– exercise–of–options–over–Ordinary–Shares;

VWAP Period means:

  • a)– in–the–case–of–the–Issue–Date–VWAP,–the– period–of–20–Business–Days–on–which–trading– in–Ordinary–Shares–took–place–immediately– preceding–(but–not–including)–the–Issue–Date;– or

  • b)– otherwise,–the–period–of–five–Business–Days–on– which–trading–in–Ordinary–Shares–took–place– immediately–preceding–(but–not–including)–the– Conversion–Date;–and

Written-off has–the–meaning–given–in–clause–6.3.

  • b)– any–other–law–setting–the–rate–of–income–tax– payable;–and–

  • c)– any–regulation–made–under–such–laws,

Terms means–these–terms–and–conditions;–

Tier 1 Capital –means–Tier–1–capital–as–defined– by–APRA–in–accordance–with–the–Prudential– Standards–from–time–to–time;

Tier 2 Capital –means–Tier–2–capital–as–defined– by–APRA–in–accordance–with–the–Prudential– Standards–from–time–to–time;

Trustee –means–The–Trust–Company–(Australia)– Limited–(ABN–21–000–000–993);

Trust Deed –means–the–deed–entitled–“AMP–Notes– 2–Trust–Deed”–between–the–Issuer–and–the–Trustee– and–dated–on–or–about–6–November–2013;

153

AMP Subordinated Notes 2

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Appendix B

Glossary

This appendix provides a glossary of key terms and abbreviations used throughout this prospectus and the attached, or accompanying, Application Forms. Defined terms used in the terms and conditions of AMP Subordinated Notes 2 ( Terms ) are set out in clause 13.2 of the Terms, which are included in Appendix A of this prospectus.

154

AMP Subordinated Notes 2

Appendix B Glossary

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----- Start of picture text -----

Term Means
----- End of picture text -----

A$ AMP Notes
ABN
ACCC
Accrued Interest Amount
Additional Amount
Additional Tier 1 Capital
AFS
AFS NZ
AFSL
AMP
AMP AAPH
AMP Bank
AMP board
AMPgroup
AMP Life
AMP Notes
AMP Notes 2 or AMP
Subordinated Notes
AMP Ordinary Share
AMPFP
AMPGFS
Application Form
APRA
ASIC
ASX
ASX Listing Rules
ATO
AUM
AUSTRAC		 TheAustraliandollartrancheoftheAMPNotes
Australianbusinessnumber
TheAustralianCompetitionandConsumerCommission
TheamountpayabletoanEligibleAMPNotesholderwhoparticipatesin
theReinvestmentOffer,whichwillbecalculatedonthebasisofthemarket
rateapplicabletotheA$AMPNoteson15November2013plusamarginof
4.75percentforthe33daysfromandincluding15November2013to,but
excluding,theIssueDate
AnadditionalamountpayablebyAMPunderclause11.2(b)oftheTerms
AdditionalTier1CapitalasdefinedbyAPRAinaccordancewithAPRA’s
prudentialstandardsfromtimetotime
AMPFinancialServices,oneofthetwoprimarybusinessunitsofAMPgroup
AFSNewZealand,oneoffourdivisionsofAFS
AustralianFinancialServicesLicence
AMPLimited(ABN49079354519)
AMPAAPHLimited(ABN78069123011)(formerlyknownasAXAAsia
PacificHoldingsLimited)
AMPBankLimited(ABN15081596009)
AMPLimitedboardofdirectors
AMPanditscontrolledentities
AMPLifeLimited(ABN84079300379)
TheAustraliandollarandNewZealanddollartranchesofthesubordinated
notesissuedbyAMPGFSin2009andguaranteedbyAMPGroupHoldings
Limited(ABN88079804676)
Thefullypaid,redeemable,subordinated,unsecuredandregistereddebt
obligationstobeissuedbyAMPunderthisprospectus
AfullypaidordinaryshareinthecapitalofAMP
AMPFinancialPlanningisaprimaryAFSdistributionchannel
AMPGroupFinanceServicesLimited(ABN95084247914)
Eachoftheapplicationformsattachedto,oraccompanying,thisprospectus
uponwhichanapplicationmaybemade,being:
A.theReinvestmentForm
B.theSecurityholderApplicationForm
C.theBrokerFirmApplicationForm
D.theelectronicapplicationformprovidedforonlineapplicationsunder
theReinvestmentOfferandSecurityholderOffer
AustralianPrudentialRegulationAuthority
AustralianSecuritiesandInvestmentsCommission
ASXLimited(ABN98008624691)orthesecuritiesmarketoperatedbyit,as
thecontextrequires
ThelistingrulesofASX
AustralianTaxOffice
Assetsundermanagement
AustralianTransactionsReportandAnalysisCentre

155

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Appendix B Glossary

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Term Means
----- End of picture text -----

Australian Tax Act
AXA SA
AXA SA Group
Banking Act
Bell Potter Securities
Bookbuild
Broker Firm
Application Form
Broker Firm Offer
Business Day
CHESS
CISA
Closing Date
Common Equity
Tier 1 Capital
Commonwealth Bank
Conversion
Conversion Date
Conversion Number
Corporations Act
Eligible AMP Notes holder		 IncomeTaxAssessmentActsof1936and1997
AXA,a_Société Anonyme_organisedunderthelawsofFrance,beingthehead
entityoftheAXASAGroup
TheglobalAXASAGroup
BankingAct1959ofAustralia
BellPotterSecuritiesLimited(ABN25006390772,AFSL243480)
Theprocessdescribedinsection7.4.1todeterminetheMargin
Theapplicationformatthebackoftheprospectustobeusedbyapplicants
undertheBrokerFirmOffer
TheinvitationmadetoclientsofSyndicatebrokerstoacquireAMPNotes2
underthisprospectus
A.adaywhichisabusinessdaywithinthemeaningoftheASXListing
Rules,and
B.forthepurposesofcalculationorpaymentofInterestoranyother
amount,adayonwhichbanksareopenforbusinessinSydney,
NewSouthWales
TheClearingHouseElectronicSub-registerSystemoperatedbyASX
SettlementPtyLimited(ABN49008505532)oranyotherapplicable
securitiestradingand/orclearancesystemonwhichtheAMPNotes2are
lodgedandtraded
SwissFederalActonCollectiveInvestmentSchemes
ThelastdatebywhichapplicationsmustbelodgedfortheOffer,expected
tobe5.00pm(Sydneytime)on9December2013(unlessvaried)
CommonEquityTier1CapitalasdefinedbyAPRAinaccordancewithAPRA’s
prudentialstandardsfromtimetotime
CommonwealthBankofAustralia(ABN48123123124,AFSL234945)
TheconversionofallorsomeAMPNotes2intoAMPOrdinaryShares
inaccordancewiththeTerms.ConvertandConvertedshallhave
correspondingmeanings
ThedateonwhichaNon-ViabilityTriggerEventoccurs,whetherornotthat
dayisaBusinessDay
Themeaninggiveninclause7.1(a)oftheTerms
CorporationsAct2001ofAustralia
AholderofAMPNoteswhois:
A.aregisteredholderofA$AMPNotestradingonASXonthe
ReinvestmentRecordDate,being7.00pm(Sydneytime)on
4November2013
B.shownontheregisterofAMPNotesashavinganaddressinAustralia
(oranotherjurisdictiontowhichAMPdeterminedtoextendthe
ReinvestmentOffer),and
C.notintheUnitedStatesoractingasanomineeforapersoninthe
UnitedStatesorotherwisepreventedfromreceivingtheReinvestment
OfferorAMPNotes2underthelawsofanyjurisdiction,asdetermined
byAMP

