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Structured Products
Currency Linked III
Important Risk Warning:
- Structured Investment Deposit is a structured investment product involving derivatives. The investment decision is yours but you should not invest in Structured Investment Deposit unless the intermediary who sells it to you has explained to you that the product is suitable for you having regard to your financial situation, investment experience and investment objectives.
- This is a structured investment product, which is NOT protected by the Deposit Protection Scheme in Hong Kong.
Additional risks are disclosed in the section of "Risk disclosure" below. Please refer to it for details.
If you are looking for:
- simpler and less risky investment
- 100% protection of your capital at maturity while you do not mind to lock up your structured investment deposit for a certain period (e.g. from 3 months to around 1 year)
- higher potential interest return while at the minimum, you can at least earn an interest close to a time deposit based on the structure you selected according to your bullish / bearish view on the underlying currency pair if hold until maturity
Capital Protected Investment Deposit - Currency Linked III may be your choice.
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| Place a structured deposit using your preferred currency e.g. AUD |
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| At maturity, receive | ||
| 100% of principal + |
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| If exchange rate moves as you expected Higher return |
OR | If exchange rate moves against your expectation Lower return (if any) |
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Available in branches |
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Available Online (For HSBC Premier Customers only) |
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| Customer View | Bullish: After 1 year, AUD/ USD shall appreciate to 0.7930 or above |
| Deposit currency | Australian Dollar (AUD) |
| Deposit Period | 1 year |
| Linked exchange rate | AUD / USD |
| Spot exchange rate | 0.7450 |
| Trigger rate | 0.7930 (Spot exchange rate + 0.048) |
| Upon maturity, customer receives * | 105.6% of principal if AUD fix at or above 0.7930 103.7% of principal if AUD fix below 0.7930 |
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As reference, if AUD 17,500 is placed in a conventional one-year time deposit on 17 May 201X , the interest rate is 3.64% p.a.
Payout scenario
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| Best case scenario Above the trigger rate |
Best case scenario Equals the trigger rate |
Worst case scenario Below the trigger rate |
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| AUD fix at fixing | 0.8030 | 0.7930 | 0.7830 |
| Upon maturity, customer receives | 105.6% of principal | 103.7% of principal | |
| Return on investment | 5.6% of principal | 3.7% of principal | |
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Assuming that the Bank becomes insolvent during the tenor of this product or defaults on its obligations under this product, you can only claim as its unsecured creditor. You may get nothing back and suffer a total loss of your deposit amount.
Return diagram
The price volatility of the product is low, and the product is normally 100% capital protected upon maturity (for products with scheduled maturity). Customers may adopt a passive strategy on the investment.
This product may be suitable for investors who are happy to accept low level of investment risk.
Scenario Analysis Disclaimer
The above scenarios are provided for illustrative purposes only, and do not reflect a complete analysis of all possible gain and loss scenarios that may arise during any actual investment. No representation or warranty is made by the Bank that any scenario described above can be duplicated under real investment conditions. Actual results may vary from the results shown above, and variations may be material.
Risk disclosure
- Not a time deposit - Currency Linked III 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 - Currency Linked III is embedded with FX option(s). Option transactions involve risks. If the exchange rate of the currency pair performs against expectation at the fixing time on the fixing date, you can only earn the minimum payout of the structure.
- Limited potential gain - The maximum potential gain is limited to higher payout on the deposit less the principal amount, when exchange rate of currency pair at fixing moves in line with your anticipated direction.
- Not the same as buying the linked currency - Investing in Currency Linked III is not the same as buying the linked currency directly.
- Market risk - The return of Currency Linked III will depend upon the exchange rates of currency pair against trigger rate at the fixing time on the fixing date. Movements in exchange rates can be unpredictable, sudden and drastic, and affected by complex political and economic factors. You must be prepared to take the risk of earning the lower payout/no return (if exchange rate performs against expectation) on the money invested.
- Liquidity risk - Currency Linked III is designed to be held untill maturity. You do not have a right to request early termination of this product before maturity.
- Credit risk of the Bank - Currency Linked III is not secured by any collateral. When you invest in this product, you will be relying on the Bank's creditworthiness. 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 deposit amount.
- Currency risk - If the deposit currency is not your home currency, and you choose to convert it back to your home currency upon maturity, you may make a gain or loss due to exchange rate fluctuations.
- Risk of early termination by the Bank - The Bank shall have the discretion to uplift a Deposit or any part thereof prior to the Maturity Date (subject to the deduction of such break costs or the addition of such proportion of the return or redemption amount, which may result in a figure less than the original principal amount of the Deposit) if it determines, in its sole discretion, that this is necessary or appropriate to protect any right of the Bank to combine accounts or set-off, or any security interest, or to protect the Customer's interests.
- Risks relating to RMB - You should note that the value of RMB against other foreign currencies fluctuates and will be affected by, amongst other things, the PRC government's control (for example, the PRC government regulates conversion between RMB and foreign currencies), which may adversely affect your return under this product when you convert RMB into your home currency. If you choose to convert your RMB deposit to other currencies at an exchange rate that is less favourable than that in which you made your original conversion to RMB, you may suffer loss in principla. RMB is currently not freely convertible and conversion of RMB in Hong Kong is subject to certain restrictions. In particular, the conversion of RMB by an individual customer through RMB deposit accounts with banks in Hong Kong is subject to a daily limit of RMB20,000 per person per day. If you intend to convert an amount of RMB from/to another currency exceeding such daily limit, you should allow sufficient period for the conversion.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.
