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Investment Services
Terms and Conditions
(This new version is posted on 1st July 2017 on the Bank´s website)
IMPORTANT NOTICE

This is an important and legally binding document. You should consider to seek independent professional advice beforehand for protecting your own rights and interests.
Please read the following provisions carefully and make sure you understand them.

Defined terms used in the Currency Linked Deposits Terms and Conditions (see below) shall have the same meaning in the following Risk Disclosure Statements save as otherwise provided.


 

Risk Disclosure Statements:
Not a time deposit – Currency Linked Deposit is NOT equivalent to, nor should it be treated as a substitute for, time deposit.  It is NOT a protected deposit and is NOT protected by the Deposit Protection Scheme of Hong Kong.
Derivatives risk – Currency Linked Deposit is embedded with a foreign exchange put option sold by you as the investor.  Option transactions involve risks, especially when selling an option.  Although the premium received from selling an option is fixed, you may sustain a loss well in excess of such premium amount, and your loss could be substantial.
Limited potential gain – The maximum potential gain is limited to contract interest amount.
Maximum potential loss Currency Linked Deposit is not principal protected: you could lose all of your deposit amount and the contract interest amount in extraordinary circumstances where the Linked Currency becomes worthless.
Not the same as buying the Linked Currency – Investing in Currency Linked Deposit is not the same as buying the Linked Currency directly.
If you buy the Linked Currency with Deposit Currency and deposit for the same tenor as a Currency Linked Deposit, you will receive the deposit interest but expose to an exchange gain or loss on the Maturity Date depending on the exchange rate movement of the Linked Currency against the Deposit Currency during the deposit period.  If you invest in Currency Linked Deposit, the Bank will compare the Strike Rate with the Fixing Rate on the Fixing Date.  If the Linked Currency has appreciated against the Deposit Currency or the Fixing Rate is equal to the Strike Rate, you will receive the Principal and the contract interest amount in Deposit Currency but NOT the Linked Currency.  Your return on investing in Currency Linked Deposit is limited to contract interest amount.  If the Linked Currency has depreciated against the Deposit Currency, you will receive the Principal and the contract interest amount in Linked Currency, being converted from the Deposit Currency at the Strike Rate. Your return on this investment (be it positive or negative) will be similar to having bought the Linked Currency with Deposit Currency at the Strike Rate at start plus the contract interest amount.
Market risk – The return of Currency Linked Deposit is linked to the exchange rates of the Deposit Currency against the Linked Currency. Movements in exchange rates can be unpredictable, sudden and drastic, and affected by, among others, complex political and economic factors.  The currencies of emerging countries may be volatile when measured against other currencies.  Any such exchange rate movement may adversely affect your potential gain or loss under a Currency Linked Deposit.
Liquidity risk – Currency Linked Deposit is designed to be held till maturity.  You do not have a right to request for early termination of this product or request the Bank to close your position before maturity.  You shall not assign, mortgage, transfer, dispose of, charge, pledge or otherwise encumber any of your title or interest of and in the Currency Linked Deposit other than to the Bank to secure the liabilities of you or any other person in favour of the Bank as the Bank may agree at its sole discretion from time to time.
Credit risk of the Bank – Currency Linked Deposit is not secured by any collateral.  When you invest in this product, you will be relying on the Bank’s creditworthiness.  If the Bank becomes insolvent or defaults on its obligations under this product, you can only claim as an unsecured creditor of the Bank.  In the worst case, you could suffer a total loss of your deposit amount and contract interest amount.
Currency risk – If the Deposit Currency and/or Linked Currency is not in your home currency, and you choose to convert it back to your home currency upon maturity, you may make a gain or loss due to exchange rate fluctuations.
Risks of early termination by the Bank – The Bank has the right (but not the obligation) to terminate this product early for compliance with the legal and/or regulatory requirements or as the Bank may deem as prudent.  In case this product is early terminated by the Bank, you will have to bear the relevant costs of unwinding the put option sold previously.  Such costs may be as substantially high as your total deposit amount.
Adjustment risk – Upon the occurrence of certain events (such as revaluation of an underlying currency, substitution of an underlying currency by another currency or the imposition of foreign exchange control affecting the Deposit Currency/ Linked Currency), the Bank may adjust the terms of the Currency Linked Deposit to account for the effect of such event (such as payment postponement or substituting the original deliverable currency by another currency selected by the Bank).  The adjustment as determined by the Bank may have negative impact on your investment under the Currency Linked Deposit.
Risks relating to Renminbi – If the Deposit Currency or Linked Currency of a Currency Linked Deposit is CNH*, the value of CNH against other foreign currencies (including Hong Kong Dollars) will fluctuate and will be affected by, amongst other things, the control directives, policy and/or measures from the Government of the People’s Republic of China, its legal or regulatory institutes/bodies (‘the PRC government’) on Renminbi from time to time.  For example, the PRC government regulates conversion between onshore Renminbi (‘CNY’) and foreign currencies (including Hong Kong Dollars).  This would affect the value of CNH because both CNY and CNH are Renminbi but traded in different and separate markets.  Renminbi is currently not freely convertible.  There is no assurance that disruption in the transferability, convertibility or liquidity of Renminbi will not occur.
As CNY and CNH markets operate independently where the flow between them is highly restricted, CNY and CNH are currently traded at different exchange rates and their movements may not be in the same direction or scale.  CNH may be trading at a premium or discount to CNY and there may be significant bid and offer spreads.
Concentration risk – You should avoid over concentration in investing in a type of investment product and/or particular issuer or counterparty.
No Post-sale cooling-off period – Post-sale cooling-off period does not apply to Currency Linked Deposit.
Not exhaustive list – The risks stated above are not and are not intended to be exhaustive in referring to all the risks involved.  You are advised to seek independent professional advice as appropriate.

