HSBC Greater China Advantage Deposit Notes, Series 2

Secondary Market Price*:
Last Updated:

The Notes will pay, if held to maturity: i) 100 per cent of the principal amount invested; and ii) a variable return, if any, linked to the increase, if any, in the value of a notional index basket comprised of four (4) equally-weighted Asian indices. The change in value of each Index will be measured from its closing level on 24 March 2010 to the arithmetic average of the closing levels of each index on specified preset quarterly observation dates (24th of each of June, September, December, and March). The performance of each index (positive or negative) will then be weighted equally to determine the index basket return and the variable return, if any, will be multiplied by the participation rate.

Key features

Issue date: 29 March 2010
Maturity date: 29 March 2016
Note term: 6 years
CUSIP #: CA40427HRQ88
Currency: USD
Participation: 115%
Selling agent fees: USD3.50 per Note

Highlights

  • Principal protected at maturity
  • Eligible for registered accounts
  • Linked to four (4) equally-weighted Asian indices
  • Return based on quarterly averaging

Underlying asset(s)

Index Ticker Index component weight
MSCI Taiwan Index SM TWY 25%
MSCI Singapore Index SM SGY 25%
Hang Seng Index SM HSI 25%
Hang Seng China Enterprise Index SM HSCEI 25%

Are the Notes right for you?

The Notes are appropriate as investments only for those Noteholders who are willing to accept a high degree of investment risk and limited or no liquidity. Depending on the performance of the Indices, a Noteholder's return on the Notes could be zero. An investment in the Notes is speculative and only persons who are willing to accept no return on their investment should consider purchasing the Notes.

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. HSBC makes no recommendation as to the suitability of the Notes for investment.

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 June 28, 2010 3.0%
June 29, 2010 to and including September 28, 2010 2.5%
September 29, 2010 to December 28, 2010 2.0%
December 29, 2010 to March 28, 2011 1.5%
March 29, 2011 to June 28, 20110 1.0%
June 29, 2011 to September 28, 2011 0.5%
September 29, 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:

  • Global equity market exposure
  • The volatility or degree to which the level of each underlying Index in the Index Basket changes
  • Notes will not constitute insured deposits
  • The full Principal Amount is repaid only if 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 Sponsors or any issuer of an instrument comprising any of the Indices
  • Price or other movements in the instrument or instruments comprising the Indices are unpredictable
  • The historical or pro forma performance of each underlying Index within the Index Basket is not an indication of future performance
  • 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 latter if (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.