Risk disclosures | Investment products

Product risk disclosure for Securities
Product risk disclosure for Certificates of Deposit (CDs)
Product risk disclosure for Deposit Plus
Product risk disclosure for Capital Protected Investment Deposit - Currency Linked 3
Product risk disclosure for Daily Cash Dividend Callable Equity Linked Investment (ELI)
Product risk disclosure for Up&Out Growth Equity Linked Investment (ELI)
Porduct risk disclosure for Private Placement Note 45 (PPN45) - potential performance return structured note
Product risk disclosure for Private Placement Note 46 (PPN46) - stepdown autocallable structured note
Product risk disclosure for Private Placement Note 47 (PPN47) - up&out growth structured note
Product risk disclosure for Private Placement Note 48 (PPN48) - autocallable fixed coupon structured note
Product risk disclosure for Private Placement Note 49 (PPN49) – twin win shark fin structured note with floor
Product risk disclosure for Private Placement Note 50 (PPN50) – Digital Coupon Note
Product risk disclosure for Private Placement Note 51 (PPN51) – Participation Note with Floor/Cap
Product risk disclosure for Private Placement Note 52 (PPN52) – Twin Win Autocallable Note
Product risk disclosure for Capped Floored Floating Rate Notes (CFFN)
Product risk disclosure for Range Accrual Notes
Product risk disclosure for Steepener Notes
Product risk disclosure for Callable Snowball Fixed Rate Notes
Product risk disclosure for Inverse Floater Notes
Product risk disclosure for Bonds
Product risk disclosure for Unit Trusts (UT)

Product risk disclosure for Securities

(Last updated 14 Nov 2022)

General

Making available to you any advertisements, marketing or promotional materials is part of our Bank’s ordinary course of securities dealing business. It shall not, by itself, constitute solicitation of the sale or recommendation of any investment products.

Investment involves risk. Notwithstanding the benefits of offer(s) mentioned herein, you should carefully consider the risks and features of any investment products (including but not limited to equities/exchange traded funds/exchange traded derivatives & structured products) or services mentioned herein to assess whether they are appropriate for you in view of your investment experience, objectives, financial resources and relevant circumstances. The price of investment products may move up or down. Losses may be incurred as well as profits made as a result of buying and selling investment products.

For Renminbi (RMB) products:

There may be exchange rate risks if you choose to convert RMB payments made on the securities to your home currency.
RMB products may suffer significant losses in liquidating the underlying investments if such investments do not have an active secondary market and their prices have large bid/ offer spreads.
In general, RMB equity products are exposed to the usual kind of default risks that might be associated with equity products denominated in other currencies.

1. Risk of Securities Trading

The prices of securities fluctuate, sometimes dramatically. The price of a security may move up or down, and may become valueless. It is as likely that losses will be incurred rather than profit made as a result of buying and selling securities.

2. Risk of Trading Futures and Options

The risk of loss in trading futures contracts or options is substantial. In some circumstances, you may sustain losses in excess of your initial margin funds. Placing contingent orders, such as "stop-loss" or "stop-limit" orders, will not necessarily avoid loss. Market conditions may make it impossible to execute such orders. You may be called upon at short notice to deposit additional margin funds. If the required funds are not provided within the prescribed time, your position may be liquidated. You will remain liable for any resulting deficit in your account. You should therefore study and understand futures contracts and options before you trade and carefully consider whether such trading is suitable in the light of your own financial position and investment objectives. If you trade options you should inform yourself of exercise and expiration procedures and your rights and obligations upon exercise or expiry.

3. Risk of Trading Growth Enterprise Market Stocks

Growth Enterprise Market (GEM) stocks involve a high investment risk. In particular, companies may list on GEM with neither a track record of profitability nor any obligation to forecast future profitability. GEM stocks may be very volatile and illiquid.

You should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and other sophisticated investors.

Current information on GEM stocks may only be found on the internet website operated by The Stock Exchange of Hong Kong Limited. GEM Companies are usually not required to issue paid announcements in gazetted newspapers.

You should seek independent professional advice if you are uncertain of or have not understood any aspect of this risk disclosure statement or the nature and risks involved in trading of GEM stocks.

4. Risks of Client Assets Received or held outside Hong Kong

Client assets received or held by the licensed or registered person outside Hong Kong are subject to the applicable laws and regulations of the relevant overseas jurisdiction which may be different from the Securities and Futures Ordinance (Cap.571) and the rules made thereunder.

Consequently, such client assets may not enjoy the same protection as that conferred on client assets received or held in Hong Kong.

5. Risk of Providing an Authority to repledge your Securities Collateral etc

There is risk if you provide the licensed or registered person with an authority that allows it to apply your securities or securities collateral pursuant to a securities borrowing and lending agreement, repledge your securities collateral for financial accommodation or deposit your securities collateral as collateral for the discharge and satisfaction of its settlement obligations and liabilities.

If your securities or securities collateral are received or held by the licensed or registered person in Hong Kong, the above arrangement is allowed only if you consent in writing. Moreover, unless you are a professional investor, your authority must specify the period for which it is current and be limited to not more than 12 months. If you are a professional investor, these restrictions do not apply.

Additionally, your authority may be deemed to be renewed (i.e. without your written consent) if the licensed or registered person issues you a reminder at least 14 days prior to the expiry of the authority, and you do not object to such deemed renewal before the expiry date of your then existing authority.

You are not required by any law to sign these authorities. But an authority may be required by licensed or registered persons, for example, to facilitate margin lending to you or to allow your securities or securities collateral to be lent to or deposited as collateral with third parties. The licensed or registered person should explain to you the purposes for which one of these authorities is to be used.

If you sign one of these authorities and your securities or securities collateral are lent to or deposited with third parties, those third parties will have a lien or charge on your securities or securities collateral. Although the licensed or registered person is responsible to you for securities or securities collateral lent or deposited under your authority, a default by it could result in the loss of your securities or securities collateral.

A cash account not involving securities borrowing and lending is available from most licensed or registered persons. If you do not require margin facilities or do not wish your securities or securities collateral to be lent or pledged, do not sign the above authorities and ask to open this type of cash account.

6. Risk of providing an authority to hold mail or to direct mail to third parties

If you provide the licensed or registered person with an authority to hold mail or to direct mail to third parties, it is important for you to promptly collect in person all contract notes and statements of your account and review them in detail to ensure that any anomalies or mistakes can be detected in a timely fashion.

7. Risk of Margin Trading

The risk of loss in financing a transaction by deposit of collateral is significant. You may sustain losses in excess of your cash and any other assets deposited as collateral with the licensed or registered person. Market conditions may make it impossible to execute contingent orders, such as "stop-loss" or "stop-limit" orders. You may be called upon at short notice to make additional margin deposits or interest payments. If the required margin deposits or interest payments are not made within the prescribed time, your collateral may be liquidated without your consent. Moreover, you will remain liable for any resulting deficit in your account and interest charged on your account. You should therefore carefully consider whether such a financing arrangement is suitable in light of your own financial position and investment objectives.

8. Risk of Trading Nasdaq-Amex Securities at The Stock Exchange of Hong Kong Limited

The securities under the Nasdaq-Amex Pilot Program ("PP") are aimed at sophisticated investors. You should consult the licensed or registered person and become familiarised with the PP before trading in the PP securities. You should be aware that the PP securities are not regulated as a primary or secondary listing on the Main Board or the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited.

9. Additional Risk Disclosure for Futures and Options Trading

This brief statement does not disclose all of the risks and other significant aspects of trading in futures and options. In light of the risks, you should undertake such transactions only if you understand the nature of the contracts (and contractual relationships) into which you are entering and the extent of your exposure to risk. Trading in futures and options is not suitable for many members of the public. You should carefully consider whether trading is appropriate for you in light of your experience, objectives, financial resources and other relevant circumstances.

9.1 Futures

(i) Effect of "Leverage" or "Gearing"

Transactions in futures carry a high degree of risk. The amount of initial margin is small relative to the value of the futures contract so that transactions are "leveraged" or "geared". A relatively small market movement will have a proportionately larger impact on the funds you have deposited or will have to deposit: this may work against you as well as for you. You may sustain a total loss of initial margin funds and any additional funds deposited with the firm to maintain your position. If the market moves against your position or margin levels are increased, you may be called upon to pay substantial additional funds on short notice to maintain your position. If you fail to comply with a request for additional funds within the time prescribed, your position may be liquidated at a loss and you will be liable for any resulting deficit.

(ii) Risk-reducing orders or strategies

The placing of certain orders (e.g. "stop-loss" orders, or "stop-limit" orders) which are intended to limit losses to certain amounts may not be effective because market conditions may make it impossible to execute such orders. Strategies using combinations of positions, such as "spread" and "straddle" positions may be as risky as taking simple "long" or "short" positions.

9.2 Options

(i) Variable degree of risk

Transactions in options carry a high degree of risk. Purchasers and sellers of options should familiarise themselves with the type of option (i.e. put or call) which they contemplate trading and the associated risks. You should calculate the extent to which the value of the options must increase for your position to become profitable, taking into account the premium and all transaction costs.

The purchaser of options may offset or exercise the options or allow the options to expire. The exercise of an option results either in a cash settlement or in the purchaser acquiring or delivering the underlying interest. If the option is on a futures contract, the purchaser will acquire a futures position with associated liabilities for margin (see the section on Futures above). If the purchased options expire worthless, you will suffer a total loss of your investment which will consist of the option premium plus transaction costs. If you are contemplating purchasing deep-out-of-the-money options, you should be aware that the chance of such options becoming profitable ordinarily is remote.

Selling ("writing" or "granting") an option generally entails considerably greater risk than purchasing options. Although the premium received by the seller is fixed, the seller may sustain a loss well in excess of that amount. The seller will be liable for additional margin to maintain the position if the market moves unfavourably.

The seller will also be exposed to the risk of the purchaser exercising the option and the seller will be obligated to either settle the option in cash or to acquire or deliver the underlying interest. If the option is on a futures contract, the seller will acquire a position in a futures contract with associated liabilities for margin (see the section on Futures above). If the option is "covered" by the seller holding a corresponding position in the underlying interest or a futures contract or another option, the risk may be reduced. If the option is not covered, the risk of loss can be unlimited.

Certain exchanges in some jurisdictions permit deferred payment of the option premium, exposing the purchaser to liability for margin payments not exceeding the amount of the premium. The purchaser is still subject to the risk of losing the premium and transaction costs. When the option is exercised or expires, the purchaser is responsible for any unpaid premium outstanding at that time.

10. Additional Risks common to Futures and Options

10.1 Terms and conditions of contracts

You should ask the firm with which you deal about the terms and conditions of the specific futures or options which you are trading and associated obligations (e.g. the circumstances under which you may become obliged to make or take delivery of the underlying interest of a futures contract and, in respect of options, expiration dates and restrictions on the time for exercise). Under certain circumstances the specifications of outstanding contracts (including the exercise price of an option) may be modified by the exchange or clearing house to reflect changes in the underlying interest.

10.2 Suspension or restriction of trading and pricing relationships

Market conditions (e.g. illiquidity) and/or the operation of the rules of certain markets (e.g. the suspension of trading in any contract or contract month because of price limits or "circuit breakers") may increase the risk of loss by making it difficult or impossible to effect transactions or liquidate/offset positions. If you have sold options, this may increase the risk of loss.

Further, normal pricing relationships between the underlying interest and the futures, and the underlying interest and the option may not exist. This can occur when, for example, the futures contract underlying the option is subject to price limits while the option is not. The absence of an underlying reference price may make it difficult to judge "fair value".

10.3 Deposited cash and property

You should familiarise yourself with the protections given to money or other property you deposit for domestic and foreign transactions, particularly in the event of a firm insolvency or bankruptcy. The extent to which you may recover your money or property may be governed by specific legislation or local rules. In some jurisdictions, property which had been specifically identifiable as your own will be pro-rated in the same manner as cash for purposes of distribution in the event of a shortfall.

10.4 Commission and other charges

Before you begin to trade, you should obtain a clear explanation of all commission, fees and other charges for which you will be liable. These charges will affect your net profit (if any) or increase your loss.

10.5 Transactions in other jurisdictions

Transactions on markets in other jurisdictions, including markets formally linked to a domestic market, may expose you to additional risk. Such markets may be subject to regulation which may offer different or diminished investor protection. Before you trade you should enquire about any rules relevant to your particular transactions. Your local regulatory authority will be unable to compel the enforcement of the rules of regulatory authorities or markets in other jurisdictions where your transactions have been effected. You should ask the firm with which you deal for details about the types of redress available in both your home jurisdiction and other relevant jurisdictions before you start to trade.

10.6 Currency risks

The profit or loss in transactions in foreign currency-denominated contracts (whether they are traded in your own or another jurisdiction) will be affected by fluctuations in currency rates where there is a need to convert from the currency denomination of the contract to another currency.

10.7 Trading facilities

Electronic trading facilities are supported by computer-based component systems for the order-routing, execution, matching, registration or clearing of trades. As with all facilities and systems, they are vulnerable to temporary disruption or failure. Your ability to recover certain losses may be subject to limits on liability imposed by the system provider, the market, the clearing house and/or participant firms. Such limits may vary: you should ask the firm with which you deal for details in this respect.

10.8 Electronic trading

Trading on an electronic trading system may differ from trading on other electronic trading systems. If you undertake transactions on an electronic trading system, you will be exposed to risks associated with the system including the failure of hardware and software. The result of any system failure may be that your order is either not executed according to your instructions or is not executed at all.

10.9 Off-exchange transactions

In some jurisdictions, and only then in restricted circumstances, firms are permitted to effect off-exchange transactions. The firm with which you deal may be acting as your counterparty to the transaction. It may be difficult or impossible to liquidate an existing position, to assess the value, to determine a fair price or to assess the exposure to risk. For these reasons, these transactions may involve increased risks. Off-exchange transactions may be less regulated or subject to a separate regulatory regime. Before you undertake such transactions, you should familiarise yourself with applicable rules and attendant risks.

11. Risk of Trading Warrants and Callable Bull/Bear Contracts

Warrants and Callable Bull/Bear Contracts (CBBCs) are structured products which involve derivatives.

You rely on the creditworthiness of the issuer of warrants and/or CCBCs. Subject to both the actual and perceived measures of the credit worthiness of its issuer and, there is no assurance of protection against a default by its issuer in respect of its payment obligations. Upon insolvency of the issuer, you may get nothing back and the potential maximum loss could be 100% of the investment amount and no return may be received.

You are warned that the prices of warrants and CBBCs may fall in value as rapidly as it may rise and holders may sustain a total loss of their investment. CBBCs have a mandatory call feature and may therefore be subject to early termination, upon which (i) investors in category N CBBCs will lose all of their investments in the CBBCs; and (ii) the residual value of category R CBBCs may be zero.

Before you purchase any warrants and/or CBBCs, you should ensure you understand the nature of warrants and/or CBBCs and carefully study the full details and risk factors set out in the relevant listing documents and, where necessary, seek professional advice before you invest in any of these products. You should also ensure that you fully understand the potential risks and rewards and independently determine that they are appropriate for you given your objectives, experience, financial and operational resources and other relevant circumstances. You should note that The Hongkong and Shanghai Banking Corporation Limited acting through its appointed liquidity provider may be the only market participant in HSBC-issued warrants and CBBCs.

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.

RMB CDs

If you are purchasing RMB denominated CDs, please take note of the following risk factors:

RMB product will be subject to the risk of exchange rate fluctuation and you may suffer loss in principal.
The available choice of RMB denominated underlying investments outside PRC is hence limited. These may adversely affect the product return and performance.
For RMB denominated debt instruments with non-RMB denominated underlying investment, they are subject to multiple currency conversion costs in making investments and liquidating investments as well as RMB exchange rate fluctuations and bid/offer spreads when assets are sold to meet redemption requests and other capital requirements.

General reminder

The offering documents are not intended to provide tax, legal or other advice. If you are in any doubt, you should obtain independent professional advice.

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.

General reminder

The investment decision is yours but you should not invest in this product unless you are sure that HSBC staff has explained to you that the product is suitable for you having regard to your financial situation, investment experience and investment objectives.
HSBC has not provided any advice on the source of funds for the investment, including (i) new fund (ii) switching out / redemption of existing product(s), if applicable, this is solely based on your decision. (added on 8 Nov 2020)
Our assessment on product suitability is based on information provided by you and you are responsible for ensuring such information is complete, accurate, up-to-date and not misleading so our assessment is not adversely affected. HSBC will not assume any responsibility for information provided by you.
(added on 8 Nov 2020)
The product is not regulated by the Securities and Futures Commission (the 'SFC'). The offering documents have not been reviewed by the SFC or any regulatory authority in Hong Kong. You are advised to exercise caution in relation to the offer. (added on 12 Aug 2019)
The offering documents are not intended to provide tax, legal or other advice. If you are in any doubt, you should obtain independent professional advice.

RISK DISCLOSURE FOR RMB DPS

RMB investment (whether RMB as Deposit Currency or Linked Currency) will be subject to the risk of exchange rate fluctuation and you may suffer loss in principal.
Products which invest in derivative instruments are subject to counterparty risk as the default by derivative issuers, may adversely affect the performance of the product and result in substantial loss.
This product will be denominated (if Deposit Currency being RMB) and settled (when receive at maturity) in RMB deliverable in Hong Kong, which is different from that of RMB deliverable in Mainland China. CNY or CNH mentioned in the linked currency pair and exchange rate denotes the deliverable CNY in offshore market.

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.

General reminder

The investment decision is yours but you should not invest in this product unless you are sure that HSBC staff has explained to you that the product is suitable for you having regard to your financial situation, investment experience and investment objectives.
HSBC has not provided any advice on the source of funds for the investment, including (i) new fund (ii) switching out / redemption of existing product(s), if applicable, this is solely based on your decision. (added on 8 Nov 2020)
Our assessment on product suitability is based on information provided by you and you are responsible for ensuring such information is complete, accurate, up-to-date and not misleading so our assessment is not adversely affected. HSBC will not assume any responsibility for information provided by you. (added on 8 Nov 2020)
The product is not regulated by the Securities and Futures Commission (the 'SFC'). The offering documents have not been reviewed by the SFC or any regulatory authority in Hong Kong. You are advised to exercise caution in relation to the offer. (added on 12 Aug 2019)
The offering documents are not intended to provide tax, legal, or other advice. If you are in any doubt, you should obtain independent professional advice.
The tranche will be launched if accumulated orders reach the launch requirement and pricing of the deposit will be fixed upon the tranche launch date.

