Capital Guaranteed 3 Year FTSE 100 Income Plan 1

Transcription

1 Accumulation Investment Income Structured Capital Guaranteed 3 Year FTSE 100 Income Plan 1 A guaranteed return of your initial deposit at maturity Regular income payments, provided the FTSE 100 does not halve at any time during the Investment Term Option 1: Fixed 5.10% gross annual, 1.24% gross quarterly or 0.40% gross monthly Option 2: Variable Sterling LIBOR plus 2% gross per annum annual, quarterly or monthly income Limited offer ends: 21 August 2009

2 Capital Guaranteed 3 Year FTSE 100 Income Plan 1 This brochure has been prepared by Investec Structured Products which is a trading name of Investec Bank plc, which is part of the Investec Group of Companies ( Investec ). Investec is an international specialist banking group that provides a diverse range of financial products and services to a niche client base in three principal markets, the United Kingdom, South Africa and Australia, as well as certain other countries. The group was established in 1974 and currently has approximately 5,800 employees. Investec focuses on delivering distinctive profitable solutions for its clients in five core areas of activity: Capital Markets, Private Client Activities, Investment Banking, Asset Management and Property Activities. Investec Bank plc, as the provider of this deposit product, should not be confused with Investec Bank (Channel Islands) Limited. Key events and dates Offer periods Direct investments and ISAs: 13 July to 21 August 2009 ISA transfers: 13 July to 7 August 2009 Plan dates Investment Date: 7 September 2009 Maturity Date: 7 September 2012 First income payment dates: Annual 7 September 2010 Quarterly 7 December 2009 Monthly 7 October 2009 Contents Key events and dates 2 What are the aims of the Capital Guaranteed 3 Year FTSE 100 Income Plan 1? 3 In what circumstances will income payments cease? 3 What might you get back at the end of the Investment Term (Option 1)? 4 Option 2: How is it different to Option 1? 5 What might you get back at the end of the Investment Term (Option 2)? 6 What are the risks of the investment? 7 Is this investment suitable for you? 8 What are the ways in which you can invest? 9 How to invest 10 Your questions answered 11 Terms and Conditions 16 How can you invest? Direct investment (not via an ISA) Cash ISA Cash ISA transfer SIPP/SSAS pension arrangements Trustee, corporate, charity, offshore bond and nominee investments. For further details see page 9. Capitalised terms used in the brochure, unless otherwise defined, have the meanings given to them in the Terms and Conditions appearing on page 16 of this brochure. You should think carefully about the benefits and risks of this Plan and whether it suits your personal circumstances and attitude to risk. We recommend that you take professional advice before investing. 2

3 What are the aims of the Capital Guaranteed 3 Year FTSE 100 Income Plan 1? The objective of the Plan is to provide regular income payments while guaranteeing your initial deposit at maturity. Option 1: Fixed payments 3 annual payments of 5.10% gross; or 12 quarterly payments of 1.24% gross; or 36 monthly payments of 0.40% gross Option 2: Variable payments 3 annual payments equivalent to sterling LIBOR plus 2% gross; or 12 quarterly payments equivalent to sterling LIBOR plus 2% gross; or 36 monthly payments equivalent to sterling LIBOR plus 2% gross In what circumstances will income payments cease? Annual, quarterly or monthly income payments will continue throughout the Investment Term provided a Barrier Breach does not occur. A Barrier Breach occurs when the FTSE 100 falls below 50% of the Initial Index Level at any time between the Barrier Start Date and the Barrier End Date. The Initial Index Level is the closing level of the FTSE 100 on 7 September The Barrier Start Date is the opening level of the FTSE 100 on 8 September The Barrier End Date is the closing level of the FTSE 100 on 6 September Both options guarantee full repayment of your initial deposit if held to maturity, otherwise you may get back less than you originally invested. Important information Before investing in this Plan you should consult a financial adviser in your jurisdiction. Investec does not offer advice or make any investment recommendations regarding this Plan. 3

4 Capital Guaranteed 3 Year FTSE 100 Income Plan 1 Option 1 What might you get back at the end of the Investment Term? The tables below show potential gross annual payments for an initial investment of 10,000 into Option 1 (fixed payments) depending on whether or not a Barrier Breach occurs. Examples of potential annual payments Payment year Fixed income payment (Option 1) Gross annual payment no Barrier Breach* Gross annual payment Barrier Breach after 2.5 years* Total 1, , Examples of potential quarterly payments Payment quarter Fixed income payment (Option 1) Gross quarterly payment no Barrier Breach* Gross quarterly payment Barrier Breach after 2.5 years* Total 1, , Examples of potential monthly payments Payment month Fixed income payment (Option 1) Gross monthly payment no Barrier Breach* Gross monthly payment Barrier Breach after 2.5 years* Total 1, , * Payments are subject to deduction of basic rate tax. 4