 

*CNH is the currency code for offshore Renminbi or Chinese Yuan.  Renminbi or Chinese Yuan is the legal tender of the People’s Republic of China.  In determining the relevant exchange rate under the Currency Linked Deposit which involves Renminbi, you should note that the relevant offshore Renminbi exchange rate but NOT onshore Renminbi exchange rate will be applied.

Advice to Customer
Customer must carefully consider whether Currency Linked Deposit (“CLD”) is suitable for his/her investment in light of his/her own financial position, investment objectives and the risks he/she agrees to bear before investing in CLD. The Customer is advised to seek independent financial and professional advice.

Currency Linked Deposits Terms and Conditions

These Terms govern the rights and obligations in connection with the Customer’s placing of Currency Linked Deposits with the Bank, which will be legally binding in event of acceptance by the Bank of the Customer’s order (whether in writing or orally in person).

 


1. Definitions and Interpretation
1.1 1.1 In these Terms, save where the context otherwise requires:
Account Rules” means the Bank’s Account Rules as amended or supplemented by the Bank at its sole discretion which may be in effect from time to time;
Bank” means Chong Hing Bank Limited including its successors and assigns;
Banking Day” means a day on which (a) the Bank is open for business in Hong Kong (but excluding (1) Saturdays and (2) any period of time between (i) the hoisting of typhoon signal number 8 or above or a black rainstorm warning and (ii) such time after the lowering of such signal or warning as the Bank may in its absolute discretion determine) and (b) if any payment is to be made in a currency other than Hong Kong Dollars, commercial banks are open for business in the principal financial centre of that currency;
Confirmation” has the meaning set out in Clause 7;
Contract Interest Rate”, in respect of a Currency Linked Deposit, means the interest rate as determined by the Bank in its absolute discretion and agreed by the Customer on the date of the contract for that Currency Linked Deposit as specified in the confirmation for that Currency Linked Deposit;
Currency Linked Deposit(s)” or “CLD(s) has the meaning set out in Clause 2.1;
Customer” means any person making an order with the Bank to invest in CLD(s) or is holding one or more immature CLD(s); if the relevant CLD is in the joint names of two or more persons, “Customer” means all of such individuals collectively; if the Customer is a sole proprietor, “Customer” includes the sole proprietor and successor(s) to such proprietorship; or if the Customer is a partnership, “Customer” means all the partners from time to time of the partnership and the successor(s) to such partnership;
Deal Date”, in respect of a Currency Linked Deposit, means the day on which a binding contract for CLD is formed between the Customer and the Bank pursuant to Clause 6.
Deposit Currency” means the currency, as selected by the Customer and agreed by the Bank, in which the Customer makes his original deposit for the purposes of placing a Currency Linked Deposit with the Bank;
Fixing Date”, in respect of a Currency Linked Deposit, means the date, as agreed by the Bank and the Customer on the Deal Date, on which the Bank determines the applicable Fixing Rate;
Fixing Rate”, in respect of a Currency Linked Deposit, means the prevailing market exchange rate (expressed in the same quotation method as the Strike Rate) between the relevant Deposit Currency and its Linked Currency at or about 2:00 p.m. (Hong Kong time) on the relevant Fixing Date as determined by the Bank in its absolute discretion from time to time;
