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Risk disclosures of HSBC investment products

Product risk disclosure for Certificates of Deposit (CDs)

(Last updated 21 Jun 2021)

General

  • Certificate of Deposit (i.e. CD) is NOT equivalent to a time deposit. It is NOT protected under the Hong Kong Deposit Protection Scheme.
  • Certificate of Deposit is subject to the actual and perceived measures of credit worthiness of the Certificate of Deposit issuer.
  • There is no assurance of protection against a default by the issuer. In the worst scenario, if the issuer defaults on the Certificate of Deposit, you might not be able to recover the principal and any coupon. The Certificate of Deposit holder has no recourse to HSBC unless HSBC is the issuer itself.
  • You should be prepared to hold your funds in the Certificate of Deposit for the full tenor.
  • The secondary market for a Certificate of Deposit may not provide significant liquidity or may trade at prices based on the prevailing market conditions, which may cause you to suffer loss if you choose to sell the Certificate of Deposit prior to maturity.
  • There may be exchange rate risks if you choose to convert payments on the Certificate of Deposit to your home currency.

Product risk disclosure for Deposit Plus

(Last updated 21 Jun 2021)

General

  • The product is a complex product and you should exercise caution in relation to the product. (added on 12 Aug 2019)
  • Deposit Plus (i.e. DPS) is a structured product involving derivatives.
  • This product is not capital protected. The net return of the product will depend on the prevailing market conditions at the deposit fixing time. You must be prepared to incur loss as a result of depreciation in the value of the currency paid.
  • Early redemption of this product is not allowed. You have to place your funds in the product for the full deposit period.
  • If the settlement currency is not your home currency, you may make a gain or loss due to exchange fluctuations.
  • If HSBC becomes insolvent or defaults on its obligations under the product, you can only claim as an unsecured creditor of HSBC regardless of the performance of the underlying currency. In the worst scenario, you could lose all of your investment.

Product risk disclosure for Capital Protected Investment Deposit - Currency Linked 3

(Last updated 21 Jun 2021)

General

  • The product is a complex product and you should exercise caution in relation to the product. (added on 12 Aug 2019)
  • Capital Protected Investment Deposit – Currency Linked 3 (i.e. CPI 3) is a structured product involving derivatives.
  • It is principal protected only at maturity. Early redemption of the product is not allowed. You should be willing to invest in the product for the entire investment term. 
  • The return of this product depends on the exchange rate performance of the chosen currencies upon fixing. You must be prepared to take the risk of earning a very low or no return on the money invested.
  • If the settlement currency is not your home currency, you may make a gain or loss due to exchange fluctuations.
  • If HSBC becomes insolvent or defaults on its obligations under the product, you can only claim as an unsecured creditor of HSBC. In the worst scenario, you could lose all of your investment.

Product risk disclosure for Equity Linked Investment (ELI)

(Last updated 21 Jun 2021)

General

  • The product is a complex product and you should exercise caution in relation to the product. (added on 25 Mar 2019)
  • Daily Cash Dividend Callable ELI (i.e. DCDC ELI) is NOT equivalent to time deposit. It is a structured products involving derivatives.
  • The product is not principal protected, you could lose all of your investment in extreme cases. The product is also not covered by the Investor Compensation Fund.
  • Buying this product is not the same as buying the reference asset. Changes in the market price of reference assets may not lead to a corresponding change in the market value of the product.
  • The maximum return on termination of this product is limited to the nominal amount together with all periodic cash dividend paid during the scheduled tenor. You are exposed to change in the market price of the reference asset or the worst performing asset of the basket of reference assets during the scheduled tenor.
  • If the settlement currency is not your home currency, you may make a gain or loss due to exchange fluctuations.
  • Since this product is not listed on any stock exchange, there is no liquid secondary market, you must be prepared to invest in the product for the entire scheduled tenor or may suffer significant loss.
  • If the autocall condition is satisfied, the product will be terminated and no further potential cash dividend amount will be payable. You may not be able to enjoy the same rate of return if you re-invest in other investments.
  • If you invest in a product linked to a basket of reference assets, you are facing a higher risk than a product linked to a single reference asset as the potential cash dividend, autocall, etc will be determined by the worst performing asset of the basket of reference assets.
  • You have no rights in the reference asset. If the issuer becomes insolvent or defaults on its obligations under the product, you can only claim as an unsecured creditor of the issuer.
  • The longer the time gap between trade date and issue date of the product, the longer you will be exposed to the market risks and price movement of the reference asset.
  • There may be conflicts of interest between issuer, its subsidiaries and its affiliates, which maybe adverse to your interests in the product. Issuer will endeavor to comply with applicable laws and regulations to minimise and manage such conflicts of interest. In the worst case scenario, you could lose all of your investment and any interest.

