book investing

HSBC Investment Statement for Term Investments This leaflet contains the Investment Statement for HSBC’s Term Investments, also known as Term Deposits. The Investment Statement outlines the key features of HSBC’s Term Investments to enable comparison with other similar investments. This document is an Investment Statement for the purposes of the Securities Act 1978. This Investment Statement is prepared as at March 2005. than Term Investments are not covered by this Investment Statement. When placing a Term Investment with us you have a number of options on maturity of the investment. Those most frequently used are: Re-invest the principal and interest for a further term decided by you; Re-invest the principal for a term decided by you; or Withdraw the Term Investment. Important Information (The information in this section is required under the Securities Act 1978.) Investment decisions are very important. They often have long-term consequences. Read all documents carefully. Ask questions. Seek advice before committing yourself. • • • 2 Who is involved in providing it for me ? Choosing an Investment When deciding whether to invest, consider carefully the answers to the following questions that can be found below: What sort of investment is this? Who is involved in providing it for me? How much do I pay? What are the charges? What returns will I get? What are my risks? Can the investment be altered? How do I cash in my investment? Who do I contact with enquiries about my investment? Is there anyone to whom I can complain if I have problems with the investment? What other information can I obtain about this investment? The issuer of this investment is The Hongkong and Shanghai Banking Corporation Limited (“HSBC”). The New Zealand head office is situated at One Queen Street, Level 9, Auckland 1, New Zealand. The HSBC Group (of which HSBC is a part) has provided financial services to customers worldwide for over 135 years. HSBC has been providing banking and financial services to New Zealand customers for over 15 years and is a registered bank under the Reserve Bank of New Zealand Act 1989. Should you have any queries on Term Investments you can contact our Direct Service Centre on 0800 80 23 80, 24 hours a day, 7 days a week. 3 How much do I pay ? Choosing an Investment Adviser You have the right to request from any investment adviser, a written disclosure statement stating his or her experience and qualifications to give advice. That document will tell you: Whether the adviser gives advice only about particular types of investments; and Whether the advice is limited to the investments offered by one or more particular financial organisations; and Whether the adviser will receive a commission or other benefit from advising you. You are strongly encouraged to request that statement. An investment adviser commits an offence if he or she does not provide you with a written disclosure statement within five working days of your request. You must make the request at the time the advice is given, or within one month of receiving the advice. In additionIf an investment adviser has any conviction for dishonesty or has been adjudged bankrupt, he or she must tell you this in writing; and If an investment adviser receives any money or assets on your behalf, he or she must tell you in writing the methods employed for this purpose. Tell the adviser what the purpose of your investment is. This is important because different investments are suitable for different purposes. • • • • • Investing in our Term Investments is easy. Call into any branch of HSBC to apply for a Term Investment. Then subject to our account opening requirements being met, your Term Investment can be opened on the spot. Alternatively, telephone our Direct Service Centre who will advise you of the process required to set up a Term Investment account. You can also open your Term Investment via our Internet Banking service, if you are set up to do so. The investment is paid to HSBC at the time when the Term Investment is made and can be paid in any manner as agreed between you and us. Payment can be made by making a cheque out to HSBC (crossed “Not Transferable”), cash or transferring money from another account, with us or from another bank. Payments can be made at any HSBC Branch. You may make an investment of any sum as long as the investment is above the minimum levels outlined below. These minimum levels are subject to change by us from time to time as are the currencies on offer, refer below for details of these minimum levels. 7 day term, minimum investment amounts: New Zealand Dollars NZD100,000 US Dollars USD40,000 Australian Dollars AUD80,000 Hong Kong Dollars HKD300,000 1 month to 5 year terms, minimum investment amounts: New Zealand Dollars NZD5,000 Hong Kong Dollars HKD50,000 US Dollars USD5,000 Japanese Yen JPY600,000 Canadian Dollars CAD5,000 Singapore Dollars SGD5,000 Australian Dollars AUD10,000 Swiss Francs CHF5,000 Pounds Sterling GBP5,000 Euro EUR5,000 4 What are the charges ? 