RISK DISCLOSURE FOR RMB CPI 3

RMB investment will be subject to the risk of exchange rate fluctuation and you may suffer loss in principal.
Products or underlying investments which are not denominated in RMB are subject to multiple currency conversion costs in making investments and liquidating investments as well as RMB exchange rate fluctuations and bid/offer spreads when assets are sold to meet redemption requests and other capital requirements.
The available choice of underlying investments denominated in RMB outside Mainland China is limited. This may adversely affect the return and performance of the product.
Products which invest in debt instruments not supported by any collateral are exposed to credit risk of the counterparties.
Products which invest in derivative instruments are subject to counterparty risk as the default by derivative issuers, may adversely affect the performance of the product and result in substantial loss.
Products which may invest in RMB debt instruments are subject to interest rate fluctuations, which may adversely affect the return and performance of the RMB products.
The product may suffer significant losses in liquidating the underlying investments, especially if the underlying investments do not have an active secondary market.
This product (if denominated in RMB) will be denominated and settled in RMB deliverable in Hong Kong, which is different from that of RMB deliverable in Mainland China. CNY or CNH mentioned in the linked currency pair and exchange rate denotes the deliverable CNY in offshore market.

Product risk disclosure for Daily Cash Dividend Callable 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.

General reminder

Early sell back prior to maturity is accepted every other Tuesday, or if such day is not a HK business day, the next following day that is a HK business day. Please contact us if you wish to early sell-back.
If the investment period of your product subscribed is more than 1 year, you have a right to sell back the product to the bank within the post-sales cooling off period (i.e. within 5 business days from and including the order subscription date). You will be able to get back the principal minus any negative market value adjustments and the handling charge (if applicable).
Secondly, the investment decision is yours but you should not invest in this product unless HSBC staff has explained to you that the product is suitable for you having regard to your financial situation, investment experience and investment objectives.
HSBC has not provided any advice on the source of funds for the investment, including (i) new fund (ii) switching out / redemption of existing product(s), if applicable, this is solely based on your decision. (added on 8 Nov 2020)
Our assessment on product suitability is based on information provided by you and you are responsible for ensuring such information is complete, accurate, up-to-date and not misleading so our assessment is not adversely affected. HSBC will not assume any responsibility for information provided by you. (added on 8 Nov 2020)
The Securities and Futures Commission (the 'SFC') has authorized the Equity Linked Investments and offering documents of Equity Linked Investments. The SFC’s authorization does not imply official recommendation or endorsement of Equity Linked Investments, nor does it guarantee the commercial merits of Equity Linked Investments or its performance. (added on 6 Apr 2019)
The offering documents are not intended to provide tax, legal or other advice. If you are in any doubt, you should obtain independent professional advice.

Risk disclosure for RMB DCDC ELI

If you are purchasing RMB denominated products, please take note of the following risk factors:

The product will be denominated and settled in RMB outside PRC. Its exchange rate and interest rate may be different from RMB in PRC.
The risk of RMB exchange rate fluctuation and the limited availability of RMB outside PRC may adversely affect the market value of the product (including any buy-back price during cooling off period or the bank's bid price for market making arrangements), and you may suffer loss in principal.
For products which are denominated in a settlement currency other than RMB and linked to reference asset denominated in RMB, if the reference asset is deliverable to investor upon expiry, its value will be subject to the exchange rate fluctuation between the settlement currency and RMB.
Products or underlying investments which are not denominated in RMB are subject to multiple currency conversion costs in making investments and liquidating investments as well as RMB exchange rate fluctuations and bid/offer spreads when assets are sold to meet redemption requests and other capital requirements.
The available choice of underlying investments denominated in RMB outside Mainland China is limited. This may adversely affect the return and performance of the product.
Products which invest in debt instruments not supported by any collateral are exposed to credit risk of the counterparties.
Products which may invest in RMB debt instruments are subject to interest rate fluctuations, which may adversely affect the return and performance of the RMB products.
Products which invest in derivative instruments are subject to counterparty risk as the default by derivative issuers, may adversely affect the performance of the product and result in substantial loss.
Interest rates for RMB is government controlled. Change in interest rate for RMB in PRC may or may not influence the interest rate for RMB outside PRC. Any interest rate fluctuation for RMB outside PRC may affect the market value of the product.
If RMB payment obligation could not be satisfied as a result of a CNY disruption event, such payment maybe settled in HKD as soon as practicable without any interest payable for any delay. Such payment will be a complete discharge of our obligations under the product.

Risk disclosure For DCDC ELI Linked To ETF

If you are purchasing products linked to ETF, please take note of the following risk factors:
If the product is linked to or invests in synthetic ETFs, and is associated with the following risks:

The political, economic, currency and other risks related to the underlying index.
Synthetic ETF invests in derivatives and customers are exposed to the risks relating to the index, the credit risk and potential contagion of the derivative issuers.
The market value of the collateral might fall substantially when the issuer seeks to realise the collateral.
Higher liquidity risk and wider bid-offer spreads are involved if the synthetic ETF involves derivatives which do not have an active secondary market. This may result in losses.
Failure of the tracking strategy, currency differences, fees and expenses etc may result in the disparity between the performance of the synthetic ETF and the performance of the underlying index.
Where the index/market that the synthetic ETF tracks is subject to restricted access, the efficiency in unit creation or redemption may be disrupted, causing the synthetic ETF to trade at a higher premium or discount to its net asset value. If the ETF terminates, investors may not be able to recover the premium.

If the product is linked to/invests in ETF, and is associated with the following risks:

Political, economic, currency and other risks related to the underlying equity(ies), assets or index.
There may be disparity between the performance of the ETF and the performance of the underlying equity(ies), assets or index.
Where the index or equity(ies) or assets that the ETF tracks is subject to restricted access, the efficiency in unit creation or redemption may be disrupted, causing the ETF to trade at a premium or discount to its net asset value.

If the product is linked to/invests in REIT, and is associated with the following risks:

The REIT is exposed to the risks relating to investment in real estate
There may be disparity between the market price of the units of a REIT and the net asset value per unit.

If the product is linked to or invests in China ETFs, and is associated with the following risks:

This product is linked to units of a China ETF issued and traded outside the PRC which invests directly in A-shares through the RQFII regime and/or the “China Connect”. Investing in this product linked to a China ETF may be riskier than investing in product linked to traditional ETFs.
The China ETF invests primarily in the PRC markets which involve concentration risk and other risks and special considerations not typically associated with investment in more developed economies or markets, such as greater risks related to political, tax, economic foreign exchange, liquidity, and regulatory.
The RQFII and China Connect prescribed by the PRC government policy and rules are new and subject to change. The uncertainty and any potential change of the laws and regulations in the PRC may adversely and retrospectively impact the China ETF as well as the product.
Trading of securities invested by the China ETF under China Connect will subject to a daily quota which does not belong to such China ETF and is utlized on a "first-come-first serve" basis. If the quota is reached, the manager may suspend creation of any China ETF unit. The liquidity of such China ETF may be affected and the China ETF may be trading in premium therefore and render the price of the Product more volatile. (added on 8 Nov 2020)
There are risks and uncertainties associated with the current Chinese tax laws applicable to investment made by China ETF.
The tax laws, rules, regulations and practice in PRC may subject to change and such change(s) may have retrospective effect. The units of such China ETF could become subject to additional taxation that is not anticipated at the trade date of the product.
Although the China ETF may have made tax provisions in respect of potential tax liability that may arise from their investments, the provisions may not be sufficient or may even be excessive.
Any shortfall between the provisions and the actual tax liabilities may have to be covered by the China ETF’s assets and may adversely affect the China ETF’s value.
In addition, any changes in tax policies of the PRC government may reduce the after-tax profits of the companies in PRC which the China ETF invests in and may adversely affect the net asset value of such China ETF which in turn may adversely affect the market value and/or any potential gain or loss of the product.
Although the units of the China ETF are listed on the Hong Kong Stock Exchange, there is no guarantee that an active trading market or liquidity of that market can be sustained. Also, the price and trading volume of the units of the China ETF may be highly volatile subject to the market sentiment, and may be more volatile than ETFs with a longer trading history. The risks may have a significant adverse impact on the performance of the units of a China ETF and the value of the product.
The ETF units are traded in both RMB and HKD under the Exchange’s dual counter model and may involve additional risks. If the product is linked to the HKD traded units, any movement in the trading prices of the RMB traded units should not directly affect the price of the product, and vice versa. The market price on the Hong Kong Stock Exchange of HKD traded units and RMB traded units may deviate significantly due to a number of factors, including market liquidity, RMB conversion risk, currency risk and the demand and supply of each counter.
Suspension of the inter-counter transfer of units between the HKD counter and the RMB counter for any reason may affect adversely to the price for the product.

Product risk disclosure for Up&Out Growth Equity Linked Investment (ELI)

(Last updated 6 Nov 2023)

General

The product is a complex product and you should exercise caution in relation to the product. (added on 25 Mar 2019)
Up&Out Growth ELI is NOT equivalent to time deposit. It is a structured products 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 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 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 received any potential return for the entire scheduled tenor of the Up&Out Growth Equity Linked Investment.
The product is subject to a cap, your potential gain is limited. Performance of the reference asset may not be 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.

General reminder

Early sell back prior to maturity is accepted every other Tuesday, or if such day is not a business day, the next following day that is a business day.
If the investment period of your product subscribed is more than 1 year, you have a right to sell back the product to the bank within the post-sales cooling off period (i.e. within 5 business days from and including the order subscription date). You will be able to get back the principal minus any negative market value adjustments and the handling charge (if applicable).
Secondly, the investment decision is yours but you should not invest in this product unless HSBC staff has explained to you that the product is suitable for you having regard to your financial situation, investment experience and investment objectives.
HSBC has not provided any advice on the source of funds for the investment, including (i) new fund (ii) switching out / redemption of existing product(s), if applicable, this is solely based on your decision. (added on 8 Nov 2020)
Our assessment on product suitability is based on information provided by you and you are responsible for ensuring such information is complete, accurate, up-to-date and not misleading so our assessment is not adversely affected. HSBC will not assume any responsibility for information provided by you. (added on 8 Nov 2020)
The Securities and Futures Commission (the 'SFC') has authorized the Equity Linked Investments and offering documents of Equity Linked Investments. The SFC’s authorization does not imply official recommendation or endorsement of Equity Linked Investments, nor does it guarantee the commercial merits of Equity Linked Investments or its performance. (added on 6 Apr 2019)
The offering documents are not intended to provide tax, legal or other advice. If you are in any doubt, you should obtain independent professional advice.

Risk disclosure for RMB ELI

If you are purchasing RMB denominated products, please take note of the following risk factors:

The product will be denominated and settled in RMB outside PRC. Its exchange rate and interest rate may be different from RMB in PRC.
The risk of RMB exchange rate fluctuation and the limited availability of RMB outside PRC may adversely affect the market value of the product (including any buy-back price during cooling off period or the bank's bid price for market making arrangements), and you may suffer loss in principal.
For products which are denominated in a settlement currency other than RMB and linked to reference asset denominated in RMB, if the reference asset is deliverable to investor upon expiry, its value will be subject to the exchange rate fluctuation between the settlement currency and RMB.
Products or underlying investments which are not denominated in RMB are subject to multiple currency conversion costs in making investments and liquidating investments as well as RMB exchange rate fluctuations and bid/offer spreads when assets are sold to meet redemption requests and other capital requirements.
The available choice of underlying investments denominated in RMB outside Mainland China is limited. This may adversely affect the return and performance of the product.
Products which invest in debt instruments not supported by any collateral are exposed to credit risk of the counterparties.
Products which may invest in RMB debt instruments are subject to interest rate fluctuations, which may adversely affect the return and performance of the RMB products.
Products which invest in derivative instruments are subject to counterparty risk as the default by derivative issuers, may adversely affect the performance of the product and result in substantial loss.
Interest rates for RMB is government controlled. Change in interest rate for RMB in PRC may or may not influence the interest rate for RMB outside PRC. Any interest rate fluctuation for RMB outside PRC may affect the market value of the product.
If RMB payment obligation could not be satisfied as a result of a CNY disruption event, such payment maybe settled in HKD as soon as practicable without any interest payable for any delay. Such payment will be a complete discharge of our obligations under the product.

Risk disclosure For ELI Linked To ETF

If you are purchasing products linked to ETF, please take note of the following risk factors:

If the product is linked to or invests in synthetic ETFs, and is associated with the following risks:

The political, economic, currency and other risks related to the underlying index.
Synthetic ETF invests in derivatives and customers are exposed to the risks relating to the index, the credit risk and potential contagion of the derivative issuers.
The market value of the collateral might fall substantially when the issuer seeks to realise the collateral.
Higher liquidity risk and wider bid-offer spreads are involved if the synthetic ETF involves derivatives which do not have an active secondary market. This may result in losses.
Failure of the tracking strategy, currency differences, fees and expenses etc may result in the disparity between the performance of the synthetic ETF and the performance of the underlying index.
Where the index/market that the synthetic ETF tracks is subject to restricted access, the efficiency in unit creation or redemption may be disrupted, causing the synthetic ETF to trade at a higher premium or discount to its net asset value. If the ETF terminates, investors may not be able to recover the premium.

If the product is linked to/invests in ETF, and is associated with the following risks:

Political, economic, currency and other risks related to the underlying equity(ies), assets or index.
There may be disparity between the performance of the ETF and the performance of the underlying equity(ies), assets or index.
Where the index or equity(ies) or assets that the ETF tracks is subject to restricted access, the efficiency in unit creation or redemption may be disrupted, causing the ETF to trade at a premium or discount to its net asset value.

If the product is linked to/invests in REIT, and is associated with the following risks:

The REIT is exposed to the risks relating to investment in real estate
There may be disparity between the market price of the units of a REIT and the net asset value per unit.

If the product is linked to or invests in China ETFs, and is associated with the following risks:

This product is linked to units of a China ETF issued and traded outside the PRC which invests directly in A-shares through the RQFII regime and/or the “China Connect”. Investing in this product linked to a China ETF may be riskier than investing in product linked to traditional ETFs.
The China ETF invests primarily in the PRC markets which involve concentration risk and other risks and special considerations not typically associated with investment in more developed economies or markets, such as greater risks related to political, tax, economic foreign exchange, liquidity, and regulatory.
The RQFII and China Connect prescribed by the PRC government policy and rules are new and subject to change. The uncertainty and any potential change of the laws and regulations in the PRC may adversely and retrospectively impact the China ETF as well as the product.
Trading of securities invested by the China ETF under China Connect will subject to a daily quota which does not belong to such China ETF and is utlized on a "first-come-first serve" basis. If the quota is reached, the manager may suspend creation of any China ETF unit. The liquidity of such China ETF may be affected and the China ETF may be trading in premium therefore and render the price of the Product more volatile. (added on 8 Nov 2020)
There are risks and uncertainties associated with the current Chinese tax laws applicable to investment made by China ETF.
The tax laws, rules, regulations and practice in PRC may subject to change and such change(s) may have retrospective effect. The units of such China ETF could become subject to additional taxation that is not anticipated at the trade date of the product.
Although the China ETF may have made tax provisions in respect of potential tax liability that may arise from their investments, the provisions may not be sufficient or may even be excessive.
Any shortfall between the provisions and the actual tax liabilities may have to be covered by the China ETF’s assets and may adversely affect the China ETF’s value.
In addition, any changes in tax policies of the PRC government may reduce the after-tax profits of the companies in PRC which the China ETF invests in and may adversely affect the net asset value of such China ETF which in turn may adversely affect the market value and/or any potential gain or loss of the product.
Although the units of the China ETF are listed on the Hong Kong Stock Exchange, there is no guarantee that an active trading market or liquidity of that market can be sustained. Also, the price and trading volume of the units of the China ETF may be highly volatile subject to the market sentiment, and may be more volatile than ETFs with a longer trading history. The risks may have a significant adverse impact on the performance of the units of a China ETF and the value of the product.
The ETF units are traded in both RMB and HKD under the Exchange’s dual counter model and may involve additional risks. If the product is linked to the HKD traded units, any movement in the trading prices of the RMB traded units should not directly affect the price of the product, and vice versa. The market price on the Hong Kong Stock Exchange of HKD traded units and RMB traded units may deviate significantly due to a number of factors, including market liquidity, RMB conversion risk, currency risk and the demand and supply of each counter.
Suspension of the inter-counter transfer of units between the HKD counter and the RMB counter for any reason may affect adversely to the price for the product.

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.

General reminder

Early sell back prior to maturity is accepted every other Tuesday, or if such day is not a HK business day, the next following day that is a HK business day. Please contact us if you wish to early sell-back.
The investment decision is yours but you should not invest in this product unless HSBC staff has explained to you that the product is suitable for you having regard to your financial situation, investment experience and investment objectives.
HSBC has not provided any advice on the source of funds for the investment, including (i) new fund (ii) switching out / redemption of existing product(s), if applicable, this is solely based on your decision. (added on 8 Nov 2020)
Our assessment on product suitability is based on information provided by you and you are responsible for ensuring such information is complete, accurate, up-to-date and not misleading so our assessment is not adversely affected. HSBC will not assume any responsibility for information provided by you. (added on 8 Nov 2020)
The offering documents of the private placement notes provided by the issuer have not been reviewed by the Securities and Futures Commission of Hong Kong or any regulatory authority in Hong Kong, and you are advised to exercise caution in relation to the offer. (added on 6 Apr 2019)
The private placement notes is available to Professional Investors only. (added on 6 Apr 2019)
The offering documents are not intended to provide tax, legal or other advice. If you are in any doubt, you should obtain independent professional advice.

