Structured Investments

The following risk disclosure statements cannot disclose all the risks involved. Prior to trading or investment, you should collect and study the information required for your investment. You should carefully consider whether trading or investment is suitable in light of your own financial position and investment objectives. You should seek independent financial and professional advice before trading or investment. If you are uncertain of or have not understood any aspect of the following risk disclosure statements or the nature and risks involved in trading or investment, you should seek independent advice.

• Not a time deposit – Target Rate Investment is NOT equivalent to, nor should it be treated as a substitute for, time deposit. It is NOT a protected deposit and is NOT protected by the Deposit Protection Scheme in Hong Kong.
• Derivatives risk – Target Rate Investment is embedded with a European digital currency option which can only be exercised on the final fixing date if the specified condition for exercise is satisfied, in which case you may either receive the interest amount calculated at a higher interest rate, or otherwise, you will receive the interest amount calculated at a lower interest rate. The interest amount is therefore unknown in advance.
• Limited potential gain – The maximum potential gain is limited to the interest amount calculated at the higher interest rate as prescribed in the term sheet of the Product.
• Principal protection at maturity only – The principal protection feature is only applicable if this product is held to maturity.
• Not the same as buying any currency of the currency pair – Investing in Target Rate Investment is not the same as buying any currency of the currency pair directly.
• Market risk – The return on Target Rate Investment is dependent on movements in the exchange rate of the currency pair. Currency exchange rates may move rapidly and are affected by a number of factors including, national and international financial, economic, political and other conditions and events and may also be subject to intervention by central banks and other bodies.
• Liquidity risk – Target Rate Investment is designed to be held till maturity. Once the transaction for this product is confirmed, you will not be allowed to early withdraw or terminate or transfer any or all of your investment before maturity.
• Credit risk of the Bank – Target Rate Investment is not secured by any collateral. If you invest in this product, you will be taking the credit risk of the Bank. If the Bank becomes insolvent or defaults on its obligations under this product, you can only claim as an unsecured creditor of the Bank. In the worst case, you could suffer a total loss of your principal amount and the potential interest amount.
• Currency risk – If the Investment currency is not your home currency, and you choose to convert it back to your home currency upon maturity, you should note that exchange rate fluctuations may have an adverse impact on, and the potential loss may offset (or even exceed), the potential return of the product.
• RMB Conversion Limitation Risk – RMB investments are subject to exchange rate fluctuations which may provide both opportunities and risks. The fluctuation in the exchange rate of RMB may result in losses in the event that the customer converts RMB into HKD or other foreign currencies.
  (Only applicable to Individual Customers) RMB is currently not fully freely convertible. Individual customers can be offered CNH rate to conduct conversion of RMB through bank accounts and may occasionally not be able to do so fully or immediately, for which it is subject to the RMB position of the banks and their commercial decisions at that moment. Customers should consider and understand the possible impact on their liquidity of RMB funds in advance.
  (Only applicable to Corporate Customers) RMB is currently not fully freely convertible. Corporate customers that intend to conduct conversion of RMB through banks may occasionally not be able to do so fully or immediately, for which it is subject to the RMB position of the banks and their commercial decisions at that moment. Customers should consider and understand the possible impact on their liquidity of RMB funds in advance.
• Emerging markets – Investments in emerging markets are more sensitive to social, political or economic development in the region than those in developed markets, and subject to risk such as market suspension, restrictions on foreign investment and control or repatriation of capital. There are also possibilities of nationalisation, expropriation or confiscatory taxation, foreign exchange control, political changes, government regulation, social instability or diplomatic developments which could adversely affect the economics of the emerging markets or the value of your investment.
• No secondary market – Target Rate Investment is not a listed security. There is no secondary market for you to sell the Product prior to its maturity.
• Not covered by Investor Compensation Fund – Target Rate Investment is not covered by the Hong Kong Investor Compensation Fund.