Issue of 1,000,000 Notes (USD 3,570,000) Market Access ... · market access with SEHK and the China...

Final Terms dated: 04 April 2018

HSBC Bank plc

Programme for the Issuance of Notes and Warrants

Issue of

1,000,000 Notes (USD 3,570,000) Market Access Notes linked to ordinary shares issued by EMAAR

THE ECONOMIC CITY ORD SHS SAR 10.00 (the "Underlying Security) due April 2021 (the

“Notes”)

PART A – CONTRACTUAL TERMS

This document constitutes the Final Terms relating to the issue of the Tranche of Notes described herein

Terms used herein shall be deemed to be defined as such for the purposes of the terms and conditions of

the Notes (the "Conditions") set forth in the Base Prospectus dated 1 June 2017 in relation to the above

Programme, together with each supplemental prospectus relating to the Programme published by the Issuer

after 1 June 2017 but before the issue date or listing date of the Notes, whichever is later, to which these

Final Terms relate which together constitute a base prospectus ("Prospectus") for the purposes of the

Prospectus Directive (Directive 2003/71/EC, as amended) (the "Prospectus Directive"). This document

constitutes the Final Terms of the Notes described herein for the purposes of Article 5.4 of the Prospectus

Directive and must be read in conjunction with such Prospectus. However, a summary of the issue of the

Notes is annexed to these Final Terms.

Full information on the Issuer and the offer of the Notes is only available on the basis of the combination

of these Final Terms and the Prospectus. The Prospectus is available for viewing during normal business

hours at HSBC Bank plc, 8 Canada Square, London E14 5HQ, United Kingdom and www.hsbc.com (please

follow links to 'Investor relations', 'Fixed income investors', 'Issuance programmes') and copies may be

obtained from HSBC Bank plc, 8 Canada Square, London E14 5HQ, United Kingdom.

1. Issuer: HSBC Bank plc

2. Tranche Number: 1

3. Settlement Currency: United States Dollars (USD)

4. Aggregate Principal Amount of

Notes admitted to trading:

(i) Series: 1,000,000 Notes (USD 3,570,000)

(ii) Tranche: 1,000,000 Notes (USD 3,570,000)

5. Issue Price: USD 3.57

6. Denomination(s): USD 3.57

7. Issue Date: 05 April 2018

8. Maturity Date: 05 April 2021

PROVISIONS RELATING TO ADDITIONAL PAYMENTS AND INTEREST (IF ANY)

PAYABLE

9.

10.

Default Rate:

Additional Payments for

Underlying Index-Linked Notes

1 week USD LIBOR plus 1 per cent., reset daily

Not applicable

PROVISIONS RELATING TO REDEMPTION

11. Redemption Commission

Percentage:

1.00%

12. Early Redemption Amount: Fair Market Value

13. Buy-Back provisions: Applicable

14. (i) Administration Fee: Not applicable

PROVISIONS APPLICABLE TO EQUITY-LINKED NOTES AND INDEX-LINKED NOTES

15. Provisions for Underlying Equity-

Linked Notes:

Applicable

(a) Underlying Security-Linked Notes: Applicable

Underlying

Securities

(including

ISIN or other

security

identification

code)

Underlying

Companies

Number of

Underlying

Securities

per Note

Exchange(s

)

Related

Exchange(s

)

Underlying

Currency(ies)

Ordinary shares

issued by the

Underlying

Company

(ISIN: SA000A0KDVM8

)

EMAAR THE ECONOMIC CITY ORD SHS SAR

10.00 1

Saudi

Arabia

Exchange

All

Exchanges

SAR

(i) Underlying Security(ies): As specified in the above table

(ii) Underlying Company(ies): As specified in the above table

(iii) Exchange(s): As specified in the above table

(iv) Related Exchange(s): As specified in the above table

(v) Underlying Currencies: As specified in the above table

(vi) PRC Underlying: No

16. Provisions for Underlying

Index-Linked Notes:

Not applicable

17. Further provisions applicable

to Underlying Index-Linked

Notes:

Not applicable

VALUATION PROVISIONS

18. Valuation Date(s): 29 March 2021

19. Valuation Time: The definition in the Conditions applies

GENERAL PROVISIONS APPLICABLE TO THE NOTES

20. Form of Notes:

(i) Form of Notes: Registered Notes

21. If issued in bearer form: Not applicable

22. Exchange Date for exchange

of Temporary Global Note:

Not applicable

23. If issued in registered form: Applicable

- Initially represented by: Combined Global Registered Note

- Combined Global

Registered Note

exchangeable at the option

of the Issuer in

circumstances where the

Issuer would suffer a

material disadvantage

following a change of law or

regulation:

Yes

24. Payments:

(i) Relevant Financial

Centre Day:

The definition in the Conditions applies

(ii) Business Centre(s): Not applicable

(iii) Payment of

Alternative

Payment Currency

Equivalent:

Not applicable

Offshore RMB

Centre:

Not applicable

25. Redenomination: Not applicable

26. Supplementary Amount: Not applicable

CONFIRMED

HSBC BANK plc

By: ......................................................................

Authorised Signatory

Date: ......................................................................

PART B – OTHER INFORMATION

LISTING

1. (i) Listing: Application will be made to admit the Notes to listing on the

Official List of the United Kingdom Financial Conduct

Authority. No assurance can be given as to whether or not, or

when, such application will be granted.

(ii) Admission to

trading:

Application will be made for the Notes to be admitted to

trading on the regulated market of the London Stock Exchange

plc. No assurance can be given as to whether or not, or when,

such application will be granted.

2. REASONS FOR THE OFFER AND USE OF PROCEEDS, ESTIMATED NET

PROCEEDS AND TOTAL EXPENSES

(i) Reasons for the

offer and use of

proceeds:

Not applicable

(ii) Estimated net

proceeds:

Information not provided

(iii) Estimated total

expenses:

Information not provided

3. INTERESTS OF NATURAL AND LEGAL PERSONS INVOLVED IN THE ISSUE

Save for any fees payable to the Dealer(s), so far as the Issuer is aware, no person involved

in the issue of the Notes has an interest material to the issue. The Dealer(s) and their affiliates

have engaged, and may in the future engage, in investment banking and/or commercial

banking transactions with, and may perform other services for, the Issuer and its affiliates in

the ordinary course of business.

4. INFORMATION ABOUT THE UNDERLYING

Details of past and further performance and volatility of the Underlying Securities are

obtainable from the following display pages on Bloomberg and such information does not

form part of this document: (Source: Bloomberg Financial Markets Information Service)

EMAAR THE ECONOMIC CITY ORD SHS SAR 10.00 and the issuer of the Underlying Securities

are available on the following website of the issuer of such Underlying Securities:

www.emaar.com. The Issuer confirms that the information sourced from Bloomberg

Financial Markets Information Service and the website of the issuer of the Underlying

Securities has been accurately reproduced. As far as the Issuer is aware and is able to

ascertain from information available from such source, no facts have been omitted which

would render the reproduced information inaccurate or misleading.

