Equity Linked Investments

Investment involves risks. Terms and conditions apply.

Overview

Equity Linked Investments (ELIs) are structured products in which the investment returns are linked to the performance of the underlying equities. With a flexibility to select different tenors and product features, ELIs can be tailored to meet your investment needs.

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Key features

Some ELIs include a partial capital protection feature at maturity, subject to a base redemption level.
The base redemption level, usually specified as a percentage, range from 70% to 99.9% of the invested amount.

In certain circumstances, you may earn higher potential returns than with conventional time deposits, depending on changes in the values of the underlying assets.

ELIs flexible tenors range from 1 month to 3 years.
ELIs with callable feature allows investors to receive the potential return and their invested amount before the maturity date.

ELIs can be linked to shares or exchange-traded funds (ETFs) that are listed on a stock exchange. They can also be linked to a single stock or a basket of stocks.

Some ELIs include an airbag feature, in which case the settlement at maturity will depend on whether an airbag lapse event has occurred.
The airbag level is usually expressed as a percentage of the linked stock’s initial spot price, and is usually set lower than its strike price.

You can subscribe via our Hang Seng Personal Banking Mobile App, Personal e-Banking (Desktop version) or any of our branches.

Knowledge and insights

How does it work

QuickGrasp

Watch the video to understand the basics of ELIs

LearnSmart[1]

Our educational tool LearnSmart offers an interactive way for you to learn more about how ELIs work. It covers two structures, “Callable ELIs” and “ELIs with Potential Upside Cash Return”, you can choose the one that best fits your investment views and objectives.

Illustration of other ELIs structures[1]

Some ELIs allow partial capital protection at maturity. Let’s begin the illustration.

Assume you will invest in a 3-month ELI with partial capital protection at maturity, and linked to a stock. Here are 4 scenarios showing how the final stock price will affect your total returns.

Details of your subscribed ELI

Terms

Amount

Initial stock priceInitial stock price is the closing price of the linked stock on the trade date of the ELIs.

HKD 100

Strike priceStrike price (i.e. reference stock price) is set as a specified percentage at or below the stock’s initial stock price. Generally, if the final stock price is at or above the strike price, you will receive the full investment amount; if the final stock price is below the strike price, you will receive physical shares of the linked stock or cash equivalent to the price at maturity.

HKD 100

Investment amount

HKD 80,000

Coupon rate (Price)

10% (HKD 110)

Base redemption levelIf the final stock price of the worst performing stock as of the final fixing date is lower than its initial stock price and less than the base redemption level of its initial stock price, you will receive an amount equal to the invested amount multiplied by the base redemption level (i.e. 80% of the investment amount) on the maturity date.

80% (HKD 80)

Understand your return in different scenarios In scenario 1, the increase in final stock price is higher than coupon rate.  In scenario 2, the increase in final stock price is lower than coupon rate. In scenario 3, final stock price is lower than the strike price / initial stock price. In scenario 4, the final stock price is lower than the base redemption level.

The increase in final stock price is higher than coupon rate
The final stock price goes all the way up to HKD 120, an increases of 20% at final fixing date. This increase in stock price is higher than the coupon rate of 10%. Thus, the coupon rate at maturity rises to 20%.

  1. First month when you subscribe

    You invest HKD 80,000
  2. At maturity date on the third month

    Total final amount (including principal and coupon) HKD 96,000

Your returns at maturity
HKD 80,000 x 20% (coupon rate at maturity) = HKD 16,000

The increase in final stock price is lower than coupon rate
The final stock price hits HKD 109, an increases of 9% at final fixing date. This increase in stock price is lower than the coupon rate of 10%. In this case, the coupon rate at maturity will be 10%.

  1. First month when you subscribe

    You invest HKD 80,000

  2. At maturity date on the third month

    Total final amount (including principal and coupon) HKD 88,000

Your returns at maturity
HKD 80,000 x 10% (coupon rate at maturity) = HKD 8,000

The final stock price is lower than the strike price and initial stock price
The final stock price drops to HKD 90, a decrease of 10% at final fixing date. Since the final stock price is lower than the strike price and the initial stock price, you are not entitled to any coupon amount and will receive only 90% of your initial investment amount.