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Appendix B Glossary

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Term Means
----- End of picture text -----

Eligible Securityholder
Event of Default
Expiry date
Exposure Period
Face Value
FATCA
FINMA
FOFA
Foreign Holder
GST
HIN
Holder
Holder Resolution
Holding statement
IGA
Inability Event
Ineligible Holder
Institutional Investor
Institutional Offer
Interest		 A.AholderofAMPOrdinarySharesat7.00pm(Sydneytime)on
4November2013,whoisshownontheregisterofAMPOrdinaryShares
ashavinganaddressinAustraliaandnotintheUnitedStates,actingasa
nomineeforapersonintheUnitedStates,or
B.anEligibleAMPNotesholder
Themeaninggiveninclause8.1oftheTerms
Thedate13monthsafterthedateofthedatetheprospectusislodged,
being6December2014
Theseven-dayperiodafterthedatetheoriginalprospectusislodged
withASICduringwhichtheCorporationsActprohibitstheprocessing
ofapplications
TheprincipalamountofeachNote,beingA$100.00
TheForeignAccountTaxComplianceActprovisions,sections1471through
1474oftheUnitedStatesInternalRevenueCode,asmorefullydefinedin
clause13.2oftheTerms
SwissFinancialMarketSupervisoryAuthority
ReferstotheamendmentstotheCorporationsActandCorporations
Regulationscollectivelyreferredtoasthe‘FutureofFinancialAdvice
Reforms’whichwereannouncedinApril2010andwhichgenerallytook
effecton1July2013(subjecttotransitionalarrangements)
Themeaninggiventoitinclause13.2oftheTerms
Goodsandservicestax
Holderidentificationnumber
InrespectofanAMPNote2,thepersonwhosenameisenteredonthe
RegisterastheholderofthatAMPNote2
Themeaninggiveninclause13.2oftheTerms
AstatementissuedtoHoldersbytheRegistrarwhichsetsoutdetailsof
NotesallottedtothemundertheOffer
AproposedIntergovernmentalAgreement(IGA)betweenAustraliaandthe
UnitedStatesregardingtaxation.
TheIssuerispreventedbyapplicablelaw,ororderofanycourt,oractionof
anygovernmentauthority(includingregardingtheinsolvency,winding-up
orotherexternaladministrationoftheIssuer)oranyotherreasonfrom
ConvertingtheAMPNotes2
Themeaninggiveninclause13.2oftheTerms
AninvestortowhomoffersoforinvitationsinrespectofAMPNotes2can
bemadewithouttheneedforaprospectus(orotherformality,otherthan
aformalitywhichAMPiswillingtocomplywith),includinginAustralia
topersonstowhomoffersoforinvitationsinrespectofsecuritiescan
bemadewithouttheneedforaprospectusunderChapter6Dofthe
CorporationsActandwhowasinvitedbytheJointleadmanagerstobidfor
AMPNotes2intheBookbuild,providedthatsuchinvestorwasnotinthe
UnitedStatesoractingasanomineeforapersonintheUnitedStatesor
otherwisepreventedfromreceivingtheInstitutionalOfferorAMPNotes2
underthelawsofanyjurisdiction,asdeterminedbyAMP
TheinvitationbytheJointleadmanagerstoInstitutionalInvestorstobidfor
AMPNotes2intheBookbuild
InterestpayableoneachAMPNote2assetoutinclause3.1oftheTerms

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Appendix B Glossary

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----- Start of picture text -----

Term Means
----- End of picture text -----

Interest Payment Dates
Interest Period
Interest Rate
IRS
IWT
Issue Date
Issue Date VWAP
Issue Price
Issuer
Joint lead managers
J.P. Morgan
LAGIC
Life Insurance Act
MRR
Margin
Market Rate
Mature
Maturity Date
Maturity Date
(AMP Note)
Maximum Conversion
Number
MUTB
New Treaties
NMLA
Non-Viability
Determination
Non-Viability
Trigger Event
NZX		 InrespectofanAMPNote2,18March,18June,18Septemberand
18DecemberineachyearandtheMaturityDateoranyearlierredemption
date,withthefirstInterestPaymentDatebeing18March2014
ForanAMPNote2,eachperiodbeginningon(andincluding)anInterest
PaymentDateandendingon(butexcluding)thenextInterestPaymentDate.
However:
A.thefirstInterestPeriodcommenceson(andincludes)theIssueDate,and
B.thefinalInterestPeriodendson(butexcludes)theMaturityDateor
earlierredemptiondate
ThesumoftheMarketRateonthefirstBusinessDayoftherelevant
InterestPeriod,plustheMargin,expressedasapercentageperannum
UnitedStatesInternalRevenueService
Interestwithholdingtax
ThedateonwhichAMPNotes2areissued,expectedtobe18December2013
TheVWAPduringtheperiodof20BusinessDaysonwhichtradinginAMP
OrdinarySharestookplaceimmediatelyprecedingbutnotincludingthe
IssueDate,asadjustedinaccordancewiththeTerms
TheinitialFaceValueofanAMPNote2,beingA$100
AMP
EachofCommonwealthBank,J.P.MorganandUBS
J.P.MorganAustraliaLimited(ABN52002888011,AFSL238188)
APRA’srevisedcapitalstandardsforregulatedgeneralinsurersandlife
insurersisknownasLAGIC
TheLifeInsuranceAct1995(Cth)
Minimumregulatoryrequirement
ThemarginonAMPNotes2whichis2.65percent
Themeaninggiveninclause3.2oftheTerms
Mature,oneofthefourdivisionsofAFS
18December2023
ThematuritydateofAMPNotesissuedin2009being1April2019
Themeaninggiveninclause7.1(a)oftheTerms
MitsubishiUFJTrustandBankingCorporation
Signedneworamendeddoubletaxconventionsenteredintobythe
AustralianGovernment
TheNationalMutualLifeAssociationofAustralasiaLimited
ABN72004020437
WhenAPRAprovidesawrittendeterminationtoAMPthattheconversion
orwrite-offofsomeorallRelevantSubordinatedInstruments(which
includesAMPNotes2)isnecessarybecausewithouttheconversionor
write-off,orwithoutapublicsectorinjectionofcapitalinto,orequivalent
capitalsupportwithrespectto,AMP,APRAconsidersthatAMPwould
becomenon-viable
Themeaninggiveninclause6.1oftheTerms
NewZealandStockExchange

