Equity Linked Investment

The risk factors associated with ELI set out below are generic in nature and do not purport to disclose or discuss all the risks associated with a particular ELI for which you are going to invest. You should read the other risk factors set out in the offering document(s) in order to understand the specific risks relating to the ELI(s) you are going to invest. If you are in doubt about the nature of or the risks associated with this investment product, you should obtain necessary and appropriate professional advice before investing in this product. Unless otherwise stated, the risk factors set out below shall be considered as applicable to both Single ELI and Basket ELI.

Equity Linked Investment is not equivalent to time deposits and is not principal protected. You could lose your entire investment. Regarding the product details and risk disclosure of Equity Linked Investment, please refer to relevant offering documents.

Limited Maximum Potential Gain - For ELI with a potential distribution feature, the maximum potential gain is capped at the total potential distribution amounts paid during the contract period. For ELI with a coupon distribution feature, if the early call feature is triggered, the maximum potential gain is capped at the exit coupon amount. However, it is possible that you may not receive any potential distribution amount or any coupon distribution amount at all.

Risk on Issuer and No Collateral - ELI is not secured on any asset or collateral. You will be relying on the issuer's creditworthiness for your investment in ELI. If the issuer defaults on its obligations under ELI or becomes insolvent, you could lose all of your investment.

Liquidity Risk - ELI is designed to be held until maturity. Only limited market making arrangement will be provided. If you try to early terminate your investment, you may receive an amount which is substantially less than your initial investment amount.

Not the Same as Investing in the Reference Asset(s) - You have no rights in the reference asset(s). Changes in the market price of the reference asset(s) may not lead to a corresponding change in the market value of, and / or your potential gain or loss under, the ELI.

Re-investment Risk - Some ELIs may contain an early call feature. If the early call feature is triggered, the ELI will be terminated before maturity and no further potential distribution amount / coupon distribution amount will be payable. You may not be able to enjoy the same rate of return if you re-invest in other investments with similar risk parameters.

Not Covered by Investor Compensation Fund - ELI is not listed on any stock exchange and is not covered by the Investor Compensation Fund.

Enforcement of Judgments - In most cases, a large portion of the issuer's business, assets, and operations will be located outside Hong Kong and you may experience difficulties and delays in enforcing a judgment obtained in a Hong Kong court against such issuer's assets outside Hong Kong or you may not be able to enforce it at all. In the worst case scenario, you could lose all of your investment.

Reliance on Distributor - You will have to rely on your distributor of ELI i.e. the Bank to distribute notices and make payment and / or delivery to you. You will be exposed to the credit risks and other default risks of the Bank. If the Bank defaults on its obligations or becomes insolvent, you may need to take action against the Bank. In the worst case scenario, you could lose all of your investment.

Exposure to Risks Associated with the ELI from the Trade Date - As you will be subject to the terms and conditions of ELI from the trade date, you will be exposed to the risk associated with ELI from the trade date.

Exposure to Price Movements of Reference Asset (or the Worst Performing Asset in a Basket, as applicable) from the Fixing Date - There is a time gap between the fixing date and the settlement date and if physical delivery of reference asset (or the worst performing asset in a basket, as applicable) is determined, you will be exposed to any price movement of the reference asset (or the worst performing asset in a basket, as applicable) from the fixing date. Moreover, you will be exposed to the market risk of holding the reference asset (or the worst performing asset in a basket, as applicable) if you choose not to realize the reference asset (or the worst performing asset in a basket, as applicable) on the settlement date.

Potential Payout Determined by the Worst Performing Asset (applicable to Basket ELI only) - The potential payout under Basket ELI is linked to the performance of the worst performing asset in the basket on each scheduled trading day and the worst performing asset on each scheduled trading day can be different. If any reference asset in the basket performs poorly, you will not benefit from the positive performance of any other reference assets in the basket.

Conflicts of Interest - Potential and actual conflicts of interest may arise from the different roles played by the issuer and distributer, their subsidiaries and affiliates in connection with ELI and their economic interests in each such role may be adverse to your interests in ELI.

Adjustment and Early Termination - If an unforeseeable event occurs, the issuer may, at its sole and absolute discretion, adjust the terms of ELI to account for that event. Moreover, ELI may be early terminated by paying you a fair market value as the issuer may determine. Such adjustment and / or early termination may have an unforeseen adverse impact on the potential return of your investment and the amount payable to you may be substantially less than your original investment amount.

Foreign Exchange Risk - You will be subject to foreign exchange risks where the settlement currency of the ELI differs from your home currency, or where the settlement currency of the ELI is different from the currency in which the reference asset (or the worst performing asset in a basket, as applicable) trades. In the latter case, you will also be subject to multiple currency conversion costs.

Exchange Control - For currency subject to exchange controls imposed by the relevant government, such as renminbi (RMB), the exchange rate may be easily affected by change in government policies. Such currencies may have different exchange rates quoted in different markets. For example, exchange rates of RMB are quoted in onshore and offshore markets; the onshore rate of RMB is being referred as "CNY" and the offshore rate (i.e. when traded in Hong Kong) is being referred as "CNH". Although CNY and CNH represent the same currency, they do not necessarily have the same exchange rate and may not move in the same direction.

For ELI Linked to Exchange Traded Fund (ETF) and / or Real Estate Investment Trust (REIT) - ETF and REIT are managed by their managers. The performance of the assets of ETF / REIT is significantly dependent upon the capabilities of the management team of the manager. The investment objectives and / or investment restrictions of ETF / REIT may be changed from time to time. If a ETF adopts an investment objective to track the performance of an underlying asset pool or index, it is exposed to the political, economic, currency and other risks related to the underlying asset pool or index that the ETF is designed to track. There may also be disparity between the performance of the ETF and the performance of the underlying asset pool or index that the ETF is designed to track. On the other hand, REIT is exposed to risks relating to investments in real estate and there may also be disparity between the market price of the units of a REIT and the net asset value per unit.

For ELI Linked to Newly Listed Stock / Fund - There is no guarantee that a trading market for a newly listed stock / fund will develop or, if a market does develop, the liquidity of that market. The price and trading volume of a newly listed stock / fund may be more volatile than a stock / fund with a longer trading history.

For Settlement Fund of the Order Sourced from To-be-received Funds - The Bank has the right to cancel an order if it fails to receive the funds to be received by you from another investment transaction on time and there is no sufficient fund placed by you for settlement. Any cost, charges and losses incurred as a result thereof shall be borne by you.

Note:

1. Dah Sing Bank, Limited ("Dah Sing Bank") is an agent of the issuers. The ELIs subscribed by customers via Dah Sing Bank are products of the issuers but not products of Dah Sing Bank. In respect of an eligible dispute (as defined in the Terms of Reference for Financial Dispute Resolution Centre in relation to the Financial Dispute Resolution Scheme) arising between Dah Sing Bank and the customer out of the selling process or processing of the related transaction, Dah Sing Bank is required to enter into a Financial Dispute Resolution Scheme process with the customer; however any dispute over the contractual terms of the product should be directly resolved between the respective issuer and the customer.
2. Unless the context requires otherwise, this document does not constitute any offer, invitation or recommendation to any person to enter into any investment transaction, nor does it constitute any prediction of likely future movements in prices of any investment products.
3. The above information has not been reviewed by the Securities and Futures Commission of Hong Kong or any regulatory authority in Hong Kong.
4. This service / product is not targeted at customers in the European Union.
5. The Chinese version of this section is for reference only and if there is any discrepancy between the English and Chinese version, the English version shall prevail.