OPERATIONAL INFORMATION

5. ISIN: XS1805268205

6. Common Code: 180526820

7. SEDOL: BFY3BV7

8. CUSIP: Not applicable

9. Clearing System: Euroclear

10. TEFRA Rules applicable to

Bearer Notes:

TEFRA Not applicable

http://www.emaar.com/

11. Additional U.S. federal

income tax considerations:

Not applicable

12. Principal Paying

Agent/Registrar/Issue

Agent/Transfer Agent:

HSBC Bank plc

13. Additional Paying Agent(s)

(if any):

Not applicable

ANNEX

ADDITIONAL PROVISIONS NOT REQUIRED BY THE SECURITIES NOTE RELATING TO

THE UNDERLYING

INFORMATION ABOUT THE SECURITY

The information set out in this Annex relating a brief discussion to EMAAR THE ECONOMIC CITY ORD

SHS SAR 10.00 (the "(Underlying Company"), (Bloomberg: EMAAR AB) provides of the business of

the Underlying Company and the split-adjusted high, low and end-of-period closing prices for each Security

for each calendar quarter in the period from 01 January 2007 to 29 March 2018 and daily from 01 April

2018 to 03 April 2018. The Issuer confirms that the information set out in this Annex relating EMAAR

THE ECONOMIC CITY ORD SHS SAR 10.00 of the Underlying Company (the "Security") has been

accurately reproduced from information available from the website of the issuer of the underlying Security, www.emaar.com. and Bloomberg Financial Markets Information Service. As far as the Issuer is aware and

is able to ascertain from information available from such source, no facts have been omitted which would

render the reproduced information inaccurate or misleading.

1. Description of the Underlying Company (Source: Bloomberg Financial Markets

Information Service

Emaar Economic City is a real estate consortium. The group develops properties for multiple use or other

developments, including infrastructure facilities. Emaar also markets, plots, and sells properties.

Listing

The Security is listed on the Saudi Arabia Stock Exchange

EMAAR AB EQUITY

Date Px

High Px Low Px Last

29/03/2007 23.25 14.25 18.00

28/06/2007 19.75 14.25 15.00

30/09/2007 17.25 14.75 15.75

31/12/2007 25.75 15.25 22.75

31/03/2008 28.75 17.50 18.00

30/06/2008 26.50 17.75 22.50

30/09/2008 23.75 13.20 14.60

31/12/2008 14.05 8.10 8.95

31/03/2009 11.00 7.60 8.25

30/06/2009 12.35 8.05 10.45

30/09/2009 10.65 9.40 10.45

31/12/2009 11.25 9.55 9.60

31/03/2010 10.65 9.55 9.85

30/06/2010 9.95 8.4 8.55

30/09/2010 8.85 7.75 7.85

30/12/2010 7.85 6.9 7.1

31/03/2011 7.6 5.55 6.9

30/06/2011 8.15 6.70 7.85

29/09/2011 7.75 6.15 6.45

29/12/2011 7.9 6.2 7.4

29/03/2012 14.2 7.05 13.15

28/06/2012 14.05 8.55 8.7

30/09/2012 10.4 8.6 9

31/12/2012 9.1 7.5 8.3

31/03/2013 10.1 8.35 9.5

30/06/2013 10.4 8.9 9.95

30/09/2013 12.45 9.8 11.6

2. Historical prices

The historical prices of a Security should not be taken as an indication of future performance,

and no assurance can be given that the price of a Security will perform sufficiently from year

to year to cause the holders of the Notes to receive any return on their investment.

ISSUE SPECIFIC SUMMARY

Section A – Introduction and Warnings

A.1 Introduction and

Warnings:

This summary must be read as an introduction to the prospectus and any

decision to invest in the Notes should be based on a consideration of the

prospectus as a whole by the investor, including any information

incorporated by reference and read together with the relevant final terms.

Where a claim relating to the information contained in the prospectus is

brought before a court in a Member State of the European Economic

Area, the claimant may, under the national legislation of the Member

States, be required to bear the costs of translating the prospectus before

the legal proceedings are initiated.

Civil liability attaches only to those persons who have tabled this

summary including any translation thereof, but only if this summary is

misleading, inaccurate or inconsistent when read together with the other

parts of the prospectus or it does not provide, when read together with the

other parts of the prospectus, key information in order to aid investors

when considering whether to invest in the Notes.

A.2 Consent by the

Issuer to the use of

Not applicable. The prospectus has been prepared solely in connection

with the admission of Notes to trading on a regulated market pursuant to

31/12/2013 13.55 11 13.3

31/03/2014 17.6 13.05 17.2

30/06/2014 18.2 14.5 15.13

30/09/2014 19.35 15.15 17.42

31/12/2014 18.2 9.75 11.89

31/03/2015 16.8 11 13.19

30/06/2015 17.1 11.95 14.89

30/09/2015 15.55 9.85 10.83

31/12/2015 13.95 8.45 12.94

31/03/2016 14.25 10.05 13.95

30/06/2016 15.95 13.3 14.45

29/09/2016 15.1 10.9 11.99

29/12/2016 19.2 11.4 17.16

30/03/2017 20.25 16.4 17.03

29/06/2017 17.45 12.64 15.72

28/09/2017 15.9 13.4 14.4

31/12/2017 14.9 11.74 13.49

29/03/2018 14.46 12.3 13.68 EMAAR AB EQUITY

Date Px High Px Low Px Last

03/04/2018 13.42 13.20 13.39

02/04/2018 13.40 13.20 13.31

01/04/2018 13.68 13.22 13.26

Section A – Introduction and Warnings

the prospectus in

subsequent resale

or final placement

of the securities,

indication of offer

period and

conditions to

consent for

subsequent resale

or final placement

and warning:

Article 3(3) of the Prospectus Directive and there will be no public offer

of the Notes. The Issuer does not consent to the use of the prospectus for

subsequent resales.

Section B – Issuer

B.1 Legal and

commercial name

of the Issuer:

The legal name of the issuer is HSBC Bank plc (the "Issuer") and, for

the purposes of advertising, the Issuer uses an abbreviated version of its

name, HSBC.

B.2 Domicile and legal

form of the Issuer,

the legislation

under which the

Issuer operates

and its country of

incorporation:

The Issuer is a public limited company registered in England and Wales

under registration number 14259. The liability of its members is limited.

The Issuer was constituted by Deed of Settlement on 15 August 1836

and in 1873, registered under the Companies Act 1862 as an unlimited

company. It was re-registered as a company limited by shares under the

Companies Acts 1862 to 1879 on 1 July 1880. On 1 February 1982 the

Issuer re-registered under the Companies Acts 1948 to 1980 as a public

limited company.

The Issuer is subject to primary and secondary legislation relating to

financial services and banking regulation in the United Kingdom,

including, inter alia, the UK Financial Services and Markets Act 2000

as amended, for the purposes of which the Issuer is an authorised person

carrying on the business of financial services provision. In addition, as

a public limited company, the Issuer is subject to the UK Companies

Act 2006.