158

AMP Subordinated Notes 2

Appendix B Glossary

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----- Start of picture text -----

Term Means
----- End of picture text -----

NZ$ AMP Notes
Offer
Offer Management
Agreement
Offer Period
Opening Date
Ord Minnett
Original prospectus
Prospectus
RBA
Record Date
Register
Registry
Regulated Entity
Regulatory Event
Reinvestment Date
Reinvestment Form
Reinvestment Offer
Reinvestment Record
Date
Relevant Perpetual
Subordinated Instrument
Relevant Subordinated
Instruments
Relevant Term
Subordinated Instrument
REs		 TheNewZealanddollartrancheoftheAMPNotes
TheinvitationunderthisprospectusmadebyAMPtopersonstosubscribe
forAMPNotes2andincorporatestheReinvestmentOffer,Securityholder
Offer,InstitutionalOfferandBrokerFirmOffer
TheoffermanagementagreemententeredintobetweenAMPandtheJoint
leadmanagers,asdescribedinsection10.6
TheperiodfromtheOpeningDatetotheClosingDate24
ThedaytheOfferopens,being14November2013
OrdMinnettLimited(ABN86002733048,AFSLNo.237121)
Theprospectusdated6November2013andlodgedwithASIConthatdate,
whichthisprospectusreplaces
Thisdocument(includingtheelectronicformofthisprospectus),andany
supplementaryorreplacementprospectusinrelationtotheOffer
TheReserveBankofAustralia
ForpaymentofInterest:
A.subjecttoparagraph(B)below,thedatewhichiseightcalendardays
beforetheapplicableInterestPaymentDate
B.suchotherdateasisdeterminedbytheIssuerinitsabsolutediscretion
andcommunicatedtoASXnotlessthaneightcalendardaysbeforethe
RecordDatewhichwouldhavebeendeterminedunderparagraph(A)
above,or
C.suchotherdateasmayberequiredby,oragreedwith,ASX
TheregisterofAMPNotes2,includinganysub-registerorbranchregister,of
holdersofAMPNotes2establishedandmaintainedby,oronbehalfofAMP
ComputershareInvestorServicesPtyLimited(ABN48078279277)orany
otherpersonappointedbyAMPtomaintaintheRegister
Themeaninggiveninclause13.2oftheTerms
Themeaninggiveninclause13.2oftheTerms
Thedateonwhich:
A.theA$AMPNotesofthoseEligibleAMPNotesholderswhohaveelected
toparticipateintheReinvestmentOfferwillbepurchasedbyAMP,and
B.AMPNotes2willbeissuedtosuchEligibleAMPNotesholders
ThepersonalisedapplicationformprovidedtoEligibleAMPNotesholders
forapplicationsundertheReinvestmentOfferandtheSecurityholderOffer
TheoffertoEligibleAMPNotesholderstoapplyforAMPNotes2andto
fundtheirsubscriptionforAMPNotes2bysellingtoAMPsomeorallof
theirA$AMPNotes
7.00pm(Sydneytime)on4November2013
Themeaninggiveninclause13.2oftheTerms
RelevantPerpetualSubordinatedInstrumentsandRelevantTerm
SubordinatedInstruments
Themeaninggiveninclause13.2oftheTerms
Responsibleentities
  • 24– –AMP–and–the–Joint–lead–managers–may,–in–their–absolute–discretion,–close–the–Offer–early–or–extend–the–Offer–Period– without–notice.–AMP–may–also–withdraw–the–Offer–at–any–time–before–AMP–Notes–2–are–issued.

159

AMP Subordinated Notes 2

Appendix B Glossary

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----- Start of picture text -----

Term Means
----- End of picture text -----

Sale and Transfer Agent
Securityholder Applicant
Securityholder
Application Form
Securityholder Offer
Senior Creditors
SMSF
Solvency Condition
Solvent
Special Resolution
Specified Countries
SRN
Step-Up Date
Syndicate broker
Tax Event
Terms
TFN
Tier 1 Capital
Tier 2 Capital
Trust Deed
Trustee
Trustee Default
UBS
US Person
US Securities Act		 Themeaninggiveninclause13.2oftheTerms
AnEligibleSecurityholderwhoappliesforAMPNotes2underthe
SecurityholderOffer
ThepersonalisedapplicationformprovidedtoEligibleSecurityholders
(otherthanEligibleAMPNotesholders)forapplicationsunderthe
SecurityholderOffer
TheinvitationtoEligibleSecurityholderstoapplyforAMPNotes2under
thisprospectus
AllcreditorsofAMPotherthan:
A.Holders
B.creditorsofAMPwhoseclaimsariseunderinstrumentsissuedas
RelevantTermSubordinatedInstruments,and
C.creditorsofAMPwhoseclaimsagainstAMPariseunderinstruments
issuedbyAMPasRelevantPerpetualSubordinatedInstrumentsor
whoseclaimsareinrespectofashareholdingincludingtheclaims
describedinsection563AAandinsection563AoftheCorporationsAct
Selfmanagedsuperfunds
Themeaninggiveninclause2.2oftheTerms
Thatapersonis:
A.abletopayitsdebtswhentheyfalldue,and
B.itsassetsexceeditsliabilities,
ineachcase,determinedonanunconsolidatedstand-alonebasis
Themeaninggiveninclause13.2oftheTerms
CountriestowhichNewTreatiesapply
Securityholderreferencenumber
Thedateonwhichthemargintobeusedincalculatingtheinterestpayable
onAMPNoteswillincrease,being15May2014
AnyoftheJointleadmanagersandanyseniorco-manager,co-managers
andbrokersappointedbytheJointleadmanagerswiththeapprovalofAMP
Themeaninggiveninclause13.2oftheTerms
ThetermsandconditionsofAMPNotes2assetoutinappendixB
Taxfilenumber
Tier1capitalasdefinedbyAPRAinaccordancewithAPRA’sprudential
standardsfromtimetotime
Tier2capitalasdefinedbyAPRAinaccordancewithAPRA’sprudential
standardsfromtimetotime
Thedeedentitled‘AMPNotesTrustDeed’betweentheIssuerandthe
Trustee,datedonorabout6November2013
TheTrustCompany(Australia)Limited(ABN21000000993)
TheTrustee’sfraud,grossnegligenceorwilfuldefaultorbreachofsection
283DA(a),(b)or(c)oftheCorporationsAct
UBSAG,AustraliaBranch(ABN47088129613,AFSLNo.231087)
ThesamemeaningasinRegulationSundertheUSSecuritiesAct
TheUnitedStatesSecuritiesActof1933

160

AMP Subordinated Notes 2

Appendix B Glossary

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----- Start of picture text -----

Term Means
----- End of picture text -----

Term Means
VWAP
VWAP Period
Website
WM
WP
Written-off		 Broadly,theaverageofthedailyvolumeweightedaveragepricesofAMP
OrdinarySharestradedonASXduringtherelevantVWAPPeriod.Forthefull
definition,refertoclause13.2oftheTerms
A.InthecaseoftheIssueDateVWAP,theperiodof20BusinessDayson
whichtradinginAMPOrdinarySharestookplaceimmediatelypreceding
(butnotincluding)theIssueDate,or
B.otherwise,theperiodoffiveBusinessDaysonwhichtradinginAMP
OrdinarySharestookplaceimmediatelypreceding(butnotincluding)
theConversionDate
ampnotes2.com.au
AustralianWealthManagement,oneofthefourdivisionsofAFS
AustralianWealthProtection,oneofthefourdivisionsofAFS
Themeaninggiveninclause6.3oftheTerms

161

AMP Subordinated Notes 2

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Application form

AMP Subordinated Notes 2

162

AMP Subordinated Notes 2

This–page–has–been–left–blank–intentionally.

