Asian Index Advantage Principal Protected Deposit Notes

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, based on the average of the six locked-in performances, as calculated on each observation date (30 June 2008, 29 June 2009, 28 June 2010, 28 June 2011, 28 June 2012, 28 June 2013). In respect of each observation date other than the final observation date, the locked-in performance for such an index shall be fixed at the greater of (a) the Index Price Return for such indices, and (b) the performance floor equal to 10 per cent. The index whose index price return is used for calculation of the locked-in performance on any observation date is then removed from the reference portfolio and disregarded for purposes of determining locked-in performance on all succeeding observations dates.

The performance floor is not a guaranteed minimum variable return. Although the performance floor provides for a minimum locked-in performance of 10 per cent for the first five years of the term, there is no performance floor for the final year.

Key features

Issue date: 28 June 2007
Maturity date: 5 July 2013
Note term: 6 years
CUSIP #: CA40427HMN03
Currency: CAD
Agent: OpenSky Capital Inc.
FundSERV code: OPS 351
Agency fee: 2% paid upfront to Agent
Selling commission: 4% paid upfront
Administrative fee: 0.20% paid upfront to Agent


  • Eligible for registered accounts
  • Principal protected at maturity
  • Exposure to the performance of six Asian indices
  • Performance Floor (minimum lock-in performance) of 10 per cent in each of the first five years

Underlying asset(s)

Index Ticker
KOSPI 200 Index ® KOSPI2
MSCI Taiwan IndexSM TWY
Hang Seng Index ® HIS
MSCI Singapore IndexSM SGY
Hang Seng China Enterprises Index™ HSCEI
Nikkei 225 StockSM Index NKY

The variable return, if any, is linked to but will not track the performance of the reference portfolio or any individual index.

Are the Notes right for you?

The Notes may be an appropriate investment for you, if, among other things: (1) you are looking for safety of principal if held to maturity; (2) want exposure to an investment that is linked to the performance of Asian equities while tracking the performance of generally recognised Asian market indices; (3) want to diversify your exposure to more than one Asian equity index; and (4) are investing for the longer term and believe that Asian equity markets will appreciate.

The Notes do not provide investors with a return or income stream 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 investors should consult with their own investment, legal and tax advisors to determine the suitability.

Early trading charges/Secondary market

The Agent intends, concurrently with HSBC Securities (Canada) Inc or an affiliate thereof, but is under no obligation, to maintain under normal market conditions, a daily secondary market for the Notes, in which the maximum bid-offer spread will be one per cent of the bid price (excluding commissions) when orders and settlements are made through FundSERV, and one per cent of the principal amount (excluding commissions) when orders and settlements are not made through FundSERV. Sale of Notes prior to maturity may be subject to an early trading charge as follows:

Time period Early trading charge
On or before 28 September 2007 6.0%
On or before 29 September 2007 and to and including 28 December 2007 4.5%
On or before 29 September 2007 and to and including 28 December 2007 3.0%
On or before 29 December 2007 and to and including 28 March 2008 1.5%
On or before 29 March 2008 and to and including 27 June 2008 0%

Please see the information statement for further details or contact your investment advisor.

Risk factors

Noteholders should carefully review and consider all risks set forth in the information statement with their investment advisor, including:

  • Asian equity market exposure
  • The volatility or degree to which the level of the index changes
  • Notes will not constitute insured deposits under Canada Deposit Insurance Corporation Act (Canada)
  • The principal amount is protected only if Notes are held to maturity
  • There is no assurance the Notes will pay any variable return and the performance floor is not a minimum guaranteed variable return
  • Decreasing diversification
  • No guaranteed secondary market
  • Price or other movements in the instrument or instruments comprising each index are unpredictable
  • The historical or pro forma performance of each index is not an indication of future performance
  • Conflicts of interest with the calculation agent

Additional information

Right of Rescission – A subscriber may only rescind any order to buy a Note (or its purchase if issued) by notice in writing to HSBC within 48 hours of the earlier of actual receipt and deemed receipt of the information statement. Such notice should be directed to: Senior Vice President, HSBC Derivative Products Group, 70 York Street, 8th Floor, Toronto, ON M5J 1S9. This rescission right does not extend to Noteholders buying a Note in any secondary market.

Amendments to Notes – The global deposit note filed on CDS representing the Notes may be amended without the consent of the holders by the Bank if, in the reasonable opinion of the Bank, the amendment would not materially and adversely affect the interests of the holders. In other cases, the global deposit note may be amended if the amendment is approved by a resolution passed by the favourable votes of the holders of not less than 662/3 per cent of the Notes.

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.