5 Option 2: How is it different from Option 1? Option 2 offers variable income payments which are determined by future sterling LIBOR rates, rather than the pre-determined fixed payments of Option 1. Sterling LIBOR is the primary benchmark for UK short-term interest rates. It is a reference measure based on the average rate that leading banks would lend to each other for a specified time period. Initial income payments will be determined by sterling LIBOR rates observed on 7 September Subsequent income payments will be determined by sterling LIBOR rates at the beginning of the relevant income period. Example income payments based on sterling LIBOR rates on 15 June 2009: Annual: 12 Month sterling LIBOR + 2% => 1.75% + 2% = 3.75% Quarterly: 3 Month sterling LIBOR + 2% => 1.25% + 2% = 0.81% 4 4 Monthly: 1 Month sterling LIBOR + 2% => 0.67% + 2% = 0.22% Rate Historical LIBOR rates from June 2004 to June % 7% 6% 5% 4% 1 Month LIBOR 3% 3 Month LIBOR 2% 12 Month LIBOR 1% 0% Jun 04 Sept 04 Dec 04 Mar 05 Jun 05 Sept 05 Dec 05 Mar 06 Jun 06 Sept 06 Dec 06 Date Mar 07 Jun 07 Sept 07 Dec 07 Mar 08 Jun 08 Sept 08 Dec 08 Mar 09 Jun 09 Source: Bloomberg Past performance is not a reliable indicator of future results. Rate Market prices of future LIBOR rates from June 2009 to June % 5% 4% 3% 2% 1% 0% Jun 09 Jun 10 Jun 11 Date Jun 12 1 Month LIBOR 3 Month LIBOR 12 Month LIBOR Jun 13 Jun 14 Source: Bloomberg Forecasts are not a reliable indicator of future performance. 5

6 Capital Guaranteed 3 Year FTSE 100 Income Plan 1 Option 2 What might you get back at the end of the Investment Term? The tables below show examples of potential gross annual payments for an initial investment of 10,000 into Option 2 (variable payments) using low, medium and high 12 Month LIBOR rate projections. Future sterling LIBOR rates can decrease as well as increase. Low interest rate environment (assuming rates decrease from current levels) Variable income payments (Option 2) Payment Received Date LIBOR Observation Date Observation Libor rate + 2% Annual Payments: No Barrier Breach Annual Payments: Barrier Breach after 2.5 years 07/09/ /09/ % /09/ /09/ % /09/ /09/ % Total 1, Medium interest rate environment (assuming rates similar to current market implied) Variable income payments (Option 2) Payment Received Date LIBOR Observation Date Observation Libor rate + 2% Annual Payments: No Barrier Breach Annual Payments: Barrier Breach after 2.5 years 07/09/ /09/ % /09/ /09/ % /09/ /09/ % Total 1, High interest rate environment (assuming rates rise significantly) Variable income payments (Option 2) Payment Received Date LIBOR Observation Date Observation Libor rate + 2% Annual Payments: No Barrier Breach Annual Payments: Barrier Breach after 2.5 years 07/09/ /09/ % /09/ /09/ % /09/ /09/ % Total 1, ,

7 What are the risks of the investment? If you redeem your investment before the end of the term, you may get back less than the amount you originally invested. The value of the Plan will be determined by the price at which the investment can actually be sold on the relevant Dealing Date. The levels and bases of taxation and reliefs from taxation can change at any time. The value and availability of any tax reliefs depends on individual circumstances. Any favourable tax treatment of ISAs, SIPPs and SSASs may not be maintained in the future and is subject to changes in legislation. This investment is in a UK onshore asset that is subject to UK tax rules. Non-UK tax resident investors should consider the tax implications of investing in a UK onshore asset. Assets bought onshore will be subject to UK tax legislation and independent tax advice should be sought prior to making any investment into the Plan. Upon transferring existing investments into this Plan there is potential for a loss of income or growth to your investment and penalties or charges may be applied on transfer by the existing plan manager. When Investec Bank plc receives your investment, it will be deposited into a Client Money account at HSBC Bank plc ( HSBC ) until the Investment Date. In the event of Investec Bank plc s insolvency during this period, your money will be protected. However, there is a risk that HSBC may fail to meet its obligations. In the event of HSBC s insolvency, your money will not be protected and you must rely on your right of recourse to the Financial Services Compensation Scheme (the FSCS ), which provides limited protection for deposit holders. Details of the FSCS can be found online at You may lose all or part of your initial deposit. 7

8 Capital Guaranteed 3 Year FTSE 100 Income Plan 1 What are the risks of the investment? continued At the Investment Date your money will be pooled and transferred to an account at Investec Bank plc. There is a risk that Investec Bank plc may fail to meet its obligations between this transfer and the maturity of the deposit. In the event of Investec Bank plc s insolvency your deposit will not be guaranteed and you must rely on your right of recourse to the FSCS, which provides limited protection for deposit holders. Details of the FSCS are set out on page 12 and online at You may lose all or part of your initial deposit. Investec Bank plc s capacity to meet its financial commitments is considered stable by a leading credit rating agency, Fitch Ratings. Past performance of the FTSE 100 should not be seen as an indication of future performance. Is this investment suitable for you? This investment may be suitable for you if: You do not need access to your money over the next 3 years You want regular income payments You want a tax-efficient investment using your ISA or SIPP/SSAS allowance You have a minimum of 1,500 to invest You want a guaranteed return of your initial deposit at maturity This investment may not be suitable for you if: You are not looking for an investment linked to the performance of stock markets You want regular income via dividends You may need immediate access to your money You want a known guaranteed rate of return You want to add to your investment on a regular basis You do not want to invest in a UK onshore asset that is subject to UK tax rules 8

