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    Structured Notes (Capital Protected)

    Overview

    Play video Structured Notes

    Structured note is a structured investment product issued by financial institutions and includes derivatives with different payoff structures linked to various underlying asset types, e.g. foreign exchange rate or upon early redemption. It provides investors opportunities to gain higher potential return. You can start your investment online with HKD100,000.​

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    Before beginning your investment journey

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    Risk Profiling Questionnaire (RPQ)
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    Key features

    This investment product helps to reduce capital loss risk amid market fluctuations.

    Structured notes (capital protected) are 100% capital protection only when it is held to maturity. The amount received by you upon early withdrawal/ termination may be less than the amount initially invested by you. Please refer to Risk Factors detailed in the Issuer’s term sheet, Important Facts and the offering documents.

    In addition to the minimum return at maturity or upon Issuer early redemption (if any), you can receive the potential return if the conditions (i.e. the performance of the linked asset, specific market events or other specified criteria) is/ are satisfied. You may go to the "Products overview and example" section to learn more about different return scenarios at maturity/ upon Issuer early redemption of various note products.

    For details, please refer to the product’s additional terms and conditions in product subscription.

    Different investment tenors available and major currencies are acceptable as investment currency, providing greater flexibility to achieve your investment goal.

    You can subscribe for structured notes via Hang Seng Mobile App with simple steps or any of our branches.

    Whether you are an investment beginner or experienced investor, you can subscribe for structured notes easily with an investment amount as low as HKD100,000.

    Products overview and examples

    Digital Coupon Notes on USD / HKD overview

    Digital Coupon Notes on USD / HKD is a structured product linked to the performance of USD against HKD foreign exchange rate. It offers 100% capital protection and minimum return at maturity. If the trigger event occurs on valuation date, you can receive additional trigger bonus at maturity.

    Subscription channel: Branch, Mobile

    Illustrative example [4]

    Subscription details

    Investment amount

    HKD100,000

    Investment tenor

    1 year

    Linked assets

    USD/HKD spot exchange rate

    Trigger event

    USD / HKD spot exchange rate is at or above limit (i.e. 7.80) on valuation date

    Minimum bonus

    3.00% flat rate

    Trigger bonus

    0.10% flat rate

    When USD/HKD spot exchange rate is at or above limit (i.e. 7.8) on valuation date

    1. When you subscribe

      You invest HKD 100,000

    2. At maturity

      You receive 100% of your principal and both minimum and trigger bonus, a total of HKD103,100

    Your return HKD100,000 ✕ (3.00% + 0.10%) = HKD3,100

    When USD / HKD rate is below limit (i.e. 7.8) on valuation date

    1. When you subscribe

      You invest HKD100,000

    2. At maturity

      You receive 100% of your principal and minimum bonus, a total of HKD103,000

    Your returns

    HKD100,000 ✕ 3.00% = HKD3,000

    You may suffer partial or total loss of the amount originally invested if the issuer becomes insolvent or defaults on their obligations.

    Callable Linear Bonus Coupon Notes overview

    Callable Linear Bonus Coupon Note is a structured product linked to interest rate, it offers 100% capital protection and coupon payment at maturity or upon issuer’s early redemption. A one-off bonus coupon will be paid if certain conditions is fulfilled.

    Subscription channel: Branch, Mobile

    Illustrative example [4]

    Subscription details

    Investment amount

    USD20,000

    Investment tenor

    5 years

    Linked assets

    Secured Overnight Financing Rate (SOFR)

    Linear coupon

    3.80% per annum without compounding

    Linear coupon payment date

    Upon issuer's optional redemption or at maturity

    Bonus coupon

    It'll be determined based on the performance of linked assets.

    Issuer 1

    Issuer 2

    Bonus coupon payment date

    One year after issue date

    Issuer’s Optional Redemption

    Issuer has the right to redeem the note one year after issue date, and on the same date in the 2nd, 3rd and 4th year

    When you hold the note till maturity and bonus coupon condition is fulfilled, you will receive 100% of your principal and maximum potential gain (including max bonus coupon)

    1. When you subscribe

      You invest USD20,000

    2. On bonus coupon payment date

      You receive bonus coupon USD100

    Different bonus coupon return scenarios

    Issuer 1   Issuer 2

    1. At maturity

      You receive 100% of your principal and accrued linear coupon (3.80% ✕ 5 years), a total of USD23,800

