Page 1 of 67 Currency-Linked Capital Protected Investment Deposit American (Bullish / Bearish) Investment Dated May 2018 Important Facts Statement This is a structured investment product which is NOT protected by the Deposit Protection Scheme in Hong Kong. The contents of this statement have not been reviewed by any regulatory authority in Hong Kong. You are advised to exercise caution before investing in this product. This statement is a part of the offering documents for this product. You should not invest in this product based on this statement alone. If you are in any doubt, you should obtain independent professional advice. If English is not your preferred language, you may request for the Chinese version of this statement from our sales staff. 倘若英 文並非閣下屬意的語言,閣下可向本行的銷售人員索取本概要的中文版本。 This is a structured investment product involving derivatives. The investment decision is yours but you should not invest in this product 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. Quick facts Bank: Hang Seng Bank Limited Product Type: Currency-Linked Investment Deposit – American Bullish / Bearish Investment (“this product”) Minimum Investment Amount: Subscription through branches - HKD 100,000 (or its equivalent) Subscription through e-banking - HKD 50,000 (or its equivalent) Tenor: 2 months or above or any other tenor as agreed between you and the Bank Available Principal Currency (or Deposit Currency): HKD, USD, AUD, GBP, EUR, JPY, CAD, CHF, NZD and CNY Available Underlying Currency Pair: AUD/USD, GBP/USD, EUR/USD, USD/JPY, USD/CAD, USD/CHF, NZD/USD, USD/CNH and any other currency pairs as agreed between you and the Bank Return Rate: Varies, as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction Deposit period/payment date: Deposit period refers to tenor of this product and return is payable only on Maturity Date Principal protection at maturity: Yes Callable by the Bank: No Early termination right by customer: No, please refer to “What are the key risks of Currency-Linked Capital Protected Investment Deposit?” section – "Early Withdrawal/Termination Risks" for details Embedded derivatives: Yes, you will buy option(s) over the Underlying Currency Pair Maximum potential gain: Varies, as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction Maximum potential loss: Please refer to Scenarios II and III of Examples 1 and 2 and Scenarios IV and V of Examples 3 and 4 in the “Scenario analysis” section of this product type for details What is this product and how does it work? • American Bullish / Bearish investment is one type of our Currency-Linked Capital Protected Investment Deposit which consists of a time deposit (in Deposit Currency) and buying option(s) on the Underlying Currency Pair of your choice. • You choose the Deposit Currency, Underlying Currency Pair and Observation Period according to your need and the Bank will set the Trigger Level. • During the whole Observation Period, the Bank will compare the exchange rate of the Underlying Currency Pair with the Trigger Level. If the exchange rate of the Underlying Currency Pair moves along with your anticipation, you will receive Guaranteed Principal and Potential Return. If the exchange rate of the Underlying Currency Pair moves against your anticipation, you will receive Guaranteed Principal and Minimum Return* (if any). • The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency. *Minimum return applies to certain investment tranches only, you should refer to the relevant termsheet for details. What are the key risks of Currency-Linked Capital Protected Investment Deposit? Earnings on Currency-Linked Capital Protected Investment Deposit are limited to the Return / Coupon (if any) payable. You should consider the following risks and read all other information contained in the relevant Termsheet and Terms and Conditions before making any investment decision. Not a time deposit Currency-Linked Capital Protected Investment Deposit is NOT equivalent to, nor should it be treated as a substitute for, time deposit. It is
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Page 1 of 67
Currency-Linked Capital Protected Investment Deposit
American (Bullish Bearish) Investment
Dated May 2018
Important Facts Statement
This is a structured investment product which is NOT protected by the Deposit Protection Scheme in Hong Kong
The contents of this statement have not been reviewed by any regulatory authority in Hong Kong You are advised to exercise caution before investing in this product This statement is a part of the offering documents for this product You should not invest in this product based on this statement alone If you are in any doubt you should obtain independent professional advice
If English is not your preferred language you may request for the Chinese version of this statement from our sales staff 倘若英
文並非閣下屬意的語言閣下可向本行的銷售人員索取本概要的中文版本
This is a structured investment product involving derivatives The investment decision is yours but you should not invest in this product 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
Quick facts Bank Hang Seng Bank Limited
Product Type Currency-Linked Investment Deposit ndash American Bullish Bearish Investment (ldquothis
productrdquo)
Minimum Investment Amount Subscription through branches - HKD 100000 (or its equivalent)
Subscription through e-banking - HKD 50000 (or its equivalent)
Tenor 2 months or above or any other tenor as agreed between you and the Bank
Available Principal Currency (or Deposit Currency) HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY
USDCNH and any other currency pairs as agreed between you and the Bank
Return Rate Varies as specified in the relevant termsheet or to be agreed between you and the
Bank upon entering into a transaction
Deposit periodpayment date Deposit period refers to tenor of this product and return is payable only on Maturity
Date
Principal protection at maturity Yes
Callable by the Bank No
Early termination right by customer No please refer to ldquoWhat are the key risks of Currency-Linked Capital Protected
Investment Depositrdquo section ndash Early WithdrawalTermination Risks for details
Embedded derivatives Yes you will buy option(s) over the Underlying Currency Pair
Maximum potential gain Varies as specified in the relevant termsheet or to be agreed between you and the
Bank upon entering into a transaction
Maximum potential loss Please refer to Scenarios II and III of Examples 1 and 2 and Scenarios IV and V of
Examples 3 and 4 in the ldquoScenario analysisrdquo section of this product type for details
What is this product and how does it work bull American Bullish Bearish investment is one type of our Currency-Linked Capital Protected Investment Deposit which consists of a time
deposit (in Deposit Currency) and buying option(s) on the Underlying Currency Pair of your choice bull You choose the Deposit Currency Underlying Currency Pair and Observation Period according to your need and the Bank will set the
Trigger Level bull During the whole Observation Period the Bank will compare the exchange rate of the Underlying Currency Pair with the Trigger Level If
the exchange rate of the Underlying Currency Pair moves along with your anticipation you will receive Guaranteed Principal and Potential Return If the exchange rate of the Underlying Currency Pair moves against your anticipation you will receive Guaranteed Principal and Minimum Return (if any)
bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency Minimum return applies to certain investment tranches only you should refer to the relevant termsheet for details
What are the key risks of Currency-Linked Capital Protected Investment Deposit Earnings on Currency-Linked Capital Protected Investment Deposit are limited to the Return Coupon (if any) payable You should consider the following risks and read all other information contained in the relevant Termsheet and Terms and Conditions before making any investment decision Not a time deposit Currency-Linked Capital Protected Investment Deposit is NOT equivalent to nor should it be treated as a substitute for time deposit It is
Page 2 of 67
NOT a protected deposit and is NOT protected by the Deposit Protection Scheme in Hong Kong Derivatives risk Currency-Linked Capital Protected Investment Deposit is embedded with FX options Option transactions involve risks even when buying an option The optionrsquos value might become worthless if the market moves against your expectation Limited potential gain The maximum potential gain is limited to the pre-agreed ReturnCoupon calculated at the Potential ReturnCoupon Rate Not the same as buying the Underlying Currency Pair Investing in Currency-Linked Capital Protected Investment Deposit is not the same as buying the Underlying Currency Pair directly Market risk The investment return of Currency-Linked Capital Protected Investment Deposit is linked to the exchange rate of the Underlying Currency Pair Movements in exchange rates can be unpredictable sudden and drastic and affected by complex political and economic factors Liquidity risk Currency-Linked Capital Protected Investment Deposit is designed to be held till maturity The Bank may at its absolute discretion refuse to consent to any withdrawaltermination request before maturity Credit risk of the Bank Currency-Linked Capital Protected Investment Deposit is not secured by any collateral When you invest in Currency-Linked Capital Protected Investment Deposit you will be relying on the Bankrsquos creditworthiness If the Bank becomes insolvent or defaults on its obligations under a Currency-Linked Capital Protected Investment Deposit you can only claim as an unsecured creditor of the Bank In the worst case you could suffer a total loss of your investment amount Currency risk Exchange rate fluctuates and sometimes drastically If the Deposit Currency used for investment is not the home currency customarily used by you and thus conversion is required you should note that you may make a gain or suffer a loss due to exchange rate fluctuations When the deposit currency depreciates the loss from depreciation may set-off or even exceed the ReturnCoupon (if any) that you may receive from investing in the Currency-Linked Capital Protected Investment Deposit Risk of adjustments or early termination by the Bank Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank this might have a negative impact on the ReturnCoupon (if any) of the Currency-Linked Capital Protected Investment Deposit Concentration Risks You should avoid excessive investment (in terms of its proportion of the overall portfolio) in any single type of investment so as to avoid the investment portfolio being over-exposed to any particular investment risk ReturnCoupon of Currency-Linked Capital Protected Investment Deposit In order to provide capital protection the investment strategy adopted for Currency-Linked Capital Protected Investment Deposit may lead to a dilution of performance when compared to non-capital protected products investing in similar markets You should be prepared to take the risks of earning a lower ReturnCoupon (if any) on the capital invested and losing the interest that might otherwise earned on money invested by way of deposits For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) periodic Coupon may be payable to you For other types of Currency-Linked Capital Protected Investment Deposit no periodic ReturnCoupon will be payable to you prior to maturity Principal protection at maturity only You should understand that the Principal of the Currency-Linked Capital Protected Investment Deposit is capital-protected only when it is held to maturity If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the amount received by you upon early withdrawaltermination may be less than the amount initially invested by you Market Risks associated with Potential ReturnCoupon Apart from the ReturnCoupon calculated at the Minimum ReturnCoupon Rate (which may be set at zero) there is no guarantee of any ReturnCoupon calculated at the Potential ReturnCoupon Rate For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) Coupon (if any) is payable only if the Currency-Linked Capital Protected Investment Deposit is held till the relevant Coupon Distribution Dates ReturnCoupon (if any) of Currency-Linked Capital Protected Investment Deposit depends on the market conditions at the time of the relevant determination Investment return on foreign exchange-linked products are dependent on the prices of inter-banksrsquo transactions on the linked exchange rate in the foreign exchange markets You should be fully aware of the risks relating to fluctuations in the linked exchange rates Factors affecting the performance of foreign exchange markets are numerous including but are not limited to changes in global and local investment sentiments interest rate policies fund flows political environment economic environment business and social conditions in the local marketplace If the market trend is different from the view taken by you there is an inherent risk that the total investment return that you may receive from Currency-Linked Capital Protected Investment Deposit will be less than the interest that would have been payable on a time deposit for the same tenor There is also an inherent risk that no ReturnCoupon calculated at the Potential ReturnCoupon Rate will be payable to you in respect of the Currency-Linked Capital Protected Investment Deposit Early WithdrawalTermination Risks Early withdrawaltermination by you is not allowed for Currency-Linked Capital Protected Investment Deposit and the capital of you will be invested in the Currency-Linked Capital Protected Investment Deposit for the entire investment period The Bank may at its absolute discretion refuse to give consent to any early withdrawaltermination request If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the Bank shall be entitled to deduct from the Principal of the relevant Currency-Linked Capital Protected Investment Deposit andor any other amount which may have accrued to you any expenses costs or damages to the Bank Damages may include any costs expenses liability or losses to the Bank as a result of the early withdrawaltermination by you Therefore there is no guarantee that you will be able to receive the Principal and the amount payable to you at early withdrawaltermination may be less than the Principal initially invested Besides If the Currency-Linked Capital Protected Investment Deposit is early withdrawnterminated you will no longer be entitled to any ReturnCoupon of the Currency-Linked Capital Protected Investment Deposit Risks associated with unsuccessful subscriptions of Currency-Linked Capital Protected Investment Deposit The Bank reserves the absolute right to approve any application and to decline any application received (whether in whole or any part thereof) before the Deposit Start Date In the event of non-acceptance a notification will be sent by the Bank and any subscription funds
Page 3 of 67
received will be returned to you after the Deposit Start Date or as soon as practicable Risks relating to Renminbi If Currency-Linked Capital Protected Investment Deposit involves CNY the relevant exchange rate(s) or level(s) of the relevant currency pair will be quoted in offshore Renminbi against alternate currency While both onshore Renminbi and offshore Renminbi are the same currency they are traded in different and separate markets operating under different regulations and independent liquidity pool Onshore Renminbi and offshore Renminbi are currently quoted in different markets with different exchange rates whereby their exchange rate movements may not be in the same direction or magnitude The offshore Renminbi exchange rate may deviate significantly from the onshore Renminbi exchange rate You should also note that Renminbi is currently not freely convertible the value of Renminbi against other foreign currencies fluctuates and will be affected by amongst other things the PRC governmentrsquos control (for example the PRC government regulates conversion between Renminbi and foreign currencies) which may adversely affect your investment return under the Currency-Linked Capital Protected Investment Deposit when you convert CNY into your home currency Renminbi is subject to foreign exchange control by the PRC government and thus investors investing in Currency-Linked Investment Deposit involving Renminbi are subject to the currency risk of Renminbi
What are the key features bull This product is designed for you whose investment objective is capital protection or to obtain potential cash income bull This product is embedded with options You will buy option(s) on the Linked Currency Pair bull 100 principal protection if this product is held to maturity bull You can choose the Deposit Currency including HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY and Linked Currency
Pair including AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD and USDCNH bull The Deposit Period of this product is 2 months or above bull You will have a chance to receive higher potential return depending on the movement of the exchange rate of the Underlying Currency
Pair during the Observation Period bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency bull The Bank pre-sets the Trigger Level and Observation Period and you choose a bullish or bearish view on different currencies bull During the whole Observation Period the exchange rate of the Underlying Currency Pair is compared with the Trigger Level to determine
the Return at maturity bull Returns (if any) on this product is payable only upon maturity bull This product may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank Please refer
to the section Can you request for early termination before maturity below
Scenario analysis (All figures shown below including the exchange rate of AUDUSD and HKDCNH Potential Return Rate Minimum Return Rate Deposit Period etc are for illustration only You should not rely on the figures below as any indication or guarantee on the expected interest amount of the Currency-Linked Capital Protected Investment Deposit you intend to invest Please refer to the Bank for up-to-date figures) Example 1 ndash American Bullish (where the Deposit Currency is your home currency) Assuming HKD is your home currency and you take a bullish view on Australian Dollar expect the exchange rate of AUDUSD will rise from 09400 to 09800 or above during the 6-month period and set up an American Bullish Investment with HKD 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment American Bullish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency HKD Guaranteed Principal HKD 100000 Deposit Period 6 months Trigger Level AUDUSD 09800 Potential Return Rate 016 (around 032 pa) Minimum Return Rate 0015 (around 003 pa) Scenario I Best case scenario At any time during the Observation Period the Exchange Rate of AUDUSD is at or above the Trigger Level (ie at or above 09800) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = HKD 100000 x (1+016) = HKD 10016000 (with a gain of 016 of investment amount) Scenario II Worst case scenario At any time during the Observation Period the Exchange Rate of AUDUSD stays below the Trigger Level (ie stays below 09800) you will receive Guaranteed Principal and Minimum Return at maturity Total Return at Maturity = HKD 100000 x (1+0015)
Page 4 of 67
= HKD 10001500 (with a gain of 0015 of investment amount)
Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a HKD 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500 Example 2 ndash American Bearish (where the Deposit Currency is your home currency) Assuming HKD is your home currency and you take a bearish view on Australian Dollar expect the exchange rate of AUDUSD will drop from 09400 to 09000 or below during the 6-month period and set up an American Bearish Investment with HKD 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment American Bearish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency HKD Guaranteed Principal HKD 100000 Deposit Period 6 months Trigger Level AUDUSD 09000 Potential Return Rate 016 (around 032 pa) Minimum Return Rate 0015 (around 003 pa) Scenario I Best case scenario At any time during the Observation Period the Exchange Rate of AUDUSD is at or below the Trigger Level (ie at or below 09000) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = HKD 100000 x (1+016) = HKD 10016000 (with a gain of 016 of investment amount) Scenario II Worst case scenario At any time during the Observation Period the Exchange Rate of AUDUSD stays above the Trigger Level (ie stays above 09000) you will receive Guaranteed Principal and Minimum Return at maturity Total Return at Maturity = HKD 100000 x (1+0015) = HKD 10001500
(with a gain of 0015 of investment amount) Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount
09800 0
Exchange Rate of AUDUSD lt Trigger Level
Potential Return Minimum Return
Return Diagram Return at Maturity
Exchange Rate of AUDUSD ge Trigger Level
Exchange Rate of AUDUSD during the Observation Period
Trigger Level = 09800
09000 0
Exchange Rate of AUDUSD le
Trigger Level
Potential Return Minimum Return
Return Diagram
Return at Maturity
Exchange Rate of AUDUSD gt Trigger Level
Exchange Rate of AUDUSD during the Observation Period
Trigger Level = 09000
Page 5 of 67
For reference only if you set up a HKD 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500 Example 3 ndash American Bullish (where the Deposit Currency is not your home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency and you take a bullish view on Australian Dollar expect the exchange rate of AUDUSD will rise from 09400 to 09800 or above during the 6-month period and set up an American Bullish Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair
Type of investment American Bullish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trigger Level AUDUSD 09800 Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH (on deposit start date) 08000 Scenario I Best case scenario At any time during the Observation Period (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is at or above the Trigger Level (ie at or above 09800) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of-the-road Gain scenario At any time during the Observation Period (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD stays below the Trigger Level (ie stays below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000
(with a gain of 150 of investment amount)
Scenario III Off-setting scenario At any time during the Observation Period the Exchange Rate of AUDUSD stays below the Trigger Level (ie stays below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD 000 Scenario IV Loss and Worst case scenario At any time during the Observation Period the Exchange Rate of AUDUSD stays below the Trigger Level (ie stays below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951)
Page 6 of 67
In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a CNY 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received at maturity would be CNY 10030000 If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Please refer to the table below for details
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home
currency (HKD) in the event that you receive Minimum Return on the Maturity Date The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home
currency (HKD) in the event that you receive Potential Return on the Maturity Date If HKDCNH rise drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange
rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
ix 9999990000 010 010 (12499990) (12499990)
At the beginning of the investment On the Maturity Date of the investment
Exchange
Rate of
HKDCNH
Initial
Investment
Amount in
Renminbi
Initial
Investment
Amount in
HKD
Exchange Rate
of HKDCNH
Total Return in
Renminbi
Total Return in
HKD
Gain (loss) in HKD if converting the
Total Return from Renminbi to home
currency (HKD)
103000 101500 12500000 10000008000
09800 0
Exchange Rate of AUDUSD lt Trigger Level
Potential Return Minimum Return
Return Diagram Return at Maturity
Exchange Rate of AUDUSD ge Trigger Level
Exchange Rate of AUDUSD during the Observation Period
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Potential Return
Exchange Rate of HKDCNH on the Maturity Date
If receiving Minimum Return
Breakeven = 08120^
If receiving Potential Return
Breakeven = 08240
Exchange Rate on Deposit Start Date
0
If CNH depreciates drastically relative to HKD
HKDCNH = 9999990000
Page 7 of 67
Renminbi to home currency (HKD) on the Maturity Date Example 4 ndash American Bearish (where the Deposit Currency is not your home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency and you take a bearish view on Australian Dollar expect the exchange rate of AUDUSD will drop from 09400 to 09000 or below during the 6-month period and set up an American Bearish Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair
Type of investment American Bearish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trigger Level AUDUSD 09000 Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH (on deposit start date) 08000 Scenario I Best case scenario At any time during the Observation Period (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is at or below the Trigger Level (ie at or below 09000) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of-the-road Gain scenario At any time during the Observation Period (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD stays above the Trigger Level (ie stays above 09000) you will receive Guaranteed Principal and Minimum Return at maturity Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000
(with a gain of 150 of investment amount) Scenario III Off-setting scenario At any time during the Observation Period the Exchange Rate of AUDUSD stays above the Trigger Level (ie stays above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD 000 Scenario IV Loss and Worst case scenario At any time during the Observation Period the Exchange Rate of AUDUSD stays above the Trigger Level (ie stays above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951)
Page 8 of 67
In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a CNY 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received at maturity would be CNY 10030000 If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Please refer to the table below for details
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home
currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home
currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date If HKDCNH rise drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange
rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
ix 9999990000 010 010 (12499990) (12499990)
At the beginning of the investment On the Maturity Date of the investment
Exchange
Rate of
HKDCNH
Initial
Investment
Amount in
Renminbi
Initial
Investment
Amount in
HKD
Exchange Rate
of HKDCNH
Total Return in
Renminbi
Total Return in
HKD
Gain (loss) in HKD if converting the
Total Return from Renminbi to home
currency (HKD)
103000 101500 12500000 10000008000
09000 0
Exchange Rate of AUDUSD le
Trigger Level
Potential Return Minimum Return
Return Diagram
Return at Maturity
Exchange Rate of AUDUSD gt Trigger Level
Exchange Rate of AUDUSD during the Observation Period
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Potential Return
Exchange Rate of HKDCNH on the Maturity Date
0
If receiving Minimum Return
Breakeven = 08120^
If receiving Potential Return
Breakeven = 08240
Exchange Rate on Deposit Start Date
If CNH depreciates drastically relatively to HKD HKDCNH = 9999990000
Page 9 of 67
How can you buy this product bull You can place a Currency-Linked Capital Protected Investment Deposit through our Hang Seng Bank Branches telephone or Hang
Seng Personal or Business e-Banking bull The Bank will provide a choice of different tranches which is subject to market conditions bull Enquiry Hotline Personal 2822 0228 Business 2198 8000
Fees and charges No handling fees or management fees will be charged for Currency-Linked Capital Protected Investment Deposit
Can you request for early termination before maturity No Currency-Linked Capital Protected Investment Deposit may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank which may be granted or withheld in the Bankrsquos sole and absolute discretion on such terms and conditions as the Bank may determine Please refer to ldquoEarly WithdrawalTermination Risksrdquo under ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section for details
Pre-Investment Cooling-off Period for retail customers Pre-Investment Cooling-off Period (PICOP) is applicable to each particular dealing of this product if you are one of the following retail customer types
(1) An elderly customer aged 65 or above unless you are not a first-time buyer of currency-linked structured investment products AND your asset concentration is below 20 AND you opt out from the PICOP arrangement or
(2) A non-elderly customer who is a first time buyer of currency-linked structured investment products AND your asset concentration
is 20 or above
For the purpose of determining whether PICOP is applicable asset concentration refers to the percentage of total net worth (excluding real estate properties) to be invested in this product
Can the Bank adjust the terms or early terminate this product Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank in certain circumstances Please refer to Clause 7 of the Currency-Linked Capital Protected Investment Deposit Terms and Conditions for details
Offering documents for this product The following documents for this product (ldquoOffering Documentsrdquo) contain detailed information about the Bank and the terms of this product You should read and understand all of the Offering Documents before deciding whether to invest in this product
(i) Currency-Linked Capital Protected Investment Deposit Terms and Conditions (ii) The relevant Currency-Linked Capital Protected Investment Deposit Termsheet (iii) This Currency-Linked Capital Protected Investment Deposit Important Facts Statement
Other information Product Risk Level The Product Risk Level for Currency-Linked Capital Protected Investment Deposit is Low
Low Low-to-Medium Medium Medium-to-High High
Product Risk Level is determined by a number of factors which include the volatility of the currency pair and the tenor of the product The Product Risk Level is subject to the Banks periodic review and may change from time to time Please refer to our branch or our Customer Service Hotline on 2822 0228 for the latest detail
Declaration and Remarks bull This Important Facts Statement is not intended to provide or regard as legal or taxation advice or investment recommendations If you
have any concerns about this product or are uncertain about the suitability of this product for you you should obtain independent professional advice
bull The liabilities of the Bank in respect of the Currency-Linked Capital Protected Investment Deposit are limited exclusively to an office of the Bank in Hong Kong and instructions in respect of the Currency-Linked Capital Protected Investment Deposit may only be made to and acted upon by such office Any amount relating to the Currency-Linked Capital Protected Investment Deposit is payable exclusively by an office of the Bank in Hong Kong and in its stated currency The Terms and Conditions of the Currency-Linked Capital Protected Investment Deposit are governed by and shall be construed in accordance with the laws of Hong Kong
bull You may contact our staff if you have any feedback or complaint in relation to our services or call our hotline at 2822 0228 We will respond to you within a reasonable period of time normally not exceeding 30 days in general circumstances You may contact the Hong Kong Monetary Authority at 55th Floor Two International Finance Centre 8 Finance Street Central Hong Kong if you are not satisfied with our handling of your complaint
bull Hang Seng Bank Limited is a Registered Licensed Bank under the Banking Ordinance bull All Currency-Linked Capital Protected Investment Deposit cannot be cancelled after subscription bull The Bank will act as principal to complete the transaction and may obtain certain monetary benefits in connection with the offering of
this Currency-Linked Capital Protected Investment Deposit to the public The current remuneration system that the Bank adopts for
Page 10 of 67
sales staff is a measurement of the staffrsquos overall performance and not just based on sales amount bull The Bank is NOT an independent intermediary because
The Bank receives fees commissions or other monetary benefits from other parties in relation to the Bankrsquos distribution of Currency-Linked Capital Protected Investment Deposit to you For details you should refer to the Bankrsquos disclosure on monetary benefits which the Bank is required to deliver to you prior to or at the point of entering into any transaction in Currency-Linked Capital Protected Investment Deposit
bull Please note that this product is not available for persons who are located within the United States are nationals of the United States and are US Persons within the meaning of Regulation S under the Securities Act (which includes any person resident in the United States and any partnership or corporation organised or incorporated under the laws of the United States)
bull 請注意本行不提供本產品予身處美國的人士美國公民及美籍人士(定義見證券法 S 條例)(包括居住在美國之任何人士及根據美國法例組成
或註冊成立之任何合夥企業或公司)
Page 20 of 67
Currency-Linked Capital Protected Investment Deposit
American Range Investment
Dated May 2018
Important Facts Statement
This is a structured investment product which is NOT protected by the Deposit Protection Scheme in Hong Kong
The contents of this statement have not been reviewed by any regulatory authority in Hong Kong You are advised to exercise caution before investing in this product This statement is a part of the offering documents for this product You should not invest in this product based on this statement alone If you are in any doubt you should obtain independent professional advice
If English is not your preferred language you may request for the Chinese version of this statement from our sales staff 倘若英
文並非閣下屬意的語言閣下可向本行的銷售人員索取本概要的中文版本
This is a structured investment product involving derivatives The investment decision is yours but you should not invest in this product 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
Quick facts Bank Hang Seng Bank Limited
Product Type Currency-Linked Investment Deposit ndash American Range Investment (ldquothis productrdquo)
Minimum Investment Amount Subscription through branches - HKD 100000 (or its equivalent) Subscription through e-banking - HKD 50000 (or its equivalent)
Tenor 2 months or above or any other tenor as agreed between you and the Bank
Available Principal Currency (or Deposit Currency) HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY
Available Underlying Currency Pair AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD USDCNH and any other currency pairs as agreed between you and the Bank
Return Rate Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Deposit periodpayment date Deposit period refers to tenor of the product and return is payable only on Maturity Date
Principal protection at maturity Yes
Callable by the Bank No
Early termination right by customer No please refer to ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section ndash Early WithdrawalTermination Risks for details
Embedded derivatives Yes you will buy option(s) over the Underlying Currency Pair
Maximum potential gain Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Maximum potential loss Please refer to Scenario II amp III of Example 1 and Scenarios IV and V of Example 2 in the ldquoScenario analysisrdquo section of this product type for details
What is this product and how does it work bull American Range investment is one type of our Currency-Linked Capital Protected Investment Deposit which consists of a time deposit
(in Deposit currency) and buying option(s) on the Underlying Currency Pair of your choice bull You choose the Deposit Currency Underlying Currency Pair and the Observation Period according to your need and the Bank will set the
Trading Range bull During the whole Observation Period the Bank will compare the exchange rate of the Underlying Currency Pair with the Trading Range
If the exchange rate of the Underlying Currency Pair moves along with your anticipation and stays within the Trading Range during the whole Observation Period you will receive Guaranteed Principal and Potential Return If the exchange rate of the Underlying Currency Pair moves against your anticipation and at anytime during the Observation Period the exchange rate of the Underlying Currency Pair is outside the Trading Range you will receive Guaranteed Principal and Minimum Return (if any)
bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency Minimum return applies to certain investment tranches only you should refer to the relevant termsheet for details
Page 21 of 67
What are the key risks of Currency-Linked Capital Protected Investment Deposit Earnings on Currency-Linked Capital Protected Investment Deposit are limited to the Return Coupon (if any) payable You should consider the following risks and read all other information contained in the relevant Termsheet and Terms and Conditions before making any investment decision Not a time deposit Currency-Linked Capital Protected Investment Deposit 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 Capital Protected Investment Deposit is embedded with FX options Option transactions involve risks even when buying an option The optionrsquos value might become worthless if the market moves against your expectation Limited potential gain The maximum potential gain is limited to the pre-agreed ReturnCoupon calculated at the Potential ReturnCoupon Rate Not the same as buying the Underlying Currency Pair Investing in Currency-Linked Capital Protected Investment Deposit is not the same as buying the Underlying Currency Pair directly Market risk The investment return of Currency-Linked Capital Protected Investment Deposit is linked to the exchange rate of the Underlying Currency Pair Movements in exchange rates can be unpredictable sudden and drastic and affected by complex political and economic factors Liquidity risk Currency-Linked Capital Protected Investment Deposit is designed to be held till maturity The Bank may at its absolute discretion refuse to consent to any withdrawaltermination request before maturity Credit risk of the Bank Currency-Linked Capital Protected Investment Deposit is not secured by any collateral When you invest in Currency-Linked Capital Protected Investment Deposit you will be relying on the Bankrsquos creditworthiness If the Bank becomes insolvent or defaults on its obligations under a Currency-Linked Capital Protected Investment Deposit you can only claim as an unsecured creditor of the Bank In the worst case you could suffer a total loss of your investment amount Currency risk Exchange rate fluctuates and sometimes drastically If the Deposit Currency used for investment is not the home currency customarily used by you and thus conversion is required you should note that you may make a gain or suffer a loss due to exchange rate fluctuations When the deposit currency depreciates the loss from depreciation may set-off or even exceed the ReturnCoupon (if any) that you may receive from investing in the Currency-Linked Capital Protected Investment Deposit Risk of adjustments or early termination by the Bank Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank this might have a negative impact on the ReturnCoupon (if any) of the Currency-Linked Capital Protected Investment Deposit Concentration Risks You should avoid excessive investment (in terms of its proportion of the overall portfolio) in any single type of investment so as to avoid the investment portfolio being over-exposed to any particular investment risk ReturnCoupon of Currency-Linked Capital Protected Investment Deposit In order to provide capital protection the investment strategy adopted for Currency-Linked Capital Protected Investment Deposit may lead to a dilution of performance when compared to non-capital protected products investing in similar markets You should be prepared to take the risks of earning a lower ReturnCoupon (if any) on the capital invested and losing the interest that might otherwise earned on money invested by way of deposits For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) periodic Coupon may be payable to you For other types of Currency-Linked Capital Protected Investment Deposit no periodic ReturnCoupon will be payable to you prior to maturity Principal protection at maturity only You should understand that the Principal of the Currency-Linked Capital Protected Investment Deposit is capital-protected only when it is held to maturity If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the amount received by you upon early withdrawaltermination may be less than the amount initially invested by you Market Risks associated with Potential ReturnCoupon Apart from the ReturnCoupon calculated at the Minimum ReturnCoupon Rate (which may be set at zero) there is no guarantee of any ReturnCoupon calculated at the Potential ReturnCoupon Rate For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) Coupon (if any) is payable only if the Currency-Linked Capital Protected Investment Deposit is held till the relevant Coupon Distribution Dates ReturnCoupon (if any) of Currency-Linked Capital Protected Investment Deposit depends on the market conditions at the time of the relevant determination Investment return on foreign exchange-linked products are dependent on the prices of inter-banksrsquo transactions on the linked exchange rate in the foreign exchange markets You should be fully aware of the risks relating to fluctuations in the linked exchange rates Factors affecting the performance of foreign exchange markets are numerous including but are not limited to changes in global and local investment sentiments interest rate policies fund flows political environment economic environment business and social conditions in the local marketplace If the market trend is different from the view taken by you there is an inherent risk that the total investment return that you may receive from Currency-Linked Capital Protected Investment Deposit will be less than the interest that would have been payable on a time deposit for the same tenor There is also an inherent risk that no ReturnCoupon calculated at the Potential ReturnCoupon Rate will be payable to you in respect of the Currency-Linked Capital Protected Investment Deposit
Page 22 of 67
Early WithdrawalTermination Risks Early withdrawaltermination by you is not allowed for Currency-Linked Capital Protected Investment Deposit and the capital of you will be invested in the Currency-Linked Capital Protected Investment Deposit for the entire investment period The Bank may at its absolute discretion refuse to give consent to any early withdrawaltermination request If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the Bank shall be entitled to deduct from the Principal of the relevant Currency-Linked Capital Protected Investment Deposit andor any other amount which may have accrued to you any expenses costs or damages to the Bank Damages may include any costs expenses liability or losses to the Bank as a result of the early withdrawaltermination by you Therefore there is no guarantee that you will be able to receive the Principal and the amount payable to you at early withdrawaltermination may be less than the Principal initially invested Besides If the Currency-Linked Capital Protected Investment Deposit is early withdrawnterminated you will no longer be entitled to any ReturnCoupon of the Currency-Linked Capital Protected Investment Deposit Risks associated with unsuccessful subscriptions of Currency-Linked Capital Protected Investment Deposit The Bank reserves the absolute right to approve any application and to decline any application received (whether in whole or any part thereof) before the Deposit Start Date In the event of non-acceptance a notification will be sent by the Bank and any subscription funds received will be returned to you after the Deposit Start Date or as soon as practicable Risks relating to Renminbi If Currency-Linked Capital Protected Investment Deposit involves CNY the relevant exchange rate(s) or level(s) of the relevant currency pair will be quoted in offshore Renminbi against alternate currency While both onshore Renminbi and offshore Renminbi are the same currency they are traded in different and separate markets operating under different regulations and independent liquidity pool Onshore Renminbi and offshore Renminbi are currently quoted in different markets with different exchange rates whereby their exchange rate movements may not be in the same direction or magnitude The offshore Renminbi exchange rate may deviate significantly from the onshore Renminbi exchange rate You should also note that Renminbi is currently not freely convertible the value of Renminbi against other foreign currencies fluctuates and will be affected by amongst other things the PRC governmentrsquos control (for example the PRC government regulates conversion between Renminbi and foreign currencies) which may adversely affect your investment return under the Currency-Linked Capital Protected Investment Deposit when you convert CNY into your home currency Renminbi is subject to foreign exchange control by the PRC government and thus investors investing in Currency-Linked Investment Deposit involving Renminbi are subject to the currency risk of Renminbi
What are the key features bull This product is designed for you whose investment objective is capital protection or to obtain potential cash income bull This product is embedded with options You will buy option(s) on the Linked Currency Pair bull 100 principal protection if this product is held to maturity bull You can choose the Deposit Currency including HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY and Linked Currency
Pair including AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD and USDCNH bull The Deposit Period of the Currency-Linked Capital Protected Investment Deposit is 2 months or above bull You will have a chance to receive higher potential return depending on the movement of the exchange rate of the Underlying Currency
Pair during the Observation Period bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency bull The Bank pre-sets the Trading Range and Observation Period bull During the whole Observation Period the exchange rate of the Underlying Currency Pair is compared with the Trading Range to
determine the Return at maturity bull Returns (if any) on this product is payable only upon maturity bull This product may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank Please refer
to the section Can you request for early termination before maturity below
Scenario analysis (All figures shown below including the exchange rate of AUDUSD and HKDCNH Potential Return Rate Minimum Return Rate Deposit Period etc are for illustration only You should not rely on the below figures as any indication or guarantee on the expected interest amount of the Currency-Linked Capital Protected Investment Deposit you intend to invest Please refer to the Bank for up-to-date figures) Example 1 ndash American Range (where the Deposit Currency is your home currency) Assuming HKD is your home currency and you anticipate the Exchange Rate of AUDUSD will stay above 09850 but below 11150 for the next 6 months and set up an American Range Investment with HKD 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment American Range (AUDUSD) Principal Guarantee 100 Deposit Currency HKD Guaranteed Principal HKD 100000 Deposit Period 6 months Trading Range AUDUSD 09850 (ldquoLower Barrierrdquo) to 11150 (ldquoUpper Barrierrdquo) (excluding both barriers) Potential Return Rate 016 (around 032 pa)
Page 23 of 67
Minimum Return Rate 0015 (around 003 pa) Scenario I Best case scenario At any time during the Observation Period the Exchange Rate of AUDUSD stays within the Trading Range (ie above 09850 but below 11150) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = HKD 100000 x (1+016) = HKD 10016000 (with a gain of 016 of investment amount) Scenario II Worst case scenario At any time during the Observation Period the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 09850 or atabove 11150) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = HKD 100000 x (1+0015) = HKD 10001500
(with a gain of 0015 of investment amount) Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a HKD 100000 6-month Time Deposit on 30 April 2014 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500
Example 2 ndash American Range (where the Deposit Currency is not your home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency and you anticipate the Exchange Rate of AUDUSD will stay above 09850 but below 11150 for the next 6 months and set up an American Range Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment American Range (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trading Range AUDUSD 09850 (ldquoLower Barrierrdquo) to 11150 (ldquoUpper Barrierrdquo) (excluding both barriers) Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH (on deposit start date) 08000 Scenario I Best case scenario At any time during the Observation Period (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD stays within the Trading Range (ie above 09850 but below 11150) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of the road Gain scenario At any time during the Observation Period (assuming the exchange rate of HKDCNH remains unchanged the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 09850 or atabove 11150) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = CNY 100000 x (1+15) = CNY 10150000 (with a gain of 150 of investment amount)
0
Exchange Rate of
AUDUSD le 09850
Potential Return Minimum Return
Return Diagram Return at Maturity
09850 Exchange Rate of AUDUSD during the Observation Period
Minimum Return
09850 lt Exchange Rate of AUDUSD lt 11150
Exchange Rate of
AUDUSD ge 11150
11150
Page 24 of 67
Scenario III Off-setting scenario At any time during the Observation Period the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 09850 or atabove 11150) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD 000 Scenario IV Loss and Worst case scenario At any time during the Observation Period the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 09850 or atabove 11150) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951) In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a CNY 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received would be CNY 10030000
If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Please refer to the table below for details
0
Exchange Rate of
AUDUSD le 09850
Potential Return Minimum Return
Return Diagram
Return at Maturity
09850 Exchange Rate of AUDUSD during the Observation Period
Minimum Return
09850 lt Exchange Rate of AUDUSD lt 11150
Exchange Rate of
AUDUSD ge 11150
11150
Page 25 of 67
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date
The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date
If HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
How can you buy this product bull You can place a Currency-Linked Capital Protected Investment Deposit through our Hang Seng Bank Branches telephone or Hang Seng
Personal or Business e-Banking bull The Bank will provide a choice of different tranches which is subject to market conditions bull Enquiry Hotline Personal 2822 0228 Business 2198 8000
Fees and charges No handling fees or management fees will be charged for Currency-Linked Capital Protected Investment Deposit
Can you request for early termination before maturity No Currency-Linked Capital Protected Investment Deposit may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank which may be granted or withheld in the Bankrsquos sole and absolute discretion on such terms and conditions as the Bank may determine Please refer to ldquoEarly WithdrawalTermination Risksrdquo under ldquoWhat are the key features featuresrisks of Currency-Linked Capital Protected Investment Depositrdquo section for details
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
ix 9999990000 010 010 (12499990) (12499990)
At the beginning of the investment On the Maturity Date of the investment
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Potential Return
Exchange Rate of HKDCNH on the Maturity Date
0
If receiving Minimum Return
Breakeven = 08120^
If receiving Potential Return
Breakeven = 08240
If CNH depreciates drastically relative to HKD
HKDCNH = 9999990000
Exchange Rate on Deposit Start Date
Page 26 of 67
Pre-Investment Cooling-off Period for retail customers Pre-Investment Cooling-off Period (PICOP) is applicable to each particular dealing of this product if you are one of the following retail customer types
(1) An elderly customer aged 65 or above unless you are not a first-time buyer of currency-linked structured investment products AND your asset concentration is below 20 AND you opt out from the PICOP arrangement or
(2) A non-elderly customer who is a first time buyer of currency-linked structured investment products AND your asset concentration
is 20 or above
For the purpose of determining whether PICOP is applicable asset concentration refers to the percentage of total net worth (excluding real estate properties) to be invested in this product
Can the Bank adjust the terms or early terminate this product Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank in certain circumstances Please refer to Clause 7 of the Currency-Linked Capital Protected Investment Deposit Terms and Conditions for details
Offering documents for this product The following documents for this product (ldquoOffering Documentsrdquo) contain detailed information about the Bank and the terms of this product You should read and understand all of the Offering Documents before deciding whether to invest in this product
(i) Currency-Linked Capital Protected Investment Deposit Terms and Conditions (ii) The relevant Currency-Linked Capital Protected Investment Deposit Termsheet (iii) This Currency-Linked Capital Protected Investment Deposit Important Facts Statement
Other information Product Risk Level The Product Risk Level for Currency-Linked Capital Protected Investment Deposit is Low
Low Low-to-Medium Medium Medium-to-High High
Product Risk Level is determined by a number of factors which include the volatility of the currency pair and the tenor of the product The Product Risk Level is subject to the Banks periodic review and may change from time to time Please refer to our branch or our Customer Service Hotline on 2822 0228 for the latest detail Declaration and Remarks bull This Important Facts Statement is not intended to provide or regard as legal or taxation advice or investment recommendations If you
have any concerns about this product or are uncertain about the suitability of this product for you you should obtain independent professional advice
bull The liabilities of the Bank in respect of the Currency-Linked Capital Protected Investment Deposit are limited exclusively to an office of the Bank in Hong Kong and instructions in respect of the Currency-Linked Capital Protected Investment Deposit may only be made to and acted upon by such office Any amount relating to the Currency-Linked Capital Protected Investment Deposit is payable exclusively by an office of the Bank in Hong Kong and in its stated currency The Terms and Conditions of the Currency-Linked Capital Protected Investment Deposit are governed by and shall be construed in accordance with the laws of Hong Kong
bull You may contact our staff if you have any feedback or complaint in relation to our services or call our hotline at 2822 0228 We will respond to you within a reasonable period of time normally not exceeding 30 days in general circumstances You may contact the Hong Kong Monetary Authority at 55th Floor Two International Finance Centre 8 Finance Street Central Hong Kong if you are not satisfied with our handling of your complaint
bull Hang Seng Bank Limited is a Registered Licensed Bank under the Banking Ordinance bull All Currency-Linked Capital Protected Investment Deposit cannot be cancelled after subscription bull The Bank will act as principal to complete the transaction and may obtain certain monetary benefits in connection with the offering of
this Currency-Linked Capital Protected Investment Deposit to the public The current remuneration system that the Bank adopts for sales staff is a measurement of the staffrsquos overall performance and not just based on sales amount
bull The Bank is NOT an independent intermediary because The Bank receives fees commissions or other monetary benefits from other parties in relation to the Bankrsquos distribution of Currency-Linked Capital Protected Investment Deposit to you For details you should refer to the Bankrsquos disclosure on monetary benefits which the Bank is required to deliver to you prior to or at the point of entering into any transaction in Currency-Linked Capital Protected Investment Deposit
bull Please note that this product is not available for persons who are located within the United States are nationals of the United States and are US Persons within the meaning of Regulation S under the Securities Act (which includes any person resident in the United States and any partnership or corporation organised or incorporated under the laws of the United States)
bull 請注意本行不提供本產品予身處美國的人士美國公民及美籍人士(定義見證券法 S 條例)(包括居住在美國之任何人士及根據美國法例組
成或註冊成立之任何合夥企業或公司)
Page 34 of 67
Currency-Linked Capital Protected Investment Deposit
European (Bullish Bearish) Investment
Dated May 2018
Important Facts Statement
This is a structured investment product which is NOT protected by the Deposit Protection Scheme in Hong Kong
The contents of this statement have not been reviewed by any regulatory authority in Hong Kong You are advised to exercise caution before investing in this product This statement is a part of the offering documents for this product You should not invest in this product based on this statement alone If you are in any doubt you should obtain independent professional advice
If English is not your preferred language you may request for the Chinese version of this statement from our sales staff 倘若英文並
非閣下屬意的語言閣下可向本行的銷售人員索取本概要的中文版本
This is a structured investment product involving derivatives The investment decision is yours but you should not invest in this product 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
Quick facts
Bank Hang Seng Bank Limited
Product Type Currency-Linked Investment Deposit ndash European Bullish Bearish Investment (ldquothis productrdquo)
Minimum Investment Amount Subscription through branches - HKD 100000 (or its equivalent) Subscription through e-banking - HKD 50000 (or its equivalent)
Tenor 2 months or above or any other tenor as agreed between you and the Bank
Available Principal Currency (or Deposit Currency) HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY
Available Underlying Currency Pair AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD USDCNH and any other currency pairs as agreed between you and the Bank
Return Rate Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Deposit periodpayment date Deposit period refers to tenor of the product and return is payable only on Maturity Date
Principal protection at maturity Yes
Callable by the Bank No
Early termination right by customer No please refer to ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section ndash Early WithdrawalTermination Risks for details
Embedded derivatives Yes you will buy option(s) over the Underlying Currency Pair
Maximum potential gain Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Maximum potential loss Please refer to Scenarios II and III of Example 1 and 2 and Scenarios IV and V of Example 3 and 4 in ldquoScenario analysisrdquo section of this product type for details
What is this product and how does it work bull European Bullish Bearish investment is one type of our Currency-Linked Capital Protected Investment Deposit which consists of a time
deposit (in Deposit Currency) and buying option(s) on the Underlying Currency Pair of your choice bull You choose the Deposit Currency Underlying Currency Pair according to your need and the Bank will set the Trigger Level bull On the Final Exchange Rate Determination Date the Bank will compare the exchange rate of the Underlying Currency Pair with the Trigger
Level If the exchange rate of the Underlying Currency Pair moves along with your anticipation you will receive Guaranteed Principal and Potential Return If the exchange rate of the Underlying Currency Pair moves against your anticipation you will receive Guaranteed Principal and Minimum Return (if any)
bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency Minimum return applies to certain investment tranches only you should refer to the relevant termsheet for details
Page 35 of 67
What are the key risks of Currency-Linked Capital Protected Investment Deposit Earnings on Currency-Linked Capital Protected Investment Deposit are limited to the Return Coupon (if any) payable You should consider the following risks and read all other information contained in the relevant Termsheet and Terms and Conditions before making any investment decision Not a time deposit Currency-Linked Capital Protected Investment Deposit 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 Capital Protected Investment Deposit is embedded with FX options Option transactions involve risks even when buying an option The optionrsquos value might become worthless if the market moves against your expectation Limited potential gain The maximum potential gain is limited to the pre-agreed ReturnCoupon calculated at the Potential ReturnCoupon Rate Not the same as buying the Underlying Currency Pair Investing in Currency-Linked Capital Protected Investment Deposit is not the same as buying the Underlying Currency Pair directly Market risk The investment return of Currency-Linked Capital Protected Investment Deposit is linked to the exchange rate of the Underlying Currency Pair Movements in exchange rates can be unpredictable sudden and drastic and affected by complex political and economic factors Liquidity risk Currency-Linked Capital Protected Investment Deposit is designed to be held till maturity The Bank may at its absolute discretion refuse to consent to any withdrawaltermination request before maturity Credit risk of the Bank Currency-Linked Capital Protected Investment Deposit is not secured by any collateral When you invest in Currency-Linked Capital Protected Investment Deposit you will be relying on the Bankrsquos creditworthiness If the Bank becomes insolvent or defaults on its obligations under a Currency-Linked Capital Protected Investment Deposit you can only claim as an unsecured creditor of the Bank In the worst case you could suffer a total loss of your investment amount Currency risk Exchange rate fluctuates and sometimes drastically If the Deposit Currency used for investment is not the home currency customarily used by you and thus conversion is required you should note that you may make a gain or suffer a loss due to exchange rate fluctuations When the deposit currency depreciates the loss from depreciation may set-off or even exceed the ReturnCoupon (if any) that you may receive from investing in the Currency-Linked Capital Protected Investment Deposit Risk of adjustments or early termination by the Bank Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank this might have a negative impact on the ReturnCoupon (if any) of the Currency-Linked Capital Protected Investment Deposit Concentration Risks You should avoid excessive investment (in terms of its proportion of the overall portfolio) in any single type of investment so as to avoid the investment portfolio being over-exposed to any particular investment risk ReturnCoupon of Currency-Linked Capital Protected Investment Deposit In order to provide capital protection the investment strategy adopted for Currency-Linked Capital Protected Investment Deposit may lead to a dilution of performance when compared to non-capital protected products investing in similar markets You should be prepared to take the risks of earning a lower ReturnCoupon (if any) on the capital invested and losing the interest that might otherwise earned on money invested by way of deposits For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) periodic Coupon may be payable to you For other types of Currency-Linked Capital Protected Investment Deposit no periodic ReturnCoupon will be payable to you prior to maturity Principal protection at maturity only You should understand that the Principal of the Currency-Linked Capital Protected Investment Deposit is capital-protected only when it is held to maturity If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the amount received by you upon early withdrawaltermination may be less than the amount initially invested by you Market Risks associated with Potential ReturnCoupon Apart from the ReturnCoupon calculated at the Minimum ReturnCoupon Rate (which may be set at zero) there is no guarantee of any ReturnCoupon calculated at the Potential ReturnCoupon Rate For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) Coupon (if any) is payable only if the Currency-Linked Capital Protected Investment Deposit is held till the relevant Coupon Distribution Dates ReturnCoupon (if any) of Currency-Linked Capital Protected Investment Deposit depends on the market conditions at the time of the relevant determination Investment return on foreign exchange-linked products are dependent on the prices of inter-banksrsquo transactions on the linked exchange rate in the foreign exchange markets You should be fully aware of the risks relating to fluctuations in the linked exchange rates Factors affecting the performance of foreign exchange markets are numerous including but are not limited to changes in global and local investment sentiments interest rate policies fund flows political environment economic environment business and social conditions in the local marketplace If the market trend is different from the view taken by you there is an inherent risk that the total investment return that you may receive from Currency-Linked Capital Protected Investment Deposit will be less than the interest that would have been payable on a time deposit for the same tenor There is also an inherent risk that no ReturnCoupon calculated at the Potential ReturnCoupon Rate will be payable to you in respect of the Currency-Linked Capital Protected Investment Deposit Early WithdrawalTermination Risks Early withdrawaltermination by you is not allowed for Currency-Linked Capital Protected Investment Deposit and the capital of you will be invested in the Currency-Linked Capital Protected Investment Deposit for the entire investment period The Bank may at its absolute discretion refuse to give consent to any early withdrawaltermination request If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the Bank shall be entitled to deduct from the Principal of the relevant Currency-Linked Capital Protected Investment Deposit andor any other amount which may have accrued to you any expenses costs or damages to the Bank Damages may include any costs expenses liability or losses to the Bank as a result of the early withdrawaltermination by you Therefore there is no guarantee that you will be able to receive the Principal and the amount payable to you at early withdrawaltermination may be less
Page 36 of 67
than the Principal initially invested Besides If the Currency-Linked Capital Protected Investment Deposit is early withdrawnterminated you will no longer be entitled to any ReturnCoupon of the Currency-Linked Capital Protected Investment Deposit Risks associated with unsuccessful subscriptions of Currency-Linked Capital Protected Investment Deposit The Bank reserves the absolute right to approve any application and to decline any application received (whether in whole or any part thereof) before the Deposit Start Date In the event of non-acceptance a notification will be sent by the Bank and any subscription funds received will be returned to you after the Deposit Start Date or as soon as practicable Risks relating to Renminbi If Currency-Linked Capital Protected Investment Deposit involves CNY the relevant exchange rate(s) or level(s) of the relevant currency pair will be quoted in offshore Renminbi against alternate currency While both onshore Renminbi and offshore Renminbi are the same currency they are traded in different and separate markets operating under different regulations and independent liquidity pool Onshore Renminbi and offshore Renminbi are currently quoted in different markets with different exchange rates whereby their exchange rate movements may not be in the same direction or magnitude The offshore Renminbi exchange rate may deviate significantly from the onshore Renminbi exchange rate You should also note that Renminbi is currently not freely convertible the value of Renminbi against other foreign currencies fluctuates and will be affected by amongst other things the PRC governmentrsquos control (for example the PRC government regulates conversion between Renminbi and foreign currencies) which may adversely affect your investment return under the Currency-Linked Capital Protected Investment Deposit when you convert CNY into your home currency Renminbi is subject to foreign exchange control by the PRC government and thus investors investing in Currency-Linked Investment Deposit involving Renminbi are subject to the currency risk of Renminbi
What are the key features bull This product is designed for you whose investment objective is capital protection or to obtain potential cash income
bull This product is embedded with options You will buy option(s) on the Linked Currency Pair bull 100 principal protection if the Currency-Linked Capital Protected Investment Deposit is held to maturity bull You can choose the Deposit Currency including HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY and Linked Currency Pair
including AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD and USDCNH bull The Deposit Period of this product is 2 months or above bull You will have a chance to receive higher potential return depending on the movement of the exchange rate of the Underlying Currency Pair bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency bull The Bank pre-sets the Trigger Level and you choose a bullish or bearish view on different currencies bull On the Final Exchange Rate Determination Date the exchange rate of the Underlying Currency Pair is compared with the Trigger Level to
determine the Return at maturity bull Returns (if any) on this product is payable only upon maturity bull This product may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank Please refer to
the section Can you request for early termination before maturity below
Scenario analysis (All figures shown below including the exchange rate of AUDUSD and HKDCNH Potential Return Rate Minimum Return Rate Deposit Period etc are for illustration only You should not rely on the below figures as any indication or guarantee on the expected interest amount of the Currency-Linked Capital Protected Investment Deposit you intend to invest Please refer to the Bank for up-to-date figures) Example 1 ndash European Bullish (where the Deposit Currency is your home currency) Assuming HKD is your home currency and you take a bullish view on Australian Dollar expect the exchange rate of AUDUSD will rise from 09400 to 09800 or above after the 6-month period and set up an European Bullish Investment with HKD 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Bullish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency HKD Guaranteed Principal HKD 100000 Deposit Period 6 months Trigger Level AUDUSD 09800 Potential Return Rate 016 (around 032 pa) Minimum Return Rate 0015 (around 003 pa) Scenario I Best case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is at or above the Trigger Level (ie at or above 09800) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = HKD 100000 x (1+016) = HKD 10016000 (with a gain of 016 of investment amount) Scenario II Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is below the Trigger Level (ie below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity
Page 37 of 67
Total Return at Maturity = HKD 100000 x (1+0015) = HKD 10001500 (with a gain of 0015 of investment amount) Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount
For reference only if you set up a HKD 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500
Example 2 ndash European Bearish (where the Deposit Currency is your home currency) Assuming HKD is your home currency and you take a bearish view on Australian Dollar expect the exchange rate of AUDUSD will drop from 09400 to 09000 or below after the 6-month period and set up an European Bearish Investment with HKD 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Bearish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency HKD Guaranteed Principal HKD 100000 Deposit Period 6 months Trigger Level AUDUSD 09000 Potential Return Rate 016 (around 032 pa) Minimum Return Rate 0015 (around 003 pa) Scenario I Best case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is at or below the Trigger Level (ie at or below 09000) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = HKD 100000 x (1+016) = HKD 10016000 (with a gain of 016 of investment amount) Scenario II Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is above the Trigger Level (ie above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = HKD 100000 x (1+0015) = HKD 10001500 (with a gain of 0015 of investment amount) Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount
0
Final Exchange Rate of AUDUSD lt Trigger Level
Potential Return Minimum Return
Return Diagram Return at Maturity
09800 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Final Exchange Rate of AUDUSD ge Trigger Level
Trigger Level = 09800
Page 38 of 67
For reference only if you set up a HKD 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500 Example 3 ndash European Bullish (where the Deposit Currency is not home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency you take a bullish view on Australian Dollar expect the exchange rate of AUDUSD will rise from 09400 to 09800 or above after the 6-month period and set up an European Bullish Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Bullish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trigger Level AUDUSD 09800 Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH on deposit start date 08000 Scenario I Best case scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is at or above the Trigger Level (ie at or above 09800) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of-the road Gain scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is below the Trigger Level (ie below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Scenario III Off-setting scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is below the Trigger Level (ie below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD 000
0
Final Exchange Rate of AUDUSD
le Trigger Level
Potential Return Minimum Return
Return Diagram
Return at Maturity
09000 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Final Exchange Rate of AUDUSD gt Trigger Level
Trigger Level = 09000
Page 39 of 67
Scenario IV Loss and Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is below the Trigger Level (ie below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 101500 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951) In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount
For reference only if you set up a CNY 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received at maturity would be CNY 10030000 If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Please refer to the table below for details
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
viiii 9999990000 010 010 (12499990) (12499990)
103000 101500 12500000 10000008000
At the beginning of the investment On the Maturity Date of the investment
Exchange
Rate of
HKDCNH
Initial
Investment
Amount in
Renminbi
Initial
Investment
Amount in
HKD
Exchange Rate
of HKDCNH
Total Return in
Renminbi
Total Return in
HKD
Gain (loss) in HKD if converting the
Total Return from Renminbi to home
currency (HKD)
0
Final Exchange Rate of AUDUSD lt Trigger Level
Potential Return Minimum Return
Return Diagram
Return at Maturity
09800 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Final Exchange Rate of AUDUSD ge Trigger Level
Trigger Level = 09800
Page 40 of 67
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date
The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date
If HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
Example 4 ndash European Bearish (where the Deposit Currency is not home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency you take a bearish view on Australian Dollar expect the exchange rate of AUDUSD will drop from 09400 to 09000 or below after the 6-month period and set up an European Bearish Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Bearish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trigger Level AUDUSD 09000 Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH at the time of investment 08000 Scenario I Best case scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is at or below the Trigger Level (ie at or below 09000) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of-the road Gain scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is above the Trigger Level (ie above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Scenario III Off-setting scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is above the Trigger Level (ie above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Exchange Rate of HKDCNH on the Maturity Date
0
If receiving Minimum Return
Breakeven = 08120^
If receiving Potential Return
Breakeven = 08240
Exchange Rate on Deposit Start Date
Potential Return
Minimum Return
If CNH depreciates drastically relative to HKD
HKDCNH = 9999990000
Page 41 of 67
= HKD 12500000 Gain(Loss) in home currency HKD 000 Scenario IV Loss and Worst Case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is above the Trigger Level (ie above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951) In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount
For reference only if you set up a CNY 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received at maturity would be CNY 10030000 If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Please refer to the table below for details
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
viiii 9999990000 010 010 (12499990) (12499990)
103000 101500 12500000 10000008000
At the beginning of the investment On the Maturity Date of the investment
Exchange
Rate of
HKDCNH
Initial
Investment
Amount in
Renminbi
Initial
Investment
Amount in
HKD
Exchange Rate
of HKDCNH
Total Return in
Renminbi
Total Return in
HKD
Gain (loss) in HKD if converting the
Total Return from Renminbi to home
currency (HKD)
0
Final Exchange Rate of AUDUSD le Trigger Level
Potential Return Minimum Return
Return Diagram Return at Maturity
09000 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Final Exchange Rate of AUDUSD gt Trigger Level
Trigger Level = 09000
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Page 42 of 67
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date
The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date
If HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
How can you buy this product bull You can place a Currency-Linked Capital Protected Investment Deposit through our Hang Seng Bank Branches telephone or Hang Seng
Personal or Business e-Banking bull The Bank will provide a choice of different tranches which is subject to market conditions bull Enquiry Hotline Personal 2822 0228 Business 2198 8000
Fees and charges No handling fees or management fees will be charged for Currency-Linked Capital Protected Investment Deposit
Can you request for early termination before maturity No Currency-Linked Capital Protected Investment Deposit may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank which may be granted or withheld in the Bankrsquos sole and absolute discretion on such terms and conditions as the Bank may determine Please refer to ldquoEarly WithdrawalTermination Risksrdquo under ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section for details
Pre-Investment Cooling-off Period for retail customers Pre-Investment Cooling-off Period (PICOP) is applicable to each particular dealing of this product if you are one of the following retail customer types
(1) An elderly customer aged 65 or above unless you are not a first-time buyer of currency-linked structured investment products AND your asset concentration is below 20 AND you opt out from the PICOP arrangement or
(2) A non-elderly customer who is a first time buyer of currency-linked structured investment products AND your asset concentration is
20 or above
For the purpose of determining whether PICOP is applicable asset concentration refers to the percentage of total net worth (excluding real estate properties) to be invested in this product
Can the Bank adjust the terms or early terminate this product Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank in certain circumstances Please refer to Clause 7 of the Currency-Linked Capital Protected Investment Deposit Terms and Conditions for details
Offering documents for this product The following documents for this product (ldquoOffering Documentsrdquo) contain detailed information about the Bank and the terms of this product You should read and understand all of the Offering Documents before deciding whether to invest in this product
(i) Currency-Linked Capital Protected Investment Deposit Terms and Conditions (ii) The relevant Currency-Linked Capital Protected Investment Deposit Termsheet (iii) This Currency-Linked Capital Protected Investment Deposit Important Facts Statement
Product Risk Level The Product Risk Level for Currency-Linked Capital Protected Investment Deposit is Low
Low Low-to-Medium Medium Medium-to-High High
Product Risk Level is determined by a number of factors which include the volatility of the currency pair and the tenor of the product The Product Risk Level is subject to the Banks periodic review and may change from time to time Please refer to our branch or our Customer Service Hotline on 2822 0228 for the latest detail Declaration and Remarks bull This Important Facts Statement is not intended to provide or regard as legal or taxation advice or investment recommendations If you have
any concerns about this product or are uncertain about the suitability of this product for you you should obtain independent professional advice
bull The liabilities of the Bank in respect of the Currency-Linked Capital Protected Investment Deposit are limited exclusively to an office of the Bank in Hong Kong and instructions in respect of the Currency-Linked Capital Protected Investment Deposit may only be made to and acted upon by such office Any amount relating to the Currency-Linked Capital Protected Investment Deposit is payable exclusively by an office of the Bank in Hong Kong and in its stated currency The Terms and Conditions of the Currency-Linked Capital Protected Investment Deposit are governed by and shall be construed in accordance with the laws of Hong Kong
bull You may contact our staff if you have any feedback or complaint in relation to our services or call our hotline at 2822 0228 We will respond to you within a reasonable period of time normally not exceeding 30 days in general circumstances You may contact the Hong Kong Monetary Authority at 55th Floor Two International Finance Centre 8 Finance Street Central Hong Kong if you are not satisfied with our handling of your complaint
bull Hang Seng Bank Limited is a Registered Licensed Bank under the Banking Ordinance bull All Currency-Linked Capital Protected Investment Deposit cannot be cancelled after subscription bull The Bank will act as principal to complete the transaction and may obtain certain monetary benefits in connection with the offering of this
Currency-Linked Capital Protected Investment Deposit to the public The current remuneration system that the Bank adopts for sales staff is a measurement of the staffrsquos overall performance and not just based on sales amount
bull The Bank is NOT an independent intermediary because The Bank receives fees commissions or other monetary benefits from other parties in relation to the Bankrsquos distribution of Currency-Linked Capital Protected Investment Deposit to you For details you should refer to the Bankrsquos disclosure on monetary benefits which the Bank is required to deliver to you prior to or at the point of entering into any transaction in Currency-Linked Capital Protected Investment Deposit
bull Please note that this product is not available for persons who are located within the United States are nationals of the United States and are US Persons within the meaning of Regulation S under the Securities Act (which includes any person resident in the United States and any partnership or corporation organised or incorporated under the laws of the United States)
bull 請注意本行不提供本產品予身處美國的人士美國公民及美籍人士(定義見證券法 S 條例)(包括居住在美國之任何人士及根據美國法例組成
或註冊成立之任何合夥企業或公司)
Page 53 of 67
Currency-Linked Capital Protected Investment Deposit
European Range Investment
Dated May 2018
Important Facts Statement
This is a structured investment product which is NOT protected by the Deposit
Protection Scheme in Hong Kong
The contents of this statement have not been reviewed by any regulatory authority in Hong Kong You are advised to exercise caution before investing in this product This statement is a part of the offering documents for this product You should not invest in this product based on this statement alone If you are in any doubt you should obtain independent professional advice
If English is not your preferred language you may request for the Chinese version of this statement from our sales staff 倘若英
文並非閣下屬意的語言閣下可向本行的銷售人員索取本概要的中文版本
This is a structured investment product involving derivatives The investment decision is yours but you should not invest in this product 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
Quick facts Bank Hang Seng Bank Limited
Product Type Currency-Linked Investment Deposit ndash European Range Investment (ldquothis productrdquo)
Minimum Investment Amount Subscription through branches - HKD 100000 (or its equivalent) Subscription through e-banking - HKD 50000 (or its equivalent)
Tenor 2 months or above or any other tenor as agreed between you and the Bank
Available Principal Currency (or Deposit Currency) HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY
Available Underlying Currency Pair AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD USDCNH and any other currency pairs as agreed between you and the Bank
Return Rate Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Deposit periodpayment date Deposit period refers to tenor of the product and return is payable only on Maturity Date
Principal protection at maturity Yes
Callable by the Bank No
Early termination right by customer No please refer to ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section ndash Early WithdrawalTermination Risks for details
Embedded derivatives Yes you will buy option(s) over the Underlying Currency Pair
Maximum potential gain Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Maximum potential loss Please refer to Scenarios II and III of Example 1 and Scenarios IV and V of Example 2 in the ldquoScenario analysisrdquo section of this product type for details
What is this product and how does it work bull European Range investment is one type of our Currency-Linked Capital Protected Investment Deposit which consists of a time deposit
(in Deposit Currency) and buying option(s) on the Underlying Currency Pair of your choice bull You choose the Deposit Currency Underlying Currency Pair according to your need and the Bank will set the Trading Range bull On the Final Exchange Rate Determination Date the Bank will compare the exchange rate of the Underlying Currency Pair with the
Trading Range If the exchange rate of the Underlying Currency Pair moves along with your anticipation and is within the Trading Range you will receive Guaranteed Principal and Potential Return If the exchange rate of the Underlying Currency Pair moves against your anticipation and is outside the Trading Range you will receive Guaranteed Principal and Minimum Return (if any)
bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency Minimum return applies to certain investment tranches only you should refer to the relevant termsheet for details
Page 54 of 67
What are the key risks of Currency-Linked Capital Protected Investment Deposit Earnings on Currency-Linked Capital Protected Investment Deposit are limited to the Return Coupon (if any) payable You should consider the following risks and read all other information contained in the relevant Termsheet and Terms and Conditions before making any investment decision Not a time deposit Currency-Linked Capital Protected Investment Deposit 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 Capital Protected Investment Deposit is embedded with FX options Option transactions involve risks even when buying an option The optionrsquos value might become worthless if the market moves against your expectation Limited potential gain The maximum potential gain is limited to the pre-agreed ReturnCoupon calculated at the Potential ReturnCoupon Rate Not the same as buying the Underlying Currency Pair Investing in Currency-Linked Capital Protected Investment Deposit is not the same as buying the Underlying Currency Pair directly Market risk The investment return of Currency-Linked Capital Protected Investment Deposit is linked to the exchange rate of the Underlying Currency Pair Movements in exchange rates can be unpredictable sudden and drastic and affected by complex political and economic factors Liquidity risk Currency-Linked Capital Protected Investment Deposit is designed to be held till maturity The Bank may at its absolute discretion refuse to consent to any withdrawaltermination request before maturity Credit risk of the Bank Currency-Linked Capital Protected Investment Deposit is not secured by any collateral When you invest in Currency-Linked Capital Protected Investment Deposit you will be relying on the Bankrsquos creditworthiness If the Bank becomes insolvent or defaults on its obligations under a Currency-Linked Capital Protected Investment Deposit you can only claim as an unsecured creditor of the Bank In the worst case you could suffer a total loss of your investment amount Currency risk Exchange rate fluctuates and sometimes drastically If the Deposit Currency used for investment is not the home currency customarily used by you and thus conversion is required you should note that you may make a gain or suffer a loss due to exchange rate fluctuations When the deposit currency depreciates the loss from depreciation may set-off or even exceed the ReturnCoupon (if any) that you may receive from investing in the Currency-Linked Capital Protected Investment Deposit Risk of adjustments or early termination by the Bank Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank this might have a negative impact on the ReturnCoupon (if any) of the Currency-Linked Capital Protected Investment Deposit Concentration Risks You should avoid excessive investment (in terms of its proportion of the overall portfolio) in any single type of investment so as to avoid the investment portfolio being over-exposed to any particular investment risk ReturnCoupon of Currency-Linked Capital Protected Investment Deposit In order to provide capital protection the investment strategy adopted for Currency-Linked Capital Protected Investment Deposit may lead to a dilution of performance when compared to non-capital protected products investing in similar markets You should be prepared to take the risks of earning a lower ReturnCoupon (if any) on the capital invested and losing the interest that might otherwise earned on money invested by way of deposits For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) periodic Coupon may be payable to you For other types of Currency-Linked Capital Protected Investment Deposit no periodic ReturnCoupon will be payable to you prior to maturity Principal protection at maturity only You should understand that the Principal of the Currency-Linked Capital Protected Investment Deposit is capital-protected only when it is held to maturity If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the amount received by you upon early withdrawaltermination may be less than the amount initially invested by you Market Risks associated with Potential ReturnCoupon Apart from the ReturnCoupon calculated at the Minimum ReturnCoupon Rate (which may be set at zero) there is no guarantee of any ReturnCoupon calculated at the Potential ReturnCoupon Rate For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) Coupon (if any) is payable only if the Currency-Linked Capital Protected Investment Deposit is held till the relevant Coupon Distribution Dates ReturnCoupon (if any) of Currency-Linked Capital Protected Investment Deposit depends on the market conditions at the time of the relevant determination Investment return on foreign exchange-linked products are dependent on the prices of inter-banksrsquo transactions on the linked exchange rate in the foreign exchange markets You should be fully aware of the risks relating to fluctuations in the linked exchange rates Factors affecting the performance of foreign exchange markets are numerous including but are not limited to changes in global and local investment sentiments interest rate policies fund flows political environment economic environment business and social conditions in the local marketplace If the market trend is different from the view taken by you there is an inherent risk that the total investment return that you may receive from Currency-Linked Capital Protected Investment Deposit will be less than the interest that would have been payable on a time deposit for the same tenor There is also an inherent risk that no ReturnCoupon calculated at the Potential ReturnCoupon Rate will be payable to you in respect of the Currency-Linked Capital Protected Investment Deposit
Page 55 of 67
Early WithdrawalTermination Risks Early withdrawaltermination by you is not allowed for Currency-Linked Capital Protected Investment Deposit and the capital of you will be invested in the Currency-Linked Capital Protected Investment Deposit for the entire investment period The Bank may at its absolute discretion refuse to give consent to any early withdrawaltermination request If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the Bank shall be entitled to deduct from the Principal of the relevant Currency-Linked Capital Protected Investment Deposit andor any other amount which may have accrued to you any expenses costs or damages to the Bank Damages may include any costs expenses liability or losses to the Bank as a result of the early withdrawaltermination by you Therefore there is no guarantee that you will be able to receive the Principal and the amount payable to you at early withdrawaltermination may be less than the Principal initially invested Besides If the Currency-Linked Capital Protected Investment Deposit is early withdrawnterminated you will no longer be entitled to any ReturnCoupon of the Currency-Linked Capital Protected Investment Deposit Risks associated with unsuccessful subscriptions of Currency-Linked Capital Protected Investment Deposit The Bank reserves the absolute right to approve any application and to decline any application received (whether in whole or any part thereof) before the Deposit Start Date In the event of non-acceptance a notification will be sent by the Bank and any subscription funds received will be returned to you after the Deposit Start Date or as soon as practicable Risks relating to Renminbi If Currency-Linked Capital Protected Investment Deposit involves CNY the relevant exchange rate(s) or level(s) of the relevant currency pair will be quoted in offshore Renminbi against alternate currency While both onshore Renminbi and offshore Renminbi are the same currency they are traded in different and separate markets operating under different regulations and independent liquidity pool Onshore Renminbi and offshore Renminbi are currently quoted in different markets with different exchange rates whereby their exchange rate movements may not be in the same direction or magnitude The offshore Renminbi exchange rate may deviate significantly from the onshore Renminbi exchange rate You should also note that Renminbi is currently not freely convertible the value of Renminbi against other foreign currencies fluctuates and will be affected by amongst other things the PRC governmentrsquos control (for example the PRC government regulates conversion between Renminbi and foreign currencies) which may adversely affect your investment return under the Currency-Linked Capital Protected Investment Deposit when you convert CNY into your home currency Renminbi is subject to foreign exchange control by the PRC government and thus investors investing in Currency-Linked Investment Deposit involving Renminbi are subject to the currency risk of Renminbi
What are the key features bull This product is designed for you whose investment objective is capital protection or to obtain potential cash income bull This product is embedded with options You will buy option(s) on the Linked Currency Pair bull 100 principal protection if this product is held to maturity bull You can choose the Deposit Currency including HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY and Linked Currency
Pair including AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD and USDCNH bull The Deposit Period of this product is 2 months or above
bull You will have a chance to receive higher potential return depending on the movement of the exchange rate of the Underlying Currency
Pair bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency bull The Bank pre-sets the Trading Range bull On the Final Exchange Rate Determination Date the exchange rate of the Underlying Currency Pair is compared with the Trading Range
to determine the Return at maturity bull Returns (if any) on this product is payable only upon maturity bull This product may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank Please refer to
the section Can you request for early termination before maturity below
Scenario analysis (All figures shown below including the exchange rate of AUDUSD and HKDCNH Potential Return Rate Minimum Return Rate Deposit Period etc are for illustration only You should not rely on the figures as any indication or guarantee on the expected interest amount of the Currency-Linked Capital Protected Investment Deposit you intend to invest Please refer to the Bank for up-to-date figures) Example 1 ndash European Range (where the Deposit Currency is your home currency) Assuming HKD is your home currency and you anticipate the Exchange Rate of AUDUSD will be above 10250 but below 10750 after 6 months and set up an European Range Investment with HKD 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Range (AUDUSD) Principal Guarantee 100 Deposit Currency HKD Guaranteed Principal HKD 100000 Deposit Period 6 months Trading Range AUDUSD 10250 (ldquoLower Barrierrdquo) to 10750 (ldquoUpper Barrierrdquo) (excluding both barriers) Potential Return Rate 016 (around 032 pa)
Page 56 of 67
Minimum Return Rate 0015 (around 003 pa) Scenario I Best case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is within the Trading Range (ie above 10250 but below 10750) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = HKD 100000 x (1+016) = HKD 10016000 (with a gain of 016 of investment amount) Scenario II Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 10250 or atabove 10750) you will receive Guaranteed Principal and Minimum Return at maturity Total Return at Maturity = HKD 100000 x (1+0015) = HKD 10001500 (with a gain of 0015 of investment amount) Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a HKD 100000 6 month Time Deposit on 30 April 2015 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500 Example 2 ndash European Range (where the Deposit Currency is not your home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency and you anticipate the Exchange Rate of AUDUSD will be above 10250 but below 10750 after 6 months and set up an European Range Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Range (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trading Range AUDUSD 10250 (ldquoLower Barrierrdquo) to 10750 (ldquoUpper Barrierrdquo) (excluding both barriers) Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH (on deposit start date) 08000 Scenario I Best case scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is within the Trading Range (ie above 10250 but below 10750) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of-the road Gain scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 10250 or atabove 10750) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount)
0
Final Exchange Rate of
AUDUSD le10250
Potential Return Minimum Return
Return Diagram
Return at Maturity
10250 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Minimum Return
Final Exchange Rate of
AUDUSD ge 10750
10750
10250lt Final Exchange Rate of AUDUSD lt10750
Page 57 of 67
Scenario III Off-setting scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 10250 or atabove 10750) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD 000 Scenario IV Loss and Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 10250 or atabove 10750) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 101500 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951) In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a CNY 100000 6 month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received at maturity would be CNY 10030000 If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to
0
Final Exchange Rate of
AUDUSD le10250
Potential Return Minimum Return
Return Diagram
Return at Maturity
10250 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Minimum Return
Final Exchange Rate of
AUDUSD ge 10750
10750
10250lt Final Exchange Rate of AUDUSD lt10750
Page 58 of 67
depreciation of Renminbi Please refer to the table below for details
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date
