Wealth Management - Terms of business

These Terms of Business replace the terms of any previous Terms of Business which we have previously entered into with you in respect of advisory, non-advisory and execution only services.

Any reference to the “Bank”, in this document refers to “HSBC Bank Malta p.l.c.”.

Any reference to the "Wealth Management Officials", in this document refers to both the "Wealth Advisors" and "Wealth Bank Officials". Where a differentiation between the two designations is required, the exact designation, i.e. Wealth Advisor or Wealth Bank Official will be noted in this document.

We offer advisory, non-advisory and execution only investment services and insurance-related products relating to the following:

• Life Assurance products and Linked long-term contracts of insurance offered by HSBC Life Assurance (Malta) Limited which is an insurance company licensed by the Malta Financial Services Authority and is a wholly-owned subsidiary of HSBC Bank Malta p.l.c.
• Collective investment schemes/Undertakings for Collective Investment in Transferable Securities (UCITS), (which may or may not be licensed by/notified to the Malta Financial Services Authority) recommended by HSBC’s Fund Centre of Reference and offered by:

i. HSBC Global Asset Management (Malta) Limited, which is licensed by the Malta Financial Services Authority and is a wholly-owned subsidiary of HSBC Bank Malta p.l.c.;

ii. HSBC Global Asset Management, which is part of the HSBC Group; and

iii. Third party Fund Managers with whom we hold a distribution agreement. HSBC does not      hold any percentage of ownership in the Third-party Fund Managers.

The following are the current parameters applicable for the sale of investment and insurance-related products.

When providing "advisory" services, the Bank will undertake an assessment from the information collected from you, i.e. a Suitability Assessment to ensure that the product/s recommended address your needs. The Bank would also have in addition determined and assessed your knowledge and experience, your demands and needs and would have established your risk tolerance so that suitable products may be recommended. During the Advisory service, all investment and insurance-related products may be sold. The service will be provided by Wealth Advisors.

When providing “non-advisory” services, the Bank will be merely executing your specific instructions without providing you with any advice. Please be aware that for insurance investment products, when acting in this manner, the Bank will be obtaining information from you and will determine and assess your demands and needs to ensure that product/s sold fulfil such demands and needs. The Bank will not be assessing the suitability of the instrument or service provided to you and therefore you will not benefit from the protection of the MFSA's Conduct of Business rules. An Appropriateness assessment will only be undertaken when the transaction relates to a “complex” product or, in the case of insurance-related products, when the exemption from undertaking an appropriateness assessment set out in the MFSA’s Conduct of Business Rulebook does not apply. During the Non-Advisory service, only the Employee Pension Plan may be sold. The service will be provided by the Wealth Management Officials.

When providing “execution only” services, such services are being provided at your initiative, where the Bank will be merely executing your specific instructions without providing you with any advice. Please be aware that when acting in this manner, the Bank will be obtaining information to determine and assess your demands and needs. Since we only sell protection products on an execution only basis, the Bank will not carry out a suitability or appropriateness assessment to assess or recommend the transaction as suitable or appropriate for you and you are responsible for ensuring the transaction is suitable or appropriate for you. Therefore, you will not benefit from the MFSA's Conduct of Business rules. The service will be provided by Wealth Advisors however during the Execution only service, no advice will be provided to you.

In relation to Collective Investment Schemes and/or UCITS offered, HSBC Bank Malta p.l.c. will be acting as the Distributor. Depending on the product/s recommended, the Fund Manufacturer would be either HSBC Global Asset Management (Malta) Ltd, HSBC Global Asset Management (part of HSBC Group) or Third Party Fund Managers with whom HSBC Bank Malta p.l.c. holds distribution agreements. In addition, on your instructions, we will arrange for you to buy or sell such investments in the name of HSBC Bank Malta p.l.c. as your nominee.

In relation to insurance-related products, the manufacturer is HSBC Life Assurance (Malta) Limited and HSBC Bank Malta p.l.c. will be acting as Distributor.

Where the financial instrument and/or insurance-related product is classified as "complex" in terms of MIFID, Insurance Distribution Directive or the MFSA’s Conduct of Business Rules, these may be offered with or without the provision of advice, within the parameters of the defined service as mentioned above.

Wealth Management Officials are approved by the Malta Financial Services Authority.

The tied insurance intermediary enrolment of the Wealth Management Officials can be confirmed by accessing the MFSA website: www.mfsa.com.mt

HSBC Bank Malta p.l.c. (C3177) having its registered address at 116, Archbishop Street, Valletta, Malta, VLT 1444 is a member of the HSBC Group.^*

^*The HSBC Group means HSBC Holdings plc, its subsidiaries and its associated companies.

We are licensed to conduct investment services business and tied insurance intermediaries activities by the Malta Financial Services Authority which is our lead regulator. The Malta Financial Services Authority (MFSA), is located in Triq l-Imdina, Zone 1, Central Business District, Birkirkara CBD 1010.

3.1 The provision of advice, non-advisory and execution only services shall be provided by the Bank only in Malta on a face to face basis or remotely on a recorded telephone call supported by email/s. We may also use video conferencing facility where available, and on your acceptance, to use this in addition to the recorded telephone call. Where video conferencing is used, this will not be recorded.

3.2 You can contact us at the address and telephone number shown on the business card provided to you by the Wealth Management Officials.

3.3 You will have the opportunity to communicate with the Bank either in Maltese or in English.

3.4 During meetings, you will have the option to choose on how to receive pre-disclosures, product documentation, recommendations and other documents.

During face to face meetings, documents may be provided in hard copy or via secure email, however for remote meetings, documents will be provided via secure email. Where provision of documents is via secure email, as your preferred option, and you also request that documents are provided in hard copy, the Wealth Management Official will, provide such documents to you also in hard copy. Where documents are provided via secure email, the Bank will use the email address it has in its records.