Product risk disclosure for Private Placement Note 45 (PPN45) - potential performance return structured note

(Last updated 21 Jun 2021)

General

  • The product is a complex product and you should exercise caution in relation to the product. (added on 25 Mar 2019)
  • PPN45 - Potential Performance Return Structured Note (i.e. PPR Note) is NOT equivalent to time deposit. It is a structured products involving derivatives.
  • The product is not principal protected, you could lose all of your investment in extreme cases. The product is also not covered by the Investor Compensation Fund.
  • Buying this product is not the same as buying the reference asset(s) and changes in the market price of reference assets(s) may not lead to a corresponding change in the market value of the product.
  • The potential performance return will only be paid if the final price of the reference asset or worst performing asset on the final valuation date is at or above the initial price. If such condition is not met, you will not receive the potential performance return. It is possible that you may not receive any potential performance return for the entire scheduled tenor of the PPR Note.
  • If the settlement currency is not your home currency, you may make a gain or loss due to exchange fluctuations.
  • Since this product is not listed on any stock exchange, there is no liquid secondary market, you must be prepared to invest in the product for the entire scheduled tenor, or may suffer significant loss.
  • If you invest in a product linked to a basket of reference assets, you are facing a higher risk than a product linked to a single reference asset as the potential cash dividend, redemption at maturity, etc will be determined by the worst performing asset of the basket of reference assets.
  • You have no rights in the reference asset. If the issuer becomes insolvent or defaults on its obligations under the product, you can only claim as an unsecured creditor of the issuer.
  • The longer the time gap between trade date and issue date of the product, the longer you will be exposed to the market risks and price movement of the reference asset.
  • There may be conflicts of interest between issuer, its subsidiaries and its affiliates, which maybe adverse to your interests in the product. Issuer will endeavor to comply with applicable laws and regulations to minimise and manage such conflicts of interest. In the worst case scenario, you could lose all of your investment and any interest.

Product risk disclosure for Private Placement Note 46 (PPN46) - stepdown autocallable structured note

(Last updated 21 Jun 2021)

General

  • The product is a complex product and you should exercise caution in relation to the product. (added on 25 Mar 2019)
  • PPN46 - Step Down Autocallable Structured Note (i.e. Step Down Note) is NOT equivalent to time deposit. It is a structured products involving derivatives.
  • The product is not principal protected, you could lose all of your investment in extreme cases. The product is also not covered by the Investor Compensation Fund.
  • Buying this product is not the same as buying the reference asset(s) and changes in the market price of reference assets(s) may not lead to a corresponding change in the market value of the product.
  • The maximum return on termination of this product is limited to the nominal amount together with all periodic cash dividend paid during the scheduled tenor. You are exposed to change in the market price of the reference asset or the worst performing asset of the basket of reference assets during the scheduled tenor.
  • If the settlement currency is not your home currency, you may make a gain or loss due to exchange fluctuations.
  • Since this product is not listed on any stock exchange, there is no liquid secondary market, you must be prepared to invest in the product for the entire scheduled tenor, or may suffer significant loss.
  • If the autocall condition is satisfied, the product will be terminated and no further cash amount will be payable. You may not be able to enjoy the same rate of return if you re-invest in other investments.
  • If you invest in a product linked to a basket of reference assets, you are facing a higher risk than a product linked to a single reference asset as the autocall, etc will be determined by the worst performing asset of the basket of reference assets.
  • You have no rights in the reference asset. If the issuer becomes insolvent or defaults on its obligations under the product, you can only claim as an unsecured creditor of the issuer.
  • The longer the time gap between trade date and issue date of the product, the longer you will be exposed to the market risks and price movement of the reference asset.
  • There may be conflicts of interest between issuer, its subsidiaries and its affiliates, which maybe adverse to your interests in the product. Issuer will endeavor to comply with applicable laws and regulations to minimise and manage such conflicts of interest. In the worst case scenario, you could lose all of your investment and any interest.