The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date
If HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
How can you buy this product
bull You can place a Currency-Linked Capital Protected Investment Deposit through our Hang Seng Bank Branches telephone or Hang
Seng Personal or Business e-Banking
bull The Bank will provide a choice of different tranches which is subject to market conditions
bull Enquiry Hotline Personal 2822 0228
Business 2198 8000
Fees and charges No handling fees or management fees will be charged for Currency-Linked Capital Protected Investment Deposit
Can you request for early termination before maturity No Currency-Linked Capital Protected Investment Deposit may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank which may be granted or withheld in the Bankrsquos sole and absolute discretion on such terms and conditions as the Bank may determine Please refer to ldquoEarly WithdrawalTermination Risksrdquo under ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section for details
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
ix 9999990000 010 010 (12499990) (12499990)
At the beginning of the investment On the Maturity Date of the investment
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Potential Return
Exchange Rate of HKDCNH on the Maturity Date
0
If receiving Minimum Return
Breakeven = 08120^
If receiving Potential Return
Breakeven = 08240
If CNH depreciates drastically relative to HKD
HKDCNH = 9999990000
Exchange Rate on Deposit Start Date
Page 59 of 67
Pre-Investment Cooling-off Period for retail customers Pre-Investment Cooling-off Period (PICOP) is applicable to each particular dealing of this product if you are one of the following retail customer types
(1) An elderly customer aged 65 or above unless you are not a first-time buyer of currency-linked structured investment products AND your asset concentration is below 20 AND you opt out from the PICOP arrangement or
(2) A non-elderly customer who is a first time buyer of currency-linked structured investment products AND your asset concentration
is 20 or above
For the purpose of determining whether PICOP is applicable asset concentration refers to the percentage of total net worth (excluding real estate properties) to be invested in this product
Can the Bank adjust the terms or early terminate this product Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank in certain circumstances Please refer to Clause 7 of the Currency-Linked Capital Protected Investment Deposit Terms and Conditions for details
Offering documents for this product The following documents for this product (ldquoOffering Documentsrdquo) contain detailed information about the Bank and the terms of this product You should read and understand all of the Offering Documents before deciding whether to invest in this product
(i) Currency-Linked Capital Protected Investment Deposit Terms and Conditions (ii) The relevant Currency-Linked Capital Protected Investment Deposit Termsheet (iii) This Currency-Linked Capital Protected Investment Deposit Important Facts Statement
Other information Product Risk Level The Product Risk Level for Currency-Linked Capital Protected Investment Deposit is Low
Low Low-to-Medium Medium Medium-to-High High
Product Risk Level is determined by a number of factors which include the volatility of the currency pair and the tenor of the product The Product Risk Level is subject to the Banks periodic review and may change from time to time Please refer to our branch or our Customer Service Hotline on 2822 0228 for the latest detail Declaration and Remarks bull This Important Facts Statement is not intended to provide or regard as legal or taxation advice or investment recommendations If you
have any concerns about this product or are uncertain about the suitability of this product for you you should obtain independent professional advice
bull The liabilities of the Bank in respect of the Currency-Linked Capital Protected Investment Deposit are limited exclusively to an office of the Bank in Hong Kong and instructions in respect of the Currency-Linked Capital Protected Investment Deposit may only be made to and acted upon by such office Any amount relating to the Currency-Linked Capital Protected Investment Deposit is payable exclusively by an office of the Bank in Hong Kong and in its stated currency The Terms and Conditions of the Currency-Linked Capital Protected Investment Deposit are governed by and shall be construed in accordance with the laws of Hong Kong
bull You may contact our staff if you have any feedback or complaint in relation to our services or call our hotline at 2822 0228 We will respond to you within a reasonable period of time normally not exceeding 30 days in general circumstances You may contact the Hong Kong Monetary Authority at 55th Floor Two International Finance Centre 8 Finance Street Central Hong Kong if you are not satisfied with our handling of your complaint
bull Hang Seng Bank Limited is a Registered Licensed Bank under the Banking Ordinance bull All Currency-Linked Capital Protected Investment Deposit cannot be cancelled after subscription bull The Bank will act as principal to complete the transaction and may obtain certain monetary benefits in connection with the offering of
this Currency-Linked Capital Protected Investment Deposit to the public The current remuneration system that the Bank adopts for sales staff is a measurement of the staffrsquos overall performance and not just based on sales amount
bull The Bank is NOT an independent intermediary because The Bank receives fees commissions or other monetary benefits from other parties in relation to the Bankrsquos distribution of Currency-Linked Capital Protected Investment Deposit to you For details you should refer to the Bankrsquos disclosure on monetary benefits which the Bank is required to deliver to you prior to or at the point of entering into any transaction in Currency-Linked Capital Protected Investment Deposit
bull Please note that this product is not available for persons who are located within the United States are nationals of the United States and are US Persons within the meaning of Regulation S under the Securities Act (which includes any person resident in the United States and any partnership or corporation organised or incorporated under the laws of the United States)
bull 請注意本行不提供本產品予身處美國的人士美國公民及美籍人士(定義見證券法 S 條例)(包括居住在美國之任何人士及根據美國法例組
成或註冊成立之任何合夥企業或公司)
Page 2 of 67
NOT a protected deposit and is NOT protected by the Deposit Protection Scheme in Hong Kong Derivatives risk Currency-Linked Capital Protected Investment Deposit is embedded with FX options Option transactions involve risks even when buying an option The optionrsquos value might become worthless if the market moves against your expectation Limited potential gain The maximum potential gain is limited to the pre-agreed ReturnCoupon calculated at the Potential ReturnCoupon Rate Not the same as buying the Underlying Currency Pair Investing in Currency-Linked Capital Protected Investment Deposit is not the same as buying the Underlying Currency Pair directly Market risk The investment return of Currency-Linked Capital Protected Investment Deposit is linked to the exchange rate of the Underlying Currency Pair Movements in exchange rates can be unpredictable sudden and drastic and affected by complex political and economic factors Liquidity risk Currency-Linked Capital Protected Investment Deposit is designed to be held till maturity The Bank may at its absolute discretion refuse to consent to any withdrawaltermination request before maturity Credit risk of the Bank Currency-Linked Capital Protected Investment Deposit is not secured by any collateral When you invest in Currency-Linked Capital Protected Investment Deposit you will be relying on the Bankrsquos creditworthiness If the Bank becomes insolvent or defaults on its obligations under a Currency-Linked Capital Protected Investment Deposit you can only claim as an unsecured creditor of the Bank In the worst case you could suffer a total loss of your investment amount Currency risk Exchange rate fluctuates and sometimes drastically If the Deposit Currency used for investment is not the home currency customarily used by you and thus conversion is required you should note that you may make a gain or suffer a loss due to exchange rate fluctuations When the deposit currency depreciates the loss from depreciation may set-off or even exceed the ReturnCoupon (if any) that you may receive from investing in the Currency-Linked Capital Protected Investment Deposit Risk of adjustments or early termination by the Bank Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank this might have a negative impact on the ReturnCoupon (if any) of the Currency-Linked Capital Protected Investment Deposit Concentration Risks You should avoid excessive investment (in terms of its proportion of the overall portfolio) in any single type of investment so as to avoid the investment portfolio being over-exposed to any particular investment risk ReturnCoupon of Currency-Linked Capital Protected Investment Deposit In order to provide capital protection the investment strategy adopted for Currency-Linked Capital Protected Investment Deposit may lead to a dilution of performance when compared to non-capital protected products investing in similar markets You should be prepared to take the risks of earning a lower ReturnCoupon (if any) on the capital invested and losing the interest that might otherwise earned on money invested by way of deposits For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) periodic Coupon may be payable to you For other types of Currency-Linked Capital Protected Investment Deposit no periodic ReturnCoupon will be payable to you prior to maturity Principal protection at maturity only You should understand that the Principal of the Currency-Linked Capital Protected Investment Deposit is capital-protected only when it is held to maturity If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the amount received by you upon early withdrawaltermination may be less than the amount initially invested by you Market Risks associated with Potential ReturnCoupon Apart from the ReturnCoupon calculated at the Minimum ReturnCoupon Rate (which may be set at zero) there is no guarantee of any ReturnCoupon calculated at the Potential ReturnCoupon Rate For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) Coupon (if any) is payable only if the Currency-Linked Capital Protected Investment Deposit is held till the relevant Coupon Distribution Dates ReturnCoupon (if any) of Currency-Linked Capital Protected Investment Deposit depends on the market conditions at the time of the relevant determination Investment return on foreign exchange-linked products are dependent on the prices of inter-banksrsquo transactions on the linked exchange rate in the foreign exchange markets You should be fully aware of the risks relating to fluctuations in the linked exchange rates Factors affecting the performance of foreign exchange markets are numerous including but are not limited to changes in global and local investment sentiments interest rate policies fund flows political environment economic environment business and social conditions in the local marketplace If the market trend is different from the view taken by you there is an inherent risk that the total investment return that you may receive from Currency-Linked Capital Protected Investment Deposit will be less than the interest that would have been payable on a time deposit for the same tenor There is also an inherent risk that no ReturnCoupon calculated at the Potential ReturnCoupon Rate will be payable to you in respect of the Currency-Linked Capital Protected Investment Deposit Early WithdrawalTermination Risks Early withdrawaltermination by you is not allowed for Currency-Linked Capital Protected Investment Deposit and the capital of you will be invested in the Currency-Linked Capital Protected Investment Deposit for the entire investment period The Bank may at its absolute discretion refuse to give consent to any early withdrawaltermination request If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the Bank shall be entitled to deduct from the Principal of the relevant Currency-Linked Capital Protected Investment Deposit andor any other amount which may have accrued to you any expenses costs or damages to the Bank Damages may include any costs expenses liability or losses to the Bank as a result of the early withdrawaltermination by you Therefore there is no guarantee that you will be able to receive the Principal and the amount payable to you at early withdrawaltermination may be less than the Principal initially invested Besides If the Currency-Linked Capital Protected Investment Deposit is early withdrawnterminated you will no longer be entitled to any ReturnCoupon of the Currency-Linked Capital Protected Investment Deposit Risks associated with unsuccessful subscriptions of Currency-Linked Capital Protected Investment Deposit The Bank reserves the absolute right to approve any application and to decline any application received (whether in whole or any part thereof) before the Deposit Start Date In the event of non-acceptance a notification will be sent by the Bank and any subscription funds
Page 3 of 67
received will be returned to you after the Deposit Start Date or as soon as practicable Risks relating to Renminbi If Currency-Linked Capital Protected Investment Deposit involves CNY the relevant exchange rate(s) or level(s) of the relevant currency pair will be quoted in offshore Renminbi against alternate currency While both onshore Renminbi and offshore Renminbi are the same currency they are traded in different and separate markets operating under different regulations and independent liquidity pool Onshore Renminbi and offshore Renminbi are currently quoted in different markets with different exchange rates whereby their exchange rate movements may not be in the same direction or magnitude The offshore Renminbi exchange rate may deviate significantly from the onshore Renminbi exchange rate You should also note that Renminbi is currently not freely convertible the value of Renminbi against other foreign currencies fluctuates and will be affected by amongst other things the PRC governmentrsquos control (for example the PRC government regulates conversion between Renminbi and foreign currencies) which may adversely affect your investment return under the Currency-Linked Capital Protected Investment Deposit when you convert CNY into your home currency Renminbi is subject to foreign exchange control by the PRC government and thus investors investing in Currency-Linked Investment Deposit involving Renminbi are subject to the currency risk of Renminbi
What are the key features bull This product is designed for you whose investment objective is capital protection or to obtain potential cash income bull This product is embedded with options You will buy option(s) on the Linked Currency Pair bull 100 principal protection if this product is held to maturity bull You can choose the Deposit Currency including HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY and Linked Currency
Pair including AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD and USDCNH bull The Deposit Period of this product is 2 months or above bull You will have a chance to receive higher potential return depending on the movement of the exchange rate of the Underlying Currency
Pair during the Observation Period bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency bull The Bank pre-sets the Trigger Level and Observation Period and you choose a bullish or bearish view on different currencies bull During the whole Observation Period the exchange rate of the Underlying Currency Pair is compared with the Trigger Level to determine
the Return at maturity bull Returns (if any) on this product is payable only upon maturity bull This product may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank Please refer
to the section Can you request for early termination before maturity below
Scenario analysis (All figures shown below including the exchange rate of AUDUSD and HKDCNH Potential Return Rate Minimum Return Rate Deposit Period etc are for illustration only You should not rely on the figures below as any indication or guarantee on the expected interest amount of the Currency-Linked Capital Protected Investment Deposit you intend to invest Please refer to the Bank for up-to-date figures) Example 1 ndash American Bullish (where the Deposit Currency is your home currency) Assuming HKD is your home currency and you take a bullish view on Australian Dollar expect the exchange rate of AUDUSD will rise from 09400 to 09800 or above during the 6-month period and set up an American Bullish Investment with HKD 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment American Bullish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency HKD Guaranteed Principal HKD 100000 Deposit Period 6 months Trigger Level AUDUSD 09800 Potential Return Rate 016 (around 032 pa) Minimum Return Rate 0015 (around 003 pa) Scenario I Best case scenario At any time during the Observation Period the Exchange Rate of AUDUSD is at or above the Trigger Level (ie at or above 09800) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = HKD 100000 x (1+016) = HKD 10016000 (with a gain of 016 of investment amount) Scenario II Worst case scenario At any time during the Observation Period the Exchange Rate of AUDUSD stays below the Trigger Level (ie stays below 09800) you will receive Guaranteed Principal and Minimum Return at maturity Total Return at Maturity = HKD 100000 x (1+0015)
Page 4 of 67
= HKD 10001500 (with a gain of 0015 of investment amount)
Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a HKD 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500 Example 2 ndash American Bearish (where the Deposit Currency is your home currency) Assuming HKD is your home currency and you take a bearish view on Australian Dollar expect the exchange rate of AUDUSD will drop from 09400 to 09000 or below during the 6-month period and set up an American Bearish Investment with HKD 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment American Bearish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency HKD Guaranteed Principal HKD 100000 Deposit Period 6 months Trigger Level AUDUSD 09000 Potential Return Rate 016 (around 032 pa) Minimum Return Rate 0015 (around 003 pa) Scenario I Best case scenario At any time during the Observation Period the Exchange Rate of AUDUSD is at or below the Trigger Level (ie at or below 09000) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = HKD 100000 x (1+016) = HKD 10016000 (with a gain of 016 of investment amount) Scenario II Worst case scenario At any time during the Observation Period the Exchange Rate of AUDUSD stays above the Trigger Level (ie stays above 09000) you will receive Guaranteed Principal and Minimum Return at maturity Total Return at Maturity = HKD 100000 x (1+0015) = HKD 10001500
(with a gain of 0015 of investment amount) Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount
09800 0
Exchange Rate of AUDUSD lt Trigger Level
Potential Return Minimum Return
Return Diagram Return at Maturity
Exchange Rate of AUDUSD ge Trigger Level
Exchange Rate of AUDUSD during the Observation Period
Trigger Level = 09800
09000 0
Exchange Rate of AUDUSD le
Trigger Level
Potential Return Minimum Return
Return Diagram
Return at Maturity
Exchange Rate of AUDUSD gt Trigger Level
Exchange Rate of AUDUSD during the Observation Period
Trigger Level = 09000
Page 5 of 67
For reference only if you set up a HKD 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500 Example 3 ndash American Bullish (where the Deposit Currency is not your home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency and you take a bullish view on Australian Dollar expect the exchange rate of AUDUSD will rise from 09400 to 09800 or above during the 6-month period and set up an American Bullish Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair
Type of investment American Bullish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trigger Level AUDUSD 09800 Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH (on deposit start date) 08000 Scenario I Best case scenario At any time during the Observation Period (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is at or above the Trigger Level (ie at or above 09800) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of-the-road Gain scenario At any time during the Observation Period (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD stays below the Trigger Level (ie stays below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000
(with a gain of 150 of investment amount)
Scenario III Off-setting scenario At any time during the Observation Period the Exchange Rate of AUDUSD stays below the Trigger Level (ie stays below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD 000 Scenario IV Loss and Worst case scenario At any time during the Observation Period the Exchange Rate of AUDUSD stays below the Trigger Level (ie stays below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951)
Page 6 of 67
In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a CNY 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received at maturity would be CNY 10030000 If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Please refer to the table below for details
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home
currency (HKD) in the event that you receive Minimum Return on the Maturity Date The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home
currency (HKD) in the event that you receive Potential Return on the Maturity Date If HKDCNH rise drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange
rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
ix 9999990000 010 010 (12499990) (12499990)
At the beginning of the investment On the Maturity Date of the investment
Exchange
Rate of
HKDCNH
Initial
Investment
Amount in
Renminbi
Initial
Investment
Amount in
HKD
Exchange Rate
of HKDCNH
Total Return in
Renminbi
Total Return in
HKD
Gain (loss) in HKD if converting the
Total Return from Renminbi to home
currency (HKD)
103000 101500 12500000 10000008000
09800 0
Exchange Rate of AUDUSD lt Trigger Level
Potential Return Minimum Return
Return Diagram Return at Maturity
Exchange Rate of AUDUSD ge Trigger Level
Exchange Rate of AUDUSD during the Observation Period
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Potential Return
Exchange Rate of HKDCNH on the Maturity Date
If receiving Minimum Return
Breakeven = 08120^
If receiving Potential Return
Breakeven = 08240
Exchange Rate on Deposit Start Date
0
If CNH depreciates drastically relative to HKD
HKDCNH = 9999990000
Page 7 of 67
Renminbi to home currency (HKD) on the Maturity Date Example 4 ndash American Bearish (where the Deposit Currency is not your home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency and you take a bearish view on Australian Dollar expect the exchange rate of AUDUSD will drop from 09400 to 09000 or below during the 6-month period and set up an American Bearish Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair
Type of investment American Bearish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trigger Level AUDUSD 09000 Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH (on deposit start date) 08000 Scenario I Best case scenario At any time during the Observation Period (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is at or below the Trigger Level (ie at or below 09000) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of-the-road Gain scenario At any time during the Observation Period (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD stays above the Trigger Level (ie stays above 09000) you will receive Guaranteed Principal and Minimum Return at maturity Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000
(with a gain of 150 of investment amount) Scenario III Off-setting scenario At any time during the Observation Period the Exchange Rate of AUDUSD stays above the Trigger Level (ie stays above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD 000 Scenario IV Loss and Worst case scenario At any time during the Observation Period the Exchange Rate of AUDUSD stays above the Trigger Level (ie stays above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951)
Page 8 of 67
In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a CNY 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received at maturity would be CNY 10030000 If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Please refer to the table below for details
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home
currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home
currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date If HKDCNH rise drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange
rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
ix 9999990000 010 010 (12499990) (12499990)
At the beginning of the investment On the Maturity Date of the investment
Exchange
Rate of
HKDCNH
Initial
Investment
Amount in
Renminbi
Initial
Investment
Amount in
HKD
Exchange Rate
of HKDCNH
Total Return in
Renminbi
Total Return in
HKD
Gain (loss) in HKD if converting the
Total Return from Renminbi to home
currency (HKD)
103000 101500 12500000 10000008000
09000 0
Exchange Rate of AUDUSD le
Trigger Level
Potential Return Minimum Return
Return Diagram
Return at Maturity
Exchange Rate of AUDUSD gt Trigger Level
Exchange Rate of AUDUSD during the Observation Period
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Potential Return
Exchange Rate of HKDCNH on the Maturity Date
0
If receiving Minimum Return
Breakeven = 08120^
If receiving Potential Return
Breakeven = 08240
Exchange Rate on Deposit Start Date
If CNH depreciates drastically relatively to HKD HKDCNH = 9999990000
Page 9 of 67
How can you buy this product bull You can place a Currency-Linked Capital Protected Investment Deposit through our Hang Seng Bank Branches telephone or Hang
Seng Personal or Business e-Banking bull The Bank will provide a choice of different tranches which is subject to market conditions bull Enquiry Hotline Personal 2822 0228 Business 2198 8000
Fees and charges No handling fees or management fees will be charged for Currency-Linked Capital Protected Investment Deposit
Can you request for early termination before maturity No Currency-Linked Capital Protected Investment Deposit may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank which may be granted or withheld in the Bankrsquos sole and absolute discretion on such terms and conditions as the Bank may determine Please refer to ldquoEarly WithdrawalTermination Risksrdquo under ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section for details
Pre-Investment Cooling-off Period for retail customers Pre-Investment Cooling-off Period (PICOP) is applicable to each particular dealing of this product if you are one of the following retail customer types
(1) An elderly customer aged 65 or above unless you are not a first-time buyer of currency-linked structured investment products AND your asset concentration is below 20 AND you opt out from the PICOP arrangement or
(2) A non-elderly customer who is a first time buyer of currency-linked structured investment products AND your asset concentration
is 20 or above
For the purpose of determining whether PICOP is applicable asset concentration refers to the percentage of total net worth (excluding real estate properties) to be invested in this product
Can the Bank adjust the terms or early terminate this product Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank in certain circumstances Please refer to Clause 7 of the Currency-Linked Capital Protected Investment Deposit Terms and Conditions for details
Offering documents for this product The following documents for this product (ldquoOffering Documentsrdquo) contain detailed information about the Bank and the terms of this product You should read and understand all of the Offering Documents before deciding whether to invest in this product
(i) Currency-Linked Capital Protected Investment Deposit Terms and Conditions (ii) The relevant Currency-Linked Capital Protected Investment Deposit Termsheet (iii) This Currency-Linked Capital Protected Investment Deposit Important Facts Statement
Other information Product Risk Level The Product Risk Level for Currency-Linked Capital Protected Investment Deposit is Low
Low Low-to-Medium Medium Medium-to-High High
Product Risk Level is determined by a number of factors which include the volatility of the currency pair and the tenor of the product The Product Risk Level is subject to the Banks periodic review and may change from time to time Please refer to our branch or our Customer Service Hotline on 2822 0228 for the latest detail
Declaration and Remarks bull This Important Facts Statement is not intended to provide or regard as legal or taxation advice or investment recommendations If you
have any concerns about this product or are uncertain about the suitability of this product for you you should obtain independent professional advice
bull The liabilities of the Bank in respect of the Currency-Linked Capital Protected Investment Deposit are limited exclusively to an office of the Bank in Hong Kong and instructions in respect of the Currency-Linked Capital Protected Investment Deposit may only be made to and acted upon by such office Any amount relating to the Currency-Linked Capital Protected Investment Deposit is payable exclusively by an office of the Bank in Hong Kong and in its stated currency The Terms and Conditions of the Currency-Linked Capital Protected Investment Deposit are governed by and shall be construed in accordance with the laws of Hong Kong
bull You may contact our staff if you have any feedback or complaint in relation to our services or call our hotline at 2822 0228 We will respond to you within a reasonable period of time normally not exceeding 30 days in general circumstances You may contact the Hong Kong Monetary Authority at 55th Floor Two International Finance Centre 8 Finance Street Central Hong Kong if you are not satisfied with our handling of your complaint
bull Hang Seng Bank Limited is a Registered Licensed Bank under the Banking Ordinance bull All Currency-Linked Capital Protected Investment Deposit cannot be cancelled after subscription bull The Bank will act as principal to complete the transaction and may obtain certain monetary benefits in connection with the offering of
this Currency-Linked Capital Protected Investment Deposit to the public The current remuneration system that the Bank adopts for
Page 10 of 67
sales staff is a measurement of the staffrsquos overall performance and not just based on sales amount bull The Bank is NOT an independent intermediary because
The Bank receives fees commissions or other monetary benefits from other parties in relation to the Bankrsquos distribution of Currency-Linked Capital Protected Investment Deposit to you For details you should refer to the Bankrsquos disclosure on monetary benefits which the Bank is required to deliver to you prior to or at the point of entering into any transaction in Currency-Linked Capital Protected Investment Deposit
bull Please note that this product is not available for persons who are located within the United States are nationals of the United States and are US Persons within the meaning of Regulation S under the Securities Act (which includes any person resident in the United States and any partnership or corporation organised or incorporated under the laws of the United States)
bull 請注意本行不提供本產品予身處美國的人士美國公民及美籍人士(定義見證券法 S 條例)(包括居住在美國之任何人士及根據美國法例組成
或註冊成立之任何合夥企業或公司)
Page 20 of 67
Currency-Linked Capital Protected Investment Deposit
American Range Investment
Dated May 2018
Important Facts Statement
This is a structured investment product which is NOT protected by the Deposit Protection Scheme in Hong Kong
The contents of this statement have not been reviewed by any regulatory authority in Hong Kong You are advised to exercise caution before investing in this product This statement is a part of the offering documents for this product You should not invest in this product based on this statement alone If you are in any doubt you should obtain independent professional advice
If English is not your preferred language you may request for the Chinese version of this statement from our sales staff 倘若英
文並非閣下屬意的語言閣下可向本行的銷售人員索取本概要的中文版本
This is a structured investment product involving derivatives The investment decision is yours but you should not invest in this product 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
Quick facts Bank Hang Seng Bank Limited
Product Type Currency-Linked Investment Deposit ndash American Range Investment (ldquothis productrdquo)
Minimum Investment Amount Subscription through branches - HKD 100000 (or its equivalent) Subscription through e-banking - HKD 50000 (or its equivalent)
Tenor 2 months or above or any other tenor as agreed between you and the Bank
Available Principal Currency (or Deposit Currency) HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY
Available Underlying Currency Pair AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD USDCNH and any other currency pairs as agreed between you and the Bank
Return Rate Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Deposit periodpayment date Deposit period refers to tenor of the product and return is payable only on Maturity Date
Principal protection at maturity Yes
Callable by the Bank No
Early termination right by customer No please refer to ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section ndash Early WithdrawalTermination Risks for details
Embedded derivatives Yes you will buy option(s) over the Underlying Currency Pair
Maximum potential gain Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Maximum potential loss Please refer to Scenario II amp III of Example 1 and Scenarios IV and V of Example 2 in the ldquoScenario analysisrdquo section of this product type for details
What is this product and how does it work bull American Range investment is one type of our Currency-Linked Capital Protected Investment Deposit which consists of a time deposit
(in Deposit currency) and buying option(s) on the Underlying Currency Pair of your choice bull You choose the Deposit Currency Underlying Currency Pair and the Observation Period according to your need and the Bank will set the
Trading Range bull During the whole Observation Period the Bank will compare the exchange rate of the Underlying Currency Pair with the Trading Range
If the exchange rate of the Underlying Currency Pair moves along with your anticipation and stays within the Trading Range during the whole Observation Period you will receive Guaranteed Principal and Potential Return If the exchange rate of the Underlying Currency Pair moves against your anticipation and at anytime during the Observation Period the exchange rate of the Underlying Currency Pair is outside the Trading Range you will receive Guaranteed Principal and Minimum Return (if any)
bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency Minimum return applies to certain investment tranches only you should refer to the relevant termsheet for details
Page 21 of 67
What are the key risks of Currency-Linked Capital Protected Investment Deposit Earnings on Currency-Linked Capital Protected Investment Deposit are limited to the Return Coupon (if any) payable You should consider the following risks and read all other information contained in the relevant Termsheet and Terms and Conditions before making any investment decision Not a time deposit Currency-Linked Capital Protected Investment Deposit 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 Capital Protected Investment Deposit is embedded with FX options Option transactions involve risks even when buying an option The optionrsquos value might become worthless if the market moves against your expectation Limited potential gain The maximum potential gain is limited to the pre-agreed ReturnCoupon calculated at the Potential ReturnCoupon Rate Not the same as buying the Underlying Currency Pair Investing in Currency-Linked Capital Protected Investment Deposit is not the same as buying the Underlying Currency Pair directly Market risk The investment return of Currency-Linked Capital Protected Investment Deposit is linked to the exchange rate of the Underlying Currency Pair Movements in exchange rates can be unpredictable sudden and drastic and affected by complex political and economic factors Liquidity risk Currency-Linked Capital Protected Investment Deposit is designed to be held till maturity The Bank may at its absolute discretion refuse to consent to any withdrawaltermination request before maturity Credit risk of the Bank Currency-Linked Capital Protected Investment Deposit is not secured by any collateral When you invest in Currency-Linked Capital Protected Investment Deposit you will be relying on the Bankrsquos creditworthiness If the Bank becomes insolvent or defaults on its obligations under a Currency-Linked Capital Protected Investment Deposit you can only claim as an unsecured creditor of the Bank In the worst case you could suffer a total loss of your investment amount Currency risk Exchange rate fluctuates and sometimes drastically If the Deposit Currency used for investment is not the home currency customarily used by you and thus conversion is required you should note that you may make a gain or suffer a loss due to exchange rate fluctuations When the deposit currency depreciates the loss from depreciation may set-off or even exceed the ReturnCoupon (if any) that you may receive from investing in the Currency-Linked Capital Protected Investment Deposit Risk of adjustments or early termination by the Bank Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank this might have a negative impact on the ReturnCoupon (if any) of the Currency-Linked Capital Protected Investment Deposit Concentration Risks You should avoid excessive investment (in terms of its proportion of the overall portfolio) in any single type of investment so as to avoid the investment portfolio being over-exposed to any particular investment risk ReturnCoupon of Currency-Linked Capital Protected Investment Deposit In order to provide capital protection the investment strategy adopted for Currency-Linked Capital Protected Investment Deposit may lead to a dilution of performance when compared to non-capital protected products investing in similar markets You should be prepared to take the risks of earning a lower ReturnCoupon (if any) on the capital invested and losing the interest that might otherwise earned on money invested by way of deposits For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) periodic Coupon may be payable to you For other types of Currency-Linked Capital Protected Investment Deposit no periodic ReturnCoupon will be payable to you prior to maturity Principal protection at maturity only You should understand that the Principal of the Currency-Linked Capital Protected Investment Deposit is capital-protected only when it is held to maturity If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the amount received by you upon early withdrawaltermination may be less than the amount initially invested by you Market Risks associated with Potential ReturnCoupon Apart from the ReturnCoupon calculated at the Minimum ReturnCoupon Rate (which may be set at zero) there is no guarantee of any ReturnCoupon calculated at the Potential ReturnCoupon Rate For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) Coupon (if any) is payable only if the Currency-Linked Capital Protected Investment Deposit is held till the relevant Coupon Distribution Dates ReturnCoupon (if any) of Currency-Linked Capital Protected Investment Deposit depends on the market conditions at the time of the relevant determination Investment return on foreign exchange-linked products are dependent on the prices of inter-banksrsquo transactions on the linked exchange rate in the foreign exchange markets You should be fully aware of the risks relating to fluctuations in the linked exchange rates Factors affecting the performance of foreign exchange markets are numerous including but are not limited to changes in global and local investment sentiments interest rate policies fund flows political environment economic environment business and social conditions in the local marketplace If the market trend is different from the view taken by you there is an inherent risk that the total investment return that you may receive from Currency-Linked Capital Protected Investment Deposit will be less than the interest that would have been payable on a time deposit for the same tenor There is also an inherent risk that no ReturnCoupon calculated at the Potential ReturnCoupon Rate will be payable to you in respect of the Currency-Linked Capital Protected Investment Deposit
Page 22 of 67
Early WithdrawalTermination Risks Early withdrawaltermination by you is not allowed for Currency-Linked Capital Protected Investment Deposit and the capital of you will be invested in the Currency-Linked Capital Protected Investment Deposit for the entire investment period The Bank may at its absolute discretion refuse to give consent to any early withdrawaltermination request If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the Bank shall be entitled to deduct from the Principal of the relevant Currency-Linked Capital Protected Investment Deposit andor any other amount which may have accrued to you any expenses costs or damages to the Bank Damages may include any costs expenses liability or losses to the Bank as a result of the early withdrawaltermination by you Therefore there is no guarantee that you will be able to receive the Principal and the amount payable to you at early withdrawaltermination may be less than the Principal initially invested Besides If the Currency-Linked Capital Protected Investment Deposit is early withdrawnterminated you will no longer be entitled to any ReturnCoupon of the Currency-Linked Capital Protected Investment Deposit Risks associated with unsuccessful subscriptions of Currency-Linked Capital Protected Investment Deposit The Bank reserves the absolute right to approve any application and to decline any application received (whether in whole or any part thereof) before the Deposit Start Date In the event of non-acceptance a notification will be sent by the Bank and any subscription funds received will be returned to you after the Deposit Start Date or as soon as practicable Risks relating to Renminbi If Currency-Linked Capital Protected Investment Deposit involves CNY the relevant exchange rate(s) or level(s) of the relevant currency pair will be quoted in offshore Renminbi against alternate currency While both onshore Renminbi and offshore Renminbi are the same currency they are traded in different and separate markets operating under different regulations and independent liquidity pool Onshore Renminbi and offshore Renminbi are currently quoted in different markets with different exchange rates whereby their exchange rate movements may not be in the same direction or magnitude The offshore Renminbi exchange rate may deviate significantly from the onshore Renminbi exchange rate You should also note that Renminbi is currently not freely convertible the value of Renminbi against other foreign currencies fluctuates and will be affected by amongst other things the PRC governmentrsquos control (for example the PRC government regulates conversion between Renminbi and foreign currencies) which may adversely affect your investment return under the Currency-Linked Capital Protected Investment Deposit when you convert CNY into your home currency Renminbi is subject to foreign exchange control by the PRC government and thus investors investing in Currency-Linked Investment Deposit involving Renminbi are subject to the currency risk of Renminbi
What are the key features bull This product is designed for you whose investment objective is capital protection or to obtain potential cash income bull This product is embedded with options You will buy option(s) on the Linked Currency Pair bull 100 principal protection if this product is held to maturity bull You can choose the Deposit Currency including HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY and Linked Currency
Pair including AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD and USDCNH bull The Deposit Period of the Currency-Linked Capital Protected Investment Deposit is 2 months or above bull You will have a chance to receive higher potential return depending on the movement of the exchange rate of the Underlying Currency
Pair during the Observation Period bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency bull The Bank pre-sets the Trading Range and Observation Period bull During the whole Observation Period the exchange rate of the Underlying Currency Pair is compared with the Trading Range to
determine the Return at maturity bull Returns (if any) on this product is payable only upon maturity bull This product may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank Please refer
to the section Can you request for early termination before maturity below
Scenario analysis (All figures shown below including the exchange rate of AUDUSD and HKDCNH Potential Return Rate Minimum Return Rate Deposit Period etc are for illustration only You should not rely on the below figures as any indication or guarantee on the expected interest amount of the Currency-Linked Capital Protected Investment Deposit you intend to invest Please refer to the Bank for up-to-date figures) Example 1 ndash American Range (where the Deposit Currency is your home currency) Assuming HKD is your home currency and you anticipate the Exchange Rate of AUDUSD will stay above 09850 but below 11150 for the next 6 months and set up an American Range Investment with HKD 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment American Range (AUDUSD) Principal Guarantee 100 Deposit Currency HKD Guaranteed Principal HKD 100000 Deposit Period 6 months Trading Range AUDUSD 09850 (ldquoLower Barrierrdquo) to 11150 (ldquoUpper Barrierrdquo) (excluding both barriers) Potential Return Rate 016 (around 032 pa)
Page 23 of 67
Minimum Return Rate 0015 (around 003 pa) Scenario I Best case scenario At any time during the Observation Period the Exchange Rate of AUDUSD stays within the Trading Range (ie above 09850 but below 11150) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = HKD 100000 x (1+016) = HKD 10016000 (with a gain of 016 of investment amount) Scenario II Worst case scenario At any time during the Observation Period the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 09850 or atabove 11150) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = HKD 100000 x (1+0015) = HKD 10001500
(with a gain of 0015 of investment amount) Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a HKD 100000 6-month Time Deposit on 30 April 2014 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500
Example 2 ndash American Range (where the Deposit Currency is not your home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency and you anticipate the Exchange Rate of AUDUSD will stay above 09850 but below 11150 for the next 6 months and set up an American Range Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment American Range (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trading Range AUDUSD 09850 (ldquoLower Barrierrdquo) to 11150 (ldquoUpper Barrierrdquo) (excluding both barriers) Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH (on deposit start date) 08000 Scenario I Best case scenario At any time during the Observation Period (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD stays within the Trading Range (ie above 09850 but below 11150) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of the road Gain scenario At any time during the Observation Period (assuming the exchange rate of HKDCNH remains unchanged the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 09850 or atabove 11150) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = CNY 100000 x (1+15) = CNY 10150000 (with a gain of 150 of investment amount)
0
Exchange Rate of
AUDUSD le 09850
Potential Return Minimum Return
Return Diagram Return at Maturity
09850 Exchange Rate of AUDUSD during the Observation Period
Minimum Return
09850 lt Exchange Rate of AUDUSD lt 11150
Exchange Rate of
AUDUSD ge 11150
11150
Page 24 of 67
Scenario III Off-setting scenario At any time during the Observation Period the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 09850 or atabove 11150) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD 000 Scenario IV Loss and Worst case scenario At any time during the Observation Period the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 09850 or atabove 11150) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951) In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a CNY 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received would be CNY 10030000
If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Please refer to the table below for details
0
Exchange Rate of
AUDUSD le 09850
Potential Return Minimum Return
Return Diagram
Return at Maturity
09850 Exchange Rate of AUDUSD during the Observation Period
Minimum Return
09850 lt Exchange Rate of AUDUSD lt 11150
Exchange Rate of
AUDUSD ge 11150
11150
Page 25 of 67
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date
The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date
If HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
How can you buy this product bull You can place a Currency-Linked Capital Protected Investment Deposit through our Hang Seng Bank Branches telephone or Hang Seng
Personal or Business e-Banking bull The Bank will provide a choice of different tranches which is subject to market conditions bull Enquiry Hotline Personal 2822 0228 Business 2198 8000
Fees and charges No handling fees or management fees will be charged for Currency-Linked Capital Protected Investment Deposit
Can you request for early termination before maturity No Currency-Linked Capital Protected Investment Deposit may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank which may be granted or withheld in the Bankrsquos sole and absolute discretion on such terms and conditions as the Bank may determine Please refer to ldquoEarly WithdrawalTermination Risksrdquo under ldquoWhat are the key features featuresrisks of Currency-Linked Capital Protected Investment Depositrdquo section for details
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
ix 9999990000 010 010 (12499990) (12499990)
At the beginning of the investment On the Maturity Date of the investment
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Potential Return
Exchange Rate of HKDCNH on the Maturity Date
0
If receiving Minimum Return
Breakeven = 08120^
If receiving Potential Return
Breakeven = 08240
If CNH depreciates drastically relative to HKD
HKDCNH = 9999990000
Exchange Rate on Deposit Start Date
Page 26 of 67
Pre-Investment Cooling-off Period for retail customers Pre-Investment Cooling-off Period (PICOP) is applicable to each particular dealing of this product if you are one of the following retail customer types
(1) An elderly customer aged 65 or above unless you are not a first-time buyer of currency-linked structured investment products AND your asset concentration is below 20 AND you opt out from the PICOP arrangement or
(2) A non-elderly customer who is a first time buyer of currency-linked structured investment products AND your asset concentration
is 20 or above
For the purpose of determining whether PICOP is applicable asset concentration refers to the percentage of total net worth (excluding real estate properties) to be invested in this product
Can the Bank adjust the terms or early terminate this product Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank in certain circumstances Please refer to Clause 7 of the Currency-Linked Capital Protected Investment Deposit Terms and Conditions for details
Offering documents for this product The following documents for this product (ldquoOffering Documentsrdquo) contain detailed information about the Bank and the terms of this product You should read and understand all of the Offering Documents before deciding whether to invest in this product
(i) Currency-Linked Capital Protected Investment Deposit Terms and Conditions (ii) The relevant Currency-Linked Capital Protected Investment Deposit Termsheet (iii) This Currency-Linked Capital Protected Investment Deposit Important Facts Statement
Other information Product Risk Level The Product Risk Level for Currency-Linked Capital Protected Investment Deposit is Low
Low Low-to-Medium Medium Medium-to-High High
Product Risk Level is determined by a number of factors which include the volatility of the currency pair and the tenor of the product The Product Risk Level is subject to the Banks periodic review and may change from time to time Please refer to our branch or our Customer Service Hotline on 2822 0228 for the latest detail Declaration and Remarks bull This Important Facts Statement is not intended to provide or regard as legal or taxation advice or investment recommendations If you
have any concerns about this product or are uncertain about the suitability of this product for you you should obtain independent professional advice
bull The liabilities of the Bank in respect of the Currency-Linked Capital Protected Investment Deposit are limited exclusively to an office of the Bank in Hong Kong and instructions in respect of the Currency-Linked Capital Protected Investment Deposit may only be made to and acted upon by such office Any amount relating to the Currency-Linked Capital Protected Investment Deposit is payable exclusively by an office of the Bank in Hong Kong and in its stated currency The Terms and Conditions of the Currency-Linked Capital Protected Investment Deposit are governed by and shall be construed in accordance with the laws of Hong Kong
bull You may contact our staff if you have any feedback or complaint in relation to our services or call our hotline at 2822 0228 We will respond to you within a reasonable period of time normally not exceeding 30 days in general circumstances You may contact the Hong Kong Monetary Authority at 55th Floor Two International Finance Centre 8 Finance Street Central Hong Kong if you are not satisfied with our handling of your complaint
bull Hang Seng Bank Limited is a Registered Licensed Bank under the Banking Ordinance bull All Currency-Linked Capital Protected Investment Deposit cannot be cancelled after subscription bull The Bank will act as principal to complete the transaction and may obtain certain monetary benefits in connection with the offering of
this Currency-Linked Capital Protected Investment Deposit to the public The current remuneration system that the Bank adopts for sales staff is a measurement of the staffrsquos overall performance and not just based on sales amount
bull The Bank is NOT an independent intermediary because The Bank receives fees commissions or other monetary benefits from other parties in relation to the Bankrsquos distribution of Currency-Linked Capital Protected Investment Deposit to you For details you should refer to the Bankrsquos disclosure on monetary benefits which the Bank is required to deliver to you prior to or at the point of entering into any transaction in Currency-Linked Capital Protected Investment Deposit
bull Please note that this product is not available for persons who are located within the United States are nationals of the United States and are US Persons within the meaning of Regulation S under the Securities Act (which includes any person resident in the United States and any partnership or corporation organised or incorporated under the laws of the United States)
bull 請注意本行不提供本產品予身處美國的人士美國公民及美籍人士(定義見證券法 S 條例)(包括居住在美國之任何人士及根據美國法例組
成或註冊成立之任何合夥企業或公司)
Page 34 of 67
Currency-Linked Capital Protected Investment Deposit
European (Bullish Bearish) Investment
Dated May 2018
Important Facts Statement
This is a structured investment product which is NOT protected by the Deposit Protection Scheme in Hong Kong
The contents of this statement have not been reviewed by any regulatory authority in Hong Kong You are advised to exercise caution before investing in this product This statement is a part of the offering documents for this product You should not invest in this product based on this statement alone If you are in any doubt you should obtain independent professional advice
If English is not your preferred language you may request for the Chinese version of this statement from our sales staff 倘若英文並
非閣下屬意的語言閣下可向本行的銷售人員索取本概要的中文版本
This is a structured investment product involving derivatives The investment decision is yours but you should not invest in this product 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
Quick facts
Bank Hang Seng Bank Limited
Product Type Currency-Linked Investment Deposit ndash European Bullish Bearish Investment (ldquothis productrdquo)
Minimum Investment Amount Subscription through branches - HKD 100000 (or its equivalent) Subscription through e-banking - HKD 50000 (or its equivalent)
Tenor 2 months or above or any other tenor as agreed between you and the Bank
Available Principal Currency (or Deposit Currency) HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY
Available Underlying Currency Pair AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD USDCNH and any other currency pairs as agreed between you and the Bank
Return Rate Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Deposit periodpayment date Deposit period refers to tenor of the product and return is payable only on Maturity Date
Principal protection at maturity Yes
Callable by the Bank No
Early termination right by customer No please refer to ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section ndash Early WithdrawalTermination Risks for details
Embedded derivatives Yes you will buy option(s) over the Underlying Currency Pair
Maximum potential gain Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Maximum potential loss Please refer to Scenarios II and III of Example 1 and 2 and Scenarios IV and V of Example 3 and 4 in ldquoScenario analysisrdquo section of this product type for details
What is this product and how does it work bull European Bullish Bearish investment is one type of our Currency-Linked Capital Protected Investment Deposit which consists of a time
deposit (in Deposit Currency) and buying option(s) on the Underlying Currency Pair of your choice bull You choose the Deposit Currency Underlying Currency Pair according to your need and the Bank will set the Trigger Level bull On the Final Exchange Rate Determination Date the Bank will compare the exchange rate of the Underlying Currency Pair with the Trigger
Level If the exchange rate of the Underlying Currency Pair moves along with your anticipation you will receive Guaranteed Principal and Potential Return If the exchange rate of the Underlying Currency Pair moves against your anticipation you will receive Guaranteed Principal and Minimum Return (if any)
bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency Minimum return applies to certain investment tranches only you should refer to the relevant termsheet for details
Page 35 of 67
What are the key risks of Currency-Linked Capital Protected Investment Deposit Earnings on Currency-Linked Capital Protected Investment Deposit are limited to the Return Coupon (if any) payable You should consider the following risks and read all other information contained in the relevant Termsheet and Terms and Conditions before making any investment decision Not a time deposit Currency-Linked Capital Protected Investment Deposit 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 Capital Protected Investment Deposit is embedded with FX options Option transactions involve risks even when buying an option The optionrsquos value might become worthless if the market moves against your expectation Limited potential gain The maximum potential gain is limited to the pre-agreed ReturnCoupon calculated at the Potential ReturnCoupon Rate Not the same as buying the Underlying Currency Pair Investing in Currency-Linked Capital Protected Investment Deposit is not the same as buying the Underlying Currency Pair directly Market risk The investment return of Currency-Linked Capital Protected Investment Deposit is linked to the exchange rate of the Underlying Currency Pair Movements in exchange rates can be unpredictable sudden and drastic and affected by complex political and economic factors Liquidity risk Currency-Linked Capital Protected Investment Deposit is designed to be held till maturity The Bank may at its absolute discretion refuse to consent to any withdrawaltermination request before maturity Credit risk of the Bank Currency-Linked Capital Protected Investment Deposit is not secured by any collateral When you invest in Currency-Linked Capital Protected Investment Deposit you will be relying on the Bankrsquos creditworthiness If the Bank becomes insolvent or defaults on its obligations under a Currency-Linked Capital Protected Investment Deposit you can only claim as an unsecured creditor of the Bank In the worst case you could suffer a total loss of your investment amount Currency risk Exchange rate fluctuates and sometimes drastically If the Deposit Currency used for investment is not the home currency customarily used by you and thus conversion is required you should note that you may make a gain or suffer a loss due to exchange rate fluctuations When the deposit currency depreciates the loss from depreciation may set-off or even exceed the ReturnCoupon (if any) that you may receive from investing in the Currency-Linked Capital Protected Investment Deposit Risk of adjustments or early termination by the Bank Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank this might have a negative impact on the ReturnCoupon (if any) of the Currency-Linked Capital Protected Investment Deposit Concentration Risks You should avoid excessive investment (in terms of its proportion of the overall portfolio) in any single type of investment so as to avoid the investment portfolio being over-exposed to any particular investment risk ReturnCoupon of Currency-Linked Capital Protected Investment Deposit In order to provide capital protection the investment strategy adopted for Currency-Linked Capital Protected Investment Deposit may lead to a dilution of performance when compared to non-capital protected products investing in similar markets You should be prepared to take the risks of earning a lower ReturnCoupon (if any) on the capital invested and losing the interest that might otherwise earned on money invested by way of deposits For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) periodic Coupon may be payable to you For other types of Currency-Linked Capital Protected Investment Deposit no periodic ReturnCoupon will be payable to you prior to maturity Principal protection at maturity only You should understand that the Principal of the Currency-Linked Capital Protected Investment Deposit is capital-protected only when it is held to maturity If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the amount received by you upon early withdrawaltermination may be less than the amount initially invested by you Market Risks associated with Potential ReturnCoupon Apart from the ReturnCoupon calculated at the Minimum ReturnCoupon Rate (which may be set at zero) there is no guarantee of any ReturnCoupon calculated at the Potential ReturnCoupon Rate For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) Coupon (if any) is payable only if the Currency-Linked Capital Protected Investment Deposit is held till the relevant Coupon Distribution Dates ReturnCoupon (if any) of Currency-Linked Capital Protected Investment Deposit depends on the market conditions at the time of the relevant determination Investment return on foreign exchange-linked products are dependent on the prices of inter-banksrsquo transactions on the linked exchange rate in the foreign exchange markets You should be fully aware of the risks relating to fluctuations in the linked exchange rates Factors affecting the performance of foreign exchange markets are numerous including but are not limited to changes in global and local investment sentiments interest rate policies fund flows political environment economic environment business and social conditions in the local marketplace If the market trend is different from the view taken by you there is an inherent risk that the total investment return that you may receive from Currency-Linked Capital Protected Investment Deposit will be less than the interest that would have been payable on a time deposit for the same tenor There is also an inherent risk that no ReturnCoupon calculated at the Potential ReturnCoupon Rate will be payable to you in respect of the Currency-Linked Capital Protected Investment Deposit Early WithdrawalTermination Risks Early withdrawaltermination by you is not allowed for Currency-Linked Capital Protected Investment Deposit and the capital of you will be invested in the Currency-Linked Capital Protected Investment Deposit for the entire investment period The Bank may at its absolute discretion refuse to give consent to any early withdrawaltermination request If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the Bank shall be entitled to deduct from the Principal of the relevant Currency-Linked Capital Protected Investment Deposit andor any other amount which may have accrued to you any expenses costs or damages to the Bank Damages may include any costs expenses liability or losses to the Bank as a result of the early withdrawaltermination by you Therefore there is no guarantee that you will be able to receive the Principal and the amount payable to you at early withdrawaltermination may be less
Page 36 of 67
than the Principal initially invested Besides If the Currency-Linked Capital Protected Investment Deposit is early withdrawnterminated you will no longer be entitled to any ReturnCoupon of the Currency-Linked Capital Protected Investment Deposit Risks associated with unsuccessful subscriptions of Currency-Linked Capital Protected Investment Deposit The Bank reserves the absolute right to approve any application and to decline any application received (whether in whole or any part thereof) before the Deposit Start Date In the event of non-acceptance a notification will be sent by the Bank and any subscription funds received will be returned to you after the Deposit Start Date or as soon as practicable Risks relating to Renminbi If Currency-Linked Capital Protected Investment Deposit involves CNY the relevant exchange rate(s) or level(s) of the relevant currency pair will be quoted in offshore Renminbi against alternate currency While both onshore Renminbi and offshore Renminbi are the same currency they are traded in different and separate markets operating under different regulations and independent liquidity pool Onshore Renminbi and offshore Renminbi are currently quoted in different markets with different exchange rates whereby their exchange rate movements may not be in the same direction or magnitude The offshore Renminbi exchange rate may deviate significantly from the onshore Renminbi exchange rate You should also note that Renminbi is currently not freely convertible the value of Renminbi against other foreign currencies fluctuates and will be affected by amongst other things the PRC governmentrsquos control (for example the PRC government regulates conversion between Renminbi and foreign currencies) which may adversely affect your investment return under the Currency-Linked Capital Protected Investment Deposit when you convert CNY into your home currency Renminbi is subject to foreign exchange control by the PRC government and thus investors investing in Currency-Linked Investment Deposit involving Renminbi are subject to the currency risk of Renminbi
What are the key features bull This product is designed for you whose investment objective is capital protection or to obtain potential cash income
bull This product is embedded with options You will buy option(s) on the Linked Currency Pair bull 100 principal protection if the Currency-Linked Capital Protected Investment Deposit is held to maturity bull You can choose the Deposit Currency including HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY and Linked Currency Pair
including AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD and USDCNH bull The Deposit Period of this product is 2 months or above bull You will have a chance to receive higher potential return depending on the movement of the exchange rate of the Underlying Currency Pair bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency bull The Bank pre-sets the Trigger Level and you choose a bullish or bearish view on different currencies bull On the Final Exchange Rate Determination Date the exchange rate of the Underlying Currency Pair is compared with the Trigger Level to
determine the Return at maturity bull Returns (if any) on this product is payable only upon maturity bull This product may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank Please refer to
the section Can you request for early termination before maturity below
Scenario analysis (All figures shown below including the exchange rate of AUDUSD and HKDCNH Potential Return Rate Minimum Return Rate Deposit Period etc are for illustration only You should not rely on the below figures as any indication or guarantee on the expected interest amount of the Currency-Linked Capital Protected Investment Deposit you intend to invest Please refer to the Bank for up-to-date figures) Example 1 ndash European Bullish (where the Deposit Currency is your home currency) Assuming HKD is your home currency and you take a bullish view on Australian Dollar expect the exchange rate of AUDUSD will rise from 09400 to 09800 or above after the 6-month period and set up an European Bullish Investment with HKD 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Bullish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency HKD Guaranteed Principal HKD 100000 Deposit Period 6 months Trigger Level AUDUSD 09800 Potential Return Rate 016 (around 032 pa) Minimum Return Rate 0015 (around 003 pa) Scenario I Best case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is at or above the Trigger Level (ie at or above 09800) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = HKD 100000 x (1+016) = HKD 10016000 (with a gain of 016 of investment amount) Scenario II Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is below the Trigger Level (ie below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity
Page 37 of 67
Total Return at Maturity = HKD 100000 x (1+0015) = HKD 10001500 (with a gain of 0015 of investment amount) Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount
For reference only if you set up a HKD 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500
Example 2 ndash European Bearish (where the Deposit Currency is your home currency) Assuming HKD is your home currency and you take a bearish view on Australian Dollar expect the exchange rate of AUDUSD will drop from 09400 to 09000 or below after the 6-month period and set up an European Bearish Investment with HKD 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Bearish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency HKD Guaranteed Principal HKD 100000 Deposit Period 6 months Trigger Level AUDUSD 09000 Potential Return Rate 016 (around 032 pa) Minimum Return Rate 0015 (around 003 pa) Scenario I Best case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is at or below the Trigger Level (ie at or below 09000) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = HKD 100000 x (1+016) = HKD 10016000 (with a gain of 016 of investment amount) Scenario II Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is above the Trigger Level (ie above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = HKD 100000 x (1+0015) = HKD 10001500 (with a gain of 0015 of investment amount) Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount
0
Final Exchange Rate of AUDUSD lt Trigger Level
Potential Return Minimum Return
Return Diagram Return at Maturity
09800 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Final Exchange Rate of AUDUSD ge Trigger Level
Trigger Level = 09800
Page 38 of 67
For reference only if you set up a HKD 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500 Example 3 ndash European Bullish (where the Deposit Currency is not home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency you take a bullish view on Australian Dollar expect the exchange rate of AUDUSD will rise from 09400 to 09800 or above after the 6-month period and set up an European Bullish Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Bullish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trigger Level AUDUSD 09800 Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH on deposit start date 08000 Scenario I Best case scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is at or above the Trigger Level (ie at or above 09800) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of-the road Gain scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is below the Trigger Level (ie below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Scenario III Off-setting scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is below the Trigger Level (ie below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD 000
0
Final Exchange Rate of AUDUSD
le Trigger Level
Potential Return Minimum Return
Return Diagram
Return at Maturity
09000 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Final Exchange Rate of AUDUSD gt Trigger Level
Trigger Level = 09000
Page 39 of 67
Scenario IV Loss and Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is below the Trigger Level (ie below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 101500 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951) In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount
For reference only if you set up a CNY 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received at maturity would be CNY 10030000 If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Please refer to the table below for details
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
viiii 9999990000 010 010 (12499990) (12499990)
103000 101500 12500000 10000008000
At the beginning of the investment On the Maturity Date of the investment
Exchange
Rate of
HKDCNH
Initial
Investment
Amount in
Renminbi
Initial
Investment
Amount in
HKD
Exchange Rate
of HKDCNH
Total Return in
Renminbi
Total Return in
HKD
Gain (loss) in HKD if converting the
Total Return from Renminbi to home
currency (HKD)
0
Final Exchange Rate of AUDUSD lt Trigger Level
Potential Return Minimum Return
Return Diagram
Return at Maturity
09800 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Final Exchange Rate of AUDUSD ge Trigger Level
Trigger Level = 09800
Page 40 of 67
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date
The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date
If HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
Example 4 ndash European Bearish (where the Deposit Currency is not home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency you take a bearish view on Australian Dollar expect the exchange rate of AUDUSD will drop from 09400 to 09000 or below after the 6-month period and set up an European Bearish Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Bearish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trigger Level AUDUSD 09000 Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH at the time of investment 08000 Scenario I Best case scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is at or below the Trigger Level (ie at or below 09000) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of-the road Gain scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is above the Trigger Level (ie above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Scenario III Off-setting scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is above the Trigger Level (ie above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Exchange Rate of HKDCNH on the Maturity Date
0
If receiving Minimum Return
Breakeven = 08120^
If receiving Potential Return
Breakeven = 08240
Exchange Rate on Deposit Start Date
Potential Return
Minimum Return
If CNH depreciates drastically relative to HKD
HKDCNH = 9999990000
Page 41 of 67
= HKD 12500000 Gain(Loss) in home currency HKD 000 Scenario IV Loss and Worst Case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is above the Trigger Level (ie above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951) In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount
For reference only if you set up a CNY 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received at maturity would be CNY 10030000 If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Please refer to the table below for details
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
viiii 9999990000 010 010 (12499990) (12499990)
103000 101500 12500000 10000008000
At the beginning of the investment On the Maturity Date of the investment
Exchange
Rate of
HKDCNH
Initial
Investment
Amount in
Renminbi
Initial
Investment
Amount in
HKD
Exchange Rate
of HKDCNH
Total Return in
Renminbi
Total Return in
HKD
Gain (loss) in HKD if converting the
Total Return from Renminbi to home
currency (HKD)
0
Final Exchange Rate of AUDUSD le Trigger Level
Potential Return Minimum Return
Return Diagram Return at Maturity
09000 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Final Exchange Rate of AUDUSD gt Trigger Level
Trigger Level = 09000
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Page 42 of 67
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date
The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date
If HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
How can you buy this product bull You can place a Currency-Linked Capital Protected Investment Deposit through our Hang Seng Bank Branches telephone or Hang Seng
Personal or Business e-Banking bull The Bank will provide a choice of different tranches which is subject to market conditions bull Enquiry Hotline Personal 2822 0228 Business 2198 8000
Fees and charges No handling fees or management fees will be charged for Currency-Linked Capital Protected Investment Deposit
Can you request for early termination before maturity No Currency-Linked Capital Protected Investment Deposit may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank which may be granted or withheld in the Bankrsquos sole and absolute discretion on such terms and conditions as the Bank may determine Please refer to ldquoEarly WithdrawalTermination Risksrdquo under ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section for details
Pre-Investment Cooling-off Period for retail customers Pre-Investment Cooling-off Period (PICOP) is applicable to each particular dealing of this product if you are one of the following retail customer types
(1) An elderly customer aged 65 or above unless you are not a first-time buyer of currency-linked structured investment products AND your asset concentration is below 20 AND you opt out from the PICOP arrangement or
(2) A non-elderly customer who is a first time buyer of currency-linked structured investment products AND your asset concentration is
20 or above
For the purpose of determining whether PICOP is applicable asset concentration refers to the percentage of total net worth (excluding real estate properties) to be invested in this product
Can the Bank adjust the terms or early terminate this product Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank in certain circumstances Please refer to Clause 7 of the Currency-Linked Capital Protected Investment Deposit Terms and Conditions for details
Offering documents for this product The following documents for this product (ldquoOffering Documentsrdquo) contain detailed information about the Bank and the terms of this product You should read and understand all of the Offering Documents before deciding whether to invest in this product
(i) Currency-Linked Capital Protected Investment Deposit Terms and Conditions (ii) The relevant Currency-Linked Capital Protected Investment Deposit Termsheet (iii) This Currency-Linked Capital Protected Investment Deposit Important Facts Statement
Product Risk Level The Product Risk Level for Currency-Linked Capital Protected Investment Deposit is Low
Low Low-to-Medium Medium Medium-to-High High
Product Risk Level is determined by a number of factors which include the volatility of the currency pair and the tenor of the product The Product Risk Level is subject to the Banks periodic review and may change from time to time Please refer to our branch or our Customer Service Hotline on 2822 0228 for the latest detail Declaration and Remarks bull This Important Facts Statement is not intended to provide or regard as legal or taxation advice or investment recommendations If you have
any concerns about this product or are uncertain about the suitability of this product for you you should obtain independent professional advice
bull The liabilities of the Bank in respect of the Currency-Linked Capital Protected Investment Deposit are limited exclusively to an office of the Bank in Hong Kong and instructions in respect of the Currency-Linked Capital Protected Investment Deposit may only be made to and acted upon by such office Any amount relating to the Currency-Linked Capital Protected Investment Deposit is payable exclusively by an office of the Bank in Hong Kong and in its stated currency The Terms and Conditions of the Currency-Linked Capital Protected Investment Deposit are governed by and shall be construed in accordance with the laws of Hong Kong
bull You may contact our staff if you have any feedback or complaint in relation to our services or call our hotline at 2822 0228 We will respond to you within a reasonable period of time normally not exceeding 30 days in general circumstances You may contact the Hong Kong Monetary Authority at 55th Floor Two International Finance Centre 8 Finance Street Central Hong Kong if you are not satisfied with our handling of your complaint
bull Hang Seng Bank Limited is a Registered Licensed Bank under the Banking Ordinance bull All Currency-Linked Capital Protected Investment Deposit cannot be cancelled after subscription bull The Bank will act as principal to complete the transaction and may obtain certain monetary benefits in connection with the offering of this
Currency-Linked Capital Protected Investment Deposit to the public The current remuneration system that the Bank adopts for sales staff is a measurement of the staffrsquos overall performance and not just based on sales amount
bull The Bank is NOT an independent intermediary because The Bank receives fees commissions or other monetary benefits from other parties in relation to the Bankrsquos distribution of Currency-Linked Capital Protected Investment Deposit to you For details you should refer to the Bankrsquos disclosure on monetary benefits which the Bank is required to deliver to you prior to or at the point of entering into any transaction in Currency-Linked Capital Protected Investment Deposit
bull Please note that this product is not available for persons who are located within the United States are nationals of the United States and are US Persons within the meaning of Regulation S under the Securities Act (which includes any person resident in the United States and any partnership or corporation organised or incorporated under the laws of the United States)
bull 請注意本行不提供本產品予身處美國的人士美國公民及美籍人士(定義見證券法 S 條例)(包括居住在美國之任何人士及根據美國法例組成
或註冊成立之任何合夥企業或公司)
Page 53 of 67
Currency-Linked Capital Protected Investment Deposit
European Range Investment
Dated May 2018
Important Facts Statement
This is a structured investment product which is NOT protected by the Deposit
Protection Scheme in Hong Kong
The contents of this statement have not been reviewed by any regulatory authority in Hong Kong You are advised to exercise caution before investing in this product This statement is a part of the offering documents for this product You should not invest in this product based on this statement alone If you are in any doubt you should obtain independent professional advice
If English is not your preferred language you may request for the Chinese version of this statement from our sales staff 倘若英
文並非閣下屬意的語言閣下可向本行的銷售人員索取本概要的中文版本
This is a structured investment product involving derivatives The investment decision is yours but you should not invest in this product 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
Quick facts Bank Hang Seng Bank Limited
Product Type Currency-Linked Investment Deposit ndash European Range Investment (ldquothis productrdquo)
Minimum Investment Amount Subscription through branches - HKD 100000 (or its equivalent) Subscription through e-banking - HKD 50000 (or its equivalent)
Tenor 2 months or above or any other tenor as agreed between you and the Bank
Available Principal Currency (or Deposit Currency) HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY
Available Underlying Currency Pair AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD USDCNH and any other currency pairs as agreed between you and the Bank
Return Rate Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Deposit periodpayment date Deposit period refers to tenor of the product and return is payable only on Maturity Date
Principal protection at maturity Yes
Callable by the Bank No
Early termination right by customer No please refer to ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section ndash Early WithdrawalTermination Risks for details
Embedded derivatives Yes you will buy option(s) over the Underlying Currency Pair
Maximum potential gain Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Maximum potential loss Please refer to Scenarios II and III of Example 1 and Scenarios IV and V of Example 2 in the ldquoScenario analysisrdquo section of this product type for details
What is this product and how does it work bull European Range investment is one type of our Currency-Linked Capital Protected Investment Deposit which consists of a time deposit
(in Deposit Currency) and buying option(s) on the Underlying Currency Pair of your choice bull You choose the Deposit Currency Underlying Currency Pair according to your need and the Bank will set the Trading Range bull On the Final Exchange Rate Determination Date the Bank will compare the exchange rate of the Underlying Currency Pair with the
Trading Range If the exchange rate of the Underlying Currency Pair moves along with your anticipation and is within the Trading Range you will receive Guaranteed Principal and Potential Return If the exchange rate of the Underlying Currency Pair moves against your anticipation and is outside the Trading Range you will receive Guaranteed Principal and Minimum Return (if any)
bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency Minimum return applies to certain investment tranches only you should refer to the relevant termsheet for details
Page 54 of 67
What are the key risks of Currency-Linked Capital Protected Investment Deposit Earnings on Currency-Linked Capital Protected Investment Deposit are limited to the Return Coupon (if any) payable You should consider the following risks and read all other information contained in the relevant Termsheet and Terms and Conditions before making any investment decision Not a time deposit Currency-Linked Capital Protected Investment Deposit 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 Capital Protected Investment Deposit is embedded with FX options Option transactions involve risks even when buying an option The optionrsquos value might become worthless if the market moves against your expectation Limited potential gain The maximum potential gain is limited to the pre-agreed ReturnCoupon calculated at the Potential ReturnCoupon Rate Not the same as buying the Underlying Currency Pair Investing in Currency-Linked Capital Protected Investment Deposit is not the same as buying the Underlying Currency Pair directly Market risk The investment return of Currency-Linked Capital Protected Investment Deposit is linked to the exchange rate of the Underlying Currency Pair Movements in exchange rates can be unpredictable sudden and drastic and affected by complex political and economic factors Liquidity risk Currency-Linked Capital Protected Investment Deposit is designed to be held till maturity The Bank may at its absolute discretion refuse to consent to any withdrawaltermination request before maturity Credit risk of the Bank Currency-Linked Capital Protected Investment Deposit is not secured by any collateral When you invest in Currency-Linked Capital Protected Investment Deposit you will be relying on the Bankrsquos creditworthiness If the Bank becomes insolvent or defaults on its obligations under a Currency-Linked Capital Protected Investment Deposit you can only claim as an unsecured creditor of the Bank In the worst case you could suffer a total loss of your investment amount Currency risk Exchange rate fluctuates and sometimes drastically If the Deposit Currency used for investment is not the home currency customarily used by you and thus conversion is required you should note that you may make a gain or suffer a loss due to exchange rate fluctuations When the deposit currency depreciates the loss from depreciation may set-off or even exceed the ReturnCoupon (if any) that you may receive from investing in the Currency-Linked Capital Protected Investment Deposit Risk of adjustments or early termination by the Bank Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank this might have a negative impact on the ReturnCoupon (if any) of the Currency-Linked Capital Protected Investment Deposit Concentration Risks You should avoid excessive investment (in terms of its proportion of the overall portfolio) in any single type of investment so as to avoid the investment portfolio being over-exposed to any particular investment risk ReturnCoupon of Currency-Linked Capital Protected Investment Deposit In order to provide capital protection the investment strategy adopted for Currency-Linked Capital Protected Investment Deposit may lead to a dilution of performance when compared to non-capital protected products investing in similar markets You should be prepared to take the risks of earning a lower ReturnCoupon (if any) on the capital invested and losing the interest that might otherwise earned on money invested by way of deposits For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) periodic Coupon may be payable to you For other types of Currency-Linked Capital Protected Investment Deposit no periodic ReturnCoupon will be payable to you prior to maturity Principal protection at maturity only You should understand that the Principal of the Currency-Linked Capital Protected Investment Deposit is capital-protected only when it is held to maturity If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the amount received by you upon early withdrawaltermination may be less than the amount initially invested by you Market Risks associated with Potential ReturnCoupon Apart from the ReturnCoupon calculated at the Minimum ReturnCoupon Rate (which may be set at zero) there is no guarantee of any ReturnCoupon calculated at the Potential ReturnCoupon Rate For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) Coupon (if any) is payable only if the Currency-Linked Capital Protected Investment Deposit is held till the relevant Coupon Distribution Dates ReturnCoupon (if any) of Currency-Linked Capital Protected Investment Deposit depends on the market conditions at the time of the relevant determination Investment return on foreign exchange-linked products are dependent on the prices of inter-banksrsquo transactions on the linked exchange rate in the foreign exchange markets You should be fully aware of the risks relating to fluctuations in the linked exchange rates Factors affecting the performance of foreign exchange markets are numerous including but are not limited to changes in global and local investment sentiments interest rate policies fund flows political environment economic environment business and social conditions in the local marketplace If the market trend is different from the view taken by you there is an inherent risk that the total investment return that you may receive from Currency-Linked Capital Protected Investment Deposit will be less than the interest that would have been payable on a time deposit for the same tenor There is also an inherent risk that no ReturnCoupon calculated at the Potential ReturnCoupon Rate will be payable to you in respect of the Currency-Linked Capital Protected Investment Deposit
Page 55 of 67
Early WithdrawalTermination Risks Early withdrawaltermination by you is not allowed for Currency-Linked Capital Protected Investment Deposit and the capital of you will be invested in the Currency-Linked Capital Protected Investment Deposit for the entire investment period The Bank may at its absolute discretion refuse to give consent to any early withdrawaltermination request If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the Bank shall be entitled to deduct from the Principal of the relevant Currency-Linked Capital Protected Investment Deposit andor any other amount which may have accrued to you any expenses costs or damages to the Bank Damages may include any costs expenses liability or losses to the Bank as a result of the early withdrawaltermination by you Therefore there is no guarantee that you will be able to receive the Principal and the amount payable to you at early withdrawaltermination may be less than the Principal initially invested Besides If the Currency-Linked Capital Protected Investment Deposit is early withdrawnterminated you will no longer be entitled to any ReturnCoupon of the Currency-Linked Capital Protected Investment Deposit Risks associated with unsuccessful subscriptions of Currency-Linked Capital Protected Investment Deposit The Bank reserves the absolute right to approve any application and to decline any application received (whether in whole or any part thereof) before the Deposit Start Date In the event of non-acceptance a notification will be sent by the Bank and any subscription funds received will be returned to you after the Deposit Start Date or as soon as practicable Risks relating to Renminbi If Currency-Linked Capital Protected Investment Deposit involves CNY the relevant exchange rate(s) or level(s) of the relevant currency pair will be quoted in offshore Renminbi against alternate currency While both onshore Renminbi and offshore Renminbi are the same currency they are traded in different and separate markets operating under different regulations and independent liquidity pool Onshore Renminbi and offshore Renminbi are currently quoted in different markets with different exchange rates whereby their exchange rate movements may not be in the same direction or magnitude The offshore Renminbi exchange rate may deviate significantly from the onshore Renminbi exchange rate You should also note that Renminbi is currently not freely convertible the value of Renminbi against other foreign currencies fluctuates and will be affected by amongst other things the PRC governmentrsquos control (for example the PRC government regulates conversion between Renminbi and foreign currencies) which may adversely affect your investment return under the Currency-Linked Capital Protected Investment Deposit when you convert CNY into your home currency Renminbi is subject to foreign exchange control by the PRC government and thus investors investing in Currency-Linked Investment Deposit involving Renminbi are subject to the currency risk of Renminbi
What are the key features bull This product is designed for you whose investment objective is capital protection or to obtain potential cash income bull This product is embedded with options You will buy option(s) on the Linked Currency Pair bull 100 principal protection if this product is held to maturity bull You can choose the Deposit Currency including HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY and Linked Currency
Pair including AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD and USDCNH bull The Deposit Period of this product is 2 months or above
bull You will have a chance to receive higher potential return depending on the movement of the exchange rate of the Underlying Currency
Pair bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency bull The Bank pre-sets the Trading Range bull On the Final Exchange Rate Determination Date the exchange rate of the Underlying Currency Pair is compared with the Trading Range
to determine the Return at maturity bull Returns (if any) on this product is payable only upon maturity bull This product may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank Please refer to
the section Can you request for early termination before maturity below
Scenario analysis (All figures shown below including the exchange rate of AUDUSD and HKDCNH Potential Return Rate Minimum Return Rate Deposit Period etc are for illustration only You should not rely on the figures as any indication or guarantee on the expected interest amount of the Currency-Linked Capital Protected Investment Deposit you intend to invest Please refer to the Bank for up-to-date figures) Example 1 ndash European Range (where the Deposit Currency is your home currency) Assuming HKD is your home currency and you anticipate the Exchange Rate of AUDUSD will be above 10250 but below 10750 after 6 months and set up an European Range Investment with HKD 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Range (AUDUSD) Principal Guarantee 100 Deposit Currency HKD Guaranteed Principal HKD 100000 Deposit Period 6 months Trading Range AUDUSD 10250 (ldquoLower Barrierrdquo) to 10750 (ldquoUpper Barrierrdquo) (excluding both barriers) Potential Return Rate 016 (around 032 pa)
Page 56 of 67
Minimum Return Rate 0015 (around 003 pa) Scenario I Best case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is within the Trading Range (ie above 10250 but below 10750) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = HKD 100000 x (1+016) = HKD 10016000 (with a gain of 016 of investment amount) Scenario II Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 10250 or atabove 10750) you will receive Guaranteed Principal and Minimum Return at maturity Total Return at Maturity = HKD 100000 x (1+0015) = HKD 10001500 (with a gain of 0015 of investment amount) Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a HKD 100000 6 month Time Deposit on 30 April 2015 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500 Example 2 ndash European Range (where the Deposit Currency is not your home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency and you anticipate the Exchange Rate of AUDUSD will be above 10250 but below 10750 after 6 months and set up an European Range Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Range (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trading Range AUDUSD 10250 (ldquoLower Barrierrdquo) to 10750 (ldquoUpper Barrierrdquo) (excluding both barriers) Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH (on deposit start date) 08000 Scenario I Best case scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is within the Trading Range (ie above 10250 but below 10750) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of-the road Gain scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 10250 or atabove 10750) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount)
0
Final Exchange Rate of
AUDUSD le10250
Potential Return Minimum Return
Return Diagram
Return at Maturity
10250 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Minimum Return
Final Exchange Rate of
AUDUSD ge 10750
10750
10250lt Final Exchange Rate of AUDUSD lt10750
Page 57 of 67
Scenario III Off-setting scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 10250 or atabove 10750) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD 000 Scenario IV Loss and Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 10250 or atabove 10750) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 101500 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951) In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a CNY 100000 6 month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received at maturity would be CNY 10030000 If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to
0
Final Exchange Rate of
AUDUSD le10250
Potential Return Minimum Return
Return Diagram
Return at Maturity
10250 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Minimum Return
Final Exchange Rate of
AUDUSD ge 10750
10750
10250lt Final Exchange Rate of AUDUSD lt10750
Page 58 of 67
depreciation of Renminbi Please refer to the table below for details
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date
The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date
If HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
How can you buy this product
bull You can place a Currency-Linked Capital Protected Investment Deposit through our Hang Seng Bank Branches telephone or Hang
Seng Personal or Business e-Banking
bull The Bank will provide a choice of different tranches which is subject to market conditions
bull Enquiry Hotline Personal 2822 0228
Business 2198 8000
Fees and charges No handling fees or management fees will be charged for Currency-Linked Capital Protected Investment Deposit
Can you request for early termination before maturity No Currency-Linked Capital Protected Investment Deposit may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank which may be granted or withheld in the Bankrsquos sole and absolute discretion on such terms and conditions as the Bank may determine Please refer to ldquoEarly WithdrawalTermination Risksrdquo under ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section for details
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
ix 9999990000 010 010 (12499990) (12499990)
At the beginning of the investment On the Maturity Date of the investment
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Potential Return
Exchange Rate of HKDCNH on the Maturity Date
0
If receiving Minimum Return
Breakeven = 08120^
If receiving Potential Return
Breakeven = 08240
If CNH depreciates drastically relative to HKD
HKDCNH = 9999990000
Exchange Rate on Deposit Start Date
Page 59 of 67
