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SG UK Kick-Out Plan (UK3) Issue 8

The UK Kick-Out Plan (UK3) Issue 8 (“the Plan”) is a maximum 8 year investment plan linked to the FTSE 100 Index. The Plan can expire after year 2, paying a Gross Return equivalent to 10.25% per year and returning your clients capital in full. At Maturity capital is protected as long as the FTSE 100 has not fallen by more than 40% on the investment End Date.

  • Aims to pay a Gross Return equivalent to 10.25% (not compounded) per annum
  • Linked to the performance of the FTSE 100 Index
  • Maximum 8 year Investment Term but can Kick out and mature early after year 2
  • Diversified Investment Risk

 

Key Dates
Investment Deadline

October 11th , 2019

Strike Date October 18th , 2019
Anniversary Dates

Year 2: October 18th, 2021

Year 3: October 18th2022

Year 4: October 18th, 2023

Year 5: October 18th, 2024

Year 6: October 20th, 2025

Year 7: October 19th, 2026

Early Expiry Date 7 days after the Anniversary Date
Investment End Date October 18th, 2027

         

 Key Terms
ISIN GB00BG8HJT62
Summary Risk Indicator 4
UKSPA Product Code 1260 – Growth, Non-protected, Kick Out
Plan Manager Walker Crips
Securities Issuer SG Issuer
Guarantor Societe Generale
Investment Term

Maximum 8 years

Minimum Investment £10,000
Intended Eligibility Direct, trust, corporate, and charity investment, Stocks and Shares ISA, SIPP and SSAS**
Underlying Asset FTSE 100 Index
Potential Gross Return

10.25% (not compounded) per year

Investment Risk to the 'UK 3'
  • Barclays Bank plc (33.33%)
  • Lloyds Bank plc (33.33%)
  • HSBC Bank plc (33.33%)
Capital Protection

Capital is at risk if the FTSE 100 Index has fallen by more than 40% on the Investment End Date

Kick Out Levels 100% in year 2, 100% in year 3, 100% in year 4, 100% in year 5 and 100% in year 6, 100% in year 7, 100% in year 8

 

*More information on the UKSPA Risk Ratings and Product Codes, including a guide on how they are calculated is available via www.ukspassociation.co.uk.

 

**Any statement in relation to tax, where made, is generic and non-exhaustive and is based on our understanding of the laws and practice in force as of the date of this document and is subject to any changes in law and practice and the interpretation and application thereof, which changes could be made with retroactive effect. Any such statement must not be construed as tax advice and must not be relied upon. The tax treatment of investments will, amongst other things, depend on an individual’s circumstances. Investors must consult with an appropriate professional tax adviser to ascertain for themselves the taxation consequences of acquiring, holding and/or disposing of any investments mentioned on this website.

ORDER LITERATURE

Key risks

You and your client should read the Plan Brochure for a full description of all the risks involved in the Plan.

  • Capital is at risk and your client could lose some or all of their capital.
  • Your client should only invest in this Plan if they do not need access to their money for the full Investment Term of eight years. Early withdrawal may result in loss of capital.
  • The Plan is designed to provide the potential for a fixed level of return which is dependent on the performance of the FTSE 100. In order to achieve this level of return, capital will be put at risk. If the FTSE 100 has fallen below 60% of its Initial Index Level on the Investment End Date, your client could lose some or all of their investment.
  • The Plan is subject to maximum growth potential and does not invest directly in the shares of any FTSE 100 companies and therefore does not receive dividends from those companies; as such the returns could be lower than if your client invested directly in the shares of the Index.
  • If SG Issuer and Societe Generale were to default or become insolvent, the Plan will terminate immediately. The amount that your client receives back for their investment will depend on i) the market value of their Investment at that time and on ii) the value of the Collateral Assets at the time of default. Your client may receive back less than their initial investment.
  • If any one of the UK3 becomes subject to a Credit Event*** during the Investment Term, 33.33% of your client’s capital will be at risk for each of the UK3 institutions that has become subject to a Credit Event. The amount that they receive back will depend on the Recovery Rate (if any) defined for each affected UK3 institutions.
  • If any of the UK3 becomes subject to a Credit Event, re-payment of your client’s initial investment and any return generated by the Plan may be delayed if no Recovery Rate is available at Maturity of the Plan.
  • As with all similar structured investments, in the event of Counterparty or Issuer insolvency your client will not have recourse to the Financial Services Compensation Scheme. It is your client who faces these risks rather than the Plan Manager, Walker Crips Structured Investments.
  • The Plan is not the same as a deposit account. A deposit account is considered a relatively safe way to invest and normally allows investors ready access to their money. The Plan gives your client the potential to benefit from enhanced returns linked to the FTSE 100 Index; however their total return could be lower than they would have received in a deposit account.

