The Protected Multi Asset Certificate CAPITAL PROTECTED OCTOBER 2013 STRUCTURED INVESTMENTS

Transcription

1 CAPITAL PROTECTED OCTOBER 2013 The Protected Multi Asset Certificate STRUCTURED INVESTMENTS Merrion Solutions is a division of Merrion Stockbrokers Limited. Merrion Stockbrokers Limited is regulated by the Central Bank of Ireland. Merrion Stockbrokers Limited is a member of the Irish Stock Exchange and the London Stock Exchange.

2 1 The Protected Multi Asset Certificate Merrion Solutions is a division of Merrion Stockbrokers Limited developed with the needs and objectives of Irish Financial Advisors at the forefront of everything we do. Initially there are two strands to the business: We have combined the expertise of Duggan Asset Management and Merrion Stockbrokers to develop a new and innovative Structured Investments business. This business will provide Investment Solutions that empower Advisors and their clients in navigating a course from deposits back to normal investment portfolio construction. myfund: We have created an Advisor friendly Stockbroking solution that combines Merrion s Investment Management and Stockbroking capability into one low cost, transparent and potentially tax efficient offering. For more information, please call (01) , solutions@merrion-capital.com or visit

3 The Protected Multi Asset Certificate 2 Merrion Structured Investments Merrion Structured Investments is passionate about creating the leading and most innovative Investment Solutions in the Irish market. We will create a series of exciting new Investment Solutions for Financial Advisors and their clients each calendar quarter. Our Investment Strategies and Solutions will be Research Driven. By combining the resources of Merrion Investment Managers, Merrion Stockbrokers and other leading international investment experts, our Investment Solutions will have a strong economic and investment logic and will represent international best practice in construction. Merrion Structured Investments operates an Open Architecture platform i.e. we will work with a broad range of Irish & International Bank counterparties. We will work with high quality investment grade counterparties when selecting partners to provide Capital Protection or other Investment Risk Controlling or Reducing Mechanisms. We will focus on providing Investment Solutions with liquidity. Where possible, we will create the provision for investors to exit their investment prior to maturity should their circumstances change or if investment performance is higher or lower than anticipated. Our quarterly Investment Solutions will offer a choice of: 1. Investment Risk Levels: From Low to Medium to High. 2. Investment Objectives: Income, Capital Growth, Hedging Strategies etc. 3. Taxation Treatment: Deposit Interest Retention Tax (DIRT), Capital Gain Tax (CGT) and Income Taxable investments. 4. Asset Classes: Traditional Asset Classes such as equities, bonds and property and Alternative Asset Classes such as commodities, currencies, inflation, interest rates etc. 5. Investment Techniques: Traditional Investment Techniques such as long only with Alternative Investment Techniques such as short selling, arbitrage, relative performance etc. Our Investment Solutions will be available to a broad range of investor types, all of whom can invest via our myfund accounts as follows: Personal Investors. Pension Schemes: Small Self Administered Pension Schemes and Insured Self Directed or Self Invested Plans. Post Retirement Plans: Self Administered ARFs & AMRFs and Insured Self Directed or Self Invested ARF & AMRF Plans. Self Administered PRSAs. Companies, Charities and other Not for Profit Organisations. Institutional Investors. Our Philosophy will be the implementation of International Best Practice in Structured Investment Techniques for Financial Advisors and their investor clients in Ireland.

4 3 The Protected Multi Asset Certificate 1. Executive Summary The Protected Multi Asset Certificate (the Certificate) is an innovative investment strategy designed for private investors who wish to invest in a low risk, multi asset, diversified, absolute return style investment strategy that offers potential investment returns above deposit interest rates. The Certificate is suitable as a stand-alone investment or as part of the process of constructing a genuinely diversified investment portfolio. Investors in the Certificate are 90% capital protected at maturity and will receive 100% participation in the growth of the Index. The return is added to 100% at the end of the Term, subject to averaging. The Investment Rationale: The investment rationale can be summarised as: 1. Investment Portfolio Diversification 2. Track Record (Past Performance & Risk Management) 3. Absolute Return Focus The underlying investment strategy (the Underlying Investment Strategy ) of the Certificate is the BNP Paribas Multi- Asset Diversified Index (BNPIMDEE Index) (the Index ). The Index can invest in the following asset classes: Equities: Europe, US, Japan, China & Emerging Markets. Government Bonds: Germany, Japan & US. Real Estate: Europe & US. Commodities: soft, energy, industrial metals & gold. The Certificate has a fixed 6 year term (the Term ). The Certificate should only be considered by investors who will not require access to their money for a 6 year Term, beginning on [6 December 2013] (the Start Date ) and maturing on [6 December 2019] (the Maturity Date ). The 90% capital protection in the case of the Growth Option of the Certificate is provided by BNP Paribas at the maturity of the Term. Averaging: The closing level of the Certificate will be based on the average monthly value of the underlying Index over the final 12 months of the Term (13 observations) on the [6th] day of each month. The Minimum Investment is 25,000. The closing date for applications is 29 November 2013 (22 November 2013 for pension investors via a Self Directed or Self Invested Insured Plan) (the Closing Date ). The base currency of the Certificate and of the Index is Euro. Taxation: The Certificate is available to Pension and Post Retirement, Company and Tax Exempt investors. Our understanding is that the returns will not be subject to taxation for Pension and Post Retirement and tax exempt investors. The taxation of the Certicate by Company investors depends on the tax circumstances of each company. Warning: This document is provided for information purposes only and is not considered to be an assessment of the suitability or appropriateness for any one investor or group of investors. The suitability or appropriateness of this product to your investment objectives or risk profile should be discussed with your financial advisor before any investment in this product is made. Warning: All of the terms outlined in this document are indicative and subject to change. The final terms will not be known until 29 November Your Financial Advisor will confirm the final terms in the Confirmation Letter issued shortly after the Issue Date on 6 December2013. If the terms of the Certificate have changed significantly on 29 November 2013, your Financial Advisor will contact you again requesting a new instruction to proceed with the investment. Disclaimer: This document has not been reviewed, approved or otherwise endorsed by BNP Paribas or any of its affiliates and BNP Paribas accepts no responsibility in relation to the accuracy, completeness or adequacy of the information included herein. Nothing in this document should be considered to be a representation or warranty by BNP Paribas to any person, including without limitation, any potential investor and any member of the public, regarding whether investing in the product described herein is suitable or advisable for such person.