Pre-Investment Cooling-off Period for retail customers Pre-Investment Cooling-off Period (PICOP) is applicable to each particular dealing of this product if you are one of the following retail customer types
(1) An elderly customer aged 65 or above unless you are not a first-time buyer of currency-linked structured investment products AND your asset concentration is below 20 AND you opt out from the PICOP arrangement or
(2) A non-elderly customer who is a first time buyer of currency-linked structured investment products AND your asset concentration
is 20 or above
For the purpose of determining whether PICOP is applicable asset concentration refers to the percentage of total net worth (excluding real estate properties) to be invested in this product
Can the Bank adjust the terms or early terminate this product Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank in certain circumstances Please refer to Clause 7 of the Currency-Linked Capital Protected Investment Deposit Terms and Conditions for details
Offering documents for this product The following documents for this product (ldquoOffering Documentsrdquo) contain detailed information about the Bank and the terms of this product You should read and understand all of the Offering Documents before deciding whether to invest in this product
(i) Currency-Linked Capital Protected Investment Deposit Terms and Conditions (ii) The relevant Currency-Linked Capital Protected Investment Deposit Termsheet (iii) This Currency-Linked Capital Protected Investment Deposit Important Facts Statement
Other information Product Risk Level The Product Risk Level for Currency-Linked Capital Protected Investment Deposit is Low
Low Low-to-Medium Medium Medium-to-High High
Product Risk Level is determined by a number of factors which include the volatility of the currency pair and the tenor of the product The Product Risk Level is subject to the Banks periodic review and may change from time to time Please refer to our branch or our Customer Service Hotline on 2822 0228 for the latest detail Declaration and Remarks bull This Important Facts Statement is not intended to provide or regard as legal or taxation advice or investment recommendations If you
have any concerns about this product or are uncertain about the suitability of this product for you you should obtain independent professional advice
bull The liabilities of the Bank in respect of the Currency-Linked Capital Protected Investment Deposit are limited exclusively to an office of the Bank in Hong Kong and instructions in respect of the Currency-Linked Capital Protected Investment Deposit may only be made to and acted upon by such office Any amount relating to the Currency-Linked Capital Protected Investment Deposit is payable exclusively by an office of the Bank in Hong Kong and in its stated currency The Terms and Conditions of the Currency-Linked Capital Protected Investment Deposit are governed by and shall be construed in accordance with the laws of Hong Kong
bull You may contact our staff if you have any feedback or complaint in relation to our services or call our hotline at 2822 0228 We will respond to you within a reasonable period of time normally not exceeding 30 days in general circumstances You may contact the Hong Kong Monetary Authority at 55th Floor Two International Finance Centre 8 Finance Street Central Hong Kong if you are not satisfied with our handling of your complaint
bull Hang Seng Bank Limited is a Registered Licensed Bank under the Banking Ordinance bull All Currency-Linked Capital Protected Investment Deposit cannot be cancelled after subscription bull The Bank will act as principal to complete the transaction and may obtain certain monetary benefits in connection with the offering of
this Currency-Linked Capital Protected Investment Deposit to the public The current remuneration system that the Bank adopts for sales staff is a measurement of the staffrsquos overall performance and not just based on sales amount
bull The Bank is NOT an independent intermediary because The Bank receives fees commissions or other monetary benefits from other parties in relation to the Bankrsquos distribution of Currency-Linked Capital Protected Investment Deposit to you For details you should refer to the Bankrsquos disclosure on monetary benefits which the Bank is required to deliver to you prior to or at the point of entering into any transaction in Currency-Linked Capital Protected Investment Deposit
bull Please note that this product is not available for persons who are located within the United States are nationals of the United States and are US Persons within the meaning of Regulation S under the Securities Act (which includes any person resident in the United States and any partnership or corporation organised or incorporated under the laws of the United States)
bull 請注意本行不提供本產品予身處美國的人士美國公民及美籍人士(定義見證券法 S 條例)(包括居住在美國之任何人士及根據美國法例組
成或註冊成立之任何合夥企業或公司)
Page 3 of 67
received will be returned to you after the Deposit Start Date or as soon as practicable Risks relating to Renminbi If Currency-Linked Capital Protected Investment Deposit involves CNY the relevant exchange rate(s) or level(s) of the relevant currency pair will be quoted in offshore Renminbi against alternate currency While both onshore Renminbi and offshore Renminbi are the same currency they are traded in different and separate markets operating under different regulations and independent liquidity pool Onshore Renminbi and offshore Renminbi are currently quoted in different markets with different exchange rates whereby their exchange rate movements may not be in the same direction or magnitude The offshore Renminbi exchange rate may deviate significantly from the onshore Renminbi exchange rate You should also note that Renminbi is currently not freely convertible the value of Renminbi against other foreign currencies fluctuates and will be affected by amongst other things the PRC governmentrsquos control (for example the PRC government regulates conversion between Renminbi and foreign currencies) which may adversely affect your investment return under the Currency-Linked Capital Protected Investment Deposit when you convert CNY into your home currency Renminbi is subject to foreign exchange control by the PRC government and thus investors investing in Currency-Linked Investment Deposit involving Renminbi are subject to the currency risk of Renminbi
What are the key features bull This product is designed for you whose investment objective is capital protection or to obtain potential cash income bull This product is embedded with options You will buy option(s) on the Linked Currency Pair bull 100 principal protection if this product is held to maturity bull You can choose the Deposit Currency including HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY and Linked Currency
Pair including AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD and USDCNH bull The Deposit Period of this product is 2 months or above bull You will have a chance to receive higher potential return depending on the movement of the exchange rate of the Underlying Currency
Pair during the Observation Period bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency bull The Bank pre-sets the Trigger Level and Observation Period and you choose a bullish or bearish view on different currencies bull During the whole Observation Period the exchange rate of the Underlying Currency Pair is compared with the Trigger Level to determine
the Return at maturity bull Returns (if any) on this product is payable only upon maturity bull This product may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank Please refer
to the section Can you request for early termination before maturity below
Scenario analysis (All figures shown below including the exchange rate of AUDUSD and HKDCNH Potential Return Rate Minimum Return Rate Deposit Period etc are for illustration only You should not rely on the figures below as any indication or guarantee on the expected interest amount of the Currency-Linked Capital Protected Investment Deposit you intend to invest Please refer to the Bank for up-to-date figures) Example 1 ndash American Bullish (where the Deposit Currency is your home currency) Assuming HKD is your home currency and you take a bullish view on Australian Dollar expect the exchange rate of AUDUSD will rise from 09400 to 09800 or above during the 6-month period and set up an American Bullish Investment with HKD 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment American Bullish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency HKD Guaranteed Principal HKD 100000 Deposit Period 6 months Trigger Level AUDUSD 09800 Potential Return Rate 016 (around 032 pa) Minimum Return Rate 0015 (around 003 pa) Scenario I Best case scenario At any time during the Observation Period the Exchange Rate of AUDUSD is at or above the Trigger Level (ie at or above 09800) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = HKD 100000 x (1+016) = HKD 10016000 (with a gain of 016 of investment amount) Scenario II Worst case scenario At any time during the Observation Period the Exchange Rate of AUDUSD stays below the Trigger Level (ie stays below 09800) you will receive Guaranteed Principal and Minimum Return at maturity Total Return at Maturity = HKD 100000 x (1+0015)
Page 4 of 67
= HKD 10001500 (with a gain of 0015 of investment amount)
Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a HKD 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500 Example 2 ndash American Bearish (where the Deposit Currency is your home currency) Assuming HKD is your home currency and you take a bearish view on Australian Dollar expect the exchange rate of AUDUSD will drop from 09400 to 09000 or below during the 6-month period and set up an American Bearish Investment with HKD 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment American Bearish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency HKD Guaranteed Principal HKD 100000 Deposit Period 6 months Trigger Level AUDUSD 09000 Potential Return Rate 016 (around 032 pa) Minimum Return Rate 0015 (around 003 pa) Scenario I Best case scenario At any time during the Observation Period the Exchange Rate of AUDUSD is at or below the Trigger Level (ie at or below 09000) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = HKD 100000 x (1+016) = HKD 10016000 (with a gain of 016 of investment amount) Scenario II Worst case scenario At any time during the Observation Period the Exchange Rate of AUDUSD stays above the Trigger Level (ie stays above 09000) you will receive Guaranteed Principal and Minimum Return at maturity Total Return at Maturity = HKD 100000 x (1+0015) = HKD 10001500
(with a gain of 0015 of investment amount) Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount
09800 0
Exchange Rate of AUDUSD lt Trigger Level
Potential Return Minimum Return
Return Diagram Return at Maturity
Exchange Rate of AUDUSD ge Trigger Level
Exchange Rate of AUDUSD during the Observation Period
Trigger Level = 09800
09000 0
Exchange Rate of AUDUSD le
Trigger Level
Potential Return Minimum Return
Return Diagram
Return at Maturity
Exchange Rate of AUDUSD gt Trigger Level
Exchange Rate of AUDUSD during the Observation Period
Trigger Level = 09000
Page 5 of 67
For reference only if you set up a HKD 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500 Example 3 ndash American Bullish (where the Deposit Currency is not your home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency and you take a bullish view on Australian Dollar expect the exchange rate of AUDUSD will rise from 09400 to 09800 or above during the 6-month period and set up an American Bullish Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair
Type of investment American Bullish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trigger Level AUDUSD 09800 Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH (on deposit start date) 08000 Scenario I Best case scenario At any time during the Observation Period (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is at or above the Trigger Level (ie at or above 09800) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of-the-road Gain scenario At any time during the Observation Period (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD stays below the Trigger Level (ie stays below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000
(with a gain of 150 of investment amount)
Scenario III Off-setting scenario At any time during the Observation Period the Exchange Rate of AUDUSD stays below the Trigger Level (ie stays below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD 000 Scenario IV Loss and Worst case scenario At any time during the Observation Period the Exchange Rate of AUDUSD stays below the Trigger Level (ie stays below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951)
Page 6 of 67
In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a CNY 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received at maturity would be CNY 10030000 If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Please refer to the table below for details
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home
currency (HKD) in the event that you receive Minimum Return on the Maturity Date The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home
currency (HKD) in the event that you receive Potential Return on the Maturity Date If HKDCNH rise drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange
rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
ix 9999990000 010 010 (12499990) (12499990)
At the beginning of the investment On the Maturity Date of the investment
Exchange
Rate of
HKDCNH
Initial
Investment
Amount in
Renminbi
Initial
Investment
Amount in
HKD
Exchange Rate
of HKDCNH
Total Return in
Renminbi
Total Return in
HKD
Gain (loss) in HKD if converting the
Total Return from Renminbi to home
currency (HKD)
103000 101500 12500000 10000008000
09800 0
Exchange Rate of AUDUSD lt Trigger Level
Potential Return Minimum Return
Return Diagram Return at Maturity
Exchange Rate of AUDUSD ge Trigger Level
Exchange Rate of AUDUSD during the Observation Period
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Potential Return
Exchange Rate of HKDCNH on the Maturity Date
If receiving Minimum Return
Breakeven = 08120^
If receiving Potential Return
Breakeven = 08240
Exchange Rate on Deposit Start Date
0
If CNH depreciates drastically relative to HKD
HKDCNH = 9999990000
Page 7 of 67
Renminbi to home currency (HKD) on the Maturity Date Example 4 ndash American Bearish (where the Deposit Currency is not your home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency and you take a bearish view on Australian Dollar expect the exchange rate of AUDUSD will drop from 09400 to 09000 or below during the 6-month period and set up an American Bearish Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair
Type of investment American Bearish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trigger Level AUDUSD 09000 Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH (on deposit start date) 08000 Scenario I Best case scenario At any time during the Observation Period (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is at or below the Trigger Level (ie at or below 09000) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of-the-road Gain scenario At any time during the Observation Period (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD stays above the Trigger Level (ie stays above 09000) you will receive Guaranteed Principal and Minimum Return at maturity Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000
(with a gain of 150 of investment amount) Scenario III Off-setting scenario At any time during the Observation Period the Exchange Rate of AUDUSD stays above the Trigger Level (ie stays above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD 000 Scenario IV Loss and Worst case scenario At any time during the Observation Period the Exchange Rate of AUDUSD stays above the Trigger Level (ie stays above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951)
Page 8 of 67
In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a CNY 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received at maturity would be CNY 10030000 If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Please refer to the table below for details
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home
currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home
currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date If HKDCNH rise drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange
rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
ix 9999990000 010 010 (12499990) (12499990)
At the beginning of the investment On the Maturity Date of the investment
Exchange
Rate of
HKDCNH
Initial
Investment
Amount in
Renminbi
Initial
Investment
Amount in
HKD
Exchange Rate
of HKDCNH
Total Return in
Renminbi
Total Return in
HKD
Gain (loss) in HKD if converting the
Total Return from Renminbi to home
currency (HKD)
103000 101500 12500000 10000008000
09000 0
Exchange Rate of AUDUSD le
Trigger Level
Potential Return Minimum Return
Return Diagram
Return at Maturity
Exchange Rate of AUDUSD gt Trigger Level
Exchange Rate of AUDUSD during the Observation Period
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Potential Return
Exchange Rate of HKDCNH on the Maturity Date
0
If receiving Minimum Return
Breakeven = 08120^
If receiving Potential Return
Breakeven = 08240
Exchange Rate on Deposit Start Date
If CNH depreciates drastically relatively to HKD HKDCNH = 9999990000
Page 9 of 67
How can you buy this product bull You can place a Currency-Linked Capital Protected Investment Deposit through our Hang Seng Bank Branches telephone or Hang
Seng Personal or Business e-Banking bull The Bank will provide a choice of different tranches which is subject to market conditions bull Enquiry Hotline Personal 2822 0228 Business 2198 8000
Fees and charges No handling fees or management fees will be charged for Currency-Linked Capital Protected Investment Deposit
Can you request for early termination before maturity No Currency-Linked Capital Protected Investment Deposit may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank which may be granted or withheld in the Bankrsquos sole and absolute discretion on such terms and conditions as the Bank may determine Please refer to ldquoEarly WithdrawalTermination Risksrdquo under ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section for details
Pre-Investment Cooling-off Period for retail customers Pre-Investment Cooling-off Period (PICOP) is applicable to each particular dealing of this product if you are one of the following retail customer types
(1) An elderly customer aged 65 or above unless you are not a first-time buyer of currency-linked structured investment products AND your asset concentration is below 20 AND you opt out from the PICOP arrangement or
(2) A non-elderly customer who is a first time buyer of currency-linked structured investment products AND your asset concentration
is 20 or above
For the purpose of determining whether PICOP is applicable asset concentration refers to the percentage of total net worth (excluding real estate properties) to be invested in this product
Can the Bank adjust the terms or early terminate this product Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank in certain circumstances Please refer to Clause 7 of the Currency-Linked Capital Protected Investment Deposit Terms and Conditions for details
Offering documents for this product The following documents for this product (ldquoOffering Documentsrdquo) contain detailed information about the Bank and the terms of this product You should read and understand all of the Offering Documents before deciding whether to invest in this product
(i) Currency-Linked Capital Protected Investment Deposit Terms and Conditions (ii) The relevant Currency-Linked Capital Protected Investment Deposit Termsheet (iii) This Currency-Linked Capital Protected Investment Deposit Important Facts Statement
Other information Product Risk Level The Product Risk Level for Currency-Linked Capital Protected Investment Deposit is Low
Low Low-to-Medium Medium Medium-to-High High
Product Risk Level is determined by a number of factors which include the volatility of the currency pair and the tenor of the product The Product Risk Level is subject to the Banks periodic review and may change from time to time Please refer to our branch or our Customer Service Hotline on 2822 0228 for the latest detail
Declaration and Remarks bull This Important Facts Statement is not intended to provide or regard as legal or taxation advice or investment recommendations If you
have any concerns about this product or are uncertain about the suitability of this product for you you should obtain independent professional advice
bull The liabilities of the Bank in respect of the Currency-Linked Capital Protected Investment Deposit are limited exclusively to an office of the Bank in Hong Kong and instructions in respect of the Currency-Linked Capital Protected Investment Deposit may only be made to and acted upon by such office Any amount relating to the Currency-Linked Capital Protected Investment Deposit is payable exclusively by an office of the Bank in Hong Kong and in its stated currency The Terms and Conditions of the Currency-Linked Capital Protected Investment Deposit are governed by and shall be construed in accordance with the laws of Hong Kong
bull You may contact our staff if you have any feedback or complaint in relation to our services or call our hotline at 2822 0228 We will respond to you within a reasonable period of time normally not exceeding 30 days in general circumstances You may contact the Hong Kong Monetary Authority at 55th Floor Two International Finance Centre 8 Finance Street Central Hong Kong if you are not satisfied with our handling of your complaint
bull Hang Seng Bank Limited is a Registered Licensed Bank under the Banking Ordinance bull All Currency-Linked Capital Protected Investment Deposit cannot be cancelled after subscription bull The Bank will act as principal to complete the transaction and may obtain certain monetary benefits in connection with the offering of
this Currency-Linked Capital Protected Investment Deposit to the public The current remuneration system that the Bank adopts for
Page 10 of 67
sales staff is a measurement of the staffrsquos overall performance and not just based on sales amount bull The Bank is NOT an independent intermediary because
The Bank receives fees commissions or other monetary benefits from other parties in relation to the Bankrsquos distribution of Currency-Linked Capital Protected Investment Deposit to you For details you should refer to the Bankrsquos disclosure on monetary benefits which the Bank is required to deliver to you prior to or at the point of entering into any transaction in Currency-Linked Capital Protected Investment Deposit
bull Please note that this product is not available for persons who are located within the United States are nationals of the United States and are US Persons within the meaning of Regulation S under the Securities Act (which includes any person resident in the United States and any partnership or corporation organised or incorporated under the laws of the United States)
bull 請注意本行不提供本產品予身處美國的人士美國公民及美籍人士(定義見證券法 S 條例)(包括居住在美國之任何人士及根據美國法例組成
或註冊成立之任何合夥企業或公司)
Page 20 of 67
Currency-Linked Capital Protected Investment Deposit
American Range Investment
Dated May 2018
Important Facts Statement
This is a structured investment product which is NOT protected by the Deposit Protection Scheme in Hong Kong
The contents of this statement have not been reviewed by any regulatory authority in Hong Kong You are advised to exercise caution before investing in this product This statement is a part of the offering documents for this product You should not invest in this product based on this statement alone If you are in any doubt you should obtain independent professional advice
If English is not your preferred language you may request for the Chinese version of this statement from our sales staff 倘若英
文並非閣下屬意的語言閣下可向本行的銷售人員索取本概要的中文版本
This is a structured investment product involving derivatives The investment decision is yours but you should not invest in this product 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
Quick facts Bank Hang Seng Bank Limited
Product Type Currency-Linked Investment Deposit ndash American Range Investment (ldquothis productrdquo)
Minimum Investment Amount Subscription through branches - HKD 100000 (or its equivalent) Subscription through e-banking - HKD 50000 (or its equivalent)
Tenor 2 months or above or any other tenor as agreed between you and the Bank
Available Principal Currency (or Deposit Currency) HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY
Available Underlying Currency Pair AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD USDCNH and any other currency pairs as agreed between you and the Bank
Return Rate Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Deposit periodpayment date Deposit period refers to tenor of the product and return is payable only on Maturity Date
Principal protection at maturity Yes
Callable by the Bank No
Early termination right by customer No please refer to ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section ndash Early WithdrawalTermination Risks for details
Embedded derivatives Yes you will buy option(s) over the Underlying Currency Pair
Maximum potential gain Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Maximum potential loss Please refer to Scenario II amp III of Example 1 and Scenarios IV and V of Example 2 in the ldquoScenario analysisrdquo section of this product type for details
What is this product and how does it work bull American Range investment is one type of our Currency-Linked Capital Protected Investment Deposit which consists of a time deposit
(in Deposit currency) and buying option(s) on the Underlying Currency Pair of your choice bull You choose the Deposit Currency Underlying Currency Pair and the Observation Period according to your need and the Bank will set the
Trading Range bull During the whole Observation Period the Bank will compare the exchange rate of the Underlying Currency Pair with the Trading Range
If the exchange rate of the Underlying Currency Pair moves along with your anticipation and stays within the Trading Range during the whole Observation Period you will receive Guaranteed Principal and Potential Return If the exchange rate of the Underlying Currency Pair moves against your anticipation and at anytime during the Observation Period the exchange rate of the Underlying Currency Pair is outside the Trading Range you will receive Guaranteed Principal and Minimum Return (if any)
bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency Minimum return applies to certain investment tranches only you should refer to the relevant termsheet for details
Page 21 of 67
What are the key risks of Currency-Linked Capital Protected Investment Deposit Earnings on Currency-Linked Capital Protected Investment Deposit are limited to the Return Coupon (if any) payable You should consider the following risks and read all other information contained in the relevant Termsheet and Terms and Conditions before making any investment decision Not a time deposit Currency-Linked Capital Protected Investment Deposit 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 Capital Protected Investment Deposit is embedded with FX options Option transactions involve risks even when buying an option The optionrsquos value might become worthless if the market moves against your expectation Limited potential gain The maximum potential gain is limited to the pre-agreed ReturnCoupon calculated at the Potential ReturnCoupon Rate Not the same as buying the Underlying Currency Pair Investing in Currency-Linked Capital Protected Investment Deposit is not the same as buying the Underlying Currency Pair directly Market risk The investment return of Currency-Linked Capital Protected Investment Deposit is linked to the exchange rate of the Underlying Currency Pair Movements in exchange rates can be unpredictable sudden and drastic and affected by complex political and economic factors Liquidity risk Currency-Linked Capital Protected Investment Deposit is designed to be held till maturity The Bank may at its absolute discretion refuse to consent to any withdrawaltermination request before maturity Credit risk of the Bank Currency-Linked Capital Protected Investment Deposit is not secured by any collateral When you invest in Currency-Linked Capital Protected Investment Deposit you will be relying on the Bankrsquos creditworthiness If the Bank becomes insolvent or defaults on its obligations under a Currency-Linked Capital Protected Investment Deposit you can only claim as an unsecured creditor of the Bank In the worst case you could suffer a total loss of your investment amount Currency risk Exchange rate fluctuates and sometimes drastically If the Deposit Currency used for investment is not the home currency customarily used by you and thus conversion is required you should note that you may make a gain or suffer a loss due to exchange rate fluctuations When the deposit currency depreciates the loss from depreciation may set-off or even exceed the ReturnCoupon (if any) that you may receive from investing in the Currency-Linked Capital Protected Investment Deposit Risk of adjustments or early termination by the Bank Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank this might have a negative impact on the ReturnCoupon (if any) of the Currency-Linked Capital Protected Investment Deposit Concentration Risks You should avoid excessive investment (in terms of its proportion of the overall portfolio) in any single type of investment so as to avoid the investment portfolio being over-exposed to any particular investment risk ReturnCoupon of Currency-Linked Capital Protected Investment Deposit In order to provide capital protection the investment strategy adopted for Currency-Linked Capital Protected Investment Deposit may lead to a dilution of performance when compared to non-capital protected products investing in similar markets You should be prepared to take the risks of earning a lower ReturnCoupon (if any) on the capital invested and losing the interest that might otherwise earned on money invested by way of deposits For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) periodic Coupon may be payable to you For other types of Currency-Linked Capital Protected Investment Deposit no periodic ReturnCoupon will be payable to you prior to maturity Principal protection at maturity only You should understand that the Principal of the Currency-Linked Capital Protected Investment Deposit is capital-protected only when it is held to maturity If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the amount received by you upon early withdrawaltermination may be less than the amount initially invested by you Market Risks associated with Potential ReturnCoupon Apart from the ReturnCoupon calculated at the Minimum ReturnCoupon Rate (which may be set at zero) there is no guarantee of any ReturnCoupon calculated at the Potential ReturnCoupon Rate For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) Coupon (if any) is payable only if the Currency-Linked Capital Protected Investment Deposit is held till the relevant Coupon Distribution Dates ReturnCoupon (if any) of Currency-Linked Capital Protected Investment Deposit depends on the market conditions at the time of the relevant determination Investment return on foreign exchange-linked products are dependent on the prices of inter-banksrsquo transactions on the linked exchange rate in the foreign exchange markets You should be fully aware of the risks relating to fluctuations in the linked exchange rates Factors affecting the performance of foreign exchange markets are numerous including but are not limited to changes in global and local investment sentiments interest rate policies fund flows political environment economic environment business and social conditions in the local marketplace If the market trend is different from the view taken by you there is an inherent risk that the total investment return that you may receive from Currency-Linked Capital Protected Investment Deposit will be less than the interest that would have been payable on a time deposit for the same tenor There is also an inherent risk that no ReturnCoupon calculated at the Potential ReturnCoupon Rate will be payable to you in respect of the Currency-Linked Capital Protected Investment Deposit
Page 22 of 67
Early WithdrawalTermination Risks Early withdrawaltermination by you is not allowed for Currency-Linked Capital Protected Investment Deposit and the capital of you will be invested in the Currency-Linked Capital Protected Investment Deposit for the entire investment period The Bank may at its absolute discretion refuse to give consent to any early withdrawaltermination request If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the Bank shall be entitled to deduct from the Principal of the relevant Currency-Linked Capital Protected Investment Deposit andor any other amount which may have accrued to you any expenses costs or damages to the Bank Damages may include any costs expenses liability or losses to the Bank as a result of the early withdrawaltermination by you Therefore there is no guarantee that you will be able to receive the Principal and the amount payable to you at early withdrawaltermination may be less than the Principal initially invested Besides If the Currency-Linked Capital Protected Investment Deposit is early withdrawnterminated you will no longer be entitled to any ReturnCoupon of the Currency-Linked Capital Protected Investment Deposit Risks associated with unsuccessful subscriptions of Currency-Linked Capital Protected Investment Deposit The Bank reserves the absolute right to approve any application and to decline any application received (whether in whole or any part thereof) before the Deposit Start Date In the event of non-acceptance a notification will be sent by the Bank and any subscription funds received will be returned to you after the Deposit Start Date or as soon as practicable Risks relating to Renminbi If Currency-Linked Capital Protected Investment Deposit involves CNY the relevant exchange rate(s) or level(s) of the relevant currency pair will be quoted in offshore Renminbi against alternate currency While both onshore Renminbi and offshore Renminbi are the same currency they are traded in different and separate markets operating under different regulations and independent liquidity pool Onshore Renminbi and offshore Renminbi are currently quoted in different markets with different exchange rates whereby their exchange rate movements may not be in the same direction or magnitude The offshore Renminbi exchange rate may deviate significantly from the onshore Renminbi exchange rate You should also note that Renminbi is currently not freely convertible the value of Renminbi against other foreign currencies fluctuates and will be affected by amongst other things the PRC governmentrsquos control (for example the PRC government regulates conversion between Renminbi and foreign currencies) which may adversely affect your investment return under the Currency-Linked Capital Protected Investment Deposit when you convert CNY into your home currency Renminbi is subject to foreign exchange control by the PRC government and thus investors investing in Currency-Linked Investment Deposit involving Renminbi are subject to the currency risk of Renminbi
What are the key features bull This product is designed for you whose investment objective is capital protection or to obtain potential cash income bull This product is embedded with options You will buy option(s) on the Linked Currency Pair bull 100 principal protection if this product is held to maturity bull You can choose the Deposit Currency including HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY and Linked Currency
Pair including AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD and USDCNH bull The Deposit Period of the Currency-Linked Capital Protected Investment Deposit is 2 months or above bull You will have a chance to receive higher potential return depending on the movement of the exchange rate of the Underlying Currency
Pair during the Observation Period bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency bull The Bank pre-sets the Trading Range and Observation Period bull During the whole Observation Period the exchange rate of the Underlying Currency Pair is compared with the Trading Range to
determine the Return at maturity bull Returns (if any) on this product is payable only upon maturity bull This product may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank Please refer
to the section Can you request for early termination before maturity below
Scenario analysis (All figures shown below including the exchange rate of AUDUSD and HKDCNH Potential Return Rate Minimum Return Rate Deposit Period etc are for illustration only You should not rely on the below figures as any indication or guarantee on the expected interest amount of the Currency-Linked Capital Protected Investment Deposit you intend to invest Please refer to the Bank for up-to-date figures) Example 1 ndash American Range (where the Deposit Currency is your home currency) Assuming HKD is your home currency and you anticipate the Exchange Rate of AUDUSD will stay above 09850 but below 11150 for the next 6 months and set up an American Range Investment with HKD 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment American Range (AUDUSD) Principal Guarantee 100 Deposit Currency HKD Guaranteed Principal HKD 100000 Deposit Period 6 months Trading Range AUDUSD 09850 (ldquoLower Barrierrdquo) to 11150 (ldquoUpper Barrierrdquo) (excluding both barriers) Potential Return Rate 016 (around 032 pa)
Page 23 of 67
Minimum Return Rate 0015 (around 003 pa) Scenario I Best case scenario At any time during the Observation Period the Exchange Rate of AUDUSD stays within the Trading Range (ie above 09850 but below 11150) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = HKD 100000 x (1+016) = HKD 10016000 (with a gain of 016 of investment amount) Scenario II Worst case scenario At any time during the Observation Period the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 09850 or atabove 11150) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = HKD 100000 x (1+0015) = HKD 10001500
(with a gain of 0015 of investment amount) Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a HKD 100000 6-month Time Deposit on 30 April 2014 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500
Example 2 ndash American Range (where the Deposit Currency is not your home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency and you anticipate the Exchange Rate of AUDUSD will stay above 09850 but below 11150 for the next 6 months and set up an American Range Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment American Range (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trading Range AUDUSD 09850 (ldquoLower Barrierrdquo) to 11150 (ldquoUpper Barrierrdquo) (excluding both barriers) Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH (on deposit start date) 08000 Scenario I Best case scenario At any time during the Observation Period (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD stays within the Trading Range (ie above 09850 but below 11150) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of the road Gain scenario At any time during the Observation Period (assuming the exchange rate of HKDCNH remains unchanged the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 09850 or atabove 11150) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = CNY 100000 x (1+15) = CNY 10150000 (with a gain of 150 of investment amount)
0
Exchange Rate of
AUDUSD le 09850
Potential Return Minimum Return
Return Diagram Return at Maturity
09850 Exchange Rate of AUDUSD during the Observation Period
Minimum Return
09850 lt Exchange Rate of AUDUSD lt 11150
Exchange Rate of
AUDUSD ge 11150
11150
Page 24 of 67
Scenario III Off-setting scenario At any time during the Observation Period the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 09850 or atabove 11150) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD 000 Scenario IV Loss and Worst case scenario At any time during the Observation Period the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 09850 or atabove 11150) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951) In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a CNY 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received would be CNY 10030000
If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Please refer to the table below for details
0
Exchange Rate of
AUDUSD le 09850
Potential Return Minimum Return
Return Diagram
Return at Maturity
09850 Exchange Rate of AUDUSD during the Observation Period
Minimum Return
09850 lt Exchange Rate of AUDUSD lt 11150
Exchange Rate of
AUDUSD ge 11150
11150
Page 25 of 67
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date
The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date
If HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
How can you buy this product bull You can place a Currency-Linked Capital Protected Investment Deposit through our Hang Seng Bank Branches telephone or Hang Seng
Personal or Business e-Banking bull The Bank will provide a choice of different tranches which is subject to market conditions bull Enquiry Hotline Personal 2822 0228 Business 2198 8000
Fees and charges No handling fees or management fees will be charged for Currency-Linked Capital Protected Investment Deposit
Can you request for early termination before maturity No Currency-Linked Capital Protected Investment Deposit may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank which may be granted or withheld in the Bankrsquos sole and absolute discretion on such terms and conditions as the Bank may determine Please refer to ldquoEarly WithdrawalTermination Risksrdquo under ldquoWhat are the key features featuresrisks of Currency-Linked Capital Protected Investment Depositrdquo section for details
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
ix 9999990000 010 010 (12499990) (12499990)
At the beginning of the investment On the Maturity Date of the investment
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Potential Return
Exchange Rate of HKDCNH on the Maturity Date
0
If receiving Minimum Return
Breakeven = 08120^
If receiving Potential Return
Breakeven = 08240
If CNH depreciates drastically relative to HKD
HKDCNH = 9999990000
Exchange Rate on Deposit Start Date
Page 26 of 67
Pre-Investment Cooling-off Period for retail customers Pre-Investment Cooling-off Period (PICOP) is applicable to each particular dealing of this product if you are one of the following retail customer types
(1) An elderly customer aged 65 or above unless you are not a first-time buyer of currency-linked structured investment products AND your asset concentration is below 20 AND you opt out from the PICOP arrangement or
(2) A non-elderly customer who is a first time buyer of currency-linked structured investment products AND your asset concentration
is 20 or above
For the purpose of determining whether PICOP is applicable asset concentration refers to the percentage of total net worth (excluding real estate properties) to be invested in this product
Can the Bank adjust the terms or early terminate this product Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank in certain circumstances Please refer to Clause 7 of the Currency-Linked Capital Protected Investment Deposit Terms and Conditions for details
Offering documents for this product The following documents for this product (ldquoOffering Documentsrdquo) contain detailed information about the Bank and the terms of this product You should read and understand all of the Offering Documents before deciding whether to invest in this product
(i) Currency-Linked Capital Protected Investment Deposit Terms and Conditions (ii) The relevant Currency-Linked Capital Protected Investment Deposit Termsheet (iii) This Currency-Linked Capital Protected Investment Deposit Important Facts Statement
Other information Product Risk Level The Product Risk Level for Currency-Linked Capital Protected Investment Deposit is Low
Low Low-to-Medium Medium Medium-to-High High
Product Risk Level is determined by a number of factors which include the volatility of the currency pair and the tenor of the product The Product Risk Level is subject to the Banks periodic review and may change from time to time Please refer to our branch or our Customer Service Hotline on 2822 0228 for the latest detail Declaration and Remarks bull This Important Facts Statement is not intended to provide or regard as legal or taxation advice or investment recommendations If you
have any concerns about this product or are uncertain about the suitability of this product for you you should obtain independent professional advice
bull The liabilities of the Bank in respect of the Currency-Linked Capital Protected Investment Deposit are limited exclusively to an office of the Bank in Hong Kong and instructions in respect of the Currency-Linked Capital Protected Investment Deposit may only be made to and acted upon by such office Any amount relating to the Currency-Linked Capital Protected Investment Deposit is payable exclusively by an office of the Bank in Hong Kong and in its stated currency The Terms and Conditions of the Currency-Linked Capital Protected Investment Deposit are governed by and shall be construed in accordance with the laws of Hong Kong
bull You may contact our staff if you have any feedback or complaint in relation to our services or call our hotline at 2822 0228 We will respond to you within a reasonable period of time normally not exceeding 30 days in general circumstances You may contact the Hong Kong Monetary Authority at 55th Floor Two International Finance Centre 8 Finance Street Central Hong Kong if you are not satisfied with our handling of your complaint
bull Hang Seng Bank Limited is a Registered Licensed Bank under the Banking Ordinance bull All Currency-Linked Capital Protected Investment Deposit cannot be cancelled after subscription bull The Bank will act as principal to complete the transaction and may obtain certain monetary benefits in connection with the offering of
this Currency-Linked Capital Protected Investment Deposit to the public The current remuneration system that the Bank adopts for sales staff is a measurement of the staffrsquos overall performance and not just based on sales amount
bull The Bank is NOT an independent intermediary because The Bank receives fees commissions or other monetary benefits from other parties in relation to the Bankrsquos distribution of Currency-Linked Capital Protected Investment Deposit to you For details you should refer to the Bankrsquos disclosure on monetary benefits which the Bank is required to deliver to you prior to or at the point of entering into any transaction in Currency-Linked Capital Protected Investment Deposit
bull Please note that this product is not available for persons who are located within the United States are nationals of the United States and are US Persons within the meaning of Regulation S under the Securities Act (which includes any person resident in the United States and any partnership or corporation organised or incorporated under the laws of the United States)
bull 請注意本行不提供本產品予身處美國的人士美國公民及美籍人士(定義見證券法 S 條例)(包括居住在美國之任何人士及根據美國法例組
成或註冊成立之任何合夥企業或公司)
Page 34 of 67
Currency-Linked Capital Protected Investment Deposit
European (Bullish Bearish) Investment
Dated May 2018
Important Facts Statement
This is a structured investment product which is NOT protected by the Deposit Protection Scheme in Hong Kong
The contents of this statement have not been reviewed by any regulatory authority in Hong Kong You are advised to exercise caution before investing in this product This statement is a part of the offering documents for this product You should not invest in this product based on this statement alone If you are in any doubt you should obtain independent professional advice
If English is not your preferred language you may request for the Chinese version of this statement from our sales staff 倘若英文並
非閣下屬意的語言閣下可向本行的銷售人員索取本概要的中文版本
This is a structured investment product involving derivatives The investment decision is yours but you should not invest in this product 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
Quick facts
Bank Hang Seng Bank Limited
Product Type Currency-Linked Investment Deposit ndash European Bullish Bearish Investment (ldquothis productrdquo)
Minimum Investment Amount Subscription through branches - HKD 100000 (or its equivalent) Subscription through e-banking - HKD 50000 (or its equivalent)
Tenor 2 months or above or any other tenor as agreed between you and the Bank
Available Principal Currency (or Deposit Currency) HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY
Available Underlying Currency Pair AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD USDCNH and any other currency pairs as agreed between you and the Bank
Return Rate Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Deposit periodpayment date Deposit period refers to tenor of the product and return is payable only on Maturity Date
Principal protection at maturity Yes
Callable by the Bank No
Early termination right by customer No please refer to ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section ndash Early WithdrawalTermination Risks for details
Embedded derivatives Yes you will buy option(s) over the Underlying Currency Pair
Maximum potential gain Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Maximum potential loss Please refer to Scenarios II and III of Example 1 and 2 and Scenarios IV and V of Example 3 and 4 in ldquoScenario analysisrdquo section of this product type for details
What is this product and how does it work bull European Bullish Bearish investment is one type of our Currency-Linked Capital Protected Investment Deposit which consists of a time
deposit (in Deposit Currency) and buying option(s) on the Underlying Currency Pair of your choice bull You choose the Deposit Currency Underlying Currency Pair according to your need and the Bank will set the Trigger Level bull On the Final Exchange Rate Determination Date the Bank will compare the exchange rate of the Underlying Currency Pair with the Trigger
Level If the exchange rate of the Underlying Currency Pair moves along with your anticipation you will receive Guaranteed Principal and Potential Return If the exchange rate of the Underlying Currency Pair moves against your anticipation you will receive Guaranteed Principal and Minimum Return (if any)
bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency Minimum return applies to certain investment tranches only you should refer to the relevant termsheet for details
Page 35 of 67
What are the key risks of Currency-Linked Capital Protected Investment Deposit Earnings on Currency-Linked Capital Protected Investment Deposit are limited to the Return Coupon (if any) payable You should consider the following risks and read all other information contained in the relevant Termsheet and Terms and Conditions before making any investment decision Not a time deposit Currency-Linked Capital Protected Investment Deposit 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 Capital Protected Investment Deposit is embedded with FX options Option transactions involve risks even when buying an option The optionrsquos value might become worthless if the market moves against your expectation Limited potential gain The maximum potential gain is limited to the pre-agreed ReturnCoupon calculated at the Potential ReturnCoupon Rate Not the same as buying the Underlying Currency Pair Investing in Currency-Linked Capital Protected Investment Deposit is not the same as buying the Underlying Currency Pair directly Market risk The investment return of Currency-Linked Capital Protected Investment Deposit is linked to the exchange rate of the Underlying Currency Pair Movements in exchange rates can be unpredictable sudden and drastic and affected by complex political and economic factors Liquidity risk Currency-Linked Capital Protected Investment Deposit is designed to be held till maturity The Bank may at its absolute discretion refuse to consent to any withdrawaltermination request before maturity Credit risk of the Bank Currency-Linked Capital Protected Investment Deposit is not secured by any collateral When you invest in Currency-Linked Capital Protected Investment Deposit you will be relying on the Bankrsquos creditworthiness If the Bank becomes insolvent or defaults on its obligations under a Currency-Linked Capital Protected Investment Deposit you can only claim as an unsecured creditor of the Bank In the worst case you could suffer a total loss of your investment amount Currency risk Exchange rate fluctuates and sometimes drastically If the Deposit Currency used for investment is not the home currency customarily used by you and thus conversion is required you should note that you may make a gain or suffer a loss due to exchange rate fluctuations When the deposit currency depreciates the loss from depreciation may set-off or even exceed the ReturnCoupon (if any) that you may receive from investing in the Currency-Linked Capital Protected Investment Deposit Risk of adjustments or early termination by the Bank Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank this might have a negative impact on the ReturnCoupon (if any) of the Currency-Linked Capital Protected Investment Deposit Concentration Risks You should avoid excessive investment (in terms of its proportion of the overall portfolio) in any single type of investment so as to avoid the investment portfolio being over-exposed to any particular investment risk ReturnCoupon of Currency-Linked Capital Protected Investment Deposit In order to provide capital protection the investment strategy adopted for Currency-Linked Capital Protected Investment Deposit may lead to a dilution of performance when compared to non-capital protected products investing in similar markets You should be prepared to take the risks of earning a lower ReturnCoupon (if any) on the capital invested and losing the interest that might otherwise earned on money invested by way of deposits For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) periodic Coupon may be payable to you For other types of Currency-Linked Capital Protected Investment Deposit no periodic ReturnCoupon will be payable to you prior to maturity Principal protection at maturity only You should understand that the Principal of the Currency-Linked Capital Protected Investment Deposit is capital-protected only when it is held to maturity If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the amount received by you upon early withdrawaltermination may be less than the amount initially invested by you Market Risks associated with Potential ReturnCoupon Apart from the ReturnCoupon calculated at the Minimum ReturnCoupon Rate (which may be set at zero) there is no guarantee of any ReturnCoupon calculated at the Potential ReturnCoupon Rate For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) Coupon (if any) is payable only if the Currency-Linked Capital Protected Investment Deposit is held till the relevant Coupon Distribution Dates ReturnCoupon (if any) of Currency-Linked Capital Protected Investment Deposit depends on the market conditions at the time of the relevant determination Investment return on foreign exchange-linked products are dependent on the prices of inter-banksrsquo transactions on the linked exchange rate in the foreign exchange markets You should be fully aware of the risks relating to fluctuations in the linked exchange rates Factors affecting the performance of foreign exchange markets are numerous including but are not limited to changes in global and local investment sentiments interest rate policies fund flows political environment economic environment business and social conditions in the local marketplace If the market trend is different from the view taken by you there is an inherent risk that the total investment return that you may receive from Currency-Linked Capital Protected Investment Deposit will be less than the interest that would have been payable on a time deposit for the same tenor There is also an inherent risk that no ReturnCoupon calculated at the Potential ReturnCoupon Rate will be payable to you in respect of the Currency-Linked Capital Protected Investment Deposit Early WithdrawalTermination Risks Early withdrawaltermination by you is not allowed for Currency-Linked Capital Protected Investment Deposit and the capital of you will be invested in the Currency-Linked Capital Protected Investment Deposit for the entire investment period The Bank may at its absolute discretion refuse to give consent to any early withdrawaltermination request If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the Bank shall be entitled to deduct from the Principal of the relevant Currency-Linked Capital Protected Investment Deposit andor any other amount which may have accrued to you any expenses costs or damages to the Bank Damages may include any costs expenses liability or losses to the Bank as a result of the early withdrawaltermination by you Therefore there is no guarantee that you will be able to receive the Principal and the amount payable to you at early withdrawaltermination may be less
Page 36 of 67
than the Principal initially invested Besides If the Currency-Linked Capital Protected Investment Deposit is early withdrawnterminated you will no longer be entitled to any ReturnCoupon of the Currency-Linked Capital Protected Investment Deposit Risks associated with unsuccessful subscriptions of Currency-Linked Capital Protected Investment Deposit The Bank reserves the absolute right to approve any application and to decline any application received (whether in whole or any part thereof) before the Deposit Start Date In the event of non-acceptance a notification will be sent by the Bank and any subscription funds received will be returned to you after the Deposit Start Date or as soon as practicable Risks relating to Renminbi If Currency-Linked Capital Protected Investment Deposit involves CNY the relevant exchange rate(s) or level(s) of the relevant currency pair will be quoted in offshore Renminbi against alternate currency While both onshore Renminbi and offshore Renminbi are the same currency they are traded in different and separate markets operating under different regulations and independent liquidity pool Onshore Renminbi and offshore Renminbi are currently quoted in different markets with different exchange rates whereby their exchange rate movements may not be in the same direction or magnitude The offshore Renminbi exchange rate may deviate significantly from the onshore Renminbi exchange rate You should also note that Renminbi is currently not freely convertible the value of Renminbi against other foreign currencies fluctuates and will be affected by amongst other things the PRC governmentrsquos control (for example the PRC government regulates conversion between Renminbi and foreign currencies) which may adversely affect your investment return under the Currency-Linked Capital Protected Investment Deposit when you convert CNY into your home currency Renminbi is subject to foreign exchange control by the PRC government and thus investors investing in Currency-Linked Investment Deposit involving Renminbi are subject to the currency risk of Renminbi
What are the key features bull This product is designed for you whose investment objective is capital protection or to obtain potential cash income
bull This product is embedded with options You will buy option(s) on the Linked Currency Pair bull 100 principal protection if the Currency-Linked Capital Protected Investment Deposit is held to maturity bull You can choose the Deposit Currency including HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY and Linked Currency Pair
including AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD and USDCNH bull The Deposit Period of this product is 2 months or above bull You will have a chance to receive higher potential return depending on the movement of the exchange rate of the Underlying Currency Pair bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency bull The Bank pre-sets the Trigger Level and you choose a bullish or bearish view on different currencies bull On the Final Exchange Rate Determination Date the exchange rate of the Underlying Currency Pair is compared with the Trigger Level to
determine the Return at maturity bull Returns (if any) on this product is payable only upon maturity bull This product may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank Please refer to
the section Can you request for early termination before maturity below
Scenario analysis (All figures shown below including the exchange rate of AUDUSD and HKDCNH Potential Return Rate Minimum Return Rate Deposit Period etc are for illustration only You should not rely on the below figures as any indication or guarantee on the expected interest amount of the Currency-Linked Capital Protected Investment Deposit you intend to invest Please refer to the Bank for up-to-date figures) Example 1 ndash European Bullish (where the Deposit Currency is your home currency) Assuming HKD is your home currency and you take a bullish view on Australian Dollar expect the exchange rate of AUDUSD will rise from 09400 to 09800 or above after the 6-month period and set up an European Bullish Investment with HKD 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Bullish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency HKD Guaranteed Principal HKD 100000 Deposit Period 6 months Trigger Level AUDUSD 09800 Potential Return Rate 016 (around 032 pa) Minimum Return Rate 0015 (around 003 pa) Scenario I Best case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is at or above the Trigger Level (ie at or above 09800) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = HKD 100000 x (1+016) = HKD 10016000 (with a gain of 016 of investment amount) Scenario II Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is below the Trigger Level (ie below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity
Page 37 of 67
Total Return at Maturity = HKD 100000 x (1+0015) = HKD 10001500 (with a gain of 0015 of investment amount) Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount
For reference only if you set up a HKD 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500
Example 2 ndash European Bearish (where the Deposit Currency is your home currency) Assuming HKD is your home currency and you take a bearish view on Australian Dollar expect the exchange rate of AUDUSD will drop from 09400 to 09000 or below after the 6-month period and set up an European Bearish Investment with HKD 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Bearish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency HKD Guaranteed Principal HKD 100000 Deposit Period 6 months Trigger Level AUDUSD 09000 Potential Return Rate 016 (around 032 pa) Minimum Return Rate 0015 (around 003 pa) Scenario I Best case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is at or below the Trigger Level (ie at or below 09000) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = HKD 100000 x (1+016) = HKD 10016000 (with a gain of 016 of investment amount) Scenario II Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is above the Trigger Level (ie above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = HKD 100000 x (1+0015) = HKD 10001500 (with a gain of 0015 of investment amount) Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount
0
Final Exchange Rate of AUDUSD lt Trigger Level
Potential Return Minimum Return
Return Diagram Return at Maturity
09800 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Final Exchange Rate of AUDUSD ge Trigger Level
Trigger Level = 09800
Page 38 of 67
For reference only if you set up a HKD 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500 Example 3 ndash European Bullish (where the Deposit Currency is not home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency you take a bullish view on Australian Dollar expect the exchange rate of AUDUSD will rise from 09400 to 09800 or above after the 6-month period and set up an European Bullish Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Bullish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trigger Level AUDUSD 09800 Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH on deposit start date 08000 Scenario I Best case scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is at or above the Trigger Level (ie at or above 09800) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of-the road Gain scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is below the Trigger Level (ie below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Scenario III Off-setting scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is below the Trigger Level (ie below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD 000
0
Final Exchange Rate of AUDUSD
le Trigger Level
Potential Return Minimum Return
Return Diagram
Return at Maturity
09000 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Final Exchange Rate of AUDUSD gt Trigger Level
Trigger Level = 09000
Page 39 of 67
Scenario IV Loss and Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is below the Trigger Level (ie below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 101500 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951) In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount
For reference only if you set up a CNY 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received at maturity would be CNY 10030000 If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Please refer to the table below for details
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
viiii 9999990000 010 010 (12499990) (12499990)
103000 101500 12500000 10000008000
At the beginning of the investment On the Maturity Date of the investment
Exchange
Rate of
HKDCNH
Initial
Investment
Amount in
Renminbi
Initial
Investment
Amount in
HKD
Exchange Rate
of HKDCNH
Total Return in
Renminbi
Total Return in
HKD
Gain (loss) in HKD if converting the
Total Return from Renminbi to home
currency (HKD)
0
Final Exchange Rate of AUDUSD lt Trigger Level
Potential Return Minimum Return
Return Diagram
Return at Maturity
09800 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Final Exchange Rate of AUDUSD ge Trigger Level
Trigger Level = 09800
Page 40 of 67
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date
The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date
If HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
Example 4 ndash European Bearish (where the Deposit Currency is not home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency you take a bearish view on Australian Dollar expect the exchange rate of AUDUSD will drop from 09400 to 09000 or below after the 6-month period and set up an European Bearish Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Bearish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trigger Level AUDUSD 09000 Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH at the time of investment 08000 Scenario I Best case scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is at or below the Trigger Level (ie at or below 09000) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of-the road Gain scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is above the Trigger Level (ie above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Scenario III Off-setting scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is above the Trigger Level (ie above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Exchange Rate of HKDCNH on the Maturity Date
0
If receiving Minimum Return
Breakeven = 08120^
If receiving Potential Return
Breakeven = 08240
Exchange Rate on Deposit Start Date
Potential Return
Minimum Return
If CNH depreciates drastically relative to HKD
HKDCNH = 9999990000
Page 41 of 67
= HKD 12500000 Gain(Loss) in home currency HKD 000 Scenario IV Loss and Worst Case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is above the Trigger Level (ie above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951) In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount
For reference only if you set up a CNY 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received at maturity would be CNY 10030000 If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Please refer to the table below for details
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
viiii 9999990000 010 010 (12499990) (12499990)
103000 101500 12500000 10000008000
At the beginning of the investment On the Maturity Date of the investment
Exchange
Rate of
HKDCNH
Initial
Investment
Amount in
Renminbi
Initial
Investment
Amount in
HKD
Exchange Rate
of HKDCNH
Total Return in
Renminbi
Total Return in
HKD
Gain (loss) in HKD if converting the
Total Return from Renminbi to home
currency (HKD)
0
Final Exchange Rate of AUDUSD le Trigger Level
Potential Return Minimum Return
Return Diagram Return at Maturity
09000 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Final Exchange Rate of AUDUSD gt Trigger Level
Trigger Level = 09000
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Page 42 of 67
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date
The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date
If HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
How can you buy this product bull You can place a Currency-Linked Capital Protected Investment Deposit through our Hang Seng Bank Branches telephone or Hang Seng
Personal or Business e-Banking bull The Bank will provide a choice of different tranches which is subject to market conditions bull Enquiry Hotline Personal 2822 0228 Business 2198 8000
Fees and charges No handling fees or management fees will be charged for Currency-Linked Capital Protected Investment Deposit
Can you request for early termination before maturity No Currency-Linked Capital Protected Investment Deposit may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank which may be granted or withheld in the Bankrsquos sole and absolute discretion on such terms and conditions as the Bank may determine Please refer to ldquoEarly WithdrawalTermination Risksrdquo under ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section for details
Pre-Investment Cooling-off Period for retail customers Pre-Investment Cooling-off Period (PICOP) is applicable to each particular dealing of this product if you are one of the following retail customer types
(1) An elderly customer aged 65 or above unless you are not a first-time buyer of currency-linked structured investment products AND your asset concentration is below 20 AND you opt out from the PICOP arrangement or
(2) A non-elderly customer who is a first time buyer of currency-linked structured investment products AND your asset concentration is
20 or above
For the purpose of determining whether PICOP is applicable asset concentration refers to the percentage of total net worth (excluding real estate properties) to be invested in this product
Can the Bank adjust the terms or early terminate this product Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank in certain circumstances Please refer to Clause 7 of the Currency-Linked Capital Protected Investment Deposit Terms and Conditions for details
Offering documents for this product The following documents for this product (ldquoOffering Documentsrdquo) contain detailed information about the Bank and the terms of this product You should read and understand all of the Offering Documents before deciding whether to invest in this product
(i) Currency-Linked Capital Protected Investment Deposit Terms and Conditions (ii) The relevant Currency-Linked Capital Protected Investment Deposit Termsheet (iii) This Currency-Linked Capital Protected Investment Deposit Important Facts Statement
Product Risk Level The Product Risk Level for Currency-Linked Capital Protected Investment Deposit is Low
Low Low-to-Medium Medium Medium-to-High High
Product Risk Level is determined by a number of factors which include the volatility of the currency pair and the tenor of the product The Product Risk Level is subject to the Banks periodic review and may change from time to time Please refer to our branch or our Customer Service Hotline on 2822 0228 for the latest detail Declaration and Remarks bull This Important Facts Statement is not intended to provide or regard as legal or taxation advice or investment recommendations If you have
any concerns about this product or are uncertain about the suitability of this product for you you should obtain independent professional advice
bull The liabilities of the Bank in respect of the Currency-Linked Capital Protected Investment Deposit are limited exclusively to an office of the Bank in Hong Kong and instructions in respect of the Currency-Linked Capital Protected Investment Deposit may only be made to and acted upon by such office Any amount relating to the Currency-Linked Capital Protected Investment Deposit is payable exclusively by an office of the Bank in Hong Kong and in its stated currency The Terms and Conditions of the Currency-Linked Capital Protected Investment Deposit are governed by and shall be construed in accordance with the laws of Hong Kong
bull You may contact our staff if you have any feedback or complaint in relation to our services or call our hotline at 2822 0228 We will respond to you within a reasonable period of time normally not exceeding 30 days in general circumstances You may contact the Hong Kong Monetary Authority at 55th Floor Two International Finance Centre 8 Finance Street Central Hong Kong if you are not satisfied with our handling of your complaint
bull Hang Seng Bank Limited is a Registered Licensed Bank under the Banking Ordinance bull All Currency-Linked Capital Protected Investment Deposit cannot be cancelled after subscription bull The Bank will act as principal to complete the transaction and may obtain certain monetary benefits in connection with the offering of this
Currency-Linked Capital Protected Investment Deposit to the public The current remuneration system that the Bank adopts for sales staff is a measurement of the staffrsquos overall performance and not just based on sales amount
bull The Bank is NOT an independent intermediary because The Bank receives fees commissions or other monetary benefits from other parties in relation to the Bankrsquos distribution of Currency-Linked Capital Protected Investment Deposit to you For details you should refer to the Bankrsquos disclosure on monetary benefits which the Bank is required to deliver to you prior to or at the point of entering into any transaction in Currency-Linked Capital Protected Investment Deposit
bull Please note that this product is not available for persons who are located within the United States are nationals of the United States and are US Persons within the meaning of Regulation S under the Securities Act (which includes any person resident in the United States and any partnership or corporation organised or incorporated under the laws of the United States)
bull 請注意本行不提供本產品予身處美國的人士美國公民及美籍人士(定義見證券法 S 條例)(包括居住在美國之任何人士及根據美國法例組成
或註冊成立之任何合夥企業或公司)
Page 53 of 67
Currency-Linked Capital Protected Investment Deposit
European Range Investment
Dated May 2018
Important Facts Statement
This is a structured investment product which is NOT protected by the Deposit
Protection Scheme in Hong Kong
The contents of this statement have not been reviewed by any regulatory authority in Hong Kong You are advised to exercise caution before investing in this product This statement is a part of the offering documents for this product You should not invest in this product based on this statement alone If you are in any doubt you should obtain independent professional advice
If English is not your preferred language you may request for the Chinese version of this statement from our sales staff 倘若英
文並非閣下屬意的語言閣下可向本行的銷售人員索取本概要的中文版本
This is a structured investment product involving derivatives The investment decision is yours but you should not invest in this product 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
Quick facts Bank Hang Seng Bank Limited
Product Type Currency-Linked Investment Deposit ndash European Range Investment (ldquothis productrdquo)
Minimum Investment Amount Subscription through branches - HKD 100000 (or its equivalent) Subscription through e-banking - HKD 50000 (or its equivalent)
Tenor 2 months or above or any other tenor as agreed between you and the Bank
Available Principal Currency (or Deposit Currency) HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY
Available Underlying Currency Pair AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD USDCNH and any other currency pairs as agreed between you and the Bank
Return Rate Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Deposit periodpayment date Deposit period refers to tenor of the product and return is payable only on Maturity Date
Principal protection at maturity Yes
Callable by the Bank No
Early termination right by customer No please refer to ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section ndash Early WithdrawalTermination Risks for details
Embedded derivatives Yes you will buy option(s) over the Underlying Currency Pair
Maximum potential gain Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Maximum potential loss Please refer to Scenarios II and III of Example 1 and Scenarios IV and V of Example 2 in the ldquoScenario analysisrdquo section of this product type for details
What is this product and how does it work bull European Range investment is one type of our Currency-Linked Capital Protected Investment Deposit which consists of a time deposit
(in Deposit Currency) and buying option(s) on the Underlying Currency Pair of your choice bull You choose the Deposit Currency Underlying Currency Pair according to your need and the Bank will set the Trading Range bull On the Final Exchange Rate Determination Date the Bank will compare the exchange rate of the Underlying Currency Pair with the
Trading Range If the exchange rate of the Underlying Currency Pair moves along with your anticipation and is within the Trading Range you will receive Guaranteed Principal and Potential Return If the exchange rate of the Underlying Currency Pair moves against your anticipation and is outside the Trading Range you will receive Guaranteed Principal and Minimum Return (if any)
bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency Minimum return applies to certain investment tranches only you should refer to the relevant termsheet for details
Page 54 of 67
What are the key risks of Currency-Linked Capital Protected Investment Deposit Earnings on Currency-Linked Capital Protected Investment Deposit are limited to the Return Coupon (if any) payable You should consider the following risks and read all other information contained in the relevant Termsheet and Terms and Conditions before making any investment decision Not a time deposit Currency-Linked Capital Protected Investment Deposit 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 Capital Protected Investment Deposit is embedded with FX options Option transactions involve risks even when buying an option The optionrsquos value might become worthless if the market moves against your expectation Limited potential gain The maximum potential gain is limited to the pre-agreed ReturnCoupon calculated at the Potential ReturnCoupon Rate Not the same as buying the Underlying Currency Pair Investing in Currency-Linked Capital Protected Investment Deposit is not the same as buying the Underlying Currency Pair directly Market risk The investment return of Currency-Linked Capital Protected Investment Deposit is linked to the exchange rate of the Underlying Currency Pair Movements in exchange rates can be unpredictable sudden and drastic and affected by complex political and economic factors Liquidity risk Currency-Linked Capital Protected Investment Deposit is designed to be held till maturity The Bank may at its absolute discretion refuse to consent to any withdrawaltermination request before maturity Credit risk of the Bank Currency-Linked Capital Protected Investment Deposit is not secured by any collateral When you invest in Currency-Linked Capital Protected Investment Deposit you will be relying on the Bankrsquos creditworthiness If the Bank becomes insolvent or defaults on its obligations under a Currency-Linked Capital Protected Investment Deposit you can only claim as an unsecured creditor of the Bank In the worst case you could suffer a total loss of your investment amount Currency risk Exchange rate fluctuates and sometimes drastically If the Deposit Currency used for investment is not the home currency customarily used by you and thus conversion is required you should note that you may make a gain or suffer a loss due to exchange rate fluctuations When the deposit currency depreciates the loss from depreciation may set-off or even exceed the ReturnCoupon (if any) that you may receive from investing in the Currency-Linked Capital Protected Investment Deposit Risk of adjustments or early termination by the Bank Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank this might have a negative impact on the ReturnCoupon (if any) of the Currency-Linked Capital Protected Investment Deposit Concentration Risks You should avoid excessive investment (in terms of its proportion of the overall portfolio) in any single type of investment so as to avoid the investment portfolio being over-exposed to any particular investment risk ReturnCoupon of Currency-Linked Capital Protected Investment Deposit In order to provide capital protection the investment strategy adopted for Currency-Linked Capital Protected Investment Deposit may lead to a dilution of performance when compared to non-capital protected products investing in similar markets You should be prepared to take the risks of earning a lower ReturnCoupon (if any) on the capital invested and losing the interest that might otherwise earned on money invested by way of deposits For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) periodic Coupon may be payable to you For other types of Currency-Linked Capital Protected Investment Deposit no periodic ReturnCoupon will be payable to you prior to maturity Principal protection at maturity only You should understand that the Principal of the Currency-Linked Capital Protected Investment Deposit is capital-protected only when it is held to maturity If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the amount received by you upon early withdrawaltermination may be less than the amount initially invested by you Market Risks associated with Potential ReturnCoupon Apart from the ReturnCoupon calculated at the Minimum ReturnCoupon Rate (which may be set at zero) there is no guarantee of any ReturnCoupon calculated at the Potential ReturnCoupon Rate For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) Coupon (if any) is payable only if the Currency-Linked Capital Protected Investment Deposit is held till the relevant Coupon Distribution Dates ReturnCoupon (if any) of Currency-Linked Capital Protected Investment Deposit depends on the market conditions at the time of the relevant determination Investment return on foreign exchange-linked products are dependent on the prices of inter-banksrsquo transactions on the linked exchange rate in the foreign exchange markets You should be fully aware of the risks relating to fluctuations in the linked exchange rates Factors affecting the performance of foreign exchange markets are numerous including but are not limited to changes in global and local investment sentiments interest rate policies fund flows political environment economic environment business and social conditions in the local marketplace If the market trend is different from the view taken by you there is an inherent risk that the total investment return that you may receive from Currency-Linked Capital Protected Investment Deposit will be less than the interest that would have been payable on a time deposit for the same tenor There is also an inherent risk that no ReturnCoupon calculated at the Potential ReturnCoupon Rate will be payable to you in respect of the Currency-Linked Capital Protected Investment Deposit
Page 55 of 67
Early WithdrawalTermination Risks Early withdrawaltermination by you is not allowed for Currency-Linked Capital Protected Investment Deposit and the capital of you will be invested in the Currency-Linked Capital Protected Investment Deposit for the entire investment period The Bank may at its absolute discretion refuse to give consent to any early withdrawaltermination request If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the Bank shall be entitled to deduct from the Principal of the relevant Currency-Linked Capital Protected Investment Deposit andor any other amount which may have accrued to you any expenses costs or damages to the Bank Damages may include any costs expenses liability or losses to the Bank as a result of the early withdrawaltermination by you Therefore there is no guarantee that you will be able to receive the Principal and the amount payable to you at early withdrawaltermination may be less than the Principal initially invested Besides If the Currency-Linked Capital Protected Investment Deposit is early withdrawnterminated you will no longer be entitled to any ReturnCoupon of the Currency-Linked Capital Protected Investment Deposit Risks associated with unsuccessful subscriptions of Currency-Linked Capital Protected Investment Deposit The Bank reserves the absolute right to approve any application and to decline any application received (whether in whole or any part thereof) before the Deposit Start Date In the event of non-acceptance a notification will be sent by the Bank and any subscription funds received will be returned to you after the Deposit Start Date or as soon as practicable Risks relating to Renminbi If Currency-Linked Capital Protected Investment Deposit involves CNY the relevant exchange rate(s) or level(s) of the relevant currency pair will be quoted in offshore Renminbi against alternate currency While both onshore Renminbi and offshore Renminbi are the same currency they are traded in different and separate markets operating under different regulations and independent liquidity pool Onshore Renminbi and offshore Renminbi are currently quoted in different markets with different exchange rates whereby their exchange rate movements may not be in the same direction or magnitude The offshore Renminbi exchange rate may deviate significantly from the onshore Renminbi exchange rate You should also note that Renminbi is currently not freely convertible the value of Renminbi against other foreign currencies fluctuates and will be affected by amongst other things the PRC governmentrsquos control (for example the PRC government regulates conversion between Renminbi and foreign currencies) which may adversely affect your investment return under the Currency-Linked Capital Protected Investment Deposit when you convert CNY into your home currency Renminbi is subject to foreign exchange control by the PRC government and thus investors investing in Currency-Linked Investment Deposit involving Renminbi are subject to the currency risk of Renminbi
What are the key features bull This product is designed for you whose investment objective is capital protection or to obtain potential cash income bull This product is embedded with options You will buy option(s) on the Linked Currency Pair bull 100 principal protection if this product is held to maturity bull You can choose the Deposit Currency including HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY and Linked Currency
Pair including AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD and USDCNH bull The Deposit Period of this product is 2 months or above
bull You will have a chance to receive higher potential return depending on the movement of the exchange rate of the Underlying Currency
Pair bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency bull The Bank pre-sets the Trading Range bull On the Final Exchange Rate Determination Date the exchange rate of the Underlying Currency Pair is compared with the Trading Range
to determine the Return at maturity bull Returns (if any) on this product is payable only upon maturity bull This product may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank Please refer to
the section Can you request for early termination before maturity below
Scenario analysis (All figures shown below including the exchange rate of AUDUSD and HKDCNH Potential Return Rate Minimum Return Rate Deposit Period etc are for illustration only You should not rely on the figures as any indication or guarantee on the expected interest amount of the Currency-Linked Capital Protected Investment Deposit you intend to invest Please refer to the Bank for up-to-date figures) Example 1 ndash European Range (where the Deposit Currency is your home currency) Assuming HKD is your home currency and you anticipate the Exchange Rate of AUDUSD will be above 10250 but below 10750 after 6 months and set up an European Range Investment with HKD 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Range (AUDUSD) Principal Guarantee 100 Deposit Currency HKD Guaranteed Principal HKD 100000 Deposit Period 6 months Trading Range AUDUSD 10250 (ldquoLower Barrierrdquo) to 10750 (ldquoUpper Barrierrdquo) (excluding both barriers) Potential Return Rate 016 (around 032 pa)
Page 56 of 67
Minimum Return Rate 0015 (around 003 pa) Scenario I Best case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is within the Trading Range (ie above 10250 but below 10750) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = HKD 100000 x (1+016) = HKD 10016000 (with a gain of 016 of investment amount) Scenario II Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 10250 or atabove 10750) you will receive Guaranteed Principal and Minimum Return at maturity Total Return at Maturity = HKD 100000 x (1+0015) = HKD 10001500 (with a gain of 0015 of investment amount) Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a HKD 100000 6 month Time Deposit on 30 April 2015 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500 Example 2 ndash European Range (where the Deposit Currency is not your home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency and you anticipate the Exchange Rate of AUDUSD will be above 10250 but below 10750 after 6 months and set up an European Range Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Range (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trading Range AUDUSD 10250 (ldquoLower Barrierrdquo) to 10750 (ldquoUpper Barrierrdquo) (excluding both barriers) Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH (on deposit start date) 08000 Scenario I Best case scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is within the Trading Range (ie above 10250 but below 10750) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of-the road Gain scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 10250 or atabove 10750) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount)
0
Final Exchange Rate of
AUDUSD le10250
Potential Return Minimum Return
Return Diagram
Return at Maturity
10250 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Minimum Return
Final Exchange Rate of
AUDUSD ge 10750
10750
10250lt Final Exchange Rate of AUDUSD lt10750
Page 57 of 67
Scenario III Off-setting scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 10250 or atabove 10750) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD 000 Scenario IV Loss and Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 10250 or atabove 10750) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 101500 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951) In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a CNY 100000 6 month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received at maturity would be CNY 10030000 If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to
0
Final Exchange Rate of
AUDUSD le10250
Potential Return Minimum Return
Return Diagram
Return at Maturity
10250 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Minimum Return
Final Exchange Rate of
AUDUSD ge 10750
10750
10250lt Final Exchange Rate of AUDUSD lt10750
Page 58 of 67
depreciation of Renminbi Please refer to the table below for details
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date
The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date
If HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
How can you buy this product
bull You can place a Currency-Linked Capital Protected Investment Deposit through our Hang Seng Bank Branches telephone or Hang
Seng Personal or Business e-Banking
bull The Bank will provide a choice of different tranches which is subject to market conditions
bull Enquiry Hotline Personal 2822 0228
Business 2198 8000
Fees and charges No handling fees or management fees will be charged for Currency-Linked Capital Protected Investment Deposit
Can you request for early termination before maturity No Currency-Linked Capital Protected Investment Deposit may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank which may be granted or withheld in the Bankrsquos sole and absolute discretion on such terms and conditions as the Bank may determine Please refer to ldquoEarly WithdrawalTermination Risksrdquo under ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section for details
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
ix 9999990000 010 010 (12499990) (12499990)
At the beginning of the investment On the Maturity Date of the investment
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Potential Return
Exchange Rate of HKDCNH on the Maturity Date
0
If receiving Minimum Return
Breakeven = 08120^
If receiving Potential Return
Breakeven = 08240
If CNH depreciates drastically relative to HKD
HKDCNH = 9999990000
Exchange Rate on Deposit Start Date
Page 59 of 67
Pre-Investment Cooling-off Period for retail customers Pre-Investment Cooling-off Period (PICOP) is applicable to each particular dealing of this product if you are one of the following retail customer types
(1) An elderly customer aged 65 or above unless you are not a first-time buyer of currency-linked structured investment products AND your asset concentration is below 20 AND you opt out from the PICOP arrangement or
(2) A non-elderly customer who is a first time buyer of currency-linked structured investment products AND your asset concentration
is 20 or above
For the purpose of determining whether PICOP is applicable asset concentration refers to the percentage of total net worth (excluding real estate properties) to be invested in this product
Can the Bank adjust the terms or early terminate this product Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank in certain circumstances Please refer to Clause 7 of the Currency-Linked Capital Protected Investment Deposit Terms and Conditions for details
Offering documents for this product The following documents for this product (ldquoOffering Documentsrdquo) contain detailed information about the Bank and the terms of this product You should read and understand all of the Offering Documents before deciding whether to invest in this product
(i) Currency-Linked Capital Protected Investment Deposit Terms and Conditions (ii) The relevant Currency-Linked Capital Protected Investment Deposit Termsheet (iii) This Currency-Linked Capital Protected Investment Deposit Important Facts Statement
Other information Product Risk Level The Product Risk Level for Currency-Linked Capital Protected Investment Deposit is Low
Low Low-to-Medium Medium Medium-to-High High
Product Risk Level is determined by a number of factors which include the volatility of the currency pair and the tenor of the product The Product Risk Level is subject to the Banks periodic review and may change from time to time Please refer to our branch or our Customer Service Hotline on 2822 0228 for the latest detail Declaration and Remarks bull This Important Facts Statement is not intended to provide or regard as legal or taxation advice or investment recommendations If you
have any concerns about this product or are uncertain about the suitability of this product for you you should obtain independent professional advice
bull The liabilities of the Bank in respect of the Currency-Linked Capital Protected Investment Deposit are limited exclusively to an office of the Bank in Hong Kong and instructions in respect of the Currency-Linked Capital Protected Investment Deposit may only be made to and acted upon by such office Any amount relating to the Currency-Linked Capital Protected Investment Deposit is payable exclusively by an office of the Bank in Hong Kong and in its stated currency The Terms and Conditions of the Currency-Linked Capital Protected Investment Deposit are governed by and shall be construed in accordance with the laws of Hong Kong
bull You may contact our staff if you have any feedback or complaint in relation to our services or call our hotline at 2822 0228 We will respond to you within a reasonable period of time normally not exceeding 30 days in general circumstances You may contact the Hong Kong Monetary Authority at 55th Floor Two International Finance Centre 8 Finance Street Central Hong Kong if you are not satisfied with our handling of your complaint
bull Hang Seng Bank Limited is a Registered Licensed Bank under the Banking Ordinance bull All Currency-Linked Capital Protected Investment Deposit cannot be cancelled after subscription bull The Bank will act as principal to complete the transaction and may obtain certain monetary benefits in connection with the offering of
this Currency-Linked Capital Protected Investment Deposit to the public The current remuneration system that the Bank adopts for sales staff is a measurement of the staffrsquos overall performance and not just based on sales amount
bull The Bank is NOT an independent intermediary because The Bank receives fees commissions or other monetary benefits from other parties in relation to the Bankrsquos distribution of Currency-Linked Capital Protected Investment Deposit to you For details you should refer to the Bankrsquos disclosure on monetary benefits which the Bank is required to deliver to you prior to or at the point of entering into any transaction in Currency-Linked Capital Protected Investment Deposit
bull Please note that this product is not available for persons who are located within the United States are nationals of the United States and are US Persons within the meaning of Regulation S under the Securities Act (which includes any person resident in the United States and any partnership or corporation organised or incorporated under the laws of the United States)
bull 請注意本行不提供本產品予身處美國的人士美國公民及美籍人士(定義見證券法 S 條例)(包括居住在美國之任何人士及根據美國法例組
成或註冊成立之任何合夥企業或公司)
Page 4 of 67
= HKD 10001500 (with a gain of 0015 of investment amount)
Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a HKD 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500 Example 2 ndash American Bearish (where the Deposit Currency is your home currency) Assuming HKD is your home currency and you take a bearish view on Australian Dollar expect the exchange rate of AUDUSD will drop from 09400 to 09000 or below during the 6-month period and set up an American Bearish Investment with HKD 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment American Bearish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency HKD Guaranteed Principal HKD 100000 Deposit Period 6 months Trigger Level AUDUSD 09000 Potential Return Rate 016 (around 032 pa) Minimum Return Rate 0015 (around 003 pa) Scenario I Best case scenario At any time during the Observation Period the Exchange Rate of AUDUSD is at or below the Trigger Level (ie at or below 09000) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = HKD 100000 x (1+016) = HKD 10016000 (with a gain of 016 of investment amount) Scenario II Worst case scenario At any time during the Observation Period the Exchange Rate of AUDUSD stays above the Trigger Level (ie stays above 09000) you will receive Guaranteed Principal and Minimum Return at maturity Total Return at Maturity = HKD 100000 x (1+0015) = HKD 10001500
(with a gain of 0015 of investment amount) Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount
09800 0
Exchange Rate of AUDUSD lt Trigger Level
Potential Return Minimum Return
Return Diagram Return at Maturity
Exchange Rate of AUDUSD ge Trigger Level
Exchange Rate of AUDUSD during the Observation Period
Trigger Level = 09800
09000 0
Exchange Rate of AUDUSD le
Trigger Level
Potential Return Minimum Return
Return Diagram
Return at Maturity
Exchange Rate of AUDUSD gt Trigger Level
Exchange Rate of AUDUSD during the Observation Period
Trigger Level = 09000
Page 5 of 67
For reference only if you set up a HKD 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500 Example 3 ndash American Bullish (where the Deposit Currency is not your home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency and you take a bullish view on Australian Dollar expect the exchange rate of AUDUSD will rise from 09400 to 09800 or above during the 6-month period and set up an American Bullish Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair
Type of investment American Bullish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trigger Level AUDUSD 09800 Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH (on deposit start date) 08000 Scenario I Best case scenario At any time during the Observation Period (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is at or above the Trigger Level (ie at or above 09800) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of-the-road Gain scenario At any time during the Observation Period (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD stays below the Trigger Level (ie stays below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000
(with a gain of 150 of investment amount)
Scenario III Off-setting scenario At any time during the Observation Period the Exchange Rate of AUDUSD stays below the Trigger Level (ie stays below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD 000 Scenario IV Loss and Worst case scenario At any time during the Observation Period the Exchange Rate of AUDUSD stays below the Trigger Level (ie stays below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951)
Page 6 of 67