163

AMP Subordinated Notes 2

Return your form to your broker:

AMP Limited ABN 49 079 354 519

M Broker Firm Offer applicants must contact their broker for information on how to submit this Application Form and application payment.

For all enquiries:

T Australia 1300 338 164 New Zealand 0800 444 152 Other countries +61 3 9415 4018 Monday to Friday 8.30am to 5.30pm (Sydney time) W ampnotes2.com.au

Broker Firm Offer Application Form

Broker Firm Offer closes 5.00pm (Sydney time) on Monday 9 December 2013

This Application Form relates to the Broker Firm Offer by AMP Limited (AMP) of AMP Subordinated Notes 2 (AMP Notes 2) made under the prospectus lodged with the Australian Securities and Investments Commission on 6 November 2013 (prospectus) (and any replacement or supplementary prospectus). The prospectus will expire 13 months after the date of the prospectus. To meet the requirements of the Corporations Act 2001 (Cth), this Application Form must not be distributed unless included in, or accompanied by, the prospectus. Capitalised terms have the meaning given to them in the prospectus.

If you need any assistance in deciding whether to apply for AMP Notes 2 Offer under the Broker Firm Offer, please contact your broker or other professional adviser without delay. The prospectus contains detailed information about investing in AMP Notes 2. You should read the entire prospectus carefully before completing this Application Form. While the prospectus is current, AMP will send paper copies of the prospectus, any replacement or supplementary prospectus and the Application Form, on request and without charge.

By applying under the Broker Firm Offer, you make the acknowledgements, declarations, representations and warranties set out in section 10.10 of the prospectus.

Step 1: AMP Subordinated Notes 2 applied for

Enter the number of AMP Notes 2 you wish to apply for and application payment. The application must be for a minimum of 50 AMP Notes 2 (A$5,000.00). Applications for greater than 50 AMP Notes 2 must be in multiples of 10 AMP Notes 2 (A$1,000.00). Enter the amount of the application payment. To calculate this amount, multiply the number of AMP Notes 2 applied for by the issue price which is A$100.00.

Step 2: Applicant name(s) and postal address

Enter the full name(s) you wish to appear on the AMP Notes 2 register. This must be either your own name or the name of a company. Up to three joint applicants may register. You should refer to the table overleaf for the correct forms of registrable title(s). Applications using the wrong form of names may be rejected. CHESS participants should complete their name identically to that presently registered in CHESS. Enter your postal address for all correspondence. All communications to you from the Registry will be mailed to the person(s) and address as shown. For joint applicants, only one address can be entered. Enter your contact name, telephone number and email address. This information may be used to communicate other matters to you subject to AMP’s privacy statement. This is not compulsory but will assist us if we need to contact you.

Step 4: Make your payment

Applicants under the Broker Firm Offer must lodge their Application Form and application payment with the relevant broker in accordance with the relevant broker’s directions in order to receive their firm allocation. Applicants under the Broker Firm Offer must not return this Application Form or application payment to the Registry. Application payments for the Broker Firm Offer must be made payable in accordance with the directions of the broker from whom the applicant received a firm allocation.

AMP adviser number

If you are applying as a client of a representative of AMP Financial Planning Pty Limited, Hillross Financial Services Limited (including Arrive Wealth Management), Ipac Securities Limited, Genesys Wealth Advisers Limited, Charter Financial Planning Limited, SMSF Advice Pty Limited or Quadrant Securities Pty Ltd you acknowledge that you have read the Supplementary Financial Services Guide (‘SFSG’) which explains their role and remuneration in relation to your application.

Turn over to complete the form è

Step 3: CHESS holdings

AMP will apply to ASX for AMP Notes 2 to participate in CHESS, operated by ASX Settlement Pty Limited, a wholly owned subsidiary of ASX. AMP will operate an electronic CHESS subregister of AMP Notes 2 and an electronic issuer sponsored subregister of AMP Notes 2.

Together, the two subregisters will make up AMP’s principal register of AMP Notes 2. AMP will not be issuing certificates to applicants in respect of AMP Notes 2 allotted.

If you are a CHESS participant (or are sponsored by a CHESS participant) and you wish to hold AMP Notes 2 allotted to you under this application on the CHESS subregister, enter your CHESS HIN.

Otherwise, leave the section blank and on allotment you will be sponsored by AMP and a Securityholder Reference Number (SRN) will be allocated to you.

Please note that if you supply a CHESS HIN but the name and address details on your Application Form do not correspond exactly with the registration details held at CHESS, your application will be deemed to be made without the CHESS HIN, and any AMP Notes 2 issued will be held on the issuer sponsored subregister.

® Registered to bpay Pty Ltd ABN 69 079 137 518

Broker Firm Offer Application Form

AMP adviser number (please refer to notes within Step 4 overleaf)

STEP 1 Enter the number of AMP Subordinated Notes 2 you wish to apply for and application payment

I/we apply for: Issue price at: Application payment: A$100 A$ .[0] 0 STEP 2 Applicant names(s) and postal address

STEP 2 STEP 2 Applicant names(s Applicant names(s Applicant names(s Applicant names(s Applicant names(s Applicant names(s Applicant names(s Applicant names(s Applicant names(s Applicant names(s ) and postal address ) and postal address ) and postal address ) and postal address ) and postal address ) and postal address ) and postal address ) and postal address ) and postal address ) and postal address ) and postal address ) and postal address ) and postal address ) and postal address
Individual / joint applications - refer to naming standards at the end of this page for correct form of registrable title(s)
Title or company Name Given name(s) Surname
Joint applicant 2 or account designation
Joint applicant 3 or account designation
Postal Address
Unit Street number Street name or PO box
Street name or PO box (continued)
City/Suburb/Town State Postcode
Contact Details
( )
Contact name

Phone number
Email address
STEP 3 CHESS holdings only -
supply your Holder Identifcation		 Number X
STEP 4 Cheque(s) must be crossed ‘Not Negotiable’ and made payable in accordance with the directions of your broker
A$
Drawer Cheque number BSB number Account number Amount of cheque

Privacy statement

Personal information is collected on this form by Computershare as registrar for AMP, for the purpose of maintaining registers of securityholders, facilitating distribution payments and other corporate actions and communications. Your personal information may be disclosed to our related bodies corporate, to external service companies such as print or mail service providers, or as otherwise permitted by law. If you would like details of your personal information held by Computershare, or you would like to correct information that is inaccurate, incorrect or out of date, please contact Computershare. In accordance with the Corporations Act 2001, you may be sent material (including marketing material) approved by AMP in addition to general corporate communications. You may elect not to receive marketing material by contacting Computershare using the details provided above or email [email protected].