Please ensure that any changes e.g. your contact details (telephone number, email address, correspondence address and residential address) are immediately communicated to the Bank who will ensure your records are amended. If you fail to do so, you may not receive communications which could be important, including notices about changes to the Terms of Business.

In addition, please inform us immediately in the event your residency and/or citizenship status changes or if there is any other material change to the information you have previously given to us in particular any change to information provided which could affect your eligibility to hold the product, your investment objectives and/or risk profile, as this may affect the Services we provide. You must provide us with any information we reasonably require about your identity or affairs.

It is your responsibility to ensure that your information can be accessed or used only by people who have your permission to do so.

All telephone calls will be recorded.

Before the start of a telephone conversation, we will ask you a set of questions to verify your identity.

3.5 The Wealth Management Official will only communicate with you on the telephone number and email address we hold in our records.

4.1 Investment advice is provided by the Bank on a non-independent basis which means that the range of products offered is limited to the financial instruments issued or provided by entities as mentioned in the introductory section within this Terms of Business and with whom the Bank would have a contractual relationship. You may ask us for a list of the entities and of the products we offer advice on at any time.

Sustainability

During the advisory process, the Wealth Advisor will ask you a set of pre-defined questions to understand your sustainability preferences towards investing. We encourage you to complete and provide us with such preferences. The Bank will do its utmost to recommend investment and insurance related products in line with your sustainability preferences. Where the Bank is unable to do so, the Bank will provide you with a clear disclosure of why it has been unable to meet your preferences and will invite you to consider whether you would like to adapt your sustainability preferences. Please note that all products recommended during the advisory process will be in line with your investment profile and determined by us to be suitable to you.

4.2 When we have provided you with advice, we will not give you any further advice unless you request it, but we will be glad to provide you advice at any time you ask us to do so. This means that the Bank will not provide you with a periodic assessment of the suitability of the financial instruments and other products in your portfolio and we therefore recommend and encourage you to contact Wealth Management to undertake a yearly review of your investments and other products bought through HSBC. Please also refer to Section 18.4 of this Terms of Business.

During the provision of advice, the Wealth Advisor will offer you a holistic financial planning process and will base the advice on a "fair" and "personal" analysis of your specific circumstances. The Wealth Advisor will take you through a process to understand your personal circumstances and also request information to understand your “Knowledge and Experience”. This assessment of suitability will enable the Wealth Advisor to recommend suitable products in line with the information you have provided.

The Wealth Advisor will take you through a full financial planning review and will recommend products according to your needs. The strategy of distribution of the products will be compatible with the target market identified by the Manufacturer and Wealth Advisors will ensure that product/s recommended is/are distributed to the identified target market.

4.3 When we act upon your direct instructions to buy or sell or to make arrangements for you to buy or sell any financial instrument, any information provided will not constitute investment advice.

4.4 During the provision of the "non-advisory" service, in respect of the Employee Pension Plan, the Bank will not provide you with any recommendations and/or advice, in relation to the transaction and the selection of HLM Funds.

An Appropriateness assessment is completed when undertaking transactions in Complex Instruments in terms of the Markets in Financial Instruments Directive (“MIFiD”) and the Insurance Distribution Directive. Hence the purpose of the Appropriateness assessment is for the Bank to ascertain whether you have the necessary knowledge and experience to understand the risks involved when dealing in products designated as complex. The outcome as to whether the transaction is appropriate for you will be communicated to you by the Wealth Management Official.

The Employee Pension Plan is a Complex product. A complex product is a product whose characteristics are relatively more difficult to understand than non-complex products and carry an increased level of risk and volatility and you should not invest in them unless you are prepared to sustain a total loss of the monies you have invested. Before making any decisions you should always consider whether the Complex product is appropriate for you in the light of your current circumstances and your financial position.

The Wealth Management Official will establish your Risk Tolerance and you will be provided with the full list of the HLM Funds. Once you have made your choice of the HLM Fund/s, if you decide to invest in HLM Funds which carry a higher risk than your Risk Tolerance, the Bank will provide you with a risk warning and will process the transaction in the HLM Funds you have selected on your own initiative. Please be aware that the Bank will not monitor that the HLM Funds you have selected remain appropriate for you throughout the term of the Employee Pension Plan and you are strongly encouraged to approach the Bank in case you require any guidance in this regard. In addition, if your personal circumstances change, you are requested to advise the Bank for any action you may wish to take on the Employee Pension Plan.

If at any time during the process you wish to seek advice, you may request to set up a meeting with one of the Wealth Advisors.

4.5 Tied Insurance Intermediaries activities

The Bank will assess your insurance demands and needs and may assist in the completion of the proposal form and will provide policy documents and collect the premium. As a tied insurance intermediary, the Bank cannot accept the risk on behalf of the insurer. Only the insurer can decide whether the risk is acceptable or not and at what premium.

Should there be a claim, the Bank may assist you to obtain a Claim Form and deliver it to the insurer. However, the claim is then handled directly by the insurer. Once the claim is accepted, if there is a settlement payment due to the insured, the insurer may send the settlement payment due to the insured, to the Bank. Otherwise, the settlement payment is given directly to you.

In the case of life insurance policies and payment protection policies purchased for mortgage purposes, you may purchase such policies from other insurance companies that also satisfy the Bank’s requirements and you are always free to choose from where to purchase your policy.

An HSBC Policy on Conflicts of Interest is in place. Please refer to the Appendix at the end of this terms of business for further information.

6.1 For meetings undertaken on a face-to-face basis, we require you to give us instructions in writing, to avoid possible disputes. Where an email address has been provided to the Bank, subsequent instructions and communication by email may also be accepted.