  1. First month when you subscribe

    You invest HKD 80,000

  2. At maturity date on the third month

    Total final amount HKD 72,000

Your loss at maturity
HKD 80,000 x 10% (decrease %) = HKD 8,000

The final stock price is lower than the base redemption level
The final stock price decreases by 30%, to HKD 70 at final fixing date. Since the final stock price is lower than the strike price and base redemption level, you are not entitled to any coupon amount, and will receive only 80% (base redemption level) of your initial investment amount.

  1. First month when you subscribe

    You invest HKD 80,000

  2. At maturity date on the third month

    Total final amount HKD 64,000

Your loss at maturity
HKD 80,000 x 20% = HKD 16,000

Step 1
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Trading service

The ELIs online trading platform processes ELIs orders from 9:00am to 3:30pm on trading days Monday through Friday (excluding Hong Kong public holidays, half-day trading, or market disruption days).

You can convert the currency via your Personal e-Banking account or instruct the Bank to convert it in your account prior to placing your ELIs order. Please note that the ELI order will be rejected if the funds in your account are insufficient in the relevant currency.

If there are any corporate actions relating to your ELIs holding, we will provide you with a written notification based on your registered contact information with the Bank.

You will need a Securities Account to subscribe to ELIs and for their stock delivery (if any). If you are an Integrated Account holder, you may open or reactivate the Securities Account via Personal e-Banking services or by visiting any of our branches. Please note that a suitability assessment is required when conduct ELIs transaction.

Yes. Simply log on to Hang Seng Personal e-Banking and click on "Order status" section. You can also view your holding details in the "My Portfolio" section under the "ELIs".

Feature & risk

The investment periods for ELIs usually range from 1 month to 3 years.

ELIs may be issued in any non-restricted and freely convertible currencies, such as AUD, CNY, EUR, GBP, HKD, JPY, NZD or USD. This will be specified in the term sheet for the relevant series of ELIs.

The settlement currency for any cash payment under an ELI will usually be the same as the currency used when you purchased the ELI.

The typical minimum investment amount is approximately HKD 80,000 or its equivalent in other currencies. The amount will be reviewed periodically and specified in the term sheet for the relevant series of ELIs.

ELIs may have features such as Airbag, Callable and / or Daily accrual. You can learn more about the relevant products through “How does it work” section in this webpage. For further information, please refer to the The Chin family.

Some of the ELIs are not capital-protected, while others are partially capital-protected at maturity, subject to a base redemption level specified in the relevant term sheet.

Please note that the full amount of your investment is at risk in either case and be prepared to bear full financial responsibility.

Please refer to risk factors listed in the relevant offering documents for the ELIs.

Once you have placed an ELI order, you have committed to purchase the ELIs unless:

  • a post-sale cooling-off period applies to the ELIs and you exercise the right to cancel or unwind your ELI order.
  • You exercise your right to cancel your order within the specified period as notified by your distributor.

You should note that the total cash amount returned to you when you unwind your order may be substantially less than your initial investment.

A product's risk rating is based on the Bank's proprietary risk rating methodology, which considers a variety of qualitative and quantitative factors.

All investment products are assigned a risk level from 1 to 5, with 1 as the lowest and 5 as the highest. A product risk rating is neither a statement of fact nor a recommendation to buy or sell the product.

Click to learn more about how we assign risk ratings for ELIs.

If you have any queries on product risk ratings, please contact your Relationship Manager. Independent financial and legal advice should be sought if necessary.

Fees and charges

Please refer to the offering documents for the ELIs you are considering.