5 The Protected Multi Asset Certificate 4 2. Description of the Certificate The Certificate is a 6 Year BNP Paribas Synergy Preference Share-linked Certificate. The Certificate will be issued under BNP Paribas Arbitrage Issuance B.V. s Note, Warrant and Certificate Programme. Copies of the Programme s base prospectus dated 3 June 2013 (which sets out the terms and conditions to be completed by the Final Terms or Pricing Supplement) and any supplements thereto are available at or from your Financial Advisor on request. 2.1 Who is the Certificate suitable for? The Certificate has been designed for investors seeking one or more of the following: 1. A low risk investment that is 90% capital protected at maturity. 2. A multi-asset, diversified, absolute return style investment strategy with the potential to provide positive investment returns in both positive and negative market conditions. 3. A low volatility investment with the potential to provide consistent returns while, preserving investor capital during periods of financial market volatility. 4. The Bond is suitable as a stand-alone investment or as part of the process of constructing a genuinely diversified investment portfolio. Warning: If you invest in the Growth Option of this product, you could lose 10% of the money you put in. 2.2 The Investment Rationale The investment rationale for investing in the Certificate can be summarised as follows: 1. Investment Portfolio Diversification: The Index can invest long or short in the following assets: - Equities: Europe, US, Japan, China & Emerging Markets. - Government Bonds: Germany, Japan & US. - Real Estate: Europe & US. - Commodities: soft, energy, industrial metals & gold. Combining alternative investment strategies (like short selling) and alternative asset classes (like Commodities) with traditional asset classes like Equities, Government Bonds and Real Estate can provide greater diversification and brin greater balance to well structured investment portfolios. 2. Track Record: The Index has a strong past & simulated past investment performance and past & simulated past risk management track record. 3. Absolute Return: The Underlying Investment Strategy has an absolute return focus. It aims to deliver absolute performance while moderating volatility regardless of market direction or momentum. 2.3 The Indicative Investment Terms of the Certificate Indicative Key Feature Description Certificate Issuer BNP Paribas Arbitrage Issuance B.V. Guarantor BNP Paribas Calculation Agent BNP Paribas Arbitrage S.N.C. Redeemable Preference Shares Issuer BNP Paribas Synergy Limited Investment Term 6 years Capital Protection 90% at Maturity (6 December 2019) Underlying Investment Strategy BNP Paribas Diversified Multi-Asset Index Participation 100%

6 5 The Protected Multi Asset Certificate Maximum Return Averaging None Monthly in the last 12 months (13 observations) Minimum Investment 25,000 (in denominations of 1,000) Closing Date 22 November 2013 Valuation Date 29 November 2013 Issue Date 6 December 2013 Maturity Date 6 December 2019 Listing Liquidity Availability Luxembourg Stock Exchange Daily, under normal market conditions and at the discretion of BNP Paribas Arbitrage S.N.C. Pensions, Post Retirement Schemes, Companies and other tax exempt investors. 2.4 The Underlying Investment Strategy BNP Paribas Multi-Asset Diversified Index (the Index ) The Index is a Systematic Multi Asset Investment Strategy. The Index can invest in a diversified portfolio of up to 14 underlying investments across 4 asset classes as follows: Asset classes Exposure to the following: Equity Europe Euro Stoxx 50 Equity US S&P 500 Equity Japan Nikkei 225 Equity China Equity Emerging Markets Real Estate Europe Real Estate US HSCEI MSCI Emerging Markets FTSE EPRA/NAREIT Eurozone Dow Jones US Real Estate Commodities Enery commodities (Dynamic Roll) Industrial Metals Dow Jones UBS Commodity S&P GSCI Energy Dynamic Roll S&P GSCI Industrial Metals Dynamic Rolls Gov. Bonds Germany Gov. Bonds US Gov. Bonds Japan Gold Euro BOBL US 5Y T-Bills Japanese Government Bonds 10Y S&P GSCI Gold Source: BNP Paribas (27 September 2013) The Index has the following characteristics: 1. Diversification: The Index can invest in a diversified portfolio of up to 14 underlying investments. 2. Systematic: The Index adopts a Quantitative Asset Allocation Model that determines the optimal allocation across assets using the efficient frontier theory. The Index also attempts to identify trend signals. The trend indicator compares the daily spot value of each underlying asset with the past spot values over a 1 year period. This comparison over the previous year can help avoid large discrepancies in the short term. 3. Active: The Index is rebalanced at the end of each month. The sum of the positions in the Index is not restricted to 100%. This means that through leveraging (net exposure greater than 100%) or deleveraging (net exposure less than 100%), the most efficient portfolio can be obtained with higher potential returns, while keeping the portfolio volatility below the 8% annualized target. 4. Risk Control Mechanism: The Index will target and maintain annualised volatility at around 8%. The Index will change the daily allocation to the underlying investments as necessary to ensure high reactivity to increased risk in any market conditions. 5. Absolute Return Style: The Index can take both long and short positions in the underlying assets depending on the trend signals. Taking short positions provides the potential for positive returns in falling market conditions.

