HSBC 2.5Y SGD Lock-in Best Coupon Structured Deposit The Hongkong and Shanghai Banking Corporation Limited's authorised sales staff must go through this document with youonce you have decided to invest in HSBC 2.5Y SGD Lock-in Best Coupon Structured Deposit (the “investment”). Thisdocument is prepared to assist you in understanding this investment. We recommend that you keep this document for futurereference. Unless otherwise defined, terms used in this document shall have the same meaning as in the relevant IndicativeTerm Sheet.

Structured Deposit Taker (“the Bank”)

The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch

Ratings As of 24 June 2009: Aa2 (Moody’s)

Tenor 2.5 years Principal Protection 100% principal protection at maturity Underlying Basket The basket of Shares (each a “Share” and together the “Shares”), which comprises the 5

Shares listed below each with equal weight: 1. DBS Group Holdings Ltd (“DBS SP”) 2. Keppel Land Ltd (“KPLD SP”) 3. Oversea-Chinese Banking Corporation Ltd (“OCBC SP”) 4. Singapore Telecommunications Ltd (“ST SP”) 5. Singapore Exchange Limited (“SGX SP”)

Product description

This investment is linked to the performance of a basket of Singapore shares (“Underlying Basket”) and enables the investor to earn a potential variable coupon if the worst performing share in the Underlying Basket (“Worst Performer”) is at or above a predetermined level on each Valuation Date. At maturity, the investor will receive his full principal.

Required period of holding

2.5 years. Investors must be prepared to hold this investment for the full 2.5-year tenor. Any early redemption by the investor is subject to the Bank’s approval and may result in a significant loss of principal.

Currency SGD (Singapore Dollars)

Minimum investment

SGD5,000

Incremental investment

SGD1,000

Risk rating 1 (suitable for investors with a Cautious risk attitude)

For more details of the terms of this investment, please refer to the Indicative Term Sheet on Page 6-11 of this document.

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Information on Structured Deposit Taker The Structured Deposit Taker is The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch (the “Bank”), rated Aa2 (Moody’s) as at 24 June 2009. The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch is a wholly owned subsidiary of HSBC Holdings plc, the holding company of the HSBC Group.

The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch Regulated by the Monetary Authority of Singapore

Licensed under the Banking Act (Cap. 19) Exempt financial adviser and exempt capital markets services licence holder

Unique Entity Number S16FC0010A Business Office: 21 Collyer Quay #14-01 HSBC Building, Singapore 049320

Tel: 1800 HSBC NOW (4722 669), Member of the HSBC Group Headquartered in London, the HSBC Group is one of the largest banking and financial services organisations in the world. Its international network comprises some 10,000 properties in 86 countries and territories in Europe, Hong Kong, Rest of Asia-Pacific, including the Middle East and Africa, North America and Latin America.

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Hypothetical Examples The following examples are purely hypothetical. The hypothetical rates of return shown in the following 4 scenario examples are meant for illustrative purposes only. The levels / movement / trends shown have no reference to historical data and are not actual or indicative of future performance. The Bank makes no representation or warranty (express or implied) of any nature nor is any responsibility of any kind accepted with respect to the completeness or accuracy of any information, projection, representation or warranty (expressed or implied) in, or omission from the below scenario analysis.

The following examples show what the investor’s potential return on the investment could be under 4 different scenarios based on an initial investment of SGD100,000.00. Initial Parameters Initial investment (“principal amount”) SGD 100,000.00

DBS SP KPLD SP OCBC SP ST SP SGX SP

Initial Share Price 10.00 2.00 6.00 2.50 7.00

Coupon Level (105% of initial share price)

10.50 2.10 6.30 2.625 7.35

Lock-in Level (110% of initial share price)

11.00 2.20 6.60 2.75 7.70

Coupon calculation In respect of each Valuation Date, a cash amount equal to principal amount times:

a) 2.00%* if the Closing Price of the Worst Performer is greater than or equal to the Coupon Level;

b) Otherwise 2.00%* and thereafter on all subsequent Coupon Payment Dates if a Lock-in Event has occurred;

c) Otherwise 0.00%

*For illustration purpose only, to be determined by the Bank in good faith on Trade Date Scenario 1: Bull Market Scenario (No Lock-in Event)

Valuation date

Closing Price of Worst

Performer greater than or

equal to Coupon Level?

Closing Price of Worst

Performer greater than or equal to Lock-

in Level? Lock-in Event

occurs?

Coupon (semi-annual)

%

Coupon (semi-annual)

$ 1 Yes No No 2.00% SGD 2,000.00 2 No No No 0.00% SGD 0.00 3 Yes No No 2.00% SGD 2,000.00 4 Yes No No 2.00% SGD 2,000.00 5 Yes No No 2.00% SGD 2,000.00

Total coupons paid 8.00% SGD 8,000.00 In this scenario, the Closing Price of the Worst Performer was greater than or equal to the Coupon Level on 4 valuation dates (out of 5) and no Lock-in Event has occurred. Therefore, the investor will be paid Coupon of 2.00% on each Valuation Date where the Closing Price of the Worst Performer was greater than or equal to the Coupon Level. Total coupons paid (over 2.5 years) = 8.00% Total redemption proceeds = SGD 100,000.00 (principal amount) + SGD 8,000.00 (Coupon) = SGD 108,000.00 over 2.5 years The investor’s simple annualized return is then 3.20% p.a. on the initial investment.