B.4b Known trends

affecting the

Issuer and the

industries in

which it operates:

UK real Gross Domestic Product ("GDP") rose by 0.5% in the fourth

quarter of 2017 - a small improvement on 0.4% in the preceding quarter.

The annual rate of growth slowed to 1.5% (from 2.0% in the same quarter

of 2016). The unemployment rate stood at 4.3% in the three months to

November 2017 - its lowest level since 1975. Employment as a

percentage of the population aged 16-64 was 75.5% in November 2017

- a series high. Annual wage growth (excluding bonuses) stood at 2.4%

in the three months to November 2017. The annual rate of growth in the

Consumer Price Index ("CPI") was 3.0% in December 2017. Activity in

the housing market weakened over the year, with price growth

moderating but remaining positive. However, the Bank of England

raised rates by 25bps to 0.5% in November 2017.

The annual pace of UK real GDP growth is now expected to slow from

1.8% in 2017 to 1.5% in 2018. Though CPI inflation may be at or near

its peak, it looks set to continue to outpace wage growth throughout

2018, with employment growth slowing. Together, these factors could

weigh on consumption growth. Political uncertainty may also keep

investment growth weak, while net trade is not expected to contribute to

GDP growth in 2018. Although the rate of growth is lower than it has

been in recent years, it is still close to what the Bank of England


considers to be the new ‘speed limit’. It may therefore raise the Bank

Rate again in 2018.

The eurozone continued on a steady growth path in 2017, with GDP

increasing at a 0.6% quarterly rate in the fourth quarter of the year,

following 0.7% in the previous two quarters. This took full year growth

to 2.5% in the eurozone last year, the fastest rate in ten years. So far we

only have the data for two of the Big 4 eurozone countries: France and

Spain. GDP increased by 0.6% quarter-on-quarter in France, led by

strong exports growth and investment, and by 0.7% quarter-on-quarter

in Spain, taking the full year growth to 3.1%, the third year in a row in

excess of 3%. Domestic consumption is likely to have remained an

important driver of growth in the fourth quarter, fuelled by strong job

creation, but HSBC Global Research expects it to have eased a little as

the recent oil price increase is reducing households’ purchasing power.

Investment has also been picking up recently, particularly in the business

sector, also helped by important fiscal incentives, while net exports are

also likely to have contributed positively to growth, thanks to the highly

synchronised global cycle, and so far with limited impact from the

appreciation of the euro (circa 9% in trade-weighted terms) since last

spring.

The latest survey data point to a continuation of the strong growth

momentum, although HSBC Global Research expects a marginal

slowdown in growth in 2018 (to 2.3%) due to stalling real wage growth

putting a lid on domestic consumption, against the background of rising

energy prices, while the stronger euro might have a dampening effect on

export growth. The European Central Bank ("ECB") Quantitative Easing

("QE") programme has been extended for 9 months from January 2018

albeit at a slightly lower pace (€30bn of asset purchases per month,

compared to €60bn previously), which should continue to provide fiscal

support to countries, while the ECB forward guidance on rates should

help prevent a further appreciation of the euro by pushing expectations

for a possible rate hike further into the future. HSBC Global Research

expects QE to end in October 2018. With nominal wage growth stalling,

HSBC Global Research expects inflation to continue to undershoot the

ECB’s inflation target, at 1.5% both in 2018 and 2019, even if the recent

oil price increase has added some pressures to inflation in the short term,

only partly offset by the stronger euro. The main political risk is the

Italian election on 4 March 2018, with polls pointing to a likely hung

parliament. The outcome of the Catalan independence threat remains

uncertain, after pro-independence parties re-gained a majority of seats in

the Catalan parliament at the regional election on 21 December 2017,

while Germany is still without a government after last September’s

election.

B.5 The group and the

Issuer's position

within the group:

The whole of the issued ordinary and preference share capital of the

Issuer is beneficially owned by HSBC Holdings plc ("HSBC Holdings",

together with its subsidiaries, the "HSBC Group"). The Issuer is the

HSBC Group's principal operating subsidiary undertaking in Europe.

The HSBC Group is one of the largest banking and financial services

organisations in the world, with an international network of more than

4,700 branches in 71 countries and territories across five geographical

regions: Europe, Asia, Middle East and North Africa, North America and

Latin America. Its total assets as at 31 December 2016 were U.S.$

2,374,986 million.


B.9 Profit forecast or

estimate:

Not applicable. There are no profit forecasts or estimates made in the

prospectus.

B.10 Nature of any

qualifications in

the audit reports

on the historical

financial

information:

Not applicable. There are no qualifications in the audit reports on the

audited, consolidated financial statements of the Issuer for the financial

years ended 31 December 2015 or 31 December 2016.

B.12 Selected key

financial

information, no

material adverse

change and no

significant change

statement:

The selected key financial information regarding the Issuer set out below

has been extracted without material adjustment from the audited

consolidated financial statements of the Issuer for the years ended 31

December 2016 and 31 December 2017.

Footnote

s 2017 2016

For the year (£m)

Profit before tax (reported basis) ................................. 2,370 874

Profit before tax (adjusted basis) ................................. 1 3,832 4,234 Net operating income before loan impairment charges

and other credit risk provisions ................................ 2 13,052 13,305 Profit/(loss) attributable to shareholders of the parent

company .................................................................. 1,809 (212)

At year end (£m) Total equity attributable to shareholders of the parent

company .................................................................. 43,462 39,930

Total assets .................................................................. 818,868 816,829

Risk-weighted assets ................................................... 233,073 245,237 Loans and advances to customers (net of impairment

allowances) .............................................................. 280,402 272,760

Customer accounts ...................................................... 381,546 375,252

Capital ratios (%) 3

Common Equity tier 1 ................................................. 11.8 10.2 Tier 1 ratio .................................................................. 13.8 12.3 Total capital ................................................................ 16.9 15.7 Performance, efficiency and other ratios

(annualised %) Return on average ordinary shareholders' equity ......... 4 4.2 (1.2)

Return on average risk-weighted assets ....................... 1.0 0.4

Adjusted return on average risk-weighted assets.... 1.6 1.7 Cost efficiency ratio (reported basis) ........................... 5 78.2 90.3 Cost efficiency ratio (adjusted basis)........................... 5 67.5 63.9 Jaws (adjusted basis) ................................................... 6 (5.8) 0.4

Ratio of customer advances to customer accounts....... 73.5 74.8 _______________________ 1 Adjusted performance is computed by adjusting reported results for the effect of significant items as detailed on pages 10 to

12 of the Issuer's Annual Report and Accounts for the year ended 31 December 2017.

2 Net operating income before loan impairment charges and other credit risk provisions is also referred to as revenue.

3 Capital ratios as detailed on the capital section on pages 56 to 58 of the Issuer's Annual Report and Accounts for the year

ended 31 December 2017.

4 The return on average ordinary shareholders’ equity is defined as profit attributable to shareholders of the parent company

divided by the average total shareholders’ equity

5 Reported cost efficiency ratio is defined as total operating expenses (reported) divided by net operating income before loan

impairment charges and other credit risk provisions (reported), while adjusted cost efficiency ratio is defined as total

operating expenses (adjusted) divided by net operating income before loan impairment charges and other credit risk


provisions (adjusted). Net operating income before loan impairment charges and other credit risk provisions (adjusted) is

also referred to as revenue (adjusted).