9 What are the ways in which you can invest? There are several ways to invest in the Plan and UK tax resident individuals can choose to invest in any or all of them. Non-UK tax resident investors cannot invest in an ISA. Direct investment You can invest between 1,500 and 1,000,000 directly into the Plan. Returns are subject to Income Tax for UK tax resident individuals. Non-UK tax resident investors should seek their own tax advice. Direct investment is also open to corporate investors, including partnerships, trustees and charities. Application Forms are available upon request from your financial adviser. Using your ISA allowance You can invest using your cash ISA allowance of up to 3,600, subject to the minimum of 1,500, if you have not already used all or part of it in this tax year. In each tax year you may only subscribe to one cash ISA. ISAs are only available to individuals who are resident and ordinarily resident in the UK. Other restrictions may apply. Please speak to your financial or tax adviser for independent advice. Transferring an existing cash ISA investment into the Plan The minimum you can transfer from an existing cash ISA is 1,500, up to a maximum of 1,000,000. You can also transfer as many existing cash ISA investments as you wish, but your existing ISA manager may impose exit or other associated charges. If you are considering transferring existing ISA investments, please seek financial advice before proceeding. Other ways to invest You can also invest through a Self Invested Personal Pension (SIPP), Small Self Administered Scheme (SSAS) pension arrangement, an offshore bond or a nominee investment. References to the tax treatment of the product contained in this brochure are in respect of investments made directly by UK tax resident individuals or through an ISA. You should seek independent advice from a financial or tax adviser in your jurisdiction if you are unsure of the tax treatment of the product for your purposes. Tax rules and the benefits from them may change at any time. 9

10 Capital Guaranteed 3 Year FTSE 100 Income Plan 1 How to invest If you are eligible to invest, simply complete and sign the relevant sections of the Application Form. Send your completed Application Form to your financial adviser, who will send it to: Investec Administration, PO Box 1008, St Albans, Hertfordshire AL1 9LZ. In the case of a direct investment, or ISA investment, you should make out your cheque for the full amount of your subscription made payable to Investec Bank plc. Application Forms with post-dated cheques will not be accepted. Your subscription will only be invested after we receive a fully completed Application Form from your financial adviser. The application deadline is 5pm on 21 August 2009 (7 August 2009 for cash ISA transfers). ISA transfers must be completed and cash received by 4 September Early Bird Interest If you are eligible to participate in the Plan and we receive your cheque and Application Form before the Plan closing date of 21 August 2009, we will pay you interest of 1.5% per annum gross. Early Bird Interest will begin 4 days after we receive your cheque and will continue up to, and including, 6 September The interest you earn will be added to your investment into the Plan on 7 September Any such interest, however, may be subject to taxation, depending on your personal circumstances. Any Early Bird Interest earned within your cash ISA will not be subject to taxation. Important information The information in this brochure does not constitute tax, legal or investment advice. For unbiased general information about this type of deposit, please refer to the FSA s website MONEYmadeclear at If you need advice as to whether this Plan is suitable for you, you should consult a financial adviser in your jurisdiction. Investec does not offer advice or make any investment recommendations regarding this Plan. 10

11 Your questions answered Q: To whom is this investment available? A: UK tax resident individuals: To invest in the Plan you must be aged 18 or over. You must be resident and ordinarily resident in the UK for tax purposes. For ISA applications we will also need your date of birth and National Insurance Number before we process your application. A: Non-UK tax resident investors and corporates: To invest in the Plan you must be aged 18 or over and resident in Guernsey or the Isle of Man. For individual investors, we will need your tax identification number, country or place of birth and a copy of your passport or identification issued by the state. A certificate of incorporation will be required for corporate investors. Non-UK tax resident investors cannot invest in an ISA. Q: What will happen if I invest before the closing date of 21 August 2009? A: If you are eligible to participate in the Plan and we receive your cheque and Application Form before the closing date of 21 August 2009, we will pay you interest of 1.5% per annum gross, from 4 business days after we receive your cheque, until 6 September The interest you earn will be added to your investment into the Plan on 7 September For direct investments, interest will be paid net of basic rate tax at 20%. If you are a higher rate taxpayer a further liability will arise. If you are entitled to receive your interest gross (i.e. without tax deducted at source) please complete a Form R85 and return it with your application. You can find a copy online at Interest earned from a cash ISA will not be subject to tax. Investors not ordinarily resident in the UK should complete the relevant version of Form R105 in order to allow any interest due to be paid gross. The relevant version of Form R105 can be obtained from the HMRC website If you have any doubts as to your tax situation you should consult a financial adviser or tax adviser in your jurisdiction. Q: To which index is performance of my investment linked? A: It is linked to the FTSE 100 which is a capitalisation weighted index of the 100 most highly capitalised companies traded on the London Stock Exchange. The FTSE 100 currently includes companies such as BP, BT Group, Tesco and Marks and Spencer (as at 24 June 2009). The FTSE 100 is a capital-only index, which takes no account of dividend returns you would receive had you held the shares directly. As a result you will not receive any dividend payments or distributions. 11