Risk disclosure for RMB PPN

If you are purchasing RMB denominated products, please take note of the following risk factors:

The product will be denominated and settled in RMB outside PRC. Its exchange rate and interest rate may be different from RMB in PRC.
The risk of RMB exchange rate fluctuation and the limited availability of RMB outside PRC may adversely affect the market value of the product (including any buy-back price during cooling off period or the bank's bid price for market making arrangements), and you may suffer loss in principal.
For products which are denominated in a settlement currency other than RMB and linked to reference asset denominated in RMB, if the reference asset is deliverable to investor upon expiry, its value will be subject to the exchange rate fluctuation between the settlement currency and RMB.
Products or underlying investments which are not denominated in RMB are subject to multiple currency conversion costs in making investments and liquidating investments as well as RMB exchange rate fluctuations and bid/offer spreads when assets are sold to meet redemption requests and other capital requirements.
The available choice of underlying investments denominated in RMB outside Mainland China is limited. This may adversely affect the return and performance of the product.
Products which invest in debt instruments not supported by any collateral are exposed to credit risk of the counterparties.
Products which may invest in RMB debt instruments are subject to interest rate fluctuations, which may adversely affect the return and performance of the RMB products.
Products which invest in derivative instruments are subject to counterparty risk as the default by derivative issuers, may adversely affect the performance of the product and result in substantial loss.
Interest rates for RMB is government controlled. Change in interest rate for RMB in PRC may or may not influence the interest rate for RMB outside PRC. Any interest rate fluctuation for RMB outside PRC may affect the market value of the product.
If RMB payment obligation could not be satisfied as a result of a CNY disruption event, such payment maybe settled in HKD as soon as practicable without any interest payable for any delay. Such payment will be a complete discharge of our obligations under the product.

Risk disclosure for PPN linked to ETF

If you are purchasing products linked to ETF, please take note of the following risk factors:
If the product is linked to or invests in synthetic ETFs, and is associated with the following risks:

The political, economic, currency and other risks related to the underlying index.
Synthetic ETF invests in derivatives and customers are exposed to the risks relating to the index, the credit risk and potential contagion of the derivative issuers.
The market value of the collateral might fall substantially when the issuer seeks to realise the collateral.
Higher liquidity risk and wider bid-offer spreads are involved if the synthetic ETF involves derivatives which do not have an active secondary market. This may result in losses.
Failure of the tracking strategy, currency differences, fees and expenses etc may result in the disparity between the performance of the synthetic ETF and the performance of the underlying index.
Where the index/market that the synthetic ETF tracks is subject to restricted access, the efficiency in unit creation or redemption may be disrupted, causing the synthetic ETF to trade at a higher premium or discount to its net asset value. If the ETF terminates, investors may not be able to recover the premium.

If the product is linked to/invests in ETF, and is associated with the following risks:

Political, economic, currency and other risks related to the underlying equity(ies), assets or index.
There may be disparity between the performance of the ETF and the performance of the underlying equity(ies), assets or index.
Where the index or equity(ies) or assets that the ETF tracks is subject to restricted access, the efficiency in unit creation or redemption may be disrupted, causing the ETF to trade at a premium or discount to its net asset value.

If the product is linked to/invests in REIT, and is associated with the following risks:

The REIT is exposed to the risks relating to investment in real estate
There may be disparity between the market price of the units of a REIT and the net asset value per unit.

If the product is linked to or invests in China ETFs, and is associated with the following risks:

This product is linked to units of a China ETF issued and traded outside the PRC which invests directly in A-shares through the RQFII regime and/or the "China Connect". Investing in this product linked to a China ETF may be riskier than investing in product linked to traditional ETFs.
The China ETF invests primarily in the PRC markets which involve concentration risk and other risks and special considerations not typically associated with investment in more developed economies or markets, such as greater risks related to political, tax, economic foreign exchange, liquidity, and regulatory.
The RQFII and China Connect prescribed by the PRC government policy and rules are new and subject to change. The uncertainty and any potential change of the laws and regulations in the PRC may adversely and retrospectively impact the China ETF as well as the product.
Trading of securities invested by the China ETF under China Connect will subject to a daily quota which does not belong to such China ETF and is utlized on a "first-come-first serve" basis. If the quota is reached, the manager may suspend creation of any China ETF unit. The liquidity of such China ETF may be affected and the China ETF may be trading in premium therefore and render the price of the Product more volatile. (added on 8 Nov 2020)
There are risks and uncertainties associated with the current Chinese tax laws applicable to investment made by China ETF.
The tax laws, rules, regulations and practice in PRC may subject to change and such change(s) may have retrospective effect. The units of such China ETF could become subject to additional taxation that is not anticipated at the trade date of the product.
Although the China ETF may have made tax provisions in respect of potential tax liability that may arise from their investments, the provisions may not be sufficient or may even be excessive.
Any shortfall between the provisions and the actual tax liabilities may have to be covered by the China ETF’s assets and may adversely affect the China ETF's value.
In addition, any changes in tax policies of the PRC government may reduce the after-tax profits of the companies in PRC which the China ETF invests in and may adversely affect the net asset value of such China ETF which in turn may adversely affect the market value and/or any potential gain or loss of the product.
Although the units of the China ETF are listed on the Hong Kong Stock Exchange, there is no guarantee that an active trading market or liquidity of that market can be sustained. Also, the price and trading volume of the units of the China ETF may be highly volatile subject to the market sentiment, and may be more volatile than ETFs with a longer trading history. The risks may have a significant adverse impact on the performance of the units of a China ETF and the value of the product.
The ETF units are traded in both RMB and HKD under the Exchange’s dual counter model and may involve additional risks. If the product is linked to the HKD traded units, any movement in the trading prices of the RMB traded units should not directly affect the price of the product, and vice versa. The market price on the Hong Kong Stock Exchange of HKD traded units and RMB traded units may deviate significantly due to a number of factors, including market liquidity, RMB conversion risk, currency risk and the demand and supply of each counter.
Suspension of the inter-counter transfer of units between the HKD counter and the RMB counter for any reason may affect adversely to the price for the product.

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.

General reminder

Early sell back prior to maturity is accepted every other Tuesday, or if such day is not a HK business day, the next following day that is a HK business day. Please contact us if you wish to early sell-back.
The investment decision is yours but you should not invest in this product unless HSBC staff has explained to you that the product is suitable for you having regard to your financial situation, investment experience and investment objectives.
HSBC has not provided any advice on the source of funds for the investment, including (i) new fund (ii) switching out / redemption of existing product(s), if applicable, this is solely based on your decision. (added on 8 Nov 2020)
Our assessment on product suitability is based on information provided by you and you are responsible for ensuring such information is complete, accurate, up-to-date and not misleading so our assessment is not adversely affected. HSBC will not assume any responsibility for information provided by you. (added on 8 Nov 2020)
The offering documents of the private placement notes provided by the issuer have not been reviewed by the Securities and Futures Commission of Hong Kong or any regulatory authority in Hong Kong, and you are advised to exercise caution in relation to the offer. (added on 6 Apr 2019)
The private placement notes is available to Professional Investors only. (added on 6 Apr 2019)
The offering documents are not intended to provide tax, legal or other advice. If you are in any doubt, you should obtain independent professional advice.

Risk disclosure for RMB PPN

If you are purchasing RMB denominated products, please take note of the following risk factors:

The product will be denominated and settled in RMB outside PRC. Its exchange rate and interest rate may be different from RMB in PRC.
The risk of RMB exchange rate fluctuation and the limited availability of RMB outside PRC may adversely affect the market value of the product (including any buy-back price during cooling off period or the bank's bid price for market making arrangements), and you may suffer loss in principal.
For products which are denominated in a settlement currency other than RMB and linked to reference asset denominated in RMB, if the reference asset is deliverable to investor upon expiry, its value will be subject to the exchange rate fluctuation between the settlement currency and RMB.
Products or underlying investments which are not denominated in RMB are subject to multiple currency conversion costs in making investments and liquidating investments as well as RMB exchange rate fluctuations and bid/offer spreads when assets are sold to meet redemption requests and other capital requirements.
The available choice of underlying investments denominated in RMB outside Mainland China is limited. This may adversely affect the return and performance of the product.
Products which invest in debt instruments not supported by any collateral are exposed to credit risk of the counterparties.
Products which may invest in RMB debt instruments are subject to interest rate fluctuations, which may adversely affect the return and performance of the RMB products.
Products which invest in derivative instruments are subject to counterparty risk as the default by derivative issuers, may adversely affect the performance of the product and result in substantial loss.
Interest rates for RMB is government controlled. Change in interest rate for RMB in PRC may or may not influence the interest rate for RMB outside PRC. Any interest rate fluctuation for RMB outside PRC may affect the market value of the product.
If RMB payment obligation could not be satisfied as a result of a CNY disruption event, such payment maybe settled in HKD as soon as practicable without any interest payable for any delay. Such payment will be a complete discharge of our obligations under the product.

Risk disclosure for PPN linked to ETF

If you are purchasing products linked to ETF, please take note of the following risk factors:
If the product is linked to or invests in synthetic ETFs, and is associated with the following risks:

The political, economic, currency and other risks related to the underlying index.
Synthetic ETF invests in derivatives and customers are exposed to the risks relating to the index, the credit risk and potential contagion of the derivative issuers.
The market value of the collateral might fall substantially when the issuer seeks to realise the collateral.
Higher liquidity risk and wider bid-offer spreads are involved if the synthetic ETF involves derivatives which do not have an active secondary market. This may result in losses.
Failure of the tracking strategy, currency differences, fees and expenses etc may result in the disparity between the performance of the synthetic ETF and the performance of the underlying index.
Where the index/market that the synthetic ETF tracks is subject to restricted access, the efficiency in unit creation or redemption may be disrupted, causing the synthetic ETF to trade at a higher premium or discount to its net asset value. If the ETF terminates, investors may not be able to recover the premium.

If the product is linked to/invests in ETF, and is associated with the following risks:

Political, economic, currency and other risks related to the underlying equity(ies), assets or index.
There may be disparity between the performance of the ETF and the performance of the underlying equity(ies), assets or index.
Where the index or equity(ies) or assets that the ETF tracks is subject to restricted access, the efficiency in unit creation or redemption may be disrupted, causing the ETF to trade at a premium or discount to its net asset value.

If the product is linked to/invests in REIT, and is associated with the following risks:

The REIT is exposed to the risks relating to investment in real estate.
There may be disparity between the market price of the units of a REIT and the net asset value per unit.

If the product is linked to or invests in China ETFs, and is associated with the following risks:

This product is linked to units of a China ETF issued and traded outside the PRC which invests directly in A-shares through the RQFII regime and/or the “China Connect”. Investing in this product linked to a China ETF may be riskier than investing in product linked to traditional ETFs.
The China ETF invests primarily in the PRC markets which involve concentration risk and other risks and special considerations not typically associated with investment in more developed economies or markets, such as greater risks related to political, tax, economic foreign exchange, liquidity, and regulatory.
The RQFII and China Connect prescribed by the PRC government policy and rules are new and subject to change. The uncertainty and any potential change of the laws and regulations in the PRC may adversely and retrospectively impact the China ETF as well as the product.
Trading of securities invested by the China ETF under China Connect will subject to a daily quota which does not belong to such China ETF and is utlized on a "first-come-first serve" basis. If the quota is reached, the manager may suspend creation of any China ETF unit. The liquidity of such China ETF may be affected and the China ETF may be trading in premium therefore and render the price of the Product more volatile. (added on 8 Nov 2020)
There are risks and uncertainties associated with the current Chinese tax laws applicable to investment made by China ETF.
The tax laws, rules, regulations and practice in PRC may subject to change and such change(s) may have retrospective effect. The units of such China ETF could become subject to additional taxation that is not anticipated at the trade date of the product.
Although the China ETF may have made tax provisions in respect of potential tax liability that may arise from their investments, the provisions may not be sufficient or may even be excessive.
Any shortfall between the provisions and the actual tax liabilities may have to be covered by the China ETF’s assets and may adversely affect the China ETF’s value.
In addition, any changes in tax policies of the PRC government may reduce the after-tax profits of the companies in PRC which the China ETF invests in and may adversely affect the net asset value of such China ETF which in turn may adversely affect the market value and/or any potential gain or loss of the product.
Although the units of the China ETF are listed on the Hong Kong Stock Exchange, there is no guarantee that an active trading market or liquidity of that market can be sustained. Also, the price and trading volume of the units of the China ETF maybe highly volatile subject to the market sentiment, and may be more volatile than ETFs with a longer trading history. The risks may have a significant adverse impact on the performance of the units of a China ETF and the value of the product.
The ETF units are traded in both RMB and HKD under the Exchange’s dual counter model and may involve additional risks. If the product is linked to the HKD traded units, any movement in the trading prices of the RMB traded units should not directly affect the price of the product, and vice versa. The market price on the Hong Kong Stock Exchange of HKD traded units and RMB traded units may deviate significantly due to a number of factors, including market liquidity, RMB conversion risk, currency risk and the demand and supply of each counter.
Suspension of the inter-counter transfer of units between the HKD counter and the RMB counter for any reason may affect adversely to the price for the product.

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.

General reminder

Early sell back prior to maturity is accepted every other Tuesday, or if such day is not a HK business day, the next following day that is a HK business day. Please contact us if you wish to early sell-back.
The investment decision is yours but you should not invest in this product unless HSBC staff has explained to you that the product is suitable for you having regard to your financial situation, investment experience and investment objectives.
HSBC has not provided any advice on the source of funds for the investment, including (i) new fund (ii) switching out / redemption of existing product(s), if applicable, this is solely based on your decision. (added on 8 Nov 2020)
Our assessment on product suitability is based on information provided by you and you are responsible for ensuring such information is complete, accurate, up-to-date and not misleading so our assessment is not adversely affected. HSBC will not assume any responsibility for information provided by you. (added on 8 Nov 2020)
The offering documents of the private placement notes provided by the issuer have not been reviewed by the Securities and Futures Commission of Hong Kong or any regulatory authority in Hong Kong, and you are advised to exercise caution in relation to the offer.
The private placement notes is available to Professional Investors only.
The offering documents are not intended to provide tax, legal or other advice. If you are in any doubt, you should obtain independent professional advice.

Risk disclosure for RMB PPN

If you are purchasing RMB denominated products, please take note of the following risk factors:

The product will be denominated and settled in RMB outside PRC. Its exchange rate and interest rate may be different from RMB in PRC.
The risk of RMB exchange rate fluctuation and the limited availability of RMB outside PRC may adversely affect the market value of the product (including any buy-back price during cooling off period or the bank's bid price for market making arrangements), and you may suffer loss in principal.
For products which are denominated in a settlement currency other than RMB and linked to reference asset denominated in RMB, if the reference asset is deliverable to investor upon expiry, its value will be subject to the exchange rate fluctuation between the settlement currency and RMB.
Products or underlying investments which are not denominated in RMB are subject to multiple currency conversion costs in making investments and liquidating investments as well as RMB exchange rate fluctuations and bid/offer spreads when assets are sold to meet redemption requests and other capital requirements.
The available choice of underlying investments denominated in RMB outside Mainland China is limited. This may adversely affect the return and performance of the product.
Products which invest in debt instruments not supported by any collateral are exposed to credit risk of the counterparties.
Products which may invest in RMB debt instruments are subject to interest rate fluctuations, which may adversely affect the return and performance of the RMB products.
Products which invest in derivative instruments are subject to counterparty risk as the default by derivative issuers, may adversely affect the performance of the product and result in substantial loss.
Interest rates for RMB is government controlled. Change in interest rate for RMB in PRC may or may not influence the interest rate for RMB outside PRC. Any interest rate fluctuation for RMB outside PRC may affect the market value of the product.
If RMB payment obligation could not be satisfied as a result of a CNY disruption event, such payment maybe settled in HKD as soon as practicable without any interest payable for any delay. Such payment will be a complete discharge of our obligations under the product.

Risk disclosure for PPN linked to ETF

If you are purchasing products linked to ETF, please take note of the following risk factors:
If the product is linked to or invests in synthetic ETFs, and is associated with the following risks:

The political, economic, currency and other risks related to the underlying index.
Synthetic ETF invests in derivatives and customers are exposed to the risks relating to the index, the credit risk and potential contagion of the derivative issuers.
The market value of the collateral might fall substantially when the issuer seeks to realise the collateral.
Higher liquidity risk and wider bid-offer spreads are involved if the synthetic ETF involves derivatives which do not have an active secondary market. This may result in losses.
Failure of the tracking strategy, currency differences, fees and expenses etc may result in the disparity between the performance of the synthetic ETF and the performance of the underlying index.
Where the index/market that the synthetic ETF tracks is subject to restricted access, the efficiency in unit creation or redemption may be disrupted, causing the synthetic ETF to trade at a higher premium or discount to its net asset value. If the ETF terminates, investors may not be able to recover the premium.

If the product is linked to/invests in ETF, and is associated with the following risks:

Political, economic, currency and other risks related to the underlying equity(ies), assets or index.
There may be disparity between the performance of the ETF and the performance of the underlying equity(ies), assets or index.
Where the index or equity(ies) or assets that the ETF tracks is subject to restricted access, the efficiency in unit creation or redemption may be disrupted, causing the ETF to trade at a premium or discount to its net asset value.

If the product is linked to/invests in REIT, and is associated with the following risks:

The REIT is exposed to the risks relating to investment in real estate
There may be disparity between the market price of the units of a REIT and the net asset value per unit.