7 The Protected Multi Asset Certificate 6 The allocations within the Index at the end of August and the end of September 2013 were as follows: End of September 2013 End of August 2013 Asset Class Weight Asset Class Weight Long Positions Government Bonds Japan 100% Government Bonds Germany 93% Equity US 40% Equity Europe 21% Equity Japan 12% Equity China 5% Energy Commodities 29% Gold 4% Government Bonds US 1% Short Positions Industrial Metals -8% Commodities -33% Equity Emerging Markets -26% Net Exposure 238% Long Positions Government Bonds Japan 97% Government Bonds Germany 80% Equity US 41% Energy Commodities 34% Equity Europe 23% Equity Japan 9% Gold 2% Short Positions Equity China -1% Industrial Metals -3% Government Bonds US -5% Commodities -33% Equity Emerging Markets -33% Net Exposure 211% Source: BNP Paribas (27 September 2013) Past Performance The chart and tables below describes the performance of the Index from 31 December 1994 to 27 September 2013: Index performance (%) BNP Paribas Multi-Asset Diversified Index Dec BNP Paribas Multi-Asset Sept 2013 Diversified Index Returns 13.62% Volatility 7.41% Sharpe Ratio 1.84 Max drawdown -7.83% Jan 95- June January 2.62% 0.08% 5.59% 3.67% 2.33% 0.81% 1.65% 0.06% 3.96% 0.95% 2.11% 7.14% -0.31% 2.50% -1.94% -0.01% -0.85% 2.22% -0.01% February -1.06% -3.67% 2.81% 1.08% -4.07% 1.26% 2.78% 1.63% 2.57% 4.78% 0.01% 1.65% 0.59% 4.43% 0.66% 1.87% 1.08% 0.70% 2.09% March 5.49% 1.72% -1.38% 4.00% 0.46% -0.49% -0.72% 0.59% -4.34% 1.00% 2.75% 4.40% -1.00% 1.02% -0.72% 2.31% -2.42% 2.82% 2.76% April 2.02% 3.43% 0.94% 1.72% 2.54% -1.85% -1.60% 2.91% 0.95% -5.11% 0.50% 1.54% 2.49% -2.00% -1.12% 2.50% 2.44% 0.83% 3.20% May 3.90% -0.78% -0.47% 3.89% -3.13% -0.76% 1.31% 3.53% 9.56% -0.32% 2.97% -3.40% -0.41% 0.66% -0.24% -1.30% 0.86% -0.47% -1.71% June -0.13% 2.43% -0.55% 3.81% 4.91% 0.03% 1.60% -1.66% -1.64% 1.95% 5.70% 0.45% -0.40% 1.86% -0.10% 0.29% -1.93% 0.13% -1.19% July 0.82% -6.80% 4.36% -1.35% 1.29% -0.14% -0.88% -1.92% -1.71% 2.07% 1.32% 0.40% -1.44% -3.20% 2.46% -0.70% 3.19% 2.83% 2.90% August -0.26% 3.15% -2.26% 2.96% 1.32% 2.30% 0.99% 4.20% 1.32% 2.05% 0.61% 1.02% 2.44% -0.04% 1.19% 4.35% 1.26% -0.35% -1.39% September 2.85% 4.81% 1.40% 4.65% -1.05% 0.17% 3.91% 2.30% 1.01% 3.50% 0.52% 1.97% 2.79% 0.30% 1.85% 0.53% 0.41% -2.36% 0.94% October -0.18% 1.59% 0.64% -0.51% -1.53% -2.07% 1.56% -1.77% 2.04% 2.54% -3.19% -0.05% 5.71% 0.78% -0.71% 1.40% 1.63% -1.09% November 4.86% 6.57% -2.07% 0.32% 2.26% 5.74% -4.69% -0.62% 1.87% 2.20% 4.23% 1.78% 0.70% 4.46% 4.10% -4.27% 0.31% -0.63% December 4.15% 2.80% 1.70% -2.06% 6.17% 3.38% -0.39% 5.79% 6.60% 0.32% 3.25% 1.95% 0.38% 1.10% -1.91% 0.62% 2.02% 1.04% Total 27.84% 15.62% 10.90% 24.23% 11.55% 8.42% 5.34% 15.71% 23.69% 16.76% 22.54% 20.15% 11.91% 12.24% 3.41% 7.57% 8.14% 5.66% 7.68% Source: BNP Paribas (31 December 1994 to 27 September 2013) after all fees and charges but before taxation. Data from 31 December 1994 to 3 October 2012 is simulated and data from 4 October 2012 to 27 September 2013 is live).

