HSBC Bank Market-Linked CD Brochure


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Issued by HSBC Bank USA N.A., these are far from your typical Certificates of Deposit. These are Investor CDs with enhanced opportunity and anchored with the guarantee of your initial principal investment.

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HSBC Bank Market-Linked CD Brochure

  1. 1. Market-LinkedCertificates of DepositMarket Participation.The security of FDIC insurance.*
  2. 2. Market-LinkedCertificates of Deposit (CDs)An important tool in helping investors address the question “How do I try togrow my money without losing it?”Introduction Risk considerationsOver the past two decades, the marketplace Market-Linked CDs are linked to thefor Structured Investments has grown performance of specific underlying assetssignificantly as investors ranging from young and are not equivalent to investing directlyfamilies to retirees have increasingly looked in that asset. It is important to note thatto these investments to help address wealth Market-Linked CDs may not always reflect themanagement objectives such as pursuing actual performance of the underlying assetsgrowth opportunities, generating income, and and have different risks than traditional CDs. Forprotecting principal. example, a Market-Linked CD may have features such as a cap or averaging, which could resultStructured Investments can take many different in the performance of the CD differing from aforms - registered notes and CDs to name a few. direct investment in the underlying index orA very common method in which Structured reference asset.Investments are issued is in the form of principalprotected Market-Linked Certificates of Deposit. There is currently no established secondary trading market for Market-Linked CDs. InMarket-Linked CDs offer investors the the event that clients are able to redeem Market-Linked CDs prior to maturity, the CDspotential to earn enhanced returns may redeem at less than the original amountcompared to those available with due to fluctuations in the underlying assets andtraditional deposit products. other market factors. In all instances, like other investments,Benefits and features Market-Linked CDs should be carefully evaluated with respect to financial objectives,All of HSBC’s Market-Linked CDs are issued suitability, duration, calculation methods, taxby HSBC Bank USA, National Association. In considerations, and other risk factors. In addition,both rising and falling markets, these Market- under US tax rules, investors may be subject toLinked CDs are 100 percent principal protected US taxes on interest income that have not beenwhen held to maturity. In addtion, the CDs are paid during the tax year. Investors should consultFDIC insured up to the statutory limits*, but are their own tax advisors prior to investment.subject to the credit risk of the issuer. For any Market-Linked CD, please readHSBC Market-Linked CDs can offer clients the disclosure materials provided by youraccess to a wide range of markets such as registered financial representative carefullyUS and international equities, commodities, before investing.and foreign exchange** by linking the returnson these CDs to the performance of theseasset classes. Equity Indices and Other Reference Assets• S&P 500 ® • Commodity Indices• NASDAQ 100 ® • Precious Metals• Dow Jones • Foreign Currencies Industrial Average®• Nikkei 225 ® (Japan) • Interest Rate Benchmarks• DJ EuroStoxx 50 ® • Equities (Euro-zone)• Hang Seng China • Exchange Traded Funds Enterprise (China) (ETFs)
  3. 3. Financial objectives About HSBCInvestor profile International banking reachThere is no typical client when it comes The CDs are issued by HSBC Bank USA,to Market-Linked CDs. Designed for N.A., which is part of the HSBC Group, one of the largest banking and financial servicesbuy and hold strategies, the investor organizations in the world. With our network ofprofile is broad, including retirees, over 8,000 offices in 88 countries and territoriesbaby boomers, vital adults and families in Europe, the Asia-Pacific region, the Americas, the Middle East, and Africa, HSBC is ‘The world’ssaving for college expenses. local bank’.Investors may be attracted by Market-Linked Recognized market leaderCDs’ ability to provide: HSBC – Voted Best Structured Products 100 percent principal protection when held Brand and #1 in Overall Service Quality to maturity no matter the performance of (Greenwich Associates 2010 and 2009 US the reference asset, subject to the issuer’s Retail Structured Products Survey) credit risk The potential for enhanced returns compared Financial strength and security to those available with traditional bank deposit products HSBC Bank USA, NA – USD184 billion in assets Focused exposure to a specific financial view (as of Dec 31, 2010) Investment horizons of one to seven years HSBC Bank USA, NA is highly rated by all three major rating agenciesTools for shaping client portfolios (as of Dec 2010)*** – Aa3 by Moody’sMarket-Linked CDs may have broad applications – AA by S&Pin a well-balanced portfolio and have become – AA by Fitcha tool that individuals and their financialadvisors should consider to meet certain FDIC Insurance: This deposit qualifies for FDICfinancial objectives. These CDs can be used as a coverage generally up to the statutory limitscomplement to existing assets in a portfolio oras a way to employ a tactical or strategic view.Market-Linked CDs can also provide an efficientmeans to attain the true benefits of portfoliodiversification, allowing investors to convenientlyinvest in alternative asset classes that may bedifficult to invest in directly.No two clients or investment objectives are thesame, which is why HSBC continuously seeksto develop innovative investment products toprovide clients with financial strategies to helpbalance risk and reward.
  4. 4. *FDIC Insurance: A Market-Linked CD represents a bank deposit obligation and is FDIC insured together with all otherdeposits you may have with the issuing bank, up to $250,000 per depositor. Any funds deposited with the issuing bank(including other CDs issued by such bank) in excess of these limits will not be eligible for FDIC insurance, so you shouldconsider and inform your Financial Advisor if you have other deposits at the issuing bank. For more detailed informationregarding FDIC insurance coverage, you may contact the FDIC Call Center at (877) 275-3342 or refer to the FDIC public websiteat, where you can obtain a copy of the FDIC’s brochure, “Your Insured Deposits, FDIC’s Guide to DepositInsurance Coverage”. Products and services are offered by HSBC Bank USA, NA, member FDIC.**Depending on the underlying asset to which the Market-Linked CD is linked, there may be certain risks to consider.For information on a particular Market-Linked CD, see the relevant offering documents for a full discussion of risks andconsiderations related to the underlying asset(s) of such CD.***The credit ratings pertain only to the creditworthiness of HSBC Bank USA, NA and are not indicative of the performance ofthe CDs nor are any third party awards received by HSBC Bank USA NA.Market-Linked Certificates of Deposit are provided by: Registered Representatives of HSBC Securities (USA) Inc., a member NYSE/FINRA/SIPC, a registered Futures Commission Merchant, a wholly-owned subsidiary of HSBC Markets (USA) Inc. and an indirectly wholly-owned subsidiary of HSBC Holdings plc. Distributors not affiliated with HSBC Securities (USA) Inc, HSBC Markets (USA) Inc.or HSBC Holdings plc.Market-Linked CD Products are: Bank deposits; obligations of the issuing bank; FDIC insured within applicable limits; not aliquid investment; and are designed to be held to maturity. Market-Linked CDs are subject to investment risk and any earlyrepayment could result in a loss of principal investment.This is not a recommendation, offer or solicitation to purchase or sell any CD, security, commodity, currency or otherinstrument. The information herein does not consider specific objectives, circumstances or needs of individual recipients.Recipients of this information should seek financial advice regarding the appropriateness of investing in any CD, security,commodity, currency or derivative instrument or strategy contained herein.Issued by HSBC Bank USA, NA.© 2011 HSBC Bank USA, NA. All rights reserved.Designed and produced by HSBC Global Publishing Services. 110711_38751