1 What sort of investment is this? This Investment Statement relates to the Term Investment products offered to the public of New Zealand by us, being debt securities for the purposes of the Securities Act 1978. A Term Investment is a deposit in New Zealand Dollars with a fixed term of investment and a fixed interest rate. Foreign currency Term Investments are also available from us. The principal sum invested is repayable by us to you on maturity of the investment and interest is paid either at agreed intervals or on maturity. Products from issuers other than us and products other There are currently no fees associated with investing in a Term Investment. However, if you wish to terminate your Term Investment before its maturity date, or alter the terms of the investment, then we may charge you a break cost fee for this (or in extraordinary circumstances decline your request). The break cost fee may take the form of a $100 administration fee plus a charge based on the economic cost to HSBC of terminating your Term Investment. The economic cost is based on the difference between HSBC’s Treasury funding rates (Value of Funds) at the date your Term Investment was established, and the date when your Term Investment is terminated. The Value of Funds represents the market value of funds available to HSBC. HSBC will provide you with the specific amount of the economic cost prior to the termination request being processed by HSBC. We may alter the break cost fee, including the administration fee component from time to time at our discretion. An example of how the economic cost component will be applied is as follows: You wish to break a $250,000 Term Investment 80 days prior to the set maturity date. On the date your Term Investment was established, the Value of Funds was 6.380% per annum. On the date your Term Investment was broken prior to maturity the Value of Funds was 6.591% per annum. The economic cost to HSBC of breaking your Term Investment is therefore 0.211% per annum. To convert the 0.211% per annum economic cost to a daily cost, divide by 365 days, which equates to 0.000578% per day. The economic cost component is therefore ($250,000 x 0.000578%) x 80 days. This equates to an economic cost of $115.60. In this example the total break cost fee would be a $100 administration fee plus the $115.60 economic cost of the term deposit break. The total break cost fee would therefore be $215.60. Where the Value of Funds has decreased between the date your Term Investment was established and the date your Term Investment was broken prior to maturity, no economic benefit will be passed on. The $100 administration fee would still apply. HSBC may alter this break cost fee at any time at its discretion. under the heading “What are the charges?” Additional investments can be made at any time in accordance with the terms and conditions applicable at that time. 8 How do I cash in my investment ? If you need to withdraw your investment before its maturity date, you can apply to do so by contacting us. If your application is accepted you will still be paid interest, but this may be at a reduced rate, as described under the heading “What are the charges?”. We may also exercise our right to combine your accounts and to set off amounts we owe to you against amounts you may owe to us. We may close your account at any time in accordance with the terms and conditions applicable at that time under any other agreement with us or if we are otherwise required by law to surrender some or all of your funds to the appropriate authorities. You are not entitled to sell or assign your Term Investment to another person. 9 Who do I contact with enquiries about my investment ? Enquiries about your investment may be made to an HSBC Customer Services Officer at any HSBC Branch or by telephoning any HSBC Branch or our Direct Service Centre on 0800 80 23 80. 5 What returns will I get ? On maturity, HSBC will pay you the fixed interest rate at which you agree to invest your money plus the principal invested (less any amounts specified under the heading “What are the charges?” if applicable). HSBC is legally liable to pay these returns. The key factors that determine your returns will be the interest rate that you agree to invest your money at, the principal invested, the term of your investment and any tax deductions. HSBC does not promise any amount or level of return. Interest is paid on the sum invested at the agreed frequency and rate of interest for the term of your investment you have agreed with HSBC. The Term Investment terms you can agree with HSBC can currently range from seven days to five years. We may change these timeframes from time to time. If funds are received by an adviser on behalf of HSBC, the date of receipt of the deposit will be deemed to be the date HSBC receives the funds from the adviser. We are required to deduct resident withholding tax from the gross interest payable to you as a New Zealand resident investor unless you hold a certificate of exemption. We are required to deduct nonresident withholding tax from the gross interest payable to non-New Zealand residents unless you agree with us to have the approved issuer levy deducted from the gross interest payable. We are legally obliged to pay the tax to the Inland Revenue on your behalf. 