For meetings held via the remote journey, the instructions will be given verbally by you during the recorded telephone call. For this purpose, you hereby acknowledge that any documents representing the instructions or the agreement between you and the Bank may be signed and executed electronically and both parties hereby consent to the communication of information and documents in electronic form. Any signature (including an electronic signature, electronic seal, telephone recorded call or other similar means of signifying intent to sign), and any other certificate, agreement, communication, document and any other form of record-keeping and contract formation (such as by way of email, facsimile, telephone or otherwise) executed by way of electronic means, shall have the same effect and enforceability as their equivalent in manual or paper-based mediums.

Your verbal consent on the recorded telephone call will also be requested in order to debit your demand deposit account with the Bank. This will enable the funding of the investment and/or insurance product you have decided to proceed with.

For the avoidance of all doubt, electronic signatures and all other means of electronic communications mentioned above shall be deemed to constitute the original and any electronic copies hereof shall be deemed to constitute duplicate originals.

Thus, your instructions as explained above will be considered as binding on the investor and the Bank and are irrevocable.

6.2 You will advise us in writing of any individuals authorised to instruct us on your behalf. We would need to identify such individuals as detailed in Section 12 and they shall provide us with specimen copies of their signatures. We may, without further enquiry, accept and act on the instructions of any person who is, or in good faith is believed to be, authorised to give such instructions.

6.3 We may however refuse to act on your instructions or those given on your behalf if we are in any doubt as to their authenticity or if acting on them would be a breach of any law, market practice, HSBC Group policies or rules and regulations of any relevant self-regulatory organisation to which we may belong.

Please refer also to Section 13.3.

6.4 For the remote journey via telephone recorded call supported by email/s, the Bank will provide you with relevant documents including the Recommendation Letter, (where applicable) product disclosures and Wealth Terms of Business via secure email (also a "durable medium"), to your email address held on our records.

Where available and subject to your acceptance, the meeting may be supported by a video conference facility in addition to the recorded telephone communication. This will especially be of benefit to you and will facilitate explanations provided by the Wealth Management Official on illustrations, graphs etc.

It is also recommended that you take time to review the product documentation/disclosures provided to you prior to the start of the remote journey. If you do not wish to receive documents via email and prefer documents to be provided in paper-based format, the Wealth Management Official will direct you to a face to face meeting at your preferred branch.

7.1 Although we do not currently charge fees for the provision of advice, non-advisory and execution only services, we may do so in respect of certain services you ask us to provide. However, before we carry out any chargeable work, you will be given written details of the fees to be charged. Where the amount cannot be ascertained, the method of calculating that amount will be clearly disclosed prior to providing the service. Once we have provided such notification, you will pay us, on demand, such costs and charges.

7.2 We may pay and/or receive fees, commissions and/or non-monetary benefits to and from a company in the HSBC Group or other third party, provided this is in line with the requirements on conflicts of interest or inducements set out in the MFSA Conduct of Business Rulebook.

Examples of non-monetary benefits include participation in conferences, seminars and other training events on the benefits and features of a specific financial instrument or an investment service, information or documentation relating to a financial instrument or an investment service, hospitality of a reasonable de minimis value, such as food and drink during a business meeting or a conference, seminar or other training events.

In respect of commissions and fees for investments, we will provide you with a separate disclosure of the essential arrangements relating to such fees/commissions.

In relation to insurance products, any fees and/or commissions we receive, will be incorporated in the premium paid to the policy account and such fees and/or commissions will be disclosed to you by the Wealth Management Official during the meeting and disclosed separately in other product documentation.

7.3 For investment funds, we will also provide important information with a description of the costs/charges of your investments.

7.4 When you pay a lump sum to purchase units in collective investment schemes, the Bank will debit your account with the total consideration on settlement date. For regular premium/savings contributions, the Bank will debit your account on contribution due date. Please ensure you hold cleared funds and debit instructions are received in good time as any delays will be at your own cost and risk.

8.1   Unless we have entered into a separate agreement with you, Wealth Management Officials will not hold your money. This means that Wealth Management Officials will not handle cash or accept a cheque made payable to us (unless it is a cheque in settlement of charges or disbursements for which we have sent you a bill).

8.2 Any money which we hold for you will only be held by us in our capacity as Banker. Your money will be held in one or more accounts in your name and will be treated in the same way as any money deposited with us.

8.3 In certain circumstances, monies accepted from you or which are due to you as a result of purchase or sale of investments may also be held for your benefit in a clients' account under our name until the relevant investment is made or transaction is processed. No interest shall be payable by us on such monies held for your account.

Monies may also be held by us in a clients' account in our name:

• when instructions are insufficient or ambiguous, such as when the relevant investment account number is not stated in the request, or insufficient or ambiguous instructions are given as to where payments are to be made in an event of any repurchase instructions
• where, in certain circumstances as permitted by the product terms or applicable law, there has been a mandatory redemption or closure of an investment/insurance related product and monies are being held for your account
• when dividend payments cannot be re-invested due to incorrect/incomplete instructions or to closure of the investment account between the ‘closing of register’ and ‘dividend payment’ dates

No interest shall be payable by us on such monies held for your account.

As HSBC Bank Malta p.l.c. is authorised and regulated by the MFSA, you may have the right to claim compensation under the Investor Compensation Scheme (established under the Investor Compensation Scheme Regulations, 2003) or the Depositor Compensation Scheme (established under the Depositor Compensation Scheme Regulations, 2003), or under the Protection and Compensation Fund (established under the Protection and Compensation Fund Regulations, 2003), as applicable, for any losses resulting from a default of obligations owed in respect of any investments or monies that we hold for your account or monies that you hold in an account with us in our capacity as bankers.