In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a CNY 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received at maturity would be CNY 10030000 If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Please refer to the table below for details
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home
currency (HKD) in the event that you receive Minimum Return on the Maturity Date The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home
currency (HKD) in the event that you receive Potential Return on the Maturity Date If HKDCNH rise drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange
rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
ix 9999990000 010 010 (12499990) (12499990)
At the beginning of the investment On the Maturity Date of the investment
Exchange
Rate of
HKDCNH
Initial
Investment
Amount in
Renminbi
Initial
Investment
Amount in
HKD
Exchange Rate
of HKDCNH
Total Return in
Renminbi
Total Return in
HKD
Gain (loss) in HKD if converting the
Total Return from Renminbi to home
currency (HKD)
103000 101500 12500000 10000008000
09800 0
Exchange Rate of AUDUSD lt Trigger Level
Potential Return Minimum Return
Return Diagram Return at Maturity
Exchange Rate of AUDUSD ge Trigger Level
Exchange Rate of AUDUSD during the Observation Period
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Potential Return
Exchange Rate of HKDCNH on the Maturity Date
If receiving Minimum Return
Breakeven = 08120^
If receiving Potential Return
Breakeven = 08240
Exchange Rate on Deposit Start Date
0
If CNH depreciates drastically relative to HKD
HKDCNH = 9999990000
Page 7 of 67
Renminbi to home currency (HKD) on the Maturity Date Example 4 ndash American Bearish (where the Deposit Currency is not your home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency and you take a bearish view on Australian Dollar expect the exchange rate of AUDUSD will drop from 09400 to 09000 or below during the 6-month period and set up an American Bearish Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair
Type of investment American Bearish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trigger Level AUDUSD 09000 Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH (on deposit start date) 08000 Scenario I Best case scenario At any time during the Observation Period (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is at or below the Trigger Level (ie at or below 09000) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of-the-road Gain scenario At any time during the Observation Period (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD stays above the Trigger Level (ie stays above 09000) you will receive Guaranteed Principal and Minimum Return at maturity Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000
(with a gain of 150 of investment amount) Scenario III Off-setting scenario At any time during the Observation Period the Exchange Rate of AUDUSD stays above the Trigger Level (ie stays above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD 000 Scenario IV Loss and Worst case scenario At any time during the Observation Period the Exchange Rate of AUDUSD stays above the Trigger Level (ie stays above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951)
Page 8 of 67
In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a CNY 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received at maturity would be CNY 10030000 If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Please refer to the table below for details
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home
currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home
currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date If HKDCNH rise drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange
rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
ix 9999990000 010 010 (12499990) (12499990)
At the beginning of the investment On the Maturity Date of the investment
Exchange
Rate of
HKDCNH
Initial
Investment
Amount in
Renminbi
Initial
Investment
Amount in
HKD
Exchange Rate
of HKDCNH
Total Return in
Renminbi
Total Return in
HKD
Gain (loss) in HKD if converting the
Total Return from Renminbi to home
currency (HKD)
103000 101500 12500000 10000008000
09000 0
Exchange Rate of AUDUSD le
Trigger Level
Potential Return Minimum Return
Return Diagram
Return at Maturity
Exchange Rate of AUDUSD gt Trigger Level
Exchange Rate of AUDUSD during the Observation Period
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Potential Return
Exchange Rate of HKDCNH on the Maturity Date
0
If receiving Minimum Return
Breakeven = 08120^
If receiving Potential Return
Breakeven = 08240
Exchange Rate on Deposit Start Date
If CNH depreciates drastically relatively to HKD HKDCNH = 9999990000
Page 9 of 67
How can you buy this product bull You can place a Currency-Linked Capital Protected Investment Deposit through our Hang Seng Bank Branches telephone or Hang
Seng Personal or Business e-Banking bull The Bank will provide a choice of different tranches which is subject to market conditions bull Enquiry Hotline Personal 2822 0228 Business 2198 8000
Fees and charges No handling fees or management fees will be charged for Currency-Linked Capital Protected Investment Deposit
Can you request for early termination before maturity No Currency-Linked Capital Protected Investment Deposit may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank which may be granted or withheld in the Bankrsquos sole and absolute discretion on such terms and conditions as the Bank may determine Please refer to ldquoEarly WithdrawalTermination Risksrdquo under ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section for details
Pre-Investment Cooling-off Period for retail customers Pre-Investment Cooling-off Period (PICOP) is applicable to each particular dealing of this product if you are one of the following retail customer types
(1) An elderly customer aged 65 or above unless you are not a first-time buyer of currency-linked structured investment products AND your asset concentration is below 20 AND you opt out from the PICOP arrangement or
(2) A non-elderly customer who is a first time buyer of currency-linked structured investment products AND your asset concentration
is 20 or above
For the purpose of determining whether PICOP is applicable asset concentration refers to the percentage of total net worth (excluding real estate properties) to be invested in this product
Can the Bank adjust the terms or early terminate this product Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank in certain circumstances Please refer to Clause 7 of the Currency-Linked Capital Protected Investment Deposit Terms and Conditions for details
Offering documents for this product The following documents for this product (ldquoOffering Documentsrdquo) contain detailed information about the Bank and the terms of this product You should read and understand all of the Offering Documents before deciding whether to invest in this product
(i) Currency-Linked Capital Protected Investment Deposit Terms and Conditions (ii) The relevant Currency-Linked Capital Protected Investment Deposit Termsheet (iii) This Currency-Linked Capital Protected Investment Deposit Important Facts Statement
Other information Product Risk Level The Product Risk Level for Currency-Linked Capital Protected Investment Deposit is Low
Low Low-to-Medium Medium Medium-to-High High
Product Risk Level is determined by a number of factors which include the volatility of the currency pair and the tenor of the product The Product Risk Level is subject to the Banks periodic review and may change from time to time Please refer to our branch or our Customer Service Hotline on 2822 0228 for the latest detail
Declaration and Remarks bull This Important Facts Statement is not intended to provide or regard as legal or taxation advice or investment recommendations If you
have any concerns about this product or are uncertain about the suitability of this product for you you should obtain independent professional advice
bull The liabilities of the Bank in respect of the Currency-Linked Capital Protected Investment Deposit are limited exclusively to an office of the Bank in Hong Kong and instructions in respect of the Currency-Linked Capital Protected Investment Deposit may only be made to and acted upon by such office Any amount relating to the Currency-Linked Capital Protected Investment Deposit is payable exclusively by an office of the Bank in Hong Kong and in its stated currency The Terms and Conditions of the Currency-Linked Capital Protected Investment Deposit are governed by and shall be construed in accordance with the laws of Hong Kong
bull You may contact our staff if you have any feedback or complaint in relation to our services or call our hotline at 2822 0228 We will respond to you within a reasonable period of time normally not exceeding 30 days in general circumstances You may contact the Hong Kong Monetary Authority at 55th Floor Two International Finance Centre 8 Finance Street Central Hong Kong if you are not satisfied with our handling of your complaint
bull Hang Seng Bank Limited is a Registered Licensed Bank under the Banking Ordinance bull All Currency-Linked Capital Protected Investment Deposit cannot be cancelled after subscription bull The Bank will act as principal to complete the transaction and may obtain certain monetary benefits in connection with the offering of
this Currency-Linked Capital Protected Investment Deposit to the public The current remuneration system that the Bank adopts for
Page 10 of 67
sales staff is a measurement of the staffrsquos overall performance and not just based on sales amount bull The Bank is NOT an independent intermediary because
The Bank receives fees commissions or other monetary benefits from other parties in relation to the Bankrsquos distribution of Currency-Linked Capital Protected Investment Deposit to you For details you should refer to the Bankrsquos disclosure on monetary benefits which the Bank is required to deliver to you prior to or at the point of entering into any transaction in Currency-Linked Capital Protected Investment Deposit
bull Please note that this product is not available for persons who are located within the United States are nationals of the United States and are US Persons within the meaning of Regulation S under the Securities Act (which includes any person resident in the United States and any partnership or corporation organised or incorporated under the laws of the United States)
bull 請注意本行不提供本產品予身處美國的人士美國公民及美籍人士(定義見證券法 S 條例)(包括居住在美國之任何人士及根據美國法例組成
或註冊成立之任何合夥企業或公司)
Page 20 of 67
Currency-Linked Capital Protected Investment Deposit
American Range Investment
Dated May 2018
Important Facts Statement
This is a structured investment product which is NOT protected by the Deposit Protection Scheme in Hong Kong
The contents of this statement have not been reviewed by any regulatory authority in Hong Kong You are advised to exercise caution before investing in this product This statement is a part of the offering documents for this product You should not invest in this product based on this statement alone If you are in any doubt you should obtain independent professional advice
If English is not your preferred language you may request for the Chinese version of this statement from our sales staff 倘若英
文並非閣下屬意的語言閣下可向本行的銷售人員索取本概要的中文版本
This is a structured investment product involving derivatives The investment decision is yours but you should not invest in this product 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
Quick facts Bank Hang Seng Bank Limited
Product Type Currency-Linked Investment Deposit ndash American Range Investment (ldquothis productrdquo)
Minimum Investment Amount Subscription through branches - HKD 100000 (or its equivalent) Subscription through e-banking - HKD 50000 (or its equivalent)
Tenor 2 months or above or any other tenor as agreed between you and the Bank
Available Principal Currency (or Deposit Currency) HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY
Available Underlying Currency Pair AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD USDCNH and any other currency pairs as agreed between you and the Bank
Return Rate Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Deposit periodpayment date Deposit period refers to tenor of the product and return is payable only on Maturity Date
Principal protection at maturity Yes
Callable by the Bank No
Early termination right by customer No please refer to ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section ndash Early WithdrawalTermination Risks for details
Embedded derivatives Yes you will buy option(s) over the Underlying Currency Pair
Maximum potential gain Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Maximum potential loss Please refer to Scenario II amp III of Example 1 and Scenarios IV and V of Example 2 in the ldquoScenario analysisrdquo section of this product type for details
What is this product and how does it work bull American Range investment is one type of our Currency-Linked Capital Protected Investment Deposit which consists of a time deposit
(in Deposit currency) and buying option(s) on the Underlying Currency Pair of your choice bull You choose the Deposit Currency Underlying Currency Pair and the Observation Period according to your need and the Bank will set the
Trading Range bull During the whole Observation Period the Bank will compare the exchange rate of the Underlying Currency Pair with the Trading Range
If the exchange rate of the Underlying Currency Pair moves along with your anticipation and stays within the Trading Range during the whole Observation Period you will receive Guaranteed Principal and Potential Return If the exchange rate of the Underlying Currency Pair moves against your anticipation and at anytime during the Observation Period the exchange rate of the Underlying Currency Pair is outside the Trading Range you will receive Guaranteed Principal and Minimum Return (if any)
bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency Minimum return applies to certain investment tranches only you should refer to the relevant termsheet for details
Page 21 of 67
What are the key risks of Currency-Linked Capital Protected Investment Deposit Earnings on Currency-Linked Capital Protected Investment Deposit are limited to the Return Coupon (if any) payable You should consider the following risks and read all other information contained in the relevant Termsheet and Terms and Conditions before making any investment decision Not a time deposit Currency-Linked Capital Protected Investment Deposit 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 Capital Protected Investment Deposit is embedded with FX options Option transactions involve risks even when buying an option The optionrsquos value might become worthless if the market moves against your expectation Limited potential gain The maximum potential gain is limited to the pre-agreed ReturnCoupon calculated at the Potential ReturnCoupon Rate Not the same as buying the Underlying Currency Pair Investing in Currency-Linked Capital Protected Investment Deposit is not the same as buying the Underlying Currency Pair directly Market risk The investment return of Currency-Linked Capital Protected Investment Deposit is linked to the exchange rate of the Underlying Currency Pair Movements in exchange rates can be unpredictable sudden and drastic and affected by complex political and economic factors Liquidity risk Currency-Linked Capital Protected Investment Deposit is designed to be held till maturity The Bank may at its absolute discretion refuse to consent to any withdrawaltermination request before maturity Credit risk of the Bank Currency-Linked Capital Protected Investment Deposit is not secured by any collateral When you invest in Currency-Linked Capital Protected Investment Deposit you will be relying on the Bankrsquos creditworthiness If the Bank becomes insolvent or defaults on its obligations under a Currency-Linked Capital Protected Investment Deposit you can only claim as an unsecured creditor of the Bank In the worst case you could suffer a total loss of your investment amount Currency risk Exchange rate fluctuates and sometimes drastically If the Deposit Currency used for investment is not the home currency customarily used by you and thus conversion is required you should note that you may make a gain or suffer a loss due to exchange rate fluctuations When the deposit currency depreciates the loss from depreciation may set-off or even exceed the ReturnCoupon (if any) that you may receive from investing in the Currency-Linked Capital Protected Investment Deposit Risk of adjustments or early termination by the Bank Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank this might have a negative impact on the ReturnCoupon (if any) of the Currency-Linked Capital Protected Investment Deposit Concentration Risks You should avoid excessive investment (in terms of its proportion of the overall portfolio) in any single type of investment so as to avoid the investment portfolio being over-exposed to any particular investment risk ReturnCoupon of Currency-Linked Capital Protected Investment Deposit In order to provide capital protection the investment strategy adopted for Currency-Linked Capital Protected Investment Deposit may lead to a dilution of performance when compared to non-capital protected products investing in similar markets You should be prepared to take the risks of earning a lower ReturnCoupon (if any) on the capital invested and losing the interest that might otherwise earned on money invested by way of deposits For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) periodic Coupon may be payable to you For other types of Currency-Linked Capital Protected Investment Deposit no periodic ReturnCoupon will be payable to you prior to maturity Principal protection at maturity only You should understand that the Principal of the Currency-Linked Capital Protected Investment Deposit is capital-protected only when it is held to maturity If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the amount received by you upon early withdrawaltermination may be less than the amount initially invested by you Market Risks associated with Potential ReturnCoupon Apart from the ReturnCoupon calculated at the Minimum ReturnCoupon Rate (which may be set at zero) there is no guarantee of any ReturnCoupon calculated at the Potential ReturnCoupon Rate For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) Coupon (if any) is payable only if the Currency-Linked Capital Protected Investment Deposit is held till the relevant Coupon Distribution Dates ReturnCoupon (if any) of Currency-Linked Capital Protected Investment Deposit depends on the market conditions at the time of the relevant determination Investment return on foreign exchange-linked products are dependent on the prices of inter-banksrsquo transactions on the linked exchange rate in the foreign exchange markets You should be fully aware of the risks relating to fluctuations in the linked exchange rates Factors affecting the performance of foreign exchange markets are numerous including but are not limited to changes in global and local investment sentiments interest rate policies fund flows political environment economic environment business and social conditions in the local marketplace If the market trend is different from the view taken by you there is an inherent risk that the total investment return that you may receive from Currency-Linked Capital Protected Investment Deposit will be less than the interest that would have been payable on a time deposit for the same tenor There is also an inherent risk that no ReturnCoupon calculated at the Potential ReturnCoupon Rate will be payable to you in respect of the Currency-Linked Capital Protected Investment Deposit
Page 22 of 67
Early WithdrawalTermination Risks Early withdrawaltermination by you is not allowed for Currency-Linked Capital Protected Investment Deposit and the capital of you will be invested in the Currency-Linked Capital Protected Investment Deposit for the entire investment period The Bank may at its absolute discretion refuse to give consent to any early withdrawaltermination request If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the Bank shall be entitled to deduct from the Principal of the relevant Currency-Linked Capital Protected Investment Deposit andor any other amount which may have accrued to you any expenses costs or damages to the Bank Damages may include any costs expenses liability or losses to the Bank as a result of the early withdrawaltermination by you Therefore there is no guarantee that you will be able to receive the Principal and the amount payable to you at early withdrawaltermination may be less than the Principal initially invested Besides If the Currency-Linked Capital Protected Investment Deposit is early withdrawnterminated you will no longer be entitled to any ReturnCoupon of the Currency-Linked Capital Protected Investment Deposit Risks associated with unsuccessful subscriptions of Currency-Linked Capital Protected Investment Deposit The Bank reserves the absolute right to approve any application and to decline any application received (whether in whole or any part thereof) before the Deposit Start Date In the event of non-acceptance a notification will be sent by the Bank and any subscription funds received will be returned to you after the Deposit Start Date or as soon as practicable Risks relating to Renminbi If Currency-Linked Capital Protected Investment Deposit involves CNY the relevant exchange rate(s) or level(s) of the relevant currency pair will be quoted in offshore Renminbi against alternate currency While both onshore Renminbi and offshore Renminbi are the same currency they are traded in different and separate markets operating under different regulations and independent liquidity pool Onshore Renminbi and offshore Renminbi are currently quoted in different markets with different exchange rates whereby their exchange rate movements may not be in the same direction or magnitude The offshore Renminbi exchange rate may deviate significantly from the onshore Renminbi exchange rate You should also note that Renminbi is currently not freely convertible the value of Renminbi against other foreign currencies fluctuates and will be affected by amongst other things the PRC governmentrsquos control (for example the PRC government regulates conversion between Renminbi and foreign currencies) which may adversely affect your investment return under the Currency-Linked Capital Protected Investment Deposit when you convert CNY into your home currency Renminbi is subject to foreign exchange control by the PRC government and thus investors investing in Currency-Linked Investment Deposit involving Renminbi are subject to the currency risk of Renminbi
What are the key features bull This product is designed for you whose investment objective is capital protection or to obtain potential cash income bull This product is embedded with options You will buy option(s) on the Linked Currency Pair bull 100 principal protection if this product is held to maturity bull You can choose the Deposit Currency including HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY and Linked Currency
Pair including AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD and USDCNH bull The Deposit Period of the Currency-Linked Capital Protected Investment Deposit is 2 months or above bull You will have a chance to receive higher potential return depending on the movement of the exchange rate of the Underlying Currency
Pair during the Observation Period bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency bull The Bank pre-sets the Trading Range and Observation Period bull During the whole Observation Period the exchange rate of the Underlying Currency Pair is compared with the Trading Range to
determine the Return at maturity bull Returns (if any) on this product is payable only upon maturity bull This product may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank Please refer
to the section Can you request for early termination before maturity below
Scenario analysis (All figures shown below including the exchange rate of AUDUSD and HKDCNH Potential Return Rate Minimum Return Rate Deposit Period etc are for illustration only You should not rely on the below figures as any indication or guarantee on the expected interest amount of the Currency-Linked Capital Protected Investment Deposit you intend to invest Please refer to the Bank for up-to-date figures) Example 1 ndash American Range (where the Deposit Currency is your home currency) Assuming HKD is your home currency and you anticipate the Exchange Rate of AUDUSD will stay above 09850 but below 11150 for the next 6 months and set up an American Range Investment with HKD 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment American Range (AUDUSD) Principal Guarantee 100 Deposit Currency HKD Guaranteed Principal HKD 100000 Deposit Period 6 months Trading Range AUDUSD 09850 (ldquoLower Barrierrdquo) to 11150 (ldquoUpper Barrierrdquo) (excluding both barriers) Potential Return Rate 016 (around 032 pa)
Page 23 of 67
Minimum Return Rate 0015 (around 003 pa) Scenario I Best case scenario At any time during the Observation Period the Exchange Rate of AUDUSD stays within the Trading Range (ie above 09850 but below 11150) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = HKD 100000 x (1+016) = HKD 10016000 (with a gain of 016 of investment amount) Scenario II Worst case scenario At any time during the Observation Period the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 09850 or atabove 11150) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = HKD 100000 x (1+0015) = HKD 10001500
(with a gain of 0015 of investment amount) Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a HKD 100000 6-month Time Deposit on 30 April 2014 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500
Example 2 ndash American Range (where the Deposit Currency is not your home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency and you anticipate the Exchange Rate of AUDUSD will stay above 09850 but below 11150 for the next 6 months and set up an American Range Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment American Range (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trading Range AUDUSD 09850 (ldquoLower Barrierrdquo) to 11150 (ldquoUpper Barrierrdquo) (excluding both barriers) Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH (on deposit start date) 08000 Scenario I Best case scenario At any time during the Observation Period (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD stays within the Trading Range (ie above 09850 but below 11150) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of the road Gain scenario At any time during the Observation Period (assuming the exchange rate of HKDCNH remains unchanged the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 09850 or atabove 11150) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = CNY 100000 x (1+15) = CNY 10150000 (with a gain of 150 of investment amount)
0
Exchange Rate of
AUDUSD le 09850
Potential Return Minimum Return
Return Diagram Return at Maturity
09850 Exchange Rate of AUDUSD during the Observation Period
Minimum Return
09850 lt Exchange Rate of AUDUSD lt 11150
Exchange Rate of
AUDUSD ge 11150
11150
Page 24 of 67
Scenario III Off-setting scenario At any time during the Observation Period the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 09850 or atabove 11150) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD 000 Scenario IV Loss and Worst case scenario At any time during the Observation Period the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 09850 or atabove 11150) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951) In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a CNY 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received would be CNY 10030000
If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Please refer to the table below for details
0
Exchange Rate of
AUDUSD le 09850
Potential Return Minimum Return
Return Diagram
Return at Maturity
09850 Exchange Rate of AUDUSD during the Observation Period
Minimum Return
09850 lt Exchange Rate of AUDUSD lt 11150
Exchange Rate of
AUDUSD ge 11150
11150
Page 25 of 67
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date
The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date
If HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
How can you buy this product bull You can place a Currency-Linked Capital Protected Investment Deposit through our Hang Seng Bank Branches telephone or Hang Seng
Personal or Business e-Banking bull The Bank will provide a choice of different tranches which is subject to market conditions bull Enquiry Hotline Personal 2822 0228 Business 2198 8000
Fees and charges No handling fees or management fees will be charged for Currency-Linked Capital Protected Investment Deposit
Can you request for early termination before maturity No Currency-Linked Capital Protected Investment Deposit may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank which may be granted or withheld in the Bankrsquos sole and absolute discretion on such terms and conditions as the Bank may determine Please refer to ldquoEarly WithdrawalTermination Risksrdquo under ldquoWhat are the key features featuresrisks of Currency-Linked Capital Protected Investment Depositrdquo section for details
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
ix 9999990000 010 010 (12499990) (12499990)
At the beginning of the investment On the Maturity Date of the investment
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Potential Return
Exchange Rate of HKDCNH on the Maturity Date
0
If receiving Minimum Return
Breakeven = 08120^
If receiving Potential Return
Breakeven = 08240
If CNH depreciates drastically relative to HKD
HKDCNH = 9999990000
Exchange Rate on Deposit Start Date
Page 26 of 67
Pre-Investment Cooling-off Period for retail customers Pre-Investment Cooling-off Period (PICOP) is applicable to each particular dealing of this product if you are one of the following retail customer types
(1) An elderly customer aged 65 or above unless you are not a first-time buyer of currency-linked structured investment products AND your asset concentration is below 20 AND you opt out from the PICOP arrangement or
(2) A non-elderly customer who is a first time buyer of currency-linked structured investment products AND your asset concentration
is 20 or above
For the purpose of determining whether PICOP is applicable asset concentration refers to the percentage of total net worth (excluding real estate properties) to be invested in this product
Can the Bank adjust the terms or early terminate this product Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank in certain circumstances Please refer to Clause 7 of the Currency-Linked Capital Protected Investment Deposit Terms and Conditions for details
Offering documents for this product The following documents for this product (ldquoOffering Documentsrdquo) contain detailed information about the Bank and the terms of this product You should read and understand all of the Offering Documents before deciding whether to invest in this product
(i) Currency-Linked Capital Protected Investment Deposit Terms and Conditions (ii) The relevant Currency-Linked Capital Protected Investment Deposit Termsheet (iii) This Currency-Linked Capital Protected Investment Deposit Important Facts Statement
Other information Product Risk Level The Product Risk Level for Currency-Linked Capital Protected Investment Deposit is Low
Low Low-to-Medium Medium Medium-to-High High
Product Risk Level is determined by a number of factors which include the volatility of the currency pair and the tenor of the product The Product Risk Level is subject to the Banks periodic review and may change from time to time Please refer to our branch or our Customer Service Hotline on 2822 0228 for the latest detail Declaration and Remarks bull This Important Facts Statement is not intended to provide or regard as legal or taxation advice or investment recommendations If you
have any concerns about this product or are uncertain about the suitability of this product for you you should obtain independent professional advice
bull The liabilities of the Bank in respect of the Currency-Linked Capital Protected Investment Deposit are limited exclusively to an office of the Bank in Hong Kong and instructions in respect of the Currency-Linked Capital Protected Investment Deposit may only be made to and acted upon by such office Any amount relating to the Currency-Linked Capital Protected Investment Deposit is payable exclusively by an office of the Bank in Hong Kong and in its stated currency The Terms and Conditions of the Currency-Linked Capital Protected Investment Deposit are governed by and shall be construed in accordance with the laws of Hong Kong
bull You may contact our staff if you have any feedback or complaint in relation to our services or call our hotline at 2822 0228 We will respond to you within a reasonable period of time normally not exceeding 30 days in general circumstances You may contact the Hong Kong Monetary Authority at 55th Floor Two International Finance Centre 8 Finance Street Central Hong Kong if you are not satisfied with our handling of your complaint
bull Hang Seng Bank Limited is a Registered Licensed Bank under the Banking Ordinance bull All Currency-Linked Capital Protected Investment Deposit cannot be cancelled after subscription bull The Bank will act as principal to complete the transaction and may obtain certain monetary benefits in connection with the offering of
this Currency-Linked Capital Protected Investment Deposit to the public The current remuneration system that the Bank adopts for sales staff is a measurement of the staffrsquos overall performance and not just based on sales amount
bull The Bank is NOT an independent intermediary because The Bank receives fees commissions or other monetary benefits from other parties in relation to the Bankrsquos distribution of Currency-Linked Capital Protected Investment Deposit to you For details you should refer to the Bankrsquos disclosure on monetary benefits which the Bank is required to deliver to you prior to or at the point of entering into any transaction in Currency-Linked Capital Protected Investment Deposit
bull Please note that this product is not available for persons who are located within the United States are nationals of the United States and are US Persons within the meaning of Regulation S under the Securities Act (which includes any person resident in the United States and any partnership or corporation organised or incorporated under the laws of the United States)
bull 請注意本行不提供本產品予身處美國的人士美國公民及美籍人士(定義見證券法 S 條例)(包括居住在美國之任何人士及根據美國法例組
成或註冊成立之任何合夥企業或公司)
Page 34 of 67
Currency-Linked Capital Protected Investment Deposit
European (Bullish Bearish) Investment
Dated May 2018
Important Facts Statement
This is a structured investment product which is NOT protected by the Deposit Protection Scheme in Hong Kong
The contents of this statement have not been reviewed by any regulatory authority in Hong Kong You are advised to exercise caution before investing in this product This statement is a part of the offering documents for this product You should not invest in this product based on this statement alone If you are in any doubt you should obtain independent professional advice
If English is not your preferred language you may request for the Chinese version of this statement from our sales staff 倘若英文並
非閣下屬意的語言閣下可向本行的銷售人員索取本概要的中文版本
This is a structured investment product involving derivatives The investment decision is yours but you should not invest in this product 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
Quick facts
Bank Hang Seng Bank Limited
Product Type Currency-Linked Investment Deposit ndash European Bullish Bearish Investment (ldquothis productrdquo)
Minimum Investment Amount Subscription through branches - HKD 100000 (or its equivalent) Subscription through e-banking - HKD 50000 (or its equivalent)
Tenor 2 months or above or any other tenor as agreed between you and the Bank
Available Principal Currency (or Deposit Currency) HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY
Available Underlying Currency Pair AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD USDCNH and any other currency pairs as agreed between you and the Bank
Return Rate Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Deposit periodpayment date Deposit period refers to tenor of the product and return is payable only on Maturity Date
Principal protection at maturity Yes
Callable by the Bank No
Early termination right by customer No please refer to ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section ndash Early WithdrawalTermination Risks for details
Embedded derivatives Yes you will buy option(s) over the Underlying Currency Pair
Maximum potential gain Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Maximum potential loss Please refer to Scenarios II and III of Example 1 and 2 and Scenarios IV and V of Example 3 and 4 in ldquoScenario analysisrdquo section of this product type for details
What is this product and how does it work bull European Bullish Bearish investment is one type of our Currency-Linked Capital Protected Investment Deposit which consists of a time
deposit (in Deposit Currency) and buying option(s) on the Underlying Currency Pair of your choice bull You choose the Deposit Currency Underlying Currency Pair according to your need and the Bank will set the Trigger Level bull On the Final Exchange Rate Determination Date the Bank will compare the exchange rate of the Underlying Currency Pair with the Trigger
Level If the exchange rate of the Underlying Currency Pair moves along with your anticipation you will receive Guaranteed Principal and Potential Return If the exchange rate of the Underlying Currency Pair moves against your anticipation you will receive Guaranteed Principal and Minimum Return (if any)
bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency Minimum return applies to certain investment tranches only you should refer to the relevant termsheet for details
Page 35 of 67
What are the key risks of Currency-Linked Capital Protected Investment Deposit Earnings on Currency-Linked Capital Protected Investment Deposit are limited to the Return Coupon (if any) payable You should consider the following risks and read all other information contained in the relevant Termsheet and Terms and Conditions before making any investment decision Not a time deposit Currency-Linked Capital Protected Investment Deposit 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 Capital Protected Investment Deposit is embedded with FX options Option transactions involve risks even when buying an option The optionrsquos value might become worthless if the market moves against your expectation Limited potential gain The maximum potential gain is limited to the pre-agreed ReturnCoupon calculated at the Potential ReturnCoupon Rate Not the same as buying the Underlying Currency Pair Investing in Currency-Linked Capital Protected Investment Deposit is not the same as buying the Underlying Currency Pair directly Market risk The investment return of Currency-Linked Capital Protected Investment Deposit is linked to the exchange rate of the Underlying Currency Pair Movements in exchange rates can be unpredictable sudden and drastic and affected by complex political and economic factors Liquidity risk Currency-Linked Capital Protected Investment Deposit is designed to be held till maturity The Bank may at its absolute discretion refuse to consent to any withdrawaltermination request before maturity Credit risk of the Bank Currency-Linked Capital Protected Investment Deposit is not secured by any collateral When you invest in Currency-Linked Capital Protected Investment Deposit you will be relying on the Bankrsquos creditworthiness If the Bank becomes insolvent or defaults on its obligations under a Currency-Linked Capital Protected Investment Deposit you can only claim as an unsecured creditor of the Bank In the worst case you could suffer a total loss of your investment amount Currency risk Exchange rate fluctuates and sometimes drastically If the Deposit Currency used for investment is not the home currency customarily used by you and thus conversion is required you should note that you may make a gain or suffer a loss due to exchange rate fluctuations When the deposit currency depreciates the loss from depreciation may set-off or even exceed the ReturnCoupon (if any) that you may receive from investing in the Currency-Linked Capital Protected Investment Deposit Risk of adjustments or early termination by the Bank Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank this might have a negative impact on the ReturnCoupon (if any) of the Currency-Linked Capital Protected Investment Deposit Concentration Risks You should avoid excessive investment (in terms of its proportion of the overall portfolio) in any single type of investment so as to avoid the investment portfolio being over-exposed to any particular investment risk ReturnCoupon of Currency-Linked Capital Protected Investment Deposit In order to provide capital protection the investment strategy adopted for Currency-Linked Capital Protected Investment Deposit may lead to a dilution of performance when compared to non-capital protected products investing in similar markets You should be prepared to take the risks of earning a lower ReturnCoupon (if any) on the capital invested and losing the interest that might otherwise earned on money invested by way of deposits For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) periodic Coupon may be payable to you For other types of Currency-Linked Capital Protected Investment Deposit no periodic ReturnCoupon will be payable to you prior to maturity Principal protection at maturity only You should understand that the Principal of the Currency-Linked Capital Protected Investment Deposit is capital-protected only when it is held to maturity If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the amount received by you upon early withdrawaltermination may be less than the amount initially invested by you Market Risks associated with Potential ReturnCoupon Apart from the ReturnCoupon calculated at the Minimum ReturnCoupon Rate (which may be set at zero) there is no guarantee of any ReturnCoupon calculated at the Potential ReturnCoupon Rate For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) Coupon (if any) is payable only if the Currency-Linked Capital Protected Investment Deposit is held till the relevant Coupon Distribution Dates ReturnCoupon (if any) of Currency-Linked Capital Protected Investment Deposit depends on the market conditions at the time of the relevant determination Investment return on foreign exchange-linked products are dependent on the prices of inter-banksrsquo transactions on the linked exchange rate in the foreign exchange markets You should be fully aware of the risks relating to fluctuations in the linked exchange rates Factors affecting the performance of foreign exchange markets are numerous including but are not limited to changes in global and local investment sentiments interest rate policies fund flows political environment economic environment business and social conditions in the local marketplace If the market trend is different from the view taken by you there is an inherent risk that the total investment return that you may receive from Currency-Linked Capital Protected Investment Deposit will be less than the interest that would have been payable on a time deposit for the same tenor There is also an inherent risk that no ReturnCoupon calculated at the Potential ReturnCoupon Rate will be payable to you in respect of the Currency-Linked Capital Protected Investment Deposit Early WithdrawalTermination Risks Early withdrawaltermination by you is not allowed for Currency-Linked Capital Protected Investment Deposit and the capital of you will be invested in the Currency-Linked Capital Protected Investment Deposit for the entire investment period The Bank may at its absolute discretion refuse to give consent to any early withdrawaltermination request If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the Bank shall be entitled to deduct from the Principal of the relevant Currency-Linked Capital Protected Investment Deposit andor any other amount which may have accrued to you any expenses costs or damages to the Bank Damages may include any costs expenses liability or losses to the Bank as a result of the early withdrawaltermination by you Therefore there is no guarantee that you will be able to receive the Principal and the amount payable to you at early withdrawaltermination may be less
Page 36 of 67
than the Principal initially invested Besides If the Currency-Linked Capital Protected Investment Deposit is early withdrawnterminated you will no longer be entitled to any ReturnCoupon of the Currency-Linked Capital Protected Investment Deposit Risks associated with unsuccessful subscriptions of Currency-Linked Capital Protected Investment Deposit The Bank reserves the absolute right to approve any application and to decline any application received (whether in whole or any part thereof) before the Deposit Start Date In the event of non-acceptance a notification will be sent by the Bank and any subscription funds received will be returned to you after the Deposit Start Date or as soon as practicable Risks relating to Renminbi If Currency-Linked Capital Protected Investment Deposit involves CNY the relevant exchange rate(s) or level(s) of the relevant currency pair will be quoted in offshore Renminbi against alternate currency While both onshore Renminbi and offshore Renminbi are the same currency they are traded in different and separate markets operating under different regulations and independent liquidity pool Onshore Renminbi and offshore Renminbi are currently quoted in different markets with different exchange rates whereby their exchange rate movements may not be in the same direction or magnitude The offshore Renminbi exchange rate may deviate significantly from the onshore Renminbi exchange rate You should also note that Renminbi is currently not freely convertible the value of Renminbi against other foreign currencies fluctuates and will be affected by amongst other things the PRC governmentrsquos control (for example the PRC government regulates conversion between Renminbi and foreign currencies) which may adversely affect your investment return under the Currency-Linked Capital Protected Investment Deposit when you convert CNY into your home currency Renminbi is subject to foreign exchange control by the PRC government and thus investors investing in Currency-Linked Investment Deposit involving Renminbi are subject to the currency risk of Renminbi
What are the key features bull This product is designed for you whose investment objective is capital protection or to obtain potential cash income
bull This product is embedded with options You will buy option(s) on the Linked Currency Pair bull 100 principal protection if the Currency-Linked Capital Protected Investment Deposit is held to maturity bull You can choose the Deposit Currency including HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY and Linked Currency Pair
including AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD and USDCNH bull The Deposit Period of this product is 2 months or above bull You will have a chance to receive higher potential return depending on the movement of the exchange rate of the Underlying Currency Pair bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency bull The Bank pre-sets the Trigger Level and you choose a bullish or bearish view on different currencies bull On the Final Exchange Rate Determination Date the exchange rate of the Underlying Currency Pair is compared with the Trigger Level to
determine the Return at maturity bull Returns (if any) on this product is payable only upon maturity bull This product may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank Please refer to
the section Can you request for early termination before maturity below
Scenario analysis (All figures shown below including the exchange rate of AUDUSD and HKDCNH Potential Return Rate Minimum Return Rate Deposit Period etc are for illustration only You should not rely on the below figures as any indication or guarantee on the expected interest amount of the Currency-Linked Capital Protected Investment Deposit you intend to invest Please refer to the Bank for up-to-date figures) Example 1 ndash European Bullish (where the Deposit Currency is your home currency) Assuming HKD is your home currency and you take a bullish view on Australian Dollar expect the exchange rate of AUDUSD will rise from 09400 to 09800 or above after the 6-month period and set up an European Bullish Investment with HKD 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Bullish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency HKD Guaranteed Principal HKD 100000 Deposit Period 6 months Trigger Level AUDUSD 09800 Potential Return Rate 016 (around 032 pa) Minimum Return Rate 0015 (around 003 pa) Scenario I Best case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is at or above the Trigger Level (ie at or above 09800) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = HKD 100000 x (1+016) = HKD 10016000 (with a gain of 016 of investment amount) Scenario II Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is below the Trigger Level (ie below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity
Page 37 of 67
Total Return at Maturity = HKD 100000 x (1+0015) = HKD 10001500 (with a gain of 0015 of investment amount) Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount
For reference only if you set up a HKD 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500
Example 2 ndash European Bearish (where the Deposit Currency is your home currency) Assuming HKD is your home currency and you take a bearish view on Australian Dollar expect the exchange rate of AUDUSD will drop from 09400 to 09000 or below after the 6-month period and set up an European Bearish Investment with HKD 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Bearish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency HKD Guaranteed Principal HKD 100000 Deposit Period 6 months Trigger Level AUDUSD 09000 Potential Return Rate 016 (around 032 pa) Minimum Return Rate 0015 (around 003 pa) Scenario I Best case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is at or below the Trigger Level (ie at or below 09000) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = HKD 100000 x (1+016) = HKD 10016000 (with a gain of 016 of investment amount) Scenario II Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is above the Trigger Level (ie above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = HKD 100000 x (1+0015) = HKD 10001500 (with a gain of 0015 of investment amount) Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount
0
Final Exchange Rate of AUDUSD lt Trigger Level
Potential Return Minimum Return
Return Diagram Return at Maturity
09800 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Final Exchange Rate of AUDUSD ge Trigger Level
Trigger Level = 09800
Page 38 of 67
For reference only if you set up a HKD 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500 Example 3 ndash European Bullish (where the Deposit Currency is not home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency you take a bullish view on Australian Dollar expect the exchange rate of AUDUSD will rise from 09400 to 09800 or above after the 6-month period and set up an European Bullish Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Bullish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trigger Level AUDUSD 09800 Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH on deposit start date 08000 Scenario I Best case scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is at or above the Trigger Level (ie at or above 09800) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of-the road Gain scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is below the Trigger Level (ie below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Scenario III Off-setting scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is below the Trigger Level (ie below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD 000
0
Final Exchange Rate of AUDUSD
le Trigger Level
Potential Return Minimum Return
Return Diagram
Return at Maturity
09000 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Final Exchange Rate of AUDUSD gt Trigger Level
Trigger Level = 09000
Page 39 of 67
Scenario IV Loss and Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is below the Trigger Level (ie below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 101500 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951) In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount
For reference only if you set up a CNY 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received at maturity would be CNY 10030000 If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Please refer to the table below for details
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
viiii 9999990000 010 010 (12499990) (12499990)
103000 101500 12500000 10000008000
At the beginning of the investment On the Maturity Date of the investment
Exchange
Rate of
HKDCNH
Initial
Investment
Amount in
Renminbi
Initial
Investment
Amount in
HKD
Exchange Rate
of HKDCNH
Total Return in
Renminbi
Total Return in
HKD
Gain (loss) in HKD if converting the
Total Return from Renminbi to home
currency (HKD)
0
Final Exchange Rate of AUDUSD lt Trigger Level
Potential Return Minimum Return
Return Diagram
Return at Maturity
09800 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Final Exchange Rate of AUDUSD ge Trigger Level
Trigger Level = 09800
Page 40 of 67
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date
The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date
If HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
Example 4 ndash European Bearish (where the Deposit Currency is not home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency you take a bearish view on Australian Dollar expect the exchange rate of AUDUSD will drop from 09400 to 09000 or below after the 6-month period and set up an European Bearish Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Bearish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trigger Level AUDUSD 09000 Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH at the time of investment 08000 Scenario I Best case scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is at or below the Trigger Level (ie at or below 09000) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of-the road Gain scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is above the Trigger Level (ie above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Scenario III Off-setting scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is above the Trigger Level (ie above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Exchange Rate of HKDCNH on the Maturity Date
0
If receiving Minimum Return
Breakeven = 08120^
If receiving Potential Return
Breakeven = 08240
Exchange Rate on Deposit Start Date
Potential Return
Minimum Return
If CNH depreciates drastically relative to HKD
HKDCNH = 9999990000
Page 41 of 67
= HKD 12500000 Gain(Loss) in home currency HKD 000 Scenario IV Loss and Worst Case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is above the Trigger Level (ie above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951) In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount
For reference only if you set up a CNY 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received at maturity would be CNY 10030000 If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Please refer to the table below for details
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
viiii 9999990000 010 010 (12499990) (12499990)
103000 101500 12500000 10000008000
At the beginning of the investment On the Maturity Date of the investment
Exchange
Rate of
HKDCNH
Initial
Investment
Amount in
Renminbi
Initial
Investment
Amount in
HKD
Exchange Rate
of HKDCNH
Total Return in
Renminbi
Total Return in
HKD
Gain (loss) in HKD if converting the
Total Return from Renminbi to home
currency (HKD)
0
Final Exchange Rate of AUDUSD le Trigger Level
Potential Return Minimum Return
Return Diagram Return at Maturity
09000 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Final Exchange Rate of AUDUSD gt Trigger Level
Trigger Level = 09000
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Page 42 of 67
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date
The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date
If HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
How can you buy this product bull You can place a Currency-Linked Capital Protected Investment Deposit through our Hang Seng Bank Branches telephone or Hang Seng
Personal or Business e-Banking bull The Bank will provide a choice of different tranches which is subject to market conditions bull Enquiry Hotline Personal 2822 0228 Business 2198 8000
Fees and charges No handling fees or management fees will be charged for Currency-Linked Capital Protected Investment Deposit
Can you request for early termination before maturity No Currency-Linked Capital Protected Investment Deposit may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank which may be granted or withheld in the Bankrsquos sole and absolute discretion on such terms and conditions as the Bank may determine Please refer to ldquoEarly WithdrawalTermination Risksrdquo under ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section for details
Pre-Investment Cooling-off Period for retail customers Pre-Investment Cooling-off Period (PICOP) is applicable to each particular dealing of this product if you are one of the following retail customer types
(1) An elderly customer aged 65 or above unless you are not a first-time buyer of currency-linked structured investment products AND your asset concentration is below 20 AND you opt out from the PICOP arrangement or
(2) A non-elderly customer who is a first time buyer of currency-linked structured investment products AND your asset concentration is
20 or above
For the purpose of determining whether PICOP is applicable asset concentration refers to the percentage of total net worth (excluding real estate properties) to be invested in this product
Can the Bank adjust the terms or early terminate this product Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank in certain circumstances Please refer to Clause 7 of the Currency-Linked Capital Protected Investment Deposit Terms and Conditions for details
Offering documents for this product The following documents for this product (ldquoOffering Documentsrdquo) contain detailed information about the Bank and the terms of this product You should read and understand all of the Offering Documents before deciding whether to invest in this product
(i) Currency-Linked Capital Protected Investment Deposit Terms and Conditions (ii) The relevant Currency-Linked Capital Protected Investment Deposit Termsheet (iii) This Currency-Linked Capital Protected Investment Deposit Important Facts Statement
Product Risk Level The Product Risk Level for Currency-Linked Capital Protected Investment Deposit is Low
Low Low-to-Medium Medium Medium-to-High High
Product Risk Level is determined by a number of factors which include the volatility of the currency pair and the tenor of the product The Product Risk Level is subject to the Banks periodic review and may change from time to time Please refer to our branch or our Customer Service Hotline on 2822 0228 for the latest detail Declaration and Remarks bull This Important Facts Statement is not intended to provide or regard as legal or taxation advice or investment recommendations If you have
any concerns about this product or are uncertain about the suitability of this product for you you should obtain independent professional advice
bull The liabilities of the Bank in respect of the Currency-Linked Capital Protected Investment Deposit are limited exclusively to an office of the Bank in Hong Kong and instructions in respect of the Currency-Linked Capital Protected Investment Deposit may only be made to and acted upon by such office Any amount relating to the Currency-Linked Capital Protected Investment Deposit is payable exclusively by an office of the Bank in Hong Kong and in its stated currency The Terms and Conditions of the Currency-Linked Capital Protected Investment Deposit are governed by and shall be construed in accordance with the laws of Hong Kong
bull You may contact our staff if you have any feedback or complaint in relation to our services or call our hotline at 2822 0228 We will respond to you within a reasonable period of time normally not exceeding 30 days in general circumstances You may contact the Hong Kong Monetary Authority at 55th Floor Two International Finance Centre 8 Finance Street Central Hong Kong if you are not satisfied with our handling of your complaint
bull Hang Seng Bank Limited is a Registered Licensed Bank under the Banking Ordinance bull All Currency-Linked Capital Protected Investment Deposit cannot be cancelled after subscription bull The Bank will act as principal to complete the transaction and may obtain certain monetary benefits in connection with the offering of this
Currency-Linked Capital Protected Investment Deposit to the public The current remuneration system that the Bank adopts for sales staff is a measurement of the staffrsquos overall performance and not just based on sales amount
bull The Bank is NOT an independent intermediary because The Bank receives fees commissions or other monetary benefits from other parties in relation to the Bankrsquos distribution of Currency-Linked Capital Protected Investment Deposit to you For details you should refer to the Bankrsquos disclosure on monetary benefits which the Bank is required to deliver to you prior to or at the point of entering into any transaction in Currency-Linked Capital Protected Investment Deposit
bull Please note that this product is not available for persons who are located within the United States are nationals of the United States and are US Persons within the meaning of Regulation S under the Securities Act (which includes any person resident in the United States and any partnership or corporation organised or incorporated under the laws of the United States)
bull 請注意本行不提供本產品予身處美國的人士美國公民及美籍人士(定義見證券法 S 條例)(包括居住在美國之任何人士及根據美國法例組成
或註冊成立之任何合夥企業或公司)
Page 53 of 67
Currency-Linked Capital Protected Investment Deposit
European Range Investment
Dated May 2018
Important Facts Statement
This is a structured investment product which is NOT protected by the Deposit
Protection Scheme in Hong Kong
The contents of this statement have not been reviewed by any regulatory authority in Hong Kong You are advised to exercise caution before investing in this product This statement is a part of the offering documents for this product You should not invest in this product based on this statement alone If you are in any doubt you should obtain independent professional advice
If English is not your preferred language you may request for the Chinese version of this statement from our sales staff 倘若英
文並非閣下屬意的語言閣下可向本行的銷售人員索取本概要的中文版本
This is a structured investment product involving derivatives The investment decision is yours but you should not invest in this product 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
Quick facts Bank Hang Seng Bank Limited
Product Type Currency-Linked Investment Deposit ndash European Range Investment (ldquothis productrdquo)
Minimum Investment Amount Subscription through branches - HKD 100000 (or its equivalent) Subscription through e-banking - HKD 50000 (or its equivalent)
Tenor 2 months or above or any other tenor as agreed between you and the Bank
Available Principal Currency (or Deposit Currency) HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY
Available Underlying Currency Pair AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD USDCNH and any other currency pairs as agreed between you and the Bank
Return Rate Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Deposit periodpayment date Deposit period refers to tenor of the product and return is payable only on Maturity Date
Principal protection at maturity Yes
Callable by the Bank No
Early termination right by customer No please refer to ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section ndash Early WithdrawalTermination Risks for details
Embedded derivatives Yes you will buy option(s) over the Underlying Currency Pair
Maximum potential gain Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Maximum potential loss Please refer to Scenarios II and III of Example 1 and Scenarios IV and V of Example 2 in the ldquoScenario analysisrdquo section of this product type for details
What is this product and how does it work bull European Range investment is one type of our Currency-Linked Capital Protected Investment Deposit which consists of a time deposit
(in Deposit Currency) and buying option(s) on the Underlying Currency Pair of your choice bull You choose the Deposit Currency Underlying Currency Pair according to your need and the Bank will set the Trading Range bull On the Final Exchange Rate Determination Date the Bank will compare the exchange rate of the Underlying Currency Pair with the
Trading Range If the exchange rate of the Underlying Currency Pair moves along with your anticipation and is within the Trading Range you will receive Guaranteed Principal and Potential Return If the exchange rate of the Underlying Currency Pair moves against your anticipation and is outside the Trading Range you will receive Guaranteed Principal and Minimum Return (if any)
bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency Minimum return applies to certain investment tranches only you should refer to the relevant termsheet for details
Page 54 of 67
What are the key risks of Currency-Linked Capital Protected Investment Deposit Earnings on Currency-Linked Capital Protected Investment Deposit are limited to the Return Coupon (if any) payable You should consider the following risks and read all other information contained in the relevant Termsheet and Terms and Conditions before making any investment decision Not a time deposit Currency-Linked Capital Protected Investment Deposit 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 Capital Protected Investment Deposit is embedded with FX options Option transactions involve risks even when buying an option The optionrsquos value might become worthless if the market moves against your expectation Limited potential gain The maximum potential gain is limited to the pre-agreed ReturnCoupon calculated at the Potential ReturnCoupon Rate Not the same as buying the Underlying Currency Pair Investing in Currency-Linked Capital Protected Investment Deposit is not the same as buying the Underlying Currency Pair directly Market risk The investment return of Currency-Linked Capital Protected Investment Deposit is linked to the exchange rate of the Underlying Currency Pair Movements in exchange rates can be unpredictable sudden and drastic and affected by complex political and economic factors Liquidity risk Currency-Linked Capital Protected Investment Deposit is designed to be held till maturity The Bank may at its absolute discretion refuse to consent to any withdrawaltermination request before maturity Credit risk of the Bank Currency-Linked Capital Protected Investment Deposit is not secured by any collateral When you invest in Currency-Linked Capital Protected Investment Deposit you will be relying on the Bankrsquos creditworthiness If the Bank becomes insolvent or defaults on its obligations under a Currency-Linked Capital Protected Investment Deposit you can only claim as an unsecured creditor of the Bank In the worst case you could suffer a total loss of your investment amount Currency risk Exchange rate fluctuates and sometimes drastically If the Deposit Currency used for investment is not the home currency customarily used by you and thus conversion is required you should note that you may make a gain or suffer a loss due to exchange rate fluctuations When the deposit currency depreciates the loss from depreciation may set-off or even exceed the ReturnCoupon (if any) that you may receive from investing in the Currency-Linked Capital Protected Investment Deposit Risk of adjustments or early termination by the Bank Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank this might have a negative impact on the ReturnCoupon (if any) of the Currency-Linked Capital Protected Investment Deposit Concentration Risks You should avoid excessive investment (in terms of its proportion of the overall portfolio) in any single type of investment so as to avoid the investment portfolio being over-exposed to any particular investment risk ReturnCoupon of Currency-Linked Capital Protected Investment Deposit In order to provide capital protection the investment strategy adopted for Currency-Linked Capital Protected Investment Deposit may lead to a dilution of performance when compared to non-capital protected products investing in similar markets You should be prepared to take the risks of earning a lower ReturnCoupon (if any) on the capital invested and losing the interest that might otherwise earned on money invested by way of deposits For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) periodic Coupon may be payable to you For other types of Currency-Linked Capital Protected Investment Deposit no periodic ReturnCoupon will be payable to you prior to maturity Principal protection at maturity only You should understand that the Principal of the Currency-Linked Capital Protected Investment Deposit is capital-protected only when it is held to maturity If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the amount received by you upon early withdrawaltermination may be less than the amount initially invested by you Market Risks associated with Potential ReturnCoupon Apart from the ReturnCoupon calculated at the Minimum ReturnCoupon Rate (which may be set at zero) there is no guarantee of any ReturnCoupon calculated at the Potential ReturnCoupon Rate For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) Coupon (if any) is payable only if the Currency-Linked Capital Protected Investment Deposit is held till the relevant Coupon Distribution Dates ReturnCoupon (if any) of Currency-Linked Capital Protected Investment Deposit depends on the market conditions at the time of the relevant determination Investment return on foreign exchange-linked products are dependent on the prices of inter-banksrsquo transactions on the linked exchange rate in the foreign exchange markets You should be fully aware of the risks relating to fluctuations in the linked exchange rates Factors affecting the performance of foreign exchange markets are numerous including but are not limited to changes in global and local investment sentiments interest rate policies fund flows political environment economic environment business and social conditions in the local marketplace If the market trend is different from the view taken by you there is an inherent risk that the total investment return that you may receive from Currency-Linked Capital Protected Investment Deposit will be less than the interest that would have been payable on a time deposit for the same tenor There is also an inherent risk that no ReturnCoupon calculated at the Potential ReturnCoupon Rate will be payable to you in respect of the Currency-Linked Capital Protected Investment Deposit
Page 55 of 67
Early WithdrawalTermination Risks Early withdrawaltermination by you is not allowed for Currency-Linked Capital Protected Investment Deposit and the capital of you will be invested in the Currency-Linked Capital Protected Investment Deposit for the entire investment period The Bank may at its absolute discretion refuse to give consent to any early withdrawaltermination request If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the Bank shall be entitled to deduct from the Principal of the relevant Currency-Linked Capital Protected Investment Deposit andor any other amount which may have accrued to you any expenses costs or damages to the Bank Damages may include any costs expenses liability or losses to the Bank as a result of the early withdrawaltermination by you Therefore there is no guarantee that you will be able to receive the Principal and the amount payable to you at early withdrawaltermination may be less than the Principal initially invested Besides If the Currency-Linked Capital Protected Investment Deposit is early withdrawnterminated you will no longer be entitled to any ReturnCoupon of the Currency-Linked Capital Protected Investment Deposit Risks associated with unsuccessful subscriptions of Currency-Linked Capital Protected Investment Deposit The Bank reserves the absolute right to approve any application and to decline any application received (whether in whole or any part thereof) before the Deposit Start Date In the event of non-acceptance a notification will be sent by the Bank and any subscription funds received will be returned to you after the Deposit Start Date or as soon as practicable Risks relating to Renminbi If Currency-Linked Capital Protected Investment Deposit involves CNY the relevant exchange rate(s) or level(s) of the relevant currency pair will be quoted in offshore Renminbi against alternate currency While both onshore Renminbi and offshore Renminbi are the same currency they are traded in different and separate markets operating under different regulations and independent liquidity pool Onshore Renminbi and offshore Renminbi are currently quoted in different markets with different exchange rates whereby their exchange rate movements may not be in the same direction or magnitude The offshore Renminbi exchange rate may deviate significantly from the onshore Renminbi exchange rate You should also note that Renminbi is currently not freely convertible the value of Renminbi against other foreign currencies fluctuates and will be affected by amongst other things the PRC governmentrsquos control (for example the PRC government regulates conversion between Renminbi and foreign currencies) which may adversely affect your investment return under the Currency-Linked Capital Protected Investment Deposit when you convert CNY into your home currency Renminbi is subject to foreign exchange control by the PRC government and thus investors investing in Currency-Linked Investment Deposit involving Renminbi are subject to the currency risk of Renminbi
What are the key features bull This product is designed for you whose investment objective is capital protection or to obtain potential cash income bull This product is embedded with options You will buy option(s) on the Linked Currency Pair bull 100 principal protection if this product is held to maturity bull You can choose the Deposit Currency including HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY and Linked Currency
Pair including AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD and USDCNH bull The Deposit Period of this product is 2 months or above
bull You will have a chance to receive higher potential return depending on the movement of the exchange rate of the Underlying Currency
Pair bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency bull The Bank pre-sets the Trading Range bull On the Final Exchange Rate Determination Date the exchange rate of the Underlying Currency Pair is compared with the Trading Range
to determine the Return at maturity bull Returns (if any) on this product is payable only upon maturity bull This product may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank Please refer to
the section Can you request for early termination before maturity below
Scenario analysis (All figures shown below including the exchange rate of AUDUSD and HKDCNH Potential Return Rate Minimum Return Rate Deposit Period etc are for illustration only You should not rely on the figures as any indication or guarantee on the expected interest amount of the Currency-Linked Capital Protected Investment Deposit you intend to invest Please refer to the Bank for up-to-date figures) Example 1 ndash European Range (where the Deposit Currency is your home currency) Assuming HKD is your home currency and you anticipate the Exchange Rate of AUDUSD will be above 10250 but below 10750 after 6 months and set up an European Range Investment with HKD 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Range (AUDUSD) Principal Guarantee 100 Deposit Currency HKD Guaranteed Principal HKD 100000 Deposit Period 6 months Trading Range AUDUSD 10250 (ldquoLower Barrierrdquo) to 10750 (ldquoUpper Barrierrdquo) (excluding both barriers) Potential Return Rate 016 (around 032 pa)
Page 56 of 67
Minimum Return Rate 0015 (around 003 pa) Scenario I Best case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is within the Trading Range (ie above 10250 but below 10750) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = HKD 100000 x (1+016) = HKD 10016000 (with a gain of 016 of investment amount) Scenario II Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 10250 or atabove 10750) you will receive Guaranteed Principal and Minimum Return at maturity Total Return at Maturity = HKD 100000 x (1+0015) = HKD 10001500 (with a gain of 0015 of investment amount) Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a HKD 100000 6 month Time Deposit on 30 April 2015 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500 Example 2 ndash European Range (where the Deposit Currency is not your home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency and you anticipate the Exchange Rate of AUDUSD will be above 10250 but below 10750 after 6 months and set up an European Range Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Range (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trading Range AUDUSD 10250 (ldquoLower Barrierrdquo) to 10750 (ldquoUpper Barrierrdquo) (excluding both barriers) Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH (on deposit start date) 08000 Scenario I Best case scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is within the Trading Range (ie above 10250 but below 10750) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of-the road Gain scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 10250 or atabove 10750) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount)
0
Final Exchange Rate of
AUDUSD le10250
Potential Return Minimum Return
Return Diagram
Return at Maturity
10250 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Minimum Return
Final Exchange Rate of
AUDUSD ge 10750
10750
10250lt Final Exchange Rate of AUDUSD lt10750
Page 57 of 67
Scenario III Off-setting scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 10250 or atabove 10750) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD 000 Scenario IV Loss and Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 10250 or atabove 10750) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 101500 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951) In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a CNY 100000 6 month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received at maturity would be CNY 10030000 If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to
0
Final Exchange Rate of
AUDUSD le10250
Potential Return Minimum Return
Return Diagram
Return at Maturity
10250 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Minimum Return
Final Exchange Rate of
AUDUSD ge 10750
10750
10250lt Final Exchange Rate of AUDUSD lt10750
Page 58 of 67
depreciation of Renminbi Please refer to the table below for details
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date
The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date
If HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
How can you buy this product
bull You can place a Currency-Linked Capital Protected Investment Deposit through our Hang Seng Bank Branches telephone or Hang
Seng Personal or Business e-Banking
bull The Bank will provide a choice of different tranches which is subject to market conditions
bull Enquiry Hotline Personal 2822 0228
Business 2198 8000
Fees and charges No handling fees or management fees will be charged for Currency-Linked Capital Protected Investment Deposit
Can you request for early termination before maturity No Currency-Linked Capital Protected Investment Deposit may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank which may be granted or withheld in the Bankrsquos sole and absolute discretion on such terms and conditions as the Bank may determine Please refer to ldquoEarly WithdrawalTermination Risksrdquo under ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section for details
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
ix 9999990000 010 010 (12499990) (12499990)
At the beginning of the investment On the Maturity Date of the investment
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Potential Return
Exchange Rate of HKDCNH on the Maturity Date
0
If receiving Minimum Return
Breakeven = 08120^
If receiving Potential Return
Breakeven = 08240
If CNH depreciates drastically relative to HKD
HKDCNH = 9999990000
Exchange Rate on Deposit Start Date
Page 59 of 67
Pre-Investment Cooling-off Period for retail customers Pre-Investment Cooling-off Period (PICOP) is applicable to each particular dealing of this product if you are one of the following retail customer types
(1) An elderly customer aged 65 or above unless you are not a first-time buyer of currency-linked structured investment products AND your asset concentration is below 20 AND you opt out from the PICOP arrangement or
(2) A non-elderly customer who is a first time buyer of currency-linked structured investment products AND your asset concentration
is 20 or above
For the purpose of determining whether PICOP is applicable asset concentration refers to the percentage of total net worth (excluding real estate properties) to be invested in this product
Can the Bank adjust the terms or early terminate this product Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank in certain circumstances Please refer to Clause 7 of the Currency-Linked Capital Protected Investment Deposit Terms and Conditions for details
Offering documents for this product The following documents for this product (ldquoOffering Documentsrdquo) contain detailed information about the Bank and the terms of this product You should read and understand all of the Offering Documents before deciding whether to invest in this product
(i) Currency-Linked Capital Protected Investment Deposit Terms and Conditions (ii) The relevant Currency-Linked Capital Protected Investment Deposit Termsheet (iii) This Currency-Linked Capital Protected Investment Deposit Important Facts Statement
Other information Product Risk Level The Product Risk Level for Currency-Linked Capital Protected Investment Deposit is Low
Low Low-to-Medium Medium Medium-to-High High
Product Risk Level is determined by a number of factors which include the volatility of the currency pair and the tenor of the product The Product Risk Level is subject to the Banks periodic review and may change from time to time Please refer to our branch or our Customer Service Hotline on 2822 0228 for the latest detail Declaration and Remarks bull This Important Facts Statement is not intended to provide or regard as legal or taxation advice or investment recommendations If you
have any concerns about this product or are uncertain about the suitability of this product for you you should obtain independent professional advice
bull The liabilities of the Bank in respect of the Currency-Linked Capital Protected Investment Deposit are limited exclusively to an office of the Bank in Hong Kong and instructions in respect of the Currency-Linked Capital Protected Investment Deposit may only be made to and acted upon by such office Any amount relating to the Currency-Linked Capital Protected Investment Deposit is payable exclusively by an office of the Bank in Hong Kong and in its stated currency The Terms and Conditions of the Currency-Linked Capital Protected Investment Deposit are governed by and shall be construed in accordance with the laws of Hong Kong
bull You may contact our staff if you have any feedback or complaint in relation to our services or call our hotline at 2822 0228 We will respond to you within a reasonable period of time normally not exceeding 30 days in general circumstances You may contact the Hong Kong Monetary Authority at 55th Floor Two International Finance Centre 8 Finance Street Central Hong Kong if you are not satisfied with our handling of your complaint
bull Hang Seng Bank Limited is a Registered Licensed Bank under the Banking Ordinance bull All Currency-Linked Capital Protected Investment Deposit cannot be cancelled after subscription bull The Bank will act as principal to complete the transaction and may obtain certain monetary benefits in connection with the offering of
this Currency-Linked Capital Protected Investment Deposit to the public The current remuneration system that the Bank adopts for sales staff is a measurement of the staffrsquos overall performance and not just based on sales amount
bull The Bank is NOT an independent intermediary because The Bank receives fees commissions or other monetary benefits from other parties in relation to the Bankrsquos distribution of Currency-Linked Capital Protected Investment Deposit to you For details you should refer to the Bankrsquos disclosure on monetary benefits which the Bank is required to deliver to you prior to or at the point of entering into any transaction in Currency-Linked Capital Protected Investment Deposit
bull Please note that this product is not available for persons who are located within the United States are nationals of the United States and are US Persons within the meaning of Regulation S under the Securities Act (which includes any person resident in the United States and any partnership or corporation organised or incorporated under the laws of the United States)
bull 請注意本行不提供本產品予身處美國的人士美國公民及美籍人士(定義見證券法 S 條例)(包括居住在美國之任何人士及根據美國法例組
成或註冊成立之任何合夥企業或公司)
Page 5 of 67
For reference only if you set up a HKD 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500 Example 3 ndash American Bullish (where the Deposit Currency is not your home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency and you take a bullish view on Australian Dollar expect the exchange rate of AUDUSD will rise from 09400 to 09800 or above during the 6-month period and set up an American Bullish Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair
Type of investment American Bullish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trigger Level AUDUSD 09800 Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH (on deposit start date) 08000 Scenario I Best case scenario At any time during the Observation Period (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is at or above the Trigger Level (ie at or above 09800) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of-the-road Gain scenario At any time during the Observation Period (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD stays below the Trigger Level (ie stays below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000
(with a gain of 150 of investment amount)
Scenario III Off-setting scenario At any time during the Observation Period the Exchange Rate of AUDUSD stays below the Trigger Level (ie stays below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD 000 Scenario IV Loss and Worst case scenario At any time during the Observation Period the Exchange Rate of AUDUSD stays below the Trigger Level (ie stays below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951)
Page 6 of 67
In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a CNY 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received at maturity would be CNY 10030000 If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Please refer to the table below for details
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home
currency (HKD) in the event that you receive Minimum Return on the Maturity Date The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home
currency (HKD) in the event that you receive Potential Return on the Maturity Date If HKDCNH rise drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange
rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
ix 9999990000 010 010 (12499990) (12499990)
At the beginning of the investment On the Maturity Date of the investment
Exchange
Rate of
HKDCNH
Initial
Investment
Amount in
Renminbi
Initial
Investment
Amount in
HKD
Exchange Rate
of HKDCNH
Total Return in
Renminbi
Total Return in
HKD
Gain (loss) in HKD if converting the
Total Return from Renminbi to home
currency (HKD)
103000 101500 12500000 10000008000
09800 0
Exchange Rate of AUDUSD lt Trigger Level
Potential Return Minimum Return
Return Diagram Return at Maturity
Exchange Rate of AUDUSD ge Trigger Level
Exchange Rate of AUDUSD during the Observation Period
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Potential Return
Exchange Rate of HKDCNH on the Maturity Date
If receiving Minimum Return
Breakeven = 08120^
If receiving Potential Return
Breakeven = 08240
Exchange Rate on Deposit Start Date
0
If CNH depreciates drastically relative to HKD
HKDCNH = 9999990000
Page 7 of 67
Renminbi to home currency (HKD) on the Maturity Date Example 4 ndash American Bearish (where the Deposit Currency is not your home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency and you take a bearish view on Australian Dollar expect the exchange rate of AUDUSD will drop from 09400 to 09000 or below during the 6-month period and set up an American Bearish Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair
Type of investment American Bearish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trigger Level AUDUSD 09000 Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH (on deposit start date) 08000 Scenario I Best case scenario At any time during the Observation Period (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is at or below the Trigger Level (ie at or below 09000) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of-the-road Gain scenario At any time during the Observation Period (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD stays above the Trigger Level (ie stays above 09000) you will receive Guaranteed Principal and Minimum Return at maturity Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000
(with a gain of 150 of investment amount) Scenario III Off-setting scenario At any time during the Observation Period the Exchange Rate of AUDUSD stays above the Trigger Level (ie stays above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD 000 Scenario IV Loss and Worst case scenario At any time during the Observation Period the Exchange Rate of AUDUSD stays above the Trigger Level (ie stays above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951)
Page 8 of 67
In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a CNY 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received at maturity would be CNY 10030000 If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Please refer to the table below for details
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home
currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home
currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date If HKDCNH rise drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange
rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
ix 9999990000 010 010 (12499990) (12499990)
At the beginning of the investment On the Maturity Date of the investment
Exchange
Rate of
HKDCNH
Initial
Investment
Amount in
Renminbi
Initial
Investment
Amount in
HKD
Exchange Rate
of HKDCNH
Total Return in
Renminbi
Total Return in
HKD
Gain (loss) in HKD if converting the
Total Return from Renminbi to home
currency (HKD)
103000 101500 12500000 10000008000
09000 0
Exchange Rate of AUDUSD le
Trigger Level
Potential Return Minimum Return
Return Diagram
Return at Maturity
Exchange Rate of AUDUSD gt Trigger Level
Exchange Rate of AUDUSD during the Observation Period
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Potential Return
Exchange Rate of HKDCNH on the Maturity Date
0
If receiving Minimum Return
Breakeven = 08120^
If receiving Potential Return
Breakeven = 08240
Exchange Rate on Deposit Start Date
If CNH depreciates drastically relatively to HKD HKDCNH = 9999990000
Page 9 of 67
How can you buy this product bull You can place a Currency-Linked Capital Protected Investment Deposit through our Hang Seng Bank Branches telephone or Hang
Seng Personal or Business e-Banking bull The Bank will provide a choice of different tranches which is subject to market conditions bull Enquiry Hotline Personal 2822 0228 Business 2198 8000
Fees and charges No handling fees or management fees will be charged for Currency-Linked Capital Protected Investment Deposit
Can you request for early termination before maturity No Currency-Linked Capital Protected Investment Deposit may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank which may be granted or withheld in the Bankrsquos sole and absolute discretion on such terms and conditions as the Bank may determine Please refer to ldquoEarly WithdrawalTermination Risksrdquo under ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section for details
Pre-Investment Cooling-off Period for retail customers Pre-Investment Cooling-off Period (PICOP) is applicable to each particular dealing of this product if you are one of the following retail customer types
(1) An elderly customer aged 65 or above unless you are not a first-time buyer of currency-linked structured investment products AND your asset concentration is below 20 AND you opt out from the PICOP arrangement or
(2) A non-elderly customer who is a first time buyer of currency-linked structured investment products AND your asset concentration
is 20 or above
For the purpose of determining whether PICOP is applicable asset concentration refers to the percentage of total net worth (excluding real estate properties) to be invested in this product
Can the Bank adjust the terms or early terminate this product Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank in certain circumstances Please refer to Clause 7 of the Currency-Linked Capital Protected Investment Deposit Terms and Conditions for details
Offering documents for this product The following documents for this product (ldquoOffering Documentsrdquo) contain detailed information about the Bank and the terms of this product You should read and understand all of the Offering Documents before deciding whether to invest in this product
(i) Currency-Linked Capital Protected Investment Deposit Terms and Conditions (ii) The relevant Currency-Linked Capital Protected Investment Deposit Termsheet (iii) This Currency-Linked Capital Protected Investment Deposit Important Facts Statement
Other information Product Risk Level The Product Risk Level for Currency-Linked Capital Protected Investment Deposit is Low
Low Low-to-Medium Medium Medium-to-High High
Product Risk Level is determined by a number of factors which include the volatility of the currency pair and the tenor of the product The Product Risk Level is subject to the Banks periodic review and may change from time to time Please refer to our branch or our Customer Service Hotline on 2822 0228 for the latest detail
Declaration and Remarks bull This Important Facts Statement is not intended to provide or regard as legal or taxation advice or investment recommendations If you
have any concerns about this product or are uncertain about the suitability of this product for you you should obtain independent professional advice
bull The liabilities of the Bank in respect of the Currency-Linked Capital Protected Investment Deposit are limited exclusively to an office of the Bank in Hong Kong and instructions in respect of the Currency-Linked Capital Protected Investment Deposit may only be made to and acted upon by such office Any amount relating to the Currency-Linked Capital Protected Investment Deposit is payable exclusively by an office of the Bank in Hong Kong and in its stated currency The Terms and Conditions of the Currency-Linked Capital Protected Investment Deposit are governed by and shall be construed in accordance with the laws of Hong Kong
bull You may contact our staff if you have any feedback or complaint in relation to our services or call our hotline at 2822 0228 We will respond to you within a reasonable period of time normally not exceeding 30 days in general circumstances You may contact the Hong Kong Monetary Authority at 55th Floor Two International Finance Centre 8 Finance Street Central Hong Kong if you are not satisfied with our handling of your complaint
bull Hang Seng Bank Limited is a Registered Licensed Bank under the Banking Ordinance bull All Currency-Linked Capital Protected Investment Deposit cannot be cancelled after subscription bull The Bank will act as principal to complete the transaction and may obtain certain monetary benefits in connection with the offering of
this Currency-Linked Capital Protected Investment Deposit to the public The current remuneration system that the Bank adopts for
Page 10 of 67
sales staff is a measurement of the staffrsquos overall performance and not just based on sales amount bull The Bank is NOT an independent intermediary because
The Bank receives fees commissions or other monetary benefits from other parties in relation to the Bankrsquos distribution of Currency-Linked Capital Protected Investment Deposit to you For details you should refer to the Bankrsquos disclosure on monetary benefits which the Bank is required to deliver to you prior to or at the point of entering into any transaction in Currency-Linked Capital Protected Investment Deposit
bull Please note that this product is not available for persons who are located within the United States are nationals of the United States and are US Persons within the meaning of Regulation S under the Securities Act (which includes any person resident in the United States and any partnership or corporation organised or incorporated under the laws of the United States)
bull 請注意本行不提供本產品予身處美國的人士美國公民及美籍人士(定義見證券法 S 條例)(包括居住在美國之任何人士及根據美國法例組成
或註冊成立之任何合夥企業或公司)
Page 20 of 67
Currency-Linked Capital Protected Investment Deposit
American Range Investment
Dated May 2018
Important Facts Statement
This is a structured investment product which is NOT protected by the Deposit Protection Scheme in Hong Kong
The contents of this statement have not been reviewed by any regulatory authority in Hong Kong You are advised to exercise caution before investing in this product This statement is a part of the offering documents for this product You should not invest in this product based on this statement alone If you are in any doubt you should obtain independent professional advice
If English is not your preferred language you may request for the Chinese version of this statement from our sales staff 倘若英
文並非閣下屬意的語言閣下可向本行的銷售人員索取本概要的中文版本
This is a structured investment product involving derivatives The investment decision is yours but you should not invest in this product 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
Quick facts Bank Hang Seng Bank Limited
Product Type Currency-Linked Investment Deposit ndash American Range Investment (ldquothis productrdquo)
Minimum Investment Amount Subscription through branches - HKD 100000 (or its equivalent) Subscription through e-banking - HKD 50000 (or its equivalent)
Tenor 2 months or above or any other tenor as agreed between you and the Bank
Available Principal Currency (or Deposit Currency) HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY
Available Underlying Currency Pair AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD USDCNH and any other currency pairs as agreed between you and the Bank
Return Rate Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Deposit periodpayment date Deposit period refers to tenor of the product and return is payable only on Maturity Date
Principal protection at maturity Yes
Callable by the Bank No
Early termination right by customer No please refer to ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section ndash Early WithdrawalTermination Risks for details
Embedded derivatives Yes you will buy option(s) over the Underlying Currency Pair
Maximum potential gain Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Maximum potential loss Please refer to Scenario II amp III of Example 1 and Scenarios IV and V of Example 2 in the ldquoScenario analysisrdquo section of this product type for details
What is this product and how does it work bull American Range investment is one type of our Currency-Linked Capital Protected Investment Deposit which consists of a time deposit
(in Deposit currency) and buying option(s) on the Underlying Currency Pair of your choice bull You choose the Deposit Currency Underlying Currency Pair and the Observation Period according to your need and the Bank will set the
Trading Range bull During the whole Observation Period the Bank will compare the exchange rate of the Underlying Currency Pair with the Trading Range
If the exchange rate of the Underlying Currency Pair moves along with your anticipation and stays within the Trading Range during the whole Observation Period you will receive Guaranteed Principal and Potential Return If the exchange rate of the Underlying Currency Pair moves against your anticipation and at anytime during the Observation Period the exchange rate of the Underlying Currency Pair is outside the Trading Range you will receive Guaranteed Principal and Minimum Return (if any)
bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency Minimum return applies to certain investment tranches only you should refer to the relevant termsheet for details
Page 21 of 67