6 Adjusted jaws measures the difference between adjusted revenue and adjusted cost growth rates.

There has been no material adverse change in the prospects of the

Issuer since 31 December 2017.

There has been no significant change in the financial or trading position

of the Issuer and its subsidiary undertakings since 31 December 2017.

B.13 Recent events

particular to the

Issuer which are to

a material extent

relevant to the

evaluation of the

Issuer's solvency:

Not applicable. There have been no recent events particular to the Issuer

which are to a material extent relevant to the evaluation of its solvency.

B.14 Dependence upon

other entities

within the group:

The Issuer is a wholly owned subsidiary of HSBC Holdings.

The Issuer and its subsidiaries form a UK-based group (the "Group").

The Issuer conducts part of its business through its subsidiaries and is

accordingly dependent upon those members of the Group.

B.15 The Issuer's

principal

activities:

The Group provides a comprehensive range of banking and related

financial services. The Group divides its activities into four business

segments: Retail Banking and Wealth Management; Commercial

Banking; Global Banking and Markets; and Global Private Banking.

B.16 Controlling

persons:

The whole of the issued ordinary and preference share capital of the

Issuer is owned directly by HSBC Holdings.

Section C – Securities

C.1 Description of

type and class of

securities:

Issuance in series:

Notes will be issued in series which may comprise one or more tranches.

Each Tranche issued under a series will have identical terms, except that

different tranches of Notes may comprise Notes in bearer form ("Bearer

Notes") or registered form ("Registered Notes") The issue dates and

issue prices under different tranches of Notes may also vary.

The Registered Notes being issued are series PALMS 1397 tranche 1

Notes (the "Notes")

Form of Notes:

Registered Notes in global form:

Registered Notes will be issued in global form and a combined global

registered note will be deposited with and registered in the name of a

common depositary (or its nominee) for Euroclear Bank SA/NV

("Euroclear") and/or Clearstream Banking, société anonyme

("Clearstream, Luxembourg")

Security Identification Number[s]:


The Registered Notes have been accepted for clearance through

Euroclear and/or Clearstream, Luxembourg and will be allocated the

following Security Identification Number[s] [to be consolidated with the

Original Issue Security Identification Number[s]:

ISIN Code XS1805268205

Common Code: 180526820

SEDOL: BFY3BV7

C.2 Currency of the

securities issue:

The settlement currency of the Notes is USD (the "Settlement

Currency").

C.5 Description of any

restrictions on the

free

transferability of

the securities:

The Notes are freely transferable. However, there are restrictions on the

offer and sale of the Notes. The Issuer and HSBC Bank plc (the

"Dealer") have agreed restrictions on the offer, sale and delivery of the

Notes and on distribution of offering materials in Australia, the Dubai

International Financial Centre, the European Economic Area, France,

Hong Kong, India, Indonesia, Italy, Japan, the Kingdom of Bahrain,

Korea, Malaysia, Mexico, the People's Republic of China, Pakistan,

Philippines, Russia, Saudi Arabia, Singapore, Spain, Sri Lanka,

Switzerland, Taiwan, Thailand, The Netherlands, the United Arab

Emirates (excluding the Dubai International Financial Centre), the

United Kingdom, the United States of America and Vietnam. In

addition, investors of the Notes, by their purchase of the Notes, will be

deemed to have given certain representations, warranties, undertakings,

acknowledgements and agreements.

C.8

The rights

attaching to the

securities,

including ranking

and limitations to

those rights:

Status of the Notes:

The Notes will be direct, unsecured and unsubordinated obligations of

the Issuer and will rank equally and without preference among

themselves and, at their date of issue, with all other unsecured and

unsubordinated obligations of the Issuer (unless preferred by law).

Interest Payments:

The Notes do not bear interest.

Early redemption/termination for illegality:

If the Calculation Agent determines that the performance of the Issuer's

obligations has become unlawful or impracticable in whole or in part for

any reason, the Issuer will be entitled to redeem the Notes and pay the

relevant investor an amount per Note equal to the fair market value of

such Note or such other amount specified in the relevant final terms

("Final Terms").

Early redemption for taxation reasons:

If the Issuer were required under the terms and conditions of the Notes

(as applicable) (the "Conditions") to pay additional amounts in respect

of tax, the Issuer may subject to prior notice to the holders of such Notes,

redeem or terminate all, but not some only, of such Notes and pay the


relevant investor an amount per Note equal to the fair market value of

such Note or such other amount specified in the relevant Final Terms.

Modification and substitution:

Modifications to the Conditions may be made without the consent of any

holders of Notes to cure any ambiguity or manifest error or correct or

supplement any Conditions provided that: (i) the modification is not

materially prejudicial to the interest of holders of Notes; (ii) the

modification is of a formal, minor or technical nature or is to correct a

manifest error or is to comply with mandatory provisions of the law of

the Issuer's jurisdiction of incorporation; or (iii) the modification corrects

inconsistency between the Conditions and the relevant termsheet relating

to the Notes. The Notes permit the substitution of the Issuer with its

affiliates without the consent of any holders of Notes where the Issuer

provides an irrevocable guarantee of the affiliate's obligations.

Events of default of the Notes:

The following events constitute events of default (each, an "Event of

Default") under the Notes and would entitle the Noteholder to accelerate

the Notes: (i) a continuing default in the repayment of any principal due

on the Notes for more than 14 days, provided that the reason for non-

payment is not compliance with any fiscal or other law or regulation or

court order, or that there is doubt as to the validity of such law, regulation

or order in accordance with independent legal advice from advisers

which is acceptable to HSBC Bank plc, acting in its capacity as principal

paying agent (the "Principal Paying Agent"); or (ii) the passing of a

winding-up order in relation to the Issuer. On an Event of Default the

Notes will be redeemed against payment of an amount per Note equal to

[the fair market value of such Note

Meetings of Noteholders

The Conditions of the Notes contain provisions for calling meetings of

Noteholders to consider matters affecting their interests generally. These

provisions permit defined majorities to bind all Noteholders including

Noteholders who did not attend and vote at the relevant meeting and

Noteholders who voted in a manner contrary to the majority.

No guarantee or security:

The Notes are the obligations of the Issuer only and are unsecured.

Taxation:

All payments by the Issuer in respect of the Notes will be made without

deduction of any taxes, duties and other similar charges, including

United Kingdom taxes unless the Issuer is required by law to withhold

or deduct any such taxes. Therefore, Noteholders will be liable for

and/or subject to any taxes, duties and other similar charges, including

withholding tax, stamp duty, stamp duty reserve tax and/or similar

transfer taxes, payable in respect of the Notes.

Governing Law:

English law.


C.11 Listing and

trading:

Application will be made to admit the Notes to the Official List of the

United Kingdom Financial Conduct Authority and to trading on the

regulated market of the London Stock Exchange plc.

