Bonds / Certificates of Deposit

Mr. Chan will receive an interest payment of USD3,000 (USD100,000 x 3%) on 1 Jan, Year 2. On 1 Jan, Year 3, Mr. Chan will receive the final coupon payment of USD3,000 plus USD100,000 face value.

Mr. Chan will receive an interest payment of USD3,000 (USD100,000 x 3%) on 1 Jan, Year 2. On 6 Jan, Year 2, Mr. Chan sells the bond at market price of 102%, and will receive the bond value of USD102,000 plus USD41.67 accrued interests*

Mr. Chan will receive an interest payment of USD3,000 (USD100,000 x 3%) on 1 Jan, Year 2. On 6 Jan, Year 2, Mr. Chan sells the bond at market price of 94%, and will receive the bond value of USD94,000 plus USD41.67 accrued interests*.

Bonds/CDs are mainly medium- to long-term fixed income products, not for short-term speculation. You should be prepared to hold your bonds/CDs for the full tenor; you could lose part or all of your principal if you choose to sell the bond/CD prior to maturity.

It is the issuer who pays interest and repays principal of bonds/CDs. If the issuer of your bond/CD defaults, you might not be able to receive back the interest and principal. You bear the credit risk of the issuer and have no recourse to HSBC unless HSBC is the issuer itself.

Indicative price of bonds/CD are available, but prices will fluctuate with market changes. Factors affecting market price of bonds/CD include, and are not limited to, fluctuations in Interest Rates, Credit Spreads, and Liquidity Premiums. The fluctuation in yield generally has a greater effect on prices of longer tenor bonds/CD. There is an inherent risk that losses may be incurred rather than profit made as a result of buying and selling bonds/CD.

If you wish to sell Bonds/CDs, HSBC may repurchase it based on the prevailing market price under normal market circumstances, but the selling price may differ from the original buying price due to changes in market conditions.

There may be exchange rate risks if you choose to convert payments made on bonds/CD to your home currency.

The secondary market for bonds/CDs may not provide significant liquidity or may trade at prices based on the prevailing market conditions and may not be in line with the expectations of holders of bonds / CD.

If bonds/CD are redeemed early, you might not receive the same rates of return when you use the funds to purchase other products.

For renminbi (RMB) products:

There may be exchange rate risks if you choose to convert RMB payments made on the bonds to your home currency.

RMB debt instruments are subject to interest rate fluctuations, which may adversely affect the return and performance of the RMB products.

RMB products may suffer significant losses in liquidating the underlying investments if such investments do not have an active secondary market and their prices have large bid/ offer spreads.

You could lose part or all of your principal if you choose to sell your RMB bonds prior to maturity. 

This information is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. HSBC has based this list on information obtained from sources it believes to be reliable but which it has not independently verified. HSBC makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. The information is subject to change without notice.

Effective 10 December 2018, settlement day of the Singapore securities markets is 2 business days after trade execution day (T+2). For buy orders, debit of the purchase amount from your account and deposit of the purchased securities will take 2 business days after trade execution day. For sell orders, sales proceeds will be credited to your account 2 business days after sale execution day.

Note: Actual settlement date is subject to market arrangement which may be beyond the stated date due to different lead time required or suspension of business or trading.

The Central Securities Depositories Regulation No 909/2014 (CSDR) is a European Union regulation that aims to improve the safety and efficiency of securities settlement and settlement infrastructures within the European Economic Area (EEA).

CSDR is a phased regulation and most of its provisions have already been implemented since it was first introduced in 2014.

As a direct participant in European Economic Area (EEA) Central Securities Depositories (CSD), we are required, under the European Union (EU) Central Securities Depositories Regulations (CSDR), to (i) offer our customers whose securities are held through the EEA CSD the choice between an Omnibus Client Segregated Account (OSA) and an Individual Client Segregated Account (ISA), and (ii) publicly disclose the level of protection and the costs associated with the different levels of segregation that the accounts provide. Please refer to the Notice and the fee table for relevant details. Frequently Asked Questions are available here.

The second phase of CSDR defines a Settlement Discipline Regime (SDR) was effective on 1 February 2022. Its main objective is to incentivise timely settlements by introducing a set of measures to prevent, monitor and address settlement fails. This may include the following: 

• Process and system enhancements across the EEA CSDs and market participants;
• The introduction of cash penalties against parties causing settlement fails; 
• The introduction of mandatory buy-ins, whereby buying parties whose instruments have not been delivered for a set number of days are to be restored to the economic position as if the transaction had settled on time.

To find out more, please read the information and FAQs to understand the potential implications of CSDR SDR for our HSBC and our customers.