The Depositor Compensation Scheme only pays compensation if a bank licensed by the Malta Financial Services Authority is unable to meet its obligations towards depositors or has otherwise suspended payment.

The Investor Compensation Scheme only pays compensation if a locally licensed investment firm (including HSBC Bank Malta p.l.c.) is unable or likely to be unable to pay claims against it. In general, this is when a licensed firm stops trading or becomes insolvent. Please also be aware that in terms of the above compensation schemes an investor cannot claim compensation on the basis of:

• market movements resulting in a decrease in the value of an investment
• poor investment advice
• a failed investment that had been duly executed
• a failure of a collective investment scheme (whether licenced in Malta or otherwise)

The purpose of the Protection and Compensation Fund is limited to:

• pay for any claims against an insurer which have remained unpaid because the insurer became insolvent. These claims must be in respect of protected risks situated in Malta or protected commitments where Malta is the country of commitment; and
• compensate victims of road traffic accidents in certain specified circumstances

You should therefore also consider carefully these limitations/exclusions prior to making any investment. More information on these compensation schemes may be obtained from www.compensationschemes.org.mt.

9.1 We will make arrangements for all your investments to be registered under our name or in the name of a Group Company as nominee unless we hold your written instructions to the contrary, where this is possible.

9.2 We will forward to you all documents showing ownership of your investments as soon as possible after we receive them. Where a number of documents relating to a series of transactions are involved, we will normally hold each document until the series is complete and then forward them to you. All documents will be sent to you by post at your own risk unless we have agreed with you to send such documents through other means (including email).

9.3 Documents of ownership in relation to insurance-related products will be mailed to you by HSBC Life Assurance (Malta) Ltd directly by post (or where applicable by electronic mail) at your own risk.

Unless you advise us to the contrary (in which case this will be documented by the Bank), we will assume that you agree to us telephoning or visiting you and to communicating with you by letter and/or by email.

When we visit you, the Wealth Advisor will give you prior notice and he/she will identify himself/herself by showing identification document, disclose the fact that he/she is a tied insurance intermediary of HSBC Life Assurance (Malta) Ltd and provide his/her business card and disclose details held on the business card.

For your security, and to enable us to comply with HSBC Group procedures and regulatory requirements, telephone calls made or received by our Wealth Management Officials will be recorded. The Bank will keep records in relation to date and location of meeting, the identity of attendees and initiator of the meeting, and the reason to why the meeting was held. We will also keep records of emails and other communication/s between us including details around the transaction proceeded with. Such recordings will be stored and accessed in line with HSBC Group procedures and applicable rules and regulations. Such records will be kept for a period of 5 years or as long as may be required in terms of any applicable law and you may ask us for a copy of such records during this period. These records remain our sole property and may be used as evidence in any dispute or anticipated dispute.

The way we process and share personal and/or confidential information about you and your affairs with the Bank as well as the way we use such information for marketing purposes is explained in our Privacy Notice which you may obtain from our website www.hsbc.com.mt, from any of our branches or by calling us on (+356) 2380 2380.

Our Privacy Notice for Retail Business applies to personal information held by HSBC Bank Malta p.l.c. and HSBC Life Assurance (Malta) Ltd as data controllers. It explains what information we collect about you, how we will use that information, who we will share it with, the circumstances when we will share it and what steps we will take to make sure it stays private and secure. It continues to apply even if your agreement for banking, insurance, investment or other products and services with us ends. It should also be read alongside your banking and/or other product terms and conditions, as these may also include sections relating to the use and disclosure of information.

For the purpose of HSBC Bank Malta p.l.c. being able to satisfy its obligations under the Banking Act of 1994 and the Professional Secrecy Act of 1994, you hereby give your express consent to us sharing your information with other members of the HSBC Group (HSBC Holdings p.l.c., and/or any of its affiliates, subsidiaries, associated entities, and any of their branches or offices) and any other third parties when this is necessary for us to be able to provide you with the services you have requested from us and this, in the manner and to extent explained in Our Privacy Notice.

12.1 Prior to proceeding with your request, in order to protect our customers, you are required to produce satisfactory evidence to enable the Bank to validate your identity. Ideally, this will be by way of an identity card, residence card or passport. If you are unable to provide a satisfactory identification document, then we will not be able to conduct business with you.

Additionally, as part of the Prevention of Money Laundering Act, and the Bank’s ongoing monitoring obligations, if during a transaction it is identified that there are any changes to your identification document which also include a change in the residential address (e.g. an update of an expired identification document) from the one held in the Bank’s records, we would be bound to make and retain photocopies of the latest identity document that you provide. In cases, where you advise the Bank with a change of residential address, and the address information is not held in the identity document that you provided (such as a passport), then alternative documents to validate your new residential address would be required (such as a recent utility bill, or, recent statement or reference letter from a reputable credit institution or a valid lease agreement).

The Wealth Management Official will be asking for information relating to ‘Source of Funds’ and ‘Source of Wealth’.

In case of insurance related products, the Bank may also make use of contact details provided by you to HSBC Life Assurance (Malta) Ltd.

12.2 You authorise us to disclose information and/or documentation about you to third party providers such as Fund Managers or Fund Administrators, as may be necessary, including statement of accounts, as evidence to enable such third party to verify your identity, your address and where relevant, Source of Funds and Source of Wealth.

13.1 As investment markets are subject to unforeseen fluctuations, no particular results can be guaranteed. Therefore, we are not liable for:

i. Errors of judgement made in good faith;

ii. Acts or omissions in the course of our service, or any partial or total non-performance of our obligations under these Terms arising from:

– Strikes;

– Interruption of power supplies;

– Machinery failures; or

– Other causes beyond our control.