C.15 Description of how

the value of the

investment is

affected by the

value of the

underlying

instrument:

The Notes are designed to track the price of the Underlying converted

into the currency of the Note (if applicable). The Final Redemption

Amount payable on redemption of any Note is linked to a fixed amount

of the Underlying by way of a hedge in respect of such fixed amount of

the Underlying (whether directly or synthetically). In general, as the

price of the Underlying increases or decreases, so will the Final

Redemption Amount payable in respect of such Notes. Similarly,

changes in the value of the relevant currency rate will change the value

of the Notes.

The quoted price of the Underlying converted into the currency of the

Note (if applicable) may diverge from the Final Redemption Amount

payable under the Note owing to disparity between any hedge and the

Underlying, and to the deduction of costs, such as, amongst other things,

brokers fees, transaction processing fees and actual and potential taxes,

duties and other similar charges, including those costs that would be

incurred by the Issuer and/or its designated affiliates of hedging the

Underlying, whether directly or synthetically, and a fee to be retained by

the Issuer, the Dealer(s) and/or their affiliates.

The offer is addressed solely to qualified investors (as such term is

defined in the Prospectus Directive).

C.16 Expiration or

maturity date of

securities:

The Notes will be cash-settled.

The maturity date of the Notes is 05 April 2021 (the "Maturity Date").

C.17 Settlement

procedure:

The Notes will be cash-settled.

All payments to Noteholders will be paid through Euroclear and/or

Clearstream, Luxembourg.

C.18 Return on

securities:

The Notes are "Underlying Security-Linked Notes and are linked to a

single underlying security (the "Underlying").

The Notes are market access products, which are designed for investors

who wish to be exposed to fluctuations in the price of the Underlying,

but who do not wish to or are not able to hold the relevant Underlying

itself. In addition, the Notes are designed to allow investors to get

exposure to the Underlying even though it may be priced locally in a less

accessible currency or currencies.

A Noteholder will receive one type of payment under the Notes: the Final

Redemption Amount

Payments at maturity or on exercise

The Notes will have a Final Redemption Amount which will be

calculated in a different manner depending on whether the Notes are

Underlying ETF-Linked Notes, Underlying Fund-Linked Notes,

Underlying Index-Linked Notes or Underlying Security-Linked Notes.

The Notes are Underlying Security-Linked Notes and accordingly the

Final Redemption Amount will be the greater of 0.03 per cent. of the


issue price per Note and the Net Realisable Sale Price. The Realisable

Sale Price per Note will be equal to:

if the Issuer or any of its affiliate(s) hold the underlying assets

and dispose of them, the amount per Note received from such

disposal, less any costs and converted into the currency of the

Note (if applicable);

if neither the Issuer nor any of its affiliate(s) hold the underlying

assets but is party to a hedge or other arrangement relating to the

Notes being redeemed, the effective price at which such hedge

or other arrangement was realised or unwound, less any costs

and converted into the currency of the Notes (if applicable); or

if neither the Issuer nor any of its affiliate(s) hold the underlying

assets nor are party to a hedge or other arrangement relating to

the Notes being redeemed, the amount per Note a notional,

direct holder of the underlying assets of the Notes would receive

from disposing of them on expiry, less any costs and converted

into the currency of the Note (if applicable).

If the actual or notional amounts received need to be converted into the

currency of the Note, the rate of exchange used will be either:

if the Issuer or its affiliate(s) has an exchange transaction

(whether implicit as part of a hedge or other arrangement for the

underlying assets or as part of a separate arrangement), the rate

of exchange obtained under that arrangement; or

if the Issuer or its affiliate(s) has not entered into an exchange

transaction the rate of exchange which a notional, direct holder

of the underlying assets of the Notes would be able to obtain.

Additional Payments

If the Notes are Underlying Security-Linked, Underlying ETF-Linked or

Underlying Index-Linked Notes, then holders of Notes will also

potentially be entitled to Additional Payments.

The Notes are Underlying Security-Linked Notes and the Additional

Payments payable to holders of Notes will be:

if the Issuer or its affiliate(s) hold the appropriate underlying

assets (that is, the shares or exchange-traded, the aggregate

amount of the net cash dividend or distribution received;

if the Issuer or its affiliate(s) hold a hedge or other arrangement

for the purposes of performing its obligations under the Notes,

the net cash dividend or distribution equivalent payment

received under the hedge or other arrangement;

if the Issuer or its affiliate(s) do not hold any of the underlying

assets or are not party to a hedge or other arrangement relating

to the Notes, the net amount a notional, direct holder of the

underlying assets relating to the Notes would receive by way of

cash dividend or distribution; or

if a non-cash dividend or distribution is made, the Issuer may in

its absolute discretion, pay to the Noteholders the net cash value


of such non-cash dividend or distribution or, if the Issuer or its

affiliate(s) holds a hedge or other arrangement relating to the

Notes, the net cash adjustment or settlement received in respect

of such non-cash dividend or distribution under such hedge or

other arrangement, in respect of the underlying securities, such

as an issue of warrants or preference shares,

in all cases, less any costs and converted into the currency of the Notes

(if applicable).

If the actual or notional amounts need to be converted into the currency

of the Note, the rate of exchange used is either:

if the Issuer or its affiliate(s) has an exchange transaction

(whether implicit as part of a hedge or other arrangement for the

underlying assets or as part of a separate arrangement), the rate

of exchange obtained under that arrangement; or

if the Issuer or its affiliate(s) has not entered into an exchange

transaction, that which a notional, direct holder of the

underlying assets of the Notes would be able to obtain.

Supplementary Amounts:

Supplementary Amounts do not apply to this series of Underlying

Security-Linked Notes.

Interest Payments:

The Notes do not bear interest.

C.19 Exercise price or

final reference

price of the

underlying:

The calculations which are required to be made to calculate the Final

Redemption Amount will be based on the value of the Underlying

determined by the Calculation Agent being HSBC Bank plc. The

Calculation Agent will determine the value of the Underlying by

reference to the actual or notional value upon disposal or realisation of

the Underlying or the value of realising or unwinding a hedge or other

arrangement in respect of such Underlying, in all cases deducting costs

and converting into the currency of the Note (if applicable).