10 Is there anyone to whom I can complain if I have problems with the Investment? Any complaints about your investment should first be raised with a Customer Services Officer or the Manager at the HSBC Branch that you first dealt with. Alternatively, you can telephone our Direct Service Centre on 0800 80 23 80, 24 hours a day, seven days a week, or contact us in writing at: PO Box 5947 Wellesley Street, Auckland, New Zealand. They will explain our complaint procedures to you and should be able to resolve any problems you may have. However, if the issue is unresolved and you are dissatisfied with our complaint procedure, you may contact the Banking Ombudsman for an independent review of your complaint, by writing to: The Office of the Banking Ombudsman Level 11, 109-111 Featherston Street P O Box 10-573, The Terrace, Wellington, New Zealand You may also contact the Office of the Banking Ombudsman by calling 0800 805 950. 11 What other information can I obtain about this investment ? Further information about our Term Investments and HSBC is contained in the following documents which are available free of charge on request from any HSBC Branch or its head office: a copy of HSBC’s most recent annual report, including the financial statements; a copy of HSBC’s most recent Disclosure Statements issued pursuant to the Reserve Bank of New Zealand Act 1989; a copy of HSBC’s most recent Investment Statement; and a copy of HSBC’s Personal Financial Services Terms and Conditions that are applicable to Term Investments. A copy of HSBC’s most recent financial statements that have been registered under the Financial Reporting Act 1993 and other documents relating to HSBC are filed on a public register at the Companies Office of the Ministry of Economic Development, and will be available for public inspection. The Companies Office may charge a nominal fee for making HSBC’s file available for public inspection. Annual interest PAYE withholding tax deduction certificates will be issued in April if the gross domestic interest paid exceeds $20 and tax is deducted. You may request information about your investment, such as the balance, from us at any time. You may obtain this information by using our Automated PhoneBanking, Internet banking service if you are set up to do so. To find out about our competitive Term Investment rates simply call into any HSBC Branch or call our Direct Service Centre on 0800 80 23 80. You can also enquire by using our fully automated telephone banking service, Automated PhoneBanking, if you are set up to do so or visit our internet web site at www.hsbc.co.nz. You have rights of access to and correction of personal information that we hold about you under the Privacy Act 1993. If you wish to make a request, please see the HSBC Branch where your accounts are held. We may impose a reasonable charge for complying with a request. 6 What are my risks ? The main risks of you not recovering the sum which you paid for the investment or of not receiving the returns described above are: The insolvency of HSBC; HSBC receiving a deduction notice in respect of your funds from a third party (such as the IRD) claiming an interest in those funds; HSBC exercising its rights to combine your accounts or to set-off funds held in credit against amounts you owe to us. You cannot be required to pay more money than you have agreed to invest with us. If we are put into liquidation during the term of the investment, then secured creditors and those creditors preferred by statute will rank ahead of your claim. After the payment of these creditors your claim will rank equally with all other unsecured creditors. On insolvency, you will not be obliged to pay any more than the amount you invested with us. If a statutory manager is appointed to HSBC, the ranking of your claim would be determined by the statutory manager in accordance with the relevant statutory framework. In addition if the investment you have made is in a foreign currency the risk of loss resulting from movements in exchange rates can be substantial. You should note that past performance of a currency is not necessarily an indication of its future performance and that advice, opinions or other data relating to the future performance of a currency are speculative. • • • • • • • • 7 Can the investment be altered ? Once an investment is made its terms cannot generally be altered. We may in certain circumstances agree to the early or partial withdrawal of the investment. However, the rate of interest payable to you may be adjusted to reflect the changes made and a fee charged, as described B0005-03-05