We will only be liable for acts or omissions arising from our negligence, fraud or willful default.

13.2 Nothing in these Terms shall exclude or restrict:

i. any obligation which we have to you under the Investment Services Act 1994 or the Investment Services Rules; or

ii. any liability which we may incur under the Investment Services Act 1994, the Insurance Distribution Act 2006, the Investment Services Rules, the Insurance Distribution Rules or the MFSA Conduct of Business Rulebook in respect of a breach of any such obligation.

13.3 It is your responsibility to ensure that accurate and up to date information is given during meetings held (both face to face and remote journeys) with the Bank because this information will be relied upon and used by the Wealth Management Official during the provision of Investment and Insurance-related Services. Therefore, during the completion of application forms, proposal form, or any other document whether or not this is signed by you, the Wealth Management Official is responsible to verbally inform you that all the answers or statements are your own responsibility.

The Bank must also be promptly updated with any material changes to any information provided including email address, residency and correspondence address, and telephone number you wish to be contacted on.

Providing incorrect or inaccurate information may result in business being declined by the Bank. Please refer also to your disclosure obligations described further below.

During the remote journey, the Wealth Management Official will be unable to take instructions over the telephone call to amend bank records, save for specific changes which may be accepted via the telephone call, subject to the Bank's discretion. All other changes need to be undertaken via Personal Internet Banking or by visiting one of our branches and the Wealth Management Official will guide you to the appropriate channel.

The Bank will not be liable for any loss to you if it declines business or refuses to follow your instructions as a result of you not providing it with any information it reasonably requests or if it becomes aware that the information you provided is no longer accurate or up to date.

Therefore, you are encouraged to update your information which was originally provided to the Bank immediately especially where significant changes occur. As an example, if your residential and correspondence address, citizenship, risk tolerance, email address and telephone number have changed, you are obliged to contact the Bank immediately and advise of such changes.

For insurance-related products, if you are or become knowledgeable of any material facts concerning the risk being discussed or insured that you feel the insurer/manufacturer should be made aware of, please advise us immediately.

It is your duty to disclose all material circumstances and give a fair presentation of the risk. Material facts include any information which could in any way influence the insurer’s consideration and assessment of the acceptability and terms to be applied to a risk.

These disclosure obligations are of a continuous nature operating before the policy of insurance commences, at the time of renewal or extension, when lodging a claim as well as throughout the duration of the policy period. Not conforming to such obligations can have serious consequences on the operation of your protection and may enable insurers to void an otherwise identifiable claim thereunder. If you are in doubt as to whether a circumstance constitutes a material fact, you should disclose it.

Specifically in relation to Protection, you should be advised (verbally), that the consequences of failure to make full disclosure of information of the relevant facts, including providing incomplete and/or inaccurate information, may lead to a number of consequences as follows:

a.  That a policy may be cancelled;

b.  That claims may not be paid or be rejected;

c.  The difficulty you may encounter in trying to purchase insurance elsewhere.

13.4 Taxation depends on a combination of your individual circumstances and government tax legislation. HSBC does not provide tax or tax credit advice. Although any gain from investments and insurance-related products (including HLM Funds) may be paid free from tax, you may be liable to tax in Malta and/or in any country of residence at your marginal tax rate.

In relation to Qualifying Schemes under the Voluntary Occupational Pension Scheme Rules/Personal Retirement Scheme Rules, contributions may be eligible for tax credits if you meet the relevant tax eligibility criteria.

The Bank strongly suggests that you seek independent tax advice, for any obligations emanating from any tax related legislation currently in force and which may change from time to time.

You should contact an independent tax advisor or the Inland Revenue Department directly for tax advice or for tax related queries.

We and other members of the HSBC Group are required to act in accordance with the laws and regulations and requests of public and regulatory authorities in various jurisdictions which relate to the prevention of money laundering, terrorist financing and the provision of financial and other services to any persons or entities which may be subject to sanctions. We or any other member of the HSBC Group may without any liability, take whatever action we consider appropriate to meet any obligations, either in Malta or elsewhere in the world, relating to the prevention of fraud, tax evasion, money laundering and terrorist activity and in the provision of financial and other services to persons who may be subject to sanctions.

We or any other member of the HSBC Group may also, without any liability, take whatever action we consider appropriate in case we know or suspect a breach of security or other suspicious circumstances in respect of or in connection with the operation of one or more of your investments/insurance products. This may include, but is not limited to, investigating and intercepting payments into and out of your investments/insurance products and investigating the source of or intended recipient of funds. It may also include making enquiries to establish whether an investment account holder/policy holder/ recipient is subject to sanctions issued by any authority having jurisdiction over any part of the HSBC Group, in Malta or abroad including United Nations Security Council (“UN”), the United Kingdom (“UK”), the Hong Kong Special Administrative Region (“HK”), the European Union (“EU”) and the United States of America (“US”). Exceptionally, this may delay the carrying out of your instructions or the receipt of funds, prevent/block access to your funds or even block or close your investment/s or insurance product/s without giving you notice or reason except where expressly required by law or contract to provide you with such notice or reason.

To the extent permissible by law, no member of HSBC Group shall be liable to you or any third party in respect of any loss (however it arose) that was suffered or incurred by you or a third party, caused in whole or in part in connection with the actions set out in this clause.

15.1 We are required to obtain Clients' consent to our Execution Policy and we shall treat a Client as having consented to the Execution Policy where you subsequently request the execution of a Client order in any financial instrument listed in MiFID Annex I Section C ("Financial Instrument").