Product risk disclosure for Private Placement Note 47 (PPN47) - up&out growth structured note

(Last updated 21 Jun 2021)

General

  • The product is a complex product and you should exercise caution in relation to the product.
  • PPN47 - Up&Out Growth Structured Note (i.e. Up&Out Note) is NOT equivalent to time deposit. It is a structured products involving derivatives.
  • It is principal protected only at maturity. You should be willing to invest in the product for the entire investment term.
  • The product is not covered by the Investor Compensation Fund.
  • Buying this product is not the same as buying the reference asset(s). Changes in the market price of reference asset(s) may not lead to a corresponding change in the market value of the product.
  • The potential return will only be paid if the Up&Out Barrier has been triggered OR final price of the reference asset or worst performing asset on the final valuation date is above the initial price. If such condition is not met, you will not receive the potential return. It is possible that you may not receive any potential return for the entire scheduled tenor of the Up&Out Note.
  • If the settlement currency is not your home currency, you may make a gain or loss due to exchange fluctuations.
  • Since this product is not listed on any stock exchange, there is no liquid secondary market, you must be prepared to invest in the product for the entire scheduled tenor, or may suffer significant loss.
  • If you invest in a product linked to a basket of reference assets, you are facing a higher risk than a product linked to a single reference asset as the return will be determined by the worst performing asset of the basket of reference assets.
  • You have no rights in the reference asset. If the issuer becomes insolvent or defaults on its obligations under the product, you can only claim as an unsecured creditor of the issuer.
  • The longer the time gap between trade date and issue date of the product, the longer you will be exposed to the market risks and price movement of the reference asset.
  • There may be conflicts of interest between issuer, its subsidiaries and its affiliates, which maybe adverse to your interests in the product. Issuer will endeavor to comply with applicable laws and regulations to minimise and manage such conflicts of interest. In the worst case scenario, you could lose all of your investment and any interest.

Product risk disclosure for Private Placement Note 48 (PPN48) - autocallable fixed coupon structured note

(Last updated 21 Jun 2021)

General

  • The product is a complex product and you should exercise caution in relation to the product.
  • PPN48 - Autocallable Fixed Coupon Structured Note (i.e. Fixed Coupon Note) is NOT equivalent to time deposit. It is a structured products involving derivatives.
  • The product is not principal protected, you could lose all of your investment in extreme cases. The product is also not covered by the Investor Compensation Fund.
  • Buying this product is not the same as buying the reference asset(s). Changes in the market price of reference asset(s) may not lead to a corresponding change in the market value of the product.
  • The maximum return on termination of this product is limited to the nominal amount together with all periodic cash coupon paid during the scheduled tenor. You are exposed to change in the market price of the reference asset or the worst performing asset of the basket of reference assets during the scheduled tenor.
  • If the settlement currency is not your home currency, you may make a gain or loss due to exchange fluctuations.
  • Since this product is not listed on any stock exchange, there is no liquid secondary market, you must be prepared to invest in the product for the entire scheduled tenor, or may suffer significant loss.
  • If the autocall condition is satisfied, the product will be terminated and no further cash amount will be payable. You may not be able to enjoy the same rate of return if you re-invest in other investments.
  • If you invest in a product linked to a basket of reference assets, you are facing a higher risk than a product linked to a single reference asset as the autocall , etc will be determined by the worst performing asset of the basket of reference assets.
  • You have no rights in the reference asset. If the issuer becomes insolvent or defaults on its obligations under the product, you can only claim as an unsecured creditor of the issuer.
  • The longer the time gap between trade date and issue date of the product, the longer you will be exposed to the market risks and price movement of the reference asset.
  • There may be conflicts of interest between issuer, its subsidiaries and its affiliates, which maybe adverse to your interests in the product. Issuer will endeavor to comply with applicable laws and regulations to minimise and manage such conflicts of interest. In the worst case scenario, you could lose all of your investment and any interest.

Product risk disclosure for Private Placement Note 49 (PPN49) – twin win shark fin structured note with floor

(Last updated 19 Sep 2022)