Hong Kong” means the Hong Kong Special Administrative Region of the People’s Republic of China;
Investment Account” means each investment account opened, maintained and operated in the name of the Customer with the Bank for the purpose of holding the Customer’s investments (including Currency Linked Deposit(s)) made pursuant to these Terms and / or the Investment Account Conditions;
Investment Account Conditions” means the Bank’s Investment Account General Terms and Conditions as amended or supplemented by the Bank at its sole discretion which may be in effect from time to time;
Issuer’s Risk” means in the event that a structured product issuer becomes insolvent and default, the investors concerned will be considered as unsecured creditors and will have no preferential claims to any assets held by the issuer;
Linked Currency”, in respect of a Currency Linked Deposit, means the currency, as selected by the Customer and agreed by the Bank, into which the relevant Deposit Currency may be converted;
Maturity Date, in respect of a Currency Linked Deposit, means the last day of the tenor in respect of the related Currency Linked Deposit, as stated on the relevant Confirmation;
Principal” has the meaning set out in Clause 8;
PDPO Notice” means the Notice to Customers and other Persons relating to the Personal Data (Privacy) Ordinance and data policies of the Bank, issued or made available by the Bank to its customers and other persons which may be amended or supplemented by the Bank at its sole discretion from time to time;
Risk Disclosure Statement” includes any or all of the risk disclosure statements as set out above and in the Investment Account Conditions respectively;
Settlement Account” means the account designated by the Customer in relation to his Investment Account into which the principal and interest in relation to his CLD (in either Deposit Currency or Linked Currency) will be credited on the Settlement Date;
Settlement Date” means the date on which the proceeds of the CLD will be credited to the Settlement Account of the Customer as stated on the relevant Confirmation;
Strike Rate”, in respect of a Currency Linked Deposit, means the exchange rate as determined by the Bank in its absolute discretion and agreed by the Customer between the relevant Deposit Currency and its Linked Currency on the date of the contract for that Currency Linked Deposit and specified in the Confirmation for that Currency Linked Deposit;
Terms” means these terms and conditions for Currency Linked Deposits (as may from time to time be amended or supplemented by the Bank at its sole discretion).
1.2

In these Terms:

  (a) words and expressions importing the singular only shall include the plural and vice versa and references to one gender shall include references to all other genders;
  (b) Clause” refers to a clause of these Terms unless otherwise specified, and clause headings are inserted for convenience of reference only and shall not affect construction;
  (c) the expression “person” shall include a company, society, corporation, firm, partnership, joint venture, trust, state, agency of a state, or an individual and in the case of an individual his or her executors, administrators, committee, receiver or other person lawfully acting on behalf of every such person;
  (d) the words “including” or “includes” shall be construed as meaning “including without limitation” or “includes without limitation” (except when used in the computation of time periods).
1.3 If there is any conflict between the English and Chinese versions of these Terms, the English version shall prevail for all purposes to the extent of such conflict.