12 Capital Guaranteed 3 Year FTSE 100 Income Plan 1 Q: What is the nature of my investment? A: Your investment will be an equity-linked structured deposit that is backed by securities and instruments that are designed to match the Investment Objectives of the Plan. From the Investment Date your deposit will be held with Investec Bank plc. If you have any doubts whether this investment is suitable for you, you should contact a financial adviser in your jurisdiction. Q: What is guaranteed? A: Provided you do not redeem your investment before maturity, your initial deposit will be guaranteed. Q: Who provides the guarantee? A: The guarantee will be provided by Investec Bank plc. Q: What compensation arrangements are in place? A: Investec Bank plc is a participant of the FSCS. Should Investec Bank plc be unable to meet its financial obligations, you will be entitled to make a claim for compensation from the FSCS provided you meet the eligibility criteria of the FSCS. The maximum cover available is 50,000 per authorised institution for a sole deposit account, or 100,000 per authorised institution for a joint deposit account. Details of the FSCS and information on eligible claimants are available at If the performance of the investments does not match any illustrated benefits there will not, for that reason alone, be any entitlement to any compensation under the FSCS. Q: What if I am dissatisfied? A: Any complaint about the sale of this Plan should be made to your financial adviser. Any complaint about any other aspect of this Plan should be made to Investec Administration, PO Box 1008, St Albans, Hertfordshire AL1 9LZ. (Telephone no ). If your complaint is not dealt with to your satisfaction you can complain to the Investment Division, Financial Ombudsman Service, South Quay Plaza, 183 Marsh Wall, London E14 9SR. Making a complaint will not prejudice your right to take legal proceedings. Q: What will be the tax treatment of returns for UK tax resident individuals? A: Direct investments: If you invest directly into the Plan your return will be paid net of basic rate tax. If you are a higher rate tax payer a further liability will arise. If you are not a tax payer and are entitled to receive interest payments gross (i.e. without tax deducted at source) you will need to ensure that we hold a valid Form R85 at the date your Plan matures. You can find a copy online at ISA investments: Returns from cash ISAs are not subject to tax. ISA transfers: If you have other cash ISA investments you can transfer them into this Plan if you wish, in which case the tax efficient status of your investment will continue. The deadline for receiving cash ISA transfer applications from existing cash ISA managers is 7 August Before you decide to transfer existing cash ISAs you should consider the effect of any applicable charges of transferring your existing investments. 12

13 You should also bear in mind the potential for loss of income or growth whilst the transfer is pending and whether the risk to your initial deposit in this Plan is suitable for your attitude to investment risk. You can transfer your existing cash ISAs into our cash ISA. You cannot transfer a stocks and shares ISA into a cash ISA. You are able to transfer some or all of your previous years subscriptions without affecting your annual ISA investment allowance. You are able to transfer current year subscriptions. Such transfers must be for the whole current year subscription in such cash ISA up to the day of transfer. Once the subscription is transferred it is treated as if it had been invested into our cash ISA. You will be able to make further subscriptions to our cash ISA up to the full remaining balance of your 3,600 maximum annual subscription to a cash ISA, subject to the overall 7,200 annual ISA allowance limit. The levels and bases of tax and tax reliefs are subject to change and the value of tax reliefs will depend on individual circumstances. Additionally, the favourable tax treatment of ISAs may not be maintained in the future. There is also a possibility of further taxes, in addition to those paid by the Plan Manager. If you are in any doubt as to the tax treatment of this Plan, please consult a financial adviser or tax adviser in your jurisdiction. Q: What will be the tax treatment for Non-UK tax resident investors? A: This investment is in a UK onshore asset that is subject to UK tax rules. Non-UK tax resident investors should consider the tax implications of investing in a UK onshore asset. Assets bought onshore will be subject to UK tax legislation and independent tax advice should be sought prior to making any investment into the Plan. Q: Who is the Plan Manager? A: The Plan is issued by Investec Bank plc (Registered No England), which is authorised and regulated by the Financial Services Authority. Registered under Financial Services Authority No Investec Bank plc does not offer investment advice or make any recommendations regarding this investment. If you have any doubt whether this investment is suitable for you, you should obtain professional advice. You should only invest if you understand and are comfortable with the risks involved. Q: What happens if I change my mind? A: When you first invest we will send you a cancellation notice which provides you with a 14 day period in which to change your mind. If you decide to cancel, the Plan Manager will then return your initial deposit without interest. If the Plan Manager receives your cancellation notice after the close of the offer period, it will then return to you without interest any cash subscriptions in the Plan. You might not get back the amount you originally invested in the Plan. 13