C.20 Type of the

underlying:

Each series of Notes is linked to the performance of one of the following:

a security or basket of securities (together, the "Underlying Securities"

and each, an "Underlying Security") issued by a company or companies

(together, the "Underlying Companies" and each, an "Underlying

Company") which is/are listed and/or admitted to trading on one or more

stock exchanges (such Notes are referred to as, "Underlying Security-

Linked Notes"); or

a security or basket of securities (together, the "China Connect

Underlying Securities" and each, a "China Connect Underlying

Security") issued by a company or companies (together, the

"Underlying Companies" and each, an "Underlying Company") which

is, or is expected to be, listed and/or admitted to trading on any stock

exchange (each a "China Connect Market") in the People's Republic of


China ("PRC", which shall for the purposes of this document exclude

Hong Kong, Macau or Taiwan) under any securities trading and clearing

links developed or to be developed by The Stock Exchange of Hong

Kong Limited ("SEHK"), any such China Connect Market, the Hong

Kong Securities Clearing Company Limited and the China Securities

Depository and Clearing Corporation for the establishment of mutual

market access between SEHK and any such China Connect Market (such

Notes are referred to as "China Connect Underlying Security-Linked

Notes"); or

an index or basket of indices (together, the "Underlying Indices" and

each, an "Underlying Index") being composed of certain securities

(together, the "Component Securities" and each, a "Component

Security") (such Notes are referred to as, "Underlying Index-Linked

Notes"); or

a fund or basket of funds (together, the "Underlying Funds" and each,

an "Underlying Fund") (such Notes are referred to as, "Underlying

Fund-Linked Notes"); or

an exchange-traded fund or a basket of funds (together, the "Underlying

ETFs" and each, an "Underlying ETF") which is/are listed and/or

admitted to trading on one or more stock exchanges (such Notes are

referred to as, "Underlying ETF-Linked Notes").

The Notes are Underlying-Security Linked Notes, being Notes in

relation to which the Final Redemption Amount is linked to one security,

namely EMAAR THE ECONOMIC CITY ORD SHS SAR 10.00 Underlying

Security Linked Notes are also referred to in the prospectus as

"Underlying Equity-Linked Notes".

References to "Underlying", either in the singular or plural form, shall

refer to any Underlying applicable to a series of Notes.

Information on the Underlying can be found on EMAAR AB /

www.emaar.com

Section D – Risks

D.2 Key risks specific

to the Issuer:

A description of the key risk factors relating to the Issuer that may affect

the ability of the Issuer to fulfil its obligations to investors in relation to

any of its debt or derivative securities is set out below.

Current economic and market conditions could materially adversely

affect the Issuer:

The Issuer's earnings are affected by global and local economic and

market conditions. Uncertain and at times volatile economic conditions

can create a challenging operating environment for financial services

companies such as the Issuer, including challenges arising from any of

the following: reduced demand for borrowing from creditworthy

customers; the imposition of protectionist measures; renewed stress as

subdued economic conditions raise asset quality concerns, and

uncertainties about the EU bank resolution regime raise funding costs; a

prolonged period of low or negative interest rates constraining the

amount of the Issuer's net interest income; market disruption adversely

affecting funding transactions and the Issuer's ability to borrow from

http://www.emaar.com/

Section D – Risks

other financial institutions; subdued economic growth and/or asset

valuation bubbles as a result of too rapid growth.

The UK's withdrawal from the EU may adversely affect the Issuer's

operating model and financial results

The UK electorate's vote to leave the EU may have a significant impact

on general macroeconomic conditions in the UK, the EU and globally,

and is likely to usher in a prolonged period of uncertainty. Negotiations

of the UK's exit agreement, its future relationship with the EU and its

trading relationships with the rest of the world will likely take a number

of years to resolve. The period of uncertainty and market volatility that

followed the UK's decision to leave the EU is likely to continue until the

UK's future relationship with the EU and the rest of the world is clearer.

Given the timeframe and the complex negotiations involved, a clearer

picture is not expected to emerge for some time.

Uncertainty as to the precise terms of these arrangements, and the future

legal and regulatory landscape, may lead to uncertain economic

conditions, market volatility and currency fluctuations. Among other

issues, the UK's future relationship with the EU may have implications

for the future business model for the Issuer's London-based European

cross-border banking operations, which relies on unrestricted access to

the European financial services market.

The Issuer's parent company is subject to regulatory commitments and

consent orders:

HSBC Holdings is subject to a deferred prosecution agreement with the

US Department of Justice and related agreements and consent orders

with US and UK government agencies to comply with certain remedial

measures with respect to the HSBC Group’s anti-money laundering and

sanctions compliance programmes, including the appointment of an

independent compliance monitor. Failure to comply with the terms of

such agreements may have a material adverse effect on the Group,

including loss of business and withdrawal of funding, restrictions on

performing dollar-clearing functions, or revocation of bank licences.

UK banking structural reform legislation and proposals could

materially adversely affect the Issuer:

Material changes to the corporate structure and business activities of the

Issuer, including the establishment of a separate ring-fenced bank for

retail banking activities, are expected pursuant to UK banking structural

reform legislation and proposals. The restructuring will involve the

transfer of qualifying components of the Issuer's UK Retail Banking and

Wealth Management, Commercial Banking and Global Private Banking

businesses from the Issuer to a new legal entity, HSBC UK. The Issuer

expects the cost of implementing these plans to be material. In addition

to the restructuring costs, the Issuer will have a reduced balance sheet,

including a reduction in risk-weighted assets, and a reduced and

potentially more volatile revenue stream. These structural changes could

result in changes to the Issuer's credit rating and increases in its cost of

funding.

The Issuer is subject to a number of legal and regulatory actions and

investigations:

Section D – Risks

The Issuer is subject to a number of legal and regulatory actions and

investigations, the outcomes of which are inherently difficult to predict.

An unfavourable result in one or more of these could result in the Issuer

incurring significant expense, substantial monetary damages, loss of

significant assets, other penalties and injunctive relief, potential

regulatory restrictions on the Issuer's business and/or a negative effect

on the Issuer's reputation.

Unfavourable legislative or regulatory developments, or changes in the

policy of regulators or governments could materially adversely affect

the Issuer:

The Issuer's businesses are subject to ongoing regulation and associated

regulatory risks, including the effects of changes in the laws, regulations,

policies, guidance, voluntary codes of practice and their interpretations

in the UK, the EU and the other markets in which the Issuer operates.

This is particularly so in the current environment, where the Issuer

expects government and regulatory intervention in the banking sector to

remain high for the foreseeable future.

The Issuer is subject to the substance and interpretation of tax laws in

the jurisdictions in which it and members of the Group operate:

The Issuer is subject to the substance and interpretation of tax laws in all

countries in which it and members of the Group operate, the risk

associated with changes in tax law or in the interpretation of tax law, the

risk of changes in tax rates and the risk of consequences arising from

failing to comply with procedures required by tax authorities.

The Issuer's operations are highly dependent on its information

technology systems:

The reliability and security of the Issuer's information and technology

infrastructure and the Issuer's customer databases are crucial to

maintaining the service availability of banking applications and

processes and to protecting the HSBC brand. Critical systems failure,

prolonged loss of service, cyber-attacks, or internet crime or a material

breach of security could lead to financial loss and cause damage to the

Issuer's business and brand.

The Issuer's operations have inherent reputational risk:

Reputational risk may arise from negative public opinion about the actual

or perceived manner in which the Issuer conducts its business activities,

its financial performance, as well as actual or perceived practices in

banking and the financial services industry generally. Negative public

opinion may adversely affect the Issuer's ability to keep and attract

customers and, in particular, corporate and retail depositors, and retain

and motivate staff which in turn could have a material adverse effect on

the Issuer.

The Issuer has significant exposure to counterparty risk:

The Issuer's ability to engage in routine transactions to fund its

operations and manage its risks could be materially adversely affected

by the actions and commercial soundness of other financial services

institutions. Financial services institutions are necessarily

interdependent because of trading, clearing, counterparty or other

Section D – Risks

relationships, which could affect a financial services institution's funding

and its ability to manage the risks of its business.

