GOLD CONVERTIBLE / REVERSE GOLD CONVERTIBLE STRUCTURED PRODUCT

Transcription

1 GOLD CONVERTIBLE / REVERSE GOLD CONVERTIBLE STRUCTURED PRODUCT RESPONSIBILITY STATEMENT This Product Highlights Sheet has been reviewed and approved by the directors or authorized committee or persons approved by the Board of CIMB Bank Berhad (the Issuer or CIMB or Bank ) and they collectively and individually accept full responsibility for the accuracy of the information. Having made all reasonable inquiries, they confirm to the best of their knowledge and belief, there are no false or misleading statements, or omission of other facts which would make any statement in the Product Highlight Sheet false or misleading. STATEMENT OF DISCLAIMER The Securities Commission Malaysia has authorized the issuance of the Gold Convertible / Reverse Gold Convertible Structured Product and a copy of this Product Highlights Sheet has been lodged with the Securities Commission Malaysia. The authorization of the Gold Convertible / Reverse Gold Convertible Structured Product and lodgement of this Product Highlights Sheet should not be taken to indicate that the Securities Commission Malaysia recommends the Gold Convertible / Reverse Gold Convertible Structured Product or assumes responsibility for the correctness of any statement made or opinion or report expressed in this Product Highlights Sheet. The Securities Commission Malaysia is not liable for any non-disclosure on the part of CIMB responsible for the Gold Convertible / Reverse Gold Convertible Structured Product and takes no responsibility for the contents of this Product Highlights Sheet. The Securities Commission Malaysia makes no representation on the accuracy or completeness of this Product Highlights Sheet, and expressly disclaims any liability whatsoever arising from, or in reliance upon, the whole or any part of its contents. This Product Highlights Sheet only highlights the key features and risks of this unlisted capital market product Gold Convertible / Reverse Gold Convertible Structured Product. Investors are advised to request, read and understand the disclosure documents such as the Product Agreement and the Risk Disclosure Statement before deciding to invest. 1/12

2 PRODUCT HIGHLIGHTS SHEET (Read this Product Highlights Sheet before you decide to take up the Gold Convertible / Reverse Gold Convertible Structured Product. Be sure to also read the general terms and conditions contained in the Product Agreement and the Risk Disclosure Statement.) GOLD CONVERTIBLE / REVERSE GOLD CONVERTIBLE STRUCTURED PRODUCT (THE INVESTMENT ) CIMB Bank Berhad (the Issuer or CIMB or Bank ) BRIEF INFORMATION ON THE PRODUCT 1. What is this product about? CIMB Bank Berhad is the issuer of Gold Convertible / Reverse Gold Convertible Structured Product. This product aims to provide fixed returns at Maturity Date. The Investment is available in tenors from one (1) week to one (1) year from the Start Date. The Principal Amount returned at Maturity Date may be in the form of cash (MYR or USD) or paper gold subject to the occurrence of a Conversion Event where the paper gold will be delivered into Investors CIMB Gold Investment Account ( GIA ) at the Conversion Rate. The Investment is NOT principal guaranteed. This Investment is NOT insured by Perbadanan Insurans Deposit Malaysia. PRODUCT SUITABILITY 2. Who is this product suitable for? This Investment is suitable for Investors who : Understand that the Investment is not principal guaranteed should a Conversion Event occur, where by the Investor s Principal Amount may be returned in the form of the Convertible Reference on Maturity Date; Understand that the Investment is also not principal guaranteed should an Early Redemption or an Early Termination occur; Are willing to receive the Convertible Reference at the Conversion Rate, if a Conversion Event occurs on Maturity Date; Seek to receive a fixed coupon payable at maturity based on the non-occurrence of an Early Termination Event; and Are willing to hold the Investment until maturity. Important: If a Conversion Event occurs, Investors may lose part or all of the value of their Principal Amount if they decide to sell/buy the Convertible Reference at the prevailing market price which may be at a lower/higher price than that of the Conversion Rate. Therefore this Investment is not a principal guaranteed investment. 2/12