    Your return

    USD20,000 ✕ (3.80% ✕ 5 years) = USD3,800

    1. Total receivable (principal and gain)

      You receive 100% of your principal and maximum potential gain (including max bonus coupon), a total of USD23,900

    Your total return

    USD100 + 3,800 = USD3,900

    When issuer redeems the note early in the 1st year and bonus coupon condition is not fulfilled, you will receive 100% of your principal and minimum gain

    1. When you subscribe

      You invest USD20,000

    2. On bonus coupon payment date

      You do not receive any bonus coupon

    Different bonus coupon return scenarios

    Issuer 1   Issuer 2

    1. Upon early redemption

      You receive 100% of your principal and accrued linear coupon (3.80% ✕ 1 year), a total of USD20,760

    Your return

    USD20,000 ✕ (3.80% ✕ 1 year) = USD760

    1. Total receivable (principal and gain)

      You receive 100% of your principal and minimum gain, a total of USD20,760

    Your total return

    USD760

    You may suffer partial or total loss of the amount originally invested if the issuer becomes insolvent or defaults on their obligations.

    Floating Rate Coupon Notes overview

    Floating Rate Coupon Note is a structured product linked to the performance of interest rate, the product offers 100% capital protection at maturity, coupon are distributed every quarter in general. It also offers minimum returns and opportunities to enjoy higher potential returns, up to a cap.

    Subscription channel: Branch

    Illustrative example [4]

    Subscription details

    Investment amount

    USD20,000

    Investment tenor

    1 years

    Linked assets

    USD SOFR CMS 1 year

    Cap

    3.50% p.a.

    Floor

    2.50% p.a.

    Coupon frequency

    Every 3 months

    Day count factor

    90/360

    Total receivable (principal and gain) at maturity

    When linked interest rate is at or above 3.50% (Cap) on a coupon determination date, you will receive max floating coupon on the relevant coupon payment date. Assuming linked interest rate = 3.60% in this example

    1. When you subscribe

      You invest USD20,000

    2. On a coupon payment date

      Your coupon will be calculated based on capped coupon, i.e. USD175

    Your coupon amount

    USD20,000 ✕ 3.50% ✕ 90/360 = USD175

    When linked interest rate between 3.50% (Cap) and 2.50% (Floor) on a coupon determination date, you will receive mid floating coupon on respective coupon payment date. Assuming linked interest rate = 3.30% in this example.

    1. When you subscribe

      You invest USD20,000

    2. On a coupon payment date

      Your coupon will be calculated based on coupon rate equal to linked interest rate, i.e. USD165

    Your coupon amount

    USD20,000 ✕ 3.30% ✕ 90/360 = USD165

    When linked interest rate is at or below 2.50% (Floor) on a coupon determination date, you will receive min floating coupon on respective coupon payment date. Assuming linked interest rate = 2.40% in this example

    1. When you subscribe

      You invest USD20,000

    2. On a coupon payment date

      Your coupon will be calculated based on floored coupon, i.e. USD125

    Your coupon amount

    USD20,000 ✕ 2.50%  ✕ 90/360 = USD125

    You may suffer partial or total loss of the amount originally invested if the issuer becomes insolvent or defaults on their obligations.

    Product information

    Step 1
    Log on to Hang Seng Mobile App and tap "Structured Notes" under "Investments" from the left menu.

    Mobile subscription tutorial video (Cantonese version)

    Play video Structured Notes

    Subscribe Structured Notes via Hang Seng Mobile App (Cantonese version)

    Product documents

    Knowledge and insights

    Invest in Capital protected products and enjoy higher potential returns while managing risk

    Read more

    Open a securities account

    New or non-integrated account customers

    Open an integrated account and activate your investment account via Hang Seng Mobile App with ease[2]

    View details

    Existing integrated account holders

    Comprehensive Structured Notes (Capital Protected) experience is just a few steps away[3]

    Activate account

    FAQs

    Popular questions

    9:00 a.m. to 5:30 p.m. from Mon to Fri (excluding Hong Kong public holidays, half-day trading or market disruption days), however, the subscription time for individual products could be different.

    You can refer to the risk factors listed in the relevant offering documents for the structured notes.

    The relevant offering documents (including Term Sheet and Important Notes to Customers) are provided during the structured notes’ subscription process . After you have subscribed a note, you may also find it from "My Structured Notes" page in Hang Seng Mobile App. Alternatively, printed copies of the offering documents can be obtained free of charge during normal business hours on any business days at our branches. Please call us at 28220228 for details of the addresses our branches.