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Scenario 2: Bull Market Scenario (Lock-in Event Occurs)

Valuation date

Closing Price of Worst

Performer greater than or

equal to Coupon Level?

Closing Price of Worst

Performer greater than or equal to Lock-

in Level? Lock-in Event

occurs?

Coupon (semi-annual)

%

Coupon (semi-annual)

$ 1 Yes No No 2.00% SGD 2,000.00 2 Yes Yes Yes 2.00% SGD 2,000.00 3 NA NA NA 2.00% SGD 2,000.00 4 NA NA NA 2.00% SGD 2,000.00 5 NA NA NA 2.00% SGD 2,000.00

Total coupons paid 10.00% SGD 10,000.00 In this scenario, the Closing Price of the Worst Performer was greater than or equal to the Lock-in Level on the second valuation date, hence a Lock-in Event has occurred. The coupon will then be “locked-in” at 2.00% on each subsequent Coupon Payment Date. Total coupons paid (over 2.5 years) = 10.00% Total redemption proceeds = SGD 100,000.00 (principal amount) + SGD 10,000.00 (Coupon) = SGD 110,000.00 over 2.5 years The investor’s simple annualized return is then 4.00% p.a. on the initial investment. Scenario 3: Stable Market Scenario (No Lock-in Event)

Valuation date

Closing Price of Worst

Performer greater than or

equal to Coupon Level?

Closing Price of Worst

Performer greater than or equal to Lock-

in Level? Lock-in Event

occurs?

Coupon (semi-annual)

%

Coupon (semi-annual)

$ 1 Yes No No 2.00% SGD 2,000.00 2 No No No 0.00% SGD 0.00 3 No No No 0.00% SGD 0.00 4 Yes No No 2.00% SGD 2,000.00 5 Yes No No 2.00% SGD 2,000.00

Total coupons paid 6.00% SGD 6,000.00 In this scenario, the Closing Price of the Worst Performer was greater than or equal to the Coupon Level on 3 valuation dates (out of 5) and no Lock-in Event has occurred. Therefore, the investor will be paid Coupon of 2.00% on each Valuation Date where the Closing Price of the Worst Performer was greater than or equal to the Coupon Level. Total coupons paid (over 2.5 years) = 6.00% Total redemption proceeds = SGD 100,000.00 (principal amount) + SGD 6,000.00 (Coupon) = SGD 106,000.00 over 2.5 years The investor’s simple annualized return is then 2.40% p.a. on the initial investment.

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Scenario 4: Worst Case Scenario (Bear Market with no Lock-in Event)

Valuation date

Closing Price of Worst

Performer greater than or

equal to Coupon Level?

Closing Price of Worst

Performer greater than or equal to Lock-

in Level? Lock-in Event

occurs?

Coupon (semi-annual)

%

Coupon (semi-annual)

$ 1 No No No 0.00% SGD 0.00 2 No No No 0.00% SGD 0.00 3 No No No 0.00% SGD 0.00 4 No No No 0.00% SGD 0.00 5 No No No 0.00% SGD 0.00

Total coupons paid 0.00% SGD 0.00 In the worst case scenario where the Closing Price of the Worst Performer has not been greater than or equal to the Coupon Level on any Valuation Date and no Lock-in Event has occurred, investor will not receive any coupons throughout the entire tenor of the investment. Total coupons paid (over 2.5 years) = 0.00% Total redemption proceeds = SGD 100,000.00 (principal amount) + SGD 0.00 (Coupon) = SGD 100,000.00 over 2.5 years The investor’s simple annualized return is then 0.00% p.a. on the initial investment. Scenario Analysis Disclaimer The above scenarios will provide investors with illustrations of potential payout calculations under different scenarios. They do not reflect a complete analysis of all potential gain and loss scenarios that may arise in respect of any actual investment. Figures used in the scenarios are for illustrative purposes only. Investors should not project the future performance of the Shares in the Underlying Basket on these illustrations. In addition, upon the occurrence of certain events as specified in the Confirmation Note (inclusive of the Final Term Sheet) governing this Structured Deposit, the Bank has the sole discretion to make certain adjustment. Accordingly, no representation or warranty is made by the Bank that any scenario described above can be duplicated under real investment conditions. Actual results may vary from the results shown above, and variations may be material.

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Indicative Term Sheet HSBC 2.5Y SGD Lock-in Best Coupon Structured Deposit

Issue HSBC 2.5Y SGD Lock-in Best Coupon Structured Deposit

Structured Deposit Taker (the “Bank”)

The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch

Ratings Aa2 (Moody’s) as of 24 June 2009

Principal Protection 100% principal protection at maturity

Minimum Subscription Size SGD 5,000 (with incremental amounts of SGD 1,000)

Trade Date [23] July 2009

Strike Date [23] July 2009, or if such day is not a Scheduled Trading Day in respect of the UnderlyingBasket, the next succeeding day that is a Scheduled Trading Day in respect of the UnderlyingBasket, subject to “Consequences of Disrupted Days”.