15.2 Best Execution factors and criteria

When transmitting a Client order for the purposes of execution, we will take all sufficient steps to achieve the best possible execution result on a consistent basis as required by the MiFID rules. Best possible result for Retail Clients shall be determined in terms of total consideration, representing the price of the financial instrument and the costs related to execution. Precedence may be given to other factors such as speed, likelihood of execution and settlement, size, nature of the order, market impact and implicit transaction costs, but only insofar as they are instrumental in providing you with Best Execution in terms of the total consideration.

Notwithstanding the above, other criteria may be taken into account such as the type of Client Order, the Financial Instruments that are the subject of that Client Order and the execution venues to which that order may be directed. More specifically, in respect of the purchase and/or redemption of units in a collective investment scheme, the procedures indicated in the funds’ prospectus applicable to purchases and redemptions will apply for Best Execution purposes.

Furthermore, for collective investment schemes the relevant Fund Manager/Fund Administrator will be the execution venue. Information regarding execution and the top five execution venues can be accessed via our website.

Please also refer to the Prospectus of the relevant Fund/s and the Nominee Terms & Conditions (as may be applicable). The Prospectus applicable to the relevant purchases and redemptions will apply for Best Execution purposes.

15.3 Specific instruction warning

Where you provide us with specific instructions on how to execute your order, we shall, where possible, endeavour to carry out your instructions. However, please note that by acting on your specific instructions, your order may not be executed in accordance with our Execution Policy. To the extent that we comply with a Client's specific instruction, we will be treated as having satisfied our obligation to take all reasonable steps to obtain the Best Execution for the Client, but in respect of those aspects of execution which are not covered by the specific instruction, we will process the order in accordance with our Execution Policy.

15.4 Monitoring

We will monitor the effectiveness of our transmission and the execution arrangements on a regular basis to ensure that the Best Execution for Client Orders is achieved on a consistent basis but should you have any concerns about HSBC Bank Malta p.l.c.’s transmission and execution arrangements, you should direct any questions by contacting the Wealth Management Official.

15.5 Amendments to the policy

We reserve the right to amend this policy as necessary. Where a material change has occurred to the policy, we will inform you accordingly.

15.6 Execution venue selection

All instructions for the purchase or sale of shares/units in collective investment schemes will be executed with the relevant Fund Manager/Fund Administrator, which will be the execution venue for the purposes of the MIFID Rules. Shares/units in collective investment schemes can only be purchased from and sold to the relevant Fund Manager and cannot be directly traded on any type of market or exchange.

You, or we, may terminate our authority to act on your behalf at any time without penalty. Notice must be given in writing and will take immediate effect. Termination will be without prejudice to the completion of any outstanding transactions and the collection of any outstanding expenses, fees or commissions. This may also require that we terminate the Nominee relationship. Please refer to the Nominee Terms and Conditions.

It is important to note that, where part or all of an investment is denominated in a currency other than the local currency, a movement in exchange rates will have an effect on the value of the investment.

18.1 The investment and financial services provided by us concern instruments involving special risks related to their specific features or the operations to be executed or whose price depends on fluctuations in the financial markets outside the Bank’s control. Historical performances are no indicators for future performances. The value of the underlying investment may go down as well as up.

18.2 The Bank will provide appropriate information to enable you to understand the nature and risks of the investment service and insurance-related product to be provided and of the specific type of financial instrument that is being offered, and consequently to take decisions on an informed basis.

18.3 This information will include details about financial instruments and proposed investment strategies, including appropriate guidance on, and warnings of the risks associated with investments in those instruments or in respect of particular investment strategies. Such information will feature on the relative product prospectus.

18.4 During the provision of advice, the Bank does not provide you with an ongoing assessment of the suitability or otherwise of the investments/other products recommended or held in your portfolio. The Bank recommends and encourages that you contact your respective Wealth Advisor at least on a yearly basis in order to undertake a full financial planning review of your portfolio including a review of investments. Such review will cover material changes in regards to your investments/other products which were purchased on our advice.

18.5 Liens, right of set-off and security interests risks

Investments/insurance products purchased by you through the Bank can be subject to a lien, power of sale and/or right of set off. In such cases, you face a risk of loss of cash or of such products if the Bank or any relevant third party having such right, enforce their security interest by exercising set-off rights against cash or by liquidating such products.

Please refer to the relevant Prospectus of the Funds and Nominee Terms and Conditions (as may be applicable).

The Bank is also entitled to enforce its security interest, or allow third parties to enforce their security interest, by causing the liquidation of a sufficient number of assets held in your name or on your behalf, without your consent or prior notice to you, where you have granted a pledge over such assets in favour of the Bank or any other third party bank/creditor.

Investment Products

In the case of the remote journey only, You have the right to cancel any new distance contract within fourteen (14) calendar days, from (a) the day of the conclusion of the distance contract or (b) from the day on which You receive the contractual terms and conditions if this is later than the date referred to in paragraph (a), by completing and returning the Notice of Cancellation to the Bank. In this case, the distance contract will be null and void. No benefit can be claimed under such distance contract once the Notification of Cancellation has been sent to the Bank. Any such Notification of Cancellation shall be irrevocable once sent.

The right of cancellation will not be applicable if:

• the service provided is in respect of a product whose price depends on fluctuations in the financial market outside the Bank’s control, which may occur during the withdrawal period; or
• the distance contract has been fully completed by both parties at your express request before You exercise the right of withdrawal

When You exercise the right of withdrawal, You shall be required to pay, without any undue delay, for the service or benefit actually provided by the Bank in accordance with the distance contract. In any case the amount payable by You shall not:

a. exceed an amount which is in proportion to the extent of the service already provided in comparison with the full coverage of the distance contract; or

b. in any case be such that it could be construed as a penalty.

The Bank shall, without any undue delay and no later than within thirty (30) calendar days, return to You any sums the Bank has received from You in accordance with the distance contract. This period shall begin from the day on which the Bank receives the Notification of Cancellation.