Useful information

Product tranche list

View the Top 10 traded ELIs offered by the Bank

Featured offers

Take a look at the latest ELIs promotions

Services and support

Open a securities account

New to Hang Seng Bank

Open a bank account and investment account with Hang Seng Mobile App[2]

Existing integrated account holders

Comprehensive Equity Linked Investments experience is just a few steps away[3]

Non-integrated account holders

Open an Integrated Account at designated branches and activate your investment account via Personal e-Banking

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Risk disclosure(s) and other point(s) to note

  1. Equity Linked Investments ("ELIs") are structured products involving derivatives. The investment decision is yours but you should not invest in the ELIs unless the intermediary who sells it to you has explained to you that the product is suitable for you having regard to your financial situation, investment experience and investment objectives. Investors should read the relevant offering documents of the ELIs before making any investment decision.
  2. Some ELIs are non capital protected - ELIs are unlisted structured products embedded with derivatives. Some ELIs are not capital protected. In the worst case scenario , investors may lose all of the investment.
  3. Some ELIs are partially capital protected at maturity – Provided that you hold the ELIs until maturity and the ELIs are not otherwise early terminated, there are some ELIs are partially capital protected at maturity. The payout that you receive at maturity may be less than your initial investment amount but is subject to a base redemption level.
  4. ELIs are unlisted structured products embedded with derivatives and are not equivalent to nor should they be treated as time deposits. They are NOT protected deposits for the purposes of the Deposit Protection Scheme.
  5. ELIs are defined as complex products under the guideline on Online Distribution and Advisory Platforms from Securities and Futures Commission (“SFC”), you should exercise caution in the relation to this product.
  6. Investors should also read the risk factors set out in the relevant offering documents of the ELIs.
  7. This webpage does not constitute any offer, invitation or recommendation to any person to purchase any ELIs described herein.
  8. The following risks should be read together with the other risk factors contained in the relevant offering documents of the ELIs.
  9. Information contained in this website has not been reviewed by the Securities and Futures Commission of Hong Kong or any regulatory authority in Hong Kong.
  10. Not protected deposit - ELIs are not equivalent to nor should they be treated as time deposits. ELIs are not protected deposits for the purposes of the Deposit Protection Scheme.
  11. Liquidity risk. ELIs are designed to be held to its maturity. You may not be able to sell your investment in the ELIs before maturity. If you try to sell the ELIs before expiry, the amount you receive may be substantially less than the investment amount you paid for the ELI.
  12. Credit risk of the ELI issuer - ELIs constitute general unsecured and unsubordinated contractual obligations of the issuer. When you buy ELIs, you will be relying on the creditworthiness of the ELI issuer and of no other person. You have no rights under the terms and conditions of ELIs against any issuer of any linked stock. If the relevant ELI issuer becomes insolvent or default on its obligations under the ELIs, in the worst case scenario, you could lose all of your investment.
  13. Not the same as investing in linked stock - Investing in ELIs is not the same as investing in the linked stock(s). Changes in the market price or level of any linked stock(s) may not lead to a corresponding change in the market value of, or your potential gain or loss under, the ELIs.
Remark(s)
  1. Contents of the illustrations in LearnSmart and/or in this website (“the illustrations”) are for illustration purpose only and do not constitute any offer, invitation or recommendation to any person to purchase any ELIs. Calculations and examples contained in the illustrations are purely hypothetical and do not reflect a complete analysis of all possible gain or loss scenario, and they should not be relied on as an indication of what the return on the ELIs might actually be upon early call or maturity. For actual calculations, rounding adjustment, settlements and delivery expenses payable, please refer to the terms and conditions set out in the relevant offering circular of ELIs.
  2. You can open a bank account online with your mobile phone only if you do not hold any of the following Hang Seng Bank accounts, including but not limited to:
    •    Savings / Current Account (including passbook and statement savings account)
    •    Integrated Account
    •    Credit Card Account
    •    Business Account
    •    Joint-named Account
    •    Mortgage Plan
    •    Safe Deposit Box Services
    The service is also only available if you fulfil all of the below criteria:
    •    Aged over 18 and under 65
    •    A permanent Hong Kong resident
    •    Not a US citizen or tax resident
    •    Residing in Hong Kong (with current residential and correspondence address(es) in Hong Kong)
    •    Currently located in Hong Kong
  3. Integrated account is referring to the following accounts:
    •    Prestige Banking
    •    Preferred Banking
    •    Green Banking
    •    Integrated Account
    •    M.I. Kid Asset Builder Account