8 7 The Protected Multi Asset Certificate Warning: Past performance is not a reliable guide to future performance. Warning: These simulated performance figures are estimates only. They are not a reliable guide to the future performance of this investment. Warning: Past volatility is not a reliable guide to future volatility. Warning: These simulated volatility figures are estimates only. They are not a reliable guide to the future volatility of this investment. 2.5 The Capital Protection Feature The Certifcate is a Low Risk investment: The Certificate is 90% Capital Protected by BNP Paribas at Maturity (Credit Ratings at 8 October 2013: Fitch: A+, Moodys: A2 and S&P: A+. Credit Ratings are subject to change). The Merrion Stockbrokers Client Account (in the case of Self Administered Pension & Post Retirement investors, companies and other tax exempt investors) or the investing Life assurance Company (in the case of insured Pension & Post Retirement investors via life policies) will receive back a minumum of 90% of the monies invested in the Certificate so long as BNP Paribas remains solvent. The Certificate has been designed as a long term investment and should only be considered by investors who are content to invest for a 6 year term. Investors should note that the 90% Capital Protection applies only on the Maturity Date (6 December 2019). If investors sell the Certificate prior to Maturity, the amount repaid to investors will be the Certificate s current realisable value at that time, which may be lower than the original amount invested and lower than the Capital Protected amount. The volatility in the value during the 6 year term of the Certificate is likely to be greater than that of a Certificate of a shorter term. The price at which the Certificate can be sold will be the open market value determined by BNP Paribas which will take fees and charges into account and can be lower than the initial amount invested. In certain circumstances, as determined by BNP Paribas, you may not be able to sell your investment in the Certificate during the term. Warning: If you invest in this product, you could lose 10% of the money you put in. Warning: The value of your investment can go down as well as up. Warning: If you cash in your investment before 6 December 2019 you may lose some or all of the money you invest. Warning: Deductions for charges and expenses are not made uniformly throughout the life of the product, but are loaded disproportionately onto the early period. If an investor withdraws from the Certificate prior to the end of the 6year term, the practice of front-end loading will impact on the amount of money that the investor receives. The investor may not get back the full amount they invested. Warning: Investors should note that the 90% Capital Protection applies only on the Maturity Date. If investors sell the Certificate prior to maturity, the amount repaid will be the Certificate s current realisable value as determined by BNP Paribas which may be lower than the original amount invested and lower than the Capital Protected amount. The volatility in the value during the 6 year term of the Certificate is likely to be greater than that of a Certificate of a shorter term. Warning: Investors will be able to sell the Certificate at any time during the term of the Certificate under normal market conditions as determined by BNP Paribas. In certain circumstances, as determined by BNP Paribas, you may not be able to sell your investment during the term.

9 The Protected Multi Asset Certificate Investment Strategy Risk Scale Merrion Solutions considers the Certificate to have a risk score of 1 on it s risk scale as follows: NO RISK LOW RISK LOW TO MEDIUM RISK MEDIUM RISK MEDIUM TO HIGH RISK HIGH RISK SPECUL- ATIVE Merrion Solutions considers the Note to have a risk score of 1 on it s risk scale. 2.7 How the Investment Returns are calculated? At Maturity, investors will receive back a minimum of 90% of their initial capital invested plus 100% of the performance of the Underlying Investment Strategy (subject to averaging). The Certificate is available to Pension and Post Retirement investors. It is our understanding that any gain on an investment by Pension and Post Retirement investors are exempt from taxation. The table below illustrates how the return is calculated if 100,000 is invested in 5 different investment return conditions: Description Example 1 Example 2 Example 3 Example 4 Example 5 Negative Neutral/No Neutral/No Positive Positive Return Return Return Return Return 6% per annum 8% per annum Initial Amount Invested ( ) 100, , , , , Increase in Underlying Investment Strategy (%) -20% -5% 0% 41.87% 58.72% Participation Rate (%) 100% 100% 100% 100% 100% Projected Investment Return (%) 0% -5% 0% 41.87% 58.72% Projected Gross Investment Return Amount ( ) , , Return of Captital Protected Amount ( ) 90, , , , , Projected Amount returned to Investors before Tax ( ) 90, , , , Compound Annual Rate (CAR) before Tax (%) -1.74% -0.85% 0.00% 6.00% 8.00% Projected Tax Amount ( ) Projected Amount returned to Investors after Tax ( ) 90, , , , , Compound Annual Rate (CAR) after Tax (%) -1.74% -0.85% 0.00% 6.00% 8.00% Warning: These figures are estimates only. They are not a reliable guide to the future performance of this investment. Warning: If you cash in your investment before 6 December 2019 you may lose some or all of the money you invest. Warning: The value of your investment can go down as well as up. Warning: The above information represents our understanding of the taxation treatment of the Certificate but does not constitute tax advice. Investors should satisfy themselves independently of the taxation treatment of the Certificate in their particular circumstances. Warning: Investors should satisfy themselves independently in relation to revenue reporting requirements and the implications of non-disclosure where required. Warning: Tax laws are subject to change without notice.