Correct forms of registrable titles

Applications must be made in the name(s) of natural persons, companies or other legal entities in accordance with the Corporations Act. At least one full given name and surname is required for each natural person. The name of the beneficial owner or any other registrable name may be included by way of an account designation or completed as described in the correct forms of registrable title(s) below.

completed as described in the correct forms of registrable title(s) below.
Type of investor Correct form of registration Incorrect form of registration
Individual - Usegiven name(s)in full, not initials Mr John Alfred Smith J.A Smith
Joint - Usegiven name(s)in full, not initials Mr John Alfred Smith & Mrs Janet Marie Smith John Alfred & Janet Marie Smith
Company- Use companytitle, not abbreviations ABC PtyLtd ABC P/L; ABC Co
Trusts - Use trustee(s) personal name(s) Ms Penny Smith Penny Smith Family Trust
- Do not use the name of the trust
Deceased Estates - Use executor(s) personal name(s) Mr Michael Smith Estate of Late John Smith
- Do not use the name of the deceased
Minor (a person under the age of 18) Mr John Alfred Smith Peter Smith
- Use the name of a responsible adult with an appropriate designation
Partnerships - Use partners personal name(s) Mr John Smith & Mr Michael Smith John Smith & Son
- Do not use the name of thepartnership
Clubs/Unincorporated Bodies/Business Names Mrs Janet Smith ABC Tennis Association
- Use offce bearer(s) personal name(s)
- Do not use the name of the club etc
Superannuation Funds John Smith Pty Ltd John Smith Pty Ltd
- Use the name of trustee of the fund Superannuation Fund
  • Do not use the name of the fund

Corporate directory

Issuer

AMP Limited

Level 24 33 Alfred Street Sydney NSW 2000

Australian legal and tax adviser

King & Wood Mallesons

Level 50, Bourke Place 600 Bourke Street Melbourne VIC 3000

Structuring adviser

UBS AG, Australia Branch

Level 16, Chifley Tower 2 Chifley Square Sydney NSW 2000

Joint lead managers

Commonwealth Bank of Australia

Ground Floor, Tower 1 201 Sussex Street Sydney NSW 2000

J.P. Morgan Australia Limited

Level 18, J.P. Morgan House 85 Castlereagh Street Sydney NSW 2000

Co-managers

Bell Potter Securities Limited

Level 38, Aurora Place 88 Phillip Street Sydney NSW 2000

Ord Minnett Limited

Level 8 255 George Street Sydney NSW 2000

UBS AG, Australia Branch

Level 16, Chifley Tower 2 Chifley Square Sydney NSW 2000

Registry

Trustee

Computershare Investor Services

The Trust Company (Australia) Limited

Level 4 60 Carrington Street Sydney NSW 2000

Level 15 20 Bond Street Sydney NSW 2000

How to contact us

AMP Notes 2 information line: 1300 338 164 (within Australia) 0800 444 152 (within New Zealand) +61 3 9415 4018 (outside Australia and New Zealand) Monday to Friday, 8.30am to 5.30pm (Sydney time)

Website

ampnotes2.com.au

166

AMP Subordinated Notes 2

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AMP Notes 2 information line

1300 338 164 (within Australia) 0800 444 152 (within New Zealand) +61 3 9415 4018 (outside Australia and New Zealand) Monday to Friday 8.30am to 5.30pm (Sydney time)

Website ampnotes2.com.au

Return your form:

AMP Limited ABN 49 079 354 519

  • M AMP Notes 2 Offer - Securityholder Offer c/- Computershare Investor Services GPO Box 505 Melbourne VIC 3001

For all enquiries:

000001 000 1301011221012102012221332120133322113 SAM MR JOHN SMITH 1 FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

  • T Australia 1300 338 164 New Zealand 0800 444 152 Other countries +61 3 9415 4018 Monday to Friday 8.30am to 5.30pm (Sydney time)

  • W ampnotes2.com.au

Securityholder Application Form

Securityholder Offer closes 5.00pm (Sydney time) on Monday 9 December 2013

This Application Form relates to the Securityholder Offer by AMP Limited (AMP) of AMP Subordinated Notes 2 (AMP Notes 2) made under the prospectus lodged with the Australian Securities and Investments Commission on 6 November 2013 (prospectus) (and any replacement or supplementary prospectus). The prospectus will expire 13 months after the date of the prospectus. To meet the requirements of the Corporations Act 2001 (Cth), this Application Form must not be distributed unless included in, or accompanied by, the prospectus. Capitalised terms have the meaning given to them in the prospectus.

If you need any assistance in deciding whether to apply for AMP Notes 2 under the Securityholder Offer, please contact your broker or other professional adviser without delay. The prospectus contains detailed information about investing in AMP Notes 2. You should read the entire prospectus carefully before completing this Application Form. While the prospectus is current, AMP will send paper copies of the prospectus, any replacement or supplementary prospectus and the Application Form, on request and without charge.

By applying under the Securityholder Offer, you make the acknowledgements, declarations, representations and warranties set out in section 10.10 of the prospectus.

Step 1: Registration name

The AMP Notes 2 will be registered in the name(s) printed on this Application Form.

Please check the details provided and update your address via Computershare Investor Services Pty Limited (Computershare) at investorcentre.com if any of the details are incorrect.

If you have a CHESS sponsored holding, please contact your controlling participant to notify a change of address.

Step 2: Make your payment

Enter the number of AMP Notes 2 you wish to apply for. The application must be for a minimum of 50 AMP Notes 2 (A$5,000) and after that in multiples of 10 AMP Notes 2 (A$1,000).

Enter the amount of application payment. To calculate this amount, multiply the number of AMP Notes 2 applied for by the issue price which is A$100.00.

Applications and application payments under the Securityholder Offer must be received by the Registry by no later than 5.00pm (Sydney time) on Monday 9 December 2013. Application payments can be made by cheque(s), bank draft(s) and/or money order(s) in Australian dollars drawn on an Australian branch of a financial institution. It should be made payable to ‘AMP Notes 2 Offer’ and if you are making a payment by cheque it must be crossed ‘Not Negotiable’.

Cheque payments will be processed on the day of receipt and as such sufficient cleared funds must be held in your account as cheques returned unpaid will not be re-presented and may result in your application being rejected. Cash will not be accepted and receipts for payment will not be forwarded. Funds cannot be debited directly from your account.