Structured Deposit Start Date [30] July 2009

Tenor 2.5 Years

Currency Singapore dollars (SGD)

Final Valuation Date [23] January 2012, or if such day is not a Scheduled Trading Day in respect of the Underlying Basket, the next succeeding day that is a Scheduled Trading Day in respect of the Index, subject to “Consequences of Disrupted Days”.

Maturity Date [30] January 2012, or if such date is not a Business Day, the next following date which is a Business Day.

Underlying Basket The basket of Shares (each a “Share” or “Share j” and together the “Shares”), which, as of the Trade Date, comprises the 5 Shares listed below each with equal weight, where “j” denotes the Share, being the integers 1 to 5 respectively. The Basket is subject to “Adjustment to the constituents of the Basket” as set out below.

j Share j Bloomberg Ticker

Exchange Currency Initial Share Price

1 DBS Group Holdings Ltd DBS SP Singapore Stock Exchange

SGD [tbc]

2 Keppel Land Ltd KPLD SP Singapore Stock Exchange

SGD [tbc]

3 Oversea-Chinese Banking Corporation Ltd

OCBC SP Singapore Stock Exchange

SGD [tbc]

4 Singapore Telecommunications Ltd

ST SP Singapore Stock Exchange

SGD [tbc]

5 Singapore Exchange Limited SGX SP Singapore Stock Exchange

SGD [tbc]

Exchange The exchange(s) on which the Share is principally traded (as stipulated in the table above); or any successor to such exchange or quotation system or any substitute exchange or quotation system to which trading in the Share has temporarily relocated (provided that the Calculation Agent has determined that there is comparable liquidity relative to such Share on such temporary substitute exchange or quotation system as on the original Exchange)

Related Exchange “All Exchanges” – each exchange or quotation system where trading has a material effect (as determined by the Calculation Agent) on the overall market for futures or options contractsrelating to the relevant Share.

Coupon With respect to a Valuation Date i (for i = 1 to 5), the following Coupons will be payable on the relevant Coupon Payment Date i (for i=1 to 5):

Principal amount x Performance i

The result will be rounded to the nearest cent (with one half cent being rounded up).

Coupon Level 105% Lock-in Level 110%

A Lock-In Event is deemed to occur if the Closing Price of the Worst Performer on Valuation Date i is greater than or equal to the Lock-in Level, as determined by the Calculation Agent in

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its sole and absolute discretion. Initial Share Price The Closing price of Share j on the Strike Date as determined by the Calculation Agent Closing Price In respect of a Share, the closing price of that Share as of the relevant day as published by the

relevant Exchange. Valuation Dates (i = 1 to 5) Such dates are expected to be the following as set out below, or if such day is not a Scheduled

Trading Day for any of the Shares in the Underlying Basket, the immediate following Scheduled Trading Day in respect of all of the Shares in the Underlying Basket (subject to “Consequences of Disrupted Days” as set out below)

i Valuation Date i 1 [22] Jan 2010 2 [23] Jul 2010 3 [24] Jan 2011 4 [22] Jul 2011 5 [23] Jan 2012

Coupon Payment Dates (i=1 to 5)

With respect to each Valuation Dates i, such dates are expected to be the following as set out below, subject to adjustment in accordance with the Following Business Day Convention.

i Coupon Payment Date i 1 [29] Jan 2010 2 [30 Jul 2010 3 [31] Jan 2011 4 [29] Jul 2011 5 [30] Jan 2012

Performance i In respect of each Valuation Date i (for i=1 to 5 ), Performance i =

(a) [1.7% to 2.00%]* if the closing price of the Worst Performer on Valuation Date i is greater than or equal to the Coupon Level;

(b) Otherwise [1.7% to 2.00%]* and thereafter on all subsequent Coupon Payment Datesif a Lock-in Event has occurred;

(c) Otherwise 0.00% * To be determined by the Bank in good faith on Trade Date

Worst Performer i With respect to each Valuation Date i, the lowest percentage determined by the Calculation Agent in accordance with the following formula in relation to each Share i as follows:

⎟⎟⎠

⎞⎜⎜⎝

⎛j

ji

SS

0

Where: j0S = Initial Share Price

jiS = The Closing Price of Share j on Valuation Date i as determined by the Calculation Agent.

Redemption Amount at Maturity

On the Maturity Date, the Bank shall pay, in respect of the Structured Deposit, a redemption amount equal to 100.00% of the principal amount.

Scheduled Trading Day A day on which each Exchange and each Related Exchange are scheduled to open for trading for their respective regular trading session.

Scheduled Closing Time In respect of an Exchange or Related Exchange and a Scheduled Trading Day, the scheduled weekday closing time of such Exchange or Related Exchange on such Scheduled Trading Day, without regards to after hours or any other trading outside of the regular trading session hours.

Exchange Business Day Any Scheduled Trading Day on which each Exchange and each Related Exchange are open for trading during their respective regular trading sessions, notwithstanding such Exchange or Related Exchange closing prior to its Scheduled Closing Time.