14 Capital Guaranteed 3 Year FTSE 100 Income Plan 1 If you are transferring an existing cash ISA to us, the cancellation notice will be sent to you after we receive the proceeds from your previous ISA manager. If you should decide to cancel then we may repay the cash proceeds directly to you and you may lose any favourable tax treatment associated with the ISA. Q: What happens if I cash in my investment early? A: The Plan is designed to be held for the full term of three years. If, however, your circumstances change and you need to cash in your investment, you may, but we cannot guarantee what the cash value of your investment will be at that point. If you cash in your investment early, we will pay you the value of your investment in accordance with the prevailing market rate at that time, less any associated selling costs and transfer taxes, but please note this amount may be less than the amount you originally invested. We would need to receive an instruction in writing. Information on procedures for cashing in your investment early is provided in the Terms and Conditions. In addition, at the date at which you cash in your investment early, there will be a difference between the buying price and the selling price also known as the spread. This will be taken into account in determining the sum returned to you. Q: What happens at maturity? A: On 7 September 2012 you will have the option to either cash in your Plan, or possibly transfer it to another plan offered by another plan manager, or to reinvest the proceeds into other products which may be available at that time from Investec Bank plc. We will contact you shortly before the Plan matures to ask your preference. Until we receive your instructions we will hold the relevant maturity proceeds on your behalf but will not pay any interest on them. Q: When will I receive financial settlement? A: Within 7 Business Days of the Plan maturing subject to receipt of your written instructions on what alternate action to take with the maturity proceeds. Q: Are there any charges or expenses I have to pay in connection with the management and distribution of the Plan? A: We have allowed for all the costs and charges payable to third parties in relation to the management and distribution of the Plan when setting the return for the product, and these costs and charges are therefore already taken into account in the growth rates and index participation rates that are available. When calculating the returns from your investment, no other initial or ongoing charges will be deducted from these rates. 14

15 Q: How much will any advice cost? A: If you require personal financial advice you should consult a financial adviser in your jurisdiction who will provide you with details of their costs. If you do not require any advice, commission may still be paid by us to a financial adviser. The amount paid will depend on the size of the investment. The payment of this commission by Investec Bank plc will not affect the cost of the investment to you or the investment returns detailed in this literature. For your reference, any such amount will be included in your welcome letter. Q: What happens if I die? A: If you are aged 75 or younger at the Investment Date, we will pay to your estate a sum equal to the maximum of the market value of the Investments at the time of your death or your initial deposit. The Plan, coupled with this feature, provides capital protection at maturity or upon your death. Your estate can either elect this option or permit the Plan to remain open until maturity. In either event, all the Investments will be administered in accordance with the instructions from your personal representatives. If you are aged over 75 at the Investment Date, the Investments will be administered in accordance with the instructions of your personal representatives, and/or as part of probate/administration. ISA investments automatically lose their ISA status immediately upon the death of the holder. The investment can then be sold or transferred to beneficiaries. For joint applications: For Plans invested in the name of husband and wife, the Plan will transfer automatically to the name of the surviving partner. Otherwise, the Investments will be administered in accordance with the instructions of your personal representatives, and/or as part of probate/administration. Q: How will you keep me informed? A: We will send you a written acknowledgement by the end of the next working day following receipt of your completed Application Form. After the start of the investment, we will send you an opening statement showing your balance. We will send you a further annual statement during September 2010, based on the value at June 2010, and further statements annually. Q: Are partial withdrawals allowed? A: Partial withdrawals or partial ISA transfers are permitted subject to a minimum of 1,500 remaining invested in the Plan. Any returns at maturity will be subject to the remaining amount invested in the Plan. Q: What should I do if I have more questions? A: It is essential that you only invest in the Plan if you fully understand the benefits and associated risks. Where you have unanswered questions you should seek advice from a financial adviser or tax adviser in your jurisdiction. 15

16 Capital Guaranteed 3 Year FTSE 100 Income Plan 1 Terms and Conditions Definitions (i) Account shall mean your ISA and/or Direct Account. (ii) Application Form means the Capital Guaranteed 3 Year FTSE 100 Income Plan 1 application for an ISA and/or a Direct Account. (iii) Banking Day means a day on which commercial banks in London are open for general business (including dealings in foreign exchange and foreign currency deposits). (iv) Barrier Breach means the FTSE 100 falls by more than 50% between the Barrier Start Date and the Barrier End Date. (v) Barrier End Date means the closing level of the FTSE 100 on 6 September (vi) Barrier Start Date means the opening level of the FTSE 100 on 8 September (vii) Business Day means any day on which the Exchange and each Related Exchange is scheduled to be open for trading for its regular trading sessions, subject to such Business Day not being a Disrupted Day. (viii) Calculation Agent means Investec Bank plc acting as calculation agent. (ix) Client Money means the provisions of the FSA s Client Assets Sourcebook relating to client money. (x) Dealing Date means any Business Day throughout the Investment Term. (xi) Direct Account means any part of the Capital Guaranteed 3 Year FTSE 100 Income Plan 1, which is not an ISA. (xii) Disrupted Day means any Business Day on which a relevant Exchange or any Related Exchange fails to open for trading during its regular trading session or on which a Market Disruption Event has occurred on any day that, but for the occurrence of a Disrupted Day, would have been a Strike Date, an averaging date, a Valuation Date, a potential exercise date, a knock-in determination day, a knock-out determination day or an expiration or termination date. (xiii) Early Bird Interest means interest payable for application monies received in advance of the Plan closing date, 21 August (xiv) Exchange means The London Stock Exchange (LSE). (xv) FSA means the Financial Services Authority. (xvi) FSA Handbook means the FSA Handbook of Rules and Guidance as amended from time to time. (xvii) FSA Rules means the Rules included within the FSA Handbook promulgated by the FSA. (xviii) FSCS means the Financial Services Compensation Scheme. (xix) FTSE 100 means the FTSE 100 Index. This product is not in any way sponsored, endorsed, sold or promoted by FTSE International Limited. (xx) HMRC means Her Majesty s Revenue & Customs. (xxi) HSBC means HSBC Bank plc. (xxii) Index Sponsor means FTSE International Limited, a UK incorporated company which calculates the FTSE 100 and which is owned jointly by the London Stock Exchange and the Financial Times. (xxiii) Initial Index Level means the closing level of the FTSE 100 on the Strike Date. (xxiv) Investments means the initial deposit investments the Plan Manager holds on your behalf under the Plan. (xxv) Investment Date means 7 September (xxvi) Investment Objective means the objective of securing the return described in the brochure to which these Terms and Conditions are attached. (xxvii) Investment Term means the period 7 September 2009 to 7 September 2012 inclusive. (xxviii) ISA is a scheme of investment managed in accordance with the ISA Regulations by the ISA Manager under terms agreed between the ISA Manager and the investor (ISA terms and conditions). An ISA is restricted to UK tax resident individuals only. 16