You shall return to the Bank any sums You have received from the Bank without any undue delay and no later than within thirty (30) calendar days. This period shall begin from the day on which You dispatch the Notification of Cancellation.

In the case of investment products, the cooling-off period does not apply in a face to face scenario.

Protection Products

In the case of both face to face and remote journeys, You have the right to cancel the policy within thirty (30) days from receiving the Statutory Notice (a document the Bank issues which informs You of your right to cancel the Policy during the Cooling-Off Period and for which you are to acknowledge receipt), by completing and returning the Notice of Cancellation to the Bank. In this case the Policy will be null and void. Any Premiums paid will be refunded in full. No benefit can be claimed under such Policy once the Notice of Cancellation has been sent to the Bank. Any such Notice of Cancellation shall be irrevocable once sent.

The Statutory Notice and the right of cancellation will not be applicable:

• if the policyholder is not an individual person;
• if the Policy has been taken out by the Policyholder in order to obtain credit or loan facilities and evidence of this is attached to the proposal form

Unit-Linked products (including pension products)

In the case of both face to face and remote journeys, You have the right to cancel the linked long term contract of insurance within thirty (30) days from receiving the Statutory Notice (a document the Bank issues which informs You of your right to cancel the Policy during the Cooling-Off Period and for which you are to acknowledge receipt), by completing and returning the Notice of Cancellation to the Bank. In this case, the Policy will be null and void. Any Premiums paid will be refunded in full subject to any reduction necessary to reflect downward movements in the Offer Price of Units allocated to Your Policy between the Commencement Date of the Policy and the next Valuation Date following receipt by the Bank of such Notice of Cancellation. No benefit can be claimed under such Policy once the Notice of Cancellation has been sent to the Bank. Any such Notice of Cancellation shall be irrevocable once sent.

The Statutory Notice and the right of cancellation will not be applicable:

• if the policyholder is not an individual person;
• where the linked long term contract of insurance has already been purchased and You are only effecting an increase in premium

20.1 At HSBC, we are committed to providing you with the best customer experience we can. We would like you to let us know, as soon as possible, whenever our service does not meet your expectations so we may promptly address your concerns.

To register a complaint please feel free to contact us by:

• telephone: 2380 2380
• secure Internet Banking Message
• letter addressed as follows:
  HSBC Bank Malta p.l.c.
  The Customer Relations Manager
  Operations Centre
  Mill Street
  Qormi, QRM3101
  Malta
• in person – to the Branch Manager or the Wealth Management Official.

20.2 If your concern is not resolved within 48 hours we will send an acknowledgement indicating the timeframe for resolving your complaint.

20.3 Following a detailed investigation, we will provide you with a response to your concern in the agreed upon timeframe, containing details of our investigation, our decision and an explanation on how it was reached.

20.4 If you then feel that your concern has not been dealt with in a satisfactory manner, you may refer the matter to the Office of the Arbiter for Financial Services (see details below) :

Office of the Arbiter for Financial Services

N/S in Regional Road

Msida MSD1920

Malta

Website: www.financialarbiter.org.mt

Details on how to lodge a complaint may be found on the website noted above.

Before raising a complaint with the Office of the Arbiter for Financial Services, a complaint should first be raised with HSBC in terms of clause 20.1 above.

These terms of business are construed in accordance with the laws of Malta and shall be subject to the jurisdiction of the Maltese Courts.

You represent and warrant, now and on a continuing basis throughout the duration of your relationship with us, that:

• you are not under any legal disability which prevents you from entering into this Terms of Business or any agreement related to the product/service provided by us
• you are not subject to any law and/or regulation which prevents you from entering into this Terms of Business or any agreement related to the product/service provided by us and from performing your obligations including purchasing of investment and insurance products recommended/specifically purchased on your own initiative
• the execution, delivery and performance by you of this Terms of Business or any agreement related to the service /product provided will not violate or conflict with any applicable law and/or regulation
• you are in compliance with all laws to which you are subject, including, without limitation, all tax laws and regulations, exchange control requirements, and registration requirements; and
• the information provided by you is complete, accurate, up-to-date, and is not misleading in any respect. In the event that the information is not complete, accurate and/or is misleading, you agree to indemnify us against all actions, costs and demands arising from any information provided by you

The Markets in Financial Instruments Directive (MiFID), which came into effect on 1st November 2007, introduced a comprehensive regulatory regime covering investment services in Europe and was formulated with the ultimate aim of opening up Europe’s capital markets by improving the price transparency of traded financial instruments, while making it easier to execute trades across borders.

If you need any further information on MiFID you can access the MFSA site on http://www.mfsa.com.mt.

Under MiFID regulations, your relationship with the Bank has been classified as “Retail”.

We will provide services to you on the basis that you are classified as a Retail Client in terms of MiFID.

You have a right to request a different classification and in such case we will inform you if we are able to provide or continue to provide services to you on the basis of your requested different classification.

The provision of investment services can only be given to personal customers (an individual which can be a joint relationship between individuals). There are limited services offered to non-personal customers (a legal person which may be a business entity, clubs, societies etc) who already hold an investment or insurance product with us. These limited services would include the closure of an existing investment or a switch into a different share class within the same fund. Therefore, no "Advisory", "Non-Advisory" or "Execution Only" services will be provided to non-personal customers for the purpose of purchasing investments or insurance products.

The Bank will only allow sales from customers who are located in Malta. Infact, the Services provided by the Bank may not be available in countries where the use thereof is prohibited by local law.

If in doubt, you should contact a legal adviser. The Bank will not be responsible for the use of its Services by persons in countries where the use of such Services is prohibited.