 

2. General
2.1 These Terms shall apply to all moneys placed or to be placed with the Bank for the purpose of its Currency Linked Deposit product under which, depending upon changes in the currency exchange rate between a Deposit Currency and its Linked Currency, the principal of and interest on such moneys may be paid in the Linked Currency instead of the Deposit Currency (all such principal moneys be collectively called “Currency Linked Deposit” or “CLD”)
2.2 In addition to these Terms, the Investment Account Conditions and the Account Rules shall also apply to Currency Linked Deposits.  If there is any conflict between these Terms and such other documents, these Terms shall prevail to the extent of such conflict.  If there is any conflict between the Investment Account Conditions and the Account Rules, the former shall prevail to the extent of such conflict.

 

3. Bank as Principal
The Bank shall act as the principal in all CLD transactions with the Customers.

 

4. Risk Disclosure
4.1 The Customer has read, understood and agreed to accept the risks as disclosed under the Risk Disclosure Statements together with such other risks as may be involved.
4.2 The Customer may not withdraw CLD, or request the Bank to close his position, before maturity.  CLD will not be automatically renewed.

 

5. Not a Protected Deposit Under Deposit Protection Scheme
Pursuant to the principles of the Deposit Protection Scheme in Hong Kong, structured deposits are not protected.  Currency Linked Deposit is not a protected deposit and is not protected by the Deposit Protection Scheme in Hong Kong.

 

6. Formation of Contracts for CLDs
6.1 Prior to entering into any contract for a CLD, the Customer shall open and maintain an Investment Account with the Bank pursuant to, among others, the Investment Account Conditions.
6.2 The Bank shall have from time to time the sole absolute discretion to determine (a) the provision of quotation of a specific currency pair in respect of a CLD, (b) the interest rate payable in respect of a CLD, (c) the minimum and maximum amount of a Deposit Currency, (d) the tenor of a CLD and its Maturity Date, (e) any exchange rate to apply in respect of a CLD, (f) any other terms of a CLD, and (g) whether or not to accept any instructions from the Customer in relation to a CLD.
6.3 If the Customer accepts or agrees to any terms offered as quoted by the Bank for a CLD, whether such acceptance or agreement is made either orally or in writing, there shall form forthwith upon such acceptance or agreement a binding contract for such CLD between the Customer and the Bank.  The Customer shall accordingly be bound to make, and the Bank shall be bound to take, the deposit in the Deposit Currency and on such terms as agreed, which shall be recorded in the Bank’s Confirmation to the Customer.  For the avoidance of doubt, the contract shall not be conditional nor shall depend on/be otherwise effected by the receipt by the Customer of such Confirmation or any written confirmation.  If the Customer does not place adequate fund for his CLD after formation of a binding contract, the Customer will be liable for all costs and losses incurred by the Bank as a consequence, including the cost of unwinding hedging positions taken by the Bank in respect of the relevant CLD and interest  The Customer agrees to inform the Bank immediately if the Customer fails to receive the Currency Linked Deposit Confirmation from the Bank within 5 Banking Days after such acceptance or agreement of CLD.
6.4 Without prejudice to the terms of the Investment Account Conditions, the Customer agrees that the Bank may (without obligation) from time to time record any conversations (including instructions) at telephone or otherwise between the Customer and the Bank by any system operated by the Bank and or else in writing and that the Bank may (without obligation) record all other instructions in writing and/or by other means (including electronic or digital means).  The Bank’s records of such conversations shall be conclusive and binding on the Customer in the absence of manifest error, negligence or fraud on the part of the Bank.  The Bank may dispose of and/or erase any such written or other records after the expiration of such period as the Bank may determine at its sole discretion subject to applicable laws, rules, codes, guidelines and regulations.
6.5 The Bank will not be liable for any loss which the Customer may suffer if the Bank fails or is unable to take instructions from the Customer for any reason beyond the Bank’s reasonable control including the case where the Bank’s computer and/or other systems is/are inoperative or defective for any reason but excluding cases caused by fraud, negligence or wilful default of the Bank, its authorised employee or agent.