17 (xxix) ISA Manager means Investec Bank plc. (xxx) ISA Regulations means The Individual Savings Account Regulations 1998, as amended or replaced from time to time. (xxxi) LIBOR means the primary benchmark for UK short-term interest rates. It is a reference measure; giving an indication of the average rate a leading bank would lend to another for a specified time period. (xxxii) Market Disruption Event means in respect of a share or an Index, the occurrence or existence on a Business Day of (i) a trading disruption at any time, or (ii) an exchange disruption, at any time during the one hour period that ends at the relevant valuation time, or (iii) an early closure of the Exchange or Relevant Exchange(s), which the Calculation Agent acting in good faith and in a commercially reasonable manner determines is material. If any Valuation Date is a Disrupted Day, then in the case of an Index transaction, share transaction, Index basket transaction or share basket transaction, the Valuation Date shall be the first succeeding Business Day that is not a Disrupted Day, unless each of the eight scheduled Business Days immediately following the original Valuation Date is a Disrupted Day, in which case, the Calculation Agent acting in good faith and in a commercially reasonable manner and in accordance with prevailing market practices shall determine the level of the relevant Index or indexes, or value of the relevant shares. (xxxiii) Maturity Date means the date on which the Investments mature. (xxxiv) Plan means the Capital Guaranteed 3 Year FTSE 100 Income Plan 1, comprising the Investments subscribed for through your ISA and/or your Direct Account, as specified in your Application Form(s). (xxxv) Plan Manager means Investec Bank plc which is authorised and regulated by the FSA and bound by its rules. (xxxvi) Related Exchange means each exchange or quotation system where trading has a material effect (as determined by the Calculation Agent) on the overall market for futures or options contracts relating to the FTSE 100, including any transferee or successor to any such exchange or quotation system or any substitute exchange or quotation system to which trading in futures or options contracts relating to the FTSE 100 has temporarily relocated (provided that the Calculation Agent has determined that there is comparable liquidity relative to the futures or options contracts relating to the FTSE 100 on such temporary substitute exchange or quotation system as on the original Related Exchange). (xxxvii) Strike Date means 7 September 2009, or if such date is not a Business Day, the next following Business Day. (xxxviii) Valuation Date means any day during the Investment Term where the investment is valued according to prevailing market conditions on that day. The Plan Manager provides the Capital Guaranteed 3 Year FTSE 100 Income Plan 1 to you on the following Terms and Conditions (of which the Application Form is a part): 1. For the purposes of offshore investment, investors in Guernsey and the Isle of Man can subscribe to this Plan. 2. On the receipt of a duly completed Application Form and cheque (or banker s draft, telegraphic transfer or any other means acceptable to the Plan Manager) the Plan Manager may accept your application subject to these Terms and Conditions. The Plan Manager reserves the right to reject an application for any reason. The Plan Manager will give you the right to cancel your Plan within 14 days of the Plan Manager s acceptance of your Application Form in accordance with the requirements of the FSA Handbook. You will be informed of your right to cancel in the information that the Plan Manager sends you on receipt of your application. Alternatively you can write to Investec Administration, PO Box 1008, St Albans, Hertfordshire AL1 9LZ. If you do so, please provide your name and address and the Plan number with clear instructions to cancel your investment. If the Plan Manager receives your cancellation notice after the close of the offer period, and before the Strike Date, it will return to you without interest any cash subscriptions in the Plan. If the Plan Manager receives your cancellation notice after the Strike Date, it will return to you without any interest cash subscriptions that may be subject to a market value adjustment. Where you do not exercise your cancellation rights, the Plan will continue in line with the Terms and Conditions. 17