You hereby agree to indemnify the Bank in respect of any action, claim or proceeding brought against the Bank as a result of you using any of the Bank’s services that are prohibited by local law in your in country of residence. You will remain liable for any costs the Bank may incur in this regard.

Where permissible, the Bank will be entitled to unilaterally close any investment or insurance related product where in the Bank's view the holding of such product is prohibited or otherwise not in compliance with applicable laws or HSBC Group policies. In such case, you will be informed of action taken and how proceeds (where permitted) may be received by you. Please also refer to section 14.

25.1 The clauses below set out our rights to change these Terms of Business during the period we are providing you with the Services and the notice we will give you.

25.2 We may only make changes to these Terms of Business during the service for any of the reasons set out below:

• if the change is favourable to you
• following or in anticipation of, and to respond to a change in relevant law or regulation or to respond to a change in industry guidance or code of practice or good practice
• to respond to the making of a relevant recommendation requirement or decision of any Court, Ombudsman, Regulator or similar body
• to respond to the costs or consequences of any event beyond our control that may impact our provision of accounts, services or facilities to you
• to respond to any change in our systems or procedures including any change arising from any re-organisation of our business as a result of it being acquired by, or by our acquiring, another Bank or organisation

25.3 Where we do make a change, the change will be proportionate to the reasons for the change.

25.4 If we reasonably consider that the change is favourable to you or that it has no material impact on you we will not give you any notification of such change. Such changes will be shown in an updated version of our Terms of Business document that can be obtained from any of our branches or through the Bank's Internet site.

For other changes that are material or unfavourable to you we will give you at least 14 days’ notice in advance of the change coming into effect. We will provide you with this notice in writing by mail, email or via our Internet Banking.

25.5 When we give you advance notice of a change before the change takes effect, you may end your relationship with us by writing to us before the expiry of such notice.

For any information or details on the content, please contact:

HSBC Bank Malta p.l.c.

Wealth Management

HSBC Wealth and Personal Banking

Mill Street

Qormi QRM3101

Malta

Version 13

HSBC Bank Malta p.l.c.

May 2024

Introduction

A Conflict of Interest (“conflict”) is a situation or arrangement where we – or someone who works for us – come under multiple influences in the course of conducting business. Competition between these influences might adversely affect decision-making or outcomes.

A conflict can be due to:

• the competition of legitimate influences, such as acting for multiple clients; or
• the presence of harmful influences, such as personal gain

Because we provide a wide range of services across our global network, our interests could conflict with yours from time to time.

We have established policies and procedures designed to identify, and prevent or manage conflicts. Our aim is to safeguard your interests. We review our conflicts policies at least annually.

How we deal with conflicts

We design our organisational structures so that we do not incentivise or reward behaviour that could lead to conflicts. Where necessary, we restrict the flow of information to certain employees in order to protect your interests.

We have procedures in place to:

• identify all types of potential conflicts that could reasonably arise in the context of our activities
• maintain registers of all potential conflicts identified
• prevent or manage conflicts on an ongoing basis
• disclose conflicts where appropriate
• maintain evidence of all occurrences of conflicts that cannot be managed

Identifying conflicts

Each of our Global Businesses is required to consider the types of potential conflict relevant to the specific services and activities they carry out.

For example, we consider potential conflicts when:

i. Developing a new product;

ii. Establishing or amending any cross-referral, revenue sharing or joint venture arrangements;

iii. Transferring businesses, activities or operations (or parts thereof) to another part of HSBC.

When potential conflicts involve clients, we also take into account whether our employees or we:

• are likely to make a financial gain or avoid a financial loss at your expense
• have an interest in the outcome of a service or transaction that differs from yours (including HSBC’s stated Environmental, Social and Governance (ESG) / climate strategy and the interests of a client and HSBC’s sustainable finance/climate targets and client’s preference)
• have a financial or other incentive to favour the interest of one client (or group of clients) over another
• carry on the same business as you
• will receive an inducement from anyone other than you in relation to a service we provide

We maintain internal registers, documenting and evaluating all identified potential conflicts. These registers also record the controls in place to prevent or manage each type of conflict, and our senior managers regularly review them.

Preventing or managing conflicts

We pay, deploy and manage our employees in a way that minimises conflicts.

Conflicts clearing procedures ensure that, where necessary, we escalate and manage potential conflicts before we commit to a transaction.

In some cases, we will consider declining to act for you or another client. For example, if:

• a conflict is too great
• confidentiality obligations prevent adequate disclosure – see below
• we cannot obtain informed consent, or this is an insufficient control to manage a conflict

A dedicated Conflicts Management Office, reporting to the Compliance department, is the point of escalation for significant conflicts, and resolves cross-business conflicts brought to its attention. Written reports on the services and activities reflected in the registers of conflicts are presented to our senior management at least annually.

Disclosure

We may make general disclosures to you about certain types of potential conflicts, explaining how we manage such conflicts to mitigate the risk of damage to your interests. For example, through separation of businesses or measures to prevent unauthorised sharing of confidential information.

However, where we have made all reasonable efforts to prevent or manage a conflict but the risk of damage to your interests remains, we will make a specific disclosure to you in writing before concluding a contract. We will include sufficient detail to enable you to take an informed decision.

At times, a duty of confidentiality to one client might limit the disclosures that we can make to another.

Employees

We require our employees to apply good judgement and act with integrity, objectivity and independence of mind. We ask them to take all appropriate steps to:

i. Avoid personal conflicts, for example, in their personal account dealings.

ii. Proactively escalate personal conflicts that do arise.

No employee is permitted to advise a client on any matter in which they have a personal interest, nor take commercial decisions on our behalf if those decisions are connected to their personal or external business affairs until steps have been taken to satisfactorily manage the conflict.