If the product is linked to or invests in China ETFs, and is associated with the following risks:

This product is linked to units of a China ETF issued and traded outside the PRC which invests directly in A-shares through the RQFII regime and/or the "China Connect". Investing in this product linked to a China ETF may be riskier than investing in product linked to traditional ETFs.
The China ETF invests primarily in the PRC markets which involve concentration risk and other risks and special considerations not typically associated with investment in more developed economies or markets, such as greater risks related to political, tax, economic foreign exchange, liquidity, and regulatory.
The RQFII and China Connect prescribed by the PRC government policy and rules are new and subject to change. The uncertainty and any potential change of the laws and regulations in the PRC may adversely and retrospectively impact the China ETF as well as the product.
Trading of securities invested by the China ETF under China Connect will subject to a daily quota which does not belong to such China ETF and is utlized on a "first-come-first serve" basis. If the quota is reached, the manager may suspend creation of any China ETF unit. The liquidity of such China ETF may be affected and the China ETF may be trading in premium therefore and render the price of the Product more volatile. (added on 8 Nov 2020)
There are risks and uncertainties associated with the current Chinese tax laws applicable to investment made by China ETF.
The tax laws, rules, regulations and practice in PRC may subject to change and such change(s) may have retrospective effect. The units of such China ETF could become subject to additional taxation that is not anticipated at the trade date of the product.
Although the China ETF may have made tax provisions in respect of potential tax liability that may arise from their investments, the provisions may not be sufficient or may even be excessive.
Any shortfall between the provisions and the actual tax liabilities may have to be covered by the China ETF's assets and may adversely affect the China ETF’s value.
In addition, any changes in tax policies of the PRC government may reduce the after-tax profits of the companies in PRC which the China ETF invests in and may adversely affect the net asset value of such China ETF which in turn may adversely affect the market value and/or any potential gain or loss of the product.
Although the units of the China ETF are listed on the Hong Kong Stock Exchange, there is no guarantee that an active trading market or liquidity of that market can be sustained. Also, the price and trading volume of the units of the China ETF may be highly volatile subject to the market sentiment, and may be more volatile than ETFs with a longer trading history. The risks may have a significant adverse impact on the performance of the units of a China ETF and the value of the product.
The ETF units are traded in both RMB and HKD under the Exchange’s dual counter model and may involve additional risks. If the product is linked to the HKD traded units, any movement in the trading prices of the RMB traded units should not directly affect the price of the product, and vice versa. The market price on the Hong Kong Stock Exchange of HKD traded units and RMB traded units may deviate significantly due to a number of factors, including market liquidity, RMB conversion risk, currency risk and the demand and supply of each counter.
Suspension of the inter-counter transfer of units between the HKD counter and the RMB counter for any reason may affect adversely to the price for the product.

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.

General reminder

Early sell back prior to maturity is accepted every other Tuesday, or if such day is not a HK business day, the next following day that is a HK business day. Please contact us if you wish to early sell-back.
The investment decision is yours but you should not invest in this product unless HSBC staff has explained to you that the product is suitable for you having regard to your financial situation, investment experience and investment objectives.
HSBC has not provided any advice on the source of funds for the investment, including (i) new fund (ii) switching out / redemption of existing product(s), if applicable, this is solely based on your decision. (added on 8 Nov 2020)
Our assessment on product suitability is based on information provided by you and you are responsible for ensuring such information is complete, accurate, up-to-date and not misleading so our assessment is not adversely affected. HSBC will not assume any responsibility for information provided by you. (added on 8 Nov 2020)
The offering documents of the private placement notes provided by the issuer have not been reviewed by the Securities and Futures Commission of Hong Kong or any regulatory authority in Hong Kong, and you are advised to exercise caution in relation to the offer.
The private placement notes is available to Professional Investors only.
The offering documents are not intended to provide tax, legal or other advice. If you are in any doubt, you should obtain independent professional advice.

Risk disclosure for RMB PPN
If you are purchasing RMB denominated products, please take note of the following risk factors:

The product will be denominated and settled in RMB outside PRC. Its exchange rate and interest rate may be different from RMB in PRC.
The risk of RMB exchange rate fluctuation and the limited availability of RMB outside PRC may adversely affect the market value of the product (including any buy-back price during cooling off period or the bank's bid price for market making arrangements), and you may suffer loss in principal.
For products which are denominated in a settlement currency other than RMB and linked to reference asset denominated in RMB, if the reference asset is deliverable to investor upon expiry, its value will be subject to the exchange rate fluctuation between the settlement currency and RMB.
Products or underlying investments which are not denominated in RMB are subject to multiple currency conversion costs in making investments and liquidating investments as well as RMB exchange rate fluctuations and bid/offer spreads when assets are sold to meet redemption requests and other capital requirements.
The available choice of underlying investments denominated in RMB outside Mainland China is limited. This may adversely affect the return and performance of the product.
Products which invest in debt instruments not supported by any collateral are exposed to credit risk of the counterparties.
Products which may invest in RMB debt instruments are subject to interest rate fluctuations, which may adversely affect the return and performance of the RMB products.
Products which invest in derivative instruments are subject to counterparty risk as the default by derivative issuers, may adversely affect the performance of the product and result in substantial loss.
Interest rates for RMB is government controlled. Change in interest rate for RMB in PRC may or may not influence the interest rate for RMB outside PRC. Any interest rate fluctuation for RMB outside PRC may affect the market value of the product.
If RMB payment obligation could not be satisfied as a result of a CNY disruption event, such payment maybe settled in HKD as soon as practicable without any interest payable for any delay. Such payment will be a complete discharge of our obligations under the product.

Risk disclosure for PPN linked to ETF
If you are purchasing products linked to ETF, please take note of the following risk factors:
If the product is linked to or invests in synthetic ETFs, and is associated with the following risks:

The political, economic, currency and other risks related to the underlying index.
Synthetic ETF invests in derivatives and customers are exposed to the risks relating to the index, the credit risk and potential contagion of the derivative issuers.
The market value of the collateral might fall substantially when the issuer seeks to realise the collateral.
Higher liquidity risk and wider bid-offer spreads are involved if the synthetic ETF involves derivatives which do not have an active secondary market. This may result in losses.
Failure of the tracking strategy, currency differences, fees and expenses etc may result in the disparity between the performance of the synthetic ETF and the performance of the underlying index.
Where the index/market that the synthetic ETF tracks is subject to restricted access, the efficiency in unit creation or redemption may be disrupted, causing the synthetic ETF to trade at a higher premium or discount to its net asset value. If the ETF terminates, investors may not be able to recover the premium.

If the product is linked to/invests in ETF, and is associated with the following risks:

Political, economic, currency and other risks related to the underlying equity(ies), assets or index.
There may be disparity between the performance of the ETF and the performance of the underlying equity(ies), assets or index.
Where the index or equity(ies) or assets that the ETF tracks is subject to restricted access, the efficiency in unit creation or redemption may be disrupted, causing the ETF to trade at a premium or discount to its net asset value.

If the product is linked to/invests in REIT, and is associated with the following risks:

The REIT is exposed to the risks relating to investment in real estate
There may be disparity between the market price of the units of a REIT and the net asset value per unit.

If the product is linked to or invests in China ETFs, and is associated with the following risks:

This product is linked to units of a China ETF issued and traded outside the PRC which invests directly in A-shares through the RQFII regime and/or the "China Connect". Investing in this product linked to a China ETF may be riskier than investing in product linked to traditional ETFs.
The China ETF invests primarily in the PRC markets which involve concentration risk and other risks and special considerations not typically associated with investment in more developed economies or markets, such as greater risks related to political, tax, economic foreign exchange, liquidity, and regulatory.
The RQFII and China Connect prescribed by the PRC government policy and rules are new and subject to change. The uncertainty and any potential change of the laws and regulations in the PRC may adversely and retrospectively impact the China ETF as well as the product.
Trading of securities invested by the China ETF under China Connect will subject to a daily quota which does not belong to such China ETF and is utlized on a "first-come-first serve" basis. If the quota is reached, the manager may suspend creation of any China ETF unit. The liquidity of such China ETF may be affected and the China ETF may be trading in premium therefore and render the price of the Product more volatile. (added on 8 Nov 2020)
There are risks and uncertainties associated with the current Chinese tax laws applicable to investment made by China ETF.
The tax laws, rules, regulations and practice in PRC may subject to change and such change(s) may have retrospective effect. The units of such China ETF could become subject to additional taxation that is not anticipated at the trade date of the product.
Although the China ETF may have made tax provisions in respect of potential tax liability that may arise from their investments, the provisions may not be sufficient or may even be excessive.
Any shortfall between the provisions and the actual tax liabilities may have to be covered by the China ETF’s assets and may adversely affect the China ETF’s value.
In addition, any changes in tax policies of the PRC government may reduce the after-tax profits of the companies in PRC which the China ETF invests in and may adversely affect the net asset value of such China ETF which in turn may adversely affect the market value and/or any potential gain or loss of the product.
Although the units of the China ETF are listed on the Hong Kong Stock Exchange, there is no guarantee that an active trading market or liquidity of that market can be sustained. Also, the price and trading volume of the units of the China ETF may be highly volatile subject to the market sentiment, and may be more volatile than ETFs with a longer trading history. The risks may have a significant adverse impact on the performance of the units of a China ETF and the value of the product.
The ETF units are traded in both RMB and HKD under the Exchange’s dual counter model and may involve additional risks. If the product is linked to the HKD traded units, any movement in the trading prices of the RMB traded units should not directly affect the price of the product, and vice versa. The market price on the Hong Kong Stock Exchange of HKD traded units and RMB traded units may deviate significantly due to a number of factors, including market liquidity, RMB conversion risk, currency risk and the demand and supply of each counter.
Suspension of the inter-counter transfer of units between the HKD counter and the RMB counter for any reason may affect adversely to the price for the product.

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.

General reminder

Early sell back prior to maturity is accepted every other Tuesday, or if such day is not a HK business day, the next following day that is a HK business day. Please contact us if you wish to early sell-back.
The investment decision is yours but you should not invest in this product unless HSBC staff has explained to you that the product is suitable for you having regard to your financial situation, investment experience and investment objectives.
HSBC has not provided any advice on the source of funds for the investment, including (i) new fund (ii) switching out / redemption of existing product(s), if applicable, this is solely based on your decision. (added on 8 Nov 2020)
Our assessment on product suitability is based on information provided by you and you are responsible for ensuring such information is complete, accurate, up-to-date and not misleading so our assessment is not adversely affected. HSBC will not assume any responsibility for information provided by you. (added on 8 Nov 2020)
The offering documents of the private placement notes provided by the issuer have not been reviewed by the Securities and Futures Commission of Hong Kong or any regulatory authority in Hong Kong, and you are advised to exercise caution in relation to the offer.
The private placement notes is available to Professional Investors only.
The offering documents are not intended to provide tax, legal or other advice. If you are in any doubt, you should obtain independent professional advice.

Risk disclosure for RMB PPN

If you are purchasing RMB denominated products, please take note of the following risk factors:

The product will be denominated and settled in RMB outside PRC. Its exchange rate and interest rate may be different from RMB in PRC.
The risk of RMB exchange rate fluctuation and the limited availability of RMB outside PRC may adversely affect the market value of the product (including any buy-back price during cooling off period or the bank's bid price for market making arrangements), and you may suffer loss in principal.
For products which are denominated in a settlement currency other than RMB and linked to reference asset denominated in RMB, if the reference asset is deliverable to investor upon expiry, its value will be subject to the exchange rate fluctuation between the settlement currency and RMB.
Products or underlying investments which are not denominated in RMB are subject to multiple currency conversion costs in making investments and liquidating investments as well as RMB exchange rate fluctuations and bid/offer spreads when assets are sold to meet redemption requests and other capital requirements.
The available choice of underlying investments denominated in RMB outside Mainland China is limited. This may adversely affect the return and performance of the product.
Products which invest in debt instruments not supported by any collateral are exposed to credit risk of the counterparties.
Products which may invest in RMB debt instruments are subject to interest rate fluctuations, which may adversely affect the return and performance of the RMB products.
Products which invest in derivative instruments are subject to counterparty risk as the default by derivative issuers, may adversely affect the performance of the product and result in substantial loss.
Interest rates for RMB is government controlled. Change in interest rate for RMB in PRC may or may not influence the interest rate for RMB outside PRC. Any interest rate fluctuation for RMB outside PRC may affect the market value of the product.
If RMB payment obligation could not be satisfied as a result of a CNY disruption event, such payment maybe settled in HKD as soon as practicable without any interest payable for any delay. Such payment will be a complete discharge of our obligations under the product.

Risk disclosure for PPN linked to ETF

If you are purchasing products linked to ETF, please take note of the following risk factors:

If the product is linked to or invests in synthetic ETFs, and is associated with the following risks:

The political, economic, currency and other risks related to the underlying index.
Synthetic ETF invests in derivatives and customers are exposed to the risks relating to the index, the credit risk and potential contagion of the derivative issuers.
The market value of the collateral might fall substantially when the issuer seeks to realise the collateral.
Higher liquidity risk and wider bid-offer spreads are involved if the synthetic ETF involves derivatives which do not have an active secondary market. This may result in losses.
Failure of the tracking strategy, currency differences, fees and expenses etc may result in the disparity between the performance of the synthetic ETF and the performance of the underlying index.
Where the index/market that the synthetic ETF tracks is subject to restricted access, the efficiency in unit creation or redemption may be disrupted, causing the synthetic ETF to trade at a higher premium or discount to its net asset value. If the ETF terminates, investors may not be able to recover the premium.

If the product is linked to/invests in ETF, and is associated with the following risks:

Political, economic, currency and other risks related to the underlying equity(ies), assets or index.
There may be disparity between the performance of the ETF and the performance of the underlying equity(ies), assets or index.
Where the index or equity(ies) or assets that the ETF tracks is subject to restricted access, the efficiency in unit creation or redemption may be disrupted, causing the ETF to trade at a premium or discount to its net asset value.

If the product is linked to/invests in REIT, and is associated with the following risks:

The REIT is exposed to the risks relating to investment in real estate
There may be disparity between the market price of the units of a REIT and the net asset value per unit.

If the product is linked to or invests in China ETFs, and is associated with the following risks:

This product is linked to units of a China ETF issued and traded outside the PRC which invests directly in A-shares through the RQFII regime and/or the "China Connect". Investing in this product linked to a China ETF may be riskier than investing in product linked to traditional ETFs.
The China ETF invests primarily in the PRC markets which involve concentration risk and other risks and special considerations not typically associated with investment in more developed economies or markets, such as greater risks related to political, tax, economic foreign exchange, liquidity, and regulatory.
The RQFII and China Connect prescribed by the PRC government policy and rules are new and subject to change. The uncertainty and any potential change of the laws and regulations in the PRC may adversely and retrospectively impact the China ETF as well as the product.
Trading of securities invested by the China ETF under China Connect will subject to a daily quota which does not belong to such China ETF and is utlized on a "first-come-first serve" basis. If the quota is reached, the manager may suspend creation of any China ETF unit. The liquidity of such China ETF may be affected and the China ETF may be trading in premium therefore and render the price of the Product more volatile. (added on 8 Nov 2020)
There are risks and uncertainties associated with the current Chinese tax laws applicable to investment made by China ETF.
The tax laws, rules, regulations and practice in PRC may subject to change and such change(s) may have retrospective effect. The units of such China ETF could become subject to additional taxation that is not anticipated at the trade date of the product.
Although the China ETF may have made tax provisions in respect of potential tax liability that may arise from their investments, the provisions may not be sufficient or may even be excessive.
Any shortfall between the provisions and the actual tax liabilities may have to be covered by the China ETF’s assets and may adversely affect the China ETF’s value.
In addition, any changes in tax policies of the PRC government may reduce the after-tax profits of the companies in PRC which the China ETF invests in and may adversely affect the net asset value of such China ETF which in turn may adversely affect the market value and/or any potential gain or loss of the product.
Although the units of the China ETF are listed on the Hong Kong Stock Exchange, there is no guarantee that an active trading market or liquidity of that market can be sustained. Also, the price and trading volume of the units of the China ETF may be highly volatile subject to the market sentiment, and may be more volatile than ETFs with a longer trading history. The risks may have a significant adverse impact on the performance of the units of a China ETF and the value of the product.
The ETF units are traded in both RMB and HKD under the Exchange’s dual counter model and may involve additional risks. If the product is linked to the HKD traded units, any movement in the trading prices of the RMB traded units should not directly affect the price of the product, and vice versa. The market price on the Hong Kong Stock Exchange of HKD traded units and RMB traded units may deviate significantly due to a number of factors, including market liquidity, RMB conversion risk, currency risk and the demand and supply of each counter.
Suspension of the inter-counter transfer of units between the HKD counter and the RMB counter for any reason may affect adversely to the price for the product.

Product risk disclosure for Private Placement Note 50 (PPN50) – Digital Coupon Note

(Last updated 27 Mar 2023)

General

The product is a complex product and you should exercise caution in relation to the product.
This note is NOT equivalent to time deposit. It is a structured product involving derivatives.
For Principal Protected or Partial Protected Note, 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.
For Non Principal Protected Note, it is not principal protected, you could lose all of your investment in extreme cases.
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 changes in the market price of the reference asset, or if the product is linked to a basket of reference assets, changes in the market price of the worst performing asset of such basket for the bullish or range bound version of the note or the best performing asset of such basket for the bearish version of the note.
The potential gain is limited. Performance of the reference asset may not be 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 such basket for the bullish and range bound versions of the note or the best performing asset of such basket for the bearish version of the note.
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.

General reminder

Early sell back prior to maturity is accepted every other Tuesday, or if such day is not a HK business day, the next following day that is a HK business day. Please contact us if you wish to early sell-back.
The investment decision is yours but you should not invest in this product unless HSBC staff has explained to you that the product is suitable for you having regard to your financial situation, investment experience and investment objectives.
HSBC has not provided any advice on the source of funds for the investment, including (i) new fund (ii) switching out / redemption of existing product(s), if applicable, this is solely based on your decision. (added on 8 Nov 2020)
Our assessment on product suitability is based on information provided by you and you are responsible for ensuring such information is complete, accurate, up-to-date and not misleading so our assessment is not adversely affected. HSBC will not assume any responsibility for information provided by you. (added on 8 Nov 2020)
The offering documents of the private placement notes provided by the issuer have not been reviewed by the Securities and Futures Commission of Hong Kong or any regulatory authority in Hong Kong, and you are advised to exercise caution in relation to the offer.
The private placement notes is available to Professional Investors only.
The offering documents are not intended to provide tax, legal or other advice. If you are in any doubt, you should obtain independent professional advice.