3 KEY PRODUCT FEATURES 3. What am I investing in? The following highlights the key features of the Investment: Tenor: Available in tenors from one (1) week to one (1) month from the Start Date as specified in the Trade Confirmation. Minimum Amount: (a) MYR 40,000.00; or (b) the equivalent in USD; or (c) the equivalent of gold (in grams) as available in the Investor s CIMB Bank GIA and rounded to the nearest 1 gram at a rate stipulated by the Bank. Investment Denomination: The original investment denomination as set out in the Trade Confirmation. This may be in either (i) MYR or USD; or (ii) GLD. Convertible Reference: Either (i) MYR or USD; or (ii) GLD as selected by the Investor for conversion from the Investment Denomination. For avoidance of doubt, if the Investment Denomination is in MYR, the Convertible Reference shall not be USD or vice versa. Conversion Rate: A rate to be agreed upon by the parties to convert the Investment Denomination into the Convertible Reference as set out in the Trade Confirmation. Reference Rate: The Investment Denomination quoted against the Convertible Reference on the Fixing Date based on the market rate as determined by the Bank. This shall be reflected in the form of either GLD/MYR or GLD/USD. If the Investment Denomination is MYR or USD and the Convertible Reference is GLD; (a) A Conversion Event will occur if on the Fixing Date, the Reference Rate Conversion Rate whereby the Principal Amount of the Investment Denomination (MYR or USD) will be converted to the Convertible Reference (GLD) at the Conversion Rate. (b) On Maturity Date, the Conversion Amount will be paid in the Convertible Reference (GLD) however the Coupon Amount will be paid to the Investor in the Investment Denomination (MYR or USD). A Conversion Event will not occur if on the Fixing Date, the Reference Rate > Conversion Rate whereby the Principal Amount will NOT be converted. On Maturity Date, the Principal Amount will be returned in full and the Coupon Amount will be paid to the Investor in the Investment Denomination (MYR or USD). 3/12

4 If the Investment Denomination is GLD and the Convertible Reference is MYR or USD; (a) A Conversion Event will occur if on the Fixing Date, the Reference Rate Conversion Rate whereby the Principal Amount (GLD) will be converted to the Convertible Reference (MYR or USD) at the Conversion Rate. On Maturity Date, the Conversion Amount will be paid in the Convertible Reference however the Coupon Amount will be paid to the Investor in the Convertible Reference (MYR or USD). (b) A Conversion Event will not occur if on the Fixing Date, the Reference Rate < Conversion Rate whereby the Principal Amount will NOT be converted. On Maturity Date the Principal Amount will be returned in full however the Coupon Amount will be paid to the Investor in the Convertible Reference (MYR or USD). If the Investor s Principal Amount is returned in GLD, then the Issuer shall deliver GLD as per the terms and conditions of the CIMB GIA, where it will be converted to grams per unit. For the avoidance of doubt, Investors may lose part or all of the value of their Principal Amount if they decide to sell/buy the Convertible Reference at the prevailing market price which may be at a lower/higher price than that of the Conversion Rate. Therefore this Investment is not a principal guaranteed investment. Coupon Amount: a) If the Investment Denomination is in MYR or USD and payable upon Maturity Date in the form of the Investment Denomination: Principal Amount x Coupon Rate x Day Count of Tenor / Year Basis b) If the Investment Denomination is in GLD and payable upon Maturity Date in the form of the Convertible Reference (MYR or USD): Principal Amount x Spot Rate Trade Date x Coupon Rate x Day Count of Tenor / 365 Where: the Spot Rate Trade Date is the GLD/MYR or GLD/USD rate at the point of entering into the Investment. Year Basis is defined in the table below: Investment Denomination Year Basis MYR 365 USD 360 Coupon Rate: A return in percentage per annum as specified in the Trade Confirmation. 4/12

5 Conversion Amount: a) If a Conversion Event occurs and the Investment Denomination is in MYR or USD: Principal Amount / Conversion Rate Payable at Maturity Date in the form of the Convertible Reference (GLD) where it is rounded down to the nearest gram and the odd amount of less than a gram if any are to be settled at the Reference Rate of the Investment Denomination (MYR or USD). b) If a Conversion Event occurs and the Investment Denomination is in GLD: Principal Amount x Conversion Rate Payable at Maturity Date in the form of the Convertible Reference (MYR or USD). Coupon Payment Date: At Maturity Date. Fixing Date: Two (2) Business Days before Maturity Date, subject to adjustment for non-trading Days, at 2 p.m. Kuala Lumpur time, as specified in the Trade Confirmation. 4. Who am I investing with? The Issuer of this Investment is CIMB Bank. 5. What are the possible outcomes of my investment? Part A: Illustration/ Worked Example for Gold Convertible Structured Product Assumptions: Investment Denomination : MYR Convertible Reference : GLD Principal Amount : MYR 40, Reference Rate : GLD/MYR Rate at Fixing Date Conversion Rate : GLD/MYR Spot (MYR per gram) Coupon Rate : 15.00% p.a. Tenor : 1 week (7 days) Year Basis : 365 5/12