If you wish to pay for AMP Notes 2 by Bpay®, log onto ampnotes2.com.au and complete the online Application Form.

Step 3: Contact details

This is not compulsory but will assist us if we need to contact you. This information may be used to communicate other matters to you subject to AMP’s privacy statement.

AMP adviser number

If you are applying as a client of a representative of AMP Financial Planning Pty Limited, Hillross Financial Services Limited (including Arrive Wealth Management), Ipac Securities Limited, Genesys Wealth Advisers Limited, Charter Financial Planning Limited, SMSF Advice Pty Limited or Quadrant Securities Pty Ltd you acknowledge that you have read the Supplementary Financial Services Guide (SFSG) which explains their role and remuneration in relation to your application.

AMP adviser number (please refer to the notes above)

Turn over to complete the form è

® Registered to bpay Pty Ltd ABN 69 079 137 518

Securityholder Application Form

==> picture [145 x 35] intentionally omitted <==

X 123456789 IND

STEP 1 Registration name

Registration name: MR JOHN SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

For your security keep your SRN/HIN confidential.

Entitlement No: 12345678

Change of address:

Make the correction in the space to the left.

STEP 2

Make your payment

==> picture [25 x 35] intentionally omitted <==

To pay by Bpay, complete your personalised Application Form online by visiting ampnotes2.com.au and following the instructions.

Pay by cheque, bank draft or money order:

  • Make your cheque, bank draft or money order payable to ‘AMP Notes 2 Offer’ and crossed ‘Not Negotiable’. Return your cheque, bank draft or money order with the below slip to:

AMP Notes 2 Offer - Securityholder Offer c/- Computershare Investor Services Pty Limited GPO Box 505 Melbourne VIC 3001

Lodgement of your application

If you are paying by cheque, bank draft or money order the slip below must be received by Computershare by no later than 5.00pm (Sydney time) on Monday 9 December 2013. You should allow sufficient time for this to occur. A reply paid envelope is enclosed for securityholders in Australia. Neither Computershare nor AMP accepts any responsibility if you lodge the slip below at any other address or by any other means.

Privacy statement

Personal information is collected on this form by Computershare as registrar for AMP, for the purpose of maintaining registers of securityholders, facilitating distribution payments and other corporate actions and communications. Your personal information may be disclosed to our related bodies corporate, to external service companies such as print or mail service providers, or as otherwise permitted by law. If you would like details of your personal information held by Computershare, or you would like to correct information that is inaccurate, incorrect or out of date, please contact Computershare. In accordance with the Corporations Act 2001, you may be sent material (including marketing material) approved by AMP in addition to general corporate communications. You may elect not to receive marketing material by contacting Computershare using the details provided above or email [email protected].

Detach here

==> picture [507 x 193] intentionally omitted <==

----- Start of picture text -----

STEP 2 Application payment details Entitlement No: 12345678
MR JOHN SAMPLE
Number of AMP FLAT 123
Notes 2 applied: 123 SAMPLE STREET
THE SAMPLE HILL
Issue price at A$100.00
A$ 0 SAMPLE ESTATE
Application payment: [.] [0]
SAMPLEVILLE VIC 3030
Payment must be received by 5.00pm (Sydney time) on Monday 9 December 2013
Cheque details
A$
Drawer Cheque number BSB number Account number Amount of cheque
STEP 3 Contact details
Contact Daytime Email
name telephone address
----- End of picture text -----

123456789123456789+0000000001-3051+14

Return your form:

==> picture [46 x 7] intentionally omitted <==

----- Start of picture text -----

AMP Limited
----- End of picture text -----

  • M AMP Notes 2 Offer - Reinvestment Offer c/- Computershare Investor Services GPO Box 2115 Melbourne VIC 3001

ABN 49 079 354 519

For all enquiries:

000001 000 1301011221012102012221332120133322113 SAM MR JOHN SMITH 1 FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

  • T Australia 1300 338 164 New Zealand 0800 444 152 Other countries +61 3 9415 4018 Monday to Friday 8.30am to 5.30pm (Sydney time)

  • W ampnotes2.com.au

Controlling CHESS participant as at 4 November 2013:

Reinvestment Form

Reinvestment Offer closes 5.00pm (Sydney time) on Monday 9 December 2013

This Application Form relates to the Reinvestment Offer by AMP Limited (AMP) of AMP Subordinated Notes 2 (AMP Notes 2) made under the prospectus lodged with the Australian Securities and Investments Commission on 6 November 2013 (prospectus) (and any replacement or supplementary prospectus). This Application Form may also be used to apply for additional AMP Notes 2 or to apply under the Securityholder Offer for AMP Notes 2. Please refer to section 6.2 of the prospectus for more details of your options.

The prospectus will expire 13 months after the date of the prospectus. To meet the requirements of the Corporations Act 2001 (Cth), this Application Form must not be distributed unless included in, or accompanied by, the prospectus. Capitalised terms have the meaning given to them in the prospectus.

If you need any assistance in deciding whether to apply for AMP Notes 2, please contact your broker or other professional adviser without delay. The prospectus contains detailed information about investing in AMP Notes 2. You should read the entire prospectus carefully before completing this Application Form. While the prospectus is current, AMP will send paper copies of the prospectus, any replacement or supplementary prospectus and the Application Form, on request and without charge.

By submitting this Application Form, you make the acknowledgements, declarations, representations and warranties set out in section 10.10 of the prospectus.

If you apply to participate in the Reinvestment Offer, you are taken to agree to a holding lock being placed on the A$ AMP Notes you have elected to sell, pending completion of the Reinvestment Offer - but it is your obligation to ensure that you do not transfer those A$ AMP Notes.

You may instruct your controlling participant (indicated above) to submit your application or alternatively you can send your Application Form to Computershare Investor Services Pty Limited (Computershare) and Computershare will contact your controlling participant on your behalf.

Step 1: Registration name & securityholder details

The AMP Notes 2 will be registered in the name(s) printed on this Application Form.

Please check the details provided and update your address via Computershare Investor Services Pty Limited (Computershare) at www.investorcentre.com if any of the details are incorrect.

Step 2: Election to participate in the Reinvestment Offer

Under the Reinvestment Offer, you may elect to sell some or all of your A$ AMP Notes to AMP to fund your subscription for AMP Notes 2. If you choose not to participate in the Reinvestment Offer, you may still apply for AMP Notes 2 in Step 3.

Option A: Full reinvestment

Eligible AMP Notes holders may apply to sell all of their A$ AMP Notes to AMP to fund their subscription for AMP Notes 2. To choose this option mark Option A overleaf.

Option B: Partial reinvestment

Eligible AMP Notes holders may apply to sell some of their A$ AMP Notes to AMP to fund their subscription for AMP Notes 2. To choose this option you must specify the number of A$ AMP Notes to be sold in Option B overleaf. If you hold less than 50 A$ AMP Notes, and wish to participate in the Reinvestment Offer, you must apply to sell all your A$ AMP Notes to AMP under Option A. If you held more than 50 A$ AMP Notes, then you must apply to sell a minimum of 50 A$ AMP Notes to AMP to participate in the Reinvestment Offer.