10 9 The Protected Multi Asset Certificate 2.8 Liquidity The Certificate will be listed on the Luxembourg Stock Exchange and is a tradable investment (subject to the Warnings below), issued by BNP Paribas Arbitrage Issuance B.V. BNP Paribas Arbitrage S.N.C. will endeavour to make a secondary market in the Certificates, subject to it being satisfied that normal market conditions prevail. Any prices indicated will be dependent upon factors affecting or likely to affect the value of the Certificate such as, but not limited to, the remaining time to the Maturity Date, the outstanding principal amount, the Issuer's or, if applicable, the Guarantor's credit risk, the performance and volatility of the underlying asset, interest rates, exchange rates, credit spreads and any incidental costs. To the extent BNP Paribas Arbitrage S.N.C. holds Certificates that it can offer and subject to it being satisfied that normal market conditions prevail, such prices will have a bid-offer spread no greater than 1.00%. BNP Paribas Arbitrage S.N.C may determine a bid and offer price in a different manner than other market participants and prices can vary. Sometimes this variance may be substantial. BNP Paribas Arbitrage S.N.C may be the only market maker in the Certificate which may affect liquidity. Therefore, investors will, in normal market conditions be able to sell the Certificate at any time during the term. The price at which the Certificate can be sold will be the open market value determined by BNP Paribas Arbitrage S.N.C. which will take fees and charges into account and can be lower than the initial amount invested. Warning: No representation is made as to the existence of a market for the Certificate. BNP Paribas Arbitrage S.N.C. will endeavour to make a secondary market in the Certificate, subject to it being satisfied that normal market conditions prevail. Any prices indicated will be dependent upon factors affecting or likely to affect the value of the Certificate such as, but not limited to, the remaining time to the Maturity Date, the outstanding principal amount, the Issuer's or, if applicable, the Guarantor's credit risk, the performance and volatility of the underlying asset, interest rates, exchange rates, credit spreads, and any incidental costs. Warning: BNP Paribas Arbitrage S.N.C. may determine a bid and offer price in a different manner than other market participants and prices can vary. Sometimes this variance may be substantial. BNP Paribas Arbitrage S.N.C may be the only market maker in the Certificate which may affect liquidity. Warning: Deductions for charges and expenses are not made uniformly throughout the life of the product, but are loaded disproportionately onto the early period. If an investor sells the Certificate prior to the end of the 6 Year term, the practice of front-end loading will impact on the amount of money that the investor receives. The investor may not get back the full amount they invested. Warning: If you invest in this product, you could lose 10% of the money you put in. Warning: The value of your investment can go down as well as up. Warning: If you cash in your investment before 6 December 2019 you may lose some or all of the money you invest. Warning: If you invest in this product you may lose some or all of the money you invest. 2.9 Administrative Process Self Administered Pensions & Post Retirement Schemes Self Administered Pensions & Post Retirement Scheme, Company and Tax Exempt Investors in the Certificate must invest via a Merrion Solutions myfund account. Your Financial Advisor will assist you in this regard. Investors must submit the Certificate Application and the myfund Application Form at the back of this Brochure. Insured Pension & Post Retirement Policies Investors via an insured Pension or Post Retirement Policy must invest via their Insurance Company s policy. Your Financial Advisor will assist you in this regard. In additional to the Insurance Company s requirements, these investors must also submit the Certificate Application Form.

11 The Protected Multi Asset Certificate Fees & Charges Merrion Solutions will receive a commission in relation to its arrangement of the Certificate. This commission will be dependent on the total amount invested and on prevailing market conditions on the issue date on 6 December Assuming that the minimum subscription amount is raised and based on financial market conditions as at 8 October 2013, the indicative upfront commission payable to Merrion Solutions will be 2.25% of the total amount invested. The Financial Advisor will receive a distribution commission from Merrion Solutions in relation to its distribution of this Certificate. This commission will be dependent on the total amount invested and on prevailing market conditions on the investment date of 6 December Assuming that the minimum subscription amount is raised and based on financial market conditions as at 8 October 2013, the indicative upfront commission payable to the Financial Advisor will be 2.75% of the total amount invested in the Certificate. The total commission amount is 5% of the amount invested in the Certificate which is fully reflected in the terms of the Certificate. Warning: Deductions for charges and expenses are not made uniformly throughout the life of the product, but are loaded disproportionately onto the early period. If an investor withdraws from the Certificate prior to the end of the 6 year term, the practice of front-end loading will impact on the amount of money that the investor receives. The investor may not get back the full amount they invested Averaging The Certificate has monthly averaging in the final 12 months of the 6 year term. In the event of a significant fall in the value of the Underlying Investment Strategy during the final 12 months of the 6 year term, this monthly averaging can protect the value of the investment by reducing the impact of such a fall on the maturity value of the Certificate. However, in the event of a significant rise in the value of the Underlying Investment Strategy during the final 12 months of the 6 year term, this monthly averaging can reduce the value of the investment by reducing the impact of such a rise on the maturity value of the Certificate. The potential impact of averaging in negative and positive investment return conditions is illustrated in the tables below: Illustration 1: Effect of averaging in the final 12 Illustration 2: Effect of averaging in the final 12 months if the investment returns are negative months if the investment returns are positive at the end of the term at the end of the term Projected Return after 5 years 25.00% Projected Monthly Returns in final 12 months Monthly Change (%) 29 November % 29 December % 30 January % 01 March % 29 March % 02 May % 30 May % 29 June % 31 July % 29 August % 29 September % 30 October % 29 November % Projected Return in final 12 months with Averaging -4.98% Projected Return in final 12 months without Averaging % Projected Return at Maturity with Averaging 20.02% Projected Return at Maturity without Averaging 15.00% Projected Return after 5 years 25.00% Projected Monthly Returns in final 12 months Monthly Change (%) 29 November % 29 December % 30 January % 01 March % 29 March % 02 May % 30 May % 29 June % 31 July % 29 August % 29 September % 30 October % 29 November % Projected Return in final 12 months with Averaging 4.98% Projected Return in final 12 months without Averaging 10.00% Projected Return at Maturity with Averaging 29.98% Projected Return at Maturity without Averaging 35.00% Warning: These figures are estimates only. They are not a reliable guide to the future performance of this investment.