Governing Law English Business Days Singapore Business Days Convention Following Calculation Agent The Hongkong and Shanghai Banking Corporation Limited

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Early Redemption by Investor Prior to Maturity Date

Starting from [15] August 2009, investors may not redeem their Structured Deposit without the Bank’s prior consent (which, if granted, may be subject to such conditions and terms as the Bank may require). Such conditions to include (without limitation) the date and time of redemption of the Structured Deposit which shall occur on a Business Day as determined by the Bank after written request for early redemption is received from the investor. Without prejudice to the foregoing, the Bank reserves the right to determine conclusively acting in good faith the amount of deduction to be made to the principal amount of the Structured Deposit for breakage costs. Such breakage costs shall include the costs, expenses, liabilities or losses incurred or suffered by the Bank as a consequence of breaking its hedge, or funding arising directly or indirectly from the investor’s written request for early withdrawal. Such request for early withdrawal shall only be given by the investor on the 15th or last Business Day of each calendar month or such other day as the Bank may determine.

The investor’s attention is drawn to the fact that the total amount repaid on early redemption of the Structured Deposits at the investor’s request may be less than the principal amount.

Taxation Payments in respect of the Investment will be made subject to withholding or deduction for, or on account of, any applicable taxes, duties, assessments or governmental charges of whatever nature, present or future. In the event of the imposition of such withholding taxes the Bank will not pay any such additional amounts as may be necessary in order that investors receive the amount that they would have received in the absence of such withholding or deduction.

Consequences of Disrupted Days:

If any Fixing Date is a Disrupted Day, that Fixing Date for each Share not affected by the occurrence of a Disrupted Day shall be the original relevant Fixing Date, and the Fixing Date for each Share affected by the occurrence of a Disrupted Day shall be deemed to be the first succeeding Scheduled Trading Day that is not a Disrupted Day relating to that Share, unless each of the eight Scheduled Trading Days immediately following the original relevant Fixing Date is a Disrupted Day. In that case (i) that 8th Scheduled Trading Day shall be deemed to be the relevant Fixing Date for the relevant Share, notwithstanding the fact that such day is a Disrupted Day and (ii) the Calculation Agent shall determine, in its sole and absolute discretion, the level for that Share as of the Valuation Time on that 8th Scheduled Trading Day.

For these purposes,

“Fixing Date” means (i) the Strike Date; (ii) each Scheduled Trading Day; and (iii) each Valuation Date. Disrupted Day: Any Scheduled Trading Day on which a relevant Exchange or any Related Exchange

fails to open for trading during its regular trading session or on which a Market Disruption Event has occurred.

Market Disruption Event: The occurrence or existence of (i) a Trading Disruption, (ii) an Exchange Disruption, which in either case the Calculation Agent determines is material, at any time during the one hour period that ends at the Valuation Time on a Scheduled Trading Day, or (iii) an Early Closure.

Trading Disruption: Any suspension of or limitation imposed on trading by the relevant Exchange or Related Exchange or otherwise and whether by reason of movements in price exceeding limits permitted by the relevant Exchange or Related Exchange or otherwise (i) relating to the Share on the Exchange, or (ii) in futures or options contracts relating to the Share on any relevant Related Exchange.

Exchange Disruption: Any event (other than an Early Closure) that disrupts or impairs (as determined by the Calculation Agent) the ability of market participants in general to effect transactions, or obtain market values for, the Shares on the Exchange, or (ii) to effect transactions in, or obtain market values for, futures or options contracts relating to the Share on any relevant Related Exchange.

Early Closure: The closure on any Exchange Business Day of any relevant Exchange or any Related Exchange(s) prior to its Scheduled Closing Time unless such earlier closing time is announced by such Exchange(s) or Related Exchange(s) at least one hour prior to the earlier of (i) the actual closing time for the regular trading session on such Exchange(s) or Related Exchange(s) on such Exchange Business Day and (ii) the submission deadline for orders to be entered into the Exchange or Related Exchange system for execution at the Valuation Time on such Exchange Business Day.

Adjustment of Terms: Without prejudice to, and in addition to, any other terms relating to the Structured Deposit, if the Calculation Agent has determined in good faith that any event has occurred, or is likely to occur, which has a diluting or concentrative effect on the Shares or any other effect on the Shares that might after the basis on which returns are

9

calculated under the Structured Deposit or any effect on the Bank’s ability to hedge its obligations in respect of the Structured Deposit, then the Bank shall be entitled (but shall not be obliged) in good faith to determine and effect, in its discretion, any additional or alternative adjustments to the terms of the Structured Deposit including but not limited to adjustments to any prices, levels, payment or settlement terms, and/or the removal of one or more Shares, the addition of, or the substitution thereof with, one or more other securities and/or assets, which it deems appropriate to account for the diluting, concentrative or other effect of the relevant event and the Investors will be bound by any such adjustments.