Risk disclosure for RMB PPN

If you are purchasing RMB denominated products, please take note of the following risk factors:

The product will be denominated and settled in RMB outside PRC. Its exchange rate and interest rate may be different from RMB in PRC.
The risk of RMB exchange rate fluctuation and the limited availability of RMB outside PRC may adversely affect the market value of the product (including any buy-back price during cooling off period or the bank's bid price for market making arrangements), and you may suffer loss in principal.
For products which are denominated in a settlement currency other than RMB and linked to reference asset denominated in RMB, if the reference asset is deliverable to investor upon expiry, its value will be subject to the exchange rate fluctuation between the settlement currency and RMB.
Products or underlying investments which are not denominated in RMB are subject to multiple currency conversion costs in making investments and liquidating investments as well as RMB exchange rate fluctuations and bid/offer spreads when assets are sold to meet redemption requests and other capital requirements.
The available choice of underlying investments denominated in RMB outside Mainland China is limited. This may adversely affect the return and performance of the product.
Products which invest in debt instruments not supported by any collateral are exposed to credit risk of the counterparties.
Products which may invest in RMB debt instruments are subject to interest rate fluctuations, which may adversely affect the return and performance of the RMB products.
Products which invest in derivative instruments are subject to counterparty risk as the default by derivative issuers, may adversely affect the performance of the product and result in substantial loss.
Interest rates for RMB is government controlled. Change in interest rate for RMB in PRC may or may not influence the interest rate for RMB outside PRC. Any interest rate fluctuation for RMB outside PRC may affect the market value of the product.
If RMB payment obligation could not be satisfied as a result of a CNY disruption event, such payment maybe settled in HKD as soon as practicable without any interest payable for any delay. Such payment will be a complete discharge of our obligations under the product.

Risk disclosure for PPN linked to ETF

If you are purchasing products linked to ETF, please take note of the following risk factors:

If the product is linked to or invests in synthetic ETFs, and is associated with the following risks:

The political, economic, currency and other risks related to the underlying index.
Synthetic ETF invests in derivatives and customers are exposed to the risks relating to the index, the credit risk and potential contagion of the derivative issuers.
The market value of the collateral might fall substantially when the issuer seeks to realise the collateral.
Higher liquidity risk and wider bid-offer spreads are involved if the synthetic ETF involves derivatives which do not have an active secondary market. This may result in losses.
Failure of the tracking strategy, currency differences, fees and expenses etc may result in the disparity between the performance of the synthetic ETF and the performance of the underlying index.
Where the index/market that the synthetic ETF tracks is subject to restricted access, the efficiency in unit creation or redemption may be disrupted, causing the synthetic ETF to trade at a higher premium or discount to its net asset value. If the ETF terminates, investors may not be able to recover the premium.

If the product is linked to/invests in ETF, and is associated with the following risks:

Political, economic, currency and other risks related to the underlying equity(ies), assets or index.
There may be disparity between the performance of the ETF and the performance of the underlying equity(ies), assets or index.
Where the index or equity(ies) or assets that the ETF tracks is subject to restricted access, the efficiency in unit creation or redemption may be disrupted, causing the ETF to trade at a premium or discount to its net asset value.

If the product is linked to/invests in REIT, and is associated with the following risks:

The REIT is exposed to the risks relating to investment in real estate
There may be disparity between the market price of the units of a REIT and the net asset value per unit.

If the product is linked to or invests in China ETFs, and is associated with the following risks:

This product is linked to units of a China ETF issued and traded outside the PRC which invests directly in A-shares through the RQFII regime and/or the "China Connect". Investing in this product linked to a China ETF may be riskier than investing in product linked to traditional ETFs.
The China ETF invests primarily in the PRC markets which involve concentration risk and other risks and special considerations not typically associated with investment in more developed economies or markets, such as greater risks related to political, tax, economic foreign exchange, liquidity, and regulatory.
The RQFII and China Connect prescribed by the PRC government policy and rules are new and subject to change. The uncertainty and any potential change of the laws and regulations in the PRC may adversely and retrospectively impact the China ETF as well as the product.
Trading of securities invested by the China ETF under China Connect will subject to a daily quota which does not belong to such China ETF and is utlized on a "first-come-first serve" basis. If the quota is reached, the manager may suspend creation of any China ETF unit. The liquidity of such China ETF may be affected and the China ETF may be trading in premium therefore and render the price of the Product more volatile. (added on 8 Nov 2020)
There are risks and uncertainties associated with the current Chinese tax laws applicable to investment made by China ETF.
The tax laws, rules, regulations and practice in PRC may subject to change and such change(s) may have retrospective effect. The units of such China ETF could become subject to additional taxation that is not anticipated at the trade date of the product.
Although the China ETF may have made tax provisions in respect of potential tax liability that may arise from their investments, the provisions may not be sufficient or may even be excessive.
Any shortfall between the provisions and the actual tax liabilities may have to be covered by the China ETF’s assets and may adversely affect the China ETF’s value.
In addition, any changes in tax policies of the PRC government may reduce the after-tax profits of the companies in PRC which the China ETF invests in and may adversely affect the net asset value of such China ETF which in turn may adversely affect the market value and/or any potential gain or loss of the product.
Although the units of the China ETF are listed on the Hong Kong Stock Exchange, there is no guarantee that an active trading market or liquidity of that market can be sustained. Also, the price and trading volume of the units of the China ETF may be highly volatile subject to the market sentiment, and may be more volatile than ETFs with a longer trading history. The risks may have a significant adverse impact on the performance of the units of a China ETF and the value of the product.
The ETF units are traded in both RMB and HKD under the Exchange’s dual counter model and may involve additional risks. If the product is linked to the HKD traded units, any movement in the trading prices of the RMB traded units should not directly affect the price of the product, and vice versa. The market price on the Hong Kong Stock Exchange of HKD traded units and RMB traded units may deviate significantly due to a number of factors, including market liquidity, RMB conversion risk, currency risk and the demand and supply of each counter.
Suspension of the inter-counter transfer of units between the HKD counter and the RMB counter for any reason may affect adversely to the price for the product.

Product risk disclosure for Private Placement Note 51 (PPN51) – Participation Note with Floor/Cap

(Last updated 26 Jun 2023)

General

The product is a complex product and you should exercise caution in relation to the product.
This note is NOT equivalent to time deposit. It is a structured product involving derivatives.
For principal protected or partial protected note, 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.
For non principal protected note, it is not principal protected, you could lose all of your investment in extreme cases.
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 reference asset(s) may not lead to a corresponding change in the market value of the product. You are exposed to changes in the reference asset(s).
If the product is subject to a cap, your potential gain is limited. Performance of the reference asset may not be 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.
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.

General reminder

Early sell back prior to maturity is accepted every other Tuesday, or if such day is not a HK business day, the next following day that is a HK business day. Please contact us if you wish to early sell-back.
The investment decision is yours but you should not invest in this product unless HSBC staff has explained to you that the product is suitable for you having regard to your financial situation, investment experience and investment objectives.
HSBC has not provided any advice on the source of funds for the investment, including (i) new fund (ii) switching out / redemption of existing product(s), if applicable, this is solely based on your decision. (added on 8 Nov 2020)
Our assessment on product suitability is based on information provided by you and you are responsible for ensuring such information is complete, accurate, up-to-date and not misleading so our assessment is not adversely affected. HSBC will not assume any responsibility for information provided by you. (added on 8 Nov 2020)
The offering documents of the private placement notes provided by the issuer have not been reviewed by the Securities and Futures Commission of Hong Kong or any regulatory authority in Hong Kong, and you are advised to exercise caution in relation to the offer.
The private placement notes is available to Professional Investors only.
The offering documents are not intended to provide tax, legal or other advice. If you are in any doubt, you should obtain independent professional advice.

Risk disclosure for RMB PPN

If you are purchasing RMB denominated products, please take note of the following risk factors:

The product will be denominated and settled in RMB outside PRC. Its exchange rate and interest rate may be different from RMB in PRC.
The risk of RMB exchange rate fluctuation and the limited availability of RMB outside PRC may adversely affect the market value of the product (including any buy-back price during cooling off period or the bank's bid price for market making arrangements), and you may suffer loss in principal.
For products which are denominated in a settlement currency other than RMB and linked to reference asset denominated in RMB, if the reference asset is deliverable to investor upon expiry, its value will be subject to the exchange rate fluctuation between the settlement currency and RMB.
Products or underlying investments which are not denominated in RMB are subject to multiple currency conversion costs in making investments and liquidating investments as well as RMB exchange rate fluctuations and bid/offer spreads when assets are sold to meet redemption requests and other capital requirements.
The available choice of underlying investments denominated in RMB outside Mainland China is limited. This may adversely affect the return and performance of the product.
Products which invest in debt instruments not supported by any collateral are exposed to credit risk of the counterparties.
Products which may invest in RMB debt instruments are subject to interest rate fluctuations, which may adversely affect the return and performance of the RMB products.
Products which invest in derivative instruments are subject to counterparty risk as the default by derivative issuers, may adversely affect the performance of the product and result in substantial loss.
Interest rates for RMB is government controlled. Change in interest rate for RMB in PRC may or may not influence the interest rate for RMB outside PRC. Any interest rate fluctuation for RMB outside PRC may affect the market value of the product.
If RMB payment obligation could not be satisfied as a result of a CNY disruption event, such payment maybe settled in HKD as soon as practicable without any interest payable for any delay. Such payment will be a complete discharge of our obligations under the product.

Risk disclosure for PPN linked to ETF

If you are purchasing products linked to ETF, please take note of the following risk factors:

If the product is linked to or invests in synthetic ETFs, and is associated with the following risks:

The political, economic, currency and other risks related to the underlying index.
Synthetic ETF invests in derivatives and customers are exposed to the risks relating to the index, the credit risk and potential contagion of the derivative issuers. The market value of the collateral might fall substantially when the issuer seeks to realise the collateral.
Higher liquidity risk and wider bid-offer spreads are involved if the synthetic ETF involves derivatives which do not have an active secondary market. This may result in losses.
Failure of the tracking strategy, currency differences, fees and expenses etc may result in the disparity between the performance of the synthetic ETF and the performance of the underlying index.
Where the index/market that the synthetic ETF tracks is subject to restricted access, the efficiency in unit creation or redemption may be disrupted, causing the synthetic ETF to trade at a higher premium or discount to its net asset value. If the ETF terminates, investors may not be able to recover the premium.

If the product is linked to/invests in ETF, and is associated with the following risks:

Political, economic, currency and other risks related to the underlying equity(ies), assets or index.
There may be disparity between the performance of the ETF and the performance of the underlying equity(ies), assets or index.
Where the index or equity(ies) or assets that the ETF tracks is subject to restricted access, the efficiency in unit creation or redemption may be disrupted, causing the ETF to trade at a premium or discount to its net asset value.

If the product is linked to/invests in REIT, and is associated with the following risks:

The REIT is exposed to the risks relating to investment in real estate
There may be disparity between the market price of the units of a REIT and the net asset value per unit.

If the product is linked to or invests in China ETFs, and is associated with the following risks:

This product is linked to units of a China ETF issued and traded outside the PRC which invests directly in A-shares through the RQFII regime and/or the "China Connect". Investing in this product linked to a China ETF may be riskier than investing in product linked to traditional ETFs.
The China ETF invests primarily in the PRC markets which involve concentration risk and other risks and special considerations not typically associated with investment in more developed economies or markets, such as greater risks related to political, tax, economic foreign exchange, liquidity, and regulatory.
The RQFII and China Connect prescribed by the PRC government policy and rules are new and subject to change. The uncertainty and any potential change of the laws and regulations in the PRC may adversely and retrospectively impact the China ETF as well as the product.
Trading of securities invested by the China ETF under China Connect will subject to a daily quota which does not belong to such China ETF and is utlized on a "first-come-first serve" basis. If the quota is reached, the manager may suspend creation of any China ETF unit. The liquidity of such China ETF may be affected and the China ETF may be trading in premium therefore and render the price of the Product more volatile. (added on 8 Nov 2020)
There are risks and uncertainties associated with the current Chinese tax laws applicable to investment made by China ETF.
The tax laws, rules, regulations and practice in PRC may subject to change and such change(s) may have retrospective effect. The units of such China ETF could become subject to additional taxation that is not anticipated at the trade date of the product.
Although the China ETF may have made tax provisions in respect of potential tax liability that may arise from their investments, the provisions may not be sufficient or may even be excessive. Any shortfall between the provisions and the actual tax liabilities may have to be covered by the China ETF’s assets and may adversely affect the China ETF’s value.
In addition, any changes in tax policies of the PRC government may reduce the after-tax profits of the companies in PRC which the China ETF invests in and may adversely affect the net asset value of such China ETF which in turn may adversely affect the market value and/or any potential gain or loss of the product.
Although the units of the China ETF are listed on the Hong Kong Stock Exchange, there is no guarantee that an active trading market or liquidity of that market can be sustained. Also, the price and trading volume of the units of the China ETF may be highly volatile subject to the market sentiment, and may be more volatile than ETFs with a longer trading history. The risks may have a significant adverse impact on the performance of the units of a China ETF and the value of the product.
The ETF units are traded in both RMB and HKD under the Exchange’s dual counter model and may involve additional risks. If the product is linked to the HKD traded units, any movement in the trading prices of the RMB traded units should not directly affect the price of the product, and vice versa. The market price on the Hong Kong Stock Exchange of HKD traded units and RMB traded units may deviate significantly due to a number of factors, including market liquidity, RMB conversion risk, currency risk and the demand and supply of each counter.
Suspension of the inter-counter transfer of units between the HKD counter and the RMB counter for any reason may affect adversely to the price for the product.

Product risk disclosure for Private Placement Note 52 (PPN52) – Twin Win Autocallable Note

(Last updated 26 Jun 2023)

General

The product is a complex product and you should exercise caution in relation to the product.
This note is NOT equivalent to time deposit. It is a structured product involving derivatives.
It is not principal protected, you could lose all of your investment in extreme cases.
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 reference asset(s) may not lead to a corresponding change in the market value of the product. You are exposed to changes in the reference asset(s).
The note will be early redeemed and the Early Redemption Amount will be paid if the reference asset or worst performing asset is at or above the Autocall Barrier Level on Early Valuation Date. The potential performance return will only be paid if the final level of the reference asset or worst performing asset on the final valuation date is at or above barrier level, subject to the occurrence of any Early Redemption, and if the barrier has not been triggered during the investment period. The payout / amount will be the absolute performance of the reference asset or worst performing asset relative to the Initial Level. If such condition is not met, you will not receive the absolute performance return. 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 early redemption condition is satisfied, the Early Redemption Amount will be paid and the Noted will be terminated. You will no longer hold the Note.
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.
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.

General reminder

Early sell back prior to maturity is accepted every other Tuesday, or if such day is not a HK business day, the next following day that is a HK business day. Please contact us if you wish to early sell-back.
The investment decision is yours but you should not invest in this product unless HSBC staff has explained to you that the product is suitable for you having regard to your financial situation, investment experience and investment objectives.
HSBC has not provided any advice on the source of funds for the investment, including (i) new fund (ii) switching out / redemption of existing product(s), if applicable, this is solely based on your decision. (added on 8 Nov 2020)
Our assessment on product suitability is based on information provided by you and you are responsible for ensuring such information is complete, accurate, up-to-date and not misleading so our assessment is not adversely affected. HSBC will not assume any responsibility for information provided by you. (added on 8 Nov 2020)
The offering documents of the private placement notes provided by the issuer have not been reviewed by the Securities and Futures Commission of Hong Kong or any regulatory authority in Hong Kong, and you are advised to exercise caution in relation to the offer.
The private placement notes is available to Professional Investors only.
The offering documents are not intended to provide tax, legal or other advice. If you are in any doubt, you should obtain independent professional advice.

Risk disclosure for RMB PPN

If you are purchasing RMB denominated products, please take note of the following risk factors:

The product will be denominated and settled in RMB outside PRC. Its exchange rate and interest rate may be different from RMB in PRC.
The risk of RMB exchange rate fluctuation and the limited availability of RMB outside PRC may adversely affect the market value of the product (including any buy-back price during cooling off period or the bank's bid price for market making arrangements), and you may suffer loss in principal.
For products which are denominated in a settlement currency other than RMB and linked to reference asset denominated in RMB, if the reference asset is deliverable to investor upon expiry, its value will be subject to the exchange rate fluctuation between the settlement currency and RMB.
Products or underlying investments which are not denominated in RMB are subject to multiple currency conversion costs in making investments and liquidating investments as well as RMB exchange rate fluctuations and bid/offer spreads when assets are sold to meet redemption requests and other capital requirements.
The available choice of underlying investments denominated in RMB outside Mainland China is limited. This may adversely affect the return and performance of the product.
Products which invest in debt instruments not supported by any collateral are exposed to credit risk of the counterparties.
Products which may invest in RMB debt instruments are subject to interest rate fluctuations, which may adversely affect the return and performance of the RMB products.
Products which invest in derivative instruments are subject to counterparty risk as the default by derivative issuers, may adversely affect the performance of the product and result in substantial loss.
Interest rates for RMB is government controlled. Change in interest rate for RMB in PRC may or may not influence the interest rate for RMB outside PRC. Any interest rate fluctuation for RMB outside PRC may affect the market value of the product.
If RMB payment obligation could not be satisfied as a result of a CNY disruption event, such payment maybe settled in HKD as soon as practicable without any interest payable for any delay. Such payment will be a complete discharge of our obligations under the product.

Risk disclosure for PPN linked to ETF

If you are purchasing products linked to ETF, please take note of the following risk factors:

If the product is linked to or invests in synthetic ETFs, and is associated with the following risks:

The political, economic, currency and other risks related to the underlying index.
Synthetic ETF invests in derivatives and customers are exposed to the risks relating to the index, the credit risk and potential contagion of the derivative issuers. The market value of the collateral might fall substantially when the issuer seeks to realise the collateral.
Higher liquidity risk and wider bid-offer spreads are involved if the synthetic ETF involves derivatives which do not have an active secondary market. This may result in losses.
Failure of the tracking strategy, currency differences, fees and expenses etc may result in the disparity between the performance of the synthetic ETF and the performance of the underlying index.
Where the index/market that the synthetic ETF tracks is subject to restricted access, the efficiency in unit creation or redemption may be disrupted, causing the synthetic ETF to trade at a higher premium or discount to its net asset value. If the ETF terminates, investors may not be able to recover the premium.

If the product is linked to/invests in ETF, and is associated with the following risks:

Political, economic, currency and other risks related to the underlying equity(ies), assets or index.
There may be disparity between the performance of the ETF and the performance of the underlying equity(ies), assets or index.
Where the index or equity(ies) or assets that the ETF tracks is subject to restricted access, the efficiency in unit creation or redemption may be disrupted, causing the ETF to trade at a premium or discount to its net asset value.