Step 3: Apply for additional AMP Subordinated Notes 2 or under Securityholder Offer

If you wish to apply for additional AMP Notes 2 or apply under the Securityholder Offer for AMP Notes 2, enter the number of AMP Notes 2 you wish to apply for and application payment. The application must be for a minimum of 50 AMP Notes 2 (A$5,000.00). Applications for greater than 50 AMP Notes 2 must be in multiples of 10 AMP Notes 2 (A$1,000.00). To calculate the amount of your application payment, multiply the number of AMP Notes 2 applied for by the issue price which is A$100.00. Applications and application payments must be received by the Registry by no later than 5.00pm (Sydney time) on Monday 9 December 2013. Application payments for applications made using this Application Form can be made by cheque(s), bank draft(s) and/or money order(s) in Australian dollars drawn on an Australian branch of a financial institution. It should be made payable to ‘AMP Notes 2 Offer’ and if you are making a payment by cheque it must be crossed ‘Not Negotiable’.

Cheque payments will be processed on the day of receipt and as such sufficient cleared funds must be held in your account as cheques returned unpaid will not be re-presented and may result in your application being rejected. Cash will not be accepted and receipts for payment will not be forwarded. Funds cannot be debited directly from your account.

If you wish to pay for AMP Notes 2 by Bpay®, log onto ampnotes2.com.au and complete the online Application Form.

As a CHESS holder you may apply for AMP Notes 2 online but cannot apply to sell your existing A$ AMP Notes to AMP online.

AMP adviser number (for applications under Step 3 only)

If you are applying as a client of a representative of AMP Financial Planning Pty Limited, Hillross Financial Services Limited (including Arrive Wealth Management), Ipac Securities Limited, Genesys Wealth Advisers Limited, Charter Financial Planning Limited, SMSF Advice Pty Limited or Quadrant Securities Pty Ltd, you acknowledge that you have read the Supplementary Financial Services Guide (SFSG) which explains their role and remuneration in relation to your application.

Step 4: Contact details

This is not compulsory but will assist us if we need to contact you. This information may be used to communicate other matters to you subject to AMP’s privacy statement.

Application through Broker Firm Offer

If you are a client of a Syndicate broker and have been contacted by them regarding the Reinvestment Offer, you should contact your Syndicate broker for information about how and when to lodge this Application Form. Generally you will lodge this Application Form with your Syndicate broker in accordance with their instructions. If you have been offered a firm allocation by a Syndicate broker, you must return this form directly to that broker in accordance with their instructions.

Applications must be received by no later than 5.00pm (Sydney time) on Monday 9 December 2013 for the Reinvestment Offer. If you are returning your Application Form by post, you should allow sufficient time for delivery by postal services.

® Registered to bpay Pty Ltd ABN 69 079 137 518

Reinvestment Form

==> picture [145 x 35] intentionally omitted <==

X 123456789 IND

STEP 1 Registration name & securityholding details

Registration name:

MR JOHN SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

For your security keep your SRN/HIN confidential.

PID: XXXXX Change of address: Please advise your broker of any change to your address.

Securityholding details: A$ AMP Notes held at the Reinvestment Record Date, 7.00pm (Sydney time) on 1234567890 4 November 2013:

STEP 2 Election to participate in the Reinvestment Offer

Option A - Full reinvestment

Please mark

If you mark both boxes AMP will treat your election as an election for full reinvestment under Option A.

OR

Option B - Partial reinvestment

For Option B, please write the number of A$ AMP Notes in the box provided. You cannot choose this option if you hold less than 50 A$ AMP Notes.

If you do not wish to participate in the Reinvestment Offer, go to Step 3.

STEP 3

Apply for additional AMP Subordinated Notes 2 or under Securityholder Offer

Complete this step if you wish to apply for additonal AMP Notes 2 or apply under the Securityholder Offer for AMP Notes 2.

Number of AMP Notes 2 applied for: Issue price at: Application payment: A$100 A$ 0[.][0]

Applications must be for a minimum of 50 AMP Notes 2 (A$5,000.00) and after that in multiples of 10 AMP Notes 2 (A$1,000.00).

Cheque payments - Make your payment payable to ‘AMP Notes 2 Offer’ and crossed ‘Not Negotiable’

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----- Start of picture text -----

A$
Drawer Cheque number BSB number Account number Amount of cheque
----- End of picture text -----

AMP adviser number (please refer to notes within Step 3)

STEP 4

Contact details

Contact Daytime name telephone Email address

Privacy statement

Personal information is collected on this form by Computershare as registrar for AMP, for the purpose of maintaining registers of securityholders, facilitating distribution payments and other corporate actions and communications. Your personal information may be disclosed to our related bodies corporate, to external service companies such as print or mail service providers, or as otherwise permitted by law. If you would like details of your personal information held by Computershare, or you would like to correct information that is inaccurate, incorrect or out of date, please contact Computershare. In accordance with the Corporations Act 2001, you may be sent material (including marketing material) approved by AMP in addition to general corporate communications. You may elect not to receive marketing material by contacting Computershare using the details provided above or email [email protected].

Return your form:

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----- Start of picture text -----

AMP Limited
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  • M AMP Notes 2 Offer - Reinvestment Offer c/- Computershare Investor Services GPO Box 2115 Melbourne VIC 3001

ABN 49 079 354 519

For all enquiries:

000001 000 1301011221012102012221332120133322113 SAM MR JOHN SMITH 1 FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

  • T Australia 1300 338 164 New Zealand 0800 444 152 Other countries +61 3 9415 4018 Monday to Friday 8.30am to 5.30pm (Sydney time)

  • W ampnotes2.com.au

Reinvestment Form

Reinvestment Offer closes 5.00pm (Sydney time) on Monday 9 December 2013

This Application Form relates to the Reinvestment Offer by AMP Limited (AMP) of AMP Subordinated Notes 2 (AMP Notes 2) made under the prospectus lodged with the Australian Securities and Investments Commission on 6 November 2013 (prospectus) (and any replacement or supplementary prospectus). This Application Form may also be used to apply for additional AMP Notes 2 or to apply under the Securityholder Offer for AMP Notes 2. Please refer to section 6.2 of the prospectus for more details of your options.

The prospectus will expire 13 months after the date of the prospectus. To meet the requirements of the Corporations Act 2001 (Cth), this Application Form must not be distributed unless included in, or accompanied by, the prospectus. Capitalised terms have the meaning given to them in the prospectus.

If you need any assistance in deciding whether to apply for AMP Notes 2, please contact your broker or other professional adviser without delay. The prospectus contains detailed information about investing in AMP Notes 2. You should read the entire prospectus carefully before completing this Application Form. While the prospectus is current, AMP will send paper copies of the prospectus, any replacement or supplementary prospectus and the Application Form, on request and without charge.