General

  • The product is a complex product and you should exercise caution in relation to the product.
  • PPN49 - Twin Win Shark Fin Structured Note with Floor (i.e. Twin Win Shark Fin Note) is NOT equivalent to time deposit. It is a structured product involving derivatives.
  • It is principal protected OR partially principal protected only at maturity. You should be willing to invest in the product for the entire investment term. If the product is not fully principal protected, you could lose part of your investment. The product is not covered by the Investor Compensation Fund.
  • Buying this product is not the same as buying the reference asset(s). Changes in the market price of reference asset(s) may not lead to a corresponding change in the market value of the product. You are exposed to change in the market price of the reference asset or the worst performing asset of the basket of reference assets during the scheduled tenor.
  • The potential gain is limited. Performance of the reference asset in excess of upper/lower barrier is not captured in the payout.
  • If the settlement currency is not your home currency, you may make a gain or loss due to exchange fluctuations.
  • Since this product is not listed on any stock exchange, there is no liquid secondary market, you must be prepared to invest in the product for the entire scheduled tenor, or may suffer significant loss.
  • If you invest in a product linked to a basket of reference assets, you are facing a higher risk than a product linked to a single reference asset as the return will be determined by the worst performing asset of the basket of reference assets.
  • You have no rights in the reference asset. If the issuer becomes insolvent or defaults on its obligations under the product, you can only claim as an unsecured creditor of the issuer.
  • The longer the time gap between trade date and issue date of the product, the longer you will be exposed to the market risks and price movement of the reference asset.
  • There may be conflicts of interest between issuer, its subsidiaries and its affiliates, which maybe adverse to your interests in the product. Issuer will endeavor to comply with applicable laws and regulations to minimise and manage such conflicts of interest. In the worst case scenario, you could lose all of your investment and any interest.

Product risk disclosure for Bonds

(Last updated 21 Jun 2021)

General

  • Bond is NOT equivalent to a time deposit. This is mainly for medium to long term investment.
  • Bond is subject to both the credit worthiness of the bond issuer and the guarantor. In the worst scenario, if the issuer or guarantor defaults on the bond, you might not be able to recover 100% of the principal or receive any coupon. The bondholder has no recourse to HSBC unless HSBC is the issuer or guarantor itself.
  • Credit ratings assigned by credit rating agencies, now or future, do not guarantee the creditworthiness of the issuer or the guarantor. It is not a recommendation to buy, sell or hold bonds. A suspension or variation of any rating to the bonds may adversely affect the price or value of the bonds. (Updated on 9 Nov 2020)
  • You should be prepared to invest for the full investment tenor; loss may be incurred if you choose to sell the bond prior to maturity or you may not be able to enjoy the same rates of return when you re-invest the funds in other investments. (Updated on 9 Nov 2020)
  • Some bonds may not have active secondary market. It would be difficult or impossible for investors to sell the bond before its maturity or at prices in line with your expectation.
  • The market price of the Bonds may fluctuate with market changes. Factors affecting market price of the bond include, and are not limited to, fluctuations in interest rates, credit spreads and liquidity premiums. Generally, the price of bonds may fall when the interest rates rise. Besides, the fluctuation in yield generally has a greater effect on prices of longer tenor bonds.
  • There may be exchange rate risks if you choose to convert payments on the bond to your home currency.

Product Risk Disclosure for Complex UT

(Last update on 29 Nov 2021)

UT General

  • The product is a complex product and you should exercise caution in relation to the product. (Added on 25 Mar 2019)
  • Unit Trusts are NOT equivalent to time deposits. Instead, they are investment products, and some may involve derivatives. You should note that investment involves risks. Past performance, if any, of the fund is not indicative of future performance. (Added on 08 Apr 2019) Value of the investments can fluctuate and is not guaranteed.
  • Unit trusts may be subject to various types of risks, including market, currency, volatility, liquidity, interest rate, credit, downgrading, regulatory and political risks. 
  • Investment returns not denominated in your home currency are exposed to exchange rate fluctuations. Rates of exchange may cause the value of investments to go up or down. Further, HKD is currently pegged to USD, any depreciation of USD against other currencies may cause the value of units denominated in HKD to depreciate against such other currencies.
  • Investment in other funds may involve another layer of fees charged at the underlying fund level.

Product Risk Disclosure for Non-Complex UT

UT General

  • Unit Trusts are NOT equivalent to time deposits. Instead, they are investment products, and some may involve derivatives. You should note that investment involves risks. Past performance, if any, of the fund is not indicative of future performance. Value of the investments can fluctuate and is not guaranteed.
  • Unit trusts may be subject to various types of risks, including market, currency, volatility, liquidity, interest rate, credit, downgrading, regulatory and political risks.
  • Investment returns not denominated in your home currency are exposed to exchange rate fluctuations. Rates of exchange may cause the value of investments to go up or down. Further, HKD is currently pegged to USD, any depreciation of USD against other currencies may cause the value of units denominated in HKD to depreciate against such other currencies.
  • Investment in other funds may involve another layer of fees charged at the underlying fund level.
  • If you choose to invest in share classes with dividends/payouts, the fund may pay dividends/payouts out of capital or gross of expenses. Dividend/payout is not guaranteed and may result in capital erosion and reduction in net asset value. Payout paying classes may make payment out of capital over a long period of time, and may result in a substantial or complete capital erosion over the long term. (added on 12 Aug 2019)