Reference Level Adjustment Events that may, at the discretion of the Calculation Agent, lead to an adjustment in the determination of the Final Share Price and/or the Initial Share Price of the Share include but are not limited to:

1. A Market Disruption Event; or

2. (i) a sub-division, consolidation or reclassification of the relevant Share (unless resulting in a Merger Event) or a free distribution or dividend of any such Shares to existing holders by way of bonus, capitalisation or similar issue; (ii) a distribution, issue or dividend to existing holders of the relevant Shares of such Shares, or share capital or other securities of another issuer acquired or owned (directly or indirectly) by the issuer of the relevant Shares as a result of a spin-off or other similar transaction; or other share capital or securities granting the right to payment of dividends and/or the proceeds of liquidation of the issuer equally or proportionately with such payments to holders of any such Share, or any type of securities, rights or warrants or other assets, in any case for payment (cash or otherwise) at less than the prevailing market price as determined by the Calculation Agent; (iii) an extraordinary dividend; (iv) a call by the issuer in respect of relevant Shares that are not fully paid; (v) a repurchase by the issuer of the Share, whether out of profits or capital and whether the consideration for such repurchase is cash, securities or otherwise; (vi) in respect of the issuer of the Share, an event that results in any shareholder rights being distributed or becoming separated from shares of common stock or other shares of the capital stock of such issuer pursuant to a shareholder rights plan or arrangement directed against hostile takeovers that provides upon the occurrence of certain events for a distribution of preferred stock, warrants, debt instruments or stock rights at a price below their market value, as determined by the Calculation Agent, provided that any adjustment effected as a result of such an event shall be readjusted upon any redemption of such rights; or (vii) any other event that may have a diluting or concentrative effect on the theoretical value of the relevant Shares (each a “Potential Adjustment Event”); or

3. (i) any reclassification or change of such Shares that results in transfer of or an irrevocable commitment to transfer all of such Shares outstanding to another entity or person; (ii) any consolidation, amalgamation, merger or binding share exchange of the issuer of such Share with or into another entity (other than a consolidation, amalgamation, merger or binding share exchange in which such issuer is the continuing entity and which does not result in any such reclassification or change of all such Shares outstanding); (iii) any takeover offer, tender offer, exchange offer, solicitation, proposal or other event by any entity or person to purchase or otherwise obtain 100% of the outstanding Shares of such issuer that results in a transfer of or an irrevocable commitment to transfer all of such Shares (other than such shares owned or controlled by such other entity or person); or (iv) any consolidation, amalgamation, merger or binding share exchange of the issuer of such Share or its subsidiaries with or into another entity in which the issuer of such Share is the continuing entity and which does not result in a reclassification or change of all such Share outstanding but results in the outstanding Share (other than Shares owned or controlled by such other entity) immediately prior to such event collectively representing less than 50% of the outstanding Share immediately following such event (each a “Merger Event”); or

4. a takeover offer, tender offer, exchange offer, solicitation, proposal or other event by any entity or person that

results in such entity or person purchasing, or otherwise obtaining or having the right to obtain, by conversion or other means, greater than 10% and less than 100% of the outstanding voting Shares of the issuer of the Shares, as determined by the Calculation Agent, based upon the making of filings with governmental or self-regulatory agencies or such other information as the Calculation Agent deems relevant (a “Tender Offer”); or

5. all the share or all or substantially all of the assets of the issuer of the Share are nationalized, expropriated or are otherwise required to be transferred to any governmental agency, authority, entity or instrumentality thereof (“Nationalization”); or

6. by reason of the voluntary or involuntary liquidation, bankruptcy, insolvency, dissolution or winding-up of or any analogous proceeding affecting the issuer of the Share , (A) all the shares of such issuer are required to be transferred to a trustee, liquidator or other similar official or (B) holders of the Share of that issuer become legally prohibited from transferring them (“Insolvency”); or

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7. the relevant Exchange announces that pursuant to the rules of such Exchange, the relevant Share cease (or will cease) to be listed, traded or publicly quoted on the relevant Exchange for any reason (other than a Merger Event or Tender Offer) and are not immediately re-listed, re-traded or re-quoted on an exchange or quotation system located in the same country as the Exchange (or, where the Exchange is within the European Union, in any member state of the European Union) (“Delisting”).

8. on or after the Trade Date (i) due to the adoption of or any change in any applicable law or regulation (including, without limitation, and any tax law), or (ii) due to the promulgation of or any change in the interpretation by any court, tribunal or regulatory authority with competent jurisdiction of any applicable law or regulation (including any action taken by a taxing authority), the Issuer determines in good faith that (a) it has become illegal to hold, acquire or dispose of Shares, or (b) it will incur a materially increased cost in performing its obligations under the Structured Deposit (including, without limitation, due to any increase in tax liability, decrease in tax benefit or other adverse effect on its tax position) (a “Change in Law”); or

9. the issuer of the Shares institutes or has instituted against it by a regulator, supervisor or any similar official with primary insolvency, rehabilitative or regulatory jurisdiction over it in the jurisdiction of its incorporation or organization or the jurisdiction of its head or home office, or it consents to a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors’ rights, or a petition is presented for its winding-up or liquidation by it or such regulator, supervisor or similar official or it consents to such a petition, provided that proceedings instituted or petitions presented by creditors and not consented to by the issuer of the Shares shall not be deemed an Insolvency Filing (“Insolvency Filing”).

