Structured Notes

“Structure Notes” is a new type of financial instrument integrating the features of fixed income products (like zero-coupon bonds) and the derivatives. In practice, the principal of Structured Notes is used for buying fixed income products like the zero-coupon bond for the principal protection to a certain degree while the interest is used to invest in derivatives linked to interest rates, foreign exchange rates, commodity futures or equity indexes, and the return of Structured Notes would depend on the underlying performance.

Features of “Structured Notes”

• Principal Protection*
  Issuers or guarantors of some Structured Notes would provide a certain percentage of principal protection at maturity (100% or other percentage).
• Minimum return*
  Minimum return at different levels may be provided depending on the products.
• Diversified Underlying
  The Notes may be linked to interest rates (like LIBOR, EURIBOR), foreign exchange rates (like foreign rate of EUR/USD, GBP/USD, etc.), stocks (like Coca-cola, Microsoft), and equity indice (like S&P 500, Nikkei 225). The return of Structured Notes would depend on the underlying performance.
• Tax Benefit **
  Under the current Tax Code, return on investment in offshore structured notes invested through Non-Discretionary Trust accounts in foreign currencies is tax exempted for individuals.

*Issuers or guarantors of some Structured Notes may provide principal protection principal at maturity or minimum return on investment. However, investors still have to assume the credit risks of the issuers and the guarantors.

**Any change in the Tax Code may affect the tax exemption nature of offshore incomes. Therefore, the effect of tax benefit may also be affected.

Types of Structured Notes

Structured Notes Related Information

• Structured Notes Fees & Channels
• Main risks for investment in “Structured Notes”
• Structured Notes Investment Example

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