6 Scenario 1: Strengthening Gold Price At Fixing Date; the Reference Rate (GLD/MYR) is MYR per gram Reference Rate > Conversion Rate = No Conversion Event (Return Principal in Investment Denomination) Coupon Amount = Principal Amount x Coupon Rate x Day Count of Tenor / Year Basis = MYR 40, x 15.00% x 7 / 365 = MYR Principal Amount of MYR 40, will be returned to investor. In Scenario 1, at maturity; investor receives the coupon of 15.00% p.a. and the Principal Amount is also returned in the original Investment Denomination. Scenario 2: Weakening Gold Price At Fixing Date; the Reference Rate (GLD/MYR) is MYR per gram Reference Rate Conversion Rate = Conversion Event Occurs (Return Principal in Convertible Reference) Coupon Amount = Principal Amount x Coupon Rate x Day Count of Tenor / Year Basis = MYR 40, x 15.00% x 7 / 365 = MYR Conversion Amount = Principal Amount / Conversion Rate = MYR 40,000 / MYR = grams = Rounded down to 285 grams (which is delivered to Investor s CIMB Bank Gold Investment Account) Odd Amount to be settled in cash = 0.71 grams x Reference Rate = 0.71 grams x MYR = MYR In Scenario 2, Conversion Event occurs on Fixing Date where the Reference Rate Conversion Rate. At maturity, the Investor receives the coupon of 15.00% p.a. and the Principal Amount is returned in form of the Convertible Reference. Investors should note the Principal Amount is not guaranteed in Scenario 2. Note: Above calculations are for illustration purposes only and are subject to rounding or truncation adjustments. 6/12

7 Part B: Illustration/ Worked Example for Reverse Gold Convertible Structured Product Assumptions: Investment Denomination : GLD Convertible Reference : MYR Principal Amount : 300 grams of gold from CIMB Bank GIA Reference Rate : GLD/MYR Rate at Fixing Date Conversion Rate : GLD/MYR Spot (MYR per gram) Spot Rate Trade Date : MYR Coupon Rate : 15.00% p.a. Tenor : 1 week (7 days) Scenario 1: Weakening Gold Price At Fixing Date; the Reference Rate (GLD/MYR) is MYR per gram Reference Rate < Conversion Rate = No Conversion Event (Return Principal in Investment Denomination) Coupon Amount = Principal Amount x Spot Rate Trade Date x Coupon Rate x Day Count of Tenor / 365 = 300 g x MYR x 15.00% x 7 / 365 = MYR Principal Amount of 300 grams of GLD to be delivered back to Investor s CIMB Bank Gold Investment Account In Scenario 1, at maturity; investor receives the coupon of 15.00% p.a. and the Principal Amount is also returned in the original Investment Denomination. Scenario 2: Strengthening Gold Price At Fixing Date; the Reference Rate (GLD/MYR) is MYR per gram Reference Rate Conversion Rate = Conversion Event Occurs (Return Principal in Convertible Reference) Coupon Amount = Principal Amount x Spot Rate Trade Date x Coupon Rate x Day Count of Tenor / 365 = 300 g x MYR x 15.00% x 7 / 365 = MYR /12

