HSBC Dow Jones Industrial Average – Linked Deposit Notes, Series 1

Secondary Market Price*:
Last Updated:

If held to maturity, the Notes will pay:

  • 100% of the principal amount invested; and
  • a Variable Return, if any, linked to the change in the value (positive or negative) of the Dow Jones Industrial Average Index SM. The performance (positive or negative) of the Index will be measured from its Initial Index Level to the Final Index Level to determine the Index Return. The Index Return will then be multiplied by the Participation Rate of 55% to determine the Variable Return, if any. If the Variable Return is zero or less than zero, then the Notes will not pay a Variable Return.

Key features

Issue date: 19 March 2010
Maturity date: 19 March 2015
Note term: 5 years
CUSIP #: CA40427HRP06
Currency: USD
Participation: 55%
Selling agent fees: USD2.25 per Note

Highlights

  • Principal protected at maturity
  • Eligible for registered accounts

Underlying asset(s)

Index Ticker
Dow Jones Industrial AverageSM Index INDU

Are the Notes right for you?

The Notes are appropriate as investments only for those Noteholders who are seeking indirect exposure to the price performance of the Index and are willing to accept a high degree of investment risk and limited or no liquidity. The Notes are not conventional notes or debt instruments in that they do not provide Noteholders with a return or income stream prior to maturity calculated by reference to a fixed or floating rate of interest that is determinable prior to maturity. The effective yield to maturity of the Notes may be less than that which would be payable on a conventional fixed-rate or floating-rate debt instrument. The Notes are generally more suitable for purchasing and holding up to maturity.

Potential Noteholders should consult with their own investment, legal and tax advisers to determine the suitability of an investment in the Notes and the appropriate amount, if any, of an investment of this nature.

Early trading charges/Secondary market

HSBC Securities (Canada) Inc. intends, in normal market conditions, to use reasonable efforts to provide a secondary price for the Notes as principal, but reserves the right not to do so in the future in its sole discretion, without providing prior notice to the Noteholders. Sale of Notes prior to maturity may be subject to an Early Trading Charge as follows:

Time period Early trading charge
Issue Date to and including September 18, 2010 2.25%
September 19, 2010 to and including March 18, 2011 1.25%
March 19, 2011 to and including the Maturity Date 0.0%

During the term of the Notes, you may inquire as to the net asset value of a Note or the level of the underlying Index and how it relates to the Variable Return that may be payable under the Notes, if any, by contacting HSBC at the number below.

Please see the Term sheet for further details or contact your investment adviser.

Risk factors

The Notes subject the Noteholders to significant risks, including the potential for lost investment opportunities. Potential Noteholders should carefully review and consider all risks set forth in this Information Statement including:

  • US equity market exposure
  • The volatility or degree to which the level of the underlying Index changes
  • Notes will not constitute insured deposits
  • Noteholders only participate in 55% of the upside performance of the Index
  • The Principal Amount is repaid only if the Notes are held to maturity
  • There is no guaranteed secondary market for the Notes and if such a market develops, there can be no assurance that it will be liquid
  • You have no recourse to the Index Sponsor or any issuer of an instrument comprising the Index.
  • Price or other movements in the instrument or instruments comprising the Index are unpredictable
  • The historical or pro forma performance of each underlying Index is not an indication of future performance
  • Conflicts of interest with the calculation agent
  • Currency risk; and
  • Special Circumstances

Additional information

Right of Cancellation- A subscriber may cancel an order to purchase a Note (or cancel the purchase of a Note if the Note has been issued) by providing written instructions to HSBC directly or through his or her investment adviser any time up to two days after the later of (i) the day on which the agreement to purchase the Note is entered into and (ii) deemed receipt of this Information Statement. Such notice should be directed to: HSBC Derivative Products Group, 70 York Street, 8th Floor, Toronto, ON M5J 1S9,
Fax 416 868 3088. This rescission right does not extend to Noteholders buying a Note in any secondary market.

Please see the information statement for further details. Please do not hesitate to call us at +1 866 511 4722 or send us an
e-mail for more information.

*The price is before the application of an early trade charge that may apply. The secondary market price for a Note, if available, represents the bid price of such Note as a percentage (%) of the original principal amount invested. The bid price stated is only as of the date indicated.

Important: Please read the disclaimer carefully.