18 Capital Guaranteed 3 Year FTSE 100 Income Plan 1 3. You must subscribe to your cash ISA with your own cash or by transfer of cash from an existing cash ISA. Transfers of cash from existing cash ISAs will normally be arranged with the existing ISA managers. Once the cash from the existing cash ISA has been transferred, your ISA will be subject to these Terms and Conditions. In respect of a cash ISA transfer, a cancellation notice will be sent to you after the funds are received from your previous ISA manager. If, following an ISA transfer you cancel your ISA, you may lose the favourable tax treatment applicable. The Plan Manager reserves the right to withhold any amounts under 1 which cannot be applied to the Plan. The remaining pence will not be returned to you. 4. All transactions relating to this Plan are covered by the Proceeds of Crime Act 2002 and the Money Laundering Regulations 2007 (as amended from time to time) and the guidance notes provided by the Joint Money Laundering Steering Group. The Plan Manager is responsible for compliance with these regulations. You may be asked for proof of identity and evidence of address when investing or on maturity. The Plan Manager may also make enquiries of third parties in verifying identity. This would include electronic verification through a third party provider. 5. For business received from overseas countries/territories whose Money Laundering Legislation is not deemed to be comparable with the legislation imposed on the Plan Manager, the Plan Manager reserves the right to request enhanced evidence of identity/address. 6. ISAs can be either cash or stocks and shares. If you are subscribing for a cash ISA you must not have subscribed and may not subscribe to another cash ISA in the same tax year. Please note that the Plan Manager only offers the cash component in this investment. 7. You will immediately inform the Plan Manager in writing if you cease to be a qualifying individual for the purposes of the ISA Regulations. The Plan Manager will notify you if, by reason of any failure to satisfy the provisions of the ISA Regulations, an ISA has, or will, become void. 8. The Plan Manager shall not accept any further amounts into an ISA if the ISA Regulations no longer give you the right to invest in that ISA. 9. For Direct Account investments, when Investec Bank plc receives your investment, it will be deposited into a Client Money account at HSBC. In the event of Investec Bank plc s insolvency during this period, your money will be protected. However, there is a risk that HSBC may fail to meet its obligations. In the event of HSBC s insolvency your money will not be protected. At the Investment Date, your money will be pooled and transferred to a deposit account at Investec Bank plc. In the event of Investec Bank plc s insolvency during this period, your money will not be protected. In either scenario you must rely on your right of recourse to the FSCS, but you may lose all or part of your initial deposit. More details of the cover provided by the FSCS and information on eligible claimants are available at Except as stated below interest will not be paid on monies held within client accounts. For the avoidance of any doubt no interest is payable on Client Money held after the Maturity Date or following an early withdrawal from the Plan. Where Early Bird Interest is paid, it will be after deduction of any tax payable and it will be credited to your Account. Early Bird Interest will begin to accrue 4 Banking Days after the date of receipt of your cheque, provided it is received before the Plan closing date of 21 August 2009 and will be payable at a rate of 1.5% per annum gross until 6 September The amount of interest invested or reinvested will be rounded down to the nearest whole number of pounds and the balance retained by the Plan Manager. It will be credited once on a simple interest basis. The amount of interest invested or reinvested will be subject to a deduction of basic rate tax of 20% for direct investments. For direct investments a further tax liability may exist for higher rate tax payers. If you are a UK tax resident individual and are entitled to receive your interest gross (i.e. without tax being deducted) please complete an R85 registration form and return it with this application. You can find a copy online at If you are not ordinarily resident in the UK and would like to receive your interest gross, please complete the relevant version of Form R105. You can find the relevant version of Form R105 at the HMRC website 18