Adjustment to the constituents of the Basket Events that may, at the discretion of the Calculation Agent, lead to an adjustment in the determination of the Final Share Price and/or the Initial Share Price of the Share include but are not limited to:

1. the Bank, as determined by the Calculation Agent, is unable after using commercially reasonable efforts, to (a) acquire, establish, re-establish, substitute, maintain, unwind or dispose of any transaction(s) or asset(s) it (or the Calculation Agent on its behalf) deems necessary to hedge the equity price risk of entering into and performing its obligations with respect to the Structured Deposit, or (b) to realise, recover or remit the proceeds of any such transaction(s) or asset(s) (“Hedging Disruption”); or

2. a Potential Adjustment Event; or

3. any Merger Event; or

4. any Tender Offer; or

5. an event of Nationalization or Insolvency; or

6. the De-listing of the relevant Share from the relevant Exchange; or

7. any Change in Law; or

8. any Insolvency Filing.

Upon the occurrence of an Adjustment Event or a Reference Level Adjustment Event, the Calculation Agent may seek to substitute the affected Share with another share comparable to the affected Share. When making such substitution, the Calculation Agent will act reasonably and in good faith in order to preserve as the Calculation Agent is reasonably able to determine the economic interests of the Investor(s).

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The criteria for selecting the New Share It should be a Share which is not currently comprised in the Underlying Basket; which is from a similar economic sector and has a comparable market capitalisation to the Affected Share

For the calculation of the performance of the New Share included in the Underlying Basket, S, the Initial Share Price of the New Share, will be determined in accordance with the following formula:

⎟⎠⎞

⎜⎝⎛×=

Share Affectedof ValueFinalShare Affectedof ValueInitial ShareNew of ValueInitial S

Where: Initial Value of New Share = means the average of the closing prices of the New Share on the 3 Exchange

Business Days (or such shorter period as determined by the Calculation Agent), which are not Disrupted Days relating to that Share, leading up to and including the date of substitution as determined by the Calculation Agent in its sole and absolute discretion.

Final Value of Affected Share = means the average of the closing prices of the Affected Share on the 3 Exchange

Business Days (or such shorter period as determined by the Calculation Agent), which are not Disrupted Days relating to that share, leading up to and including the date of substitution as determined by the Calculation Agent in its sole and absolute discretion.

Initial Value of Affected Share = means the Initial Share Price of the Affected Share

Underlying - Historical Performance Any historical prices which appear below are not necessarily indicative of future prices. Although the information is obtained from sources which are considered reliable, it is not represented that it is accurate or complete.

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DBS SP - DBS Group Holdings limited is Southeast Asia's largest bank and one of the leading banks in Asia with operations in 16 markets. It offers consumer banking, SME banking, corporate banking, treasury and capital markets services. Its "AA-" and "Aa1" credit ratings are among the highest in the region. It is also the first Singapore bank to incorporate in China.

DBS SP

05

1015202530

6/25/0

4

12/25

/04

6/25/0

5

12/25

/05

6/25/0

6

12/25

/06

6/25/0

7

12/25

/07

6/25/0

8

12/25

/08

6/25/0

9

KPLD SP - Keppel Land is the property arm of the Keppel Group, one of Singapore's largest multinational companies. Their core businesses are property development and property fund management. It has a diversified portfolio of quality residential developments and investment-grade commercial properties, such as One Raffles Quay, Marina Bay Financial Centre and iconic waterfront homes at Keppel Bay and Marina Bay.

KPLD SP

02468

1012

6/25/0

4

12/25

/04

6/25/0

5

12/25

/05

6/25/0

6

12/25

/06

6/25/0

7

12/25

/07

6/25/0

8

12/25

/08

6/25/0

9

13

OCBC SP - Oversea-Chinese Banking Corporation Limited is one of the largest financial institutions in the Singapore-Malaysia market with 480 branches in 15 countries and total assets of S$180 billion. Their insurance subsidiary Great Eastern Holdings is the largest insurance group in Singapore and Malaysia while their asset management arm Lion Global Investors is one of Southeast Asia's largest.

OCBC SP

02468

10121416

6/25/0

4

12/25

/04

6/25/0

5

12/25

/05

6/25/0

6

12/25

/06

6/25/0

7

12/25

/07

6/25/0

8

12/25

/08

6/25/0

9

ST SP - SingTel is the second largest satellite operator in Asia-Pacific and is one of Asia's leading communications companies with operations and investments in more than 20 countries, including Australia where they own Optus. In addition to voice and data services across fixed, wireless and Internet platforms, they also provide postal services and directory advertising.

ST SP

0

1

23

4

5

6/25/0

4

12/25

/04

6/25/0

5

12/25

/05

6/25/0

6

12/25

/06

6/25/0

7

12/25

/07

6/25/0

8

12/25

/08

6/25/0

9

SGX SP – Singapore Exchange Limited owns and operates Singapore’s Securities and derivatives exchange and their related clearing houses. The Company also provides ancillary securities processing and information technology services to participants in the financial sector.

SGX SP

02468

1012141618

6/25/0

4

12/25

/04

6/25/0

5

12/25

/05

6/25/0

6

12/25

/06

6/25/0

7

12/25

/07

6/25/0

8

12/25

/08

6/25/0

9

Source: Bloomberg and corporate websites, as of 26 June, 2009. The performance of the Shares shown above is based on information obtained from various third party sources (including Bloomberg). The Bank and its affiliates do not take any responsibility for, nor make any express or implied warranties or any representation as to the accuracy or the completeness of this information and has not separately verified such information. All performances are calculated in local currencies. The value of the Shares can go down as well as up. Past performance is not a guide to future performance.