By submitting this Application Form, you make the acknowledgements, declarations, representations and warranties set out in section 10.10 of the prospectus. If you apply to participate in the Reinvestment Offer, you are taken to agree to a holding lock being placed on the A$ AMP Notes you have elected to sell, pending completion of the Reinvestment Offer - but it is your obligation to ensure that you do not transfer those A$ AMP Notes. You may also apply to reinvest your A$ AMP Notes at ampnotes2.com.au.

Step 1: Registration name & securityholding details

The AMP Notes 2 will be registered in the name(s) printed on this Application Form.

Please check the details provided and update your address via Computershare Investor Services Pty Limited (Computershare) at www.investorcentre.com if any of the details are incorrect.

Step 2: Election to participate in the Reinvestment Offer

Under the Reinvestment Offer, you may elect to sell some or all of your A$ AMP Notes to AMP to fund your subscription for AMP Notes 2. If you choose not to participate in the Reinvestment Offer, you may still apply for AMP Notes 2 in Step 3.

Option A: Full reinvestment

Eligible AMP Notes holders may apply to sell all of their A$ AMP Notes to AMP to fund their subscription for AMP Notes 2. To choose this option mark Option A overleaf.

Option B: Partial reinvestment

Eligible AMP Notes holders may apply to sell some of their A$ AMP Notes to AMP to fund their subscription for AMP Notes 2. To choose this option you must specify the number of A$ AMP Notes to be sold in Option B overleaf.

If you hold less than 50 A$ AMP Notes, and wish to participate in the Reinvestment Offer, you must apply to sell all your A$ AMP Notes to AMP under Option A. If you held more than 50 A$ AMP Notes, then you must apply to sell a minimum of 50 A$ AMP Notes to AMP to participate in the Reinvestment Offer.

Step 3: Apply for additional AMP Subordinated Notes 2 or under Securityholder Offer

If you wish to apply for additional AMP Notes 2 or apply under the Securityholder Offer for AMP Notes 2, enter the number of AMP Notes 2 you wish to apply for and application payment. The application must be for a minimum of 50 AMP Notes 2 (A$5,000.00). Applications for greater than 50 AMP Notes 2 must be in multiples of 10 AMP Notes 2 (A$1,000.00). To calculate the amount of your application payment, multiply the number of AMP Notes 2 applied for by the issue price which is A$100.00. Applications and application payments must be received by the Registry by no later than 5.00pm (Sydney time) on Monday 9 December 2013. Application payments for applications made using this Application Form can be made by cheque(s), bank draft(s) and/or money order(s) in Australian dollars drawn on an Australian branch of a financial institution. It should be made payable to ‘AMP Notes 2 Offer’ and if you are making a payment by cheque it must be crossed ‘Not Negotiable’.

Cheque payments will be processed on the day of receipt and as such sufficient cleared funds must be held in your account as cheques returned unpaid will not be re-presented and may result in your application being rejected. Cash will not be accepted and receipts for payment will not be forwarded. Funds cannot be debited directly from your account.

If you wish to pay for AMP Notes 2 by Bpay®, log onto ampnotes2.com.au and complete the online Application Form.

AMP adviser number (for applications under Step 3 only)

If you are applying as a client of a representative of AMP Financial Planning Pty Limited, Hillross Financial Services Limited (including Arrive Wealth Management), Ipac Securities Limited, Genesys Wealth Advisers Limited, Charter Financial Planning Limited, SMSF Advice Pty Limited or Quadrant Securities Pty Ltd, you acknowledge that you have read the Supplementary Financial Services Guide (SFSG) which explains their role and remuneration in relation to your application.

Step 4: Contact details

This is not compulsory but will assist us if we need to contact you. This information may be used to communicate other matters to you subject to AMP’s privacy statement.

Application through Broker Firm Offer

If you are a client of a Syndicate broker and have been contacted by them regarding the Reinvestment Offer, you should contact your Syndicate broker for information about how and when to lodge this Application Form. Generally you will lodge this Application Form with your Syndicate broker in accordance with their instructions. If you have been offered a firm allocation by a Syndicate broker, you must return this form directly to that broker in accordance with their instructions.

Applications must be received by no later than 5.00pm (Sydney time) on Monday 9 December 2013 for the Reinvestment Offer. If you are returning your Application Form by post, you should allow sufficient time for delivery by postal services.

® Registered to bpay Pty Ltd ABN 69 079 137 518

Reinvestment Form

==> picture [145 x 35] intentionally omitted <==

I 123456789 IND

Registration name & securityholding details

STEP 1

For your security keep your SRN/HIN confidential. MR JOHN SAMPLE FLAT 123 123 SAMPLE STREET Change of address: Make the correction in the THE SAMPLE HILL SAMPLE ESTATE space to the left. SAMPLEVILLE VIC 3030

Registration name:

Securityholding details: A$ AMP Notes held at the Reinvestment Record Date, 7.00pm (Sydney time) on 1234567890 4 November 2013:

STEP 2 Election to participate in the Reinvestment Offer

Option A - Full reinvestment

Please mark

If you mark both boxes AMP will treat your election as an election for full reinvestment under Option A.

OR

Option B - Partial reinvestment

For Option B, please write the number of A$ AMP Notes in the box provided. You cannot choose this option if you hold less than 50 A$ AMP Notes.

If you do not wish to participate in the Reinvestment Offer, go to Step 3.

STEP 3

Apply for additional AMP Subordinated Notes 2 or under Securityholder Offer

Complete this step if you wish to apply for additonal AMP Notes 2 or apply under the Securityholder Offer for AMP Notes 2.

==> picture [497 x 36] intentionally omitted <==

----- Start of picture text -----

Number of AMP Notes 2 applied for: Issue price at: Application payment:
A$100 A$ 0
[.] [0]
----- End of picture text -----

Applications must be for a minimum of 50 AMP Notes 2 (A$5,000.00) and after that in multiples of 10 AMP Notes 2 (A$1,000.00).

Cheque payments - Make your payment payable to ‘AMP Notes 2 Offer’ and crossed ‘Not Negotiable’

==> picture [503 x 31] intentionally omitted <==

----- Start of picture text -----

A$
Drawer Cheque number BSB number Account number Amount of cheque
----- End of picture text -----

AMP adviser number (please refer to notes within Step 3)

STEP 4

Contact details

Contact Daytime name telephone Email address

Privacy statement

Personal information is collected on this form by Computershare as registrar for AMP, for the purpose of maintaining registers of securityholders, facilitating distribution payments and other corporate actions and communications. Your personal information may be disclosed to our related bodies corporate, to external service companies such as print or mail service providers, or as otherwise permitted by law. If you would like details of your personal information held by Computershare, or you would like to correct information that is inaccurate, incorrect or out of date, please contact Computershare. In accordance with the Corporations Act 2001, you may be sent material (including marketing material) approved by AMP in addition to general corporate communications. You may elect not to receive marketing material by contacting Computershare using the details provided above or email [email protected].

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