Market-LinkedCertificates of DepositMarket participationThe security of FDIC insurance*
Market-LinkedCertificates of Deposit (CDs)An important tool in helping investors address thequestion “How do I try to grow my money withoutlosing it?”IntroductionOver the past two decades, the marketplace for structuredinvestments has grown significantly as investors rangingfrom young families to retirees have increasingly lookedto these investments to help address wealth managementobjectives such as pursuing growth opportunities,generating income, and protecting principal.Structured investments can take many differentforms – registered notes and CDs to name a few. Avery common method in which structured investmentsare issued is in the form of principal protectedMarket-Linked Certificates of Deposit (CDs).Market-Linked CDs offer investors the potentialto earn enhanced returns compared to thoseavailable with traditional deposit products.Benefits and featuresAll of HSBC’s Market-Linked CDs are issued by HSBCBank USA, National Association. In both rising andfalling markets, these Market-Linked CDs are 100%principal protected, subject to issuers ability to pay,when held to maturity. In addition, the CDs areFDIC-insured up to the statutory limits*, but aresubject to the credit risk of the issuer.HSBC Market-Linked CDs can offer clients access toa wide range of markets such as US and internationalequities, commodities, and foreign exchange** bylinking the returns on these CDs to the performanceof these asset classes. Equity indices and other reference assets S&P 500 ® Commodity indices NASDAQ 100 ® Precious metals Dow Jones Industrial Average® Foreign currencies Nikkei 225 (Japan) ® Interest rate benchmarks DJ EuroStoxx 50 ® (Eurozone) Equities Hang Seng China Enterprise (China) Exchange traded funds (ETFs)
Financial objectivesInvestor profileThere is no typical client when it comes toMarket-Linked CDs. Designed for buy and holdstrategies, the investor profile is broad, includingretirees, baby boomers and families saving forcollege expenses.Investors may be attracted by Market-Linked CDs’ abilityto provide:• 100% principal protection when held to maturity regardless of the performance of the reference asset, subject to the issuer’s credit risk• The potential for enhanced returns compared to those available with traditional bank deposit products• Focused exposure to a specific financial view• Investment horizons of one to seven yearsTools for shaping client portfoliosMarket-Linked CDs may have broad applications in awell-balanced portfolio and have become a tool thatindividuals and their financial advisors should considerto meet certain financial objectives. These CDs can beused as a complement to existing assets in a portfolio oras a way to employ a tactical or strategic view.Market-Linked CDs can also provide an efficient means toattain the true benefits of portfolio diversification, allowinginvestors to conveniently invest in alternative asset classesthat may be difficult to invest in directly.No two clients or investment objectives are the same,which is why HSBC continuously seeks to developinnovative investment products to provide clients withfinancial strategies to help balance risk and reward.
Risk considerationsMarket-Linked CDs are linked to the performance of specificunderlying assets and are not equivalent to investing directlyin that asset. It is important to note that Market-LinkedCDs may not always reflect the actual performance of theunderlying assets and have different risks than traditionalCDs. For example, a Market-Linked CD may have featuressuch as a cap or averaging, which could result in theperformance of the CD differing from a direct investmentin the underlying index or reference asset.There is currently no established secondary trading marketfor Market-Linked CDs. In the event that clients are ableto redeem Market-Linked CDs prior to maturity, the CDs mayredeem at less than the original amount due to fluctuationsin the underlying assets and other market factors.In all instances, like other investments, Market-Linked CDsshould be carefully evaluated with respect to financialobjectives, suitability, duration, calculation methods, taxconsiderations, and other risk factors. In addition, underUS tax rules, investors may be subject to US taxes oninterest income that have not been paid during the taxyear. Investors should consult their own tax advisors priorto investment.For any Market-Linked CD, please read the disclosurematerials provided by your registered financialrepresentative carefully before investing.
About HSBCInternational banking reachThe CDs are issued by HSBC Bank USA, NA, which is partof the HSBC Group, one of the largest banking and financialservices organizations in the world, with a network of over6,600 offices in 81 countries and territories worldwide.Financial strength and security• HSBC Bank USA, NA – USD187 billion in assets (as of December 2012)• HSBC Bank USA, NA credit ratings are as follows: (as of December 2012)*** – A1 by Moody’s – AA- by S&P – AA- by Fitch• FDIC Insurance: This deposit qualifies for FDIC coverage generally up to the statutory limitsRecognized Industry leader• In the industry’s benchmark survey of U.S. structured products distributors conducted by Greenwich Associates, HSBC maintained its position as the leading provider of structured products to U.S. retail clients for the 4th consecutive year! – #1 in Overall Market Penetration – #1 in Overall Service QualityFor each year, Greenwich Associates conducted telephoneinterviews in the United States with distributors of retailstructured products to better understand product demand,distributor preferences and the competitive landscape.The findings reported reflect solely the views reported toGreenwich Associates by the research participants. Theydo not represent opinions or endorsements by GreenwichAssociates or its staff. Interviewees may have be askedabout their use of and demand for financial products andservices and about investment practices in relevant financialmarkets. Greenwich Associates compiled the data received,conducted statistical analysis and reviews for presentationpurposes in order to produce the final results.