***Such term as defined in the 2014 ISDA Credit Derivatives Definitions, as published by the International Swaps and Derivatives Association, Inc. (“ISDA”). For more information on Credit Events, please download our guide to managing Counterparty Risk which is available at: http://www.sgifa.co.uk/gettingstarted/counterparty_risk.php

Terms & Conditions


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Key risks for Investment Plans

 

Capital is at risk and investors could lose some or all of their capital.


If SG Issuer and Societe Generale were to default or become insolvent, the products will terminate immediately. The amount that your client receives back for their investment will depend on i) the market value of their Investment at that time and on ii) the value of the collateral assets at the time of expiry and your client may receive back less than your initial investment.


Liquidity risk: Societe Generale aims to provide a secondary market for the products during the investment term. However, certain exceptional market circumstances may have a negative effect on the liquidity of the products, and even render the products entirely illiquid, which may make it impossible to sell the products and result in the partial or total loss of the invested amount. There is no liquid market on which these products can be easily traded, and this may have a material adverse effect on the price at which these products might be sold. Therefore, the investor may lose part or all of the invested amount.


As with all similar structured investments, in the event of Counterparty or Issuer insolvency your client will not have recourse to the Financial Services Compensation Scheme.


Market risk: The products may be subject to significant price movement at any time before maturity, which may in certain cases lead to the loss of your entire capital invested.

 

 

Key risks for Deposit Plans

 

If Societe Generale Hambros Bank Limited becomes insolvent or fails to repay the amounts due, you could lose some or all of your initial deposit and any gross return owed to you on the Plan maturity Date. As with any deposit, if the Deposit taker fails to pay or becomes insolvent you may be eligible to claim under the UK Financial Services Compensation Scheme (“FSCS”) up to the scheme limits. For further information visit www.fscs.org.uk


In order to provide the performance of a Deposit Plan, the Deposit taker will enter into a linked transaction with Societe Generale. In the event an ‘Extraordinary Event’ were to occur whereby for example, Societe Generale becomes insolvent, and the Deposit taker was unable to match the terms of the linked transaction with another provider, the Deposit taker may not be able to maintain the returns or income stipulated for a Deposit Plan. In such circumstances the income or return investors receive from a Deposit Plan may be less than the headline rate. The investor’s Counterparty Risk with Societe Generale relates only to the terms of the income or return which can be offered by a Deposit Plan. The solvency of Societe Generale has no effect on the actual deposit.


Market risk: The deposit Plans may be subject to significant price movement at any time before maturity. If you were to withdraw from the Plan early you could get back less than your initial deposit.

 

 

Suitability test

 

The purpose of the suitability test is to ensure that the products and services offered meet the client’s investment objectives. In addition, it ensures that the client shall be able financially to bear the risks of the investment (including any relevant loss of capital) and that the client has the necessary experience and knowledge to understand these risks. When providing personal recommendations in relation to these Plans each Financial Adviser is required to and must have undertaken a suitability test and must only recommend products and services that are in accordance with the results of the suitability test.


Please note that Societe Generale does not provide investment advice.

https://www.handbook.fca.org.uk/handbook/COBS/9/

 


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