Structured Product

Yield Enhancement Notes

The return from a Yield Enhancement Notes is dependent on the performance of an underlying financial instrument.

Typical financial instruments linked to a Yield Enhancement Notes include equities, interest rates, credit, market indices, fixed income instruments, foreign exchange rates and a combination of these.You can earn higher yields from Yield Enhancement Notes by taking a view on the underlying financial instruments. They are usually issued by a financial institution and the investors are exposed to the issuer’s credit risk. As the investment risk is higher, the product is suitable for experienced investors .

Benefits

  • Potential enhanced yields
  • Short investment tenor
  • Customised pay-off profile to suit investors’ needs
  • Diversification of underlying instruments

How to apply

  • Visit any of our branches or contact our Treasures Relationship Manager.
  • Call our 24-hour personal banking service hotline at 0809-002889 or 02-66129888

Useful Links

Risk Disclosure

  1. Minimum Return Risk:
  2. Minimum return risk should include maximum loss. In worst case scenario, investor might lose all principal and interest.
  3. Early Redemption Risk
  4. On early redemption the product may return less than its principal amount. The early redemption amount will factor in the costs of terminating hedging and funding arrangements relating to the product. This may reduce the amount payable to you.
  5. Interest Rate Risk
  6. This product carries interest rate risk. Changes in interest rates will impact the performance of the product.
  7. Liquidity Risk
  8. There may not always be a secondary market for the product. If a secondary market exists, prices in that market may be lower than the issue price or purchase price of the product.
  9. Credit Risk
  10. You shall take on credit risk of the institutional issuer or guarantor as they pledge to protect your principal and returns. Your credit risk assessment shall be based on your evaluation of the notes issuer or guarantor’s credit rating.
  11. Foreign Exchange Risk
  12. The product may be denominated in foreign currency. If you purchase this product in NTD or a non-denomination currency, you shall be aware that you are exposed to the FX risk, which is receiving an amount less than the original investment in NTD for converting to NTD asset.
  13. Event Risk
  14. The notes performance would be impacted or the notes, issuer or guarantor’s credit rating may be downgraded if the issuer or guarantor experiences a significant event.
  15. Country Risk
  16. You will incur loss if any major unforeseen event such as war breaks out in the country where the product is issued or where the institutional guarantor is registered.
  17. Delivery Risk
  18. The delivery will be temporarily suspended or delayed if a emergency condition takes place in the country where the institutional issuer or guarantor registers, where the exchange market in which trades underlying instrument is located, or where the delivery and payment institution is located. Market fluctuations and different delivery practices in holidays in such country may also result in temporary suspension or delay of delivery.

Individual Product Risk:

  1. The institutional issuer exercises the right to call the notes before maturity
  2. If the institutional issuer exercises the right to call back the notes before maturity, the investment tenor will be shortened.
  3. Reinvestment Risk
  4. If the institutional issuer exercises the right to call the notes before maturity, the investor will be exposed to reinvestment risk.
  5. Risk of underlying instrument changes
  6. If the underlying instrument has to be replaced for special reasons, the calculation agent will have the right to find another suitable instrument based on good faith principles.
  7. Inflation Risk
  8. Inflation will reduce the real value of yields of notes.
  9. Lock-up period risk
  10. If the product terms has lock-up period, you are exposed to lock-up period risk.

Investment Risk Warnings

  1. These products are complicated financial instruments, which require explanation in person for investment decision. If you are not able to completely understand the product, please do not invest.
  2. This Product is an investment, not a deposit. It is excluded from coverage of deposit insurance. As the risks involved are different from bank deposit, this product shall not be seen as a substitute of demand, saving or time deposits.
  3. You shall understand that the product is an investment instrument and agree to take on its market risk and the institutional issuer’s credit risk.
  4. You shall read product description and risk disclosure statement carefully, assess the product independently and take on the risk of loss.
  5. You shall assess the appropriateness of investing in the product based on your condition and financial status. Structured product shall not constitute the major investment in your portfolio.
  6. You should fully understand the nature of structured products and related financial, accounting, taxation and regulatory information. You should evaluate your financial condition and risk tolerance before investment decision is made.

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