 

7. Confirmation
Within 2 Banking Days after the day on which a contract for a Currency Linked Deposit has been formed pursuant to Clause 6, the Bank shall issue to the Customer a written confirmation (“Confirmation”) setting out the terms of such contract of Currency Linked Deposit.  The Customer must immediately examine all the details of the Confirmation and notify the Bank forthwith if the Customer considers that any details set out in the Confirmation as incorrect, incomplete or otherwise erroneous in any respect.  If the Bank does not receive any notification from the Customer within 5 Banking Days after the deemed receipt of the Confirmation by the Customer pursuant to Clause 15, the Customer shall be deemed to have confirmed all the contract details set out in the Confirmation as true, complete and accurate in all respects absent manifest error.

 

8. Maturity Date
8.1 On the Maturity Date, the Bank will pay to the Customer principal and interest of the relevant Currency Linked Deposit subject to the following:
(a) if on the basis of a comparison between the Fixing Rate and the Strike Rate on the Fixing Date, (01) the Linked Currency has appreciated against the Deposit Currency or (02) the Fixing Rate is equal to the Strike Rate, the Bank shall pay to the Customer the principal of the relevant Currency Linked Deposit (“Principal”) in the Deposit Currency and interest on such Principal in the Deposit Currency as stated in the Confirmation; or
(b) if on the basis of a comparison between the Fixing Rate and the Strike Rate on the Fixing Date, the Linked Currency has depreciated against the Deposit Currency, at the Bank’s option (which may be exercised by the Bank at its absolute discretion no later than the time specified in the relevant Confirmation on the Fixing Date as the time of expiry of the exercise of such option), the Bank shall pay to the Customer the relevant Principal and interest on such Principal at the contract interest rate stated in the Confirmation converted into the relevant Linked Currency at the applicable Strike Rate.
8.2 Interest on the Principal shall accrue and be payable in arrears on the Maturity Date, which shall be calculated on the basis of the actual number of days elapsed (including the first day but excluding the last day of the tenor during which it accrues) and a 360/365 day year, depending on the “day count” convention applicable by market practice to the relevant Deposit Currency, as determined by the Bank at its sole discretion in good faith.
8.3 If, for any reason, the Maturity Date and / or Fixing Date originally specified for a Currency Linked Deposit is not a Banking Day, then it shall be postponed to the following Banking Day, and additional interest will accrue on the relevant Principal at the Bank’s ordinary savings deposit rate for the Deposit Currency of that Currency Linked Deposit (which may be different from the interest rate specified in the Confirmation) for each day from, and including, the originally specified Maturity Date to, but excluding, the actual Maturity Date, which shall be determined by the Bank at its sole discretion.

 

9. Payment
9.1

Unless the Bank shall have received instructions from the Customer to the contrary 2 Business Days  before the relevant Maturity Date in relation to the Principal and interest, such Principal and interest shall be credited in the relevant currency into the Customer’s Settlement Account with the Bank.

9.2 At its discretion, the Bank may effect payment in respect of any Currency Linked Deposit established in a currency other than Hong Kong Dollars either in the Deposit Currency or its Linked Currency pursuant to Clause 8.1 above or the equivalent amount of Hong Kong Dollars converted at the Bank’s spot rate of exchange at the time of payment, as determined by the Bank at its sole discretion.
9.3 Each Currency Linked Deposit will be payable only at the relevant branch of the Bank in Hong Kong where the deposit is made even if the Currency Linked Deposit is made (or may be repaid) in a currency other than Hong Kong Dollars.
9.4 Notwithstanding any provision to the contrary of these Terms including Clause 8.1 and this Clause, the Bank may at any time without liability and without disclosing any reason suspend, freeze or terminate Currency Linked Deposit and any account of the Customer for compliance with the legal and/or regulatory requirements, or as the Bank may deem as prudent.

 

10. Information for reference only
10.1 The Bank may make available to the Customer information which may include indicative exchange rates from time to time, which is and shall be provided for the Customer’s reference only.
10.2 The Customer agrees that the Bank does not assume any liability for the accuracy or completeness of any indicative exchange rates and such information is provided for the Customer’s reference only.  Customer shall consult his independent professional advisors in relation to his placement of the CLD and the terms and conditions governing or relating thereto.

 

11. Early Withdrawal of Currency Linked Deposits
The Customer shall not withdraw Currency Linked Deposit, or request the Bank to close his position, before its Maturity Date.

