Super Yield Investment

Five Advantages of Super Yield Investmentss

• Real-time quotations
  HSBC’s real-time quotation system offers you the most updated information in accordance with the number of days, the portfolio mix and expected returns at your discretion.
• A variety of foreign currency combinations
  You can choose USD, EUR, GBP, AUD, NZD, HKD, JPY, and SGD as the denominated currency or the linked currency.
• Flexibility in the choice of investment horizon
  Available tenors are 1 week, 2 weeks, 1 month, 2 months, 3 months and 6 months and any odd days.
• Low investment threshold
  The minimum investment principal is USD 50,000 or an equivalent amount in other foreign currency.
• Easy process
  Instructions may be given to a branch or via fax in order to quickly capture investment opportunities.

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Three Steps for Investing in Super Yield Investment

• Step 1. Choose the desired currencies and the tenor of investment
  
  Example:
  Tenor: 2 weeks
  Principal: USD 100,000
  Base Currency: USD
  Linked Currency: EUR
• Step 2. Set the Conversion Rate to determine the yield
  The closer the chosen conversion rates are to spot prices, the higher the yield.
  
  Example:
  Exchange rate assigned 1:3616
  → total yield *1：10.00%
• Step 3. Calculation of return on maturity
  On the fixing date, the prevailing exchange rates will be compared against the pre-set conversion rates to decide the currency of principal returned to you and total yields upon maturity.
  Example:
  

  

Note 1 : Total yield (p.a.) consists of the 5.25% (annualized) term deposit interest rate for the 2-week deposit of the USD and 4.75% (annualized) return on options.

Note 2 : The number of days when the interest rates for the base currency are computed according to the international practice. GBP and HKD are based on 365 days per year; whereas other currencies are based on 360 days per year.

Note 3 : The above example does not include the applicable taxes. HSBC will comply with all the relevant tax regulations and reporting requirements.

Note 4 : This example is illustrated based on the interest rates and exchange rates on July 30, 2007 and for reference only. In practice, the terms and conditions are dependent on the market conditions at the time of the transaction.

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Major Risks

• Return risk
  The yield of this product consists of interest on the fixed-term deposit of the foreign currency and the premium on the foreign currency option. Due to fluctuations of exchange rates, the yield may not necessarily be higher than that of other investment products or deposits.
• Principal and Interest conversion risks
  The payment of gains on this product may not necessarily be made in the base currency. For example, if the spot rate on the fixing date reaches the pre-set conversion terms, the payment will be made in the linked currency upon maturity. The proceeds of the principal paid in the linked currency may not be the equivalent dollar amount of 100% of the original principal.
• Currency risks
  Exchange rate risks may occur if the payment is to be converted into the original base currency or any currency other than the linked currency.
• Liquidity risks and early redemption risks
  This liquidity of the product is low and no early redemption is allowed for any tenor less than one month. If investors request an early redemption, they need to bear the relevant costs associated with market price fluctuations, expenses and transaction fees, such that they may not able to receive the full amount of original principal.

Notes:

• The payment of yield is made in the base currency at an interest rate higher than the term deposit of the same currency and the same tenor at HSBC. However, customers must bear the risks associated with currency conversion risk. This product does not guarantee the payment of principal or the total yield will be made in base currency. Therefore, investors may suffer losses or enjoy gains. When the linked currency is depreciating (against the base currency) at the fixing date, HSBC has the right to make the payment of the principal and the yield in the linked currency upon maturity. Before entering any transaction, customers should evaluate all economic and financial risks and returns associated with the transaction independently (as opposed to relying on HSBC or its affiliates) and the implications and outcomes in law, taxation and accounting. In addition, customers should understand that an early redemption will result in deductions from the principal and the yield of relevant interests, premiums and transaction fees. Customer should carefully consider whether they are capable of undertaking such risks. The terms and conditions indicated in Product Information or brochures by HSBC does not constitute any offer for sale or solicitation to customers, or attempt to convince customers to enter into transactions with HSBC.
• Citizens, residents or permanent residents or green card holders of the United States may not subscribe to this product.
• Super Yield Investment is not protected under the deposit insurance scheme of the Central Deposit Insurance Corporation. Investors must bear the credit risks of HSBC.
• The detailed contents of the product and associated rights and obligations shall be based on the agreement entered into between HSBC and the customers, the terms and conditions of Product Information and letters of confirmation.

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