If the product is linked to/invests in REIT, and is associated with the following risks:

The REIT is exposed to the risks relating to investment in real estate
There may be disparity between the market price of the units of a REIT and the net asset value per unit.

If the product is linked to or invests in China ETFs, and is associated with the following risks:

This product is linked to units of a China ETF issued and traded outside the PRC which invests directly in A-shares through the RQFII regime and/or the "China Connect". Investing in this product linked to a China ETF may be riskier than investing in product linked to traditional ETFs.
The China ETF invests primarily in the PRC markets which involve concentration risk and other risks and special considerations not typically associated with investment in more developed economies or markets, such as greater risks related to political, tax, economic foreign exchange, liquidity, and regulatory.
The RQFII and China Connect prescribed by the PRC government policy and rules are new and subject to change. The uncertainty and any potential change of the laws and regulations in the PRC may adversely and retrospectively impact the China ETF as well as the product.
Trading of securities invested by the China ETF under China Connect will subject to a daily quota which does not belong to such China ETF and is utlized on a "first-come-first serve" basis. If the quota is reached, the manager may suspend creation of any China ETF unit. The liquidity of such China ETF may be affected and the China ETF may be trading in premium therefore and render the price of the Product more volatile. (added on 8 Nov 2020)
There are risks and uncertainties associated with the current Chinese tax laws applicable to investment made by China ETF.
The tax laws, rules, regulations and practice in PRC may subject to change and such change(s) may have retrospective effect. The units of such China ETF could become subject to additional taxation that is not anticipated at the trade date of the product.
Although the China ETF may have made tax provisions in respect of potential tax liability that may arise from their investments, the provisions may not be sufficient or may even be excessive. Any shortfall between the provisions and the actual tax liabilities may have to be covered by the China ETF’s assets and may adversely affect the China ETF’s value.
In addition, any changes in tax policies of the PRC government may reduce the after-tax profits of the companies in PRC which the China ETF invests in and may adversely affect the net asset value of such China ETF which in turn may adversely affect the market value and/or any potential gain or loss of the product.
Although the units of the China ETF are listed on the Hong Kong Stock Exchange, there is no guarantee that an active trading market or liquidity of that market can be sustained. Also, the price and trading volume of the units of the China ETF may be highly volatile subject to the market sentiment, and may be more volatile than ETFs with a longer trading history. The risks may have a significant adverse impact on the performance of the units of a China ETF and the value of the product.
The ETF units are traded in both RMB and HKD under the Exchange’s dual counter model and may involve additional risks. If the product is linked to the HKD traded units, any movement in the trading prices of the RMB traded units should not directly affect the price of the product, and vice versa. The market price on the Hong Kong Stock Exchange of HKD traded units and RMB traded units may deviate significantly due to a number of factors, including market liquidity, RMB conversion risk, currency risk and the demand and supply of each counter.
Suspension of the inter-counter transfer of units between the HKD counter and the RMB counter for any reason may affect adversely to the price for the product.

Product risk disclosure for Capped Floored Floating Rate Notes (CFFN)

(Last updated 27 Feb 2023)

General

The product is a complex product and you should exercise caution in relation to the product.
Capped Floored Floating Rate Notes (CFFN)is NOT equivalent to time deposit. It is a structured product 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.
The return of this product depends on the performance of the underlying interest rate during the observation period. You must be prepared to take the risk of earning a very low return or no return on the money invested.
The Maximum Interest Rate Cap may limit the upside potential of investment return.
Market value of the product may fluctuate from time to time. Changes in the underlying interest rate may not lead to a corresponding change in the market value of the product. You are exposed to change in the level of underlying 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 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 underlying interest rate movement.
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.

General reminder

Early sell back prior to maturity is accepted every other Tuesday, or if such day is not a HK business day, the next following day that is a HK business day. Please contact us if you wish to early sell-back.
The investment decision is yours but you should not invest in this product unless HSBC staff has explained to you that the product is suitable for you having regard to your financial situation, investment experience and investment objectives.
HSBC has not provided any advice on the source of funds for the investment, including (i) new fund (ii) switching out / redemption of existing product(s), if applicable, this is solely based on your decision. (added on 8 Nov 2020)
Our assessment on product suitability is based on information provided by you and you are responsible for ensuring such information is complete, accurate, up-to-date and not misleading so our assessment is not adversely affected. HSBC will not assume any responsibility for information provided by you. (added on 8 Nov 2020)
The offering documents of the structured notes provided by the issuer have not been reviewed by the Securities and Futures Commission of Hong Kong or any regulatory authority in Hong Kong, and you are advised to exercise caution in relation to the offer.
If you are subscribing to private placement notes, please note that the private placement note is available to Professional Investors only.
The offering documents are not intended to provide tax, legal or other advice. If you are in any doubt, you should obtain independent professional advice.

Risk disclosure for Risk Free Rate

Risk Free Rates (RFRs) are not free of risk, hence they are considered "near risk-free". RFRs can rise or fall as a result of changing economic conditions and central bank policy decisions.
The Coupon for a Note based on an RFR may be calculated based on a series of overnight rates compounded over the relevant interest period. Therefore, the Coupon payable under such a Note may only be known at or near the end of that interest period and it may be difficult for you to estimate reliably the amount of Coupon which will be payable.
The market continues to develop the use of, and alternatives to, RFR. Therefore, it is possible that market participants or a significant part thereof may adopt applications of, and /or methodologies for, the calculation of RFR which differ. In such circumstances the Coupon amount with respect to the Notes may differ over time and depending on the calculation and/or methodology used at that time.
Daily changes in the RFR may be more volatile than daily changes in comparable benchmark or market rates and, as such, the return or payments on a Note linked to an RFR may fluctuate more than in the case of a Note that is linked to a less volatile rate.
The RFR market is still developing. It is possible that future changes to market practice or conventions relating to the use of RFRs may result in the Issuer amending the definition and/or the use of RFR. It cannot be predicted how such future changes may impact the Notes and such changes may have an adverse impact in your investment in the Notes.

Risk disclosure for RMB Structured Notes

If you are purchasing RMB denominated products, please take note of the following risk factors:

The product will be denominated and settled in RMB outside PRC. Its exchange rate and interest rate may be different from RMB in PRC.
The risk of RMB exchange rate fluctuation and the limited availability of RMB outside PRC may adversely affect the market value of the product (including any buy-back price during cooling off period or the bank's bid price for market making arrangements), and you may suffer loss in principal.
For products which are denominated in a settlement currency other than RMB and linked to reference asset denominated in RMB, if the reference asset is deliverable to investor upon expiry, its value will be subject to the exchange rate fluctuation between the settlement currency and RMB.
Products or underlying investments which are not denominated in RMB are subject to multiple currency conversion costs in making investments and liquidating investments as well as RMB exchange rate fluctuations and bid/offer spreads when assets are sold to meet redemption requests and other capital requirements.
The available choice of underlying investments denominated in RMB outside Mainland China is limited. This may adversely affect the return and performance of the product.
Products which invest in debt instruments not supported by any collateral are exposed to credit risk of the counterparties.
Products which may invest in RMB debt instruments are subject to interest rate fluctuations, which may adversely affect the return and performance of the RMB products.
Products which invest in derivative instruments are subject to counterparty risk as the default by derivative issuers, may adversely affect the performance of the product and result in substantial loss.
Interest rates for RMB is government controlled. Change in interest rate for RMB in PRC may or may not influence the interest rate for RMB outside PRC. Any interest rate fluctuation for RMB outside PRC may affect the market value of the product.
If RMB payment obligation could not be satisfied as a result of a CNY disruption event, such payment maybe settled in HKD as soon as practicable without any interest payable for any delay. Such payment will be a complete discharge of our obligations under the product.

Product risk disclosure for Range Accrual Notes

(Last updated 6 Nov 2023)

General

The product is a complex product and you should exercise caution in relation to the product.
This product is NOT equivalent to time deposit. It is a structured product 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.
The return of this product depends on the Accrual Condition(s). You must be prepared to take the risk of earning a very low return or no return on the money invested.
The Coupon Rate may limit the upside potential of investment return.
Market value of the product may fluctuate from time to time. Changes in the underlying interest rate may not lead to a corresponding change in the market value of the product. You are exposed to change in the level of underlying 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 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 underlying interest rate movement.
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.

General reminder

Early sell back prior to maturity is accepted every other Tuesday, or if such day is not a business day, the next following day that is a business day. (updated on 6 Nov 2023)
The investment decision is yours but you should not invest in this product unless HSBC staff has explained to you that the product is suitable for you having regard to your financial situation, investment experience and investment objectives.
HSBC has not provided any advice on the source of funds for the investment, including (i) new fund (ii) switching out / redemption of existing product(s), if applicable, this is solely based on your decision. (added on 8 Nov 2020)
Our assessment on product suitability is based on information provided by you and you are responsible for ensuring such information is complete, accurate, up-to-date and not misleading so our assessment is not adversely affected. HSBC will not assume any responsibility for information provided by you. (added on 8 Nov 2020)
The offering documents of the structured notes provided by the issuer have not been reviewed by the Securities and Futures Commission of Hong Kong or any regulatory authority in Hong Kong, and you are advised to exercise caution in relation to the offer.
If you are subscribing to private placement notes, please note that the private placement note is available to Professional Investors only.
The offering documents are not intended to provide tax, legal or other advice. If you are in any doubt, you should obtain independent professional advice.

Risk disclosure for Risk Free Rate

Risk Free Rates (RFRs) are not free of risk, hence they are considered "near risk-free". RFRs can rise or fall as a result of changing economic conditions and central bank policy decisions.
The Coupon for a Note based on an RFR may be calculated based on a series of overnight rates compounded over the relevant interest period. Therefore, the Coupon payable under such a Note may only be known at or near the end of that interest period and it may be difficult for you to estimate reliably the amount of Coupon which will be payable.
The market continues to develop the use of, and alternatives to, RFR. Therefore, it is possible that market participants or a significant part thereof may adopt applications of, and /or methodologies for, the calculation of RFR which differ. In such circumstances the Coupon amount with respect to the Notes may differ over time and depending on the calculation and/or methodology used at that time.
Daily changes in the RFR may be more volatile than daily changes in comparable benchmark or market rates and, as such, the return or payments on a Note linked to an RFR may fluctuate more than in the case of a Note that is linked to a less volatile rate.
The RFR market is still developing. It is possible that future changes to market practice or conventions relating to the use of RFRs may result in the Issuer amending the definition and/or the use of RFR. It cannot be predicted how such future changes may impact the Notes and such changes may have an adverse impact in your investment in the Notes.

Risk disclosure for RMB Structured Notes

The product will be denominated and settled in RMB outside PRC. Its exchange rate and interest rate may be different from RMB in PRC.
The risk of RMB exchange rate fluctuation and the limited availability of RMB outside PRC may adversely affect the market value of the product (including any buy-back price during cooling off period or the bank's bid price for market making arrangements), and you may suffer loss in principal.
For products which are denominated in a settlement currency other than RMB and linked to reference asset denominated in RMB, if the reference asset is deliverable to investor upon expiry, its value will be subject to the exchange rate fluctuation between the settlement currency and RMB.
Products or underlying investments which are not denominated in RMB are subject to multiple currency conversion costs in making investments and liquidating investments as well as RMB exchange rate fluctuations and bid/offer spreads when assets are sold to meet redemption requests and other capital requirements.
The available choice of underlying investments denominated in RMB outside Mainland China is limited. This may adversely affect the return and performance of the product.
Products which invest in debt instruments not supported by any collateral are exposed to credit risk of the counterparties.
Products which may invest in RMB debt instruments are subject to interest rate fluctuations, which may adversely affect the return and performance of the RMB products.
Products which invest in derivative instruments are subject to counterparty risk as the default by derivative issuers, may adversely affect the performance of the product and result in substantial loss.
Interest rates for RMB is government controlled. Change in interest rate for RMB in PRC may or may not influence the interest rate for RMB outside PRC. Any interest rate fluctuation for RMB outside PRC may affect the market value of the product.
If RMB payment obligation could not be satisfied as a result of a CNY disruption event, such payment maybe settled in HKD as soon as practicable without any interest payable for any delay. Such payment will be a complete discharge of our obligations under the product.

Product risk disclosure for Steepener Notes

(Last updated 6 Nov 2023)

General

The product is a complex product and you should exercise caution in relation to the product.
This product is NOT equivalent to time deposit. It is a structured product 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.
The return of this product depends on the Reference Spread. You must be prepared to take the risk of earning a very low return or no return on the money invested.
Market value of the product may fluctuate from time to time. Changes in the underlying interest rate may not lead to a corresponding change in the market value of the product. You are exposed to change in the level of underlying 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 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 underlying interest rate movement.
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.

General reminder

Early sell back prior to maturity is accepted every other Tuesday, or if such day is not a business day, the next following day that is a business day. (updated on 6 Nov 2023)
The investment decision is yours but you should not invest in this product unless HSBC staff has explained to you that the product is suitable for you having regard to your financial situation, investment experience and investment objectives.
HSBC has not provided any advice on the source of funds for the investment, including (i) new fund (ii) switching out / redemption of existing product(s), if applicable, this is solely based on your decision. (added on 8 Nov 2020)
Our assessment on product suitability is based on information provided by you and you are responsible for ensuring such information is complete, accurate, up-to-date and not misleading so our assessment is not adversely affected. HSBC will not assume any responsibility for information provided by you. (added on 8 Nov 2020)
The offering documents of the structured notes provided by the issuer have not been reviewed by the Securities and Futures Commission of Hong Kong or any regulatory authority in Hong Kong, and you are advised to exercise caution in relation to the offer.
If you are subscribing to private placement notes, please note that the private placement note is available to Professional Investors only.
The offering documents are not intended to provide tax, legal or other advice. If you are in any doubt, you should obtain independent professional advice.

Risk disclosure for Risk Free Rate

Risk Free Rates (RFRs) are not free of risk, hence they are considered "near risk-free". RFRs can rise or fall as a result of changing economic conditions and central bank policy decisions.
The Coupon for a Note based on an RFR may be calculated based on a series of overnight rates compounded over the relevant interest period. Therefore, the Coupon payable under such a Note may only be known at or near the end of that interest period and it may be difficult for you to estimate reliably the amount of Coupon which will be payable.
The market continues to develop the use of, and alternatives to, RFR. Therefore, it is possible that market participants or a significant part thereof may adopt applications of, and /or methodologies for, the calculation of RFR which differ. In such circumstances the Coupon amount with respect to the Notes may differ over time and depending on the calculation and/or methodology used at that time.
Daily changes in the RFR may be more volatile than daily changes in comparable benchmark or market rates and, as such, the return or payments on a Note linked to an RFR may fluctuate more than in the case of a Note that is linked to a less volatile rate.
The RFR market is still developing. It is possible that future changes to market practice or conventions relating to the use of RFRs may result in the Issuer amending the definition and/or the use of RFR. It cannot be predicted how such future changes may impact the Notes and such changes may have an adverse impact in your investment in the Notes.

Risk disclosure for RMB Structured Notes

If you are purchasing RMB denominated products, please take note of the following risk factors:

The product will be denominated and settled in RMB outside PRC. Its exchange rate and interest rate may be different from RMB in PRC.
The risk of RMB exchange rate fluctuation and the limited availability of RMB outside PRC may adversely affect the market value of the product (including any buy-back price during cooling off period or the bank's bid price for market making arrangements), and you may suffer loss in principal.
For products which are denominated in a settlement currency other than RMB and linked to reference asset denominated in RMB, if the reference asset is deliverable to investor upon expiry, its value will be subject to the exchange rate fluctuation between the settlement currency and RMB.
Products or underlying investments which are not denominated in RMB are subject to multiple currency conversion costs in making investments and liquidating investments as well as RMB exchange rate fluctuations and bid/offer spreads when assets are sold to meet redemption requests and other capital requirements.
The available choice of underlying investments denominated in RMB outside Mainland China is limited. This may adversely affect the return and performance of the product.
Products which invest in debt instruments not supported by any collateral are exposed to credit risk of the counterparties.
Products which may invest in RMB debt instruments are subject to interest rate fluctuations, which may adversely affect the return and performance of the RMB products.
Products which invest in derivative instruments are subject to counterparty risk as the default by derivative issuers, may adversely affect the performance of the product and result in substantial loss.
Interest rates for RMB is government controlled. Change in interest rate for RMB in PRC may or may not influence the interest rate for RMB outside PRC. Any interest rate fluctuation for RMB outside PRC may affect the market value of the product.
If RMB payment obligation could not be satisfied as a result of a CNY disruption event, such payment maybe settled in HKD as soon as practicable without any interest payable for any delay. Such payment will be a complete discharge of our obligations under the product.

Product risk disclosure for Callable Snowball Fixed Rate Notes

(Last updated 11 Mar 2024)

UT General

The product is a complex product and you should exercise caution in relation to the product.
This product is NOT equivalent to time deposit. It is a structured product 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.
The Coupon Rate may limit the upside potential of investment return.
Market value of the product may fluctuate from time to time. Changes in the underlying interest rate may not lead to a corresponding change in the market value of the product. You are exposed to change in the level of underlying 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 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 underlying interest rate movement.
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.

General reminder

Early sell back prior to maturity is accepted every other Tuesday, or if such day is not a business day, the next following day that is a business day. (updated on 6 Nov 2023)
The investment decision is yours but you should not invest in this product unless HSBC staff has explained to you that the product is suitable for you having regard to your financial situation, investment experience and investment objectives.
HSBC has not provided any advice on the source of funds for the investment, including (i) new fund (ii) switching out / redemption of existing product(s), if applicable, this is solely based on your decision. (added on 8 Nov 2020)
Our assessment on product suitability is based on information provided by you and you are responsible for ensuring such information is complete, accurate, up-to-date and not misleading so our assessment is not adversely affected. HSBC will not assume any responsibility for information provided by you. (added on 8 Nov 2020)
The offering documents of the structured notes provided by the issuer have not been reviewed by the Securities and Futures Commission of Hong Kong or any regulatory authority in Hong Kong, and you are advised to exercise caution in relation to the offer.
If you are subscribing to private placement notes, please note that the private placement note is available to Professional Investors only.
The offering documents are not intended to provide tax, legal or other advice. If you are in any doubt, you should obtain independent professional advice.