Market fluctuations may reduce the Issuer's income or the value of its

portfolios:

The Issuer's businesses are exposed to changes in, and increased

volatility of, interest rates, inflation rates, credit spreads, foreign

exchange rates, commodity, equity, bond and property prices and the risk

that the Issuer's customers act in a manner inconsistent with its business,

pricing and hedging assumptions. It is difficult to predict with any

accuracy changes in market conditions, and such changes could have a

material adverse effect on the Issuer.

Liquidity, or ready access to funds, is essential to the Issuer's business:

If the Issuer is unable to raise funds, its liquidity position could be

adversely affected and the Issuer might be unable to meet deposit

withdrawals or obligations under committed financing facilities and

insurance contracts, to fund new loans, investments and businesses or to

repay borrowings as they mature.

Any reduction in the credit rating of the Issuer or any of its debt

securities could affect the availability of the Issuer's funding and affect

its liquidity position and interest margins:

Credit ratings affect the cost and other terms upon which the Issuer is

able to obtain market funding. Rating agencies regularly evaluate the

Issuer, as well as its respective debt securities. There can be no assurance

that the rating agencies will maintain the Issuer's current ratings or

outlook. Any reductions in these ratings and outlook could increase the

cost of the Issuer's funding, limit access to capital markets and require

additional collateral to be placed.

D.6 Key risks specific

to the securities

and risk warning

to the investor:

Credit risk: The Notes are direct, unsubordinated and unsecured

obligations of the Issuer and not of any other person. If the Issuer's

financial position were to deteriorate, there could be a risk that the Issuer

would not be able to meet its obligations under the Notes (the Issuer's

credit risk). If the Issuer becomes insolvent or defaults on its obligations

under the Notes, in the worst case scenario, investors in the Notes could

lose all of their invested amounts.

The Notes are unsecured obligations: The Notes are not secured over

any asset. Therefore, the investor would not be able to enforce security

as a method of recouping payments due under the Notes if the Issuer

were to become insolvent and cease to be able to pay such amounts.

The Notes are not ordinary debt securities: The Notes do not pay

interest and, upon redemption, expiry or upon exercise (as applicable),

may return less than the amount invested or nothing. The Notes are

designed to track the price or level of the Underlying. If the performance

of such Underlying does not move in the anticipated direction or if the

issuer thereof becomes insolvent, the Notes will be adversely affected

and, in a worst case scenario, may become worthless.

Payments under the Notes may be delayed: Payments to holders of

Notes which are calculated by reference to hedging arrangements will

only be due if the proceeds would have been received by an investor

outside the jurisdiction where the Underlying is listed or quoted. There

Section D – Risks

is a risk that limitations on the importation and withdrawal of funds in

such jurisdiction could lead to potential delays in payments under the

Notes or, in the worst case, the Notes becoming worthless.

No ownership rights: The Notes do not confer any legal or beneficial

interest or any voting or dividend rights in the Underlying or the

Component Securities.

Suspension of Issuer's payment obligation: Payments to holders of

Notes may be suspended so long as dealings in the relevant Underlying

and related hedging transaction are or are wholly to be prevented,

delayed or restricted by the closure of a relevant exchange or the

suspension of trading or the occurrence of other circumstances, or if any

circumstances arise which adversely affect the ability to carry out foreign

exchange transactions or currency transfers. In the event of such

suspension, Noteholders will not be entitled to any interest or other

compensation in respect of the suspension.

There may be no active trading market or secondary market for

liquidity for the Notes: Any series of Notes may not be widely

distributed and there may not be an active trading market, nor is there

assurance as to the development of an active trading market. If there is

no liquid market, investors may not be able to realise their investment

until maturity of the Notes or may not realise a return that equals or

exceeds the purchase price of their Notes. Notwithstanding the

foregoing, the Issuer may issue Notes which provide for certain

circumstances where the Issuer and/or Dealer may buy-back such Notes

from the holders of such securities.

Certain factors affecting the value and trading price of Notes: The

Final Redemption Amount payable under the Notes may be affected by

fluctuations in value of the Underlying or the Component Securities,

changes in currency exchange rates, changes in interest rates, volatility

of the Underlying, time remaining to expiry, dividend rates on the

Underlying or the Component Securities or, where applicable, the

number and type of Underlyings included in a basket to which the

relevant Notes relate.

Conflicts of interest may arise between the interests of the Issuer or its

affiliates and those of the holders of the Notes: The Issuer or its

affiliates may enter into hedging or other transactions (i) relating to

Underlyings or the Component Securities or (ii) with issuers of

Underlyings or the Component Securities. The Issuer or its affiliates

may also publish research or other reports relating to Underlyings or the

Component Securities. Any such activities may have a negative effect

on the value of Notes relating to such Underlyings. In addition, the Issuer

may assume roles as hedging party, service providers or calculation

agent in respect of Underlyings which are funds, calculation agent under

the Notes or publisher of research reports. In respect of any of these roles

the Issuer may have interests that conflict with the interests of holders of

such securities.

Commission and cost of hedging: The issue price of the Notes may

include commissions charged by Issuer or its affiliates and the cost or

expected costs of hedging the Issuer's obligations under the Notes (if

any). Accordingly, there is a risk that, upon issue, the market price of

Notes may be lower than original issue price of the Notes. Also, fees,

Section D – Risks

commission and hedging costs may be deducted from the Final

Redemption Amount in the case of Notes.

Exchange rate risks and exchange control risk: The Issuer will pay

amounts in respect of the Notes in the Settlement Currency. Since the

Underlying is referenced in SAR (the "Underlying Currency"),

amounts payable under the Notes may be affected by multiple currency

conversion costs which may be passed on to investors. Where the

Settlement Currency is not the same as the investor's home currency, the

realisable value of the investment in the investor's home currency may

be at risk from fluctuations in the exchange rate. Government and

monetary authorities may impose or modify exchange controls that could

adversely affect an applicable exchange rate or transfer of funds in and

out of the country. As a result of such restrictions and controls the Issuer

may suspend its obligations to make any payment under any Notes if and

for as long as such exchange controls have occurred and are continuing.

Holders of the Notes shall not be entitled to any interest or other

compensation in respect of any such suspension.

Market Disruption Events and Additional Disruption Events: In the

case of early closure of the relevant exchange, disruption of such

exchange or suspension of trading on such exchange, including, in the

case of Notes linked to a China Connect Underlying, including the early

closure or disruption of the securities trading and clearing links

programme developed or to be developed by The Stock Exchange of

Hong Kong Limited (the "SEHK"), the China Connect Market, the Hong

Kong Securities Clearing Company Limited and the China Securities

Depository and Clearing Corporation for the establishment of mutual

market access with SEHK and the China Connect Market, where

applicable ("Market Disruption Events") or a hedging disruption, a

change in applicable laws, an increased cost of hedging, where

applicable, an insolvency filing of the issuer of the Underlying, a foreign

exchange disruption event, or, in the case of Notes linked to a China

Connect Underlying, a ceasing by the relevant exchange to accept

Securities as "China Connect" securities, or a permanent suspension or

termination of the "China Connect" service with respect to the Securities

("Additional Disruption Events"), postponement or adjustment of

valuations in case of a Market Disruption Event or adjustment of terms

agreed to by the holders of Notes or redemption or exercise of the Notes

in case of an Additional Disruption Event in respect of such Notes may

have an adverse effect on the value of and/or the Final Redemption

Amount in respect of such Notes.