19 10. For ISA investments, when Investec Bank plc receives your investment, it will be deposited into an ISA Client Money account at HSBC. In the event of Investec Bank plc s insolvency during this period, your money will be protected. However, there is a risk that HSBC may fail to meet its obligations. In the event of HSBC s insolvency your money will not be protected. At the Investment Date your money will be pooled and transferred to Investec Bank plc. In the event of Investec Bank plc s insolvency during this period, your money will not be protected. In either scenario you must rely on your right of recourse to the FSCS, but you may lose all or part of your initial deposit. Except as stated below interest will not be paid on monies held within client accounts. For the avoidance of any doubt no interest is payable on Client Money held after the Maturity Date or following an early withdrawal from the Plan. Early Bird Interest will be paid gross. Early Bird Interest will begin to accrue 4 Banking Days after the date of receipt of your cheque, provided it is received before the Plan closing date of 21 August 2009, and will be payable at a rate of 1.5% per annum gross until 6 September The amount of interest invested or reinvested will be rounded down to the nearest whole number of pounds and the balance retained by the Plan Manager. It will be credited once on a simple interest basis. 11. Under the terms of the Plan, the Maturity Date will occur after 3 years. This is explained in the brochure of which these Terms and Conditions are part, under the section headed What are the aims of the Capital Guaranteed 3 Year FTSE 100 Income Plan 1? The Plan Manager will realise the proceeds of your initial deposit on the Maturity Date. The Investments are structured so that their value on that date will correspond to the amount you are due to receive from your Plan in accordance with the Investment Objective. The Plan Manager will contact you prior to the Maturity Date to inform you of any action required by you. The Plan Manager may, at its discretion, repay maturity proceeds to you by transferring the funds into the bank or building society account from where the initial deposit originated. Should this occur you will be informed in writing by the Plan Manager. You should note that once the Plan has matured, the proceeds from the Plan do not earn interest if held by the Plan Manager. 12. For UK tax residents, the proceeds of an ISA will not be subject to either UK Income Tax or UK Capital Gains Tax and any gains or losses on your investment will be disregarded for the purposes of UK tax. Where Investments are held through a Direct Account your return will be paid net of basic rate tax. If you are a higher rate tax payer a further liability will arise. If you are a UK tax resident individual and are entitled to receive interest payments gross (i.e. without tax deducted at source) you will need to ensure that we hold a valid Form R85 at the date your Plan matures. You can find a copy online at If you are not ordinarily resident in the UK and would like to receive your interest gross, please complete the relevant version of Form R105. You can find the relevant version of Form R105 at the HMRC website These statements are based on current legislation, regulations and practice, all of which may change. 13. Occasions can arise where the Plan Manager, or one of its other clients, will have some form of interest in business which is being transacted for the Plan. If this happens, or the Plan Manager becomes aware that its interests or those of one of its other clients conflict with your interests, you will be informed and asked for your written consent before any transaction is carried out. A copy of Investec Bank plc s conflicts policy can be obtained upon request from Investec Administration, PO Box 1008, St Albans, Hertfordshire AL1 9LZ ( ). A summary can be found at The Plan Manager will maintain insurance cover to indemnify you against, amongst other risks, misappropriation of funds or securities by any employee of the Plan Manager. 15. At all times you or your nominated agent may request sight or a copy of entries in the Plan Manager s records relating to your Investments in accordance with the rules of the FSA Handbook. Such records will be maintained for a minimum of seven years after the Investment Date. 16. The Plan Manager will supply you annually with a report on the value of the Investments held through your ISA and/or your Direct Account. 19

20 Capital Guaranteed 3 Year FTSE 100 Income Plan The Plan Manager may employ agents in connection with the services it is to provide and may delegate any or all of its powers or duties to any delegate(s) of its choice in accordance with the ISA Regulations. The Plan Manager will satisfy itself that any person to whom it delegates any of its functions and responsibilities under these Terms and Conditions is competent to carry out those functions and responsibilities. The Plan Manager shall not be liable for the fraud, negligence or willful default of any such agent or delegate. This shall not exclude or restrict any liability towards you to which, by virtue of the ISA Regulations, the Financial Services and Markets Act 2000, or the FSA Handbook, the Plan Manager may be subject. 18. The Plan or any Account comprised in it may be terminated immediately by the Plan Manager on giving written notice to you if in its opinion it is impossible to administer the Plan or that Account in accordance with the ISA Regulations or you are in breach of the ISA Regulations. 19. The ISA will terminate automatically with immediate effect if it becomes void under the ISA Regulations. The Plan Manager will notify you in writing if the ISA becomes void. 20. The Plan Manager may terminate the Plan on one month s notice if you fail to pay any money due under these Terms and Conditions or are in breach of any of these Terms and Conditions. 21. The Plan Manager may terminate the Plan at any time for reasons including, but not limited to illegality, force majeure or other events beyond the control of the Plan Manager, provided the Plan Manager gives you a reasonable period of written notice as the situation dictates. 22. You may terminate the Plan or any Account at any time by giving written notice to that effect to the Plan Manager. The notice must specify whether you wish the redemption proceeds of the Investments to be paid directly to you or, for an ISA, to be transferred to another ISA manager. Such notice must be received no later than close of business two days prior to the next Dealing Date. Early encashment may result in a loss of some of your investment. 23. Termination of the Plan or any Account will not affect the settlement of any outstanding fees and will not affect any legal rights or obligations which may have already arisen or any provision of these Terms and Conditions which is expressly or by necessary implication intended to survive termination. On termination, the Plan Manager will promptly account to you for the proceeds of sale of the Investments held through your Plans save that it will be entitled to retain any funds required to pay any outstanding tax or other amounts payable from the Plan. 24. On your death, your ISA will lose its ISA status immediately and your Plan will be dealt with in accordance with the instructions of your personal representatives. Your personal representatives can sell your Investments or transfer them to your beneficiaries. 25. The returns which you are due to receive, in accordance with the Investment Objective, are net of all anticipated charges and expenses due to third parties (excluding any tax that you may be liable to pay, or charges we may reasonably require you to pay in respect of significant taxation changes). These charges are estimated to be not more than 5%, excluding any such tax or charges for taxation changes, but including commission paid to any financial adviser who arranged the investment. No other charges are anticipated. If you terminate your Plan before maturity, no further charges will be deducted nor will those taken at the Investment Date be rebated, however you may not get back the original amount invested. If you cancel your Plan within 14 days, you will receive a full refund of your initial deposit. Please note that it is possible that you will be liable to pay additional taxes or costs that are not paid, or imposed, by us. 26. The Plan Manager may vary these Terms and Conditions by giving you reasonable written notice: (a) to comply with any changes to the ISA Regulations, or other relevant legislation, HMRC practice and the FSA Rules (or the way they are applied); (b) to make them fairer to you or to correct a mistake (provided this correction would not adversely affect your rights); or 20