14

15

Risk Disclosures Structured product transactions are complex. Prior to entering into an investment in a Structured Deposit, you should ensure that you understand the nature of all of the risks associated with the investment in order to determine whether the investment is suitable for you in light of your experience, objectives, financial position and other relevant circumstances. You may wish to consult with your legal, regulatory, tax, financial and/or accounting advisors before making a commitment to invest in this Structured Deposit. In the event you do not seek advice you should carefully consider whether this Structured Deposit is suitable for you. This Term Sheet is indicative, thus all terms and conditions may be subject to change. Market Risk

Structured Deposits can be volatile instruments and may be subject to considerable fluctuations in value and other risks inherent in investing in securities and/or derivatives. The value of a Structured Deposit may fall as rapidly as it may rise due to numerous factors, including, but not limited to, systemic risks, variations in the frequency and magnitude of changes in interest rates, inflation outlook and the price/level of any underlying reference to which the Structured Deposits relate (e.g. securities, commodities, funds, rates and/or Indices). The value of Structured Deposits may increase or decrease throughout their tenor. Return Risk

Structured Deposits have an investment element and returns may vary. Potential returns may be less than returns on a non-structured fixed coupon bond or a direct investment in the underlying assets or other investments. Investors may receive no return for the entire tenor of the investment. No coupon will be paid, for example, if all the Shares close below the Coupon Levels on all Valuation Dates. There can be no assurance that the Structured Deposit will earn any coupon at all, in which case, investors would have foregone any potential return that may have been earned on a direct investment in the underlying assets or any other investments. Credit Risk

Prospective investors should be aware that receipt of any sums due at maturity by an investor is subject to the credit risk of the Bank. Investors assume the risk that the Bank will not be able to satisfy its obligations under the Structured Deposits. Except where specifically provided otherwise, the Structured Deposit will constitute general and unsecured contractual obligations of the Bank and such obligations will rank equally with all other unsecured contractual obligations of the Bank. The Structured Deposit will also rank pari passu with subsequent unsecured obligations of the Bank. In the case of an insolvency of the Bank, preferred liabilities of the Bank will have priority over unsecured obligations such as these Structured Deposits. Any stated credit rating of the Bank reflects the independent opinion of the referenced Rating Agency as to the creditworthiness of the rated entity but is not a guarantee of credit quality of the Bank. Any downgrading of the credit ratings of the Bank or its parent or affiliates, by any rating agency could result in a reduction in the value of the Structured Deposit. In the event that bankruptcy proceedings or composition, scheme of arrangement or similar proceedings to avert bankruptcy are instituted by or against the Bank, the payment of sums due on the Structured Deposit may be substantially reduced or delayed. Liquidity Risk

Structured Deposits are not transferable and any early redemption by the investor is at the discretion of the Bank. It may not therefore be possible to liquidate a Structured Deposit prior to scheduled maturity.

Early Redemption by the Investor Risk

An investor may redeem the Structured Deposit prior to its maturity only with the prior consent of the Bank. On any early redemption it should be noted that the Bank will deduct any early redemption costs from the principal payable to the investor (including without limitation the Bank’s costs of breaking its hedge in relation to the Structured Deposits or funding arising directly or indirectly from the early withdrawal). It is therefore possible that investors will not receive 100% of the principal back. The redemption costs may be substantial and hence it is important that investors be prepared to hold this investment until

aturity or alternatively be prepared to incur substantial costs and deductions in the event of early redemption. m Re-investment Risk

You need to consider your ability to re-invest the principal amount plus the coupon (if paid) in other suitable products with milar returns and tenors where the Structured Deposit has matured or has been early redeemed (if applicable). si

Settlement Risk

Upon purchasing Structured Deposits, investors assume all settlement risks relating to the Bank failing to settle Structured eposits on the primary settlement date, and unless stated otherwise. D

16

evant authorities may also adversely affect the applicable exchange rate and result in the receipt of reduced principal mount.

tion, in respect of any amount payable by the ank under the Structured Deposit will be borne by the investor.

vestors will need to consider the effect that inflation may have on the real value of their investment.

Foreign Exchange Risk Investors investing in Structured Deposits denominated in non-local currency should be aware of the risk of exchange rate fluctuations that may result in a loss of principal when converted to the investor’s local currency. Exchange controls imposed by the rela Tax Risk

Tax burden, if any, imposed by or arising from any changes to applicable regulaB to the investor Inflation Risk

In

17

Investor Commitment & Acknowledgement When you invest in this Structured Deposit, you will be required to make a series of confirmations and acknowledgements,

at you:

(i) document, including the risks of investing in the Structured Deposit as explained in the section “Risk Disclosures”;

(ii) stment has a product risk level of “1” and are likely to be suitable for investors with a “Cautious” risk attitude;

(iii) investment does not guarantee to produce any return higher

than any other investment products or any return at all.