    The issue date is the date on which structured notes are issued. The issue date is a day falling from 5 to 10 business days (subject to the specified structured notes) after the subscription date.

    Yes, simply log on to Hang Seng Mobile App and tap "Structured Notes (Capital Protected)” to visit My Structured Notes page, you can view your subscription status and holding details.

    According to LERS, when the demand for Hong Kong dollars is greater than the supply and the market exchange rate strengthens to the strong-side CU of HKD7.75 to USD1, the Hong Kong Monetary Authority (HKMA) stands ready to sell Hong Kong dollars to banks for US dollars. The aggregate balance (a component of the monetary base) will then expand to push down Hong Kong dollar interest rates, creating monetary conditions that move the Hong Kong dollars away from the strong-side limit to within the convertibility zone of 7.75 to 7.85.

    If the supply of Hong Kong dollars is greater than demand and the market exchange rate weakens to the weak-side CU of HKD7.85 to USD1 the HKMA stands ready to buy Hong Kong dollars from banks. The aggregate balance (a component of the monetary base) will then contract to drive Hong Kong dollar interest rates up, pushing the Hong Kong dollars away from the weak-side limit to stay within the convertibility zone. For details, please refer to https://www.hkma.gov.hk/eng/key-functions/money/linked-exchange-rate-system/how-does-the-lers-work/

    Only applicable for specific notes product.

    Subject to the terms in the product's term sheet, you can redeem your investment in structured notes before maturity. The early redemption amount may be affected by the prevailing market conditions and may result in loss of the principal.

    No. Please visit any of our branches if you want to redeem your structured notes.

    There is no handling fee for subscribing structured notes. For details, please refer to offering documents.

    SOFR is a broad indicator used to calculate the cost of borrowing overnight in the repo market collateralised by US Treasury securities. It is essentially the benchmark interest rate for USD denominated derivatives and loans.

    Federal Reserve's Alternative Reference Rates Committee announced its preferred alternative reference rate to the USD LIBOR rate: Secured Overnight Financing Rate (SOFR).

    For details, you may refer to https://www.hkma.gov.hk/media/eng/doc/key-functions/banking-stability/banking-policy-and-supervision/LIBOR_transtion_corporates_Q&As_revised.pdf and https://www.cmegroup.com/education/courses/introduction-to-sofr/what-is-sofr.html

    Since SOFR is an overnight interest rate, several calculation methods based on SOFR have been developed to provide various interest rate options for different products. CME Term SOFR Reference Rates benchmark (Term SOFR) which is a set of forward-looking interest rate estimates, calculated and published daily for 1-, 3-, 6- and 12-month tenors. USD SOFR CMS 1 year is a forward-looking interest rate estimates for 12-month tenors.

    For details, you may refer to https://www.cmegroup.com/articles/faqs/cme-term-sofr-reference-rates.html

    Need more help?

    Footnote

    Other point(s) to note

    1. You should not only base on this material alone to make investment decisions, but should read the relevant offering documents of the investment products (including the full text of the risk factors stated therein) and risk disclosure statements of the relevant investment products in details before making any investment decision. You should obtain independent professional advice if you have concerns about your investment.
    2. In case of any inconsistencies or conflicts between the English version and versions of other languages, the English version shall prevail.

    Remark(s)

    1. Structured notes (capital protected) are 100% capital protection only when it is held to maturity. The amount received by you upon early withdrawal/ termination may be less than the amount initially invested by you. Investment in the structured notes is subject to the credit risk of the Issuer.
    2. This service is not available to customers who:
      • only hold joint-named integrated accounts
      • already hold a sole-named Prestige Banking account
      Such customers can make an appointment online to open or upgrade account in any of our branches.
    3. Integrated account is referring to the following accounts:
      • Prestige Banking
      • Preferred Banking
      • Integrated Account
      • Family+ Account
    4. Contents of the illustrations in this website ("the illustrations") are for illustration purpose only and do not constitute any offer, invitation or recommendation to any person to purchase any structured notes. Calculations and examples contained in the illustrations are purely hypothetical and do not reflect a complete analysis of all possible gain or loss scenario, and they should not be relied on as an indication of what the return on the structured notes might actually at maturity. For actual calculations, rounding adjustment, settlements and delivery expenses payable, please refer to the terms and conditions set out in the relevant offering documents.
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