What are the key risks of Currency-Linked Capital Protected Investment Deposit Earnings on Currency-Linked Capital Protected Investment Deposit are limited to the Return Coupon (if any) payable You should consider the following risks and read all other information contained in the relevant Termsheet and Terms and Conditions before making any investment decision Not a time deposit Currency-Linked Capital Protected Investment Deposit 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 Capital Protected Investment Deposit is embedded with FX options Option transactions involve risks even when buying an option The optionrsquos value might become worthless if the market moves against your expectation Limited potential gain The maximum potential gain is limited to the pre-agreed ReturnCoupon calculated at the Potential ReturnCoupon Rate Not the same as buying the Underlying Currency Pair Investing in Currency-Linked Capital Protected Investment Deposit is not the same as buying the Underlying Currency Pair directly Market risk The investment return of Currency-Linked Capital Protected Investment Deposit is linked to the exchange rate of the Underlying Currency Pair Movements in exchange rates can be unpredictable sudden and drastic and affected by complex political and economic factors Liquidity risk Currency-Linked Capital Protected Investment Deposit is designed to be held till maturity The Bank may at its absolute discretion refuse to consent to any withdrawaltermination request before maturity Credit risk of the Bank Currency-Linked Capital Protected Investment Deposit is not secured by any collateral When you invest in Currency-Linked Capital Protected Investment Deposit you will be relying on the Bankrsquos creditworthiness If the Bank becomes insolvent or defaults on its obligations under a Currency-Linked Capital Protected Investment Deposit you can only claim as an unsecured creditor of the Bank In the worst case you could suffer a total loss of your investment amount Currency risk Exchange rate fluctuates and sometimes drastically If the Deposit Currency used for investment is not the home currency customarily used by you and thus conversion is required you should note that you may make a gain or suffer a loss due to exchange rate fluctuations When the deposit currency depreciates the loss from depreciation may set-off or even exceed the ReturnCoupon (if any) that you may receive from investing in the Currency-Linked Capital Protected Investment Deposit Risk of adjustments or early termination by the Bank Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank this might have a negative impact on the ReturnCoupon (if any) of the Currency-Linked Capital Protected Investment Deposit Concentration Risks You should avoid excessive investment (in terms of its proportion of the overall portfolio) in any single type of investment so as to avoid the investment portfolio being over-exposed to any particular investment risk ReturnCoupon of Currency-Linked Capital Protected Investment Deposit In order to provide capital protection the investment strategy adopted for Currency-Linked Capital Protected Investment Deposit may lead to a dilution of performance when compared to non-capital protected products investing in similar markets You should be prepared to take the risks of earning a lower ReturnCoupon (if any) on the capital invested and losing the interest that might otherwise earned on money invested by way of deposits For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) periodic Coupon may be payable to you For other types of Currency-Linked Capital Protected Investment Deposit no periodic ReturnCoupon will be payable to you prior to maturity Principal protection at maturity only You should understand that the Principal of the Currency-Linked Capital Protected Investment Deposit is capital-protected only when it is held to maturity If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the amount received by you upon early withdrawaltermination may be less than the amount initially invested by you Market Risks associated with Potential ReturnCoupon Apart from the ReturnCoupon calculated at the Minimum ReturnCoupon Rate (which may be set at zero) there is no guarantee of any ReturnCoupon calculated at the Potential ReturnCoupon Rate For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) Coupon (if any) is payable only if the Currency-Linked Capital Protected Investment Deposit is held till the relevant Coupon Distribution Dates ReturnCoupon (if any) of Currency-Linked Capital Protected Investment Deposit depends on the market conditions at the time of the relevant determination Investment return on foreign exchange-linked products are dependent on the prices of inter-banksrsquo transactions on the linked exchange rate in the foreign exchange markets You should be fully aware of the risks relating to fluctuations in the linked exchange rates Factors affecting the performance of foreign exchange markets are numerous including but are not limited to changes in global and local investment sentiments interest rate policies fund flows political environment economic environment business and social conditions in the local marketplace If the market trend is different from the view taken by you there is an inherent risk that the total investment return that you may receive from Currency-Linked Capital Protected Investment Deposit will be less than the interest that would have been payable on a time deposit for the same tenor There is also an inherent risk that no ReturnCoupon calculated at the Potential ReturnCoupon Rate will be payable to you in respect of the Currency-Linked Capital Protected Investment Deposit
Page 22 of 67
Early WithdrawalTermination Risks Early withdrawaltermination by you is not allowed for Currency-Linked Capital Protected Investment Deposit and the capital of you will be invested in the Currency-Linked Capital Protected Investment Deposit for the entire investment period The Bank may at its absolute discretion refuse to give consent to any early withdrawaltermination request If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the Bank shall be entitled to deduct from the Principal of the relevant Currency-Linked Capital Protected Investment Deposit andor any other amount which may have accrued to you any expenses costs or damages to the Bank Damages may include any costs expenses liability or losses to the Bank as a result of the early withdrawaltermination by you Therefore there is no guarantee that you will be able to receive the Principal and the amount payable to you at early withdrawaltermination may be less than the Principal initially invested Besides If the Currency-Linked Capital Protected Investment Deposit is early withdrawnterminated you will no longer be entitled to any ReturnCoupon of the Currency-Linked Capital Protected Investment Deposit Risks associated with unsuccessful subscriptions of Currency-Linked Capital Protected Investment Deposit The Bank reserves the absolute right to approve any application and to decline any application received (whether in whole or any part thereof) before the Deposit Start Date In the event of non-acceptance a notification will be sent by the Bank and any subscription funds received will be returned to you after the Deposit Start Date or as soon as practicable Risks relating to Renminbi If Currency-Linked Capital Protected Investment Deposit involves CNY the relevant exchange rate(s) or level(s) of the relevant currency pair will be quoted in offshore Renminbi against alternate currency While both onshore Renminbi and offshore Renminbi are the same currency they are traded in different and separate markets operating under different regulations and independent liquidity pool Onshore Renminbi and offshore Renminbi are currently quoted in different markets with different exchange rates whereby their exchange rate movements may not be in the same direction or magnitude The offshore Renminbi exchange rate may deviate significantly from the onshore Renminbi exchange rate You should also note that Renminbi is currently not freely convertible the value of Renminbi against other foreign currencies fluctuates and will be affected by amongst other things the PRC governmentrsquos control (for example the PRC government regulates conversion between Renminbi and foreign currencies) which may adversely affect your investment return under the Currency-Linked Capital Protected Investment Deposit when you convert CNY into your home currency Renminbi is subject to foreign exchange control by the PRC government and thus investors investing in Currency-Linked Investment Deposit involving Renminbi are subject to the currency risk of Renminbi
What are the key features bull This product is designed for you whose investment objective is capital protection or to obtain potential cash income bull This product is embedded with options You will buy option(s) on the Linked Currency Pair bull 100 principal protection if this product is held to maturity bull You can choose the Deposit Currency including HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY and Linked Currency
Pair including AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD and USDCNH bull The Deposit Period of the Currency-Linked Capital Protected Investment Deposit is 2 months or above bull You will have a chance to receive higher potential return depending on the movement of the exchange rate of the Underlying Currency
Pair during the Observation Period bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency bull The Bank pre-sets the Trading Range and Observation Period bull During the whole Observation Period the exchange rate of the Underlying Currency Pair is compared with the Trading Range to
determine the Return at maturity bull Returns (if any) on this product is payable only upon maturity bull This product may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank Please refer
to the section Can you request for early termination before maturity below
Scenario analysis (All figures shown below including the exchange rate of AUDUSD and HKDCNH Potential Return Rate Minimum Return Rate Deposit Period etc are for illustration only You should not rely on the below figures as any indication or guarantee on the expected interest amount of the Currency-Linked Capital Protected Investment Deposit you intend to invest Please refer to the Bank for up-to-date figures) Example 1 ndash American Range (where the Deposit Currency is your home currency) Assuming HKD is your home currency and you anticipate the Exchange Rate of AUDUSD will stay above 09850 but below 11150 for the next 6 months and set up an American Range Investment with HKD 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment American Range (AUDUSD) Principal Guarantee 100 Deposit Currency HKD Guaranteed Principal HKD 100000 Deposit Period 6 months Trading Range AUDUSD 09850 (ldquoLower Barrierrdquo) to 11150 (ldquoUpper Barrierrdquo) (excluding both barriers) Potential Return Rate 016 (around 032 pa)
Page 23 of 67
Minimum Return Rate 0015 (around 003 pa) Scenario I Best case scenario At any time during the Observation Period the Exchange Rate of AUDUSD stays within the Trading Range (ie above 09850 but below 11150) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = HKD 100000 x (1+016) = HKD 10016000 (with a gain of 016 of investment amount) Scenario II Worst case scenario At any time during the Observation Period the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 09850 or atabove 11150) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = HKD 100000 x (1+0015) = HKD 10001500
(with a gain of 0015 of investment amount) Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a HKD 100000 6-month Time Deposit on 30 April 2014 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500
Example 2 ndash American Range (where the Deposit Currency is not your home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency and you anticipate the Exchange Rate of AUDUSD will stay above 09850 but below 11150 for the next 6 months and set up an American Range Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment American Range (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trading Range AUDUSD 09850 (ldquoLower Barrierrdquo) to 11150 (ldquoUpper Barrierrdquo) (excluding both barriers) Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH (on deposit start date) 08000 Scenario I Best case scenario At any time during the Observation Period (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD stays within the Trading Range (ie above 09850 but below 11150) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of the road Gain scenario At any time during the Observation Period (assuming the exchange rate of HKDCNH remains unchanged the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 09850 or atabove 11150) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = CNY 100000 x (1+15) = CNY 10150000 (with a gain of 150 of investment amount)
0
Exchange Rate of
AUDUSD le 09850
Potential Return Minimum Return
Return Diagram Return at Maturity
09850 Exchange Rate of AUDUSD during the Observation Period
Minimum Return
09850 lt Exchange Rate of AUDUSD lt 11150
Exchange Rate of
AUDUSD ge 11150
11150
Page 24 of 67
Scenario III Off-setting scenario At any time during the Observation Period the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 09850 or atabove 11150) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD 000 Scenario IV Loss and Worst case scenario At any time during the Observation Period the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 09850 or atabove 11150) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951) In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a CNY 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received would be CNY 10030000
If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Please refer to the table below for details
0
Exchange Rate of
AUDUSD le 09850
Potential Return Minimum Return
Return Diagram
Return at Maturity
09850 Exchange Rate of AUDUSD during the Observation Period
Minimum Return
09850 lt Exchange Rate of AUDUSD lt 11150
Exchange Rate of
AUDUSD ge 11150
11150
Page 25 of 67
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date
The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date
If HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
How can you buy this product bull You can place a Currency-Linked Capital Protected Investment Deposit through our Hang Seng Bank Branches telephone or Hang Seng
Personal or Business e-Banking bull The Bank will provide a choice of different tranches which is subject to market conditions bull Enquiry Hotline Personal 2822 0228 Business 2198 8000
Fees and charges No handling fees or management fees will be charged for Currency-Linked Capital Protected Investment Deposit
Can you request for early termination before maturity No Currency-Linked Capital Protected Investment Deposit may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank which may be granted or withheld in the Bankrsquos sole and absolute discretion on such terms and conditions as the Bank may determine Please refer to ldquoEarly WithdrawalTermination Risksrdquo under ldquoWhat are the key features featuresrisks of Currency-Linked Capital Protected Investment Depositrdquo section for details
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
ix 9999990000 010 010 (12499990) (12499990)
At the beginning of the investment On the Maturity Date of the investment
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Potential Return
Exchange Rate of HKDCNH on the Maturity Date
0
If receiving Minimum Return
Breakeven = 08120^
If receiving Potential Return
Breakeven = 08240
If CNH depreciates drastically relative to HKD
HKDCNH = 9999990000
Exchange Rate on Deposit Start Date
Page 26 of 67
Pre-Investment Cooling-off Period for retail customers Pre-Investment Cooling-off Period (PICOP) is applicable to each particular dealing of this product if you are one of the following retail customer types
(1) An elderly customer aged 65 or above unless you are not a first-time buyer of currency-linked structured investment products AND your asset concentration is below 20 AND you opt out from the PICOP arrangement or
(2) A non-elderly customer who is a first time buyer of currency-linked structured investment products AND your asset concentration
is 20 or above
For the purpose of determining whether PICOP is applicable asset concentration refers to the percentage of total net worth (excluding real estate properties) to be invested in this product
Can the Bank adjust the terms or early terminate this product Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank in certain circumstances Please refer to Clause 7 of the Currency-Linked Capital Protected Investment Deposit Terms and Conditions for details
Offering documents for this product The following documents for this product (ldquoOffering Documentsrdquo) contain detailed information about the Bank and the terms of this product You should read and understand all of the Offering Documents before deciding whether to invest in this product
(i) Currency-Linked Capital Protected Investment Deposit Terms and Conditions (ii) The relevant Currency-Linked Capital Protected Investment Deposit Termsheet (iii) This Currency-Linked Capital Protected Investment Deposit Important Facts Statement
Other information Product Risk Level The Product Risk Level for Currency-Linked Capital Protected Investment Deposit is Low
Low Low-to-Medium Medium Medium-to-High High
Product Risk Level is determined by a number of factors which include the volatility of the currency pair and the tenor of the product The Product Risk Level is subject to the Banks periodic review and may change from time to time Please refer to our branch or our Customer Service Hotline on 2822 0228 for the latest detail Declaration and Remarks bull This Important Facts Statement is not intended to provide or regard as legal or taxation advice or investment recommendations If you
have any concerns about this product or are uncertain about the suitability of this product for you you should obtain independent professional advice
bull The liabilities of the Bank in respect of the Currency-Linked Capital Protected Investment Deposit are limited exclusively to an office of the Bank in Hong Kong and instructions in respect of the Currency-Linked Capital Protected Investment Deposit may only be made to and acted upon by such office Any amount relating to the Currency-Linked Capital Protected Investment Deposit is payable exclusively by an office of the Bank in Hong Kong and in its stated currency The Terms and Conditions of the Currency-Linked Capital Protected Investment Deposit are governed by and shall be construed in accordance with the laws of Hong Kong
bull You may contact our staff if you have any feedback or complaint in relation to our services or call our hotline at 2822 0228 We will respond to you within a reasonable period of time normally not exceeding 30 days in general circumstances You may contact the Hong Kong Monetary Authority at 55th Floor Two International Finance Centre 8 Finance Street Central Hong Kong if you are not satisfied with our handling of your complaint
bull Hang Seng Bank Limited is a Registered Licensed Bank under the Banking Ordinance bull All Currency-Linked Capital Protected Investment Deposit cannot be cancelled after subscription bull The Bank will act as principal to complete the transaction and may obtain certain monetary benefits in connection with the offering of
this Currency-Linked Capital Protected Investment Deposit to the public The current remuneration system that the Bank adopts for sales staff is a measurement of the staffrsquos overall performance and not just based on sales amount
bull The Bank is NOT an independent intermediary because The Bank receives fees commissions or other monetary benefits from other parties in relation to the Bankrsquos distribution of Currency-Linked Capital Protected Investment Deposit to you For details you should refer to the Bankrsquos disclosure on monetary benefits which the Bank is required to deliver to you prior to or at the point of entering into any transaction in Currency-Linked Capital Protected Investment Deposit
bull Please note that this product is not available for persons who are located within the United States are nationals of the United States and are US Persons within the meaning of Regulation S under the Securities Act (which includes any person resident in the United States and any partnership or corporation organised or incorporated under the laws of the United States)
bull 請注意本行不提供本產品予身處美國的人士美國公民及美籍人士(定義見證券法 S 條例)(包括居住在美國之任何人士及根據美國法例組
成或註冊成立之任何合夥企業或公司)
Page 34 of 67
Currency-Linked Capital Protected Investment Deposit
European (Bullish Bearish) Investment
Dated May 2018
Important Facts Statement
This is a structured investment product which is NOT protected by the Deposit Protection Scheme in Hong Kong
The contents of this statement have not been reviewed by any regulatory authority in Hong Kong You are advised to exercise caution before investing in this product This statement is a part of the offering documents for this product You should not invest in this product based on this statement alone If you are in any doubt you should obtain independent professional advice
If English is not your preferred language you may request for the Chinese version of this statement from our sales staff 倘若英文並
非閣下屬意的語言閣下可向本行的銷售人員索取本概要的中文版本
This is a structured investment product involving derivatives The investment decision is yours but you should not invest in this product 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
Quick facts
Bank Hang Seng Bank Limited
Product Type Currency-Linked Investment Deposit ndash European Bullish Bearish Investment (ldquothis productrdquo)
Minimum Investment Amount Subscription through branches - HKD 100000 (or its equivalent) Subscription through e-banking - HKD 50000 (or its equivalent)
Tenor 2 months or above or any other tenor as agreed between you and the Bank
Available Principal Currency (or Deposit Currency) HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY
Available Underlying Currency Pair AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD USDCNH and any other currency pairs as agreed between you and the Bank
Return Rate Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Deposit periodpayment date Deposit period refers to tenor of the product and return is payable only on Maturity Date
Principal protection at maturity Yes
Callable by the Bank No
Early termination right by customer No please refer to ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section ndash Early WithdrawalTermination Risks for details
Embedded derivatives Yes you will buy option(s) over the Underlying Currency Pair
Maximum potential gain Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Maximum potential loss Please refer to Scenarios II and III of Example 1 and 2 and Scenarios IV and V of Example 3 and 4 in ldquoScenario analysisrdquo section of this product type for details
What is this product and how does it work bull European Bullish Bearish investment is one type of our Currency-Linked Capital Protected Investment Deposit which consists of a time
deposit (in Deposit Currency) and buying option(s) on the Underlying Currency Pair of your choice bull You choose the Deposit Currency Underlying Currency Pair according to your need and the Bank will set the Trigger Level bull On the Final Exchange Rate Determination Date the Bank will compare the exchange rate of the Underlying Currency Pair with the Trigger
Level If the exchange rate of the Underlying Currency Pair moves along with your anticipation you will receive Guaranteed Principal and Potential Return If the exchange rate of the Underlying Currency Pair moves against your anticipation you will receive Guaranteed Principal and Minimum Return (if any)
bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency Minimum return applies to certain investment tranches only you should refer to the relevant termsheet for details
Page 35 of 67
What are the key risks of Currency-Linked Capital Protected Investment Deposit Earnings on Currency-Linked Capital Protected Investment Deposit are limited to the Return Coupon (if any) payable You should consider the following risks and read all other information contained in the relevant Termsheet and Terms and Conditions before making any investment decision Not a time deposit Currency-Linked Capital Protected Investment Deposit 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 Capital Protected Investment Deposit is embedded with FX options Option transactions involve risks even when buying an option The optionrsquos value might become worthless if the market moves against your expectation Limited potential gain The maximum potential gain is limited to the pre-agreed ReturnCoupon calculated at the Potential ReturnCoupon Rate Not the same as buying the Underlying Currency Pair Investing in Currency-Linked Capital Protected Investment Deposit is not the same as buying the Underlying Currency Pair directly Market risk The investment return of Currency-Linked Capital Protected Investment Deposit is linked to the exchange rate of the Underlying Currency Pair Movements in exchange rates can be unpredictable sudden and drastic and affected by complex political and economic factors Liquidity risk Currency-Linked Capital Protected Investment Deposit is designed to be held till maturity The Bank may at its absolute discretion refuse to consent to any withdrawaltermination request before maturity Credit risk of the Bank Currency-Linked Capital Protected Investment Deposit is not secured by any collateral When you invest in Currency-Linked Capital Protected Investment Deposit you will be relying on the Bankrsquos creditworthiness If the Bank becomes insolvent or defaults on its obligations under a Currency-Linked Capital Protected Investment Deposit you can only claim as an unsecured creditor of the Bank In the worst case you could suffer a total loss of your investment amount Currency risk Exchange rate fluctuates and sometimes drastically If the Deposit Currency used for investment is not the home currency customarily used by you and thus conversion is required you should note that you may make a gain or suffer a loss due to exchange rate fluctuations When the deposit currency depreciates the loss from depreciation may set-off or even exceed the ReturnCoupon (if any) that you may receive from investing in the Currency-Linked Capital Protected Investment Deposit Risk of adjustments or early termination by the Bank Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank this might have a negative impact on the ReturnCoupon (if any) of the Currency-Linked Capital Protected Investment Deposit Concentration Risks You should avoid excessive investment (in terms of its proportion of the overall portfolio) in any single type of investment so as to avoid the investment portfolio being over-exposed to any particular investment risk ReturnCoupon of Currency-Linked Capital Protected Investment Deposit In order to provide capital protection the investment strategy adopted for Currency-Linked Capital Protected Investment Deposit may lead to a dilution of performance when compared to non-capital protected products investing in similar markets You should be prepared to take the risks of earning a lower ReturnCoupon (if any) on the capital invested and losing the interest that might otherwise earned on money invested by way of deposits For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) periodic Coupon may be payable to you For other types of Currency-Linked Capital Protected Investment Deposit no periodic ReturnCoupon will be payable to you prior to maturity Principal protection at maturity only You should understand that the Principal of the Currency-Linked Capital Protected Investment Deposit is capital-protected only when it is held to maturity If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the amount received by you upon early withdrawaltermination may be less than the amount initially invested by you Market Risks associated with Potential ReturnCoupon Apart from the ReturnCoupon calculated at the Minimum ReturnCoupon Rate (which may be set at zero) there is no guarantee of any ReturnCoupon calculated at the Potential ReturnCoupon Rate For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) Coupon (if any) is payable only if the Currency-Linked Capital Protected Investment Deposit is held till the relevant Coupon Distribution Dates ReturnCoupon (if any) of Currency-Linked Capital Protected Investment Deposit depends on the market conditions at the time of the relevant determination Investment return on foreign exchange-linked products are dependent on the prices of inter-banksrsquo transactions on the linked exchange rate in the foreign exchange markets You should be fully aware of the risks relating to fluctuations in the linked exchange rates Factors affecting the performance of foreign exchange markets are numerous including but are not limited to changes in global and local investment sentiments interest rate policies fund flows political environment economic environment business and social conditions in the local marketplace If the market trend is different from the view taken by you there is an inherent risk that the total investment return that you may receive from Currency-Linked Capital Protected Investment Deposit will be less than the interest that would have been payable on a time deposit for the same tenor There is also an inherent risk that no ReturnCoupon calculated at the Potential ReturnCoupon Rate will be payable to you in respect of the Currency-Linked Capital Protected Investment Deposit Early WithdrawalTermination Risks Early withdrawaltermination by you is not allowed for Currency-Linked Capital Protected Investment Deposit and the capital of you will be invested in the Currency-Linked Capital Protected Investment Deposit for the entire investment period The Bank may at its absolute discretion refuse to give consent to any early withdrawaltermination request If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the Bank shall be entitled to deduct from the Principal of the relevant Currency-Linked Capital Protected Investment Deposit andor any other amount which may have accrued to you any expenses costs or damages to the Bank Damages may include any costs expenses liability or losses to the Bank as a result of the early withdrawaltermination by you Therefore there is no guarantee that you will be able to receive the Principal and the amount payable to you at early withdrawaltermination may be less
Page 36 of 67
than the Principal initially invested Besides If the Currency-Linked Capital Protected Investment Deposit is early withdrawnterminated you will no longer be entitled to any ReturnCoupon of the Currency-Linked Capital Protected Investment Deposit Risks associated with unsuccessful subscriptions of Currency-Linked Capital Protected Investment Deposit The Bank reserves the absolute right to approve any application and to decline any application received (whether in whole or any part thereof) before the Deposit Start Date In the event of non-acceptance a notification will be sent by the Bank and any subscription funds received will be returned to you after the Deposit Start Date or as soon as practicable Risks relating to Renminbi If Currency-Linked Capital Protected Investment Deposit involves CNY the relevant exchange rate(s) or level(s) of the relevant currency pair will be quoted in offshore Renminbi against alternate currency While both onshore Renminbi and offshore Renminbi are the same currency they are traded in different and separate markets operating under different regulations and independent liquidity pool Onshore Renminbi and offshore Renminbi are currently quoted in different markets with different exchange rates whereby their exchange rate movements may not be in the same direction or magnitude The offshore Renminbi exchange rate may deviate significantly from the onshore Renminbi exchange rate You should also note that Renminbi is currently not freely convertible the value of Renminbi against other foreign currencies fluctuates and will be affected by amongst other things the PRC governmentrsquos control (for example the PRC government regulates conversion between Renminbi and foreign currencies) which may adversely affect your investment return under the Currency-Linked Capital Protected Investment Deposit when you convert CNY into your home currency Renminbi is subject to foreign exchange control by the PRC government and thus investors investing in Currency-Linked Investment Deposit involving Renminbi are subject to the currency risk of Renminbi
What are the key features bull This product is designed for you whose investment objective is capital protection or to obtain potential cash income
bull This product is embedded with options You will buy option(s) on the Linked Currency Pair bull 100 principal protection if the Currency-Linked Capital Protected Investment Deposit is held to maturity bull You can choose the Deposit Currency including HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY and Linked Currency Pair
including AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD and USDCNH bull The Deposit Period of this product is 2 months or above bull You will have a chance to receive higher potential return depending on the movement of the exchange rate of the Underlying Currency Pair bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency bull The Bank pre-sets the Trigger Level and you choose a bullish or bearish view on different currencies bull On the Final Exchange Rate Determination Date the exchange rate of the Underlying Currency Pair is compared with the Trigger Level to
determine the Return at maturity bull Returns (if any) on this product is payable only upon maturity bull This product may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank Please refer to
the section Can you request for early termination before maturity below
Scenario analysis (All figures shown below including the exchange rate of AUDUSD and HKDCNH Potential Return Rate Minimum Return Rate Deposit Period etc are for illustration only You should not rely on the below figures as any indication or guarantee on the expected interest amount of the Currency-Linked Capital Protected Investment Deposit you intend to invest Please refer to the Bank for up-to-date figures) Example 1 ndash European Bullish (where the Deposit Currency is your home currency) Assuming HKD is your home currency and you take a bullish view on Australian Dollar expect the exchange rate of AUDUSD will rise from 09400 to 09800 or above after the 6-month period and set up an European Bullish Investment with HKD 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Bullish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency HKD Guaranteed Principal HKD 100000 Deposit Period 6 months Trigger Level AUDUSD 09800 Potential Return Rate 016 (around 032 pa) Minimum Return Rate 0015 (around 003 pa) Scenario I Best case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is at or above the Trigger Level (ie at or above 09800) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = HKD 100000 x (1+016) = HKD 10016000 (with a gain of 016 of investment amount) Scenario II Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is below the Trigger Level (ie below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity
Page 37 of 67
Total Return at Maturity = HKD 100000 x (1+0015) = HKD 10001500 (with a gain of 0015 of investment amount) Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount
For reference only if you set up a HKD 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500
Example 2 ndash European Bearish (where the Deposit Currency is your home currency) Assuming HKD is your home currency and you take a bearish view on Australian Dollar expect the exchange rate of AUDUSD will drop from 09400 to 09000 or below after the 6-month period and set up an European Bearish Investment with HKD 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Bearish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency HKD Guaranteed Principal HKD 100000 Deposit Period 6 months Trigger Level AUDUSD 09000 Potential Return Rate 016 (around 032 pa) Minimum Return Rate 0015 (around 003 pa) Scenario I Best case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is at or below the Trigger Level (ie at or below 09000) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = HKD 100000 x (1+016) = HKD 10016000 (with a gain of 016 of investment amount) Scenario II Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is above the Trigger Level (ie above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = HKD 100000 x (1+0015) = HKD 10001500 (with a gain of 0015 of investment amount) Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount
0
Final Exchange Rate of AUDUSD lt Trigger Level
Potential Return Minimum Return
Return Diagram Return at Maturity
09800 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Final Exchange Rate of AUDUSD ge Trigger Level
Trigger Level = 09800
Page 38 of 67
For reference only if you set up a HKD 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500 Example 3 ndash European Bullish (where the Deposit Currency is not home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency you take a bullish view on Australian Dollar expect the exchange rate of AUDUSD will rise from 09400 to 09800 or above after the 6-month period and set up an European Bullish Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Bullish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trigger Level AUDUSD 09800 Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH on deposit start date 08000 Scenario I Best case scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is at or above the Trigger Level (ie at or above 09800) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of-the road Gain scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is below the Trigger Level (ie below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Scenario III Off-setting scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is below the Trigger Level (ie below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD 000
0
Final Exchange Rate of AUDUSD
le Trigger Level
Potential Return Minimum Return
Return Diagram
Return at Maturity
09000 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Final Exchange Rate of AUDUSD gt Trigger Level
Trigger Level = 09000
Page 39 of 67
Scenario IV Loss and Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is below the Trigger Level (ie below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 101500 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951) In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount
For reference only if you set up a CNY 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received at maturity would be CNY 10030000 If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Please refer to the table below for details
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
viiii 9999990000 010 010 (12499990) (12499990)
103000 101500 12500000 10000008000
At the beginning of the investment On the Maturity Date of the investment
Exchange
Rate of
HKDCNH
Initial
Investment
Amount in
Renminbi
Initial
Investment
Amount in
HKD
Exchange Rate
of HKDCNH
Total Return in
Renminbi
Total Return in
HKD
Gain (loss) in HKD if converting the
Total Return from Renminbi to home
currency (HKD)
0
Final Exchange Rate of AUDUSD lt Trigger Level
Potential Return Minimum Return
Return Diagram
Return at Maturity
09800 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Final Exchange Rate of AUDUSD ge Trigger Level
Trigger Level = 09800
Page 40 of 67
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date
The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date
If HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
Example 4 ndash European Bearish (where the Deposit Currency is not home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency you take a bearish view on Australian Dollar expect the exchange rate of AUDUSD will drop from 09400 to 09000 or below after the 6-month period and set up an European Bearish Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Bearish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trigger Level AUDUSD 09000 Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH at the time of investment 08000 Scenario I Best case scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is at or below the Trigger Level (ie at or below 09000) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of-the road Gain scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is above the Trigger Level (ie above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Scenario III Off-setting scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is above the Trigger Level (ie above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Exchange Rate of HKDCNH on the Maturity Date
0
If receiving Minimum Return
Breakeven = 08120^
If receiving Potential Return
Breakeven = 08240
Exchange Rate on Deposit Start Date
Potential Return
Minimum Return
If CNH depreciates drastically relative to HKD
HKDCNH = 9999990000
Page 41 of 67
= HKD 12500000 Gain(Loss) in home currency HKD 000 Scenario IV Loss and Worst Case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is above the Trigger Level (ie above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951) In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount
For reference only if you set up a CNY 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received at maturity would be CNY 10030000 If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Please refer to the table below for details
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
viiii 9999990000 010 010 (12499990) (12499990)
103000 101500 12500000 10000008000
At the beginning of the investment On the Maturity Date of the investment
Exchange
Rate of
HKDCNH
Initial
Investment
Amount in
Renminbi
Initial
Investment
Amount in
HKD
Exchange Rate
of HKDCNH
Total Return in
Renminbi
Total Return in
HKD
Gain (loss) in HKD if converting the
Total Return from Renminbi to home
currency (HKD)
0
Final Exchange Rate of AUDUSD le Trigger Level
Potential Return Minimum Return
Return Diagram Return at Maturity
09000 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Final Exchange Rate of AUDUSD gt Trigger Level
Trigger Level = 09000
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Page 42 of 67
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date
The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date
If HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
How can you buy this product bull You can place a Currency-Linked Capital Protected Investment Deposit through our Hang Seng Bank Branches telephone or Hang Seng
Personal or Business e-Banking bull The Bank will provide a choice of different tranches which is subject to market conditions bull Enquiry Hotline Personal 2822 0228 Business 2198 8000
Fees and charges No handling fees or management fees will be charged for Currency-Linked Capital Protected Investment Deposit
Can you request for early termination before maturity No Currency-Linked Capital Protected Investment Deposit may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank which may be granted or withheld in the Bankrsquos sole and absolute discretion on such terms and conditions as the Bank may determine Please refer to ldquoEarly WithdrawalTermination Risksrdquo under ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section for details
Pre-Investment Cooling-off Period for retail customers Pre-Investment Cooling-off Period (PICOP) is applicable to each particular dealing of this product if you are one of the following retail customer types
(1) An elderly customer aged 65 or above unless you are not a first-time buyer of currency-linked structured investment products AND your asset concentration is below 20 AND you opt out from the PICOP arrangement or
(2) A non-elderly customer who is a first time buyer of currency-linked structured investment products AND your asset concentration is
20 or above
For the purpose of determining whether PICOP is applicable asset concentration refers to the percentage of total net worth (excluding real estate properties) to be invested in this product
Can the Bank adjust the terms or early terminate this product Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank in certain circumstances Please refer to Clause 7 of the Currency-Linked Capital Protected Investment Deposit Terms and Conditions for details
Offering documents for this product The following documents for this product (ldquoOffering Documentsrdquo) contain detailed information about the Bank and the terms of this product You should read and understand all of the Offering Documents before deciding whether to invest in this product
(i) Currency-Linked Capital Protected Investment Deposit Terms and Conditions (ii) The relevant Currency-Linked Capital Protected Investment Deposit Termsheet (iii) This Currency-Linked Capital Protected Investment Deposit Important Facts Statement
Product Risk Level The Product Risk Level for Currency-Linked Capital Protected Investment Deposit is Low
Low Low-to-Medium Medium Medium-to-High High
Product Risk Level is determined by a number of factors which include the volatility of the currency pair and the tenor of the product The Product Risk Level is subject to the Banks periodic review and may change from time to time Please refer to our branch or our Customer Service Hotline on 2822 0228 for the latest detail Declaration and Remarks bull This Important Facts Statement is not intended to provide or regard as legal or taxation advice or investment recommendations If you have
any concerns about this product or are uncertain about the suitability of this product for you you should obtain independent professional advice
bull The liabilities of the Bank in respect of the Currency-Linked Capital Protected Investment Deposit are limited exclusively to an office of the Bank in Hong Kong and instructions in respect of the Currency-Linked Capital Protected Investment Deposit may only be made to and acted upon by such office Any amount relating to the Currency-Linked Capital Protected Investment Deposit is payable exclusively by an office of the Bank in Hong Kong and in its stated currency The Terms and Conditions of the Currency-Linked Capital Protected Investment Deposit are governed by and shall be construed in accordance with the laws of Hong Kong
bull You may contact our staff if you have any feedback or complaint in relation to our services or call our hotline at 2822 0228 We will respond to you within a reasonable period of time normally not exceeding 30 days in general circumstances You may contact the Hong Kong Monetary Authority at 55th Floor Two International Finance Centre 8 Finance Street Central Hong Kong if you are not satisfied with our handling of your complaint
bull Hang Seng Bank Limited is a Registered Licensed Bank under the Banking Ordinance bull All Currency-Linked Capital Protected Investment Deposit cannot be cancelled after subscription bull The Bank will act as principal to complete the transaction and may obtain certain monetary benefits in connection with the offering of this
Currency-Linked Capital Protected Investment Deposit to the public The current remuneration system that the Bank adopts for sales staff is a measurement of the staffrsquos overall performance and not just based on sales amount
bull The Bank is NOT an independent intermediary because The Bank receives fees commissions or other monetary benefits from other parties in relation to the Bankrsquos distribution of Currency-Linked Capital Protected Investment Deposit to you For details you should refer to the Bankrsquos disclosure on monetary benefits which the Bank is required to deliver to you prior to or at the point of entering into any transaction in Currency-Linked Capital Protected Investment Deposit
bull Please note that this product is not available for persons who are located within the United States are nationals of the United States and are US Persons within the meaning of Regulation S under the Securities Act (which includes any person resident in the United States and any partnership or corporation organised or incorporated under the laws of the United States)
bull 請注意本行不提供本產品予身處美國的人士美國公民及美籍人士(定義見證券法 S 條例)(包括居住在美國之任何人士及根據美國法例組成
或註冊成立之任何合夥企業或公司)
Page 53 of 67
Currency-Linked Capital Protected Investment Deposit
European Range Investment
Dated May 2018
Important Facts Statement
This is a structured investment product which is NOT protected by the Deposit
Protection Scheme in Hong Kong
The contents of this statement have not been reviewed by any regulatory authority in Hong Kong You are advised to exercise caution before investing in this product This statement is a part of the offering documents for this product You should not invest in this product based on this statement alone If you are in any doubt you should obtain independent professional advice
If English is not your preferred language you may request for the Chinese version of this statement from our sales staff 倘若英
文並非閣下屬意的語言閣下可向本行的銷售人員索取本概要的中文版本
This is a structured investment product involving derivatives The investment decision is yours but you should not invest in this product 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
Quick facts Bank Hang Seng Bank Limited
Product Type Currency-Linked Investment Deposit ndash European Range Investment (ldquothis productrdquo)
Minimum Investment Amount Subscription through branches - HKD 100000 (or its equivalent) Subscription through e-banking - HKD 50000 (or its equivalent)
Tenor 2 months or above or any other tenor as agreed between you and the Bank
Available Principal Currency (or Deposit Currency) HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY
Available Underlying Currency Pair AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD USDCNH and any other currency pairs as agreed between you and the Bank
Return Rate Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Deposit periodpayment date Deposit period refers to tenor of the product and return is payable only on Maturity Date
Principal protection at maturity Yes
Callable by the Bank No
Early termination right by customer No please refer to ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section ndash Early WithdrawalTermination Risks for details
Embedded derivatives Yes you will buy option(s) over the Underlying Currency Pair
Maximum potential gain Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Maximum potential loss Please refer to Scenarios II and III of Example 1 and Scenarios IV and V of Example 2 in the ldquoScenario analysisrdquo section of this product type for details
What is this product and how does it work bull European Range investment is one type of our Currency-Linked Capital Protected Investment Deposit which consists of a time deposit
(in Deposit Currency) and buying option(s) on the Underlying Currency Pair of your choice bull You choose the Deposit Currency Underlying Currency Pair according to your need and the Bank will set the Trading Range bull On the Final Exchange Rate Determination Date the Bank will compare the exchange rate of the Underlying Currency Pair with the
Trading Range If the exchange rate of the Underlying Currency Pair moves along with your anticipation and is within the Trading Range you will receive Guaranteed Principal and Potential Return If the exchange rate of the Underlying Currency Pair moves against your anticipation and is outside the Trading Range you will receive Guaranteed Principal and Minimum Return (if any)
bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency Minimum return applies to certain investment tranches only you should refer to the relevant termsheet for details
Page 54 of 67
What are the key risks of Currency-Linked Capital Protected Investment Deposit Earnings on Currency-Linked Capital Protected Investment Deposit are limited to the Return Coupon (if any) payable You should consider the following risks and read all other information contained in the relevant Termsheet and Terms and Conditions before making any investment decision Not a time deposit Currency-Linked Capital Protected Investment Deposit 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 Capital Protected Investment Deposit is embedded with FX options Option transactions involve risks even when buying an option The optionrsquos value might become worthless if the market moves against your expectation Limited potential gain The maximum potential gain is limited to the pre-agreed ReturnCoupon calculated at the Potential ReturnCoupon Rate Not the same as buying the Underlying Currency Pair Investing in Currency-Linked Capital Protected Investment Deposit is not the same as buying the Underlying Currency Pair directly Market risk The investment return of Currency-Linked Capital Protected Investment Deposit is linked to the exchange rate of the Underlying Currency Pair Movements in exchange rates can be unpredictable sudden and drastic and affected by complex political and economic factors Liquidity risk Currency-Linked Capital Protected Investment Deposit is designed to be held till maturity The Bank may at its absolute discretion refuse to consent to any withdrawaltermination request before maturity Credit risk of the Bank Currency-Linked Capital Protected Investment Deposit is not secured by any collateral When you invest in Currency-Linked Capital Protected Investment Deposit you will be relying on the Bankrsquos creditworthiness If the Bank becomes insolvent or defaults on its obligations under a Currency-Linked Capital Protected Investment Deposit you can only claim as an unsecured creditor of the Bank In the worst case you could suffer a total loss of your investment amount Currency risk Exchange rate fluctuates and sometimes drastically If the Deposit Currency used for investment is not the home currency customarily used by you and thus conversion is required you should note that you may make a gain or suffer a loss due to exchange rate fluctuations When the deposit currency depreciates the loss from depreciation may set-off or even exceed the ReturnCoupon (if any) that you may receive from investing in the Currency-Linked Capital Protected Investment Deposit Risk of adjustments or early termination by the Bank Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank this might have a negative impact on the ReturnCoupon (if any) of the Currency-Linked Capital Protected Investment Deposit Concentration Risks You should avoid excessive investment (in terms of its proportion of the overall portfolio) in any single type of investment so as to avoid the investment portfolio being over-exposed to any particular investment risk ReturnCoupon of Currency-Linked Capital Protected Investment Deposit In order to provide capital protection the investment strategy adopted for Currency-Linked Capital Protected Investment Deposit may lead to a dilution of performance when compared to non-capital protected products investing in similar markets You should be prepared to take the risks of earning a lower ReturnCoupon (if any) on the capital invested and losing the interest that might otherwise earned on money invested by way of deposits For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) periodic Coupon may be payable to you For other types of Currency-Linked Capital Protected Investment Deposit no periodic ReturnCoupon will be payable to you prior to maturity Principal protection at maturity only You should understand that the Principal of the Currency-Linked Capital Protected Investment Deposit is capital-protected only when it is held to maturity If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the amount received by you upon early withdrawaltermination may be less than the amount initially invested by you Market Risks associated with Potential ReturnCoupon Apart from the ReturnCoupon calculated at the Minimum ReturnCoupon Rate (which may be set at zero) there is no guarantee of any ReturnCoupon calculated at the Potential ReturnCoupon Rate For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) Coupon (if any) is payable only if the Currency-Linked Capital Protected Investment Deposit is held till the relevant Coupon Distribution Dates ReturnCoupon (if any) of Currency-Linked Capital Protected Investment Deposit depends on the market conditions at the time of the relevant determination Investment return on foreign exchange-linked products are dependent on the prices of inter-banksrsquo transactions on the linked exchange rate in the foreign exchange markets You should be fully aware of the risks relating to fluctuations in the linked exchange rates Factors affecting the performance of foreign exchange markets are numerous including but are not limited to changes in global and local investment sentiments interest rate policies fund flows political environment economic environment business and social conditions in the local marketplace If the market trend is different from the view taken by you there is an inherent risk that the total investment return that you may receive from Currency-Linked Capital Protected Investment Deposit will be less than the interest that would have been payable on a time deposit for the same tenor There is also an inherent risk that no ReturnCoupon calculated at the Potential ReturnCoupon Rate will be payable to you in respect of the Currency-Linked Capital Protected Investment Deposit
Page 55 of 67
Early WithdrawalTermination Risks Early withdrawaltermination by you is not allowed for Currency-Linked Capital Protected Investment Deposit and the capital of you will be invested in the Currency-Linked Capital Protected Investment Deposit for the entire investment period The Bank may at its absolute discretion refuse to give consent to any early withdrawaltermination request If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the Bank shall be entitled to deduct from the Principal of the relevant Currency-Linked Capital Protected Investment Deposit andor any other amount which may have accrued to you any expenses costs or damages to the Bank Damages may include any costs expenses liability or losses to the Bank as a result of the early withdrawaltermination by you Therefore there is no guarantee that you will be able to receive the Principal and the amount payable to you at early withdrawaltermination may be less than the Principal initially invested Besides If the Currency-Linked Capital Protected Investment Deposit is early withdrawnterminated you will no longer be entitled to any ReturnCoupon of the Currency-Linked Capital Protected Investment Deposit Risks associated with unsuccessful subscriptions of Currency-Linked Capital Protected Investment Deposit The Bank reserves the absolute right to approve any application and to decline any application received (whether in whole or any part thereof) before the Deposit Start Date In the event of non-acceptance a notification will be sent by the Bank and any subscription funds received will be returned to you after the Deposit Start Date or as soon as practicable Risks relating to Renminbi If Currency-Linked Capital Protected Investment Deposit involves CNY the relevant exchange rate(s) or level(s) of the relevant currency pair will be quoted in offshore Renminbi against alternate currency While both onshore Renminbi and offshore Renminbi are the same currency they are traded in different and separate markets operating under different regulations and independent liquidity pool Onshore Renminbi and offshore Renminbi are currently quoted in different markets with different exchange rates whereby their exchange rate movements may not be in the same direction or magnitude The offshore Renminbi exchange rate may deviate significantly from the onshore Renminbi exchange rate You should also note that Renminbi is currently not freely convertible the value of Renminbi against other foreign currencies fluctuates and will be affected by amongst other things the PRC governmentrsquos control (for example the PRC government regulates conversion between Renminbi and foreign currencies) which may adversely affect your investment return under the Currency-Linked Capital Protected Investment Deposit when you convert CNY into your home currency Renminbi is subject to foreign exchange control by the PRC government and thus investors investing in Currency-Linked Investment Deposit involving Renminbi are subject to the currency risk of Renminbi
What are the key features bull This product is designed for you whose investment objective is capital protection or to obtain potential cash income bull This product is embedded with options You will buy option(s) on the Linked Currency Pair bull 100 principal protection if this product is held to maturity bull You can choose the Deposit Currency including HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY and Linked Currency
Pair including AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD and USDCNH bull The Deposit Period of this product is 2 months or above
bull You will have a chance to receive higher potential return depending on the movement of the exchange rate of the Underlying Currency
Pair bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency bull The Bank pre-sets the Trading Range bull On the Final Exchange Rate Determination Date the exchange rate of the Underlying Currency Pair is compared with the Trading Range
to determine the Return at maturity bull Returns (if any) on this product is payable only upon maturity bull This product may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank Please refer to
the section Can you request for early termination before maturity below
Scenario analysis (All figures shown below including the exchange rate of AUDUSD and HKDCNH Potential Return Rate Minimum Return Rate Deposit Period etc are for illustration only You should not rely on the figures as any indication or guarantee on the expected interest amount of the Currency-Linked Capital Protected Investment Deposit you intend to invest Please refer to the Bank for up-to-date figures) Example 1 ndash European Range (where the Deposit Currency is your home currency) Assuming HKD is your home currency and you anticipate the Exchange Rate of AUDUSD will be above 10250 but below 10750 after 6 months and set up an European Range Investment with HKD 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Range (AUDUSD) Principal Guarantee 100 Deposit Currency HKD Guaranteed Principal HKD 100000 Deposit Period 6 months Trading Range AUDUSD 10250 (ldquoLower Barrierrdquo) to 10750 (ldquoUpper Barrierrdquo) (excluding both barriers) Potential Return Rate 016 (around 032 pa)
Page 56 of 67
Minimum Return Rate 0015 (around 003 pa) Scenario I Best case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is within the Trading Range (ie above 10250 but below 10750) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = HKD 100000 x (1+016) = HKD 10016000 (with a gain of 016 of investment amount) Scenario II Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 10250 or atabove 10750) you will receive Guaranteed Principal and Minimum Return at maturity Total Return at Maturity = HKD 100000 x (1+0015) = HKD 10001500 (with a gain of 0015 of investment amount) Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a HKD 100000 6 month Time Deposit on 30 April 2015 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500 Example 2 ndash European Range (where the Deposit Currency is not your home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency and you anticipate the Exchange Rate of AUDUSD will be above 10250 but below 10750 after 6 months and set up an European Range Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Range (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trading Range AUDUSD 10250 (ldquoLower Barrierrdquo) to 10750 (ldquoUpper Barrierrdquo) (excluding both barriers) Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH (on deposit start date) 08000 Scenario I Best case scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is within the Trading Range (ie above 10250 but below 10750) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of-the road Gain scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 10250 or atabove 10750) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount)
0
Final Exchange Rate of
AUDUSD le10250
Potential Return Minimum Return
Return Diagram
Return at Maturity
10250 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Minimum Return
Final Exchange Rate of
AUDUSD ge 10750
10750
10250lt Final Exchange Rate of AUDUSD lt10750
Page 57 of 67
Scenario III Off-setting scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 10250 or atabove 10750) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD 000 Scenario IV Loss and Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 10250 or atabove 10750) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 101500 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951) In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a CNY 100000 6 month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received at maturity would be CNY 10030000 If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to
0
Final Exchange Rate of
AUDUSD le10250
Potential Return Minimum Return
Return Diagram
Return at Maturity
10250 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Minimum Return
Final Exchange Rate of
AUDUSD ge 10750
10750
10250lt Final Exchange Rate of AUDUSD lt10750
Page 58 of 67
depreciation of Renminbi Please refer to the table below for details
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date
The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date
If HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
How can you buy this product
bull You can place a Currency-Linked Capital Protected Investment Deposit through our Hang Seng Bank Branches telephone or Hang
Seng Personal or Business e-Banking
bull The Bank will provide a choice of different tranches which is subject to market conditions
bull Enquiry Hotline Personal 2822 0228
Business 2198 8000
Fees and charges No handling fees or management fees will be charged for Currency-Linked Capital Protected Investment Deposit
Can you request for early termination before maturity No Currency-Linked Capital Protected Investment Deposit may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank which may be granted or withheld in the Bankrsquos sole and absolute discretion on such terms and conditions as the Bank may determine Please refer to ldquoEarly WithdrawalTermination Risksrdquo under ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section for details
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
ix 9999990000 010 010 (12499990) (12499990)
At the beginning of the investment On the Maturity Date of the investment
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Potential Return
Exchange Rate of HKDCNH on the Maturity Date
0
If receiving Minimum Return
Breakeven = 08120^
If receiving Potential Return
Breakeven = 08240
If CNH depreciates drastically relative to HKD
HKDCNH = 9999990000
Exchange Rate on Deposit Start Date
Page 59 of 67
Pre-Investment Cooling-off Period for retail customers Pre-Investment Cooling-off Period (PICOP) is applicable to each particular dealing of this product if you are one of the following retail customer types
(1) An elderly customer aged 65 or above unless you are not a first-time buyer of currency-linked structured investment products AND your asset concentration is below 20 AND you opt out from the PICOP arrangement or
(2) A non-elderly customer who is a first time buyer of currency-linked structured investment products AND your asset concentration
is 20 or above
For the purpose of determining whether PICOP is applicable asset concentration refers to the percentage of total net worth (excluding real estate properties) to be invested in this product
Can the Bank adjust the terms or early terminate this product Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank in certain circumstances Please refer to Clause 7 of the Currency-Linked Capital Protected Investment Deposit Terms and Conditions for details
Offering documents for this product The following documents for this product (ldquoOffering Documentsrdquo) contain detailed information about the Bank and the terms of this product You should read and understand all of the Offering Documents before deciding whether to invest in this product
(i) Currency-Linked Capital Protected Investment Deposit Terms and Conditions (ii) The relevant Currency-Linked Capital Protected Investment Deposit Termsheet (iii) This Currency-Linked Capital Protected Investment Deposit Important Facts Statement
Other information Product Risk Level The Product Risk Level for Currency-Linked Capital Protected Investment Deposit is Low
Low Low-to-Medium Medium Medium-to-High High
Product Risk Level is determined by a number of factors which include the volatility of the currency pair and the tenor of the product The Product Risk Level is subject to the Banks periodic review and may change from time to time Please refer to our branch or our Customer Service Hotline on 2822 0228 for the latest detail Declaration and Remarks bull This Important Facts Statement is not intended to provide or regard as legal or taxation advice or investment recommendations If you
have any concerns about this product or are uncertain about the suitability of this product for you you should obtain independent professional advice
bull The liabilities of the Bank in respect of the Currency-Linked Capital Protected Investment Deposit are limited exclusively to an office of the Bank in Hong Kong and instructions in respect of the Currency-Linked Capital Protected Investment Deposit may only be made to and acted upon by such office Any amount relating to the Currency-Linked Capital Protected Investment Deposit is payable exclusively by an office of the Bank in Hong Kong and in its stated currency The Terms and Conditions of the Currency-Linked Capital Protected Investment Deposit are governed by and shall be construed in accordance with the laws of Hong Kong
bull You may contact our staff if you have any feedback or complaint in relation to our services or call our hotline at 2822 0228 We will respond to you within a reasonable period of time normally not exceeding 30 days in general circumstances You may contact the Hong Kong Monetary Authority at 55th Floor Two International Finance Centre 8 Finance Street Central Hong Kong if you are not satisfied with our handling of your complaint
bull Hang Seng Bank Limited is a Registered Licensed Bank under the Banking Ordinance bull All Currency-Linked Capital Protected Investment Deposit cannot be cancelled after subscription bull The Bank will act as principal to complete the transaction and may obtain certain monetary benefits in connection with the offering of
this Currency-Linked Capital Protected Investment Deposit to the public The current remuneration system that the Bank adopts for sales staff is a measurement of the staffrsquos overall performance and not just based on sales amount
bull The Bank is NOT an independent intermediary because The Bank receives fees commissions or other monetary benefits from other parties in relation to the Bankrsquos distribution of Currency-Linked Capital Protected Investment Deposit to you For details you should refer to the Bankrsquos disclosure on monetary benefits which the Bank is required to deliver to you prior to or at the point of entering into any transaction in Currency-Linked Capital Protected Investment Deposit
bull Please note that this product is not available for persons who are located within the United States are nationals of the United States and are US Persons within the meaning of Regulation S under the Securities Act (which includes any person resident in the United States and any partnership or corporation organised or incorporated under the laws of the United States)
bull 請注意本行不提供本產品予身處美國的人士美國公民及美籍人士(定義見證券法 S 條例)(包括居住在美國之任何人士及根據美國法例組
成或註冊成立之任何合夥企業或公司)
Page 6 of 67
In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a CNY 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received at maturity would be CNY 10030000 If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Please refer to the table below for details
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home
currency (HKD) in the event that you receive Minimum Return on the Maturity Date The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home
currency (HKD) in the event that you receive Potential Return on the Maturity Date If HKDCNH rise drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange
rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
ix 9999990000 010 010 (12499990) (12499990)
At the beginning of the investment On the Maturity Date of the investment
Exchange
Rate of
HKDCNH
Initial
Investment
Amount in
Renminbi
Initial
Investment
Amount in
HKD
Exchange Rate
of HKDCNH
Total Return in
Renminbi
Total Return in
HKD
Gain (loss) in HKD if converting the
Total Return from Renminbi to home
currency (HKD)
103000 101500 12500000 10000008000
09800 0
Exchange Rate of AUDUSD lt Trigger Level
Potential Return Minimum Return
Return Diagram Return at Maturity
Exchange Rate of AUDUSD ge Trigger Level
Exchange Rate of AUDUSD during the Observation Period
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Potential Return
Exchange Rate of HKDCNH on the Maturity Date
If receiving Minimum Return
Breakeven = 08120^
If receiving Potential Return
Breakeven = 08240
Exchange Rate on Deposit Start Date
0
If CNH depreciates drastically relative to HKD
HKDCNH = 9999990000
Page 7 of 67
Renminbi to home currency (HKD) on the Maturity Date Example 4 ndash American Bearish (where the Deposit Currency is not your home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency and you take a bearish view on Australian Dollar expect the exchange rate of AUDUSD will drop from 09400 to 09000 or below during the 6-month period and set up an American Bearish Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair
Type of investment American Bearish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trigger Level AUDUSD 09000 Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH (on deposit start date) 08000 Scenario I Best case scenario At any time during the Observation Period (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is at or below the Trigger Level (ie at or below 09000) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of-the-road Gain scenario At any time during the Observation Period (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD stays above the Trigger Level (ie stays above 09000) you will receive Guaranteed Principal and Minimum Return at maturity Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000
(with a gain of 150 of investment amount) Scenario III Off-setting scenario At any time during the Observation Period the Exchange Rate of AUDUSD stays above the Trigger Level (ie stays above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD 000 Scenario IV Loss and Worst case scenario At any time during the Observation Period the Exchange Rate of AUDUSD stays above the Trigger Level (ie stays above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951)
Page 8 of 67
In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a CNY 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received at maturity would be CNY 10030000 If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Please refer to the table below for details
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home
currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home
currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date If HKDCNH rise drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange
rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
ix 9999990000 010 010 (12499990) (12499990)
At the beginning of the investment On the Maturity Date of the investment
Exchange
Rate of
HKDCNH
Initial
Investment
Amount in
Renminbi
Initial
Investment
Amount in
HKD
Exchange Rate
of HKDCNH
Total Return in
Renminbi
Total Return in
HKD
Gain (loss) in HKD if converting the
Total Return from Renminbi to home
currency (HKD)
103000 101500 12500000 10000008000
09000 0
Exchange Rate of AUDUSD le
Trigger Level
Potential Return Minimum Return
Return Diagram
Return at Maturity
Exchange Rate of AUDUSD gt Trigger Level
Exchange Rate of AUDUSD during the Observation Period
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Potential Return
Exchange Rate of HKDCNH on the Maturity Date
0
If receiving Minimum Return
Breakeven = 08120^
If receiving Potential Return
Breakeven = 08240
Exchange Rate on Deposit Start Date
If CNH depreciates drastically relatively to HKD HKDCNH = 9999990000
Page 9 of 67
How can you buy this product bull You can place a Currency-Linked Capital Protected Investment Deposit through our Hang Seng Bank Branches telephone or Hang
Seng Personal or Business e-Banking bull The Bank will provide a choice of different tranches which is subject to market conditions bull Enquiry Hotline Personal 2822 0228 Business 2198 8000
Fees and charges No handling fees or management fees will be charged for Currency-Linked Capital Protected Investment Deposit
Can you request for early termination before maturity No Currency-Linked Capital Protected Investment Deposit may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank which may be granted or withheld in the Bankrsquos sole and absolute discretion on such terms and conditions as the Bank may determine Please refer to ldquoEarly WithdrawalTermination Risksrdquo under ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section for details
Pre-Investment Cooling-off Period for retail customers Pre-Investment Cooling-off Period (PICOP) is applicable to each particular dealing of this product if you are one of the following retail customer types
(1) An elderly customer aged 65 or above unless you are not a first-time buyer of currency-linked structured investment products AND your asset concentration is below 20 AND you opt out from the PICOP arrangement or
(2) A non-elderly customer who is a first time buyer of currency-linked structured investment products AND your asset concentration
is 20 or above
For the purpose of determining whether PICOP is applicable asset concentration refers to the percentage of total net worth (excluding real estate properties) to be invested in this product
Can the Bank adjust the terms or early terminate this product Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank in certain circumstances Please refer to Clause 7 of the Currency-Linked Capital Protected Investment Deposit Terms and Conditions for details
Offering documents for this product The following documents for this product (ldquoOffering Documentsrdquo) contain detailed information about the Bank and the terms of this product You should read and understand all of the Offering Documents before deciding whether to invest in this product
(i) Currency-Linked Capital Protected Investment Deposit Terms and Conditions (ii) The relevant Currency-Linked Capital Protected Investment Deposit Termsheet (iii) This Currency-Linked Capital Protected Investment Deposit Important Facts Statement
Other information Product Risk Level The Product Risk Level for Currency-Linked Capital Protected Investment Deposit is Low
Low Low-to-Medium Medium Medium-to-High High
Product Risk Level is determined by a number of factors which include the volatility of the currency pair and the tenor of the product The Product Risk Level is subject to the Banks periodic review and may change from time to time Please refer to our branch or our Customer Service Hotline on 2822 0228 for the latest detail
Declaration and Remarks bull This Important Facts Statement is not intended to provide or regard as legal or taxation advice or investment recommendations If you
have any concerns about this product or are uncertain about the suitability of this product for you you should obtain independent professional advice
bull The liabilities of the Bank in respect of the Currency-Linked Capital Protected Investment Deposit are limited exclusively to an office of the Bank in Hong Kong and instructions in respect of the Currency-Linked Capital Protected Investment Deposit may only be made to and acted upon by such office Any amount relating to the Currency-Linked Capital Protected Investment Deposit is payable exclusively by an office of the Bank in Hong Kong and in its stated currency The Terms and Conditions of the Currency-Linked Capital Protected Investment Deposit are governed by and shall be construed in accordance with the laws of Hong Kong
bull You may contact our staff if you have any feedback or complaint in relation to our services or call our hotline at 2822 0228 We will respond to you within a reasonable period of time normally not exceeding 30 days in general circumstances You may contact the Hong Kong Monetary Authority at 55th Floor Two International Finance Centre 8 Finance Street Central Hong Kong if you are not satisfied with our handling of your complaint
bull Hang Seng Bank Limited is a Registered Licensed Bank under the Banking Ordinance bull All Currency-Linked Capital Protected Investment Deposit cannot be cancelled after subscription bull The Bank will act as principal to complete the transaction and may obtain certain monetary benefits in connection with the offering of
this Currency-Linked Capital Protected Investment Deposit to the public The current remuneration system that the Bank adopts for
Page 10 of 67
sales staff is a measurement of the staffrsquos overall performance and not just based on sales amount bull The Bank is NOT an independent intermediary because
The Bank receives fees commissions or other monetary benefits from other parties in relation to the Bankrsquos distribution of Currency-Linked Capital Protected Investment Deposit to you For details you should refer to the Bankrsquos disclosure on monetary benefits which the Bank is required to deliver to you prior to or at the point of entering into any transaction in Currency-Linked Capital Protected Investment Deposit
bull Please note that this product is not available for persons who are located within the United States are nationals of the United States and are US Persons within the meaning of Regulation S under the Securities Act (which includes any person resident in the United States and any partnership or corporation organised or incorporated under the laws of the United States)
bull 請注意本行不提供本產品予身處美國的人士美國公民及美籍人士(定義見證券法 S 條例)(包括居住在美國之任何人士及根據美國法例組成
或註冊成立之任何合夥企業或公司)
Page 20 of 67
Currency-Linked Capital Protected Investment Deposit
American Range Investment
Dated May 2018
Important Facts Statement
This is a structured investment product which is NOT protected by the Deposit Protection Scheme in Hong Kong
The contents of this statement have not been reviewed by any regulatory authority in Hong Kong You are advised to exercise caution before investing in this product This statement is a part of the offering documents for this product You should not invest in this product based on this statement alone If you are in any doubt you should obtain independent professional advice
If English is not your preferred language you may request for the Chinese version of this statement from our sales staff 倘若英
文並非閣下屬意的語言閣下可向本行的銷售人員索取本概要的中文版本
This is a structured investment product involving derivatives The investment decision is yours but you should not invest in this product 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
Quick facts Bank Hang Seng Bank Limited
Product Type Currency-Linked Investment Deposit ndash American Range Investment (ldquothis productrdquo)
Minimum Investment Amount Subscription through branches - HKD 100000 (or its equivalent) Subscription through e-banking - HKD 50000 (or its equivalent)
Tenor 2 months or above or any other tenor as agreed between you and the Bank
Available Principal Currency (or Deposit Currency) HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY
Available Underlying Currency Pair AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD USDCNH and any other currency pairs as agreed between you and the Bank
Return Rate Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Deposit periodpayment date Deposit period refers to tenor of the product and return is payable only on Maturity Date
Principal protection at maturity Yes
Callable by the Bank No
Early termination right by customer No please refer to ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section ndash Early WithdrawalTermination Risks for details
Embedded derivatives Yes you will buy option(s) over the Underlying Currency Pair
Maximum potential gain Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Maximum potential loss Please refer to Scenario II amp III of Example 1 and Scenarios IV and V of Example 2 in the ldquoScenario analysisrdquo section of this product type for details
What is this product and how does it work bull American Range investment is one type of our Currency-Linked Capital Protected Investment Deposit which consists of a time deposit
(in Deposit currency) and buying option(s) on the Underlying Currency Pair of your choice bull You choose the Deposit Currency Underlying Currency Pair and the Observation Period according to your need and the Bank will set the
Trading Range bull During the whole Observation Period the Bank will compare the exchange rate of the Underlying Currency Pair with the Trading Range
If the exchange rate of the Underlying Currency Pair moves along with your anticipation and stays within the Trading Range during the whole Observation Period you will receive Guaranteed Principal and Potential Return If the exchange rate of the Underlying Currency Pair moves against your anticipation and at anytime during the Observation Period the exchange rate of the Underlying Currency Pair is outside the Trading Range you will receive Guaranteed Principal and Minimum Return (if any)
bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency Minimum return applies to certain investment tranches only you should refer to the relevant termsheet for details
Page 21 of 67
What are the key risks of Currency-Linked Capital Protected Investment Deposit Earnings on Currency-Linked Capital Protected Investment Deposit are limited to the Return Coupon (if any) payable You should consider the following risks and read all other information contained in the relevant Termsheet and Terms and Conditions before making any investment decision Not a time deposit Currency-Linked Capital Protected Investment Deposit 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 Capital Protected Investment Deposit is embedded with FX options Option transactions involve risks even when buying an option The optionrsquos value might become worthless if the market moves against your expectation Limited potential gain The maximum potential gain is limited to the pre-agreed ReturnCoupon calculated at the Potential ReturnCoupon Rate Not the same as buying the Underlying Currency Pair Investing in Currency-Linked Capital Protected Investment Deposit is not the same as buying the Underlying Currency Pair directly Market risk The investment return of Currency-Linked Capital Protected Investment Deposit is linked to the exchange rate of the Underlying Currency Pair Movements in exchange rates can be unpredictable sudden and drastic and affected by complex political and economic factors Liquidity risk Currency-Linked Capital Protected Investment Deposit is designed to be held till maturity The Bank may at its absolute discretion refuse to consent to any withdrawaltermination request before maturity Credit risk of the Bank Currency-Linked Capital Protected Investment Deposit is not secured by any collateral When you invest in Currency-Linked Capital Protected Investment Deposit you will be relying on the Bankrsquos creditworthiness If the Bank becomes insolvent or defaults on its obligations under a Currency-Linked Capital Protected Investment Deposit you can only claim as an unsecured creditor of the Bank In the worst case you could suffer a total loss of your investment amount Currency risk Exchange rate fluctuates and sometimes drastically If the Deposit Currency used for investment is not the home currency customarily used by you and thus conversion is required you should note that you may make a gain or suffer a loss due to exchange rate fluctuations When the deposit currency depreciates the loss from depreciation may set-off or even exceed the ReturnCoupon (if any) that you may receive from investing in the Currency-Linked Capital Protected Investment Deposit Risk of adjustments or early termination by the Bank Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank this might have a negative impact on the ReturnCoupon (if any) of the Currency-Linked Capital Protected Investment Deposit Concentration Risks You should avoid excessive investment (in terms of its proportion of the overall portfolio) in any single type of investment so as to avoid the investment portfolio being over-exposed to any particular investment risk ReturnCoupon of Currency-Linked Capital Protected Investment Deposit In order to provide capital protection the investment strategy adopted for Currency-Linked Capital Protected Investment Deposit may lead to a dilution of performance when compared to non-capital protected products investing in similar markets You should be prepared to take the risks of earning a lower ReturnCoupon (if any) on the capital invested and losing the interest that might otherwise earned on money invested by way of deposits For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) periodic Coupon may be payable to you For other types of Currency-Linked Capital Protected Investment Deposit no periodic ReturnCoupon will be payable to you prior to maturity Principal protection at maturity only You should understand that the Principal of the Currency-Linked Capital Protected Investment Deposit is capital-protected only when it is held to maturity If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the amount received by you upon early withdrawaltermination may be less than the amount initially invested by you Market Risks associated with Potential ReturnCoupon Apart from the ReturnCoupon calculated at the Minimum ReturnCoupon Rate (which may be set at zero) there is no guarantee of any ReturnCoupon calculated at the Potential ReturnCoupon Rate For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) Coupon (if any) is payable only if the Currency-Linked Capital Protected Investment Deposit is held till the relevant Coupon Distribution Dates ReturnCoupon (if any) of Currency-Linked Capital Protected Investment Deposit depends on the market conditions at the time of the relevant determination Investment return on foreign exchange-linked products are dependent on the prices of inter-banksrsquo transactions on the linked exchange rate in the foreign exchange markets You should be fully aware of the risks relating to fluctuations in the linked exchange rates Factors affecting the performance of foreign exchange markets are numerous including but are not limited to changes in global and local investment sentiments interest rate policies fund flows political environment economic environment business and social conditions in the local marketplace If the market trend is different from the view taken by you there is an inherent risk that the total investment return that you may receive from Currency-Linked Capital Protected Investment Deposit will be less than the interest that would have been payable on a time deposit for the same tenor There is also an inherent risk that no ReturnCoupon calculated at the Potential ReturnCoupon Rate will be payable to you in respect of the Currency-Linked Capital Protected Investment Deposit
Page 22 of 67
Early WithdrawalTermination Risks Early withdrawaltermination by you is not allowed for Currency-Linked Capital Protected Investment Deposit and the capital of you will be invested in the Currency-Linked Capital Protected Investment Deposit for the entire investment period The Bank may at its absolute discretion refuse to give consent to any early withdrawaltermination request If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the Bank shall be entitled to deduct from the Principal of the relevant Currency-Linked Capital Protected Investment Deposit andor any other amount which may have accrued to you any expenses costs or damages to the Bank Damages may include any costs expenses liability or losses to the Bank as a result of the early withdrawaltermination by you Therefore there is no guarantee that you will be able to receive the Principal and the amount payable to you at early withdrawaltermination may be less than the Principal initially invested Besides If the Currency-Linked Capital Protected Investment Deposit is early withdrawnterminated you will no longer be entitled to any ReturnCoupon of the Currency-Linked Capital Protected Investment Deposit Risks associated with unsuccessful subscriptions of Currency-Linked Capital Protected Investment Deposit The Bank reserves the absolute right to approve any application and to decline any application received (whether in whole or any part thereof) before the Deposit Start Date In the event of non-acceptance a notification will be sent by the Bank and any subscription funds received will be returned to you after the Deposit Start Date or as soon as practicable Risks relating to Renminbi If Currency-Linked Capital Protected Investment Deposit involves CNY the relevant exchange rate(s) or level(s) of the relevant currency pair will be quoted in offshore Renminbi against alternate currency While both onshore Renminbi and offshore Renminbi are the same currency they are traded in different and separate markets operating under different regulations and independent liquidity pool Onshore Renminbi and offshore Renminbi are currently quoted in different markets with different exchange rates whereby their exchange rate movements may not be in the same direction or magnitude The offshore Renminbi exchange rate may deviate significantly from the onshore Renminbi exchange rate You should also note that Renminbi is currently not freely convertible the value of Renminbi against other foreign currencies fluctuates and will be affected by amongst other things the PRC governmentrsquos control (for example the PRC government regulates conversion between Renminbi and foreign currencies) which may adversely affect your investment return under the Currency-Linked Capital Protected Investment Deposit when you convert CNY into your home currency Renminbi is subject to foreign exchange control by the PRC government and thus investors investing in Currency-Linked Investment Deposit involving Renminbi are subject to the currency risk of Renminbi
What are the key features bull This product is designed for you whose investment objective is capital protection or to obtain potential cash income bull This product is embedded with options You will buy option(s) on the Linked Currency Pair bull 100 principal protection if this product is held to maturity bull You can choose the Deposit Currency including HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY and Linked Currency
Pair including AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD and USDCNH bull The Deposit Period of the Currency-Linked Capital Protected Investment Deposit is 2 months or above bull You will have a chance to receive higher potential return depending on the movement of the exchange rate of the Underlying Currency
Pair during the Observation Period bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency bull The Bank pre-sets the Trading Range and Observation Period bull During the whole Observation Period the exchange rate of the Underlying Currency Pair is compared with the Trading Range to
determine the Return at maturity bull Returns (if any) on this product is payable only upon maturity bull This product may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank Please refer
to the section Can you request for early termination before maturity below
Scenario analysis (All figures shown below including the exchange rate of AUDUSD and HKDCNH Potential Return Rate Minimum Return Rate Deposit Period etc are for illustration only You should not rely on the below figures as any indication or guarantee on the expected interest amount of the Currency-Linked Capital Protected Investment Deposit you intend to invest Please refer to the Bank for up-to-date figures) Example 1 ndash American Range (where the Deposit Currency is your home currency) Assuming HKD is your home currency and you anticipate the Exchange Rate of AUDUSD will stay above 09850 but below 11150 for the next 6 months and set up an American Range Investment with HKD 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment American Range (AUDUSD) Principal Guarantee 100 Deposit Currency HKD Guaranteed Principal HKD 100000 Deposit Period 6 months Trading Range AUDUSD 09850 (ldquoLower Barrierrdquo) to 11150 (ldquoUpper Barrierrdquo) (excluding both barriers) Potential Return Rate 016 (around 032 pa)
Page 23 of 67
Minimum Return Rate 0015 (around 003 pa) Scenario I Best case scenario At any time during the Observation Period the Exchange Rate of AUDUSD stays within the Trading Range (ie above 09850 but below 11150) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = HKD 100000 x (1+016) = HKD 10016000 (with a gain of 016 of investment amount) Scenario II Worst case scenario At any time during the Observation Period the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 09850 or atabove 11150) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = HKD 100000 x (1+0015) = HKD 10001500
(with a gain of 0015 of investment amount) Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a HKD 100000 6-month Time Deposit on 30 April 2014 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500
Example 2 ndash American Range (where the Deposit Currency is not your home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency and you anticipate the Exchange Rate of AUDUSD will stay above 09850 but below 11150 for the next 6 months and set up an American Range Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment American Range (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trading Range AUDUSD 09850 (ldquoLower Barrierrdquo) to 11150 (ldquoUpper Barrierrdquo) (excluding both barriers) Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH (on deposit start date) 08000 Scenario I Best case scenario At any time during the Observation Period (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD stays within the Trading Range (ie above 09850 but below 11150) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of the road Gain scenario At any time during the Observation Period (assuming the exchange rate of HKDCNH remains unchanged the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 09850 or atabove 11150) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = CNY 100000 x (1+15) = CNY 10150000 (with a gain of 150 of investment amount)
0
Exchange Rate of
AUDUSD le 09850
Potential Return Minimum Return
Return Diagram Return at Maturity
09850 Exchange Rate of AUDUSD during the Observation Period
Minimum Return
09850 lt Exchange Rate of AUDUSD lt 11150
Exchange Rate of
AUDUSD ge 11150
11150
Page 24 of 67
Scenario III Off-setting scenario At any time during the Observation Period the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 09850 or atabove 11150) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD 000 Scenario IV Loss and Worst case scenario At any time during the Observation Period the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 09850 or atabove 11150) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951) In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a CNY 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received would be CNY 10030000
If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Please refer to the table below for details
0
Exchange Rate of
AUDUSD le 09850
Potential Return Minimum Return
Return Diagram
Return at Maturity
09850 Exchange Rate of AUDUSD during the Observation Period
Minimum Return
09850 lt Exchange Rate of AUDUSD lt 11150
Exchange Rate of
AUDUSD ge 11150
11150
Page 25 of 67
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date
The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date
If HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
How can you buy this product bull You can place a Currency-Linked Capital Protected Investment Deposit through our Hang Seng Bank Branches telephone or Hang Seng
Personal or Business e-Banking bull The Bank will provide a choice of different tranches which is subject to market conditions bull Enquiry Hotline Personal 2822 0228 Business 2198 8000
Fees and charges No handling fees or management fees will be charged for Currency-Linked Capital Protected Investment Deposit
Can you request for early termination before maturity No Currency-Linked Capital Protected Investment Deposit may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank which may be granted or withheld in the Bankrsquos sole and absolute discretion on such terms and conditions as the Bank may determine Please refer to ldquoEarly WithdrawalTermination Risksrdquo under ldquoWhat are the key features featuresrisks of Currency-Linked Capital Protected Investment Depositrdquo section for details
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
ix 9999990000 010 010 (12499990) (12499990)
At the beginning of the investment On the Maturity Date of the investment
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Potential Return
Exchange Rate of HKDCNH on the Maturity Date
0
If receiving Minimum Return
Breakeven = 08120^
If receiving Potential Return
Breakeven = 08240
If CNH depreciates drastically relative to HKD
HKDCNH = 9999990000
Exchange Rate on Deposit Start Date
Page 26 of 67
Pre-Investment Cooling-off Period for retail customers Pre-Investment Cooling-off Period (PICOP) is applicable to each particular dealing of this product if you are one of the following retail customer types
(1) An elderly customer aged 65 or above unless you are not a first-time buyer of currency-linked structured investment products AND your asset concentration is below 20 AND you opt out from the PICOP arrangement or
(2) A non-elderly customer who is a first time buyer of currency-linked structured investment products AND your asset concentration
is 20 or above
For the purpose of determining whether PICOP is applicable asset concentration refers to the percentage of total net worth (excluding real estate properties) to be invested in this product
Can the Bank adjust the terms or early terminate this product Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank in certain circumstances Please refer to Clause 7 of the Currency-Linked Capital Protected Investment Deposit Terms and Conditions for details
Offering documents for this product The following documents for this product (ldquoOffering Documentsrdquo) contain detailed information about the Bank and the terms of this product You should read and understand all of the Offering Documents before deciding whether to invest in this product