12 11 The Protected Multi Asset Certificate 2.12 Currency Risk The assets that constitute the Index may have a currency denomination other than the Euro. Warning: The Certificate may be affected by changes in currency exchange rates Death What happens if I die before the Certificate matures? In the event of the death of a sole investor or surviving joint investor prior to the expiry of the term, the Certificate investment will continue to Maturity in the name of the executor or administrator. Where an investment is made on behalf of a Self Administered Pension or Post Retirement Scheme, the Certificate may be sold prior to Maturity (see Liquidity Section 2.8 above), at its current realisable value which may be lower than the original amount invested and lower than the Capital Protected amount. The proceeds from a sale of the Certificate as a result of death will be paid to the investing self administered scheme. Where an investment is made on behalf of an insured Pension & Post Retirement investor via a life policy, in the event of death of the investor prior to the expiry of the term, the Certificate may be sold prior to Maturity (see Liquidity Section 2.8 above), at its realisable value which may be more or less than the Capital Protected amount. The proceeds from a sale of the Certificate as a result of death will be paid to the investing life company. Warning: The value of your investment can go down as well as up. Warning: If you cash in your investment before 6 December 2019 you may lose some or all of the money you invest. Warning: Deductions for charges and expenses are not made uniformly throughout the life of the product, but are loaded disproportionately onto the early period. If an investor withdraws from the Certificate as a result of death prior to the end of the 6 year term, the practice of front-end loading will impact on the amount of money that the investor receives. In the event of death, the executor, administrator or investing life company plan may not get back the full amount the investor invested Taxation What about tax? The Certificate is available to Pension and Post Retirement, Company and Tax Exempt investors. Our understanding is that the returns will not be subject to taxation for Pension and Post Retirement and tax exempt investors. The taxation of the Certificate by Company investors depends on the tax circumstances of each company. Warning: The above information represents our understanding of the taxation treatment of the Certificate but does not constitute tax advice. Investors should satisfy themselves independently of the taxation treatment of the Certificate in their particular circumstances. Warning: Investors should satisfy themselves independently in relation to revenue reporting requirements and the implications of non-disclosure where required. Warning: Tax law and tax rates are subject to change without notice The Parties Involved The Arranger and Lead Distributor: Merrion Solutions Block C The Sweepstakes Centre Ballsbridge Dublin 4

13 The Protected Multi Asset Certificate General Wealth Warnings Warning: If BNP Paribas defaults or goes bankrupt you may lose some or all of your investment and because you are investing in a Preference Share-linked Certificate issued by BNP Paribas Arbitrage Issuance B.V. and not a bank deposit, you will not be eligible for compensation under any Deposit Guarantee or Deposit Compensation Scheme. Warning: This Certificate is 90% Capital Protected. If you invest in this Certificate you may lose up to 10% of the money you invest. Warning: Investors will benefit from the Potential Return if the predefined return condition is met. Investors will not benefit from any additional positive investment performance generated by the Underlying Investments over and above the Potential Return levels provided in advance. Investors will not benefit from any dividends on the Underlying Investments. Warning: The Certificates are debt obligations of BNP Paribas Arbitrage Issuance B.V. and all payments on the Certificates, including the repayment of principal, are subject to the credit risk of BNP Paribas. Credit ratings can be a useful way to compare the credit risk associated with different product providers and related investments. Credit ratings are assigned by independent companies known as ratings agencies and reviewed regularly. The guarantor, BNP Paribas long term credit rating as at 8 October 2013 is A2 from Moody s (its equivalent rating by Standard and Poor s is A+ and from Fitch is A+). You should note that Moody s rate companies from Aaa (Most Secure/Best) to C (Most Risky/ Worst), while Standard & Poor s and Fitch rate companies from AAA (Most Secure/Best) to D (Most Risky/ Worst). Each of Moody s, Standard & Poor s and Fitch are independent ratings agencies. These credit ratings are reviewed on a regular basis and are subject to change by these agencies. Warning: The Certificate is for Distribution by way of a Private Offer in the Republic of Ireland only. Warning: Investors in the Certificate will not benefit from dividends or coupons from the Underlying Investments and do not directly invest in these shares. Warning: The Underlying Investments can be volatile. Warning: Investors should not read this document alone but should also read the associated prospectus which is obtainable from Merrion Solutions or from your Financial Advisor where the Terms & Conditions and a full list of Warnings are provided. Warning: Merrion Solutions has not provided any financial, legal, regulatory, tax, accounting or investment advice and does not accept any responsibility for the appropriateness or suitability of the Certificate for any investor. Warning: This product may be affected by changes in currency exchange rates.