 

12. Bank’s decisions conclusive
If any exchange rate (other than a Strike Rate) or any other matter relating to a Currency Linked Deposit is to be determined or decided on by the Bank, the Bank shall make such determination or decision in good faith and, in the case of exchange rates other than a Strike Rate, in accordance with generally accepted practices in the relevant foreign exchange market.  Subject to the latter qualification, each such determination or decision shall, at the Bank’s sole discretion, be conclusive and binding in the absence of manifest error, negligence or fraud.

 

13. Currency Linked Deposits free from charges etc.
The Customer shall not assign, mortgage, transfer, dispose of, charge, pledge or otherwise encumber any of his title or interest of and in the Currency Linked Deposit other than to the Bank to secure the liabilities of the Customer or any other person in favour of the Bank as the Bank may agree from time to time.

 

14. Representations
The Customer warrants, represents and agrees in favour of the Bank that:
(a) the Customer is over 18 years old and is not a citizen or resident of the United States of America or Canada;
(b) the Customer is and will be making the Currency Linked Deposits as a principal on the Customer’s own behalf and not as trustee or agent;
(c) the Customer understands the nature and suitability for the Customer’s purposes of the types of currency transactions to be made under Currency Linked Deposits and the risks involved in them, and the Customer has sufficient experience to assess the suitability of such transactions;
(d) the Customer shall make each Currency Linked Deposit relying on the Customer’s own independent judgment;
(e) the Customer has full capacity, power and authority to agree to make Currency Linked Deposits and to exercise the Customer’s rights and perform the Customer’s obligations in respect of Currency Linked Deposits, and has obtained all authorizations and consents necessary to do so, such authorizations and consents are in full force and effect and these Terms are binding on the Customer; and
(f) all the representations, warranties and agreements made by the Customer shall remain true, complete and accurate at all times.

 

15. Notices
15.1 Any notice or other document issued by the Bank shall be deemed to have been validly served on the Customer if addressed to the Customer at the address for notices notified to the Bank in writing by the Customer from time to time or which appears in the Bank’s records as the Customer’s last known address.  Any notice or other document delivered personally shall be deemed to have been validly served at time of delivery.  Any notice or other document dispatched by post (postage prepaid) shall be deemed to have been validly served (a) 48 hours after posting, if the address is in Hong Kong or (b) 7 days after posting, if the address is outside Hong Kong (including the People’s Republic of China), its return by the post office notwithstanding.  Any notice or other document sent by telex or by facsimile shall be deemed to have been validly served at the time of transmission.
15.2 Notwithstanding any provision to the contrary, service of any notice or document on any one person constituting the Customer will be deemed effective for such other person(s) of the Customer.

 

16. Governing Laws
These Terms and each Currency Linked Deposit shall be governed by the laws of Hong Kong.  The Customer submit irrevocably to the non-exclusive jurisdiction of the courts of Hong Kong.

 

17. Amendments
The Bank shall be entitled at any time by notice of, not less than 30 days (except outside the Bank’s reasonable control) to the Customer, to supplement, amend or change any or all of these Terms at the Bank’s sole discretion which shall be effective as the date as the Bank may designate by placing such updated version of these Terms at the Bank’s website and/or any branch of the Bank in Hong Kong.

 

18. Suitability
If the Bank solicits the sale of or recommend any Financial Product to the Customer, the Financial Product must be reasonably suitable for the Customer having regard to the Customer's financial situation, investment experience and investment objectives. No other provision of these Terms or any other document the Bank may ask the Customer to sign and no statement the Bank may ask the Customer to make derogates from this clause.

For the purposes of this Clause 18, “Financial Product” means any securities, futures contracts or leveraged foreign exchange contracts as defined under the Securities and Futures Ordinance. Regarding “leveraged foreign exchange contracts”, it is only applicable to those traded by persons licensed for Type 3 regulated activity under the Securities and Futures Ordinance.

 

Currency Linked Deposits Terms and Conditions (including Customer's Confirmation and Declaration)
 

Currency Linked Deposits Terms and Conditions (including Customer's Confirmation and Declaration)