(i) Currency-Linked Capital Protected Investment Deposit Terms and Conditions (ii) The relevant Currency-Linked Capital Protected Investment Deposit Termsheet (iii) This Currency-Linked Capital Protected Investment Deposit Important Facts Statement
Other information Product Risk Level The Product Risk Level for Currency-Linked Capital Protected Investment Deposit is Low
Low Low-to-Medium Medium Medium-to-High High
Product Risk Level is determined by a number of factors which include the volatility of the currency pair and the tenor of the product The Product Risk Level is subject to the Banks periodic review and may change from time to time Please refer to our branch or our Customer Service Hotline on 2822 0228 for the latest detail Declaration and Remarks bull This Important Facts Statement is not intended to provide or regard as legal or taxation advice or investment recommendations If you
have any concerns about this product or are uncertain about the suitability of this product for you you should obtain independent professional advice
bull The liabilities of the Bank in respect of the Currency-Linked Capital Protected Investment Deposit are limited exclusively to an office of the Bank in Hong Kong and instructions in respect of the Currency-Linked Capital Protected Investment Deposit may only be made to and acted upon by such office Any amount relating to the Currency-Linked Capital Protected Investment Deposit is payable exclusively by an office of the Bank in Hong Kong and in its stated currency The Terms and Conditions of the Currency-Linked Capital Protected Investment Deposit are governed by and shall be construed in accordance with the laws of Hong Kong
bull You may contact our staff if you have any feedback or complaint in relation to our services or call our hotline at 2822 0228 We will respond to you within a reasonable period of time normally not exceeding 30 days in general circumstances You may contact the Hong Kong Monetary Authority at 55th Floor Two International Finance Centre 8 Finance Street Central Hong Kong if you are not satisfied with our handling of your complaint
bull Hang Seng Bank Limited is a Registered Licensed Bank under the Banking Ordinance bull All Currency-Linked Capital Protected Investment Deposit cannot be cancelled after subscription bull The Bank will act as principal to complete the transaction and may obtain certain monetary benefits in connection with the offering of
this Currency-Linked Capital Protected Investment Deposit to the public The current remuneration system that the Bank adopts for sales staff is a measurement of the staffrsquos overall performance and not just based on sales amount
bull The Bank is NOT an independent intermediary because The Bank receives fees commissions or other monetary benefits from other parties in relation to the Bankrsquos distribution of Currency-Linked Capital Protected Investment Deposit to you For details you should refer to the Bankrsquos disclosure on monetary benefits which the Bank is required to deliver to you prior to or at the point of entering into any transaction in Currency-Linked Capital Protected Investment Deposit
bull Please note that this product is not available for persons who are located within the United States are nationals of the United States and are US Persons within the meaning of Regulation S under the Securities Act (which includes any person resident in the United States and any partnership or corporation organised or incorporated under the laws of the United States)
bull 請注意本行不提供本產品予身處美國的人士美國公民及美籍人士(定義見證券法 S 條例)(包括居住在美國之任何人士及根據美國法例組
成或註冊成立之任何合夥企業或公司)
Page 34 of 67
Currency-Linked Capital Protected Investment Deposit
European (Bullish Bearish) Investment
Dated May 2018
Important Facts Statement
This is a structured investment product which is NOT protected by the Deposit Protection Scheme in Hong Kong
The contents of this statement have not been reviewed by any regulatory authority in Hong Kong You are advised to exercise caution before investing in this product This statement is a part of the offering documents for this product You should not invest in this product based on this statement alone If you are in any doubt you should obtain independent professional advice
If English is not your preferred language you may request for the Chinese version of this statement from our sales staff 倘若英文並
非閣下屬意的語言閣下可向本行的銷售人員索取本概要的中文版本
This is a structured investment product involving derivatives The investment decision is yours but you should not invest in this product 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
Quick facts
Bank Hang Seng Bank Limited
Product Type Currency-Linked Investment Deposit ndash European Bullish Bearish Investment (ldquothis productrdquo)
Minimum Investment Amount Subscription through branches - HKD 100000 (or its equivalent) Subscription through e-banking - HKD 50000 (or its equivalent)
Tenor 2 months or above or any other tenor as agreed between you and the Bank
Available Principal Currency (or Deposit Currency) HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY
Available Underlying Currency Pair AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD USDCNH and any other currency pairs as agreed between you and the Bank
Return Rate Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Deposit periodpayment date Deposit period refers to tenor of the product and return is payable only on Maturity Date
Principal protection at maturity Yes
Callable by the Bank No
Early termination right by customer No please refer to ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section ndash Early WithdrawalTermination Risks for details
Embedded derivatives Yes you will buy option(s) over the Underlying Currency Pair
Maximum potential gain Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Maximum potential loss Please refer to Scenarios II and III of Example 1 and 2 and Scenarios IV and V of Example 3 and 4 in ldquoScenario analysisrdquo section of this product type for details
What is this product and how does it work bull European Bullish Bearish investment is one type of our Currency-Linked Capital Protected Investment Deposit which consists of a time
deposit (in Deposit Currency) and buying option(s) on the Underlying Currency Pair of your choice bull You choose the Deposit Currency Underlying Currency Pair according to your need and the Bank will set the Trigger Level bull On the Final Exchange Rate Determination Date the Bank will compare the exchange rate of the Underlying Currency Pair with the Trigger
Level If the exchange rate of the Underlying Currency Pair moves along with your anticipation you will receive Guaranteed Principal and Potential Return If the exchange rate of the Underlying Currency Pair moves against your anticipation you will receive Guaranteed Principal and Minimum Return (if any)
bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency Minimum return applies to certain investment tranches only you should refer to the relevant termsheet for details
Page 35 of 67
What are the key risks of Currency-Linked Capital Protected Investment Deposit Earnings on Currency-Linked Capital Protected Investment Deposit are limited to the Return Coupon (if any) payable You should consider the following risks and read all other information contained in the relevant Termsheet and Terms and Conditions before making any investment decision Not a time deposit Currency-Linked Capital Protected Investment Deposit 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 Capital Protected Investment Deposit is embedded with FX options Option transactions involve risks even when buying an option The optionrsquos value might become worthless if the market moves against your expectation Limited potential gain The maximum potential gain is limited to the pre-agreed ReturnCoupon calculated at the Potential ReturnCoupon Rate Not the same as buying the Underlying Currency Pair Investing in Currency-Linked Capital Protected Investment Deposit is not the same as buying the Underlying Currency Pair directly Market risk The investment return of Currency-Linked Capital Protected Investment Deposit is linked to the exchange rate of the Underlying Currency Pair Movements in exchange rates can be unpredictable sudden and drastic and affected by complex political and economic factors Liquidity risk Currency-Linked Capital Protected Investment Deposit is designed to be held till maturity The Bank may at its absolute discretion refuse to consent to any withdrawaltermination request before maturity Credit risk of the Bank Currency-Linked Capital Protected Investment Deposit is not secured by any collateral When you invest in Currency-Linked Capital Protected Investment Deposit you will be relying on the Bankrsquos creditworthiness If the Bank becomes insolvent or defaults on its obligations under a Currency-Linked Capital Protected Investment Deposit you can only claim as an unsecured creditor of the Bank In the worst case you could suffer a total loss of your investment amount Currency risk Exchange rate fluctuates and sometimes drastically If the Deposit Currency used for investment is not the home currency customarily used by you and thus conversion is required you should note that you may make a gain or suffer a loss due to exchange rate fluctuations When the deposit currency depreciates the loss from depreciation may set-off or even exceed the ReturnCoupon (if any) that you may receive from investing in the Currency-Linked Capital Protected Investment Deposit Risk of adjustments or early termination by the Bank Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank this might have a negative impact on the ReturnCoupon (if any) of the Currency-Linked Capital Protected Investment Deposit Concentration Risks You should avoid excessive investment (in terms of its proportion of the overall portfolio) in any single type of investment so as to avoid the investment portfolio being over-exposed to any particular investment risk ReturnCoupon of Currency-Linked Capital Protected Investment Deposit In order to provide capital protection the investment strategy adopted for Currency-Linked Capital Protected Investment Deposit may lead to a dilution of performance when compared to non-capital protected products investing in similar markets You should be prepared to take the risks of earning a lower ReturnCoupon (if any) on the capital invested and losing the interest that might otherwise earned on money invested by way of deposits For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) periodic Coupon may be payable to you For other types of Currency-Linked Capital Protected Investment Deposit no periodic ReturnCoupon will be payable to you prior to maturity Principal protection at maturity only You should understand that the Principal of the Currency-Linked Capital Protected Investment Deposit is capital-protected only when it is held to maturity If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the amount received by you upon early withdrawaltermination may be less than the amount initially invested by you Market Risks associated with Potential ReturnCoupon Apart from the ReturnCoupon calculated at the Minimum ReturnCoupon Rate (which may be set at zero) there is no guarantee of any ReturnCoupon calculated at the Potential ReturnCoupon Rate For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) Coupon (if any) is payable only if the Currency-Linked Capital Protected Investment Deposit is held till the relevant Coupon Distribution Dates ReturnCoupon (if any) of Currency-Linked Capital Protected Investment Deposit depends on the market conditions at the time of the relevant determination Investment return on foreign exchange-linked products are dependent on the prices of inter-banksrsquo transactions on the linked exchange rate in the foreign exchange markets You should be fully aware of the risks relating to fluctuations in the linked exchange rates Factors affecting the performance of foreign exchange markets are numerous including but are not limited to changes in global and local investment sentiments interest rate policies fund flows political environment economic environment business and social conditions in the local marketplace If the market trend is different from the view taken by you there is an inherent risk that the total investment return that you may receive from Currency-Linked Capital Protected Investment Deposit will be less than the interest that would have been payable on a time deposit for the same tenor There is also an inherent risk that no ReturnCoupon calculated at the Potential ReturnCoupon Rate will be payable to you in respect of the Currency-Linked Capital Protected Investment Deposit Early WithdrawalTermination Risks Early withdrawaltermination by you is not allowed for Currency-Linked Capital Protected Investment Deposit and the capital of you will be invested in the Currency-Linked Capital Protected Investment Deposit for the entire investment period The Bank may at its absolute discretion refuse to give consent to any early withdrawaltermination request If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the Bank shall be entitled to deduct from the Principal of the relevant Currency-Linked Capital Protected Investment Deposit andor any other amount which may have accrued to you any expenses costs or damages to the Bank Damages may include any costs expenses liability or losses to the Bank as a result of the early withdrawaltermination by you Therefore there is no guarantee that you will be able to receive the Principal and the amount payable to you at early withdrawaltermination may be less
Page 36 of 67
than the Principal initially invested Besides If the Currency-Linked Capital Protected Investment Deposit is early withdrawnterminated you will no longer be entitled to any ReturnCoupon of the Currency-Linked Capital Protected Investment Deposit Risks associated with unsuccessful subscriptions of Currency-Linked Capital Protected Investment Deposit The Bank reserves the absolute right to approve any application and to decline any application received (whether in whole or any part thereof) before the Deposit Start Date In the event of non-acceptance a notification will be sent by the Bank and any subscription funds received will be returned to you after the Deposit Start Date or as soon as practicable Risks relating to Renminbi If Currency-Linked Capital Protected Investment Deposit involves CNY the relevant exchange rate(s) or level(s) of the relevant currency pair will be quoted in offshore Renminbi against alternate currency While both onshore Renminbi and offshore Renminbi are the same currency they are traded in different and separate markets operating under different regulations and independent liquidity pool Onshore Renminbi and offshore Renminbi are currently quoted in different markets with different exchange rates whereby their exchange rate movements may not be in the same direction or magnitude The offshore Renminbi exchange rate may deviate significantly from the onshore Renminbi exchange rate You should also note that Renminbi is currently not freely convertible the value of Renminbi against other foreign currencies fluctuates and will be affected by amongst other things the PRC governmentrsquos control (for example the PRC government regulates conversion between Renminbi and foreign currencies) which may adversely affect your investment return under the Currency-Linked Capital Protected Investment Deposit when you convert CNY into your home currency Renminbi is subject to foreign exchange control by the PRC government and thus investors investing in Currency-Linked Investment Deposit involving Renminbi are subject to the currency risk of Renminbi
What are the key features bull This product is designed for you whose investment objective is capital protection or to obtain potential cash income
bull This product is embedded with options You will buy option(s) on the Linked Currency Pair bull 100 principal protection if the Currency-Linked Capital Protected Investment Deposit is held to maturity bull You can choose the Deposit Currency including HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY and Linked Currency Pair
including AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD and USDCNH bull The Deposit Period of this product is 2 months or above bull You will have a chance to receive higher potential return depending on the movement of the exchange rate of the Underlying Currency Pair bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency bull The Bank pre-sets the Trigger Level and you choose a bullish or bearish view on different currencies bull On the Final Exchange Rate Determination Date the exchange rate of the Underlying Currency Pair is compared with the Trigger Level to
determine the Return at maturity bull Returns (if any) on this product is payable only upon maturity bull This product may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank Please refer to
the section Can you request for early termination before maturity below
Scenario analysis (All figures shown below including the exchange rate of AUDUSD and HKDCNH Potential Return Rate Minimum Return Rate Deposit Period etc are for illustration only You should not rely on the below figures as any indication or guarantee on the expected interest amount of the Currency-Linked Capital Protected Investment Deposit you intend to invest Please refer to the Bank for up-to-date figures) Example 1 ndash European Bullish (where the Deposit Currency is your home currency) Assuming HKD is your home currency and you take a bullish view on Australian Dollar expect the exchange rate of AUDUSD will rise from 09400 to 09800 or above after the 6-month period and set up an European Bullish Investment with HKD 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Bullish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency HKD Guaranteed Principal HKD 100000 Deposit Period 6 months Trigger Level AUDUSD 09800 Potential Return Rate 016 (around 032 pa) Minimum Return Rate 0015 (around 003 pa) Scenario I Best case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is at or above the Trigger Level (ie at or above 09800) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = HKD 100000 x (1+016) = HKD 10016000 (with a gain of 016 of investment amount) Scenario II Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is below the Trigger Level (ie below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity
Page 37 of 67
Total Return at Maturity = HKD 100000 x (1+0015) = HKD 10001500 (with a gain of 0015 of investment amount) Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount
For reference only if you set up a HKD 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500
Example 2 ndash European Bearish (where the Deposit Currency is your home currency) Assuming HKD is your home currency and you take a bearish view on Australian Dollar expect the exchange rate of AUDUSD will drop from 09400 to 09000 or below after the 6-month period and set up an European Bearish Investment with HKD 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Bearish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency HKD Guaranteed Principal HKD 100000 Deposit Period 6 months Trigger Level AUDUSD 09000 Potential Return Rate 016 (around 032 pa) Minimum Return Rate 0015 (around 003 pa) Scenario I Best case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is at or below the Trigger Level (ie at or below 09000) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = HKD 100000 x (1+016) = HKD 10016000 (with a gain of 016 of investment amount) Scenario II Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is above the Trigger Level (ie above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = HKD 100000 x (1+0015) = HKD 10001500 (with a gain of 0015 of investment amount) Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount
0
Final Exchange Rate of AUDUSD lt Trigger Level
Potential Return Minimum Return
Return Diagram Return at Maturity
09800 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Final Exchange Rate of AUDUSD ge Trigger Level
Trigger Level = 09800
Page 38 of 67
For reference only if you set up a HKD 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500 Example 3 ndash European Bullish (where the Deposit Currency is not home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency you take a bullish view on Australian Dollar expect the exchange rate of AUDUSD will rise from 09400 to 09800 or above after the 6-month period and set up an European Bullish Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Bullish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trigger Level AUDUSD 09800 Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH on deposit start date 08000 Scenario I Best case scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is at or above the Trigger Level (ie at or above 09800) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of-the road Gain scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is below the Trigger Level (ie below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Scenario III Off-setting scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is below the Trigger Level (ie below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD 000
0
Final Exchange Rate of AUDUSD
le Trigger Level
Potential Return Minimum Return
Return Diagram
Return at Maturity
09000 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Final Exchange Rate of AUDUSD gt Trigger Level
Trigger Level = 09000
Page 39 of 67
Scenario IV Loss and Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is below the Trigger Level (ie below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 101500 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951) In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount
For reference only if you set up a CNY 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received at maturity would be CNY 10030000 If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Please refer to the table below for details
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
viiii 9999990000 010 010 (12499990) (12499990)
103000 101500 12500000 10000008000
At the beginning of the investment On the Maturity Date of the investment
Exchange
Rate of
HKDCNH
Initial
Investment
Amount in
Renminbi
Initial
Investment
Amount in
HKD
Exchange Rate
of HKDCNH
Total Return in
Renminbi
Total Return in
HKD
Gain (loss) in HKD if converting the
Total Return from Renminbi to home
currency (HKD)
0
Final Exchange Rate of AUDUSD lt Trigger Level
Potential Return Minimum Return
Return Diagram
Return at Maturity
09800 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Final Exchange Rate of AUDUSD ge Trigger Level
Trigger Level = 09800
Page 40 of 67
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date
The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date
If HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
Example 4 ndash European Bearish (where the Deposit Currency is not home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency you take a bearish view on Australian Dollar expect the exchange rate of AUDUSD will drop from 09400 to 09000 or below after the 6-month period and set up an European Bearish Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Bearish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trigger Level AUDUSD 09000 Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH at the time of investment 08000 Scenario I Best case scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is at or below the Trigger Level (ie at or below 09000) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of-the road Gain scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is above the Trigger Level (ie above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Scenario III Off-setting scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is above the Trigger Level (ie above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Exchange Rate of HKDCNH on the Maturity Date
0
If receiving Minimum Return
Breakeven = 08120^
If receiving Potential Return
Breakeven = 08240
Exchange Rate on Deposit Start Date
Potential Return
Minimum Return
If CNH depreciates drastically relative to HKD
HKDCNH = 9999990000
Page 41 of 67
= HKD 12500000 Gain(Loss) in home currency HKD 000 Scenario IV Loss and Worst Case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is above the Trigger Level (ie above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951) In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount
For reference only if you set up a CNY 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received at maturity would be CNY 10030000 If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Please refer to the table below for details
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
viiii 9999990000 010 010 (12499990) (12499990)
103000 101500 12500000 10000008000
At the beginning of the investment On the Maturity Date of the investment
Exchange
Rate of
HKDCNH
Initial
Investment
Amount in
Renminbi
Initial
Investment
Amount in
HKD
Exchange Rate
of HKDCNH
Total Return in
Renminbi
Total Return in
HKD
Gain (loss) in HKD if converting the
Total Return from Renminbi to home
currency (HKD)
0
Final Exchange Rate of AUDUSD le Trigger Level
Potential Return Minimum Return
Return Diagram Return at Maturity
09000 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Final Exchange Rate of AUDUSD gt Trigger Level
Trigger Level = 09000
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Page 42 of 67
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date
The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date
If HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
How can you buy this product bull You can place a Currency-Linked Capital Protected Investment Deposit through our Hang Seng Bank Branches telephone or Hang Seng
Personal or Business e-Banking bull The Bank will provide a choice of different tranches which is subject to market conditions bull Enquiry Hotline Personal 2822 0228 Business 2198 8000
Fees and charges No handling fees or management fees will be charged for Currency-Linked Capital Protected Investment Deposit
Can you request for early termination before maturity No Currency-Linked Capital Protected Investment Deposit may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank which may be granted or withheld in the Bankrsquos sole and absolute discretion on such terms and conditions as the Bank may determine Please refer to ldquoEarly WithdrawalTermination Risksrdquo under ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section for details
Pre-Investment Cooling-off Period for retail customers Pre-Investment Cooling-off Period (PICOP) is applicable to each particular dealing of this product if you are one of the following retail customer types
(1) An elderly customer aged 65 or above unless you are not a first-time buyer of currency-linked structured investment products AND your asset concentration is below 20 AND you opt out from the PICOP arrangement or
(2) A non-elderly customer who is a first time buyer of currency-linked structured investment products AND your asset concentration is
20 or above
For the purpose of determining whether PICOP is applicable asset concentration refers to the percentage of total net worth (excluding real estate properties) to be invested in this product
Can the Bank adjust the terms or early terminate this product Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank in certain circumstances Please refer to Clause 7 of the Currency-Linked Capital Protected Investment Deposit Terms and Conditions for details
Offering documents for this product The following documents for this product (ldquoOffering Documentsrdquo) contain detailed information about the Bank and the terms of this product You should read and understand all of the Offering Documents before deciding whether to invest in this product
(i) Currency-Linked Capital Protected Investment Deposit Terms and Conditions (ii) The relevant Currency-Linked Capital Protected Investment Deposit Termsheet (iii) This Currency-Linked Capital Protected Investment Deposit Important Facts Statement
Product Risk Level The Product Risk Level for Currency-Linked Capital Protected Investment Deposit is Low
Low Low-to-Medium Medium Medium-to-High High
Product Risk Level is determined by a number of factors which include the volatility of the currency pair and the tenor of the product The Product Risk Level is subject to the Banks periodic review and may change from time to time Please refer to our branch or our Customer Service Hotline on 2822 0228 for the latest detail Declaration and Remarks bull This Important Facts Statement is not intended to provide or regard as legal or taxation advice or investment recommendations If you have
any concerns about this product or are uncertain about the suitability of this product for you you should obtain independent professional advice
bull The liabilities of the Bank in respect of the Currency-Linked Capital Protected Investment Deposit are limited exclusively to an office of the Bank in Hong Kong and instructions in respect of the Currency-Linked Capital Protected Investment Deposit may only be made to and acted upon by such office Any amount relating to the Currency-Linked Capital Protected Investment Deposit is payable exclusively by an office of the Bank in Hong Kong and in its stated currency The Terms and Conditions of the Currency-Linked Capital Protected Investment Deposit are governed by and shall be construed in accordance with the laws of Hong Kong
bull You may contact our staff if you have any feedback or complaint in relation to our services or call our hotline at 2822 0228 We will respond to you within a reasonable period of time normally not exceeding 30 days in general circumstances You may contact the Hong Kong Monetary Authority at 55th Floor Two International Finance Centre 8 Finance Street Central Hong Kong if you are not satisfied with our handling of your complaint
bull Hang Seng Bank Limited is a Registered Licensed Bank under the Banking Ordinance bull All Currency-Linked Capital Protected Investment Deposit cannot be cancelled after subscription bull The Bank will act as principal to complete the transaction and may obtain certain monetary benefits in connection with the offering of this
Currency-Linked Capital Protected Investment Deposit to the public The current remuneration system that the Bank adopts for sales staff is a measurement of the staffrsquos overall performance and not just based on sales amount
bull The Bank is NOT an independent intermediary because The Bank receives fees commissions or other monetary benefits from other parties in relation to the Bankrsquos distribution of Currency-Linked Capital Protected Investment Deposit to you For details you should refer to the Bankrsquos disclosure on monetary benefits which the Bank is required to deliver to you prior to or at the point of entering into any transaction in Currency-Linked Capital Protected Investment Deposit
bull Please note that this product is not available for persons who are located within the United States are nationals of the United States and are US Persons within the meaning of Regulation S under the Securities Act (which includes any person resident in the United States and any partnership or corporation organised or incorporated under the laws of the United States)
bull 請注意本行不提供本產品予身處美國的人士美國公民及美籍人士(定義見證券法 S 條例)(包括居住在美國之任何人士及根據美國法例組成
或註冊成立之任何合夥企業或公司)
Page 53 of 67
Currency-Linked Capital Protected Investment Deposit
European Range Investment
Dated May 2018
Important Facts Statement
This is a structured investment product which is NOT protected by the Deposit
Protection Scheme in Hong Kong
The contents of this statement have not been reviewed by any regulatory authority in Hong Kong You are advised to exercise caution before investing in this product This statement is a part of the offering documents for this product You should not invest in this product based on this statement alone If you are in any doubt you should obtain independent professional advice
If English is not your preferred language you may request for the Chinese version of this statement from our sales staff 倘若英
文並非閣下屬意的語言閣下可向本行的銷售人員索取本概要的中文版本
This is a structured investment product involving derivatives The investment decision is yours but you should not invest in this product 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
Quick facts Bank Hang Seng Bank Limited
Product Type Currency-Linked Investment Deposit ndash European Range Investment (ldquothis productrdquo)
Minimum Investment Amount Subscription through branches - HKD 100000 (or its equivalent) Subscription through e-banking - HKD 50000 (or its equivalent)
Tenor 2 months or above or any other tenor as agreed between you and the Bank
Available Principal Currency (or Deposit Currency) HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY
Available Underlying Currency Pair AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD USDCNH and any other currency pairs as agreed between you and the Bank
Return Rate Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Deposit periodpayment date Deposit period refers to tenor of the product and return is payable only on Maturity Date
Principal protection at maturity Yes
Callable by the Bank No
Early termination right by customer No please refer to ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section ndash Early WithdrawalTermination Risks for details
Embedded derivatives Yes you will buy option(s) over the Underlying Currency Pair
Maximum potential gain Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Maximum potential loss Please refer to Scenarios II and III of Example 1 and Scenarios IV and V of Example 2 in the ldquoScenario analysisrdquo section of this product type for details
What is this product and how does it work bull European Range investment is one type of our Currency-Linked Capital Protected Investment Deposit which consists of a time deposit
(in Deposit Currency) and buying option(s) on the Underlying Currency Pair of your choice bull You choose the Deposit Currency Underlying Currency Pair according to your need and the Bank will set the Trading Range bull On the Final Exchange Rate Determination Date the Bank will compare the exchange rate of the Underlying Currency Pair with the
Trading Range If the exchange rate of the Underlying Currency Pair moves along with your anticipation and is within the Trading Range you will receive Guaranteed Principal and Potential Return If the exchange rate of the Underlying Currency Pair moves against your anticipation and is outside the Trading Range you will receive Guaranteed Principal and Minimum Return (if any)
bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency Minimum return applies to certain investment tranches only you should refer to the relevant termsheet for details
Page 54 of 67
What are the key risks of Currency-Linked Capital Protected Investment Deposit Earnings on Currency-Linked Capital Protected Investment Deposit are limited to the Return Coupon (if any) payable You should consider the following risks and read all other information contained in the relevant Termsheet and Terms and Conditions before making any investment decision Not a time deposit Currency-Linked Capital Protected Investment Deposit 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 Capital Protected Investment Deposit is embedded with FX options Option transactions involve risks even when buying an option The optionrsquos value might become worthless if the market moves against your expectation Limited potential gain The maximum potential gain is limited to the pre-agreed ReturnCoupon calculated at the Potential ReturnCoupon Rate Not the same as buying the Underlying Currency Pair Investing in Currency-Linked Capital Protected Investment Deposit is not the same as buying the Underlying Currency Pair directly Market risk The investment return of Currency-Linked Capital Protected Investment Deposit is linked to the exchange rate of the Underlying Currency Pair Movements in exchange rates can be unpredictable sudden and drastic and affected by complex political and economic factors Liquidity risk Currency-Linked Capital Protected Investment Deposit is designed to be held till maturity The Bank may at its absolute discretion refuse to consent to any withdrawaltermination request before maturity Credit risk of the Bank Currency-Linked Capital Protected Investment Deposit is not secured by any collateral When you invest in Currency-Linked Capital Protected Investment Deposit you will be relying on the Bankrsquos creditworthiness If the Bank becomes insolvent or defaults on its obligations under a Currency-Linked Capital Protected Investment Deposit you can only claim as an unsecured creditor of the Bank In the worst case you could suffer a total loss of your investment amount Currency risk Exchange rate fluctuates and sometimes drastically If the Deposit Currency used for investment is not the home currency customarily used by you and thus conversion is required you should note that you may make a gain or suffer a loss due to exchange rate fluctuations When the deposit currency depreciates the loss from depreciation may set-off or even exceed the ReturnCoupon (if any) that you may receive from investing in the Currency-Linked Capital Protected Investment Deposit Risk of adjustments or early termination by the Bank Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank this might have a negative impact on the ReturnCoupon (if any) of the Currency-Linked Capital Protected Investment Deposit Concentration Risks You should avoid excessive investment (in terms of its proportion of the overall portfolio) in any single type of investment so as to avoid the investment portfolio being over-exposed to any particular investment risk ReturnCoupon of Currency-Linked Capital Protected Investment Deposit In order to provide capital protection the investment strategy adopted for Currency-Linked Capital Protected Investment Deposit may lead to a dilution of performance when compared to non-capital protected products investing in similar markets You should be prepared to take the risks of earning a lower ReturnCoupon (if any) on the capital invested and losing the interest that might otherwise earned on money invested by way of deposits For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) periodic Coupon may be payable to you For other types of Currency-Linked Capital Protected Investment Deposit no periodic ReturnCoupon will be payable to you prior to maturity Principal protection at maturity only You should understand that the Principal of the Currency-Linked Capital Protected Investment Deposit is capital-protected only when it is held to maturity If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the amount received by you upon early withdrawaltermination may be less than the amount initially invested by you Market Risks associated with Potential ReturnCoupon Apart from the ReturnCoupon calculated at the Minimum ReturnCoupon Rate (which may be set at zero) there is no guarantee of any ReturnCoupon calculated at the Potential ReturnCoupon Rate For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) Coupon (if any) is payable only if the Currency-Linked Capital Protected Investment Deposit is held till the relevant Coupon Distribution Dates ReturnCoupon (if any) of Currency-Linked Capital Protected Investment Deposit depends on the market conditions at the time of the relevant determination Investment return on foreign exchange-linked products are dependent on the prices of inter-banksrsquo transactions on the linked exchange rate in the foreign exchange markets You should be fully aware of the risks relating to fluctuations in the linked exchange rates Factors affecting the performance of foreign exchange markets are numerous including but are not limited to changes in global and local investment sentiments interest rate policies fund flows political environment economic environment business and social conditions in the local marketplace If the market trend is different from the view taken by you there is an inherent risk that the total investment return that you may receive from Currency-Linked Capital Protected Investment Deposit will be less than the interest that would have been payable on a time deposit for the same tenor There is also an inherent risk that no ReturnCoupon calculated at the Potential ReturnCoupon Rate will be payable to you in respect of the Currency-Linked Capital Protected Investment Deposit
Page 55 of 67
Early WithdrawalTermination Risks Early withdrawaltermination by you is not allowed for Currency-Linked Capital Protected Investment Deposit and the capital of you will be invested in the Currency-Linked Capital Protected Investment Deposit for the entire investment period The Bank may at its absolute discretion refuse to give consent to any early withdrawaltermination request If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the Bank shall be entitled to deduct from the Principal of the relevant Currency-Linked Capital Protected Investment Deposit andor any other amount which may have accrued to you any expenses costs or damages to the Bank Damages may include any costs expenses liability or losses to the Bank as a result of the early withdrawaltermination by you Therefore there is no guarantee that you will be able to receive the Principal and the amount payable to you at early withdrawaltermination may be less than the Principal initially invested Besides If the Currency-Linked Capital Protected Investment Deposit is early withdrawnterminated you will no longer be entitled to any ReturnCoupon of the Currency-Linked Capital Protected Investment Deposit Risks associated with unsuccessful subscriptions of Currency-Linked Capital Protected Investment Deposit The Bank reserves the absolute right to approve any application and to decline any application received (whether in whole or any part thereof) before the Deposit Start Date In the event of non-acceptance a notification will be sent by the Bank and any subscription funds received will be returned to you after the Deposit Start Date or as soon as practicable Risks relating to Renminbi If Currency-Linked Capital Protected Investment Deposit involves CNY the relevant exchange rate(s) or level(s) of the relevant currency pair will be quoted in offshore Renminbi against alternate currency While both onshore Renminbi and offshore Renminbi are the same currency they are traded in different and separate markets operating under different regulations and independent liquidity pool Onshore Renminbi and offshore Renminbi are currently quoted in different markets with different exchange rates whereby their exchange rate movements may not be in the same direction or magnitude The offshore Renminbi exchange rate may deviate significantly from the onshore Renminbi exchange rate You should also note that Renminbi is currently not freely convertible the value of Renminbi against other foreign currencies fluctuates and will be affected by amongst other things the PRC governmentrsquos control (for example the PRC government regulates conversion between Renminbi and foreign currencies) which may adversely affect your investment return under the Currency-Linked Capital Protected Investment Deposit when you convert CNY into your home currency Renminbi is subject to foreign exchange control by the PRC government and thus investors investing in Currency-Linked Investment Deposit involving Renminbi are subject to the currency risk of Renminbi
What are the key features bull This product is designed for you whose investment objective is capital protection or to obtain potential cash income bull This product is embedded with options You will buy option(s) on the Linked Currency Pair bull 100 principal protection if this product is held to maturity bull You can choose the Deposit Currency including HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY and Linked Currency
Pair including AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD and USDCNH bull The Deposit Period of this product is 2 months or above
bull You will have a chance to receive higher potential return depending on the movement of the exchange rate of the Underlying Currency
Pair bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency bull The Bank pre-sets the Trading Range bull On the Final Exchange Rate Determination Date the exchange rate of the Underlying Currency Pair is compared with the Trading Range
to determine the Return at maturity bull Returns (if any) on this product is payable only upon maturity bull This product may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank Please refer to
the section Can you request for early termination before maturity below
Scenario analysis (All figures shown below including the exchange rate of AUDUSD and HKDCNH Potential Return Rate Minimum Return Rate Deposit Period etc are for illustration only You should not rely on the figures as any indication or guarantee on the expected interest amount of the Currency-Linked Capital Protected Investment Deposit you intend to invest Please refer to the Bank for up-to-date figures) Example 1 ndash European Range (where the Deposit Currency is your home currency) Assuming HKD is your home currency and you anticipate the Exchange Rate of AUDUSD will be above 10250 but below 10750 after 6 months and set up an European Range Investment with HKD 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Range (AUDUSD) Principal Guarantee 100 Deposit Currency HKD Guaranteed Principal HKD 100000 Deposit Period 6 months Trading Range AUDUSD 10250 (ldquoLower Barrierrdquo) to 10750 (ldquoUpper Barrierrdquo) (excluding both barriers) Potential Return Rate 016 (around 032 pa)
Page 56 of 67
Minimum Return Rate 0015 (around 003 pa) Scenario I Best case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is within the Trading Range (ie above 10250 but below 10750) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = HKD 100000 x (1+016) = HKD 10016000 (with a gain of 016 of investment amount) Scenario II Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 10250 or atabove 10750) you will receive Guaranteed Principal and Minimum Return at maturity Total Return at Maturity = HKD 100000 x (1+0015) = HKD 10001500 (with a gain of 0015 of investment amount) Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a HKD 100000 6 month Time Deposit on 30 April 2015 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500 Example 2 ndash European Range (where the Deposit Currency is not your home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency and you anticipate the Exchange Rate of AUDUSD will be above 10250 but below 10750 after 6 months and set up an European Range Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Range (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trading Range AUDUSD 10250 (ldquoLower Barrierrdquo) to 10750 (ldquoUpper Barrierrdquo) (excluding both barriers) Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH (on deposit start date) 08000 Scenario I Best case scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is within the Trading Range (ie above 10250 but below 10750) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of-the road Gain scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 10250 or atabove 10750) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount)
0
Final Exchange Rate of
AUDUSD le10250
Potential Return Minimum Return
Return Diagram
Return at Maturity
10250 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Minimum Return
Final Exchange Rate of
AUDUSD ge 10750
10750
10250lt Final Exchange Rate of AUDUSD lt10750
Page 57 of 67
Scenario III Off-setting scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 10250 or atabove 10750) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD 000 Scenario IV Loss and Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 10250 or atabove 10750) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 101500 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951) In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a CNY 100000 6 month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received at maturity would be CNY 10030000 If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to
0
Final Exchange Rate of
AUDUSD le10250
Potential Return Minimum Return
Return Diagram
Return at Maturity
10250 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Minimum Return
Final Exchange Rate of
AUDUSD ge 10750
10750
10250lt Final Exchange Rate of AUDUSD lt10750
Page 58 of 67
depreciation of Renminbi Please refer to the table below for details
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date
The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date
If HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
How can you buy this product
bull You can place a Currency-Linked Capital Protected Investment Deposit through our Hang Seng Bank Branches telephone or Hang
Seng Personal or Business e-Banking
bull The Bank will provide a choice of different tranches which is subject to market conditions
bull Enquiry Hotline Personal 2822 0228
Business 2198 8000
Fees and charges No handling fees or management fees will be charged for Currency-Linked Capital Protected Investment Deposit
Can you request for early termination before maturity No Currency-Linked Capital Protected Investment Deposit may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank which may be granted or withheld in the Bankrsquos sole and absolute discretion on such terms and conditions as the Bank may determine Please refer to ldquoEarly WithdrawalTermination Risksrdquo under ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section for details
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
ix 9999990000 010 010 (12499990) (12499990)
At the beginning of the investment On the Maturity Date of the investment
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Potential Return
Exchange Rate of HKDCNH on the Maturity Date
0
If receiving Minimum Return
Breakeven = 08120^
If receiving Potential Return
Breakeven = 08240
If CNH depreciates drastically relative to HKD
HKDCNH = 9999990000
Exchange Rate on Deposit Start Date
Page 59 of 67
Pre-Investment Cooling-off Period for retail customers Pre-Investment Cooling-off Period (PICOP) is applicable to each particular dealing of this product if you are one of the following retail customer types
(1) An elderly customer aged 65 or above unless you are not a first-time buyer of currency-linked structured investment products AND your asset concentration is below 20 AND you opt out from the PICOP arrangement or
(2) A non-elderly customer who is a first time buyer of currency-linked structured investment products AND your asset concentration
is 20 or above
For the purpose of determining whether PICOP is applicable asset concentration refers to the percentage of total net worth (excluding real estate properties) to be invested in this product
Can the Bank adjust the terms or early terminate this product Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank in certain circumstances Please refer to Clause 7 of the Currency-Linked Capital Protected Investment Deposit Terms and Conditions for details
Offering documents for this product The following documents for this product (ldquoOffering Documentsrdquo) contain detailed information about the Bank and the terms of this product You should read and understand all of the Offering Documents before deciding whether to invest in this product
(i) Currency-Linked Capital Protected Investment Deposit Terms and Conditions (ii) The relevant Currency-Linked Capital Protected Investment Deposit Termsheet (iii) This Currency-Linked Capital Protected Investment Deposit Important Facts Statement
Other information Product Risk Level The Product Risk Level for Currency-Linked Capital Protected Investment Deposit is Low
Low Low-to-Medium Medium Medium-to-High High
Product Risk Level is determined by a number of factors which include the volatility of the currency pair and the tenor of the product The Product Risk Level is subject to the Banks periodic review and may change from time to time Please refer to our branch or our Customer Service Hotline on 2822 0228 for the latest detail Declaration and Remarks bull This Important Facts Statement is not intended to provide or regard as legal or taxation advice or investment recommendations If you
have any concerns about this product or are uncertain about the suitability of this product for you you should obtain independent professional advice
bull The liabilities of the Bank in respect of the Currency-Linked Capital Protected Investment Deposit are limited exclusively to an office of the Bank in Hong Kong and instructions in respect of the Currency-Linked Capital Protected Investment Deposit may only be made to and acted upon by such office Any amount relating to the Currency-Linked Capital Protected Investment Deposit is payable exclusively by an office of the Bank in Hong Kong and in its stated currency The Terms and Conditions of the Currency-Linked Capital Protected Investment Deposit are governed by and shall be construed in accordance with the laws of Hong Kong
bull You may contact our staff if you have any feedback or complaint in relation to our services or call our hotline at 2822 0228 We will respond to you within a reasonable period of time normally not exceeding 30 days in general circumstances You may contact the Hong Kong Monetary Authority at 55th Floor Two International Finance Centre 8 Finance Street Central Hong Kong if you are not satisfied with our handling of your complaint
bull Hang Seng Bank Limited is a Registered Licensed Bank under the Banking Ordinance bull All Currency-Linked Capital Protected Investment Deposit cannot be cancelled after subscription bull The Bank will act as principal to complete the transaction and may obtain certain monetary benefits in connection with the offering of
this Currency-Linked Capital Protected Investment Deposit to the public The current remuneration system that the Bank adopts for sales staff is a measurement of the staffrsquos overall performance and not just based on sales amount
bull The Bank is NOT an independent intermediary because The Bank receives fees commissions or other monetary benefits from other parties in relation to the Bankrsquos distribution of Currency-Linked Capital Protected Investment Deposit to you For details you should refer to the Bankrsquos disclosure on monetary benefits which the Bank is required to deliver to you prior to or at the point of entering into any transaction in Currency-Linked Capital Protected Investment Deposit
bull Please note that this product is not available for persons who are located within the United States are nationals of the United States and are US Persons within the meaning of Regulation S under the Securities Act (which includes any person resident in the United States and any partnership or corporation organised or incorporated under the laws of the United States)
bull 請注意本行不提供本產品予身處美國的人士美國公民及美籍人士(定義見證券法 S 條例)(包括居住在美國之任何人士及根據美國法例組
成或註冊成立之任何合夥企業或公司)
Page 7 of 67
Renminbi to home currency (HKD) on the Maturity Date Example 4 ndash American Bearish (where the Deposit Currency is not your home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency and you take a bearish view on Australian Dollar expect the exchange rate of AUDUSD will drop from 09400 to 09000 or below during the 6-month period and set up an American Bearish Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair
Type of investment American Bearish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trigger Level AUDUSD 09000 Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH (on deposit start date) 08000 Scenario I Best case scenario At any time during the Observation Period (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is at or below the Trigger Level (ie at or below 09000) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of-the-road Gain scenario At any time during the Observation Period (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD stays above the Trigger Level (ie stays above 09000) you will receive Guaranteed Principal and Minimum Return at maturity Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000
(with a gain of 150 of investment amount) Scenario III Off-setting scenario At any time during the Observation Period the Exchange Rate of AUDUSD stays above the Trigger Level (ie stays above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD 000 Scenario IV Loss and Worst case scenario At any time during the Observation Period the Exchange Rate of AUDUSD stays above the Trigger Level (ie stays above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951)
Page 8 of 67
In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a CNY 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received at maturity would be CNY 10030000 If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Please refer to the table below for details
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home
currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home
currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date If HKDCNH rise drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange
rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
ix 9999990000 010 010 (12499990) (12499990)
At the beginning of the investment On the Maturity Date of the investment
Exchange
Rate of
HKDCNH
Initial
Investment
Amount in
Renminbi
Initial
Investment
Amount in
HKD
Exchange Rate
of HKDCNH
Total Return in
Renminbi
Total Return in
HKD
Gain (loss) in HKD if converting the
Total Return from Renminbi to home
currency (HKD)
103000 101500 12500000 10000008000
09000 0
Exchange Rate of AUDUSD le
Trigger Level
Potential Return Minimum Return
Return Diagram
Return at Maturity
Exchange Rate of AUDUSD gt Trigger Level
Exchange Rate of AUDUSD during the Observation Period
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Potential Return
Exchange Rate of HKDCNH on the Maturity Date
0
If receiving Minimum Return
Breakeven = 08120^
If receiving Potential Return
Breakeven = 08240
Exchange Rate on Deposit Start Date
If CNH depreciates drastically relatively to HKD HKDCNH = 9999990000
Page 9 of 67
How can you buy this product bull You can place a Currency-Linked Capital Protected Investment Deposit through our Hang Seng Bank Branches telephone or Hang
Seng Personal or Business e-Banking bull The Bank will provide a choice of different tranches which is subject to market conditions bull Enquiry Hotline Personal 2822 0228 Business 2198 8000
Fees and charges No handling fees or management fees will be charged for Currency-Linked Capital Protected Investment Deposit
Can you request for early termination before maturity No Currency-Linked Capital Protected Investment Deposit may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank which may be granted or withheld in the Bankrsquos sole and absolute discretion on such terms and conditions as the Bank may determine Please refer to ldquoEarly WithdrawalTermination Risksrdquo under ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section for details
Pre-Investment Cooling-off Period for retail customers Pre-Investment Cooling-off Period (PICOP) is applicable to each particular dealing of this product if you are one of the following retail customer types
(1) An elderly customer aged 65 or above unless you are not a first-time buyer of currency-linked structured investment products AND your asset concentration is below 20 AND you opt out from the PICOP arrangement or
(2) A non-elderly customer who is a first time buyer of currency-linked structured investment products AND your asset concentration
is 20 or above
For the purpose of determining whether PICOP is applicable asset concentration refers to the percentage of total net worth (excluding real estate properties) to be invested in this product
Can the Bank adjust the terms or early terminate this product Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank in certain circumstances Please refer to Clause 7 of the Currency-Linked Capital Protected Investment Deposit Terms and Conditions for details
Offering documents for this product The following documents for this product (ldquoOffering Documentsrdquo) contain detailed information about the Bank and the terms of this product You should read and understand all of the Offering Documents before deciding whether to invest in this product
(i) Currency-Linked Capital Protected Investment Deposit Terms and Conditions (ii) The relevant Currency-Linked Capital Protected Investment Deposit Termsheet (iii) This Currency-Linked Capital Protected Investment Deposit Important Facts Statement
Other information Product Risk Level The Product Risk Level for Currency-Linked Capital Protected Investment Deposit is Low
Low Low-to-Medium Medium Medium-to-High High
Product Risk Level is determined by a number of factors which include the volatility of the currency pair and the tenor of the product The Product Risk Level is subject to the Banks periodic review and may change from time to time Please refer to our branch or our Customer Service Hotline on 2822 0228 for the latest detail
Declaration and Remarks bull This Important Facts Statement is not intended to provide or regard as legal or taxation advice or investment recommendations If you
have any concerns about this product or are uncertain about the suitability of this product for you you should obtain independent professional advice
bull The liabilities of the Bank in respect of the Currency-Linked Capital Protected Investment Deposit are limited exclusively to an office of the Bank in Hong Kong and instructions in respect of the Currency-Linked Capital Protected Investment Deposit may only be made to and acted upon by such office Any amount relating to the Currency-Linked Capital Protected Investment Deposit is payable exclusively by an office of the Bank in Hong Kong and in its stated currency The Terms and Conditions of the Currency-Linked Capital Protected Investment Deposit are governed by and shall be construed in accordance with the laws of Hong Kong
bull You may contact our staff if you have any feedback or complaint in relation to our services or call our hotline at 2822 0228 We will respond to you within a reasonable period of time normally not exceeding 30 days in general circumstances You may contact the Hong Kong Monetary Authority at 55th Floor Two International Finance Centre 8 Finance Street Central Hong Kong if you are not satisfied with our handling of your complaint
bull Hang Seng Bank Limited is a Registered Licensed Bank under the Banking Ordinance bull All Currency-Linked Capital Protected Investment Deposit cannot be cancelled after subscription bull The Bank will act as principal to complete the transaction and may obtain certain monetary benefits in connection with the offering of
this Currency-Linked Capital Protected Investment Deposit to the public The current remuneration system that the Bank adopts for
Page 10 of 67
sales staff is a measurement of the staffrsquos overall performance and not just based on sales amount bull The Bank is NOT an independent intermediary because
The Bank receives fees commissions or other monetary benefits from other parties in relation to the Bankrsquos distribution of Currency-Linked Capital Protected Investment Deposit to you For details you should refer to the Bankrsquos disclosure on monetary benefits which the Bank is required to deliver to you prior to or at the point of entering into any transaction in Currency-Linked Capital Protected Investment Deposit
bull Please note that this product is not available for persons who are located within the United States are nationals of the United States and are US Persons within the meaning of Regulation S under the Securities Act (which includes any person resident in the United States and any partnership or corporation organised or incorporated under the laws of the United States)
bull 請注意本行不提供本產品予身處美國的人士美國公民及美籍人士(定義見證券法 S 條例)(包括居住在美國之任何人士及根據美國法例組成
或註冊成立之任何合夥企業或公司)
Page 20 of 67
Currency-Linked Capital Protected Investment Deposit
American Range Investment
Dated May 2018
Important Facts Statement
This is a structured investment product which is NOT protected by the Deposit Protection Scheme in Hong Kong
The contents of this statement have not been reviewed by any regulatory authority in Hong Kong You are advised to exercise caution before investing in this product This statement is a part of the offering documents for this product You should not invest in this product based on this statement alone If you are in any doubt you should obtain independent professional advice
If English is not your preferred language you may request for the Chinese version of this statement from our sales staff 倘若英
文並非閣下屬意的語言閣下可向本行的銷售人員索取本概要的中文版本
This is a structured investment product involving derivatives The investment decision is yours but you should not invest in this product 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
Quick facts Bank Hang Seng Bank Limited
Product Type Currency-Linked Investment Deposit ndash American Range Investment (ldquothis productrdquo)
Minimum Investment Amount Subscription through branches - HKD 100000 (or its equivalent) Subscription through e-banking - HKD 50000 (or its equivalent)
Tenor 2 months or above or any other tenor as agreed between you and the Bank
Available Principal Currency (or Deposit Currency) HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY
Available Underlying Currency Pair AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD USDCNH and any other currency pairs as agreed between you and the Bank
Return Rate Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Deposit periodpayment date Deposit period refers to tenor of the product and return is payable only on Maturity Date
Principal protection at maturity Yes
Callable by the Bank No
Early termination right by customer No please refer to ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section ndash Early WithdrawalTermination Risks for details
Embedded derivatives Yes you will buy option(s) over the Underlying Currency Pair
Maximum potential gain Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Maximum potential loss Please refer to Scenario II amp III of Example 1 and Scenarios IV and V of Example 2 in the ldquoScenario analysisrdquo section of this product type for details
What is this product and how does it work bull American Range investment is one type of our Currency-Linked Capital Protected Investment Deposit which consists of a time deposit
(in Deposit currency) and buying option(s) on the Underlying Currency Pair of your choice bull You choose the Deposit Currency Underlying Currency Pair and the Observation Period according to your need and the Bank will set the
Trading Range bull During the whole Observation Period the Bank will compare the exchange rate of the Underlying Currency Pair with the Trading Range
If the exchange rate of the Underlying Currency Pair moves along with your anticipation and stays within the Trading Range during the whole Observation Period you will receive Guaranteed Principal and Potential Return If the exchange rate of the Underlying Currency Pair moves against your anticipation and at anytime during the Observation Period the exchange rate of the Underlying Currency Pair is outside the Trading Range you will receive Guaranteed Principal and Minimum Return (if any)
bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency Minimum return applies to certain investment tranches only you should refer to the relevant termsheet for details
Page 21 of 67
What are the key risks of Currency-Linked Capital Protected Investment Deposit Earnings on Currency-Linked Capital Protected Investment Deposit are limited to the Return Coupon (if any) payable You should consider the following risks and read all other information contained in the relevant Termsheet and Terms and Conditions before making any investment decision Not a time deposit Currency-Linked Capital Protected Investment Deposit 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 Capital Protected Investment Deposit is embedded with FX options Option transactions involve risks even when buying an option The optionrsquos value might become worthless if the market moves against your expectation Limited potential gain The maximum potential gain is limited to the pre-agreed ReturnCoupon calculated at the Potential ReturnCoupon Rate Not the same as buying the Underlying Currency Pair Investing in Currency-Linked Capital Protected Investment Deposit is not the same as buying the Underlying Currency Pair directly Market risk The investment return of Currency-Linked Capital Protected Investment Deposit is linked to the exchange rate of the Underlying Currency Pair Movements in exchange rates can be unpredictable sudden and drastic and affected by complex political and economic factors Liquidity risk Currency-Linked Capital Protected Investment Deposit is designed to be held till maturity The Bank may at its absolute discretion refuse to consent to any withdrawaltermination request before maturity Credit risk of the Bank Currency-Linked Capital Protected Investment Deposit is not secured by any collateral When you invest in Currency-Linked Capital Protected Investment Deposit you will be relying on the Bankrsquos creditworthiness If the Bank becomes insolvent or defaults on its obligations under a Currency-Linked Capital Protected Investment Deposit you can only claim as an unsecured creditor of the Bank In the worst case you could suffer a total loss of your investment amount Currency risk Exchange rate fluctuates and sometimes drastically If the Deposit Currency used for investment is not the home currency customarily used by you and thus conversion is required you should note that you may make a gain or suffer a loss due to exchange rate fluctuations When the deposit currency depreciates the loss from depreciation may set-off or even exceed the ReturnCoupon (if any) that you may receive from investing in the Currency-Linked Capital Protected Investment Deposit Risk of adjustments or early termination by the Bank Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank this might have a negative impact on the ReturnCoupon (if any) of the Currency-Linked Capital Protected Investment Deposit Concentration Risks You should avoid excessive investment (in terms of its proportion of the overall portfolio) in any single type of investment so as to avoid the investment portfolio being over-exposed to any particular investment risk ReturnCoupon of Currency-Linked Capital Protected Investment Deposit In order to provide capital protection the investment strategy adopted for Currency-Linked Capital Protected Investment Deposit may lead to a dilution of performance when compared to non-capital protected products investing in similar markets You should be prepared to take the risks of earning a lower ReturnCoupon (if any) on the capital invested and losing the interest that might otherwise earned on money invested by way of deposits For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) periodic Coupon may be payable to you For other types of Currency-Linked Capital Protected Investment Deposit no periodic ReturnCoupon will be payable to you prior to maturity Principal protection at maturity only You should understand that the Principal of the Currency-Linked Capital Protected Investment Deposit is capital-protected only when it is held to maturity If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the amount received by you upon early withdrawaltermination may be less than the amount initially invested by you Market Risks associated with Potential ReturnCoupon Apart from the ReturnCoupon calculated at the Minimum ReturnCoupon Rate (which may be set at zero) there is no guarantee of any ReturnCoupon calculated at the Potential ReturnCoupon Rate For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) Coupon (if any) is payable only if the Currency-Linked Capital Protected Investment Deposit is held till the relevant Coupon Distribution Dates ReturnCoupon (if any) of Currency-Linked Capital Protected Investment Deposit depends on the market conditions at the time of the relevant determination Investment return on foreign exchange-linked products are dependent on the prices of inter-banksrsquo transactions on the linked exchange rate in the foreign exchange markets You should be fully aware of the risks relating to fluctuations in the linked exchange rates Factors affecting the performance of foreign exchange markets are numerous including but are not limited to changes in global and local investment sentiments interest rate policies fund flows political environment economic environment business and social conditions in the local marketplace If the market trend is different from the view taken by you there is an inherent risk that the total investment return that you may receive from Currency-Linked Capital Protected Investment Deposit will be less than the interest that would have been payable on a time deposit for the same tenor There is also an inherent risk that no ReturnCoupon calculated at the Potential ReturnCoupon Rate will be payable to you in respect of the Currency-Linked Capital Protected Investment Deposit
Page 22 of 67
Early WithdrawalTermination Risks Early withdrawaltermination by you is not allowed for Currency-Linked Capital Protected Investment Deposit and the capital of you will be invested in the Currency-Linked Capital Protected Investment Deposit for the entire investment period The Bank may at its absolute discretion refuse to give consent to any early withdrawaltermination request If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the Bank shall be entitled to deduct from the Principal of the relevant Currency-Linked Capital Protected Investment Deposit andor any other amount which may have accrued to you any expenses costs or damages to the Bank Damages may include any costs expenses liability or losses to the Bank as a result of the early withdrawaltermination by you Therefore there is no guarantee that you will be able to receive the Principal and the amount payable to you at early withdrawaltermination may be less than the Principal initially invested Besides If the Currency-Linked Capital Protected Investment Deposit is early withdrawnterminated you will no longer be entitled to any ReturnCoupon of the Currency-Linked Capital Protected Investment Deposit Risks associated with unsuccessful subscriptions of Currency-Linked Capital Protected Investment Deposit The Bank reserves the absolute right to approve any application and to decline any application received (whether in whole or any part thereof) before the Deposit Start Date In the event of non-acceptance a notification will be sent by the Bank and any subscription funds received will be returned to you after the Deposit Start Date or as soon as practicable Risks relating to Renminbi If Currency-Linked Capital Protected Investment Deposit involves CNY the relevant exchange rate(s) or level(s) of the relevant currency pair will be quoted in offshore Renminbi against alternate currency While both onshore Renminbi and offshore Renminbi are the same currency they are traded in different and separate markets operating under different regulations and independent liquidity pool Onshore Renminbi and offshore Renminbi are currently quoted in different markets with different exchange rates whereby their exchange rate movements may not be in the same direction or magnitude The offshore Renminbi exchange rate may deviate significantly from the onshore Renminbi exchange rate You should also note that Renminbi is currently not freely convertible the value of Renminbi against other foreign currencies fluctuates and will be affected by amongst other things the PRC governmentrsquos control (for example the PRC government regulates conversion between Renminbi and foreign currencies) which may adversely affect your investment return under the Currency-Linked Capital Protected Investment Deposit when you convert CNY into your home currency Renminbi is subject to foreign exchange control by the PRC government and thus investors investing in Currency-Linked Investment Deposit involving Renminbi are subject to the currency risk of Renminbi
What are the key features bull This product is designed for you whose investment objective is capital protection or to obtain potential cash income bull This product is embedded with options You will buy option(s) on the Linked Currency Pair bull 100 principal protection if this product is held to maturity bull You can choose the Deposit Currency including HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY and Linked Currency
Pair including AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD and USDCNH bull The Deposit Period of the Currency-Linked Capital Protected Investment Deposit is 2 months or above bull You will have a chance to receive higher potential return depending on the movement of the exchange rate of the Underlying Currency
Pair during the Observation Period bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency bull The Bank pre-sets the Trading Range and Observation Period bull During the whole Observation Period the exchange rate of the Underlying Currency Pair is compared with the Trading Range to
determine the Return at maturity bull Returns (if any) on this product is payable only upon maturity bull This product may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank Please refer
to the section Can you request for early termination before maturity below
Scenario analysis (All figures shown below including the exchange rate of AUDUSD and HKDCNH Potential Return Rate Minimum Return Rate Deposit Period etc are for illustration only You should not rely on the below figures as any indication or guarantee on the expected interest amount of the Currency-Linked Capital Protected Investment Deposit you intend to invest Please refer to the Bank for up-to-date figures) Example 1 ndash American Range (where the Deposit Currency is your home currency) Assuming HKD is your home currency and you anticipate the Exchange Rate of AUDUSD will stay above 09850 but below 11150 for the next 6 months and set up an American Range Investment with HKD 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment American Range (AUDUSD) Principal Guarantee 100 Deposit Currency HKD Guaranteed Principal HKD 100000 Deposit Period 6 months Trading Range AUDUSD 09850 (ldquoLower Barrierrdquo) to 11150 (ldquoUpper Barrierrdquo) (excluding both barriers) Potential Return Rate 016 (around 032 pa)
Page 23 of 67
Minimum Return Rate 0015 (around 003 pa) Scenario I Best case scenario At any time during the Observation Period the Exchange Rate of AUDUSD stays within the Trading Range (ie above 09850 but below 11150) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = HKD 100000 x (1+016) = HKD 10016000 (with a gain of 016 of investment amount) Scenario II Worst case scenario At any time during the Observation Period the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 09850 or atabove 11150) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = HKD 100000 x (1+0015) = HKD 10001500
(with a gain of 0015 of investment amount) Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a HKD 100000 6-month Time Deposit on 30 April 2014 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500
Example 2 ndash American Range (where the Deposit Currency is not your home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency and you anticipate the Exchange Rate of AUDUSD will stay above 09850 but below 11150 for the next 6 months and set up an American Range Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment American Range (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trading Range AUDUSD 09850 (ldquoLower Barrierrdquo) to 11150 (ldquoUpper Barrierrdquo) (excluding both barriers) Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH (on deposit start date) 08000 Scenario I Best case scenario At any time during the Observation Period (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD stays within the Trading Range (ie above 09850 but below 11150) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of the road Gain scenario At any time during the Observation Period (assuming the exchange rate of HKDCNH remains unchanged the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 09850 or atabove 11150) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = CNY 100000 x (1+15) = CNY 10150000 (with a gain of 150 of investment amount)
0
Exchange Rate of
AUDUSD le 09850
Potential Return Minimum Return
Return Diagram Return at Maturity
09850 Exchange Rate of AUDUSD during the Observation Period
Minimum Return
09850 lt Exchange Rate of AUDUSD lt 11150
Exchange Rate of
AUDUSD ge 11150
11150
Page 24 of 67
Scenario III Off-setting scenario At any time during the Observation Period the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 09850 or atabove 11150) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD 000 Scenario IV Loss and Worst case scenario At any time during the Observation Period the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 09850 or atabove 11150) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951) In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a CNY 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received would be CNY 10030000
If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Please refer to the table below for details
0
Exchange Rate of
AUDUSD le 09850
Potential Return Minimum Return
Return Diagram
Return at Maturity
09850 Exchange Rate of AUDUSD during the Observation Period
Minimum Return
09850 lt Exchange Rate of AUDUSD lt 11150
Exchange Rate of
AUDUSD ge 11150
11150
Page 25 of 67
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date
The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date
If HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
How can you buy this product bull You can place a Currency-Linked Capital Protected Investment Deposit through our Hang Seng Bank Branches telephone or Hang Seng
Personal or Business e-Banking bull The Bank will provide a choice of different tranches which is subject to market conditions bull Enquiry Hotline Personal 2822 0228 Business 2198 8000
Fees and charges No handling fees or management fees will be charged for Currency-Linked Capital Protected Investment Deposit
Can you request for early termination before maturity No Currency-Linked Capital Protected Investment Deposit may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank which may be granted or withheld in the Bankrsquos sole and absolute discretion on such terms and conditions as the Bank may determine Please refer to ldquoEarly WithdrawalTermination Risksrdquo under ldquoWhat are the key features featuresrisks of Currency-Linked Capital Protected Investment Depositrdquo section for details
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
ix 9999990000 010 010 (12499990) (12499990)
At the beginning of the investment On the Maturity Date of the investment
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Potential Return
Exchange Rate of HKDCNH on the Maturity Date
0
If receiving Minimum Return
Breakeven = 08120^
If receiving Potential Return
Breakeven = 08240
If CNH depreciates drastically relative to HKD
HKDCNH = 9999990000
Exchange Rate on Deposit Start Date
Page 26 of 67
Pre-Investment Cooling-off Period for retail customers Pre-Investment Cooling-off Period (PICOP) is applicable to each particular dealing of this product if you are one of the following retail customer types
(1) An elderly customer aged 65 or above unless you are not a first-time buyer of currency-linked structured investment products AND your asset concentration is below 20 AND you opt out from the PICOP arrangement or
(2) A non-elderly customer who is a first time buyer of currency-linked structured investment products AND your asset concentration
is 20 or above
For the purpose of determining whether PICOP is applicable asset concentration refers to the percentage of total net worth (excluding real estate properties) to be invested in this product
Can the Bank adjust the terms or early terminate this product Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank in certain circumstances Please refer to Clause 7 of the Currency-Linked Capital Protected Investment Deposit Terms and Conditions for details
Offering documents for this product The following documents for this product (ldquoOffering Documentsrdquo) contain detailed information about the Bank and the terms of this product You should read and understand all of the Offering Documents before deciding whether to invest in this product
(i) Currency-Linked Capital Protected Investment Deposit Terms and Conditions (ii) The relevant Currency-Linked Capital Protected Investment Deposit Termsheet (iii) This Currency-Linked Capital Protected Investment Deposit Important Facts Statement
Other information Product Risk Level The Product Risk Level for Currency-Linked Capital Protected Investment Deposit is Low
Low Low-to-Medium Medium Medium-to-High High
Product Risk Level is determined by a number of factors which include the volatility of the currency pair and the tenor of the product The Product Risk Level is subject to the Banks periodic review and may change from time to time Please refer to our branch or our Customer Service Hotline on 2822 0228 for the latest detail Declaration and Remarks bull This Important Facts Statement is not intended to provide or regard as legal or taxation advice or investment recommendations If you
have any concerns about this product or are uncertain about the suitability of this product for you you should obtain independent professional advice
bull The liabilities of the Bank in respect of the Currency-Linked Capital Protected Investment Deposit are limited exclusively to an office of the Bank in Hong Kong and instructions in respect of the Currency-Linked Capital Protected Investment Deposit may only be made to and acted upon by such office Any amount relating to the Currency-Linked Capital Protected Investment Deposit is payable exclusively by an office of the Bank in Hong Kong and in its stated currency The Terms and Conditions of the Currency-Linked Capital Protected Investment Deposit are governed by and shall be construed in accordance with the laws of Hong Kong
bull You may contact our staff if you have any feedback or complaint in relation to our services or call our hotline at 2822 0228 We will respond to you within a reasonable period of time normally not exceeding 30 days in general circumstances You may contact the Hong Kong Monetary Authority at 55th Floor Two International Finance Centre 8 Finance Street Central Hong Kong if you are not satisfied with our handling of your complaint
bull Hang Seng Bank Limited is a Registered Licensed Bank under the Banking Ordinance bull All Currency-Linked Capital Protected Investment Deposit cannot be cancelled after subscription bull The Bank will act as principal to complete the transaction and may obtain certain monetary benefits in connection with the offering of
this Currency-Linked Capital Protected Investment Deposit to the public The current remuneration system that the Bank adopts for sales staff is a measurement of the staffrsquos overall performance and not just based on sales amount
bull The Bank is NOT an independent intermediary because The Bank receives fees commissions or other monetary benefits from other parties in relation to the Bankrsquos distribution of Currency-Linked Capital Protected Investment Deposit to you For details you should refer to the Bankrsquos disclosure on monetary benefits which the Bank is required to deliver to you prior to or at the point of entering into any transaction in Currency-Linked Capital Protected Investment Deposit
bull Please note that this product is not available for persons who are located within the United States are nationals of the United States and are US Persons within the meaning of Regulation S under the Securities Act (which includes any person resident in the United States and any partnership or corporation organised or incorporated under the laws of the United States)
bull 請注意本行不提供本產品予身處美國的人士美國公民及美籍人士(定義見證券法 S 條例)(包括居住在美國之任何人士及根據美國法例組
成或註冊成立之任何合夥企業或公司)
Page 34 of 67
Currency-Linked Capital Protected Investment Deposit
European (Bullish Bearish) Investment
Dated May 2018
Important Facts Statement
This is a structured investment product which is NOT protected by the Deposit Protection Scheme in Hong Kong
The contents of this statement have not been reviewed by any regulatory authority in Hong Kong You are advised to exercise caution before investing in this product This statement is a part of the offering documents for this product You should not invest in this product based on this statement alone If you are in any doubt you should obtain independent professional advice
If English is not your preferred language you may request for the Chinese version of this statement from our sales staff 倘若英文並
非閣下屬意的語言閣下可向本行的銷售人員索取本概要的中文版本
This is a structured investment product involving derivatives The investment decision is yours but you should not invest in this product 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
Quick facts
Bank Hang Seng Bank Limited
Product Type Currency-Linked Investment Deposit ndash European Bullish Bearish Investment (ldquothis productrdquo)
Minimum Investment Amount Subscription through branches - HKD 100000 (or its equivalent) Subscription through e-banking - HKD 50000 (or its equivalent)
Tenor 2 months or above or any other tenor as agreed between you and the Bank
Available Principal Currency (or Deposit Currency) HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY
Available Underlying Currency Pair AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD USDCNH and any other currency pairs as agreed between you and the Bank
Return Rate Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Deposit periodpayment date Deposit period refers to tenor of the product and return is payable only on Maturity Date
Principal protection at maturity Yes
Callable by the Bank No
Early termination right by customer No please refer to ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section ndash Early WithdrawalTermination Risks for details
Embedded derivatives Yes you will buy option(s) over the Underlying Currency Pair
Maximum potential gain Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Maximum potential loss Please refer to Scenarios II and III of Example 1 and 2 and Scenarios IV and V of Example 3 and 4 in ldquoScenario analysisrdquo section of this product type for details
What is this product and how does it work bull European Bullish Bearish investment is one type of our Currency-Linked Capital Protected Investment Deposit which consists of a time
deposit (in Deposit Currency) and buying option(s) on the Underlying Currency Pair of your choice bull You choose the Deposit Currency Underlying Currency Pair according to your need and the Bank will set the Trigger Level bull On the Final Exchange Rate Determination Date the Bank will compare the exchange rate of the Underlying Currency Pair with the Trigger
Level If the exchange rate of the Underlying Currency Pair moves along with your anticipation you will receive Guaranteed Principal and Potential Return If the exchange rate of the Underlying Currency Pair moves against your anticipation you will receive Guaranteed Principal and Minimum Return (if any)
bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency Minimum return applies to certain investment tranches only you should refer to the relevant termsheet for details
Page 35 of 67
What are the key risks of Currency-Linked Capital Protected Investment Deposit Earnings on Currency-Linked Capital Protected Investment Deposit are limited to the Return Coupon (if any) payable You should consider the following risks and read all other information contained in the relevant Termsheet and Terms and Conditions before making any investment decision Not a time deposit Currency-Linked Capital Protected Investment Deposit 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 Capital Protected Investment Deposit is embedded with FX options Option transactions involve risks even when buying an option The optionrsquos value might become worthless if the market moves against your expectation Limited potential gain The maximum potential gain is limited to the pre-agreed ReturnCoupon calculated at the Potential ReturnCoupon Rate Not the same as buying the Underlying Currency Pair Investing in Currency-Linked Capital Protected Investment Deposit is not the same as buying the Underlying Currency Pair directly Market risk The investment return of Currency-Linked Capital Protected Investment Deposit is linked to the exchange rate of the Underlying Currency Pair Movements in exchange rates can be unpredictable sudden and drastic and affected by complex political and economic factors Liquidity risk Currency-Linked Capital Protected Investment Deposit is designed to be held till maturity The Bank may at its absolute discretion refuse to consent to any withdrawaltermination request before maturity Credit risk of the Bank Currency-Linked Capital Protected Investment Deposit is not secured by any collateral When you invest in Currency-Linked Capital Protected Investment Deposit you will be relying on the Bankrsquos creditworthiness If the Bank becomes insolvent or defaults on its obligations under a Currency-Linked Capital Protected Investment Deposit you can only claim as an unsecured creditor of the Bank In the worst case you could suffer a total loss of your investment amount Currency risk Exchange rate fluctuates and sometimes drastically If the Deposit Currency used for investment is not the home currency customarily used by you and thus conversion is required you should note that you may make a gain or suffer a loss due to exchange rate fluctuations When the deposit currency depreciates the loss from depreciation may set-off or even exceed the ReturnCoupon (if any) that you may receive from investing in the Currency-Linked Capital Protected Investment Deposit Risk of adjustments or early termination by the Bank Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank this might have a negative impact on the ReturnCoupon (if any) of the Currency-Linked Capital Protected Investment Deposit Concentration Risks You should avoid excessive investment (in terms of its proportion of the overall portfolio) in any single type of investment so as to avoid the investment portfolio being over-exposed to any particular investment risk ReturnCoupon of Currency-Linked Capital Protected Investment Deposit In order to provide capital protection the investment strategy adopted for Currency-Linked Capital Protected Investment Deposit may lead to a dilution of performance when compared to non-capital protected products investing in similar markets You should be prepared to take the risks of earning a lower ReturnCoupon (if any) on the capital invested and losing the interest that might otherwise earned on money invested by way of deposits For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) periodic Coupon may be payable to you For other types of Currency-Linked Capital Protected Investment Deposit no periodic ReturnCoupon will be payable to you prior to maturity Principal protection at maturity only You should understand that the Principal of the Currency-Linked Capital Protected Investment Deposit is capital-protected only when it is held to maturity If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the amount received by you upon early withdrawaltermination may be less than the amount initially invested by you Market Risks associated with Potential ReturnCoupon Apart from the ReturnCoupon calculated at the Minimum ReturnCoupon Rate (which may be set at zero) there is no guarantee of any ReturnCoupon calculated at the Potential ReturnCoupon Rate For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) Coupon (if any) is payable only if the Currency-Linked Capital Protected Investment Deposit is held till the relevant Coupon Distribution Dates ReturnCoupon (if any) of Currency-Linked Capital Protected Investment Deposit depends on the market conditions at the time of the relevant determination Investment return on foreign exchange-linked products are dependent on the prices of inter-banksrsquo transactions on the linked exchange rate in the foreign exchange markets You should be fully aware of the risks relating to fluctuations in the linked exchange rates Factors affecting the performance of foreign exchange markets are numerous including but are not limited to changes in global and local investment sentiments interest rate policies fund flows political environment economic environment business and social conditions in the local marketplace If the market trend is different from the view taken by you there is an inherent risk that the total investment return that you may receive from Currency-Linked Capital Protected Investment Deposit will be less than the interest that would have been payable on a time deposit for the same tenor There is also an inherent risk that no ReturnCoupon calculated at the Potential ReturnCoupon Rate will be payable to you in respect of the Currency-Linked Capital Protected Investment Deposit Early WithdrawalTermination Risks Early withdrawaltermination by you is not allowed for Currency-Linked Capital Protected Investment Deposit and the capital of you will be invested in the Currency-Linked Capital Protected Investment Deposit for the entire investment period The Bank may at its absolute discretion refuse to give consent to any early withdrawaltermination request If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the Bank shall be entitled to deduct from the Principal of the relevant Currency-Linked Capital Protected Investment Deposit andor any other amount which may have accrued to you any expenses costs or damages to the Bank Damages may include any costs expenses liability or losses to the Bank as a result of the early withdrawaltermination by you Therefore there is no guarantee that you will be able to receive the Principal and the amount payable to you at early withdrawaltermination may be less
Page 36 of 67
than the Principal initially invested Besides If the Currency-Linked Capital Protected Investment Deposit is early withdrawnterminated you will no longer be entitled to any ReturnCoupon of the Currency-Linked Capital Protected Investment Deposit Risks associated with unsuccessful subscriptions of Currency-Linked Capital Protected Investment Deposit The Bank reserves the absolute right to approve any application and to decline any application received (whether in whole or any part thereof) before the Deposit Start Date In the event of non-acceptance a notification will be sent by the Bank and any subscription funds received will be returned to you after the Deposit Start Date or as soon as practicable Risks relating to Renminbi If Currency-Linked Capital Protected Investment Deposit involves CNY the relevant exchange rate(s) or level(s) of the relevant currency pair will be quoted in offshore Renminbi against alternate currency While both onshore Renminbi and offshore Renminbi are the same currency they are traded in different and separate markets operating under different regulations and independent liquidity pool Onshore Renminbi and offshore Renminbi are currently quoted in different markets with different exchange rates whereby their exchange rate movements may not be in the same direction or magnitude The offshore Renminbi exchange rate may deviate significantly from the onshore Renminbi exchange rate You should also note that Renminbi is currently not freely convertible the value of Renminbi against other foreign currencies fluctuates and will be affected by amongst other things the PRC governmentrsquos control (for example the PRC government regulates conversion between Renminbi and foreign currencies) which may adversely affect your investment return under the Currency-Linked Capital Protected Investment Deposit when you convert CNY into your home currency Renminbi is subject to foreign exchange control by the PRC government and thus investors investing in Currency-Linked Investment Deposit involving Renminbi are subject to the currency risk of Renminbi
What are the key features bull This product is designed for you whose investment objective is capital protection or to obtain potential cash income
bull This product is embedded with options You will buy option(s) on the Linked Currency Pair bull 100 principal protection if the Currency-Linked Capital Protected Investment Deposit is held to maturity bull You can choose the Deposit Currency including HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY and Linked Currency Pair
including AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD and USDCNH bull The Deposit Period of this product is 2 months or above bull You will have a chance to receive higher potential return depending on the movement of the exchange rate of the Underlying Currency Pair bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency bull The Bank pre-sets the Trigger Level and you choose a bullish or bearish view on different currencies bull On the Final Exchange Rate Determination Date the exchange rate of the Underlying Currency Pair is compared with the Trigger Level to
determine the Return at maturity bull Returns (if any) on this product is payable only upon maturity bull This product may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank Please refer to
the section Can you request for early termination before maturity below
Scenario analysis (All figures shown below including the exchange rate of AUDUSD and HKDCNH Potential Return Rate Minimum Return Rate Deposit Period etc are for illustration only You should not rely on the below figures as any indication or guarantee on the expected interest amount of the Currency-Linked Capital Protected Investment Deposit you intend to invest Please refer to the Bank for up-to-date figures) Example 1 ndash European Bullish (where the Deposit Currency is your home currency) Assuming HKD is your home currency and you take a bullish view on Australian Dollar expect the exchange rate of AUDUSD will rise from 09400 to 09800 or above after the 6-month period and set up an European Bullish Investment with HKD 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Bullish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency HKD Guaranteed Principal HKD 100000 Deposit Period 6 months Trigger Level AUDUSD 09800 Potential Return Rate 016 (around 032 pa) Minimum Return Rate 0015 (around 003 pa) Scenario I Best case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is at or above the Trigger Level (ie at or above 09800) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = HKD 100000 x (1+016) = HKD 10016000 (with a gain of 016 of investment amount) Scenario II Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is below the Trigger Level (ie below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity
Page 37 of 67
Total Return at Maturity = HKD 100000 x (1+0015) = HKD 10001500 (with a gain of 0015 of investment amount) Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount
For reference only if you set up a HKD 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500
Example 2 ndash European Bearish (where the Deposit Currency is your home currency) Assuming HKD is your home currency and you take a bearish view on Australian Dollar expect the exchange rate of AUDUSD will drop from 09400 to 09000 or below after the 6-month period and set up an European Bearish Investment with HKD 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Bearish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency HKD Guaranteed Principal HKD 100000 Deposit Period 6 months Trigger Level AUDUSD 09000 Potential Return Rate 016 (around 032 pa) Minimum Return Rate 0015 (around 003 pa) Scenario I Best case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is at or below the Trigger Level (ie at or below 09000) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = HKD 100000 x (1+016) = HKD 10016000 (with a gain of 016 of investment amount) Scenario II Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is above the Trigger Level (ie above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = HKD 100000 x (1+0015) = HKD 10001500 (with a gain of 0015 of investment amount) Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount
0
Final Exchange Rate of AUDUSD lt Trigger Level
Potential Return Minimum Return
Return Diagram Return at Maturity
09800 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Final Exchange Rate of AUDUSD ge Trigger Level
Trigger Level = 09800
Page 38 of 67
For reference only if you set up a HKD 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500 Example 3 ndash European Bullish (where the Deposit Currency is not home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency you take a bullish view on Australian Dollar expect the exchange rate of AUDUSD will rise from 09400 to 09800 or above after the 6-month period and set up an European Bullish Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Bullish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trigger Level AUDUSD 09800 Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH on deposit start date 08000 Scenario I Best case scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is at or above the Trigger Level (ie at or above 09800) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of-the road Gain scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is below the Trigger Level (ie below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Scenario III Off-setting scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is below the Trigger Level (ie below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD 000
0
Final Exchange Rate of AUDUSD
le Trigger Level
Potential Return Minimum Return
Return Diagram
Return at Maturity
09000 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Final Exchange Rate of AUDUSD gt Trigger Level
Trigger Level = 09000
Page 39 of 67
Scenario IV Loss and Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is below the Trigger Level (ie below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 101500 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951) In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount
For reference only if you set up a CNY 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received at maturity would be CNY 10030000 If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Please refer to the table below for details
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
viiii 9999990000 010 010 (12499990) (12499990)
103000 101500 12500000 10000008000
At the beginning of the investment On the Maturity Date of the investment
Exchange
Rate of
HKDCNH
Initial
Investment
Amount in
Renminbi
Initial
Investment
Amount in
HKD
Exchange Rate
of HKDCNH
Total Return in
Renminbi
Total Return in
HKD
Gain (loss) in HKD if converting the
Total Return from Renminbi to home
currency (HKD)
0
Final Exchange Rate of AUDUSD lt Trigger Level
Potential Return Minimum Return
Return Diagram
Return at Maturity
09800 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Final Exchange Rate of AUDUSD ge Trigger Level
Trigger Level = 09800
Page 40 of 67
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date
The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date
If HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
Example 4 ndash European Bearish (where the Deposit Currency is not home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency you take a bearish view on Australian Dollar expect the exchange rate of AUDUSD will drop from 09400 to 09000 or below after the 6-month period and set up an European Bearish Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Bearish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trigger Level AUDUSD 09000 Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH at the time of investment 08000 Scenario I Best case scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is at or below the Trigger Level (ie at or below 09000) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of-the road Gain scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is above the Trigger Level (ie above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Scenario III Off-setting scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is above the Trigger Level (ie above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Exchange Rate of HKDCNH on the Maturity Date
0
If receiving Minimum Return
Breakeven = 08120^
If receiving Potential Return
Breakeven = 08240
Exchange Rate on Deposit Start Date
Potential Return
Minimum Return
If CNH depreciates drastically relative to HKD
HKDCNH = 9999990000
Page 41 of 67
= HKD 12500000 Gain(Loss) in home currency HKD 000 Scenario IV Loss and Worst Case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is above the Trigger Level (ie above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951) In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount
For reference only if you set up a CNY 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received at maturity would be CNY 10030000 If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Please refer to the table below for details
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
viiii 9999990000 010 010 (12499990) (12499990)
103000 101500 12500000 10000008000
At the beginning of the investment On the Maturity Date of the investment
Exchange
Rate of
HKDCNH
Initial
Investment
Amount in
Renminbi
Initial
Investment
Amount in
HKD
Exchange Rate
of HKDCNH
Total Return in
Renminbi
Total Return in
HKD
Gain (loss) in HKD if converting the
Total Return from Renminbi to home
currency (HKD)
0
Final Exchange Rate of AUDUSD le Trigger Level
Potential Return Minimum Return
Return Diagram Return at Maturity
09000 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Final Exchange Rate of AUDUSD gt Trigger Level
Trigger Level = 09000
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Page 42 of 67
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date
The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date
If HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
How can you buy this product bull You can place a Currency-Linked Capital Protected Investment Deposit through our Hang Seng Bank Branches telephone or Hang Seng
Personal or Business e-Banking bull The Bank will provide a choice of different tranches which is subject to market conditions bull Enquiry Hotline Personal 2822 0228 Business 2198 8000
Fees and charges No handling fees or management fees will be charged for Currency-Linked Capital Protected Investment Deposit
Can you request for early termination before maturity No Currency-Linked Capital Protected Investment Deposit may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank which may be granted or withheld in the Bankrsquos sole and absolute discretion on such terms and conditions as the Bank may determine Please refer to ldquoEarly WithdrawalTermination Risksrdquo under ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section for details
Pre-Investment Cooling-off Period for retail customers Pre-Investment Cooling-off Period (PICOP) is applicable to each particular dealing of this product if you are one of the following retail customer types
(1) An elderly customer aged 65 or above unless you are not a first-time buyer of currency-linked structured investment products AND your asset concentration is below 20 AND you opt out from the PICOP arrangement or
(2) A non-elderly customer who is a first time buyer of currency-linked structured investment products AND your asset concentration is
20 or above
For the purpose of determining whether PICOP is applicable asset concentration refers to the percentage of total net worth (excluding real estate properties) to be invested in this product
Can the Bank adjust the terms or early terminate this product Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank in certain circumstances Please refer to Clause 7 of the Currency-Linked Capital Protected Investment Deposit Terms and Conditions for details
Offering documents for this product The following documents for this product (ldquoOffering Documentsrdquo) contain detailed information about the Bank and the terms of this product You should read and understand all of the Offering Documents before deciding whether to invest in this product
(i) Currency-Linked Capital Protected Investment Deposit Terms and Conditions (ii) The relevant Currency-Linked Capital Protected Investment Deposit Termsheet (iii) This Currency-Linked Capital Protected Investment Deposit Important Facts Statement
Product Risk Level The Product Risk Level for Currency-Linked Capital Protected Investment Deposit is Low
Low Low-to-Medium Medium Medium-to-High High
Product Risk Level is determined by a number of factors which include the volatility of the currency pair and the tenor of the product The Product Risk Level is subject to the Banks periodic review and may change from time to time Please refer to our branch or our Customer Service Hotline on 2822 0228 for the latest detail Declaration and Remarks bull This Important Facts Statement is not intended to provide or regard as legal or taxation advice or investment recommendations If you have
any concerns about this product or are uncertain about the suitability of this product for you you should obtain independent professional advice
bull The liabilities of the Bank in respect of the Currency-Linked Capital Protected Investment Deposit are limited exclusively to an office of the Bank in Hong Kong and instructions in respect of the Currency-Linked Capital Protected Investment Deposit may only be made to and acted upon by such office Any amount relating to the Currency-Linked Capital Protected Investment Deposit is payable exclusively by an office of the Bank in Hong Kong and in its stated currency The Terms and Conditions of the Currency-Linked Capital Protected Investment Deposit are governed by and shall be construed in accordance with the laws of Hong Kong
bull You may contact our staff if you have any feedback or complaint in relation to our services or call our hotline at 2822 0228 We will respond to you within a reasonable period of time normally not exceeding 30 days in general circumstances You may contact the Hong Kong Monetary Authority at 55th Floor Two International Finance Centre 8 Finance Street Central Hong Kong if you are not satisfied with our handling of your complaint
bull Hang Seng Bank Limited is a Registered Licensed Bank under the Banking Ordinance bull All Currency-Linked Capital Protected Investment Deposit cannot be cancelled after subscription bull The Bank will act as principal to complete the transaction and may obtain certain monetary benefits in connection with the offering of this
Currency-Linked Capital Protected Investment Deposit to the public The current remuneration system that the Bank adopts for sales staff is a measurement of the staffrsquos overall performance and not just based on sales amount
bull The Bank is NOT an independent intermediary because The Bank receives fees commissions or other monetary benefits from other parties in relation to the Bankrsquos distribution of Currency-Linked Capital Protected Investment Deposit to you For details you should refer to the Bankrsquos disclosure on monetary benefits which the Bank is required to deliver to you prior to or at the point of entering into any transaction in Currency-Linked Capital Protected Investment Deposit
bull Please note that this product is not available for persons who are located within the United States are nationals of the United States and are US Persons within the meaning of Regulation S under the Securities Act (which includes any person resident in the United States and any partnership or corporation organised or incorporated under the laws of the United States)
bull 請注意本行不提供本產品予身處美國的人士美國公民及美籍人士(定義見證券法 S 條例)(包括居住在美國之任何人士及根據美國法例組成
或註冊成立之任何合夥企業或公司)
Page 53 of 67
Currency-Linked Capital Protected Investment Deposit
European Range Investment
Dated May 2018
Important Facts Statement
This is a structured investment product which is NOT protected by the Deposit
Protection Scheme in Hong Kong
The contents of this statement have not been reviewed by any regulatory authority in Hong Kong You are advised to exercise caution before investing in this product This statement is a part of the offering documents for this product You should not invest in this product based on this statement alone If you are in any doubt you should obtain independent professional advice
If English is not your preferred language you may request for the Chinese version of this statement from our sales staff 倘若英
文並非閣下屬意的語言閣下可向本行的銷售人員索取本概要的中文版本
This is a structured investment product involving derivatives The investment decision is yours but you should not invest in this product 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
Quick facts Bank Hang Seng Bank Limited
Product Type Currency-Linked Investment Deposit ndash European Range Investment (ldquothis productrdquo)
Minimum Investment Amount Subscription through branches - HKD 100000 (or its equivalent) Subscription through e-banking - HKD 50000 (or its equivalent)
Tenor 2 months or above or any other tenor as agreed between you and the Bank
Available Principal Currency (or Deposit Currency) HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY
Available Underlying Currency Pair AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD USDCNH and any other currency pairs as agreed between you and the Bank
Return Rate Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Deposit periodpayment date Deposit period refers to tenor of the product and return is payable only on Maturity Date
Principal protection at maturity Yes
Callable by the Bank No
Early termination right by customer No please refer to ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section ndash Early WithdrawalTermination Risks for details
Embedded derivatives Yes you will buy option(s) over the Underlying Currency Pair
Maximum potential gain Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Maximum potential loss Please refer to Scenarios II and III of Example 1 and Scenarios IV and V of Example 2 in the ldquoScenario analysisrdquo section of this product type for details
What is this product and how does it work bull European Range investment is one type of our Currency-Linked Capital Protected Investment Deposit which consists of a time deposit
(in Deposit Currency) and buying option(s) on the Underlying Currency Pair of your choice bull You choose the Deposit Currency Underlying Currency Pair according to your need and the Bank will set the Trading Range bull On the Final Exchange Rate Determination Date the Bank will compare the exchange rate of the Underlying Currency Pair with the
Trading Range If the exchange rate of the Underlying Currency Pair moves along with your anticipation and is within the Trading Range you will receive Guaranteed Principal and Potential Return If the exchange rate of the Underlying Currency Pair moves against your anticipation and is outside the Trading Range you will receive Guaranteed Principal and Minimum Return (if any)
bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency Minimum return applies to certain investment tranches only you should refer to the relevant termsheet for details
Page 54 of 67
What are the key risks of Currency-Linked Capital Protected Investment Deposit Earnings on Currency-Linked Capital Protected Investment Deposit are limited to the Return Coupon (if any) payable You should consider the following risks and read all other information contained in the relevant Termsheet and Terms and Conditions before making any investment decision Not a time deposit Currency-Linked Capital Protected Investment Deposit 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 Capital Protected Investment Deposit is embedded with FX options Option transactions involve risks even when buying an option The optionrsquos value might become worthless if the market moves against your expectation Limited potential gain The maximum potential gain is limited to the pre-agreed ReturnCoupon calculated at the Potential ReturnCoupon Rate Not the same as buying the Underlying Currency Pair Investing in Currency-Linked Capital Protected Investment Deposit is not the same as buying the Underlying Currency Pair directly Market risk The investment return of Currency-Linked Capital Protected Investment Deposit is linked to the exchange rate of the Underlying Currency Pair Movements in exchange rates can be unpredictable sudden and drastic and affected by complex political and economic factors Liquidity risk Currency-Linked Capital Protected Investment Deposit is designed to be held till maturity The Bank may at its absolute discretion refuse to consent to any withdrawaltermination request before maturity Credit risk of the Bank Currency-Linked Capital Protected Investment Deposit is not secured by any collateral When you invest in Currency-Linked Capital Protected Investment Deposit you will be relying on the Bankrsquos creditworthiness If the Bank becomes insolvent or defaults on its obligations under a Currency-Linked Capital Protected Investment Deposit you can only claim as an unsecured creditor of the Bank In the worst case you could suffer a total loss of your investment amount Currency risk Exchange rate fluctuates and sometimes drastically If the Deposit Currency used for investment is not the home currency customarily used by you and thus conversion is required you should note that you may make a gain or suffer a loss due to exchange rate fluctuations When the deposit currency depreciates the loss from depreciation may set-off or even exceed the ReturnCoupon (if any) that you may receive from investing in the Currency-Linked Capital Protected Investment Deposit Risk of adjustments or early termination by the Bank Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank this might have a negative impact on the ReturnCoupon (if any) of the Currency-Linked Capital Protected Investment Deposit Concentration Risks You should avoid excessive investment (in terms of its proportion of the overall portfolio) in any single type of investment so as to avoid the investment portfolio being over-exposed to any particular investment risk ReturnCoupon of Currency-Linked Capital Protected Investment Deposit In order to provide capital protection the investment strategy adopted for Currency-Linked Capital Protected Investment Deposit may lead to a dilution of performance when compared to non-capital protected products investing in similar markets You should be prepared to take the risks of earning a lower ReturnCoupon (if any) on the capital invested and losing the interest that might otherwise earned on money invested by way of deposits For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) periodic Coupon may be payable to you For other types of Currency-Linked Capital Protected Investment Deposit no periodic ReturnCoupon will be payable to you prior to maturity Principal protection at maturity only You should understand that the Principal of the Currency-Linked Capital Protected Investment Deposit is capital-protected only when it is held to maturity If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the amount received by you upon early withdrawaltermination may be less than the amount initially invested by you Market Risks associated with Potential ReturnCoupon Apart from the ReturnCoupon calculated at the Minimum ReturnCoupon Rate (which may be set at zero) there is no guarantee of any ReturnCoupon calculated at the Potential ReturnCoupon Rate For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) Coupon (if any) is payable only if the Currency-Linked Capital Protected Investment Deposit is held till the relevant Coupon Distribution Dates ReturnCoupon (if any) of Currency-Linked Capital Protected Investment Deposit depends on the market conditions at the time of the relevant determination Investment return on foreign exchange-linked products are dependent on the prices of inter-banksrsquo transactions on the linked exchange rate in the foreign exchange markets You should be fully aware of the risks relating to fluctuations in the linked exchange rates Factors affecting the performance of foreign exchange markets are numerous including but are not limited to changes in global and local investment sentiments interest rate policies fund flows political environment economic environment business and social conditions in the local marketplace If the market trend is different from the view taken by you there is an inherent risk that the total investment return that you may receive from Currency-Linked Capital Protected Investment Deposit will be less than the interest that would have been payable on a time deposit for the same tenor There is also an inherent risk that no ReturnCoupon calculated at the Potential ReturnCoupon Rate will be payable to you in respect of the Currency-Linked Capital Protected Investment Deposit
Page 55 of 67
Early WithdrawalTermination Risks Early withdrawaltermination by you is not allowed for Currency-Linked Capital Protected Investment Deposit and the capital of you will be invested in the Currency-Linked Capital Protected Investment Deposit for the entire investment period The Bank may at its absolute discretion refuse to give consent to any early withdrawaltermination request If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the Bank shall be entitled to deduct from the Principal of the relevant Currency-Linked Capital Protected Investment Deposit andor any other amount which may have accrued to you any expenses costs or damages to the Bank Damages may include any costs expenses liability or losses to the Bank as a result of the early withdrawaltermination by you Therefore there is no guarantee that you will be able to receive the Principal and the amount payable to you at early withdrawaltermination may be less than the Principal initially invested Besides If the Currency-Linked Capital Protected Investment Deposit is early withdrawnterminated you will no longer be entitled to any ReturnCoupon of the Currency-Linked Capital Protected Investment Deposit Risks associated with unsuccessful subscriptions of Currency-Linked Capital Protected Investment Deposit The Bank reserves the absolute right to approve any application and to decline any application received (whether in whole or any part thereof) before the Deposit Start Date In the event of non-acceptance a notification will be sent by the Bank and any subscription funds received will be returned to you after the Deposit Start Date or as soon as practicable Risks relating to Renminbi If Currency-Linked Capital Protected Investment Deposit involves CNY the relevant exchange rate(s) or level(s) of the relevant currency pair will be quoted in offshore Renminbi against alternate currency While both onshore Renminbi and offshore Renminbi are the same currency they are traded in different and separate markets operating under different regulations and independent liquidity pool Onshore Renminbi and offshore Renminbi are currently quoted in different markets with different exchange rates whereby their exchange rate movements may not be in the same direction or magnitude The offshore Renminbi exchange rate may deviate significantly from the onshore Renminbi exchange rate You should also note that Renminbi is currently not freely convertible the value of Renminbi against other foreign currencies fluctuates and will be affected by amongst other things the PRC governmentrsquos control (for example the PRC government regulates conversion between Renminbi and foreign currencies) which may adversely affect your investment return under the Currency-Linked Capital Protected Investment Deposit when you convert CNY into your home currency Renminbi is subject to foreign exchange control by the PRC government and thus investors investing in Currency-Linked Investment Deposit involving Renminbi are subject to the currency risk of Renminbi
What are the key features bull This product is designed for you whose investment objective is capital protection or to obtain potential cash income bull This product is embedded with options You will buy option(s) on the Linked Currency Pair bull 100 principal protection if this product is held to maturity bull You can choose the Deposit Currency including HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY and Linked Currency
Pair including AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD and USDCNH bull The Deposit Period of this product is 2 months or above
bull You will have a chance to receive higher potential return depending on the movement of the exchange rate of the Underlying Currency
Pair bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency bull The Bank pre-sets the Trading Range bull On the Final Exchange Rate Determination Date the exchange rate of the Underlying Currency Pair is compared with the Trading Range
to determine the Return at maturity bull Returns (if any) on this product is payable only upon maturity bull This product may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank Please refer to
the section Can you request for early termination before maturity below
Scenario analysis (All figures shown below including the exchange rate of AUDUSD and HKDCNH Potential Return Rate Minimum Return Rate Deposit Period etc are for illustration only You should not rely on the figures as any indication or guarantee on the expected interest amount of the Currency-Linked Capital Protected Investment Deposit you intend to invest Please refer to the Bank for up-to-date figures) Example 1 ndash European Range (where the Deposit Currency is your home currency) Assuming HKD is your home currency and you anticipate the Exchange Rate of AUDUSD will be above 10250 but below 10750 after 6 months and set up an European Range Investment with HKD 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Range (AUDUSD) Principal Guarantee 100 Deposit Currency HKD Guaranteed Principal HKD 100000 Deposit Period 6 months Trading Range AUDUSD 10250 (ldquoLower Barrierrdquo) to 10750 (ldquoUpper Barrierrdquo) (excluding both barriers) Potential Return Rate 016 (around 032 pa)
Page 56 of 67
Minimum Return Rate 0015 (around 003 pa) Scenario I Best case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is within the Trading Range (ie above 10250 but below 10750) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = HKD 100000 x (1+016) = HKD 10016000 (with a gain of 016 of investment amount) Scenario II Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 10250 or atabove 10750) you will receive Guaranteed Principal and Minimum Return at maturity Total Return at Maturity = HKD 100000 x (1+0015) = HKD 10001500 (with a gain of 0015 of investment amount) Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a HKD 100000 6 month Time Deposit on 30 April 2015 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500 Example 2 ndash European Range (where the Deposit Currency is not your home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency and you anticipate the Exchange Rate of AUDUSD will be above 10250 but below 10750 after 6 months and set up an European Range Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Range (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trading Range AUDUSD 10250 (ldquoLower Barrierrdquo) to 10750 (ldquoUpper Barrierrdquo) (excluding both barriers) Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH (on deposit start date) 08000 Scenario I Best case scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is within the Trading Range (ie above 10250 but below 10750) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of-the road Gain scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 10250 or atabove 10750) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount)
0
Final Exchange Rate of
AUDUSD le10250
Potential Return Minimum Return
Return Diagram
Return at Maturity
10250 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Minimum Return
Final Exchange Rate of
AUDUSD ge 10750
10750
10250lt Final Exchange Rate of AUDUSD lt10750
Page 57 of 67
Scenario III Off-setting scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 10250 or atabove 10750) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD 000 Scenario IV Loss and Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 10250 or atabove 10750) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 101500 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951) In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a CNY 100000 6 month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received at maturity would be CNY 10030000 If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to
0
Final Exchange Rate of
AUDUSD le10250
Potential Return Minimum Return
Return Diagram
Return at Maturity
10250 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Minimum Return
Final Exchange Rate of
AUDUSD ge 10750
10750
10250lt Final Exchange Rate of AUDUSD lt10750
Page 58 of 67
depreciation of Renminbi Please refer to the table below for details
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date
The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date
If HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
How can you buy this product
bull You can place a Currency-Linked Capital Protected Investment Deposit through our Hang Seng Bank Branches telephone or Hang
Seng Personal or Business e-Banking
bull The Bank will provide a choice of different tranches which is subject to market conditions
bull Enquiry Hotline Personal 2822 0228
Business 2198 8000
Fees and charges No handling fees or management fees will be charged for Currency-Linked Capital Protected Investment Deposit
Can you request for early termination before maturity No Currency-Linked Capital Protected Investment Deposit may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank which may be granted or withheld in the Bankrsquos sole and absolute discretion on such terms and conditions as the Bank may determine Please refer to ldquoEarly WithdrawalTermination Risksrdquo under ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section for details
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
ix 9999990000 010 010 (12499990) (12499990)
At the beginning of the investment On the Maturity Date of the investment
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Potential Return
Exchange Rate of HKDCNH on the Maturity Date
0
If receiving Minimum Return
Breakeven = 08120^
If receiving Potential Return
Breakeven = 08240
If CNH depreciates drastically relative to HKD
HKDCNH = 9999990000
Exchange Rate on Deposit Start Date
Page 59 of 67
Pre-Investment Cooling-off Period for retail customers Pre-Investment Cooling-off Period (PICOP) is applicable to each particular dealing of this product if you are one of the following retail customer types
(1) An elderly customer aged 65 or above unless you are not a first-time buyer of currency-linked structured investment products AND your asset concentration is below 20 AND you opt out from the PICOP arrangement or
(2) A non-elderly customer who is a first time buyer of currency-linked structured investment products AND your asset concentration
is 20 or above
For the purpose of determining whether PICOP is applicable asset concentration refers to the percentage of total net worth (excluding real estate properties) to be invested in this product
Can the Bank adjust the terms or early terminate this product Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank in certain circumstances Please refer to Clause 7 of the Currency-Linked Capital Protected Investment Deposit Terms and Conditions for details
Offering documents for this product The following documents for this product (ldquoOffering Documentsrdquo) contain detailed information about the Bank and the terms of this product You should read and understand all of the Offering Documents before deciding whether to invest in this product
(i) Currency-Linked Capital Protected Investment Deposit Terms and Conditions (ii) The relevant Currency-Linked Capital Protected Investment Deposit Termsheet (iii) This Currency-Linked Capital Protected Investment Deposit Important Facts Statement
Other information Product Risk Level The Product Risk Level for Currency-Linked Capital Protected Investment Deposit is Low
Low Low-to-Medium Medium Medium-to-High High
Product Risk Level is determined by a number of factors which include the volatility of the currency pair and the tenor of the product The Product Risk Level is subject to the Banks periodic review and may change from time to time Please refer to our branch or our Customer Service Hotline on 2822 0228 for the latest detail Declaration and Remarks bull This Important Facts Statement is not intended to provide or regard as legal or taxation advice or investment recommendations If you
have any concerns about this product or are uncertain about the suitability of this product for you you should obtain independent professional advice
bull The liabilities of the Bank in respect of the Currency-Linked Capital Protected Investment Deposit are limited exclusively to an office of the Bank in Hong Kong and instructions in respect of the Currency-Linked Capital Protected Investment Deposit may only be made to and acted upon by such office Any amount relating to the Currency-Linked Capital Protected Investment Deposit is payable exclusively by an office of the Bank in Hong Kong and in its stated currency The Terms and Conditions of the Currency-Linked Capital Protected Investment Deposit are governed by and shall be construed in accordance with the laws of Hong Kong
bull You may contact our staff if you have any feedback or complaint in relation to our services or call our hotline at 2822 0228 We will respond to you within a reasonable period of time normally not exceeding 30 days in general circumstances You may contact the Hong Kong Monetary Authority at 55th Floor Two International Finance Centre 8 Finance Street Central Hong Kong if you are not satisfied with our handling of your complaint
bull Hang Seng Bank Limited is a Registered Licensed Bank under the Banking Ordinance bull All Currency-Linked Capital Protected Investment Deposit cannot be cancelled after subscription bull The Bank will act as principal to complete the transaction and may obtain certain monetary benefits in connection with the offering of
this Currency-Linked Capital Protected Investment Deposit to the public The current remuneration system that the Bank adopts for sales staff is a measurement of the staffrsquos overall performance and not just based on sales amount
bull The Bank is NOT an independent intermediary because The Bank receives fees commissions or other monetary benefits from other parties in relation to the Bankrsquos distribution of Currency-Linked Capital Protected Investment Deposit to you For details you should refer to the Bankrsquos disclosure on monetary benefits which the Bank is required to deliver to you prior to or at the point of entering into any transaction in Currency-Linked Capital Protected Investment Deposit
bull Please note that this product is not available for persons who are located within the United States are nationals of the United States and are US Persons within the meaning of Regulation S under the Securities Act (which includes any person resident in the United States and any partnership or corporation organised or incorporated under the laws of the United States)
bull 請注意本行不提供本產品予身處美國的人士美國公民及美籍人士(定義見證券法 S 條例)(包括居住在美國之任何人士及根據美國法例組
成或註冊成立之任何合夥企業或公司)
Page 8 of 67
In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a CNY 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received at maturity would be CNY 10030000 If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Please refer to the table below for details
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home
currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home
currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date If HKDCNH rise drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange
rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
ix 9999990000 010 010 (12499990) (12499990)
At the beginning of the investment On the Maturity Date of the investment
Exchange
Rate of
HKDCNH
Initial
Investment
Amount in
Renminbi
Initial
Investment
Amount in
HKD
Exchange Rate
of HKDCNH
Total Return in
Renminbi
Total Return in
HKD
Gain (loss) in HKD if converting the
Total Return from Renminbi to home
currency (HKD)
103000 101500 12500000 10000008000
09000 0
Exchange Rate of AUDUSD le
Trigger Level
Potential Return Minimum Return
Return Diagram
Return at Maturity
Exchange Rate of AUDUSD gt Trigger Level
Exchange Rate of AUDUSD during the Observation Period
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Potential Return
Exchange Rate of HKDCNH on the Maturity Date
0
If receiving Minimum Return
Breakeven = 08120^
If receiving Potential Return
Breakeven = 08240
Exchange Rate on Deposit Start Date
If CNH depreciates drastically relatively to HKD HKDCNH = 9999990000
Page 9 of 67
How can you buy this product bull You can place a Currency-Linked Capital Protected Investment Deposit through our Hang Seng Bank Branches telephone or Hang
Seng Personal or Business e-Banking bull The Bank will provide a choice of different tranches which is subject to market conditions bull Enquiry Hotline Personal 2822 0228 Business 2198 8000
Fees and charges No handling fees or management fees will be charged for Currency-Linked Capital Protected Investment Deposit
Can you request for early termination before maturity No Currency-Linked Capital Protected Investment Deposit may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank which may be granted or withheld in the Bankrsquos sole and absolute discretion on such terms and conditions as the Bank may determine Please refer to ldquoEarly WithdrawalTermination Risksrdquo under ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section for details
Pre-Investment Cooling-off Period for retail customers Pre-Investment Cooling-off Period (PICOP) is applicable to each particular dealing of this product if you are one of the following retail customer types
(1) An elderly customer aged 65 or above unless you are not a first-time buyer of currency-linked structured investment products AND your asset concentration is below 20 AND you opt out from the PICOP arrangement or
(2) A non-elderly customer who is a first time buyer of currency-linked structured investment products AND your asset concentration
is 20 or above
For the purpose of determining whether PICOP is applicable asset concentration refers to the percentage of total net worth (excluding real estate properties) to be invested in this product
Can the Bank adjust the terms or early terminate this product Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank in certain circumstances Please refer to Clause 7 of the Currency-Linked Capital Protected Investment Deposit Terms and Conditions for details
Offering documents for this product The following documents for this product (ldquoOffering Documentsrdquo) contain detailed information about the Bank and the terms of this product You should read and understand all of the Offering Documents before deciding whether to invest in this product
(i) Currency-Linked Capital Protected Investment Deposit Terms and Conditions (ii) The relevant Currency-Linked Capital Protected Investment Deposit Termsheet (iii) This Currency-Linked Capital Protected Investment Deposit Important Facts Statement
Other information Product Risk Level The Product Risk Level for Currency-Linked Capital Protected Investment Deposit is Low
Low Low-to-Medium Medium Medium-to-High High
Product Risk Level is determined by a number of factors which include the volatility of the currency pair and the tenor of the product The Product Risk Level is subject to the Banks periodic review and may change from time to time Please refer to our branch or our Customer Service Hotline on 2822 0228 for the latest detail
Declaration and Remarks bull This Important Facts Statement is not intended to provide or regard as legal or taxation advice or investment recommendations If you
have any concerns about this product or are uncertain about the suitability of this product for you you should obtain independent professional advice
bull The liabilities of the Bank in respect of the Currency-Linked Capital Protected Investment Deposit are limited exclusively to an office of the Bank in Hong Kong and instructions in respect of the Currency-Linked Capital Protected Investment Deposit may only be made to and acted upon by such office Any amount relating to the Currency-Linked Capital Protected Investment Deposit is payable exclusively by an office of the Bank in Hong Kong and in its stated currency The Terms and Conditions of the Currency-Linked Capital Protected Investment Deposit are governed by and shall be construed in accordance with the laws of Hong Kong
bull You may contact our staff if you have any feedback or complaint in relation to our services or call our hotline at 2822 0228 We will respond to you within a reasonable period of time normally not exceeding 30 days in general circumstances You may contact the Hong Kong Monetary Authority at 55th Floor Two International Finance Centre 8 Finance Street Central Hong Kong if you are not satisfied with our handling of your complaint
bull Hang Seng Bank Limited is a Registered Licensed Bank under the Banking Ordinance bull All Currency-Linked Capital Protected Investment Deposit cannot be cancelled after subscription bull The Bank will act as principal to complete the transaction and may obtain certain monetary benefits in connection with the offering of
this Currency-Linked Capital Protected Investment Deposit to the public The current remuneration system that the Bank adopts for
Page 10 of 67
sales staff is a measurement of the staffrsquos overall performance and not just based on sales amount bull The Bank is NOT an independent intermediary because
The Bank receives fees commissions or other monetary benefits from other parties in relation to the Bankrsquos distribution of Currency-Linked Capital Protected Investment Deposit to you For details you should refer to the Bankrsquos disclosure on monetary benefits which the Bank is required to deliver to you prior to or at the point of entering into any transaction in Currency-Linked Capital Protected Investment Deposit
bull Please note that this product is not available for persons who are located within the United States are nationals of the United States and are US Persons within the meaning of Regulation S under the Securities Act (which includes any person resident in the United States and any partnership or corporation organised or incorporated under the laws of the United States)
bull 請注意本行不提供本產品予身處美國的人士美國公民及美籍人士(定義見證券法 S 條例)(包括居住在美國之任何人士及根據美國法例組成
或註冊成立之任何合夥企業或公司)
Page 20 of 67
Currency-Linked Capital Protected Investment Deposit
American Range Investment
Dated May 2018
Important Facts Statement
This is a structured investment product which is NOT protected by the Deposit Protection Scheme in Hong Kong
The contents of this statement have not been reviewed by any regulatory authority in Hong Kong You are advised to exercise caution before investing in this product This statement is a part of the offering documents for this product You should not invest in this product based on this statement alone If you are in any doubt you should obtain independent professional advice
If English is not your preferred language you may request for the Chinese version of this statement from our sales staff 倘若英
文並非閣下屬意的語言閣下可向本行的銷售人員索取本概要的中文版本
This is a structured investment product involving derivatives The investment decision is yours but you should not invest in this product 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
Quick facts Bank Hang Seng Bank Limited
Product Type Currency-Linked Investment Deposit ndash American Range Investment (ldquothis productrdquo)
Minimum Investment Amount Subscription through branches - HKD 100000 (or its equivalent) Subscription through e-banking - HKD 50000 (or its equivalent)
Tenor 2 months or above or any other tenor as agreed between you and the Bank
Available Principal Currency (or Deposit Currency) HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY
Available Underlying Currency Pair AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD USDCNH and any other currency pairs as agreed between you and the Bank
Return Rate Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Deposit periodpayment date Deposit period refers to tenor of the product and return is payable only on Maturity Date
Principal protection at maturity Yes
Callable by the Bank No
Early termination right by customer No please refer to ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section ndash Early WithdrawalTermination Risks for details
Embedded derivatives Yes you will buy option(s) over the Underlying Currency Pair
Maximum potential gain Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Maximum potential loss Please refer to Scenario II amp III of Example 1 and Scenarios IV and V of Example 2 in the ldquoScenario analysisrdquo section of this product type for details
What is this product and how does it work bull American Range investment is one type of our Currency-Linked Capital Protected Investment Deposit which consists of a time deposit
(in Deposit currency) and buying option(s) on the Underlying Currency Pair of your choice bull You choose the Deposit Currency Underlying Currency Pair and the Observation Period according to your need and the Bank will set the
Trading Range bull During the whole Observation Period the Bank will compare the exchange rate of the Underlying Currency Pair with the Trading Range
If the exchange rate of the Underlying Currency Pair moves along with your anticipation and stays within the Trading Range during the whole Observation Period you will receive Guaranteed Principal and Potential Return If the exchange rate of the Underlying Currency Pair moves against your anticipation and at anytime during the Observation Period the exchange rate of the Underlying Currency Pair is outside the Trading Range you will receive Guaranteed Principal and Minimum Return (if any)
bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency Minimum return applies to certain investment tranches only you should refer to the relevant termsheet for details
Page 21 of 67
What are the key risks of Currency-Linked Capital Protected Investment Deposit Earnings on Currency-Linked Capital Protected Investment Deposit are limited to the Return Coupon (if any) payable You should consider the following risks and read all other information contained in the relevant Termsheet and Terms and Conditions before making any investment decision Not a time deposit Currency-Linked Capital Protected Investment Deposit 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 Capital Protected Investment Deposit is embedded with FX options Option transactions involve risks even when buying an option The optionrsquos value might become worthless if the market moves against your expectation Limited potential gain The maximum potential gain is limited to the pre-agreed ReturnCoupon calculated at the Potential ReturnCoupon Rate Not the same as buying the Underlying Currency Pair Investing in Currency-Linked Capital Protected Investment Deposit is not the same as buying the Underlying Currency Pair directly Market risk The investment return of Currency-Linked Capital Protected Investment Deposit is linked to the exchange rate of the Underlying Currency Pair Movements in exchange rates can be unpredictable sudden and drastic and affected by complex political and economic factors Liquidity risk Currency-Linked Capital Protected Investment Deposit is designed to be held till maturity The Bank may at its absolute discretion refuse to consent to any withdrawaltermination request before maturity Credit risk of the Bank Currency-Linked Capital Protected Investment Deposit is not secured by any collateral When you invest in Currency-Linked Capital Protected Investment Deposit you will be relying on the Bankrsquos creditworthiness If the Bank becomes insolvent or defaults on its obligations under a Currency-Linked Capital Protected Investment Deposit you can only claim as an unsecured creditor of the Bank In the worst case you could suffer a total loss of your investment amount Currency risk Exchange rate fluctuates and sometimes drastically If the Deposit Currency used for investment is not the home currency customarily used by you and thus conversion is required you should note that you may make a gain or suffer a loss due to exchange rate fluctuations When the deposit currency depreciates the loss from depreciation may set-off or even exceed the ReturnCoupon (if any) that you may receive from investing in the Currency-Linked Capital Protected Investment Deposit Risk of adjustments or early termination by the Bank Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank this might have a negative impact on the ReturnCoupon (if any) of the Currency-Linked Capital Protected Investment Deposit Concentration Risks You should avoid excessive investment (in terms of its proportion of the overall portfolio) in any single type of investment so as to avoid the investment portfolio being over-exposed to any particular investment risk ReturnCoupon of Currency-Linked Capital Protected Investment Deposit In order to provide capital protection the investment strategy adopted for Currency-Linked Capital Protected Investment Deposit may lead to a dilution of performance when compared to non-capital protected products investing in similar markets You should be prepared to take the risks of earning a lower ReturnCoupon (if any) on the capital invested and losing the interest that might otherwise earned on money invested by way of deposits For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) periodic Coupon may be payable to you For other types of Currency-Linked Capital Protected Investment Deposit no periodic ReturnCoupon will be payable to you prior to maturity Principal protection at maturity only You should understand that the Principal of the Currency-Linked Capital Protected Investment Deposit is capital-protected only when it is held to maturity If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the amount received by you upon early withdrawaltermination may be less than the amount initially invested by you Market Risks associated with Potential ReturnCoupon Apart from the ReturnCoupon calculated at the Minimum ReturnCoupon Rate (which may be set at zero) there is no guarantee of any ReturnCoupon calculated at the Potential ReturnCoupon Rate For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) Coupon (if any) is payable only if the Currency-Linked Capital Protected Investment Deposit is held till the relevant Coupon Distribution Dates ReturnCoupon (if any) of Currency-Linked Capital Protected Investment Deposit depends on the market conditions at the time of the relevant determination Investment return on foreign exchange-linked products are dependent on the prices of inter-banksrsquo transactions on the linked exchange rate in the foreign exchange markets You should be fully aware of the risks relating to fluctuations in the linked exchange rates Factors affecting the performance of foreign exchange markets are numerous including but are not limited to changes in global and local investment sentiments interest rate policies fund flows political environment economic environment business and social conditions in the local marketplace If the market trend is different from the view taken by you there is an inherent risk that the total investment return that you may receive from Currency-Linked Capital Protected Investment Deposit will be less than the interest that would have been payable on a time deposit for the same tenor There is also an inherent risk that no ReturnCoupon calculated at the Potential ReturnCoupon Rate will be payable to you in respect of the Currency-Linked Capital Protected Investment Deposit
Page 22 of 67
Early WithdrawalTermination Risks Early withdrawaltermination by you is not allowed for Currency-Linked Capital Protected Investment Deposit and the capital of you will be invested in the Currency-Linked Capital Protected Investment Deposit for the entire investment period The Bank may at its absolute discretion refuse to give consent to any early withdrawaltermination request If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the Bank shall be entitled to deduct from the Principal of the relevant Currency-Linked Capital Protected Investment Deposit andor any other amount which may have accrued to you any expenses costs or damages to the Bank Damages may include any costs expenses liability or losses to the Bank as a result of the early withdrawaltermination by you Therefore there is no guarantee that you will be able to receive the Principal and the amount payable to you at early withdrawaltermination may be less than the Principal initially invested Besides If the Currency-Linked Capital Protected Investment Deposit is early withdrawnterminated you will no longer be entitled to any ReturnCoupon of the Currency-Linked Capital Protected Investment Deposit Risks associated with unsuccessful subscriptions of Currency-Linked Capital Protected Investment Deposit The Bank reserves the absolute right to approve any application and to decline any application received (whether in whole or any part thereof) before the Deposit Start Date In the event of non-acceptance a notification will be sent by the Bank and any subscription funds received will be returned to you after the Deposit Start Date or as soon as practicable Risks relating to Renminbi If Currency-Linked Capital Protected Investment Deposit involves CNY the relevant exchange rate(s) or level(s) of the relevant currency pair will be quoted in offshore Renminbi against alternate currency While both onshore Renminbi and offshore Renminbi are the same currency they are traded in different and separate markets operating under different regulations and independent liquidity pool Onshore Renminbi and offshore Renminbi are currently quoted in different markets with different exchange rates whereby their exchange rate movements may not be in the same direction or magnitude The offshore Renminbi exchange rate may deviate significantly from the onshore Renminbi exchange rate You should also note that Renminbi is currently not freely convertible the value of Renminbi against other foreign currencies fluctuates and will be affected by amongst other things the PRC governmentrsquos control (for example the PRC government regulates conversion between Renminbi and foreign currencies) which may adversely affect your investment return under the Currency-Linked Capital Protected Investment Deposit when you convert CNY into your home currency Renminbi is subject to foreign exchange control by the PRC government and thus investors investing in Currency-Linked Investment Deposit involving Renminbi are subject to the currency risk of Renminbi
What are the key features bull This product is designed for you whose investment objective is capital protection or to obtain potential cash income bull This product is embedded with options You will buy option(s) on the Linked Currency Pair bull 100 principal protection if this product is held to maturity bull You can choose the Deposit Currency including HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY and Linked Currency
Pair including AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD and USDCNH bull The Deposit Period of the Currency-Linked Capital Protected Investment Deposit is 2 months or above bull You will have a chance to receive higher potential return depending on the movement of the exchange rate of the Underlying Currency
Pair during the Observation Period bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency bull The Bank pre-sets the Trading Range and Observation Period bull During the whole Observation Period the exchange rate of the Underlying Currency Pair is compared with the Trading Range to
determine the Return at maturity bull Returns (if any) on this product is payable only upon maturity bull This product may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank Please refer
to the section Can you request for early termination before maturity below
Scenario analysis (All figures shown below including the exchange rate of AUDUSD and HKDCNH Potential Return Rate Minimum Return Rate Deposit Period etc are for illustration only You should not rely on the below figures as any indication or guarantee on the expected interest amount of the Currency-Linked Capital Protected Investment Deposit you intend to invest Please refer to the Bank for up-to-date figures) Example 1 ndash American Range (where the Deposit Currency is your home currency) Assuming HKD is your home currency and you anticipate the Exchange Rate of AUDUSD will stay above 09850 but below 11150 for the next 6 months and set up an American Range Investment with HKD 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment American Range (AUDUSD) Principal Guarantee 100 Deposit Currency HKD Guaranteed Principal HKD 100000 Deposit Period 6 months Trading Range AUDUSD 09850 (ldquoLower Barrierrdquo) to 11150 (ldquoUpper Barrierrdquo) (excluding both barriers) Potential Return Rate 016 (around 032 pa)
Page 23 of 67
Minimum Return Rate 0015 (around 003 pa) Scenario I Best case scenario At any time during the Observation Period the Exchange Rate of AUDUSD stays within the Trading Range (ie above 09850 but below 11150) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = HKD 100000 x (1+016) = HKD 10016000 (with a gain of 016 of investment amount) Scenario II Worst case scenario At any time during the Observation Period the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 09850 or atabove 11150) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = HKD 100000 x (1+0015) = HKD 10001500
(with a gain of 0015 of investment amount) Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a HKD 100000 6-month Time Deposit on 30 April 2014 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500
Example 2 ndash American Range (where the Deposit Currency is not your home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency and you anticipate the Exchange Rate of AUDUSD will stay above 09850 but below 11150 for the next 6 months and set up an American Range Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment American Range (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trading Range AUDUSD 09850 (ldquoLower Barrierrdquo) to 11150 (ldquoUpper Barrierrdquo) (excluding both barriers) Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH (on deposit start date) 08000 Scenario I Best case scenario At any time during the Observation Period (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD stays within the Trading Range (ie above 09850 but below 11150) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of the road Gain scenario At any time during the Observation Period (assuming the exchange rate of HKDCNH remains unchanged the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 09850 or atabove 11150) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = CNY 100000 x (1+15) = CNY 10150000 (with a gain of 150 of investment amount)
0
Exchange Rate of
AUDUSD le 09850
Potential Return Minimum Return
Return Diagram Return at Maturity
09850 Exchange Rate of AUDUSD during the Observation Period
Minimum Return
09850 lt Exchange Rate of AUDUSD lt 11150
Exchange Rate of
AUDUSD ge 11150
11150
Page 24 of 67
Scenario III Off-setting scenario At any time during the Observation Period the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 09850 or atabove 11150) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD 000 Scenario IV Loss and Worst case scenario At any time during the Observation Period the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 09850 or atabove 11150) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951) In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a CNY 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received would be CNY 10030000
If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Please refer to the table below for details
0
Exchange Rate of
AUDUSD le 09850
Potential Return Minimum Return
Return Diagram
Return at Maturity
09850 Exchange Rate of AUDUSD during the Observation Period
Minimum Return
09850 lt Exchange Rate of AUDUSD lt 11150
Exchange Rate of
AUDUSD ge 11150
11150
Page 25 of 67
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date
The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date
If HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
How can you buy this product bull You can place a Currency-Linked Capital Protected Investment Deposit through our Hang Seng Bank Branches telephone or Hang Seng
Personal or Business e-Banking bull The Bank will provide a choice of different tranches which is subject to market conditions bull Enquiry Hotline Personal 2822 0228 Business 2198 8000
Fees and charges No handling fees or management fees will be charged for Currency-Linked Capital Protected Investment Deposit
Can you request for early termination before maturity No Currency-Linked Capital Protected Investment Deposit may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank which may be granted or withheld in the Bankrsquos sole and absolute discretion on such terms and conditions as the Bank may determine Please refer to ldquoEarly WithdrawalTermination Risksrdquo under ldquoWhat are the key features featuresrisks of Currency-Linked Capital Protected Investment Depositrdquo section for details
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
ix 9999990000 010 010 (12499990) (12499990)
At the beginning of the investment On the Maturity Date of the investment
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Potential Return
Exchange Rate of HKDCNH on the Maturity Date
0
If receiving Minimum Return
Breakeven = 08120^
If receiving Potential Return
Breakeven = 08240
If CNH depreciates drastically relative to HKD
HKDCNH = 9999990000
Exchange Rate on Deposit Start Date
Page 26 of 67
Pre-Investment Cooling-off Period for retail customers Pre-Investment Cooling-off Period (PICOP) is applicable to each particular dealing of this product if you are one of the following retail customer types
(1) An elderly customer aged 65 or above unless you are not a first-time buyer of currency-linked structured investment products AND your asset concentration is below 20 AND you opt out from the PICOP arrangement or
(2) A non-elderly customer who is a first time buyer of currency-linked structured investment products AND your asset concentration
is 20 or above
For the purpose of determining whether PICOP is applicable asset concentration refers to the percentage of total net worth (excluding real estate properties) to be invested in this product
Can the Bank adjust the terms or early terminate this product Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank in certain circumstances Please refer to Clause 7 of the Currency-Linked Capital Protected Investment Deposit Terms and Conditions for details
Offering documents for this product The following documents for this product (ldquoOffering Documentsrdquo) contain detailed information about the Bank and the terms of this product You should read and understand all of the Offering Documents before deciding whether to invest in this product
(i) Currency-Linked Capital Protected Investment Deposit Terms and Conditions (ii) The relevant Currency-Linked Capital Protected Investment Deposit Termsheet (iii) This Currency-Linked Capital Protected Investment Deposit Important Facts Statement
Other information Product Risk Level The Product Risk Level for Currency-Linked Capital Protected Investment Deposit is Low
Low Low-to-Medium Medium Medium-to-High High
Product Risk Level is determined by a number of factors which include the volatility of the currency pair and the tenor of the product The Product Risk Level is subject to the Banks periodic review and may change from time to time Please refer to our branch or our Customer Service Hotline on 2822 0228 for the latest detail Declaration and Remarks bull This Important Facts Statement is not intended to provide or regard as legal or taxation advice or investment recommendations If you
have any concerns about this product or are uncertain about the suitability of this product for you you should obtain independent professional advice
bull The liabilities of the Bank in respect of the Currency-Linked Capital Protected Investment Deposit are limited exclusively to an office of the Bank in Hong Kong and instructions in respect of the Currency-Linked Capital Protected Investment Deposit may only be made to and acted upon by such office Any amount relating to the Currency-Linked Capital Protected Investment Deposit is payable exclusively by an office of the Bank in Hong Kong and in its stated currency The Terms and Conditions of the Currency-Linked Capital Protected Investment Deposit are governed by and shall be construed in accordance with the laws of Hong Kong
bull You may contact our staff if you have any feedback or complaint in relation to our services or call our hotline at 2822 0228 We will respond to you within a reasonable period of time normally not exceeding 30 days in general circumstances You may contact the Hong Kong Monetary Authority at 55th Floor Two International Finance Centre 8 Finance Street Central Hong Kong if you are not satisfied with our handling of your complaint
bull Hang Seng Bank Limited is a Registered Licensed Bank under the Banking Ordinance bull All Currency-Linked Capital Protected Investment Deposit cannot be cancelled after subscription bull The Bank will act as principal to complete the transaction and may obtain certain monetary benefits in connection with the offering of
this Currency-Linked Capital Protected Investment Deposit to the public The current remuneration system that the Bank adopts for sales staff is a measurement of the staffrsquos overall performance and not just based on sales amount
bull The Bank is NOT an independent intermediary because The Bank receives fees commissions or other monetary benefits from other parties in relation to the Bankrsquos distribution of Currency-Linked Capital Protected Investment Deposit to you For details you should refer to the Bankrsquos disclosure on monetary benefits which the Bank is required to deliver to you prior to or at the point of entering into any transaction in Currency-Linked Capital Protected Investment Deposit
bull Please note that this product is not available for persons who are located within the United States are nationals of the United States and are US Persons within the meaning of Regulation S under the Securities Act (which includes any person resident in the United States and any partnership or corporation organised or incorporated under the laws of the United States)
bull 請注意本行不提供本產品予身處美國的人士美國公民及美籍人士(定義見證券法 S 條例)(包括居住在美國之任何人士及根據美國法例組
成或註冊成立之任何合夥企業或公司)
Page 34 of 67
Currency-Linked Capital Protected Investment Deposit
European (Bullish Bearish) Investment
Dated May 2018
Important Facts Statement
This is a structured investment product which is NOT protected by the Deposit Protection Scheme in Hong Kong
The contents of this statement have not been reviewed by any regulatory authority in Hong Kong You are advised to exercise caution before investing in this product This statement is a part of the offering documents for this product You should not invest in this product based on this statement alone If you are in any doubt you should obtain independent professional advice
If English is not your preferred language you may request for the Chinese version of this statement from our sales staff 倘若英文並
非閣下屬意的語言閣下可向本行的銷售人員索取本概要的中文版本
This is a structured investment product involving derivatives The investment decision is yours but you should not invest in this product 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
Quick facts
Bank Hang Seng Bank Limited
Product Type Currency-Linked Investment Deposit ndash European Bullish Bearish Investment (ldquothis productrdquo)
Minimum Investment Amount Subscription through branches - HKD 100000 (or its equivalent) Subscription through e-banking - HKD 50000 (or its equivalent)
Tenor 2 months or above or any other tenor as agreed between you and the Bank
Available Principal Currency (or Deposit Currency) HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY
Available Underlying Currency Pair AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD USDCNH and any other currency pairs as agreed between you and the Bank
Return Rate Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Deposit periodpayment date Deposit period refers to tenor of the product and return is payable only on Maturity Date
Principal protection at maturity Yes
Callable by the Bank No
Early termination right by customer No please refer to ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section ndash Early WithdrawalTermination Risks for details
Embedded derivatives Yes you will buy option(s) over the Underlying Currency Pair
Maximum potential gain Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Maximum potential loss Please refer to Scenarios II and III of Example 1 and 2 and Scenarios IV and V of Example 3 and 4 in ldquoScenario analysisrdquo section of this product type for details
What is this product and how does it work bull European Bullish Bearish investment is one type of our Currency-Linked Capital Protected Investment Deposit which consists of a time
deposit (in Deposit Currency) and buying option(s) on the Underlying Currency Pair of your choice bull You choose the Deposit Currency Underlying Currency Pair according to your need and the Bank will set the Trigger Level bull On the Final Exchange Rate Determination Date the Bank will compare the exchange rate of the Underlying Currency Pair with the Trigger
Level If the exchange rate of the Underlying Currency Pair moves along with your anticipation you will receive Guaranteed Principal and Potential Return If the exchange rate of the Underlying Currency Pair moves against your anticipation you will receive Guaranteed Principal and Minimum Return (if any)
bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency Minimum return applies to certain investment tranches only you should refer to the relevant termsheet for details
Page 35 of 67
What are the key risks of Currency-Linked Capital Protected Investment Deposit Earnings on Currency-Linked Capital Protected Investment Deposit are limited to the Return Coupon (if any) payable You should consider the following risks and read all other information contained in the relevant Termsheet and Terms and Conditions before making any investment decision Not a time deposit Currency-Linked Capital Protected Investment Deposit 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 Capital Protected Investment Deposit is embedded with FX options Option transactions involve risks even when buying an option The optionrsquos value might become worthless if the market moves against your expectation Limited potential gain The maximum potential gain is limited to the pre-agreed ReturnCoupon calculated at the Potential ReturnCoupon Rate Not the same as buying the Underlying Currency Pair Investing in Currency-Linked Capital Protected Investment Deposit is not the same as buying the Underlying Currency Pair directly Market risk The investment return of Currency-Linked Capital Protected Investment Deposit is linked to the exchange rate of the Underlying Currency Pair Movements in exchange rates can be unpredictable sudden and drastic and affected by complex political and economic factors Liquidity risk Currency-Linked Capital Protected Investment Deposit is designed to be held till maturity The Bank may at its absolute discretion refuse to consent to any withdrawaltermination request before maturity Credit risk of the Bank Currency-Linked Capital Protected Investment Deposit is not secured by any collateral When you invest in Currency-Linked Capital Protected Investment Deposit you will be relying on the Bankrsquos creditworthiness If the Bank becomes insolvent or defaults on its obligations under a Currency-Linked Capital Protected Investment Deposit you can only claim as an unsecured creditor of the Bank In the worst case you could suffer a total loss of your investment amount Currency risk Exchange rate fluctuates and sometimes drastically If the Deposit Currency used for investment is not the home currency customarily used by you and thus conversion is required you should note that you may make a gain or suffer a loss due to exchange rate fluctuations When the deposit currency depreciates the loss from depreciation may set-off or even exceed the ReturnCoupon (if any) that you may receive from investing in the Currency-Linked Capital Protected Investment Deposit Risk of adjustments or early termination by the Bank Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank this might have a negative impact on the ReturnCoupon (if any) of the Currency-Linked Capital Protected Investment Deposit Concentration Risks You should avoid excessive investment (in terms of its proportion of the overall portfolio) in any single type of investment so as to avoid the investment portfolio being over-exposed to any particular investment risk ReturnCoupon of Currency-Linked Capital Protected Investment Deposit In order to provide capital protection the investment strategy adopted for Currency-Linked Capital Protected Investment Deposit may lead to a dilution of performance when compared to non-capital protected products investing in similar markets You should be prepared to take the risks of earning a lower ReturnCoupon (if any) on the capital invested and losing the interest that might otherwise earned on money invested by way of deposits For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) periodic Coupon may be payable to you For other types of Currency-Linked Capital Protected Investment Deposit no periodic ReturnCoupon will be payable to you prior to maturity Principal protection at maturity only You should understand that the Principal of the Currency-Linked Capital Protected Investment Deposit is capital-protected only when it is held to maturity If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the amount received by you upon early withdrawaltermination may be less than the amount initially invested by you Market Risks associated with Potential ReturnCoupon Apart from the ReturnCoupon calculated at the Minimum ReturnCoupon Rate (which may be set at zero) there is no guarantee of any ReturnCoupon calculated at the Potential ReturnCoupon Rate For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) Coupon (if any) is payable only if the Currency-Linked Capital Protected Investment Deposit is held till the relevant Coupon Distribution Dates ReturnCoupon (if any) of Currency-Linked Capital Protected Investment Deposit depends on the market conditions at the time of the relevant determination Investment return on foreign exchange-linked products are dependent on the prices of inter-banksrsquo transactions on the linked exchange rate in the foreign exchange markets You should be fully aware of the risks relating to fluctuations in the linked exchange rates Factors affecting the performance of foreign exchange markets are numerous including but are not limited to changes in global and local investment sentiments interest rate policies fund flows political environment economic environment business and social conditions in the local marketplace If the market trend is different from the view taken by you there is an inherent risk that the total investment return that you may receive from Currency-Linked Capital Protected Investment Deposit will be less than the interest that would have been payable on a time deposit for the same tenor There is also an inherent risk that no ReturnCoupon calculated at the Potential ReturnCoupon Rate will be payable to you in respect of the Currency-Linked Capital Protected Investment Deposit Early WithdrawalTermination Risks Early withdrawaltermination by you is not allowed for Currency-Linked Capital Protected Investment Deposit and the capital of you will be invested in the Currency-Linked Capital Protected Investment Deposit for the entire investment period The Bank may at its absolute discretion refuse to give consent to any early withdrawaltermination request If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the Bank shall be entitled to deduct from the Principal of the relevant Currency-Linked Capital Protected Investment Deposit andor any other amount which may have accrued to you any expenses costs or damages to the Bank Damages may include any costs expenses liability or losses to the Bank as a result of the early withdrawaltermination by you Therefore there is no guarantee that you will be able to receive the Principal and the amount payable to you at early withdrawaltermination may be less
Page 36 of 67
than the Principal initially invested Besides If the Currency-Linked Capital Protected Investment Deposit is early withdrawnterminated you will no longer be entitled to any ReturnCoupon of the Currency-Linked Capital Protected Investment Deposit Risks associated with unsuccessful subscriptions of Currency-Linked Capital Protected Investment Deposit The Bank reserves the absolute right to approve any application and to decline any application received (whether in whole or any part thereof) before the Deposit Start Date In the event of non-acceptance a notification will be sent by the Bank and any subscription funds received will be returned to you after the Deposit Start Date or as soon as practicable Risks relating to Renminbi If Currency-Linked Capital Protected Investment Deposit involves CNY the relevant exchange rate(s) or level(s) of the relevant currency pair will be quoted in offshore Renminbi against alternate currency While both onshore Renminbi and offshore Renminbi are the same currency they are traded in different and separate markets operating under different regulations and independent liquidity pool Onshore Renminbi and offshore Renminbi are currently quoted in different markets with different exchange rates whereby their exchange rate movements may not be in the same direction or magnitude The offshore Renminbi exchange rate may deviate significantly from the onshore Renminbi exchange rate You should also note that Renminbi is currently not freely convertible the value of Renminbi against other foreign currencies fluctuates and will be affected by amongst other things the PRC governmentrsquos control (for example the PRC government regulates conversion between Renminbi and foreign currencies) which may adversely affect your investment return under the Currency-Linked Capital Protected Investment Deposit when you convert CNY into your home currency Renminbi is subject to foreign exchange control by the PRC government and thus investors investing in Currency-Linked Investment Deposit involving Renminbi are subject to the currency risk of Renminbi
What are the key features bull This product is designed for you whose investment objective is capital protection or to obtain potential cash income
bull This product is embedded with options You will buy option(s) on the Linked Currency Pair bull 100 principal protection if the Currency-Linked Capital Protected Investment Deposit is held to maturity bull You can choose the Deposit Currency including HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY and Linked Currency Pair
including AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD and USDCNH bull The Deposit Period of this product is 2 months or above bull You will have a chance to receive higher potential return depending on the movement of the exchange rate of the Underlying Currency Pair bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency bull The Bank pre-sets the Trigger Level and you choose a bullish or bearish view on different currencies bull On the Final Exchange Rate Determination Date the exchange rate of the Underlying Currency Pair is compared with the Trigger Level to
determine the Return at maturity bull Returns (if any) on this product is payable only upon maturity bull This product may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank Please refer to
the section Can you request for early termination before maturity below
Scenario analysis (All figures shown below including the exchange rate of AUDUSD and HKDCNH Potential Return Rate Minimum Return Rate Deposit Period etc are for illustration only You should not rely on the below figures as any indication or guarantee on the expected interest amount of the Currency-Linked Capital Protected Investment Deposit you intend to invest Please refer to the Bank for up-to-date figures) Example 1 ndash European Bullish (where the Deposit Currency is your home currency) Assuming HKD is your home currency and you take a bullish view on Australian Dollar expect the exchange rate of AUDUSD will rise from 09400 to 09800 or above after the 6-month period and set up an European Bullish Investment with HKD 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Bullish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency HKD Guaranteed Principal HKD 100000 Deposit Period 6 months Trigger Level AUDUSD 09800 Potential Return Rate 016 (around 032 pa) Minimum Return Rate 0015 (around 003 pa) Scenario I Best case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is at or above the Trigger Level (ie at or above 09800) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = HKD 100000 x (1+016) = HKD 10016000 (with a gain of 016 of investment amount) Scenario II Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is below the Trigger Level (ie below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity
Page 37 of 67
Total Return at Maturity = HKD 100000 x (1+0015) = HKD 10001500 (with a gain of 0015 of investment amount) Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount
For reference only if you set up a HKD 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500
Example 2 ndash European Bearish (where the Deposit Currency is your home currency) Assuming HKD is your home currency and you take a bearish view on Australian Dollar expect the exchange rate of AUDUSD will drop from 09400 to 09000 or below after the 6-month period and set up an European Bearish Investment with HKD 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Bearish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency HKD Guaranteed Principal HKD 100000 Deposit Period 6 months Trigger Level AUDUSD 09000 Potential Return Rate 016 (around 032 pa) Minimum Return Rate 0015 (around 003 pa) Scenario I Best case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is at or below the Trigger Level (ie at or below 09000) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = HKD 100000 x (1+016) = HKD 10016000 (with a gain of 016 of investment amount) Scenario II Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is above the Trigger Level (ie above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = HKD 100000 x (1+0015) = HKD 10001500 (with a gain of 0015 of investment amount) Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount
0
Final Exchange Rate of AUDUSD lt Trigger Level
Potential Return Minimum Return
Return Diagram Return at Maturity
09800 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Final Exchange Rate of AUDUSD ge Trigger Level
Trigger Level = 09800
Page 38 of 67
For reference only if you set up a HKD 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500 Example 3 ndash European Bullish (where the Deposit Currency is not home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency you take a bullish view on Australian Dollar expect the exchange rate of AUDUSD will rise from 09400 to 09800 or above after the 6-month period and set up an European Bullish Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Bullish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trigger Level AUDUSD 09800 Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH on deposit start date 08000 Scenario I Best case scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is at or above the Trigger Level (ie at or above 09800) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of-the road Gain scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is below the Trigger Level (ie below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Scenario III Off-setting scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is below the Trigger Level (ie below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD 000
0
Final Exchange Rate of AUDUSD
le Trigger Level
Potential Return Minimum Return
Return Diagram
Return at Maturity
09000 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Final Exchange Rate of AUDUSD gt Trigger Level
Trigger Level = 09000
Page 39 of 67
Scenario IV Loss and Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is below the Trigger Level (ie below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 101500 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951) In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount
For reference only if you set up a CNY 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received at maturity would be CNY 10030000 If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Please refer to the table below for details
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
viiii 9999990000 010 010 (12499990) (12499990)
103000 101500 12500000 10000008000
At the beginning of the investment On the Maturity Date of the investment
Exchange
Rate of
HKDCNH
Initial
Investment
Amount in
Renminbi
Initial
Investment
Amount in
HKD
Exchange Rate
of HKDCNH
Total Return in
Renminbi
Total Return in
HKD
Gain (loss) in HKD if converting the
Total Return from Renminbi to home
currency (HKD)
0
Final Exchange Rate of AUDUSD lt Trigger Level
Potential Return Minimum Return
Return Diagram
Return at Maturity
09800 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Final Exchange Rate of AUDUSD ge Trigger Level
Trigger Level = 09800
Page 40 of 67
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date
The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date
If HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
Example 4 ndash European Bearish (where the Deposit Currency is not home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency you take a bearish view on Australian Dollar expect the exchange rate of AUDUSD will drop from 09400 to 09000 or below after the 6-month period and set up an European Bearish Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Bearish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trigger Level AUDUSD 09000 Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH at the time of investment 08000 Scenario I Best case scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is at or below the Trigger Level (ie at or below 09000) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of-the road Gain scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is above the Trigger Level (ie above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Scenario III Off-setting scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is above the Trigger Level (ie above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Exchange Rate of HKDCNH on the Maturity Date
0
If receiving Minimum Return
Breakeven = 08120^
If receiving Potential Return
Breakeven = 08240
Exchange Rate on Deposit Start Date
Potential Return
Minimum Return
If CNH depreciates drastically relative to HKD
HKDCNH = 9999990000
Page 41 of 67
= HKD 12500000 Gain(Loss) in home currency HKD 000 Scenario IV Loss and Worst Case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is above the Trigger Level (ie above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951) In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount
For reference only if you set up a CNY 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received at maturity would be CNY 10030000 If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Please refer to the table below for details
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
viiii 9999990000 010 010 (12499990) (12499990)
103000 101500 12500000 10000008000
At the beginning of the investment On the Maturity Date of the investment
Exchange
Rate of
HKDCNH
Initial
Investment
Amount in
Renminbi
Initial
Investment
Amount in
HKD
Exchange Rate
of HKDCNH
Total Return in
Renminbi
Total Return in
HKD
Gain (loss) in HKD if converting the
Total Return from Renminbi to home
currency (HKD)
0
Final Exchange Rate of AUDUSD le Trigger Level
Potential Return Minimum Return
Return Diagram Return at Maturity
09000 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Final Exchange Rate of AUDUSD gt Trigger Level
Trigger Level = 09000
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Page 42 of 67
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date
The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date
If HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
How can you buy this product bull You can place a Currency-Linked Capital Protected Investment Deposit through our Hang Seng Bank Branches telephone or Hang Seng
Personal or Business e-Banking bull The Bank will provide a choice of different tranches which is subject to market conditions bull Enquiry Hotline Personal 2822 0228 Business 2198 8000
Fees and charges No handling fees or management fees will be charged for Currency-Linked Capital Protected Investment Deposit
Can you request for early termination before maturity No Currency-Linked Capital Protected Investment Deposit may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank which may be granted or withheld in the Bankrsquos sole and absolute discretion on such terms and conditions as the Bank may determine Please refer to ldquoEarly WithdrawalTermination Risksrdquo under ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section for details
Pre-Investment Cooling-off Period for retail customers Pre-Investment Cooling-off Period (PICOP) is applicable to each particular dealing of this product if you are one of the following retail customer types
(1) An elderly customer aged 65 or above unless you are not a first-time buyer of currency-linked structured investment products AND your asset concentration is below 20 AND you opt out from the PICOP arrangement or
(2) A non-elderly customer who is a first time buyer of currency-linked structured investment products AND your asset concentration is
20 or above
For the purpose of determining whether PICOP is applicable asset concentration refers to the percentage of total net worth (excluding real estate properties) to be invested in this product
Can the Bank adjust the terms or early terminate this product Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank in certain circumstances Please refer to Clause 7 of the Currency-Linked Capital Protected Investment Deposit Terms and Conditions for details
Offering documents for this product The following documents for this product (ldquoOffering Documentsrdquo) contain detailed information about the Bank and the terms of this product You should read and understand all of the Offering Documents before deciding whether to invest in this product
(i) Currency-Linked Capital Protected Investment Deposit Terms and Conditions (ii) The relevant Currency-Linked Capital Protected Investment Deposit Termsheet (iii) This Currency-Linked Capital Protected Investment Deposit Important Facts Statement
Product Risk Level The Product Risk Level for Currency-Linked Capital Protected Investment Deposit is Low
Low Low-to-Medium Medium Medium-to-High High
Product Risk Level is determined by a number of factors which include the volatility of the currency pair and the tenor of the product The Product Risk Level is subject to the Banks periodic review and may change from time to time Please refer to our branch or our Customer Service Hotline on 2822 0228 for the latest detail Declaration and Remarks bull This Important Facts Statement is not intended to provide or regard as legal or taxation advice or investment recommendations If you have
any concerns about this product or are uncertain about the suitability of this product for you you should obtain independent professional advice
bull The liabilities of the Bank in respect of the Currency-Linked Capital Protected Investment Deposit are limited exclusively to an office of the Bank in Hong Kong and instructions in respect of the Currency-Linked Capital Protected Investment Deposit may only be made to and acted upon by such office Any amount relating to the Currency-Linked Capital Protected Investment Deposit is payable exclusively by an office of the Bank in Hong Kong and in its stated currency The Terms and Conditions of the Currency-Linked Capital Protected Investment Deposit are governed by and shall be construed in accordance with the laws of Hong Kong
bull You may contact our staff if you have any feedback or complaint in relation to our services or call our hotline at 2822 0228 We will respond to you within a reasonable period of time normally not exceeding 30 days in general circumstances You may contact the Hong Kong Monetary Authority at 55th Floor Two International Finance Centre 8 Finance Street Central Hong Kong if you are not satisfied with our handling of your complaint
bull Hang Seng Bank Limited is a Registered Licensed Bank under the Banking Ordinance bull All Currency-Linked Capital Protected Investment Deposit cannot be cancelled after subscription bull The Bank will act as principal to complete the transaction and may obtain certain monetary benefits in connection with the offering of this
Currency-Linked Capital Protected Investment Deposit to the public The current remuneration system that the Bank adopts for sales staff is a measurement of the staffrsquos overall performance and not just based on sales amount
bull The Bank is NOT an independent intermediary because The Bank receives fees commissions or other monetary benefits from other parties in relation to the Bankrsquos distribution of Currency-Linked Capital Protected Investment Deposit to you For details you should refer to the Bankrsquos disclosure on monetary benefits which the Bank is required to deliver to you prior to or at the point of entering into any transaction in Currency-Linked Capital Protected Investment Deposit
bull Please note that this product is not available for persons who are located within the United States are nationals of the United States and are US Persons within the meaning of Regulation S under the Securities Act (which includes any person resident in the United States and any partnership or corporation organised or incorporated under the laws of the United States)
bull 請注意本行不提供本產品予身處美國的人士美國公民及美籍人士(定義見證券法 S 條例)(包括居住在美國之任何人士及根據美國法例組成
或註冊成立之任何合夥企業或公司)
Page 53 of 67
Currency-Linked Capital Protected Investment Deposit
European Range Investment
Dated May 2018
Important Facts Statement
This is a structured investment product which is NOT protected by the Deposit
Protection Scheme in Hong Kong
The contents of this statement have not been reviewed by any regulatory authority in Hong Kong You are advised to exercise caution before investing in this product This statement is a part of the offering documents for this product You should not invest in this product based on this statement alone If you are in any doubt you should obtain independent professional advice
If English is not your preferred language you may request for the Chinese version of this statement from our sales staff 倘若英
文並非閣下屬意的語言閣下可向本行的銷售人員索取本概要的中文版本
This is a structured investment product involving derivatives The investment decision is yours but you should not invest in this product 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
Quick facts Bank Hang Seng Bank Limited
Product Type Currency-Linked Investment Deposit ndash European Range Investment (ldquothis productrdquo)
Minimum Investment Amount Subscription through branches - HKD 100000 (or its equivalent) Subscription through e-banking - HKD 50000 (or its equivalent)
Tenor 2 months or above or any other tenor as agreed between you and the Bank
Available Principal Currency (or Deposit Currency) HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY
Available Underlying Currency Pair AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD USDCNH and any other currency pairs as agreed between you and the Bank
Return Rate Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Deposit periodpayment date Deposit period refers to tenor of the product and return is payable only on Maturity Date
Principal protection at maturity Yes
Callable by the Bank No
Early termination right by customer No please refer to ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section ndash Early WithdrawalTermination Risks for details
Embedded derivatives Yes you will buy option(s) over the Underlying Currency Pair
Maximum potential gain Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Maximum potential loss Please refer to Scenarios II and III of Example 1 and Scenarios IV and V of Example 2 in the ldquoScenario analysisrdquo section of this product type for details
What is this product and how does it work bull European Range investment is one type of our Currency-Linked Capital Protected Investment Deposit which consists of a time deposit
(in Deposit Currency) and buying option(s) on the Underlying Currency Pair of your choice bull You choose the Deposit Currency Underlying Currency Pair according to your need and the Bank will set the Trading Range bull On the Final Exchange Rate Determination Date the Bank will compare the exchange rate of the Underlying Currency Pair with the
Trading Range If the exchange rate of the Underlying Currency Pair moves along with your anticipation and is within the Trading Range you will receive Guaranteed Principal and Potential Return If the exchange rate of the Underlying Currency Pair moves against your anticipation and is outside the Trading Range you will receive Guaranteed Principal and Minimum Return (if any)
bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency Minimum return applies to certain investment tranches only you should refer to the relevant termsheet for details
Page 54 of 67