Risk disclosure for Risk Free Rate

Risk Free Rates (RFRs) are not free of risk, hence they are considered "near risk-free". RFRs can rise or fall as a result of changing economic conditions and central bank policy decisions.
The Coupon for a Note based on an RFR may be calculated based on a series of overnight rates compounded over the relevant interest period. Therefore, the Coupon payable under such a Note may only be known at or near the end of that interest period and it may be difficult for you to estimate reliably the amount of Coupon which will be payable.
The market continues to develop the use of, and alternatives to, RFR. Therefore, it is possible that market participants or a significant part thereof may adopt applications of, and /or methodologies for, the calculation of RFR which differ. In such circumstances the Coupon amount with respect to the Notes may differ over time and depending on the calculation and/or methodology used at that time.
Daily changes in the RFR may be more volatile than daily changes in comparable benchmark or market rates and, as such, the return or payments on a Note linked to an RFR may fluctuate more than in the case of a Note that is linked to a less volatile rate.
The RFR market is still developing. It is possible that future changes to market practice or conventions relating to the use of RFRs may result in the Issuer amending the definition and/or the use of RFR. It cannot be predicted how such future changes may impact the Notes and such changes may have an adverse impact in your investment in the Notes.

Risk disclosure for RMB Structured Notes

If you are purchasing RMB denominated products, please take note of the following risk factors:

The product will be denominated and settled in RMB outside PRC. Its exchange rate and interest rate may be different from RMB in PRC.
The risk of RMB exchange rate fluctuation and the limited availability of RMB outside PRC may adversely affect the market value of the product (including any buy-back price during cooling off period or the bank's bid price for market making arrangements), and you may suffer loss in principal.
For products which are denominated in a settlement currency other than RMB and linked to reference asset denominated in RMB, if the reference asset is deliverable to investor upon expiry, its value will be subject to the exchange rate fluctuation between the settlement currency and RMB.
Products or underlying investments which are not denominated in RMB are subject to multiple currency conversion costs in making investments and liquidating investments as well as RMB exchange rate fluctuations and bid/offer spreads when assets are sold to meet redemption requests and other capital requirements.
The available choice of underlying investments denominated in RMB outside Mainland China is limited. This may adversely affect the return and performance of the product.
Products which invest in debt instruments not supported by any collateral are exposed to credit risk of the counterparties.
Products which may invest in RMB debt instruments are subject to interest rate fluctuations, which may adversely affect the return and performance of the RMB products.
Products which invest in derivative instruments are subject to counterparty risk as the default by derivative issuers, may adversely affect the performance of the product and result in substantial loss.
Interest rates for RMB is government controlled. Change in interest rate for RMB in PRC may or may not influence the interest rate for RMB outside PRC. Any interest rate fluctuation for RMB outside PRC may affect the market value of the product.
If RMB payment obligation could not be satisfied as a result of a CNY disruption event, such payment maybe settled in HKD as soon as practicable without any interest payable for any delay. Such payment will be a complete discharge of our obligations under the product.

Product risk disclosure for Inverse Floater Notes

(Last updated 11 Mar 2024)

General

The product is a complex product and you should exercise caution in relation to the product.
This product is NOT equivalent to time deposit. It is a structured product 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.
The return of this product depends on the Reference Rate performance and the Variable Coupon Condition You must be prepared to take the risk of earning a very low return or no return on the money invested.
The Coupon Cap may limit the upside potential of investment return.
Market value of the product may fluctuate from time to time. Changes in the underlying interest rate may not lead to a corresponding change in the market value of the product. You are exposed to change in the level of underlying 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 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 underlying interest rate movement.
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.

General reminder

Early sell back prior to maturity is accepted every other Tuesday, or if such day is not a business day, the next following day that is a business day. (updated on 6 Nov 2023)
The investment decision is yours but you should not invest in this product unless HSBC staff has explained to you that the product is suitable for you having regard to your financial situation, investment experience and investment objectives.
HSBC has not provided any advice on the source of funds for the investment, including (i) new fund (ii) switching out / redemption of existing product(s), if applicable, this is solely based on your decision. (added on 8 Nov 2020)
Our assessment on product suitability is based on information provided by you and you are responsible for ensuring such information is complete, accurate, up-to-date and not misleading so our assessment is not adversely affected. HSBC will not assume any responsibility for information provided by you. (added on 8 Nov 2020)
The offering documents of the structured notes provided by the issuer have not been reviewed by the Securities and Futures Commission of Hong Kong or any regulatory authority in Hong Kong, and you are advised to exercise caution in relation to the offer.
If you are subscribing to private placement notes, please note that the private placement note is available to Professional Investors only.
The offering documents are not intended to provide tax, legal or other advice. If you are in any doubt, you should obtain independent professional advice.

Risk disclosure for Risk Free Rate

Risk Free Rates (RFRs) are not free of risk, hence they are considered "near risk-free". RFRs can rise or fall as a result of changing economic conditions and central bank policy decisions.
The Coupon for a Note based on an RFR may be calculated based on a series of overnight rates compounded over the relevant interest period. Therefore, the Coupon payable under such a Note may only be known at or near the end of that interest period and it may be difficult for you to estimate reliably the amount of Coupon which will be payable.
The market continues to develop the use of, and alternatives to, RFR. Therefore, it is possible that market participants or a significant part thereof may adopt applications of, and /or methodologies for, the calculation of RFR which differ. In such circumstances the Coupon amount with respect to the Notes may differ over time and depending on the calculation and/or methodology used at that time.
Daily changes in the RFR may be more volatile than daily changes in comparable benchmark or market rates and, as such, the return or payments on a Note linked to an RFR may fluctuate more than in the case of a Note that is linked to a less volatile rate.
The RFR market is still developing. It is possible that future changes to market practice or conventions relating to the use of RFRs may result in the Issuer amending the definition and/or the use of RFR. It cannot be predicted how such future changes may impact the Notes and such changes may have an adverse impact in your investment in the Notes.

Risk disclosure for RMB Structured Notes

If you are purchasing RMB denominated products, please take note of the following risk factors:

The product will be denominated and settled in RMB outside PRC. Its exchange rate and interest rate may be different from RMB in PRC.
The risk of RMB exchange rate fluctuation and the limited availability of RMB outside PRC may adversely affect the market value of the product (including any buy-back price during cooling off period or the bank's bid price for market making arrangements), and you may suffer loss in principal.
For products which are denominated in a settlement currency other than RMB and linked to reference asset denominated in RMB, if the reference asset is deliverable to investor upon expiry, its value will be subject to the exchange rate fluctuation between the settlement currency and RMB.
Products or underlying investments which are not denominated in RMB are subject to multiple currency conversion costs in making investments and liquidating investments as well as RMB exchange rate fluctuations and bid/offer spreads when assets are sold to meet redemption requests and other capital requirements.
The available choice of underlying investments denominated in RMB outside Mainland China is limited. This may adversely affect the return and performance of the product.
Products which invest in debt instruments not supported by any collateral are exposed to credit risk of the counterparties.
Products which may invest in RMB debt instruments are subject to interest rate fluctuations, which may adversely affect the return and performance of the RMB products.
Products which invest in derivative instruments are subject to counterparty risk as the default by derivative issuers, may adversely affect the performance of the product and result in substantial loss.
Interest rates for RMB is government controlled. Change in interest rate for RMB in PRC may or may not influence the interest rate for RMB outside PRC. Any interest rate fluctuation for RMB outside PRC may affect the market value of the product.
If RMB payment obligation could not be satisfied as a result of a CNY disruption event, such payment maybe settled in HKD as soon as practicable without any interest payable for any delay. Such payment will be a complete discharge of our obligations under the product.

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.

RMB Bonds
If you are purchasing RMB denominated bonds, please take note of the following risk factors:

RMB investment will be subject to the risk of exchange rate fluctuation and you may suffer loss in principal.
Products or underlying investments which are not denominated in RMB are subject to multiple currency conversion costs in making investments and liquidating investments as well as RMB exchange rate fluctuations and bid/offer spreads when assets are sold to meet redemption requests and other capital requirements.
The available choice of underlying investments denominated in RMB outside Mainland China is limited. This may adversely affect the return and performance of the product.

High Yield Bonds
If you are subscribing High Yield Bonds. Please take note of the following additional risk disclosure

High yield bonds are typically rated below investment grade by a credit rating agency, or unrated. Whilst high yield bonds bear a higher yield opportunity than investment grade bonds, they present greater risks of issuer default, liquidity, volatility and non-payment of principal and interest.
The risk of default on principal and / or interest, is greater for high yield bonds due to higher credit risk of the issuer and lower priority of claim by the bond holders in case of issuer default.
High yield bonds can sometimes be less liquid than investment-grade bonds, depending on the issuer and the market conditions at any given time. Investors may be difficult to sell the high yield bond before maturity or at prices in line with their expectation compare to listed bond.
High yield bonds tend to be more vulnerable to economic cycles and changes in the issuer’s financial conditions or business developments. In particular, during economic downturn, such bonds typically fall more in value than investment-grade bonds as the issuer default risk rises and investors become more risk adverse.
Please be aware the concentration risk of investing in bonds issued by the same issuer or companies by the same group. A degrading of any of the group company's credit rating may expose the whole group to contagion risk. Please be also aware the risk of over concentrating investment in the high risk investment products.

General reminder

Past performance, if any, of the Notes are not indicative of future performance. The Notes are not authorized by the Securities and Futures Commission ("SFC") and the relevant offering documentation provided by the issuer have not been reviewed by the SFC. You are advised to exercise caution in relation to the offer. (Added on 24 Jun 2019)
The offering documents are not intended to provide tax, legal or other advice. If you are in any doubt, you should obtain independent professional advice.
Listing of the Notes is not to be taken as an indication of the merits of the Issuer, the Group or the Notes. In making an investment decision, investors must rely on their own examination of the Issuer, the Group and the terms of the offering, including the merits and risks involved. (Added on 9 April 2018)

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.

UT – Bond Fund

If the fund is a fixed income or bond fund, it will be subject to risks associated with investing in bonds, including:

Credit risk

Bonds are subject to the risk of the issuer defaulting on its obligations. It should also be noted that credit ratings assigned by credit rating agencies do not guarantee the creditworthiness of the issuer;

Liquidity risk

Some bonds may not have active secondary markets and it would be difficult or impossible for investors to sell the bond before its maturity; and

Interest rate risk

Bonds are more susceptible to fluctuations in interest rates and generally prices of bonds will fall when interest rates rise.
It will be subject to a higher degree of risks if it invests in non-investment grade debt securities, distressed debt securities, defaulted debt securities, emerging market debt securities, mortgage and asset-backed securities, debt securities in a limited number of geographical markets or sectors, contingent convertible securities.

Risk of debt securities issued by Special Purpose Vehicle ("SPVs")

Investments in debt securities issued by SPVs may expose the Fund to additional risks such as the credit/default risk of both the SPV and its parent company or associated company.
Investments in debt securities of a subordinated nature issued by SPVs will have a lower priority of claim in the event of the relevant issuer’s liquidation or bankruptcy as they rank behind holders of unsubordinated debt securities but before holders of equity securities and is therefore exposed to higher credit / insolvency risk of its counterparties.

Limited time horizon risk and reinvestment risk

(Added on 24 Jun 2019)

neither the income nor the capital is guaranteed for investors to invest in the fund with limited time horizon (i.e. up to the Term Date). The fund’s investments may mature prior to the Term Date. The closer the fund is to the Term Date then the greater the investment in replacement shorter-dated securities (with progressively shorter maturities) and cash. Shorter-dated securities or cash may not offer as high a return as the securities they replace. Investors should have regard to the fixed time horizon of the fund in deciding whether investment in the fund is suitable for them.

UT – High Yield Bond Fund

Funds that primarily invest in high yield bonds are associated with the following risks:

Risks associated with investment in high yield bonds, such as

Higher credit risk

since they are typically rated below investment grade or are unrated and as such are often subject to a higher risk of issuer default;
Vulnerability to economic cycles

During economic downturns such bonds typically fall more in value than investment grade bonds as

(i) investors become more risk averse and (ii) default risk rises.

The net asset value of a fund that invests in high-yield bonds may decline or be negatively affected if there is a default of any of the high yield bonds that it invests in or if interest rates change.
Some high-yield bond funds may have fees and/or dividends paid out of capital. As a result, the capital that the fund has available for investment in the future and capital growth may be reduced.
Some high-yield bond funds may not distribute dividends, but instead reinvest the dividends into the fund or alternatively, the investment manager may have discretion on whether or not to make any distribution out of income and/or capital of the fund. Also, a high distribution yield does not imply a positive or high return on the total investment.
Other key risks that may relate to the relevant fund including concentration of investments in particular types of specialized debt or a specific geographical region or sovereign securities.

UT – Equity / Balanced Fund

If the fund is an equity fund and it invests in emerging markets, a single market or a limited number of geographical markets, sectors or smaller cap companies, the fund will be subject to higher degree of risk.
Balanced fund invests in both fixed income products and equities, will be exposed to risks of both fixed income fund and equity fund as described above.
If the fund invests in derivatives, it may be subject to higher volatility; counterparty risk and other additional risks may be involved.
If the fund’s investments are concentrated in Greater China, it involves greater risk of loss than investing in more developed markets due to, among other factors, greater concentration, political, tax, economic, foreign exchange, liquidity, market volatility (such as interest rate and price volatility), legal and regulatory risks.
If the fund invests in China A-shares and B-shares and make the relevant investment through Shanghai-Hong Kong Stock Connect, Shenzhen-Hong Kong Stock Connect and China A-shares Access Products may involve additional risks.

UT – Hedged Share Class

Investment in Hedged Classes which do not hedge underlying portfolio currency exposures back to the investor’s own currency may result in the investor taking speculative currency positions which may be volatile and may have a material impact on Unitholders’ returns.
A Hedged Class aims to manage the currency risk between the base currency and the customer's chosen Class Currency. Investment in Hedged Classes may protect unitholders against a decrease in the value of the base currency relative to the Class Currency, but it may also preclude unitholders from benefiting from an increase in the value of the base currency relative to the Class Currency.
There is no guarantee that (a) any hedging objective will be achieved, or (b) any hedging strategy will fully and effectively eliminate the effects of exchange rate fluctuations.
The Fund’s underlying assets may not be hedged either to the base currency of the Fund or to the Class Currency. Investors will still be subject to currency risks of any underlying investments in the Fund’s portfolio. Investors should note that the implementation of currency hedging strategies (if the customer has chosen a different Class Currency to the base currency) is distinct from the various currency hedging strategies that the Manager may implement at an overall fund portfolio level to manage risks.

UT – RMB Currency Risk

RMB investment will be subject to the risk of exchange rate fluctuation and you may suffer loss in principal.
Products or underlying investments which are not denominated in RMB are subject to multiple currency conversion costs in making investments and liquidating investments as well as RMB exchange rate fluctuations and bid/offer spreads when assets are sold to meet redemption requests and other capital requirements.
The available choice of underlying investments denominated in RMB outside Mainland China is limited. This may adversely affect the return and performance of the product.
Products which invest in debt instruments not supported by any collateral are exposed to credit risk of the counterparties.
Products which invest in derivative instruments are subject to counterparty risk as the default by derivative issuers, may adversely affect the performance of the product and result in substantial loss.
Products which may invest in RMB debt instruments are subject to interest rate fluctuations, which may adversely affect the return and performance of the RMB products.
The product may suffer significant losses in liquidating the underlying investments, especially if the underlying investments do not have an active secondary market.
The Fund offers RMB denominated units of investments. Subscriptions and redemptions for the Fund may involve conversion of currency at the applicable exchange rates.
The value of investment is subject to the exchange rate movements between RMB relative to the base currency of the Fund and/or other currency(ies) of the non-RMB-denominated underlying investments. An investor, may still suffer losses even if there are gains or no losses in the value of the non-RMB-denominated underlying investments and may subject to further losses if the non-RMB-denominated underlying investments falls in value.
RMB is not freely convertible and currency conversions are subject to:

a) the funds ability to convert into RMB and its availability of sufficient RMB at time of redemption
b) possible delays in payment of redemption proceeds or dividends & in case of sizable redemptions the manager has the absolute discretion to delay any payment in respect of redemption of the RMB Classes (up to a maximum of one calendar month from receipt of a properly documented redemption request).

When calculating the net asset value of Units of a RMB denominated Class, the exchange rate for offshore RMB market in Hong Kong, i.e. the CNH exchange rate will be applied, which may be at a premium or discount to the exchange rate for onshore RMB market in the PRC, i.e. the CNY exchange rate, leading to a possible trading costs incurred and investors may suffer losses.

For hedged class denominated in RMB, there is no guarantee that currency hedging between RMB and the base currency will be effective.

UT – Risks associated with Financial Derivative Instruments

(added on 22 Mar 2021)

Risks associated with financial derivative instruments include counterparty/credit risk, greater liquidity risk, valuation risk and volatility risk.
The use of derivatives for investment purposes may involve leverage. Leverage can result in a loss significantly greater than the amount invested in derivatives by the Fund leading to a higher risk of significant loss by the Fund.
Certain derivatives such as derivatives on currencies may be uncorrelated with the underlying securities held by the Fund. In this regard the Fund may suffer significant losses notwithstanding that there may be no loss in respect of the underlying securities positions (predominantly fixed income securities) held by the Fund Concentration risk / Mainland China market risk
If the fund invests in alternative asset classes including hedge fund strategies, private equity or real estate sectors, the fund will involve higher volatility and liquidity risks.

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)

UT – Bond Fund

If the fund is a fixed income or bond fund, it will be subject to risks associated with investing in bonds, including:

Credit risk

Bonds are subject to the risk of the issuer defaulting on its obligations. It should also be noted that credit ratings assigned by credit rating agencies do not guarantee the creditworthiness of the issuer;

Liquidity risk

Some bonds may not have active secondary markets and it would be difficult or impossible for investors to sell the bond before its maturity; and

Interest rate risk

Bonds are more susceptible to fluctuations in interest rates and generally prices of bonds will fall when interest rates rise.
It will be subject to a higher degree of risks if it invests in non-investment grade debt securities, distressed debt securities, defaulted debt securities, emerging market debt securities, mortgage and asset-backed securities, debt securities in a limited number of geographical markets or sectors, contingent convertible securities.