(iv) ard to its total proportion of your overall portfolio, in order to guard against overexposure to any single investment;

(v) SBC Holdings plc or any of its

subsidiaries in assessing the merits, risks and suitability of the Structured Deposits;

i) confirm that you have sufficient liquid emergency funds to meet any unforeseen circumstances;

(vii) to invest for the entire investment tenor and are not relying on any early

to be suitable for investors who have experience in investing in similar structures or other relevant instruments;

(x) make determinations and

(xi) r evaluation of the Bank, and prospective investors

ii) understand that the minimum investment amount is SGD5,000.

th

have read and understood this

understand that this inve

understand that this investment is likely to be suitable for you if you acknowledge and accept that potential return is not guaranteed. Investors should also understand that the

understand that you should avoid excessive investment in a single type of investment, with reg

understand that the Bank is not making, and has not made, any representation whatsoever as to the underlying; and you confirm that you have not relied on the Bank’s views or advice or those of H

(v

confirm that you are prepared call/redemption/sell back feature;

(viii) confirm that you take a “moderately bullish” view on the performance on the Underlying Basket;

understand that this investment is likely(ix)

understand that the Bank owes no duty or obligation to you to take any action other than toexercise discretion in accordance with the terms and conditions of the Structured Deposits;

understand that this document is not intended to provide and should not be relied upon for tax, legal or accounting advice, investment recommendations or a credit worthiness or otheshould consult their tax, legal, accounting and/or other advisors;

(x

Other Information Confirmation Note, Coupon Payment Advice Confirmation Note will be sent to the investors five (5) Business Days after Trade Date and Coupon Payment Advice will be

nt three (3) Business Days after payment is credited to investors’ HSBC account. se Cancellation In the event the Bank decides to cancel before launch, investors’ account will be credited with the original investment amount

o additional interest paid) within five (5) Business Days from the closing date. (n Closing date and cut-off time [17] July 2009, 3:00 pm (Singapore time) Cooling-off period Three business days’ cooling-off period is given to the Investors after the closing date. Investors are allowed to cancel the

urchase of this investment anytime before 3:00 pm, [22] July 2009 without any additional cost incurred. p Non-acceptance The Bank reserves the right, in its sole discretion, on or before the Structured Deposit Start Date, to reject your application

holly or partially. w

18

Indicative Price If investors wish to obtain indicative price of the early redemption of the Structured Deposit, they can contact the Bank in Singapore. The indicative price of early withdrawal shall only be given to the investors two (2) Business Days prior to the 15th r last Business Day of each calendar month or such other day as the Bank may determine. o

Enquiries/Complaints For any enquiries/complaints, please contact our 24-hour Customer Service Hotline at 1800-HSBC NOW (4722 669) Important Notes

his Term Sheet contains indicative terms only. Please re-confirm the final terms with your relationship manager.

consideration has been given to the particular ment objectives, financial situation or particular needs of any recipient.

osit surance Act (No. 31 of 2005), and is not covered by the government guarantee on deposits effected on 16 October 2008.

ock-in Best oupon Structured Deposit.

aking Sense of Structured Deposits”.

__________________ e

ate:

ock-in Best oupon Structured Deposit.

aking Sense of Structured Deposits”.

__________________ e

Date:

ock-in Best oupon Structured Deposit.

aking Sense of Structured Deposits”.

__________________ e

Date:

T

This document is not intended for distribution in the United States of America and Canada or to US and Canadian residents and/or citizens. This document is intended to be distributed in its entirety. Noinvest Please note that HSBC 2.5Y SGD Lock-in Best Coupon Structured Deposit is not an insured deposit for the purposes of the DepIn

I/we acknowledge that this Structured Deposit is subject to HSBC’s Structured Deposit Terms and Conditions. In addition to the Declarations in the Investor Commitment and Acknowledgement Section above and the separate Structured Deposit Transaction Form, I/we confirm that I/we have read, understood and accepted the terms and risks of HSBC 2.5Y SGD LC I also confirm that I have been furnished with copies of the ABS guide on “What You Should Know About Investment Products” and the MAS guide on“M _________SignaturName:D

I/we acknowledge that this Structured Deposit is subject to HSBC’s Structured Deposit Terms and Conditions. In addition to the Declarations in the Investor Commitment and Acknowledgement Section above and the separate Structured Deposit Transaction Form, I/we confirm that I/we have read, understood and accepted the terms and risks of HSBC 2.5Y SGD LC I also confirm that I have been furnished with copies of the ABS guide on “What You Should Know About Investment Products” and the MAS guide on“M _________SignaturName:

I/we acknowledge that this Structured Deposit is subject to HSBC’s Structured Deposit Terms and Conditions. In addition to the Declarations in the Investor Commitment and Acknowledgement Section above and the separate Structured Deposit Transaction Form, I/we confirm that I/we have read, understood and accepted the terms and risks of HSBC 2.5Y SGD LC I also confirm that I have been furnished with copies of the ABS guide on “What You Should Know About Investment Products” and the MAS guide on“M _________SignaturName:

For bank use only: Signature verified by:

I declare that all 18 pages of this document have been provided to customer. RM's name & signature: ____________________________

acknowledge receipt of all 18 pages of this document: Customer's name & signature: ________________________________________

I