What are the key risks of Currency-Linked Capital Protected Investment Deposit Earnings on Currency-Linked Capital Protected Investment Deposit are limited to the Return Coupon (if any) payable You should consider the following risks and read all other information contained in the relevant Termsheet and Terms and Conditions before making any investment decision Not a time deposit Currency-Linked Capital Protected Investment Deposit 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 Capital Protected Investment Deposit is embedded with FX options Option transactions involve risks even when buying an option The optionrsquos value might become worthless if the market moves against your expectation Limited potential gain The maximum potential gain is limited to the pre-agreed ReturnCoupon calculated at the Potential ReturnCoupon Rate Not the same as buying the Underlying Currency Pair Investing in Currency-Linked Capital Protected Investment Deposit is not the same as buying the Underlying Currency Pair directly Market risk The investment return of Currency-Linked Capital Protected Investment Deposit is linked to the exchange rate of the Underlying Currency Pair Movements in exchange rates can be unpredictable sudden and drastic and affected by complex political and economic factors Liquidity risk Currency-Linked Capital Protected Investment Deposit is designed to be held till maturity The Bank may at its absolute discretion refuse to consent to any withdrawaltermination request before maturity Credit risk of the Bank Currency-Linked Capital Protected Investment Deposit is not secured by any collateral When you invest in Currency-Linked Capital Protected Investment Deposit you will be relying on the Bankrsquos creditworthiness If the Bank becomes insolvent or defaults on its obligations under a Currency-Linked Capital Protected Investment Deposit you can only claim as an unsecured creditor of the Bank In the worst case you could suffer a total loss of your investment amount Currency risk Exchange rate fluctuates and sometimes drastically If the Deposit Currency used for investment is not the home currency customarily used by you and thus conversion is required you should note that you may make a gain or suffer a loss due to exchange rate fluctuations When the deposit currency depreciates the loss from depreciation may set-off or even exceed the ReturnCoupon (if any) that you may receive from investing in the Currency-Linked Capital Protected Investment Deposit Risk of adjustments or early termination by the Bank Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank this might have a negative impact on the ReturnCoupon (if any) of the Currency-Linked Capital Protected Investment Deposit Concentration Risks You should avoid excessive investment (in terms of its proportion of the overall portfolio) in any single type of investment so as to avoid the investment portfolio being over-exposed to any particular investment risk ReturnCoupon of Currency-Linked Capital Protected Investment Deposit In order to provide capital protection the investment strategy adopted for Currency-Linked Capital Protected Investment Deposit may lead to a dilution of performance when compared to non-capital protected products investing in similar markets You should be prepared to take the risks of earning a lower ReturnCoupon (if any) on the capital invested and losing the interest that might otherwise earned on money invested by way of deposits For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) periodic Coupon may be payable to you For other types of Currency-Linked Capital Protected Investment Deposit no periodic ReturnCoupon will be payable to you prior to maturity Principal protection at maturity only You should understand that the Principal of the Currency-Linked Capital Protected Investment Deposit is capital-protected only when it is held to maturity If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the amount received by you upon early withdrawaltermination may be less than the amount initially invested by you Market Risks associated with Potential ReturnCoupon Apart from the ReturnCoupon calculated at the Minimum ReturnCoupon Rate (which may be set at zero) there is no guarantee of any ReturnCoupon calculated at the Potential ReturnCoupon Rate For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) Coupon (if any) is payable only if the Currency-Linked Capital Protected Investment Deposit is held till the relevant Coupon Distribution Dates ReturnCoupon (if any) of Currency-Linked Capital Protected Investment Deposit depends on the market conditions at the time of the relevant determination Investment return on foreign exchange-linked products are dependent on the prices of inter-banksrsquo transactions on the linked exchange rate in the foreign exchange markets You should be fully aware of the risks relating to fluctuations in the linked exchange rates Factors affecting the performance of foreign exchange markets are numerous including but are not limited to changes in global and local investment sentiments interest rate policies fund flows political environment economic environment business and social conditions in the local marketplace If the market trend is different from the view taken by you there is an inherent risk that the total investment return that you may receive from Currency-Linked Capital Protected Investment Deposit will be less than the interest that would have been payable on a time deposit for the same tenor There is also an inherent risk that no ReturnCoupon calculated at the Potential ReturnCoupon Rate will be payable to you in respect of the Currency-Linked Capital Protected Investment Deposit
Page 55 of 67
Early WithdrawalTermination Risks Early withdrawaltermination by you is not allowed for Currency-Linked Capital Protected Investment Deposit and the capital of you will be invested in the Currency-Linked Capital Protected Investment Deposit for the entire investment period The Bank may at its absolute discretion refuse to give consent to any early withdrawaltermination request If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the Bank shall be entitled to deduct from the Principal of the relevant Currency-Linked Capital Protected Investment Deposit andor any other amount which may have accrued to you any expenses costs or damages to the Bank Damages may include any costs expenses liability or losses to the Bank as a result of the early withdrawaltermination by you Therefore there is no guarantee that you will be able to receive the Principal and the amount payable to you at early withdrawaltermination may be less than the Principal initially invested Besides If the Currency-Linked Capital Protected Investment Deposit is early withdrawnterminated you will no longer be entitled to any ReturnCoupon of the Currency-Linked Capital Protected Investment Deposit Risks associated with unsuccessful subscriptions of Currency-Linked Capital Protected Investment Deposit The Bank reserves the absolute right to approve any application and to decline any application received (whether in whole or any part thereof) before the Deposit Start Date In the event of non-acceptance a notification will be sent by the Bank and any subscription funds received will be returned to you after the Deposit Start Date or as soon as practicable Risks relating to Renminbi If Currency-Linked Capital Protected Investment Deposit involves CNY the relevant exchange rate(s) or level(s) of the relevant currency pair will be quoted in offshore Renminbi against alternate currency While both onshore Renminbi and offshore Renminbi are the same currency they are traded in different and separate markets operating under different regulations and independent liquidity pool Onshore Renminbi and offshore Renminbi are currently quoted in different markets with different exchange rates whereby their exchange rate movements may not be in the same direction or magnitude The offshore Renminbi exchange rate may deviate significantly from the onshore Renminbi exchange rate You should also note that Renminbi is currently not freely convertible the value of Renminbi against other foreign currencies fluctuates and will be affected by amongst other things the PRC governmentrsquos control (for example the PRC government regulates conversion between Renminbi and foreign currencies) which may adversely affect your investment return under the Currency-Linked Capital Protected Investment Deposit when you convert CNY into your home currency Renminbi is subject to foreign exchange control by the PRC government and thus investors investing in Currency-Linked Investment Deposit involving Renminbi are subject to the currency risk of Renminbi
What are the key features bull This product is designed for you whose investment objective is capital protection or to obtain potential cash income bull This product is embedded with options You will buy option(s) on the Linked Currency Pair bull 100 principal protection if this product is held to maturity bull You can choose the Deposit Currency including HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY and Linked Currency
Pair including AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD and USDCNH bull The Deposit Period of this product is 2 months or above
bull You will have a chance to receive higher potential return depending on the movement of the exchange rate of the Underlying Currency
Pair bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency bull The Bank pre-sets the Trading Range bull On the Final Exchange Rate Determination Date the exchange rate of the Underlying Currency Pair is compared with the Trading Range
to determine the Return at maturity bull Returns (if any) on this product is payable only upon maturity bull This product may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank Please refer to
the section Can you request for early termination before maturity below
Scenario analysis (All figures shown below including the exchange rate of AUDUSD and HKDCNH Potential Return Rate Minimum Return Rate Deposit Period etc are for illustration only You should not rely on the figures as any indication or guarantee on the expected interest amount of the Currency-Linked Capital Protected Investment Deposit you intend to invest Please refer to the Bank for up-to-date figures) Example 1 ndash European Range (where the Deposit Currency is your home currency) Assuming HKD is your home currency and you anticipate the Exchange Rate of AUDUSD will be above 10250 but below 10750 after 6 months and set up an European Range Investment with HKD 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Range (AUDUSD) Principal Guarantee 100 Deposit Currency HKD Guaranteed Principal HKD 100000 Deposit Period 6 months Trading Range AUDUSD 10250 (ldquoLower Barrierrdquo) to 10750 (ldquoUpper Barrierrdquo) (excluding both barriers) Potential Return Rate 016 (around 032 pa)
Page 56 of 67
Minimum Return Rate 0015 (around 003 pa) Scenario I Best case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is within the Trading Range (ie above 10250 but below 10750) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = HKD 100000 x (1+016) = HKD 10016000 (with a gain of 016 of investment amount) Scenario II Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 10250 or atabove 10750) you will receive Guaranteed Principal and Minimum Return at maturity Total Return at Maturity = HKD 100000 x (1+0015) = HKD 10001500 (with a gain of 0015 of investment amount) Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a HKD 100000 6 month Time Deposit on 30 April 2015 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500 Example 2 ndash European Range (where the Deposit Currency is not your home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency and you anticipate the Exchange Rate of AUDUSD will be above 10250 but below 10750 after 6 months and set up an European Range Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Range (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trading Range AUDUSD 10250 (ldquoLower Barrierrdquo) to 10750 (ldquoUpper Barrierrdquo) (excluding both barriers) Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH (on deposit start date) 08000 Scenario I Best case scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is within the Trading Range (ie above 10250 but below 10750) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of-the road Gain scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 10250 or atabove 10750) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount)
0
Final Exchange Rate of
AUDUSD le10250
Potential Return Minimum Return
Return Diagram
Return at Maturity
10250 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Minimum Return
Final Exchange Rate of
AUDUSD ge 10750
10750
10250lt Final Exchange Rate of AUDUSD lt10750
Page 57 of 67
Scenario III Off-setting scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 10250 or atabove 10750) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD 000 Scenario IV Loss and Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 10250 or atabove 10750) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 101500 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951) In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a CNY 100000 6 month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received at maturity would be CNY 10030000 If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to
0
Final Exchange Rate of
AUDUSD le10250
Potential Return Minimum Return
Return Diagram
Return at Maturity
10250 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Minimum Return
Final Exchange Rate of
AUDUSD ge 10750
10750
10250lt Final Exchange Rate of AUDUSD lt10750
Page 58 of 67
depreciation of Renminbi Please refer to the table below for details
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date
The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date
If HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
How can you buy this product
bull You can place a Currency-Linked Capital Protected Investment Deposit through our Hang Seng Bank Branches telephone or Hang
Seng Personal or Business e-Banking
bull The Bank will provide a choice of different tranches which is subject to market conditions
bull Enquiry Hotline Personal 2822 0228
Business 2198 8000
Fees and charges No handling fees or management fees will be charged for Currency-Linked Capital Protected Investment Deposit
Can you request for early termination before maturity No Currency-Linked Capital Protected Investment Deposit may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank which may be granted or withheld in the Bankrsquos sole and absolute discretion on such terms and conditions as the Bank may determine Please refer to ldquoEarly WithdrawalTermination Risksrdquo under ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section for details
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
ix 9999990000 010 010 (12499990) (12499990)
At the beginning of the investment On the Maturity Date of the investment
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Potential Return
Exchange Rate of HKDCNH on the Maturity Date
0
If receiving Minimum Return
Breakeven = 08120^
If receiving Potential Return
Breakeven = 08240
If CNH depreciates drastically relative to HKD
HKDCNH = 9999990000
Exchange Rate on Deposit Start Date
Page 59 of 67
Pre-Investment Cooling-off Period for retail customers Pre-Investment Cooling-off Period (PICOP) is applicable to each particular dealing of this product if you are one of the following retail customer types
(1) An elderly customer aged 65 or above unless you are not a first-time buyer of currency-linked structured investment products AND your asset concentration is below 20 AND you opt out from the PICOP arrangement or
(2) A non-elderly customer who is a first time buyer of currency-linked structured investment products AND your asset concentration
is 20 or above
For the purpose of determining whether PICOP is applicable asset concentration refers to the percentage of total net worth (excluding real estate properties) to be invested in this product
Can the Bank adjust the terms or early terminate this product Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank in certain circumstances Please refer to Clause 7 of the Currency-Linked Capital Protected Investment Deposit Terms and Conditions for details
Offering documents for this product The following documents for this product (ldquoOffering Documentsrdquo) contain detailed information about the Bank and the terms of this product You should read and understand all of the Offering Documents before deciding whether to invest in this product
(i) Currency-Linked Capital Protected Investment Deposit Terms and Conditions (ii) The relevant Currency-Linked Capital Protected Investment Deposit Termsheet (iii) This Currency-Linked Capital Protected Investment Deposit Important Facts Statement
Other information Product Risk Level The Product Risk Level for Currency-Linked Capital Protected Investment Deposit is Low
Low Low-to-Medium Medium Medium-to-High High
Product Risk Level is determined by a number of factors which include the volatility of the currency pair and the tenor of the product The Product Risk Level is subject to the Banks periodic review and may change from time to time Please refer to our branch or our Customer Service Hotline on 2822 0228 for the latest detail Declaration and Remarks bull This Important Facts Statement is not intended to provide or regard as legal or taxation advice or investment recommendations If you
have any concerns about this product or are uncertain about the suitability of this product for you you should obtain independent professional advice
bull The liabilities of the Bank in respect of the Currency-Linked Capital Protected Investment Deposit are limited exclusively to an office of the Bank in Hong Kong and instructions in respect of the Currency-Linked Capital Protected Investment Deposit may only be made to and acted upon by such office Any amount relating to the Currency-Linked Capital Protected Investment Deposit is payable exclusively by an office of the Bank in Hong Kong and in its stated currency The Terms and Conditions of the Currency-Linked Capital Protected Investment Deposit are governed by and shall be construed in accordance with the laws of Hong Kong
bull You may contact our staff if you have any feedback or complaint in relation to our services or call our hotline at 2822 0228 We will respond to you within a reasonable period of time normally not exceeding 30 days in general circumstances You may contact the Hong Kong Monetary Authority at 55th Floor Two International Finance Centre 8 Finance Street Central Hong Kong if you are not satisfied with our handling of your complaint
bull Hang Seng Bank Limited is a Registered Licensed Bank under the Banking Ordinance bull All Currency-Linked Capital Protected Investment Deposit cannot be cancelled after subscription bull The Bank will act as principal to complete the transaction and may obtain certain monetary benefits in connection with the offering of
this Currency-Linked Capital Protected Investment Deposit to the public The current remuneration system that the Bank adopts for sales staff is a measurement of the staffrsquos overall performance and not just based on sales amount
bull The Bank is NOT an independent intermediary because The Bank receives fees commissions or other monetary benefits from other parties in relation to the Bankrsquos distribution of Currency-Linked Capital Protected Investment Deposit to you For details you should refer to the Bankrsquos disclosure on monetary benefits which the Bank is required to deliver to you prior to or at the point of entering into any transaction in Currency-Linked Capital Protected Investment Deposit
bull Please note that this product is not available for persons who are located within the United States are nationals of the United States and are US Persons within the meaning of Regulation S under the Securities Act (which includes any person resident in the United States and any partnership or corporation organised or incorporated under the laws of the United States)
bull 請注意本行不提供本產品予身處美國的人士美國公民及美籍人士(定義見證券法 S 條例)(包括居住在美國之任何人士及根據美國法例組
成或註冊成立之任何合夥企業或公司)
Page 9 of 67
How can you buy this product bull You can place a Currency-Linked Capital Protected Investment Deposit through our Hang Seng Bank Branches telephone or Hang
Seng Personal or Business e-Banking bull The Bank will provide a choice of different tranches which is subject to market conditions bull Enquiry Hotline Personal 2822 0228 Business 2198 8000
Fees and charges No handling fees or management fees will be charged for Currency-Linked Capital Protected Investment Deposit
Can you request for early termination before maturity No Currency-Linked Capital Protected Investment Deposit may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank which may be granted or withheld in the Bankrsquos sole and absolute discretion on such terms and conditions as the Bank may determine Please refer to ldquoEarly WithdrawalTermination Risksrdquo under ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section for details
Pre-Investment Cooling-off Period for retail customers Pre-Investment Cooling-off Period (PICOP) is applicable to each particular dealing of this product if you are one of the following retail customer types
(1) An elderly customer aged 65 or above unless you are not a first-time buyer of currency-linked structured investment products AND your asset concentration is below 20 AND you opt out from the PICOP arrangement or
(2) A non-elderly customer who is a first time buyer of currency-linked structured investment products AND your asset concentration
is 20 or above
For the purpose of determining whether PICOP is applicable asset concentration refers to the percentage of total net worth (excluding real estate properties) to be invested in this product
Can the Bank adjust the terms or early terminate this product Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank in certain circumstances Please refer to Clause 7 of the Currency-Linked Capital Protected Investment Deposit Terms and Conditions for details
Offering documents for this product The following documents for this product (ldquoOffering Documentsrdquo) contain detailed information about the Bank and the terms of this product You should read and understand all of the Offering Documents before deciding whether to invest in this product
(i) Currency-Linked Capital Protected Investment Deposit Terms and Conditions (ii) The relevant Currency-Linked Capital Protected Investment Deposit Termsheet (iii) This Currency-Linked Capital Protected Investment Deposit Important Facts Statement
Other information Product Risk Level The Product Risk Level for Currency-Linked Capital Protected Investment Deposit is Low
Low Low-to-Medium Medium Medium-to-High High
Product Risk Level is determined by a number of factors which include the volatility of the currency pair and the tenor of the product The Product Risk Level is subject to the Banks periodic review and may change from time to time Please refer to our branch or our Customer Service Hotline on 2822 0228 for the latest detail
Declaration and Remarks bull This Important Facts Statement is not intended to provide or regard as legal or taxation advice or investment recommendations If you
have any concerns about this product or are uncertain about the suitability of this product for you you should obtain independent professional advice
bull The liabilities of the Bank in respect of the Currency-Linked Capital Protected Investment Deposit are limited exclusively to an office of the Bank in Hong Kong and instructions in respect of the Currency-Linked Capital Protected Investment Deposit may only be made to and acted upon by such office Any amount relating to the Currency-Linked Capital Protected Investment Deposit is payable exclusively by an office of the Bank in Hong Kong and in its stated currency The Terms and Conditions of the Currency-Linked Capital Protected Investment Deposit are governed by and shall be construed in accordance with the laws of Hong Kong
bull You may contact our staff if you have any feedback or complaint in relation to our services or call our hotline at 2822 0228 We will respond to you within a reasonable period of time normally not exceeding 30 days in general circumstances You may contact the Hong Kong Monetary Authority at 55th Floor Two International Finance Centre 8 Finance Street Central Hong Kong if you are not satisfied with our handling of your complaint
bull Hang Seng Bank Limited is a Registered Licensed Bank under the Banking Ordinance bull All Currency-Linked Capital Protected Investment Deposit cannot be cancelled after subscription bull The Bank will act as principal to complete the transaction and may obtain certain monetary benefits in connection with the offering of
this Currency-Linked Capital Protected Investment Deposit to the public The current remuneration system that the Bank adopts for
Page 10 of 67
sales staff is a measurement of the staffrsquos overall performance and not just based on sales amount bull The Bank is NOT an independent intermediary because
The Bank receives fees commissions or other monetary benefits from other parties in relation to the Bankrsquos distribution of Currency-Linked Capital Protected Investment Deposit to you For details you should refer to the Bankrsquos disclosure on monetary benefits which the Bank is required to deliver to you prior to or at the point of entering into any transaction in Currency-Linked Capital Protected Investment Deposit
bull Please note that this product is not available for persons who are located within the United States are nationals of the United States and are US Persons within the meaning of Regulation S under the Securities Act (which includes any person resident in the United States and any partnership or corporation organised or incorporated under the laws of the United States)
bull 請注意本行不提供本產品予身處美國的人士美國公民及美籍人士(定義見證券法 S 條例)(包括居住在美國之任何人士及根據美國法例組成
或註冊成立之任何合夥企業或公司)
Page 20 of 67
Currency-Linked Capital Protected Investment Deposit
American Range Investment
Dated May 2018
Important Facts Statement
This is a structured investment product which is NOT protected by the Deposit Protection Scheme in Hong Kong
The contents of this statement have not been reviewed by any regulatory authority in Hong Kong You are advised to exercise caution before investing in this product This statement is a part of the offering documents for this product You should not invest in this product based on this statement alone If you are in any doubt you should obtain independent professional advice
If English is not your preferred language you may request for the Chinese version of this statement from our sales staff 倘若英
文並非閣下屬意的語言閣下可向本行的銷售人員索取本概要的中文版本
This is a structured investment product involving derivatives The investment decision is yours but you should not invest in this product 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
Quick facts Bank Hang Seng Bank Limited
Product Type Currency-Linked Investment Deposit ndash American Range Investment (ldquothis productrdquo)
Minimum Investment Amount Subscription through branches - HKD 100000 (or its equivalent) Subscription through e-banking - HKD 50000 (or its equivalent)
Tenor 2 months or above or any other tenor as agreed between you and the Bank
Available Principal Currency (or Deposit Currency) HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY
Available Underlying Currency Pair AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD USDCNH and any other currency pairs as agreed between you and the Bank
Return Rate Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Deposit periodpayment date Deposit period refers to tenor of the product and return is payable only on Maturity Date
Principal protection at maturity Yes
Callable by the Bank No
Early termination right by customer No please refer to ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section ndash Early WithdrawalTermination Risks for details
Embedded derivatives Yes you will buy option(s) over the Underlying Currency Pair
Maximum potential gain Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Maximum potential loss Please refer to Scenario II amp III of Example 1 and Scenarios IV and V of Example 2 in the ldquoScenario analysisrdquo section of this product type for details
What is this product and how does it work bull American Range investment is one type of our Currency-Linked Capital Protected Investment Deposit which consists of a time deposit
(in Deposit currency) and buying option(s) on the Underlying Currency Pair of your choice bull You choose the Deposit Currency Underlying Currency Pair and the Observation Period according to your need and the Bank will set the
Trading Range bull During the whole Observation Period the Bank will compare the exchange rate of the Underlying Currency Pair with the Trading Range
If the exchange rate of the Underlying Currency Pair moves along with your anticipation and stays within the Trading Range during the whole Observation Period you will receive Guaranteed Principal and Potential Return If the exchange rate of the Underlying Currency Pair moves against your anticipation and at anytime during the Observation Period the exchange rate of the Underlying Currency Pair is outside the Trading Range you will receive Guaranteed Principal and Minimum Return (if any)
bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency Minimum return applies to certain investment tranches only you should refer to the relevant termsheet for details
Page 21 of 67
What are the key risks of Currency-Linked Capital Protected Investment Deposit Earnings on Currency-Linked Capital Protected Investment Deposit are limited to the Return Coupon (if any) payable You should consider the following risks and read all other information contained in the relevant Termsheet and Terms and Conditions before making any investment decision Not a time deposit Currency-Linked Capital Protected Investment Deposit 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 Capital Protected Investment Deposit is embedded with FX options Option transactions involve risks even when buying an option The optionrsquos value might become worthless if the market moves against your expectation Limited potential gain The maximum potential gain is limited to the pre-agreed ReturnCoupon calculated at the Potential ReturnCoupon Rate Not the same as buying the Underlying Currency Pair Investing in Currency-Linked Capital Protected Investment Deposit is not the same as buying the Underlying Currency Pair directly Market risk The investment return of Currency-Linked Capital Protected Investment Deposit is linked to the exchange rate of the Underlying Currency Pair Movements in exchange rates can be unpredictable sudden and drastic and affected by complex political and economic factors Liquidity risk Currency-Linked Capital Protected Investment Deposit is designed to be held till maturity The Bank may at its absolute discretion refuse to consent to any withdrawaltermination request before maturity Credit risk of the Bank Currency-Linked Capital Protected Investment Deposit is not secured by any collateral When you invest in Currency-Linked Capital Protected Investment Deposit you will be relying on the Bankrsquos creditworthiness If the Bank becomes insolvent or defaults on its obligations under a Currency-Linked Capital Protected Investment Deposit you can only claim as an unsecured creditor of the Bank In the worst case you could suffer a total loss of your investment amount Currency risk Exchange rate fluctuates and sometimes drastically If the Deposit Currency used for investment is not the home currency customarily used by you and thus conversion is required you should note that you may make a gain or suffer a loss due to exchange rate fluctuations When the deposit currency depreciates the loss from depreciation may set-off or even exceed the ReturnCoupon (if any) that you may receive from investing in the Currency-Linked Capital Protected Investment Deposit Risk of adjustments or early termination by the Bank Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank this might have a negative impact on the ReturnCoupon (if any) of the Currency-Linked Capital Protected Investment Deposit Concentration Risks You should avoid excessive investment (in terms of its proportion of the overall portfolio) in any single type of investment so as to avoid the investment portfolio being over-exposed to any particular investment risk ReturnCoupon of Currency-Linked Capital Protected Investment Deposit In order to provide capital protection the investment strategy adopted for Currency-Linked Capital Protected Investment Deposit may lead to a dilution of performance when compared to non-capital protected products investing in similar markets You should be prepared to take the risks of earning a lower ReturnCoupon (if any) on the capital invested and losing the interest that might otherwise earned on money invested by way of deposits For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) periodic Coupon may be payable to you For other types of Currency-Linked Capital Protected Investment Deposit no periodic ReturnCoupon will be payable to you prior to maturity Principal protection at maturity only You should understand that the Principal of the Currency-Linked Capital Protected Investment Deposit is capital-protected only when it is held to maturity If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the amount received by you upon early withdrawaltermination may be less than the amount initially invested by you Market Risks associated with Potential ReturnCoupon Apart from the ReturnCoupon calculated at the Minimum ReturnCoupon Rate (which may be set at zero) there is no guarantee of any ReturnCoupon calculated at the Potential ReturnCoupon Rate For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) Coupon (if any) is payable only if the Currency-Linked Capital Protected Investment Deposit is held till the relevant Coupon Distribution Dates ReturnCoupon (if any) of Currency-Linked Capital Protected Investment Deposit depends on the market conditions at the time of the relevant determination Investment return on foreign exchange-linked products are dependent on the prices of inter-banksrsquo transactions on the linked exchange rate in the foreign exchange markets You should be fully aware of the risks relating to fluctuations in the linked exchange rates Factors affecting the performance of foreign exchange markets are numerous including but are not limited to changes in global and local investment sentiments interest rate policies fund flows political environment economic environment business and social conditions in the local marketplace If the market trend is different from the view taken by you there is an inherent risk that the total investment return that you may receive from Currency-Linked Capital Protected Investment Deposit will be less than the interest that would have been payable on a time deposit for the same tenor There is also an inherent risk that no ReturnCoupon calculated at the Potential ReturnCoupon Rate will be payable to you in respect of the Currency-Linked Capital Protected Investment Deposit
Page 22 of 67
Early WithdrawalTermination Risks Early withdrawaltermination by you is not allowed for Currency-Linked Capital Protected Investment Deposit and the capital of you will be invested in the Currency-Linked Capital Protected Investment Deposit for the entire investment period The Bank may at its absolute discretion refuse to give consent to any early withdrawaltermination request If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the Bank shall be entitled to deduct from the Principal of the relevant Currency-Linked Capital Protected Investment Deposit andor any other amount which may have accrued to you any expenses costs or damages to the Bank Damages may include any costs expenses liability or losses to the Bank as a result of the early withdrawaltermination by you Therefore there is no guarantee that you will be able to receive the Principal and the amount payable to you at early withdrawaltermination may be less than the Principal initially invested Besides If the Currency-Linked Capital Protected Investment Deposit is early withdrawnterminated you will no longer be entitled to any ReturnCoupon of the Currency-Linked Capital Protected Investment Deposit Risks associated with unsuccessful subscriptions of Currency-Linked Capital Protected Investment Deposit The Bank reserves the absolute right to approve any application and to decline any application received (whether in whole or any part thereof) before the Deposit Start Date In the event of non-acceptance a notification will be sent by the Bank and any subscription funds received will be returned to you after the Deposit Start Date or as soon as practicable Risks relating to Renminbi If Currency-Linked Capital Protected Investment Deposit involves CNY the relevant exchange rate(s) or level(s) of the relevant currency pair will be quoted in offshore Renminbi against alternate currency While both onshore Renminbi and offshore Renminbi are the same currency they are traded in different and separate markets operating under different regulations and independent liquidity pool Onshore Renminbi and offshore Renminbi are currently quoted in different markets with different exchange rates whereby their exchange rate movements may not be in the same direction or magnitude The offshore Renminbi exchange rate may deviate significantly from the onshore Renminbi exchange rate You should also note that Renminbi is currently not freely convertible the value of Renminbi against other foreign currencies fluctuates and will be affected by amongst other things the PRC governmentrsquos control (for example the PRC government regulates conversion between Renminbi and foreign currencies) which may adversely affect your investment return under the Currency-Linked Capital Protected Investment Deposit when you convert CNY into your home currency Renminbi is subject to foreign exchange control by the PRC government and thus investors investing in Currency-Linked Investment Deposit involving Renminbi are subject to the currency risk of Renminbi
What are the key features bull This product is designed for you whose investment objective is capital protection or to obtain potential cash income bull This product is embedded with options You will buy option(s) on the Linked Currency Pair bull 100 principal protection if this product is held to maturity bull You can choose the Deposit Currency including HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY and Linked Currency
Pair including AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD and USDCNH bull The Deposit Period of the Currency-Linked Capital Protected Investment Deposit is 2 months or above bull You will have a chance to receive higher potential return depending on the movement of the exchange rate of the Underlying Currency
Pair during the Observation Period bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency bull The Bank pre-sets the Trading Range and Observation Period bull During the whole Observation Period the exchange rate of the Underlying Currency Pair is compared with the Trading Range to
determine the Return at maturity bull Returns (if any) on this product is payable only upon maturity bull This product may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank Please refer
to the section Can you request for early termination before maturity below
Scenario analysis (All figures shown below including the exchange rate of AUDUSD and HKDCNH Potential Return Rate Minimum Return Rate Deposit Period etc are for illustration only You should not rely on the below figures as any indication or guarantee on the expected interest amount of the Currency-Linked Capital Protected Investment Deposit you intend to invest Please refer to the Bank for up-to-date figures) Example 1 ndash American Range (where the Deposit Currency is your home currency) Assuming HKD is your home currency and you anticipate the Exchange Rate of AUDUSD will stay above 09850 but below 11150 for the next 6 months and set up an American Range Investment with HKD 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment American Range (AUDUSD) Principal Guarantee 100 Deposit Currency HKD Guaranteed Principal HKD 100000 Deposit Period 6 months Trading Range AUDUSD 09850 (ldquoLower Barrierrdquo) to 11150 (ldquoUpper Barrierrdquo) (excluding both barriers) Potential Return Rate 016 (around 032 pa)
Page 23 of 67
Minimum Return Rate 0015 (around 003 pa) Scenario I Best case scenario At any time during the Observation Period the Exchange Rate of AUDUSD stays within the Trading Range (ie above 09850 but below 11150) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = HKD 100000 x (1+016) = HKD 10016000 (with a gain of 016 of investment amount) Scenario II Worst case scenario At any time during the Observation Period the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 09850 or atabove 11150) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = HKD 100000 x (1+0015) = HKD 10001500
(with a gain of 0015 of investment amount) Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a HKD 100000 6-month Time Deposit on 30 April 2014 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500
Example 2 ndash American Range (where the Deposit Currency is not your home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency and you anticipate the Exchange Rate of AUDUSD will stay above 09850 but below 11150 for the next 6 months and set up an American Range Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment American Range (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trading Range AUDUSD 09850 (ldquoLower Barrierrdquo) to 11150 (ldquoUpper Barrierrdquo) (excluding both barriers) Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH (on deposit start date) 08000 Scenario I Best case scenario At any time during the Observation Period (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD stays within the Trading Range (ie above 09850 but below 11150) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of the road Gain scenario At any time during the Observation Period (assuming the exchange rate of HKDCNH remains unchanged the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 09850 or atabove 11150) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = CNY 100000 x (1+15) = CNY 10150000 (with a gain of 150 of investment amount)
0
Exchange Rate of
AUDUSD le 09850
Potential Return Minimum Return
Return Diagram Return at Maturity
09850 Exchange Rate of AUDUSD during the Observation Period
Minimum Return
09850 lt Exchange Rate of AUDUSD lt 11150
Exchange Rate of
AUDUSD ge 11150
11150
Page 24 of 67
Scenario III Off-setting scenario At any time during the Observation Period the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 09850 or atabove 11150) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD 000 Scenario IV Loss and Worst case scenario At any time during the Observation Period the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 09850 or atabove 11150) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951) In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a CNY 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received would be CNY 10030000
If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Please refer to the table below for details
0
Exchange Rate of
AUDUSD le 09850
Potential Return Minimum Return
Return Diagram
Return at Maturity
09850 Exchange Rate of AUDUSD during the Observation Period
Minimum Return
09850 lt Exchange Rate of AUDUSD lt 11150
Exchange Rate of
AUDUSD ge 11150
11150
Page 25 of 67
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date
The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date
If HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
How can you buy this product bull You can place a Currency-Linked Capital Protected Investment Deposit through our Hang Seng Bank Branches telephone or Hang Seng
Personal or Business e-Banking bull The Bank will provide a choice of different tranches which is subject to market conditions bull Enquiry Hotline Personal 2822 0228 Business 2198 8000
Fees and charges No handling fees or management fees will be charged for Currency-Linked Capital Protected Investment Deposit
Can you request for early termination before maturity No Currency-Linked Capital Protected Investment Deposit may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank which may be granted or withheld in the Bankrsquos sole and absolute discretion on such terms and conditions as the Bank may determine Please refer to ldquoEarly WithdrawalTermination Risksrdquo under ldquoWhat are the key features featuresrisks of Currency-Linked Capital Protected Investment Depositrdquo section for details
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
ix 9999990000 010 010 (12499990) (12499990)
At the beginning of the investment On the Maturity Date of the investment
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Potential Return
Exchange Rate of HKDCNH on the Maturity Date
0
If receiving Minimum Return
Breakeven = 08120^
If receiving Potential Return
Breakeven = 08240
If CNH depreciates drastically relative to HKD
HKDCNH = 9999990000
Exchange Rate on Deposit Start Date
Page 26 of 67
Pre-Investment Cooling-off Period for retail customers Pre-Investment Cooling-off Period (PICOP) is applicable to each particular dealing of this product if you are one of the following retail customer types
(1) An elderly customer aged 65 or above unless you are not a first-time buyer of currency-linked structured investment products AND your asset concentration is below 20 AND you opt out from the PICOP arrangement or
(2) A non-elderly customer who is a first time buyer of currency-linked structured investment products AND your asset concentration
is 20 or above
For the purpose of determining whether PICOP is applicable asset concentration refers to the percentage of total net worth (excluding real estate properties) to be invested in this product
Can the Bank adjust the terms or early terminate this product Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank in certain circumstances Please refer to Clause 7 of the Currency-Linked Capital Protected Investment Deposit Terms and Conditions for details
Offering documents for this product The following documents for this product (ldquoOffering Documentsrdquo) contain detailed information about the Bank and the terms of this product You should read and understand all of the Offering Documents before deciding whether to invest in this product
(i) Currency-Linked Capital Protected Investment Deposit Terms and Conditions (ii) The relevant Currency-Linked Capital Protected Investment Deposit Termsheet (iii) This Currency-Linked Capital Protected Investment Deposit Important Facts Statement
Other information Product Risk Level The Product Risk Level for Currency-Linked Capital Protected Investment Deposit is Low
Low Low-to-Medium Medium Medium-to-High High
Product Risk Level is determined by a number of factors which include the volatility of the currency pair and the tenor of the product The Product Risk Level is subject to the Banks periodic review and may change from time to time Please refer to our branch or our Customer Service Hotline on 2822 0228 for the latest detail Declaration and Remarks bull This Important Facts Statement is not intended to provide or regard as legal or taxation advice or investment recommendations If you
have any concerns about this product or are uncertain about the suitability of this product for you you should obtain independent professional advice
bull The liabilities of the Bank in respect of the Currency-Linked Capital Protected Investment Deposit are limited exclusively to an office of the Bank in Hong Kong and instructions in respect of the Currency-Linked Capital Protected Investment Deposit may only be made to and acted upon by such office Any amount relating to the Currency-Linked Capital Protected Investment Deposit is payable exclusively by an office of the Bank in Hong Kong and in its stated currency The Terms and Conditions of the Currency-Linked Capital Protected Investment Deposit are governed by and shall be construed in accordance with the laws of Hong Kong
bull You may contact our staff if you have any feedback or complaint in relation to our services or call our hotline at 2822 0228 We will respond to you within a reasonable period of time normally not exceeding 30 days in general circumstances You may contact the Hong Kong Monetary Authority at 55th Floor Two International Finance Centre 8 Finance Street Central Hong Kong if you are not satisfied with our handling of your complaint
bull Hang Seng Bank Limited is a Registered Licensed Bank under the Banking Ordinance bull All Currency-Linked Capital Protected Investment Deposit cannot be cancelled after subscription bull The Bank will act as principal to complete the transaction and may obtain certain monetary benefits in connection with the offering of
this Currency-Linked Capital Protected Investment Deposit to the public The current remuneration system that the Bank adopts for sales staff is a measurement of the staffrsquos overall performance and not just based on sales amount
bull The Bank is NOT an independent intermediary because The Bank receives fees commissions or other monetary benefits from other parties in relation to the Bankrsquos distribution of Currency-Linked Capital Protected Investment Deposit to you For details you should refer to the Bankrsquos disclosure on monetary benefits which the Bank is required to deliver to you prior to or at the point of entering into any transaction in Currency-Linked Capital Protected Investment Deposit
bull Please note that this product is not available for persons who are located within the United States are nationals of the United States and are US Persons within the meaning of Regulation S under the Securities Act (which includes any person resident in the United States and any partnership or corporation organised or incorporated under the laws of the United States)
bull 請注意本行不提供本產品予身處美國的人士美國公民及美籍人士(定義見證券法 S 條例)(包括居住在美國之任何人士及根據美國法例組
成或註冊成立之任何合夥企業或公司)
Page 34 of 67
Currency-Linked Capital Protected Investment Deposit
European (Bullish Bearish) Investment
Dated May 2018
Important Facts Statement
This is a structured investment product which is NOT protected by the Deposit Protection Scheme in Hong Kong
The contents of this statement have not been reviewed by any regulatory authority in Hong Kong You are advised to exercise caution before investing in this product This statement is a part of the offering documents for this product You should not invest in this product based on this statement alone If you are in any doubt you should obtain independent professional advice
If English is not your preferred language you may request for the Chinese version of this statement from our sales staff 倘若英文並
非閣下屬意的語言閣下可向本行的銷售人員索取本概要的中文版本
This is a structured investment product involving derivatives The investment decision is yours but you should not invest in this product 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
Quick facts
Bank Hang Seng Bank Limited
Product Type Currency-Linked Investment Deposit ndash European Bullish Bearish Investment (ldquothis productrdquo)
Minimum Investment Amount Subscription through branches - HKD 100000 (or its equivalent) Subscription through e-banking - HKD 50000 (or its equivalent)
Tenor 2 months or above or any other tenor as agreed between you and the Bank
Available Principal Currency (or Deposit Currency) HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY
Available Underlying Currency Pair AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD USDCNH and any other currency pairs as agreed between you and the Bank
Return Rate Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Deposit periodpayment date Deposit period refers to tenor of the product and return is payable only on Maturity Date
Principal protection at maturity Yes
Callable by the Bank No
Early termination right by customer No please refer to ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section ndash Early WithdrawalTermination Risks for details
Embedded derivatives Yes you will buy option(s) over the Underlying Currency Pair
Maximum potential gain Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Maximum potential loss Please refer to Scenarios II and III of Example 1 and 2 and Scenarios IV and V of Example 3 and 4 in ldquoScenario analysisrdquo section of this product type for details
What is this product and how does it work bull European Bullish Bearish investment is one type of our Currency-Linked Capital Protected Investment Deposit which consists of a time
deposit (in Deposit Currency) and buying option(s) on the Underlying Currency Pair of your choice bull You choose the Deposit Currency Underlying Currency Pair according to your need and the Bank will set the Trigger Level bull On the Final Exchange Rate Determination Date the Bank will compare the exchange rate of the Underlying Currency Pair with the Trigger
Level If the exchange rate of the Underlying Currency Pair moves along with your anticipation you will receive Guaranteed Principal and Potential Return If the exchange rate of the Underlying Currency Pair moves against your anticipation you will receive Guaranteed Principal and Minimum Return (if any)
bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency Minimum return applies to certain investment tranches only you should refer to the relevant termsheet for details
Page 35 of 67
What are the key risks of Currency-Linked Capital Protected Investment Deposit Earnings on Currency-Linked Capital Protected Investment Deposit are limited to the Return Coupon (if any) payable You should consider the following risks and read all other information contained in the relevant Termsheet and Terms and Conditions before making any investment decision Not a time deposit Currency-Linked Capital Protected Investment Deposit 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 Capital Protected Investment Deposit is embedded with FX options Option transactions involve risks even when buying an option The optionrsquos value might become worthless if the market moves against your expectation Limited potential gain The maximum potential gain is limited to the pre-agreed ReturnCoupon calculated at the Potential ReturnCoupon Rate Not the same as buying the Underlying Currency Pair Investing in Currency-Linked Capital Protected Investment Deposit is not the same as buying the Underlying Currency Pair directly Market risk The investment return of Currency-Linked Capital Protected Investment Deposit is linked to the exchange rate of the Underlying Currency Pair Movements in exchange rates can be unpredictable sudden and drastic and affected by complex political and economic factors Liquidity risk Currency-Linked Capital Protected Investment Deposit is designed to be held till maturity The Bank may at its absolute discretion refuse to consent to any withdrawaltermination request before maturity Credit risk of the Bank Currency-Linked Capital Protected Investment Deposit is not secured by any collateral When you invest in Currency-Linked Capital Protected Investment Deposit you will be relying on the Bankrsquos creditworthiness If the Bank becomes insolvent or defaults on its obligations under a Currency-Linked Capital Protected Investment Deposit you can only claim as an unsecured creditor of the Bank In the worst case you could suffer a total loss of your investment amount Currency risk Exchange rate fluctuates and sometimes drastically If the Deposit Currency used for investment is not the home currency customarily used by you and thus conversion is required you should note that you may make a gain or suffer a loss due to exchange rate fluctuations When the deposit currency depreciates the loss from depreciation may set-off or even exceed the ReturnCoupon (if any) that you may receive from investing in the Currency-Linked Capital Protected Investment Deposit Risk of adjustments or early termination by the Bank Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank this might have a negative impact on the ReturnCoupon (if any) of the Currency-Linked Capital Protected Investment Deposit Concentration Risks You should avoid excessive investment (in terms of its proportion of the overall portfolio) in any single type of investment so as to avoid the investment portfolio being over-exposed to any particular investment risk ReturnCoupon of Currency-Linked Capital Protected Investment Deposit In order to provide capital protection the investment strategy adopted for Currency-Linked Capital Protected Investment Deposit may lead to a dilution of performance when compared to non-capital protected products investing in similar markets You should be prepared to take the risks of earning a lower ReturnCoupon (if any) on the capital invested and losing the interest that might otherwise earned on money invested by way of deposits For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) periodic Coupon may be payable to you For other types of Currency-Linked Capital Protected Investment Deposit no periodic ReturnCoupon will be payable to you prior to maturity Principal protection at maturity only You should understand that the Principal of the Currency-Linked Capital Protected Investment Deposit is capital-protected only when it is held to maturity If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the amount received by you upon early withdrawaltermination may be less than the amount initially invested by you Market Risks associated with Potential ReturnCoupon Apart from the ReturnCoupon calculated at the Minimum ReturnCoupon Rate (which may be set at zero) there is no guarantee of any ReturnCoupon calculated at the Potential ReturnCoupon Rate For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) Coupon (if any) is payable only if the Currency-Linked Capital Protected Investment Deposit is held till the relevant Coupon Distribution Dates ReturnCoupon (if any) of Currency-Linked Capital Protected Investment Deposit depends on the market conditions at the time of the relevant determination Investment return on foreign exchange-linked products are dependent on the prices of inter-banksrsquo transactions on the linked exchange rate in the foreign exchange markets You should be fully aware of the risks relating to fluctuations in the linked exchange rates Factors affecting the performance of foreign exchange markets are numerous including but are not limited to changes in global and local investment sentiments interest rate policies fund flows political environment economic environment business and social conditions in the local marketplace If the market trend is different from the view taken by you there is an inherent risk that the total investment return that you may receive from Currency-Linked Capital Protected Investment Deposit will be less than the interest that would have been payable on a time deposit for the same tenor There is also an inherent risk that no ReturnCoupon calculated at the Potential ReturnCoupon Rate will be payable to you in respect of the Currency-Linked Capital Protected Investment Deposit Early WithdrawalTermination Risks Early withdrawaltermination by you is not allowed for Currency-Linked Capital Protected Investment Deposit and the capital of you will be invested in the Currency-Linked Capital Protected Investment Deposit for the entire investment period The Bank may at its absolute discretion refuse to give consent to any early withdrawaltermination request If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the Bank shall be entitled to deduct from the Principal of the relevant Currency-Linked Capital Protected Investment Deposit andor any other amount which may have accrued to you any expenses costs or damages to the Bank Damages may include any costs expenses liability or losses to the Bank as a result of the early withdrawaltermination by you Therefore there is no guarantee that you will be able to receive the Principal and the amount payable to you at early withdrawaltermination may be less
Page 36 of 67
than the Principal initially invested Besides If the Currency-Linked Capital Protected Investment Deposit is early withdrawnterminated you will no longer be entitled to any ReturnCoupon of the Currency-Linked Capital Protected Investment Deposit Risks associated with unsuccessful subscriptions of Currency-Linked Capital Protected Investment Deposit The Bank reserves the absolute right to approve any application and to decline any application received (whether in whole or any part thereof) before the Deposit Start Date In the event of non-acceptance a notification will be sent by the Bank and any subscription funds received will be returned to you after the Deposit Start Date or as soon as practicable Risks relating to Renminbi If Currency-Linked Capital Protected Investment Deposit involves CNY the relevant exchange rate(s) or level(s) of the relevant currency pair will be quoted in offshore Renminbi against alternate currency While both onshore Renminbi and offshore Renminbi are the same currency they are traded in different and separate markets operating under different regulations and independent liquidity pool Onshore Renminbi and offshore Renminbi are currently quoted in different markets with different exchange rates whereby their exchange rate movements may not be in the same direction or magnitude The offshore Renminbi exchange rate may deviate significantly from the onshore Renminbi exchange rate You should also note that Renminbi is currently not freely convertible the value of Renminbi against other foreign currencies fluctuates and will be affected by amongst other things the PRC governmentrsquos control (for example the PRC government regulates conversion between Renminbi and foreign currencies) which may adversely affect your investment return under the Currency-Linked Capital Protected Investment Deposit when you convert CNY into your home currency Renminbi is subject to foreign exchange control by the PRC government and thus investors investing in Currency-Linked Investment Deposit involving Renminbi are subject to the currency risk of Renminbi
What are the key features bull This product is designed for you whose investment objective is capital protection or to obtain potential cash income
bull This product is embedded with options You will buy option(s) on the Linked Currency Pair bull 100 principal protection if the Currency-Linked Capital Protected Investment Deposit is held to maturity bull You can choose the Deposit Currency including HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY and Linked Currency Pair
including AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD and USDCNH bull The Deposit Period of this product is 2 months or above bull You will have a chance to receive higher potential return depending on the movement of the exchange rate of the Underlying Currency Pair bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency bull The Bank pre-sets the Trigger Level and you choose a bullish or bearish view on different currencies bull On the Final Exchange Rate Determination Date the exchange rate of the Underlying Currency Pair is compared with the Trigger Level to
determine the Return at maturity bull Returns (if any) on this product is payable only upon maturity bull This product may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank Please refer to
the section Can you request for early termination before maturity below
Scenario analysis (All figures shown below including the exchange rate of AUDUSD and HKDCNH Potential Return Rate Minimum Return Rate Deposit Period etc are for illustration only You should not rely on the below figures as any indication or guarantee on the expected interest amount of the Currency-Linked Capital Protected Investment Deposit you intend to invest Please refer to the Bank for up-to-date figures) Example 1 ndash European Bullish (where the Deposit Currency is your home currency) Assuming HKD is your home currency and you take a bullish view on Australian Dollar expect the exchange rate of AUDUSD will rise from 09400 to 09800 or above after the 6-month period and set up an European Bullish Investment with HKD 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Bullish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency HKD Guaranteed Principal HKD 100000 Deposit Period 6 months Trigger Level AUDUSD 09800 Potential Return Rate 016 (around 032 pa) Minimum Return Rate 0015 (around 003 pa) Scenario I Best case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is at or above the Trigger Level (ie at or above 09800) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = HKD 100000 x (1+016) = HKD 10016000 (with a gain of 016 of investment amount) Scenario II Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is below the Trigger Level (ie below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity
Page 37 of 67
Total Return at Maturity = HKD 100000 x (1+0015) = HKD 10001500 (with a gain of 0015 of investment amount) Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount
For reference only if you set up a HKD 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500
Example 2 ndash European Bearish (where the Deposit Currency is your home currency) Assuming HKD is your home currency and you take a bearish view on Australian Dollar expect the exchange rate of AUDUSD will drop from 09400 to 09000 or below after the 6-month period and set up an European Bearish Investment with HKD 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Bearish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency HKD Guaranteed Principal HKD 100000 Deposit Period 6 months Trigger Level AUDUSD 09000 Potential Return Rate 016 (around 032 pa) Minimum Return Rate 0015 (around 003 pa) Scenario I Best case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is at or below the Trigger Level (ie at or below 09000) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = HKD 100000 x (1+016) = HKD 10016000 (with a gain of 016 of investment amount) Scenario II Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is above the Trigger Level (ie above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = HKD 100000 x (1+0015) = HKD 10001500 (with a gain of 0015 of investment amount) Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount
0
Final Exchange Rate of AUDUSD lt Trigger Level
Potential Return Minimum Return
Return Diagram Return at Maturity
09800 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Final Exchange Rate of AUDUSD ge Trigger Level
Trigger Level = 09800
Page 38 of 67
For reference only if you set up a HKD 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500 Example 3 ndash European Bullish (where the Deposit Currency is not home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency you take a bullish view on Australian Dollar expect the exchange rate of AUDUSD will rise from 09400 to 09800 or above after the 6-month period and set up an European Bullish Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Bullish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trigger Level AUDUSD 09800 Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH on deposit start date 08000 Scenario I Best case scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is at or above the Trigger Level (ie at or above 09800) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of-the road Gain scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is below the Trigger Level (ie below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Scenario III Off-setting scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is below the Trigger Level (ie below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD 000
0
Final Exchange Rate of AUDUSD
le Trigger Level
Potential Return Minimum Return
Return Diagram
Return at Maturity
09000 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Final Exchange Rate of AUDUSD gt Trigger Level
Trigger Level = 09000
Page 39 of 67
Scenario IV Loss and Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is below the Trigger Level (ie below 09800) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 101500 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951) In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount
For reference only if you set up a CNY 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received at maturity would be CNY 10030000 If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Please refer to the table below for details
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
viiii 9999990000 010 010 (12499990) (12499990)
103000 101500 12500000 10000008000
At the beginning of the investment On the Maturity Date of the investment
Exchange
Rate of
HKDCNH
Initial
Investment
Amount in
Renminbi
Initial
Investment
Amount in
HKD
Exchange Rate
of HKDCNH
Total Return in
Renminbi
Total Return in
HKD
Gain (loss) in HKD if converting the
Total Return from Renminbi to home
currency (HKD)
0
Final Exchange Rate of AUDUSD lt Trigger Level
Potential Return Minimum Return
Return Diagram
Return at Maturity
09800 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Final Exchange Rate of AUDUSD ge Trigger Level
Trigger Level = 09800
Page 40 of 67
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date
The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date
If HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
Example 4 ndash European Bearish (where the Deposit Currency is not home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency you take a bearish view on Australian Dollar expect the exchange rate of AUDUSD will drop from 09400 to 09000 or below after the 6-month period and set up an European Bearish Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Bearish on AUD (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trigger Level AUDUSD 09000 Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH at the time of investment 08000 Scenario I Best case scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is at or below the Trigger Level (ie at or below 09000) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of-the road Gain scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is above the Trigger Level (ie above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Scenario III Off-setting scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is above the Trigger Level (ie above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Exchange Rate of HKDCNH on the Maturity Date
0
If receiving Minimum Return
Breakeven = 08120^
If receiving Potential Return
Breakeven = 08240
Exchange Rate on Deposit Start Date
Potential Return
Minimum Return
If CNH depreciates drastically relative to HKD
HKDCNH = 9999990000
Page 41 of 67
= HKD 12500000 Gain(Loss) in home currency HKD 000 Scenario IV Loss and Worst Case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is above the Trigger Level (ie above 09000) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951) In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount
For reference only if you set up a CNY 100000 6-month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received at maturity would be CNY 10030000 If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Please refer to the table below for details
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
viiii 9999990000 010 010 (12499990) (12499990)
103000 101500 12500000 10000008000
At the beginning of the investment On the Maturity Date of the investment
Exchange
Rate of
HKDCNH
Initial
Investment
Amount in
Renminbi
Initial
Investment
Amount in
HKD
Exchange Rate
of HKDCNH
Total Return in
Renminbi
Total Return in
HKD
Gain (loss) in HKD if converting the
Total Return from Renminbi to home
currency (HKD)
0
Final Exchange Rate of AUDUSD le Trigger Level
Potential Return Minimum Return
Return Diagram Return at Maturity
09000 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Final Exchange Rate of AUDUSD gt Trigger Level
Trigger Level = 09000
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Page 42 of 67
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date
The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date
If HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
How can you buy this product bull You can place a Currency-Linked Capital Protected Investment Deposit through our Hang Seng Bank Branches telephone or Hang Seng
Personal or Business e-Banking bull The Bank will provide a choice of different tranches which is subject to market conditions bull Enquiry Hotline Personal 2822 0228 Business 2198 8000
Fees and charges No handling fees or management fees will be charged for Currency-Linked Capital Protected Investment Deposit
Can you request for early termination before maturity No Currency-Linked Capital Protected Investment Deposit may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank which may be granted or withheld in the Bankrsquos sole and absolute discretion on such terms and conditions as the Bank may determine Please refer to ldquoEarly WithdrawalTermination Risksrdquo under ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section for details
Pre-Investment Cooling-off Period for retail customers Pre-Investment Cooling-off Period (PICOP) is applicable to each particular dealing of this product if you are one of the following retail customer types
(1) An elderly customer aged 65 or above unless you are not a first-time buyer of currency-linked structured investment products AND your asset concentration is below 20 AND you opt out from the PICOP arrangement or
(2) A non-elderly customer who is a first time buyer of currency-linked structured investment products AND your asset concentration is
20 or above
For the purpose of determining whether PICOP is applicable asset concentration refers to the percentage of total net worth (excluding real estate properties) to be invested in this product
Can the Bank adjust the terms or early terminate this product Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank in certain circumstances Please refer to Clause 7 of the Currency-Linked Capital Protected Investment Deposit Terms and Conditions for details
Offering documents for this product The following documents for this product (ldquoOffering Documentsrdquo) contain detailed information about the Bank and the terms of this product You should read and understand all of the Offering Documents before deciding whether to invest in this product
(i) Currency-Linked Capital Protected Investment Deposit Terms and Conditions (ii) The relevant Currency-Linked Capital Protected Investment Deposit Termsheet (iii) This Currency-Linked Capital Protected Investment Deposit Important Facts Statement
Product Risk Level The Product Risk Level for Currency-Linked Capital Protected Investment Deposit is Low
Low Low-to-Medium Medium Medium-to-High High
Product Risk Level is determined by a number of factors which include the volatility of the currency pair and the tenor of the product The Product Risk Level is subject to the Banks periodic review and may change from time to time Please refer to our branch or our Customer Service Hotline on 2822 0228 for the latest detail Declaration and Remarks bull This Important Facts Statement is not intended to provide or regard as legal or taxation advice or investment recommendations If you have
any concerns about this product or are uncertain about the suitability of this product for you you should obtain independent professional advice
bull The liabilities of the Bank in respect of the Currency-Linked Capital Protected Investment Deposit are limited exclusively to an office of the Bank in Hong Kong and instructions in respect of the Currency-Linked Capital Protected Investment Deposit may only be made to and acted upon by such office Any amount relating to the Currency-Linked Capital Protected Investment Deposit is payable exclusively by an office of the Bank in Hong Kong and in its stated currency The Terms and Conditions of the Currency-Linked Capital Protected Investment Deposit are governed by and shall be construed in accordance with the laws of Hong Kong
bull You may contact our staff if you have any feedback or complaint in relation to our services or call our hotline at 2822 0228 We will respond to you within a reasonable period of time normally not exceeding 30 days in general circumstances You may contact the Hong Kong Monetary Authority at 55th Floor Two International Finance Centre 8 Finance Street Central Hong Kong if you are not satisfied with our handling of your complaint
bull Hang Seng Bank Limited is a Registered Licensed Bank under the Banking Ordinance bull All Currency-Linked Capital Protected Investment Deposit cannot be cancelled after subscription bull The Bank will act as principal to complete the transaction and may obtain certain monetary benefits in connection with the offering of this
Currency-Linked Capital Protected Investment Deposit to the public The current remuneration system that the Bank adopts for sales staff is a measurement of the staffrsquos overall performance and not just based on sales amount
bull The Bank is NOT an independent intermediary because The Bank receives fees commissions or other monetary benefits from other parties in relation to the Bankrsquos distribution of Currency-Linked Capital Protected Investment Deposit to you For details you should refer to the Bankrsquos disclosure on monetary benefits which the Bank is required to deliver to you prior to or at the point of entering into any transaction in Currency-Linked Capital Protected Investment Deposit
bull Please note that this product is not available for persons who are located within the United States are nationals of the United States and are US Persons within the meaning of Regulation S under the Securities Act (which includes any person resident in the United States and any partnership or corporation organised or incorporated under the laws of the United States)
bull 請注意本行不提供本產品予身處美國的人士美國公民及美籍人士(定義見證券法 S 條例)(包括居住在美國之任何人士及根據美國法例組成
或註冊成立之任何合夥企業或公司)
Page 53 of 67
Currency-Linked Capital Protected Investment Deposit
European Range Investment
Dated May 2018
Important Facts Statement
This is a structured investment product which is NOT protected by the Deposit
Protection Scheme in Hong Kong
The contents of this statement have not been reviewed by any regulatory authority in Hong Kong You are advised to exercise caution before investing in this product This statement is a part of the offering documents for this product You should not invest in this product based on this statement alone If you are in any doubt you should obtain independent professional advice
If English is not your preferred language you may request for the Chinese version of this statement from our sales staff 倘若英
文並非閣下屬意的語言閣下可向本行的銷售人員索取本概要的中文版本
This is a structured investment product involving derivatives The investment decision is yours but you should not invest in this product 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
Quick facts Bank Hang Seng Bank Limited
Product Type Currency-Linked Investment Deposit ndash European Range Investment (ldquothis productrdquo)
Minimum Investment Amount Subscription through branches - HKD 100000 (or its equivalent) Subscription through e-banking - HKD 50000 (or its equivalent)
Tenor 2 months or above or any other tenor as agreed between you and the Bank
Available Principal Currency (or Deposit Currency) HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY
Available Underlying Currency Pair AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD USDCNH and any other currency pairs as agreed between you and the Bank
Return Rate Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Deposit periodpayment date Deposit period refers to tenor of the product and return is payable only on Maturity Date
Principal protection at maturity Yes
Callable by the Bank No
Early termination right by customer No please refer to ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section ndash Early WithdrawalTermination Risks for details
Embedded derivatives Yes you will buy option(s) over the Underlying Currency Pair
Maximum potential gain Varies as specified in the relevant termsheet or to be agreed between you and the Bank upon entering into a transaction
Maximum potential loss Please refer to Scenarios II and III of Example 1 and Scenarios IV and V of Example 2 in the ldquoScenario analysisrdquo section of this product type for details
What is this product and how does it work bull European Range investment is one type of our Currency-Linked Capital Protected Investment Deposit which consists of a time deposit
(in Deposit Currency) and buying option(s) on the Underlying Currency Pair of your choice bull You choose the Deposit Currency Underlying Currency Pair according to your need and the Bank will set the Trading Range bull On the Final Exchange Rate Determination Date the Bank will compare the exchange rate of the Underlying Currency Pair with the
Trading Range If the exchange rate of the Underlying Currency Pair moves along with your anticipation and is within the Trading Range you will receive Guaranteed Principal and Potential Return If the exchange rate of the Underlying Currency Pair moves against your anticipation and is outside the Trading Range you will receive Guaranteed Principal and Minimum Return (if any)
bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency Minimum return applies to certain investment tranches only you should refer to the relevant termsheet for details
Page 54 of 67
What are the key risks of Currency-Linked Capital Protected Investment Deposit Earnings on Currency-Linked Capital Protected Investment Deposit are limited to the Return Coupon (if any) payable You should consider the following risks and read all other information contained in the relevant Termsheet and Terms and Conditions before making any investment decision Not a time deposit Currency-Linked Capital Protected Investment Deposit 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 Capital Protected Investment Deposit is embedded with FX options Option transactions involve risks even when buying an option The optionrsquos value might become worthless if the market moves against your expectation Limited potential gain The maximum potential gain is limited to the pre-agreed ReturnCoupon calculated at the Potential ReturnCoupon Rate Not the same as buying the Underlying Currency Pair Investing in Currency-Linked Capital Protected Investment Deposit is not the same as buying the Underlying Currency Pair directly Market risk The investment return of Currency-Linked Capital Protected Investment Deposit is linked to the exchange rate of the Underlying Currency Pair Movements in exchange rates can be unpredictable sudden and drastic and affected by complex political and economic factors Liquidity risk Currency-Linked Capital Protected Investment Deposit is designed to be held till maturity The Bank may at its absolute discretion refuse to consent to any withdrawaltermination request before maturity Credit risk of the Bank Currency-Linked Capital Protected Investment Deposit is not secured by any collateral When you invest in Currency-Linked Capital Protected Investment Deposit you will be relying on the Bankrsquos creditworthiness If the Bank becomes insolvent or defaults on its obligations under a Currency-Linked Capital Protected Investment Deposit you can only claim as an unsecured creditor of the Bank In the worst case you could suffer a total loss of your investment amount Currency risk Exchange rate fluctuates and sometimes drastically If the Deposit Currency used for investment is not the home currency customarily used by you and thus conversion is required you should note that you may make a gain or suffer a loss due to exchange rate fluctuations When the deposit currency depreciates the loss from depreciation may set-off or even exceed the ReturnCoupon (if any) that you may receive from investing in the Currency-Linked Capital Protected Investment Deposit Risk of adjustments or early termination by the Bank Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank this might have a negative impact on the ReturnCoupon (if any) of the Currency-Linked Capital Protected Investment Deposit Concentration Risks You should avoid excessive investment (in terms of its proportion of the overall portfolio) in any single type of investment so as to avoid the investment portfolio being over-exposed to any particular investment risk ReturnCoupon of Currency-Linked Capital Protected Investment Deposit In order to provide capital protection the investment strategy adopted for Currency-Linked Capital Protected Investment Deposit may lead to a dilution of performance when compared to non-capital protected products investing in similar markets You should be prepared to take the risks of earning a lower ReturnCoupon (if any) on the capital invested and losing the interest that might otherwise earned on money invested by way of deposits For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) periodic Coupon may be payable to you For other types of Currency-Linked Capital Protected Investment Deposit no periodic ReturnCoupon will be payable to you prior to maturity Principal protection at maturity only You should understand that the Principal of the Currency-Linked Capital Protected Investment Deposit is capital-protected only when it is held to maturity If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the amount received by you upon early withdrawaltermination may be less than the amount initially invested by you Market Risks associated with Potential ReturnCoupon Apart from the ReturnCoupon calculated at the Minimum ReturnCoupon Rate (which may be set at zero) there is no guarantee of any ReturnCoupon calculated at the Potential ReturnCoupon Rate For Currency-Linked Capital Protected Investment Deposit (with potential multi-coupon) Coupon (if any) is payable only if the Currency-Linked Capital Protected Investment Deposit is held till the relevant Coupon Distribution Dates ReturnCoupon (if any) of Currency-Linked Capital Protected Investment Deposit depends on the market conditions at the time of the relevant determination Investment return on foreign exchange-linked products are dependent on the prices of inter-banksrsquo transactions on the linked exchange rate in the foreign exchange markets You should be fully aware of the risks relating to fluctuations in the linked exchange rates Factors affecting the performance of foreign exchange markets are numerous including but are not limited to changes in global and local investment sentiments interest rate policies fund flows political environment economic environment business and social conditions in the local marketplace If the market trend is different from the view taken by you there is an inherent risk that the total investment return that you may receive from Currency-Linked Capital Protected Investment Deposit will be less than the interest that would have been payable on a time deposit for the same tenor There is also an inherent risk that no ReturnCoupon calculated at the Potential ReturnCoupon Rate will be payable to you in respect of the Currency-Linked Capital Protected Investment Deposit
Page 55 of 67
Early WithdrawalTermination Risks Early withdrawaltermination by you is not allowed for Currency-Linked Capital Protected Investment Deposit and the capital of you will be invested in the Currency-Linked Capital Protected Investment Deposit for the entire investment period The Bank may at its absolute discretion refuse to give consent to any early withdrawaltermination request If the Bank allows you to early withdrawterminate the Currency-Linked Capital Protected Investment Deposit with written consent the Bank shall be entitled to deduct from the Principal of the relevant Currency-Linked Capital Protected Investment Deposit andor any other amount which may have accrued to you any expenses costs or damages to the Bank Damages may include any costs expenses liability or losses to the Bank as a result of the early withdrawaltermination by you Therefore there is no guarantee that you will be able to receive the Principal and the amount payable to you at early withdrawaltermination may be less than the Principal initially invested Besides If the Currency-Linked Capital Protected Investment Deposit is early withdrawnterminated you will no longer be entitled to any ReturnCoupon of the Currency-Linked Capital Protected Investment Deposit Risks associated with unsuccessful subscriptions of Currency-Linked Capital Protected Investment Deposit The Bank reserves the absolute right to approve any application and to decline any application received (whether in whole or any part thereof) before the Deposit Start Date In the event of non-acceptance a notification will be sent by the Bank and any subscription funds received will be returned to you after the Deposit Start Date or as soon as practicable Risks relating to Renminbi If Currency-Linked Capital Protected Investment Deposit involves CNY the relevant exchange rate(s) or level(s) of the relevant currency pair will be quoted in offshore Renminbi against alternate currency While both onshore Renminbi and offshore Renminbi are the same currency they are traded in different and separate markets operating under different regulations and independent liquidity pool Onshore Renminbi and offshore Renminbi are currently quoted in different markets with different exchange rates whereby their exchange rate movements may not be in the same direction or magnitude The offshore Renminbi exchange rate may deviate significantly from the onshore Renminbi exchange rate You should also note that Renminbi is currently not freely convertible the value of Renminbi against other foreign currencies fluctuates and will be affected by amongst other things the PRC governmentrsquos control (for example the PRC government regulates conversion between Renminbi and foreign currencies) which may adversely affect your investment return under the Currency-Linked Capital Protected Investment Deposit when you convert CNY into your home currency Renminbi is subject to foreign exchange control by the PRC government and thus investors investing in Currency-Linked Investment Deposit involving Renminbi are subject to the currency risk of Renminbi
What are the key features bull This product is designed for you whose investment objective is capital protection or to obtain potential cash income bull This product is embedded with options You will buy option(s) on the Linked Currency Pair bull 100 principal protection if this product is held to maturity bull You can choose the Deposit Currency including HKD USD AUD GBP EUR JPY CAD CHF NZD and CNY and Linked Currency
Pair including AUDUSD GBPUSD EURUSD USDJPY USDCAD USDCHF NZDUSD and USDCNH bull The Deposit Period of this product is 2 months or above
bull You will have a chance to receive higher potential return depending on the movement of the exchange rate of the Underlying Currency
Pair bull The Guaranteed Principal and Return at maturity (if any) will be settled in the Deposit Currency bull The Bank pre-sets the Trading Range bull On the Final Exchange Rate Determination Date the exchange rate of the Underlying Currency Pair is compared with the Trading Range
to determine the Return at maturity bull Returns (if any) on this product is payable only upon maturity bull This product may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank Please refer to
the section Can you request for early termination before maturity below
Scenario analysis (All figures shown below including the exchange rate of AUDUSD and HKDCNH Potential Return Rate Minimum Return Rate Deposit Period etc are for illustration only You should not rely on the figures as any indication or guarantee on the expected interest amount of the Currency-Linked Capital Protected Investment Deposit you intend to invest Please refer to the Bank for up-to-date figures) Example 1 ndash European Range (where the Deposit Currency is your home currency) Assuming HKD is your home currency and you anticipate the Exchange Rate of AUDUSD will be above 10250 but below 10750 after 6 months and set up an European Range Investment with HKD 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Range (AUDUSD) Principal Guarantee 100 Deposit Currency HKD Guaranteed Principal HKD 100000 Deposit Period 6 months Trading Range AUDUSD 10250 (ldquoLower Barrierrdquo) to 10750 (ldquoUpper Barrierrdquo) (excluding both barriers) Potential Return Rate 016 (around 032 pa)
Page 56 of 67
Minimum Return Rate 0015 (around 003 pa) Scenario I Best case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is within the Trading Range (ie above 10250 but below 10750) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = HKD 100000 x (1+016) = HKD 10016000 (with a gain of 016 of investment amount) Scenario II Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 10250 or atabove 10750) you will receive Guaranteed Principal and Minimum Return at maturity Total Return at Maturity = HKD 100000 x (1+0015) = HKD 10001500 (with a gain of 0015 of investment amount) Scenario III The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a HKD 100000 6 month Time Deposit on 30 April 2015 the annual interest rate would be 005 and the principal and interest received at maturity would be HKD 10002500 Example 2 ndash European Range (where the Deposit Currency is not your home currency) Assuming the Deposit Currency is not your home currency and HKD is your home currency and you anticipate the Exchange Rate of AUDUSD will be above 10250 but below 10750 after 6 months and set up an European Range Investment with CNY 100000 as Principal Amount for 6 months taking AUDUSD as the Underlying Currency Pair Type of investment European Range (AUDUSD) Principal Guarantee 100 Deposit Currency CNY Guaranteed Principal CNY 100000 Deposit Period 6 months Trading Range AUDUSD 10250 (ldquoLower Barrierrdquo) to 10750 (ldquoUpper Barrierrdquo) (excluding both barriers) Potential Return Rate 300 (around 600 pa) Minimum Return Rate 150 (around 300 pa) HKDCNH (on deposit start date) 08000 Scenario I Best case scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is within the Trading Range (ie above 10250 but below 10750) you will receive Guaranteed Principal and Potential Return at maturity Total Return at Maturity = CNY 100000 x (1+300) = CNY 10300000 (with a gain of 300 of investment amount) Scenario II Middle-of-the road Gain scenario On the Final Exchange Rate Determination Date (assuming the exchange rate of HKDCNH remains unchanged) the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 10250 or atabove 10750) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount)
0
Final Exchange Rate of
AUDUSD le10250
Potential Return Minimum Return
Return Diagram
Return at Maturity
10250 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Minimum Return
Final Exchange Rate of
AUDUSD ge 10750
10750
10250lt Final Exchange Rate of AUDUSD lt10750
Page 57 of 67
Scenario III Off-setting scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 10250 or atabove 10750) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a mild depreciation against HKD at maturity and the HKDCNH is 08120 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss will off-set the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 10150000 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08120 = CNY 101500 08120 = HKD 12500000 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY 100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD 000 Scenario IV Loss and Worst case scenario On the Final Exchange Rate Determination Date the Exchange Rate of AUDUSD is atbelow the Lower Barrier or atabove the Upper Barrier (ie atbelow 10250 or atabove 10750) you will receive Guaranteed Principal and Minimum Return (if applicable) at maturity However assuming CNY has a significant depreciation against HKD at maturity and the HKDCNH is 08200 at maturity and you choose to convert the Total Return in CNY into HKD you will suffer a loss due to the depreciation of CNY Such loss exceeds the gain you can receive under the product Total Return at Maturity = CNY 100000 x (1+150) = CNY 101500 (with a gain of 150 of investment amount) Total Return at Maturity converted to HKD on the maturity date when HKDCNH depreciates to 08200 = CNY 101500 08200 = HKD 12378049 Less Initial Investment Amount in HKD on the deposit start date when HKDCNH was 08000 = CNY100000 08000 = HKD 12500000 Gain(Loss) in home currency HKD (121951) In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to depreciation of Renminbi Scenario V The Bank becomes insolvent or defaults on its obligations 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 investment amount For reference only if you set up a CNY 100000 6 month Time Deposit on 30 April 2015 the annual interest rate would be 060 and the principal and interest received at maturity would be CNY 10030000 If the Deposit Currency is not your home currency your gain or loss will also be affected by the fluctuation of the exchange rate between the Deposit Currency and your home currency If the Deposit Currency has depreciated against your home currency the loss arising from such depreciation may offset or even exceed any potential gain from investing in this product In the worst case scenario if HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) you will suffer almost total loss in HKD due to
0
Final Exchange Rate of
AUDUSD le10250
Potential Return Minimum Return
Return Diagram
Return at Maturity
10250 The Final Exchange Rate of AUDUSD on the Final Exchange Rate Determination Date
Minimum Return
Final Exchange Rate of
AUDUSD ge 10750
10750
10250lt Final Exchange Rate of AUDUSD lt10750
Page 58 of 67
depreciation of Renminbi Please refer to the table below for details
^ The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Minimum Return on the Maturity Date
The exchange rate of HKDCNH where you will breakeven when you convert your Total Return from Renminbi to home currency (HKD) at Maturity in the event that you receive Potential Return on the Maturity Date
If HKDCNH rises drastically (ie CNH depreciates relative to HKD drastically and becomes almost worthless) the exchange rate of HKDCNH where you will lose almost all of your investment amount when you convert your Total Return from Renminbi to home currency (HKD) on the Maturity Date
How can you buy this product
bull You can place a Currency-Linked Capital Protected Investment Deposit through our Hang Seng Bank Branches telephone or Hang
Seng Personal or Business e-Banking
bull The Bank will provide a choice of different tranches which is subject to market conditions
bull Enquiry Hotline Personal 2822 0228
Business 2198 8000
Fees and charges No handling fees or management fees will be charged for Currency-Linked Capital Protected Investment Deposit
Can you request for early termination before maturity No Currency-Linked Capital Protected Investment Deposit may not be withdrawnterminated by you before the maturity date without the approval in writing of the Bank which may be granted or withheld in the Bankrsquos sole and absolute discretion on such terms and conditions as the Bank may determine Please refer to ldquoEarly WithdrawalTermination Risksrdquo under ldquoWhat are the key risks of Currency-Linked Capital Protected Investment Depositrdquo section for details
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
Receiving
Potential
Return
Receiving
Minimum
Return
(a) (b) (c)
= b a
(d) (e) (f) (g)
= e d
(h)
= f d
(i)
= g - c
(j)
= h - c
i 07800 13205128 13012821 705128 512821
ii 07900 13037975 12848101 537975 348101
iii 08000 12875000 12687500 375000 187500
iv 08100 12716049 12530864 216049 30864
v 08120 ^ 12684729 12500000 184729 000
vi 08200 12560976 12378049 60976 (121951)
vii 08240 12500000 12317961 000 (182039)
viii 08300 12409639 12228916 (90361) (271084)
ix 9999990000 010 010 (12499990) (12499990)
At the beginning of the investment On the Maturity Date of the investment
Gain (loss) in HKD if converting the Total Return from Renminbi to HKD at Maturity
Potential Return
Exchange Rate of HKDCNH on the Maturity Date
0
If receiving Minimum Return
Breakeven = 08120^
If receiving Potential Return
Breakeven = 08240
If CNH depreciates drastically relative to HKD
HKDCNH = 9999990000
Exchange Rate on Deposit Start Date
Page 59 of 67
Pre-Investment Cooling-off Period for retail customers Pre-Investment Cooling-off Period (PICOP) is applicable to each particular dealing of this product if you are one of the following retail customer types
(1) An elderly customer aged 65 or above unless you are not a first-time buyer of currency-linked structured investment products AND your asset concentration is below 20 AND you opt out from the PICOP arrangement or
(2) A non-elderly customer who is a first time buyer of currency-linked structured investment products AND your asset concentration
is 20 or above
For the purpose of determining whether PICOP is applicable asset concentration refers to the percentage of total net worth (excluding real estate properties) to be invested in this product
Can the Bank adjust the terms or early terminate this product Certain terms and conditions (including some of the key dates) of Currency-Linked Capital Protected Investment Deposit can be adjusted by the Bank in certain circumstances Please refer to Clause 7 of the Currency-Linked Capital Protected Investment Deposit Terms and Conditions for details
Offering documents for this product The following documents for this product (ldquoOffering Documentsrdquo) contain detailed information about the Bank and the terms of this product You should read and understand all of the Offering Documents before deciding whether to invest in this product
(i) Currency-Linked Capital Protected Investment Deposit Terms and Conditions (ii) The relevant Currency-Linked Capital Protected Investment Deposit Termsheet (iii) This Currency-Linked Capital Protected Investment Deposit Important Facts Statement
Other information Product Risk Level The Product Risk Level for Currency-Linked Capital Protected Investment Deposit is Low
Low Low-to-Medium Medium Medium-to-High High
Product Risk Level is determined by a number of factors which include the volatility of the currency pair and the tenor of the product The Product Risk Level is subject to the Banks periodic review and may change from time to time Please refer to our branch or our Customer Service Hotline on 2822 0228 for the latest detail Declaration and Remarks bull This Important Facts Statement is not intended to provide or regard as legal or taxation advice or investment recommendations If you
have any concerns about this product or are uncertain about the suitability of this product for you you should obtain independent professional advice
bull The liabilities of the Bank in respect of the Currency-Linked Capital Protected Investment Deposit are limited exclusively to an office of the Bank in Hong Kong and instructions in respect of the Currency-Linked Capital Protected Investment Deposit may only be made to and acted upon by such office Any amount relating to the Currency-Linked Capital Protected Investment Deposit is payable exclusively by an office of the Bank in Hong Kong and in its stated currency The Terms and Conditions of the Currency-Linked Capital Protected Investment Deposit are governed by and shall be construed in accordance with the laws of Hong Kong
bull You may contact our staff if you have any feedback or complaint in relation to our services or call our hotline at 2822 0228 We will respond to you within a reasonable period of time normally not exceeding 30 days in general circumstances You may contact the Hong Kong Monetary Authority at 55th Floor Two International Finance Centre 8 Finance Street Central Hong Kong if you are not satisfied with our handling of your complaint
bull Hang Seng Bank Limited is a Registered Licensed Bank under the Banking Ordinance bull All Currency-Linked Capital Protected Investment Deposit cannot be cancelled after subscription bull The Bank will act as principal to complete the transaction and may obtain certain monetary benefits in connection with the offering of
this Currency-Linked Capital Protected Investment Deposit to the public The current remuneration system that the Bank adopts for sales staff is a measurement of the staffrsquos overall performance and not just based on sales amount
bull The Bank is NOT an independent intermediary because The Bank receives fees commissions or other monetary benefits from other parties in relation to the Bankrsquos distribution of Currency-Linked Capital Protected Investment Deposit to you For details you should refer to the Bankrsquos disclosure on monetary benefits which the Bank is required to deliver to you prior to or at the point of entering into any transaction in Currency-Linked Capital Protected Investment Deposit
bull Please note that this product is not available for persons who are located within the United States are nationals of the United States and are US Persons within the meaning of Regulation S under the Securities Act (which includes any person resident in the United States and any partnership or corporation organised or incorporated under the laws of the United States)