14 13 The Protected Multi Asset Certificate Potential investors are urged to consult with their legal, regulatory, investment, accounting, tax and other advisors with regard to any proposed or actual investment in the Certificate and to review the Base Prospectus. Please see the Base Prospectus together with the Final Terms for a full detailed description of the Certificate and in particular, please review the Risk Factors associated with this Certificate. Investing in the Certificate entails certain risks including, but not limited to, the following: BNP Paribas is not providing the recipients of this document with any investment advice or recommendation to enter into any potential transaction. Any purchaser of Securities, other than a BNP Paribas counterparty or distributor, will be purchasing the Securities from such counterparty or distributor and will have no contractual relationship with BNP Paribas. In particular BNP Paribas will not be responsible for assessing the appropriateness or suitability of an investment in the Securities in relation to such third parties. This document should be read together with the base prospectus for the Securities (including any supplements to it, the Base Prospectus ). Any proposed issuance illustrated in this document cannot be fully assessed without full knowledge and understanding of the Terms and Conditions contained in the Base Prospectus, which is publicly available on the Netherlands Authority for Financial Markets (Autoriteit Financiële Markten AFM) website ( In particular, potential investors should carefully read the sections headed "Risk Factors" for a full description of the potential risks associated with the Securities, and Offering and Sale, for certain limitations on the purchase and onward sales of the Securities. The terms outlined in this document are summary and are subject to the applicable Terms and Conditions of the Securities as will be set out in the relevant Final Terms. To the extent of any inconsistency between this termsheet and the Final Terms of the Securities, the Final Terms of the Securities shall prevail. In addition to the other risks described in the Base Prospectus and this term sheet, a holder of Securities will be exposed to the unsecured credit risk of the Issuer and, if applicable, the Guarantor of the Securities. Any indicative price quotations, investment cases or market analysis contained in this document or any related marketing materials we may have provided to you have been prepared on assumptions and parameters that reflect our good faith judgement or selection but must be subject to your own independent analysis and due diligence before you make any investment decision. Any reference to an Issue Price in this document is not necessarily an expression of the market value of the Securities. You should conduct your own independent analysis or seek independent advice as to any market value of the Securities. Please note that there can be conflicts of interests between BNP Paribas and potential investors (see below) and we can therefore not assume any responsibility for the financial consequences of your investment decision, which must be independent. We require that you undertake your own independent due diligence and avail yourself of your own advisors in order to assess the suitability of Securities in relation to your own financial objectives. Accordingly, if you decide to purchase Securities, you will be deemed to understand and accept the terms, conditions and risks associated with the Securities. You will also be deemed to act for your own account, to have made your own independent decision to purchase the Securities and to declare that such transaction is appropriate for you based upon your own judgement and the advice from such advisers as you have deemed necessary to consult. Each holder of the Securities shall assume and be responsible for any and all taxes of any jurisdiction or governmental or regulatory authority and should consult their own tax advisers in this respect. You should note and assess for the purposes of any investment decision that members of the BNP Paribas group may face possible conflicts of interest in connection with certain duties under the Securities, such as trading in an underlying for their own account or for the account of others, receiving fees in a number of capacities or taking market views which are not consistent with the objective of the Securities. Unless otherwise stated, no action has been or will be taken that would, or is intended to, permit a public offering of the Securities in any jurisdiction. The Securities are sold to investors on the understanding that they will comply with all relevant securities laws and public offer requirements in the jurisdictions in which they may purchase, place or resell the Securities, including, without limitation, Directive 2003/71/EC (the EU Prospectus Directive ) as amended (which includes the amendments made by Directive 2010/73/EU the "2010 PD Amending Directive") and the relevant implementing measures in any EU member state. As you may not be the only purchaser of the Securities, any public offer exemption relying on offers only being made to a restricted number of investors (classified by type or location as applicable) may not be achievable.

15 The Protected Multi Asset Certificate 14 The Securities may not be offered or sold in the United States or to U.S. persons at any time (as defined in regulation S under the U.S. Securities Act of 1933 or the U.S. internal revenue code). The Securities have not been and will not be registered under the U.S. Securities Act of 1933, as amended, or the securities laws of any state in the United States, and are subject to U.S. tax requirements. In purchasing the Securities, you represent and warrant that you are neither located in the United States nor a U.S. person and that you are not purchasing for the account or benefit of any such person. The Securities may not be offered, sold, transferred or delivered without compliance with all applicable securities laws and regulations The Securities have no capital protection at any time and there can be a partial or total loss of any capital invested. Investment in the Securities is therefore highly speculative and should only be considered by persons who can afford to lose their entire investment. The tax treatment of prospective holders of the Certificates depends on their individual circumstances and may be subject to change in the future (including, in particular, where the Preference Shares are capital-protected above a certain threshold or where such individuals are trading in financial instruments). Prospective investors who may be unsure as to their tax position should seek their own professional advice about their particular tax treatment and completion of their self-assessment tax return in relation to such Certificates. These comments are not intended to be, nor should they be regarded as tax advice. BNP Paribas London Branch (registered office: 10 Harewood Avenue, London NW1 6AA; tel: [44 20] ; fax: [44 20] ) is authorised by the Autorité de Contrôle Prudentiel and the Prudential Regulation Authority and subject to limited regulation by the Financial Conduct Authority and Prudential Regulation Authority. Details about the extent of our authorisation and regulation by the Prudential Regulation Authority, and regulation by the Financial Conduct Authority are available from BNP Paribas upon request. BNP Paribas London Branch is registered in England and Wales under no. FC Complaints Procedure Merrion Solutions aims to provide the highest quality of customer service at all times. If you have any complaint, please contact Merrion Compliance, Block C, The Sweepstakes Centre, Dublin 4. If you are dissatisfied with the outcome of our efforts to resolve your complaint you may refer your complaint to the Financial Services Ombudsman s Bureau, 3rd Floor, Lincoln House, Lincoln Place, Dublin 2. Lo Call: ; Telephone (01) ; Fax (01) ; enquiries@financialombudsman.ie