Risk of debt securities issued by Special Purpose Vehicle ("SPVs")

Investments in debt securities issued by SPVs may expose the Fund to additional risks such as the credit/default risk of both the SPV and its parent company or associated company.
Investments in debt securities of a subordinated nature issued by SPVs will have a lower priority of claim in the event of the relevant issuer’s liquidation or bankruptcy as they rank behind holders of unsubordinated debt securities but before holders of equity securities and is therefore exposed to higher credit / insolvency risk of its counterparties.

Limited time horizon risk and reinvestment risk

neither the income nor the capital is guaranteed for investors to invest in the fund with limited time horizon (i.e. up to the Term Date). The fund’s investments may mature prior to the Term Date. The closer the fund is to the Term Date then the greater the investment in replacement shorter-dated securities (with progressively shorter maturities) and cash. Shorter-dated securities or cash may not offer as high a return as the securities they replace. Investors should have regard to the fixed time horizon of the fund in deciding whether investment in the fund is suitable for them.

UT – High Yield Bond Fund

Funds that primarily invest in high yield bonds are associated with the following risks:

Risks associated with investment in high yield bonds, such as

Higher credit risk

since they are typically rated below investment grade or are unrated and as such are often subject to a higher risk of issuer default;
Vulnerability to economic cycles

During economic downturns such bonds typically fall more in value than investment grade bonds as

(i) investors become more risk averse and (ii) default risk rises.

The net asset value of a fund that invests in high-yield bonds may decline or be negatively affected if there is a default of any of the high yield bonds that it invests in or if interest rates change.
Some high-yield bond funds may have fees and/or dividends paid out of capital. As a result, the capital that the fund has available for investment in the future and capital growth may be reduced.
Some high-yield bond funds may not distribute dividends, but instead reinvest the dividends into the fund or alternatively, the investment manager may have discretion on whether or not to make any distribution out of income and/or capital of the fund. Also, a high distribution yield does not imply a positive or high return on the total investment.
Other key risks that may relate to the relevant fund including concentration of investments in particular types of specialized debt or a specific geographical region or sovereign securities.

UT – Equity / Balanced Fund

If the fund is an equity fund and it invests in emerging markets, a single market or a limited number of geographical markets, sectors or smaller cap companies, the fund will be subject to higher degree of risk.
Balanced fund invests in both fixed income products and equities, will be exposed to risks of both fixed income fund and equity fund as described above.
If the fund invests in derivatives, it may be subject to higher volatility; counterparty risk and other additional risks may be involved.
If the fund’s investments are concentrated in Greater China, it involves greater risk of loss than investing in more developed markets due to, among other factors, greater concentration, political, tax, economic, foreign exchange, liquidity, market volatility (such as interest rate and price volatility), legal and regulatory risks.
If the fund invests in China A-shares and B-shares and make the relevant investment through Shanghai-Hong Kong Stock Connect, Shenzhen-Hong Kong Stock Connect and China A-shares Access Products may involve additional risks.

UT – ESG Fund

(Added on 29 Nov 2021)

There is no guarantee that an investment approach which considers environmental, social and governance (ESG) factors will produce returns similar to those which don't consider these factors. Investments which consider ESG factors may diverge from traditional market benchmarks.
In addition, there is no standard definition of, or measurement criteria for environmental, social and governance impact ("SG Impact"). ESG Impact measurement criteria is (a) highly subjective and (b) may vary significantly across and within sectors.
HSBC undertakes due diligence when selecting third party fund managers. However, HSBC relies on the ESG Impact measurement criteria reported by third party fund managers and does not conduct its own specific due diligence in relation to ESG Impact measurement criteria.
There is no guarantee that: (a) the nature of the ESG Impact of an investment will be aligned with any particular investor's ESG Impact goals; and (b) the stated level or target level of ESG Impact will be achieved.

UT – Risks associated with the SME Board, ChiNext Board and/or STAR Board

(Added on 23 Nov 2020)

Investments in the SME Board, ChiNext Board and/or STAR Board are subject to the following risks and may result in significant losses for the fund.
Higher fluctuation on stock prices and over-valuation risk: Listed companies on the SME Board, ChiNext Board and/or STAR Board are usually of emerging nature with smaller operating scale which are subject to higher fluctuation in stock prices and liquidity and have higher risks and turnover ratios than companies listed on the main board. The listed stocks may be overvalued and such exceptionally high valuation may not be sustainable.
Differences in regulation applicable to ChiNext Board and STAR Board: The rules and regulations regarding companies listed on ChiNext Board and STAR Board are less stringent in terms of profitability and share capital than those in the main board and SME Board.
Delisting risk: It may be more common and faster for companies listed on the SME Board, ChiNext Board and/or STAR Board to delist.
Concentration risk applicable to STAR Board: STAR Board is a newly established board and may have a limited number of listed companies during the initial stage. Investments in STAR Board may be concentrated in a small number of stocks and subject the fund to higher concentration risk.

UT – Risks in connection with the investment strategy

(Added on 23 Nov 2020)

Investments in specific themes may not achieve the desired results under all circumstances and market conditions. The investments of the fund may be adjusted among different themes from time to time depending on the market conditions of the respective themes and therefore the fund may incur greater transaction costs than a fund with static allocation strategy. The fund may focus its investments in specific themes, which may increase the concentration risk and may be more volatile than that of a fund having a more diverse portfolio of investments.

UT – Hedged Share Class

Investment in Hedged Classes which do not hedge underlying portfolio currency exposures back to the investor’s own currency may result in the investor taking speculative currency positions which may be volatile and may have a material impact on Unitholders’ returns.
A Hedged Class aims to manage the currency risk between the base currency and the customer's chosen Class Currency. Investment in Hedged Classes may protect unitholders against a decrease in the value of the base currency relative to the Class Currency, but it may also preclude unitholders from benefiting from an increase in the value of the base currency relative to the Class Currency.
There is no guarantee that (a) any hedging objective will be achieved, or (b) any hedging strategy will fully and effectively eliminate the effects of exchange rate fluctuations.
The Fund’s underlying assets may not be hedged either to the base currency of the Fund or to the Class Currency. Investors will still be subject to currency risks of any underlying investments in the Fund’s portfolio. Investors should note that the implementation of currency hedging strategies (if the customer has chosen a different Class Currency to the base currency) is distinct from the various currency hedging strategies that the Manager may implement at an overall fund portfolio level to manage risks.

UT – RMB Currency Risk

RMB investment will be subject to the risk of exchange rate fluctuation and you may suffer loss in principal.
Products or underlying investments which are not denominated in RMB are subject to multiple currency conversion costs in making investments and liquidating investments as well as RMB exchange rate fluctuations and bid/offer spreads when assets are sold to meet redemption requests and other capital requirements.
The available choice of underlying investments denominated in RMB outside Mainland China is limited. This may adversely affect the return and performance of the product.
Products which invest in debt instruments not supported by any collateral are exposed to credit risk of the counterparties.
Products which invest in derivative instruments are subject to counterparty risk as the default by derivative issuers, may adversely affect the performance of the product and result in substantial loss.
Products which may invest in RMB debt instruments are subject to interest rate fluctuations, which may adversely affect the return and performance of the RMB products.
The product may suffer significant losses in liquidating the underlying investments, especially if the underlying investments do not have an active secondary market.
The Fund offers RMB denominated units of investments. Subscriptions and redemptions for the Fund may involve conversion of currency at the applicable exchange rates.
The value of investment is subject to the exchange rate movements between RMB relative to the base currency of the Fund and/or other currency(ies) of the non-RMB-denominated underlying investments. An investor, may still suffer losses even if there are gains or no losses in the value of the non-RMB-denominated underlying investments and may subject to further losses if the non-RMB-denominated underlying investments falls in value.
RMB is not freely convertible and currency conversions are subject to:

a) the funds ability to convert into RMB and its availability of sufficient RMB at time of redemption
b) possible delays in payment of redemption proceeds or dividends & in case of sizable redemptions the manager has the absolute discretion to delay any payment in respect of redemption of the RMB Classes (up to a maximum of one calendar month from receipt of a properly documented redemption request).

When calculating the net asset value of Units of a RMB denominated Class, the exchange rate for offshore RMB market in Hong Kong, i.e. the CNH exchange rate will be applied, which may be at a premium or discount to the exchange rate for onshore RMB market in the PRC, i.e. the CNY exchange rate, leading to a possible trading costs incurred and investors may suffer losses.

For hedged class denominated in RMB, there is no guarantee that currency hedging between RMB and the base currency will be effective.

UT – Risks associated with the MRF arrangement

Quota restrictions: The Mainland-Hong Kong Mutual Recognition of Funds (MRF) scheme is subject to an overall quota restriction. Subscription of units in the Fund may be suspended at any time if such quota is used up.
Failure to meet eligibility requirements: If the Fund ceases to meet any of the eligibility requirements under the MRF, it may not be allowed to accept new subscriptions. In the worst scenario, the SFC may even withdraw its authorisation for the Fund to be publicly offered in Hong Kong for breach of eligibility requirements. There is no assurance that the Fund can satisfy these requirements on a continuous basis.
Mainland China tax risk: Currently, certain tax concessions and exemptions are available to the Fund and/or its investors under the MRF regime. There is no assurance that such concessions and exemptions or Mainland tax laws and regulations will not change. Any change to the existing concessions and exemptions as well as the relevant laws and regulations may adversely affect the Fund and/or its investors and they may suffer substantial losses as a result.
Different market practices: Market practices in the Mainland China and Hong Kong may be different. In addition, operational arrangements of the Fund and other public funds offered in Hong Kong may be different in certain ways. For example, subscriptions or redemptions of units may only be processed on a day when both Mainland and Hong Kong markets are open, or it may have different cut-off times or dealing day arrangements versus other SFC-authorised funds. Investors should understand these differences and their implications.

Concentration risk / Mainland China market risk

The Fund invests primarily in securities related to the Mainland China market and may be subject to additional concentration risk. Investing in the Mainland China market may give rise to different risks including political, policy, tax, economic, foreign exchange, legal, regulatory and liquidity risks.

RMB currency and conversion risks

RMB is currently not freely convertible and is subject to exchange controls and restrictions.
Non-RMB based investors are exposed to foreign exchange risk and there is no guarantee that the value of RMB against the investors’ base currencies (for example HKD) will not depreciate. Any depreciation of RMB could adversely affect the value of investor’s investment in the Fund.
Investors may not receive RMB upon redemption of investments and/or dividend payment or such payment may be delayed due to the exchange controls and restrictions applicable to RMB.

Mainland China Equity risk

Market risk: The Fund’s investment in equity securities is subject to general market risks, whose value may fluctuate due to various factors, such as changes in investment sentiment, political and economic conditions and issuer-specific factors.
Volatility risk: High market volatility and potential settlement difficulties in the Mainland China equity markets may also result in significant fluctuations in the prices of the securities traded on such markets and thereby may adversely affect the value of the Fund.
Policy risk: Securities exchanges in Mainland China typically have the right to suspend or limit trading in any security traded on the relevant exchange. The government or the regulators may also implement policies that may affect the financial markets. All these may have a negative impact on the Fund.
High stock valuation risk: The stocks listed on the Mainland China stock exchanges may have a higher price-earnings ratio; and such high valuation may not be sustainable and stock prices may fall drastically.
Liquidity risk: Securities markets in Mainland China may be less liquid than other developed markets. The Fund may suffer substantial losses if it is not able to dispose of investments at a time it desires.
Risk associated with small-capitalisation/mid-capitalisation companies: The stock of small-capitalisaction/mid-capitalisation companies may have lower liquidity and their prices are more volatile to adverse economic developments than those of larger capitalisation companies in general.
Risk associated with ChiNext market:

Differences in regulations: The rules and regulations regarding securities in the ChiNext market are less stringent in terms of profitability and share capital than those in the main board market.

Emerging nature of ChiNext companies: Given the emerging nature of companies listed on the ChiNext market, there is a risk that the securities traded on ChiNext market may be susceptible to higher market volatility compared to securities traded on the main board market.

Higher fluctuation on stock prices: Listed companies in the ChiNext market are usually in their preliminary stage of development having a smaller scale and shorter operating history and their stability and resistance to market risks may be lower. Hence, they are subject to higher fluctuation in stock prices as the performance of these companies changes. They are subject to higher risks and higher turnover ratios than companies listed on the main board.
Delisting risk: The companies listed on the ChiNext market are generally less resistant to market risks and may experience more fluctuations in their performance. It may be more common and faster for listed companies in the ChiNext market than companies listed on main board and SME board to delist. This may have an adverse impact on the Fund if the companies that it invests in are delisted.
Valuation risk: Conventional valuation methods may not be entirely applicable to companies listed in the ChiNext market. There are fewer circulating shares in the ChiNext market as such stock prices may be more susceptible to manipulation and may experience higher fluctuation upon market speculation. Stocks traded on the ChiNext market may be overvalued and such high valuation may not be sustainable.

Mainland debt securities risks

Volatility and liquidity risks: The Mainland debt securities markets may be subject to higher volatility and lower liquidity compared to more developed markets. The prices of securities traded in such markets may be subject to fluctuations.
Counterparty risk: The Fund is exposed to the credit/default risk of issuers of the debt securities that the Fund may invest in.
Interest rate risk: Investment in the Fund is subject to interest rate risk. In general, the prices of debt securities rise when interest rates fall, whilst their prices fall when interest rates rise. The Fund is exposed to additional policy risk of potential adjustment by the government to the interbank deposit rate.
Downgrading risk: The credit rating of a debt instrument or its issuer may be downgraded subsequent to investment by the Fund. In the event of such downgrading, the value of the Fund may be adversely affected. The Manager may or may not be able to dispose of the debt instruments that are being downgraded.
Credit rating agency risk: The credit appraisal system in the Mainland and the rating methodologies employed in the Mainland may be different from those employed in other markets. Credit ratings given by Mainland rating agencies may therefore not be directly comparable with those given by other international rating agencies.
Risk associated with urban investment bonds: The Fund may invest in urban investment bonds. Urban investment bonds are issued by local government financing vehicles ("LGFVs"), such bonds are typically not guaranteed by local governments or the central government of the Mainland. In the even that the LGFVs default on payment of principal or interest of the urban investment bonds, the Fund could suffer substantial loss and the net asset value of the Fund could be adversely affected.
Risk associated with asset-backed securities: The Fund may invest in asset-backed securities (including asset-backed commercial papers). Asset-backed securities may be highly illiquid and prone to substantial price volatility. These instruments may be subject to greater credit, liquidity and interest rate risk compared to other debt securities. They are often exposed to extension and prepayment risks and risks that the payment obligations relating to the underlying assets are not met, which may adversely impact the returns of the securities.
Risk associated with debt securities which are rated BB+ or below by a Mainland credit rating agency or unrated: The Fund may invest in debt securities rated BB+ or below by a Mainland credit rating agency or unrated. Such securities are generally subject to lower liquidity, higher volatility and greater risk of loss of principal and interest than high-rated debt securities.

Risks associated with repurchase and reverse repurchase transactions:

The Manager may enter into repurchase and reverse repurchase transactions for the account of the Fund on the Mainland stock exchanges or in the interbank market.

The collateral pledged under the reverse repurchase transactions in the interbank market may not be marked-to-market. In addition, the Fund may suffer substantial loss when engaging in reverse repurchase transactions as there may be delay and difficulties in recovering cash placed out or realizing the collateral, or proceeds from the sale of the collateral may be less than the cash placed with the counterparty due to inadequate valuation of the collateral and market movements upon default of the counterparty.
For repurchase transactions, the Fund may suffer substantial loss as there may be delay and difficulties in recovering collateral pledged with the counterparty or the cash originally received may be less than the collateral pledged due to inadequate valuation of the collateral and market movement upon default of the counterparty.

Risk disclosures of HSBC investment products

Table of contents

Product risk disclosure for Securities

General

Other product risk disclosures for Securities

Product factsheets for HK stocks, US stocks and China A shares

Product risk disclosure for Certificates of Deposit (CDs)

General

Other product risk disclosures for CDs

Product risk disclosure for Deposit Plus

General

Other product risk disclosures for Deposit Plus

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

General

Other product risk disclosure for Capital Protected Investment Deposit

Product risk disclosure for Daily Cash Dividend Callable Equity Linked Investment (ELI)

General

Other product risk disclosures for Daily Cash Dividend Callable Equity Linked Investment

Product risk disclosure for Up&Out Growth Equity Linked Investment (ELI)

General

Other product risk disclosures for Up&Out Growth Equity Linked Investment

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

General

Other product risk disclosures for Private Placement Note 45

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

General

Other product risk disclosures for Private Placement Note 46

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

General

Other product risk disclosures for Private Placement Note 47

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

General

Other product risk disclosures for Private Placement Note 48

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

General

Other product risk disclosures for Private Placement Note 49

Product risk disclosure for Private Placement Note 50 (PPN50) – Digital Coupon Note

General

Other product risk disclosures for Private Placement Note

Product risk disclosure for Private Placement Note 51 (PPN51) – Participation Note with Floor/Cap

General

Other product risk disclosures for Private Placement Note

Product risk disclosure for Private Placement Note 52 (PPN52) – Twin Win Autocallable Note

General

Other product risk disclosures for Private Placement Note

Product risk disclosure for Capped Floored Floating Rate Notes (CFFN)

Other product risk disclosures for Capped Floored Floating Rate Notes (CFFN)

Product risk disclosure for Range Accrual Notes

General

Other product risk disclosures for Range Accrual Notes

Product risk disclosure for Steepener Notes

General

Other product risk disclosures for Steepener Notes

Product risk disclosure for Callable Snowball Fixed Rate Notes

UT General

Other product risk disclosures for Callable Snowball Fixed Rate Notes

Product risk disclosure for Inverse Floater Notes

General

Other product risk disclosures for Inverse Floater Notes

Product risk disclosure for Bonds

General

Other product risk disclosures for Bonds

Product Risk Disclosure for Complex UT

UT General

Other product risk disclosure for Complex UT

Product Risk Disclosure for Non-Complex UT

UT General

Other product risk disclosure for Non-Complex UT