Illegality or changes in tax law may cause the Issuer's obligations

under the Notes to be redeemed or terminated early: If the Calculation

Agent determines the performance of the Issuer's obligations under any

Notes shall have become unlawful or impracticable or if the Issuer

determines that it would be required to pay additional amounts in respect

of any withholding or deduction for taxes, duties or other similar charges

on payments under the Notes, the Issuer may redeem such Notes and pay

a sum representing the fair market value of such Notes. As a result

holders of Notes will forgo any future appreciation in the relevant

Underlying and may suffer a loss of some or all of their investments.

Considerations regarding hedging: The value of the Notes may not

exactly correlate with the value of the Underlying to which the Notes

relate.

Section D – Risks

Applicable Bank Resolution Powers: The Issuer is subject to the

Banking Act 2009 which implements the BRRD in the UK and gives

wide powers in respect of UK banks and their parent and other group

companies to HM Treasury, the Bank of England, the Prudential

Regulation Authority and the United Kingdom Financial Conduct

Authority (each, a "relevant UKRA") in circumstances where a UK

bank has encountered or is likely to encounter financial difficulties.

These powers include a "bail-in" power, which gives the relevant UKRA

the power to cancel all or a portion of the principal amount of, or interest

on, certain unsecured liabilities (which could include the Notes) of a

failing financial institution, to convert certain debt claims (which could

be amounts payable under the Notes) into another security (including

common shares), or alter the terms of such liabilities, including their

maturity or expiry or the date on which interest becomes payable,

including by suspending payments for a temporary period. The exercise

by the relevant UKRA of any of its powers under the Banking Act 2009

(including especially the bail-in power) could lead to the holders of the

Notes losing some or all of their investment or may adversely affect the

rights of holders of the Notes, the market value thereof or the Issuer's

ability to satisfy its obligations thereunder.

Tax risks: The amount of a payment to the investor under the Notes may

be decreased to take into account the effect of taxes, duties or other

similar charges on an investment in the Underlying. There is a risk that

tax law or practice will change in the future resulting in the imposition

of or increase in tax on an investment in, or disposition of the Underlying.

This will result in a decrease of the amounts payable under the Notes.

Also, investors in the Notes will be obliged to pay all taxes, duties or

other similar charges payable in connection with the subscription,

purchase or holding of such Note and the payment of the Final

Redemption Amount and/or any Additional Payment.

Emerging market risks: Investors in Notes relating to Underlyings

which are issued in or located in or listed on an exchange in an emerging

market, namely Saudi Arabia, should be aware that investments in

emerging markets, and specifically Saudi Arabia, are subject to greater

risks than well-developed western markets. Institutions relied upon for

the efficient functioning of capital markets, such as stock exchanges,

economic, legal and regulatory institutions, systems for the clearing,

settlement and registration of securities, may be less developed.

Disclosure standards may be less onerous on issuers and accountancy

practices may differ from those which are internationally accepted.

Political conditions in certain geographic locations where the issuers of

Underlyings may operate may be volatile or unstable, and there could be

increased price volatility.

Specific risks relating to Underlying Equity-Linked Notes: If a

Potential Adjustment Event occurs and dilutes the theoretical value of

the Underlying or an Extraordinary Event occurs, the Calculation Agent

may make corresponding adjustments to the conditions of the Notes

which may adversely affect the Final Redemption Amount payable or (in

the case of Extraordinary Events) may redeem the Notes; as a result the

holder of Notes may lose some or all of its investment. As the Underlying

are units in a fund, the investor will be exposed to the risks of specific

regulation affecting funds, risk relating to the fund's management and

internal rules and, where the fund is a synthetic fund, also from

counterparty risk from the swap counterparty.

Section D – Risks

Alternative Payment Currency Risk: If "Payment of Alternative

Payment Currency Equivalent" is specified as applicable in the relevant

Final Terms, an investor is subject to the risk that payments in respect of

such Notes will be made in the Alternative Payment Currency specified

in the relevant Final Terms instead of the Settlement Currency. To the

extent the Issuer is not able, or it is impracticable for it, to satisfy its

obligation to pay the Final Redemption Amount, Additional Payments

and/or Supplementary Amounts (if applicable) as a result of

Inconvertibility, Non transferability or Illiquidity (each, as defined in the

Conditions), the Issuer shall be entitled to settle any such payment in the

Alternative Payment Currency specified in the relevant Final Terms on

the due date at the Alternative Payment Currency Equivalent of any such

Final Redemption Amount, Additional Payments and/or Supplementary

Amounts (if applicable). In this case, the subheading in this section

entitled "Exchange rate risks and exchange control risk" would apply

as if the relevant Alternative Payment Currency were the Settlement

Currency.

Investors may lose the value of their entire investment or part of it,

as the case may be.

Section E – Offer

E.2b Reasons for the

offer and use of

proceeds when

different from

making profit

and/or hedging

certain risks:



Article 3(3) of the Prospectus Directive. There will be no public offer of

the Notes and thus reasons for the offer and use of proceeds are not

required.

E.3 Description of the

Terms and

conditions of the

offer:




the Notes and thus a description of the terms and conditions of the offer

is not required.

E.4 Description of any

interests material

to the issue/offer,

including

conflicting

interests:

The Issuer or its affiliates may engage in hedging or other transactions

involving the relevant Underlying which may have a positive or negative

effect on the value of such Underlying and therefore on the value of any

Notes to which they relate. Certain affiliates of the Issuer may also be

the counterparty to the hedge of the Issuer's obligations under an issue of

Notes and the Calculation Agent is responsible for making

determinations and calculations in connection with the Notes in its sole

and absolute discretion acting in good faith and may be a service provider

in respect of Underlyings which are funds. The Issuer or its affiliates

may from time to time advise the issuer or obligors of, or publish

research reports relating to, an Underlying. The views or advice may

have a positive or negative effect on the value of an Underlying and may

be inconsistent with purchasing or holding the Notes relating to such an

Underlying.

Fees may be payable by the Issuer to the Dealer[s] acting as

underwriter(s) of issues of the Notes.

Section E – Offer

Save as disclosed above, no person involved in the issue of the Notes

has, so far as the Issuer is aware, an interest material to the issue.

E.7 Estimated

expenses charged

to the investor by

the Issuer or the

offeror:




the Notes and expenses in respect of the listing of Notes are not charged

directly by the Issuer or Dealer(s) to the investor.

Issue of 1,000,000 Notes (USD 3,570,000) Market Access ... · market access with SEHK and the China...

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