16 15 The Protected Multi Asset Certificate I/We hereby apply for the Protected Multi Asset Certificate A. Personal Investors Certificate Application Form Please note that by signing this Application Form, you are confirming that you have read and understood the material in this Brochure and have received advice from your Financial Advisor in relation to the suitability of this investment for you. If you are unclear about any of the information presented in this Brochure, the Merrion Stockbrokers Terms of Business or about the suitability of this investment for you, please seek further advice before completing this Application Form. Please complete Section A, B or C and the Declaration of the following document in BLOCK CAPITALs and return along with your cheque/draft made payable to Merrion Stockbrokers Limited (or the investing life company where an investment is made on behalf of a Self Directed or Self Invested Insured Pension Plan). Primary Name: Address: Date of Birth: Occupation: Address: Telephone Number (Home): Mobile Number: Secondary Name: Address: Date of Birth: Occupation: Address: Telephone Number (Home): Mobile Number: If your investment is being made together with another person you acknowledge that the investment will be a joint investment between the persons named herein. B. Pension/Post Retirement Investors Scheme Name: Scheme Provider Name: Policy/Plan/Account No: Pre or Post Retirement: Scheme Type: (e.g. Small Self Administered Scheme, Self Administered PRSA, Self Invested/Self Directed) Revenue Tax Reference No: C. Company or Credit Union Entity Name: Address: Credit Union/Company Registration No: Primary Contact Name: Primary Contact Number Telephone Number: Address: Fax Number: Website Address: I/We wish to invest in the Protected Multi Asset Certificate ( 25,000 minimum) and to open an Execution Only myfund account to do so.

17 The Protected Multi Asset Certificate 16 Investor Type (please tick the appropriate box): Personal Investor Self Administered Pension or Post Retirement Scheme Self Invested/Self Directed Pension or Post Retirement Plan Company Investor Credit Union Revenue No: Plan No: Company No: Credit Union No: Other Please specify: Investor Declaration: I/We declare that (i) the details above are correct, that I/We are over 18 and confirm that I/We understand and accept the Indicative Key Features of the Certificate set out in this Brochure. I/We confirm that the Indicative Key Features of the Certificate are consistent with my/our Investment Objectives and Risk Profile. I/We understand that the indicative terms outlined in this document are subject to change and that the final terms will not be known until 29 November I/We understand that the investment will not be deemed to have been made until the application has been accepted and that, if and when accepted, the investment will commence on 6 December Where applicable, I/We hereby request and authorise you: (a) place my/our Investment Amount in a Client Asset Account in the name of Merrion Stockbrokers Limited. Primary Signature: Date: Secondary Signature: Date: Warning: The value of your investment can go down as well as up. Financial Advisor Declaration: I/We confirm the following: Having conducted a full review of this investor s financial circumstances, that this Certificate is consistent with the investor s Investment Objectives and Risk Profile. That we have advised the investor that this Certificate is not Capital Protected and that we have advised each investor that they can lose some or all of the amount invested. We have complied in full with the Anti Money Laundering (AML) and combating terrorist system that applies to all designated bodies with effect from 15 July Where an investor has been identified as potentially vulnerable (e.g. over 60 years of age) we have followed our internal procedures in this regard. Firm Name: Print Advisor Name: Date: Advisor Signature:

18 17 The Protected Multi Asset Certificate A. Personal Accounts myfund Application Form Merrion Solutions is a division of Merrion Stockbrokers Limited. Merrion Stockbrokers Limited is regulated by the Central Bank of Ireland. Merrion Stockbrokers Limited is a member firm of the Irish Stock Exchange and the London Stock Exchange. Please complete Section A, B or C and Sections D & E of the following document in BLOCK CAPITALS Primary Name: Address: Date of Birth: Occupation: Address: Telephone Number (Home): Mobile Number: Secondary Name: Address: Date of Birth: Occupation: Address: Telephone Number (Home): Mobile Number: Joint Account Mandate (if applicable): Investment Instruction Merrion will be entitled to act on the investment instructions of any of the named parties to this account, unless otherwise directed in writing. Bank Transfers/Cheque Requests (Please tick one box for joint accounts) We confirm that any instruction regarding the transfer of funds (including to a third party) can be accepted by Merrion from any of the named parties to this application. OR We confirm that any instructions regarding the transfer of funds (including to a third party) can only be accepted by Merrion when instructed by all of the named parties to this application. Investor 1: Signed: Date: Investor 2: Signed: Date: Authorised Signatory: (if applicable) Print Name of Authorised Signatory: Date: Relationship to above account: B. Pension/Post Retirement Account Scheme Name: Scheme Provider Name: Policy/Plan/Account No: Pre or Post Retirement: Scheme Type: (e.g. Small Self Administered Scheme, Self Administered PRSA, Self Invested/Self Directed) Revenue Tax Reference No: C. Company/Credit Union Accounts Corporate Mandate It was resolved that: Merrion Stockbrokers Limited (Merrion) is hereby requested to open one or more accounts in the name of (hereunder called the client ) and is hereby authorised to act on instructions relating to the accounts, affairs or transactions of the client provided that they are provided in writing, by telephone, fax or on behalf of the client by any of the following: Director/Authorised Signatory Name (Block Capitals): Specimen Signature: A B Please provide 2 authorised signatories but note that Merrion may accept instructions from either party.