8 Conversion Amount = Principal Amount x Conversion Rate = 300 g x MYR = MYR 42, In Scenario 2, Conversion Event occurs on Fixing Date where the Reference Rate Conversion Rate. At maturity, the Investor receives the coupon of 15.00% p.a. and the Principal Amount is returned in form of the Convertible Reference. Investors should note the Principal Amount is not guaranteed in Scenario 2. Note: Above calculations are for illustration purposes only and are subject to rounding or truncation adjustments. 6. What are the key terms and conditions that I should know? Start Date: o The Bank, may, at its sole discretion, revise any indicative prices or rates prior to the Start Date. o In the event the Bank cancels the proposed issuance of the Investment, notification will be provided and any monies placed with the Bank as Principal Amount will be returned to the relevant Investors but without interest. Early Redemption: Any early redemption requested by the Investor(s) shall be at the discretion of the Bank. In the event of an early redemption which has been accepted and approved by the Bank, Investors agree that the early redemption price may not necessarily be equal to the Redemption Price at Maturity. Any redemption of the Investment prior to the Maturity Date will be at a price that will be subject to mark-to-market valuation by the Issuer and may result in a partial loss of the Principal Amount. Any partial redemption must not result in the outstanding Principal Amount being less than Minimum Amount, or any other denominations/amounts as may be notified by the Bank from time to time. Any early redemption proceeds is payable in the form of Investment Denomination. Early Termination: Upon the occurrence of any Events, the Bank has the right, but not the obligation to terminate the Investment prior to the Maturity Date. Transferability: This Investment is not transferable. Investors should be prepared to hold this Investment until maturity. Procedures for payment of coupon and principal: Coupons will be: o transferred to CIMB Islamic Bank Berhad or CIMB Bank Berhad savings/ current/ foreign currency/gia account stipulated by the investor; or o payable via cheque (where applicable) if this is the method stipulated by the investor. Note: Procedures for payment of the Principal Amount and Coupon Amount can be determined/ changed by the Bank at its own discretion from time to time subject to Notice of Changes as set out in the Product Agreement. All capitalised terms not defined herein shall adopt and bear the same meanings as those as defined in the Product Agreement of this Investment (as attached). 8/12

9 KEY RISKS 7. What are the key risks associated with this product? Investor(s) will be exposed to the following risks: (i) Credit Risk - This Investment is NOT principal guaranteed and is NOT insured by Perbadanan Insurans Deposit Malaysia. The payment of the Principal Amount or returns (coupon) of this Investment depends upon the ability of CIMB Bank (the Issuer or Bank ) to make such payments. The Investor is therefore taking the credit risk of the Bank as the counterparty to the Investment. Additionally, when redemption requires the delivery of the Investment Denomination, the redemption will also be dependent on the credit risk of the Bank as well as the ability of the Bank to purchase such Investment Denomination from the market. Given this exposure, the Investor should be comfortable with the credit strength of the Bank and its ability to perform its obligations herein. (i) Market Risk - The Investor should note that the method of determining the redemption price at maturity of the Investment shall be determined by the Reference Rate s level on the Fixing Date of the Investment. The value of the Reference Rate may be susceptible to fluctuations due to economic factors, market sentiments and may vary depending on the outcome of one or more market factors. Changes in the price of the Reference Rate may result in a Conversion Event on Fixing Date, which will negatively impact the return of the Principal Amount. The Investor may lose all, or a significant portion of the investment if he/she receives the Principal Amount in the form of the Convertible Reference as the investor may end up with a Convertible Reference with significantly less market value. (ii) Early Redemption and/or Early Termination Risk - This Investment is NOT principal guaranteed should a Conversion Event occur, in which the Investor s Principal Amount may be returned in the form of the Convertible Reference on Maturity Date. The Investor should note that the Investment is a type of investment that is intended to be held until maturity. However, the Investor may, subject to the Bank s prior consent and approval, request for an early redemption. If the Investor chooses to redeem the Investment early, or due to an Early Termination, the Investor may not necessarily receive the full rate of return in respect of the Investment, including the possibility of some degree of principal loss. Further, the Investor should also be aware that in the event of an Early Redemption, the Investor also bears a reinvestment risk that the redemption value will then have to be reinvested at prevailing market rates which may not match the rate of return at the time of initial investment in the Investment nor match available alternative interest rates in other available products at the time of initial investment. YOU ARE ADVISED TO READ THE PRODUCT AGREEMENT AND RISK DISCLOSURE STATEMENT FOR DETAILED DESCRIPTIONS OF THE RISKS. YOU ARE ALSO ADVISED TO CAREFULLY CONSIDER ALL RISKS FACTORS BEFORE MAKING AN INVESTMENT DECISION. Important Notice Investors should note that there is no Prospectus for this Investment. Investors must read and understand the Risk Disclosure Statement, Warning and Disclaimer, if any, as contained in this document for this product before deciding to invest. Investors may seek clarification from the Bank should they require additional information about the investment. While all information in this document has been produced or compiled from sources believed to be reliable, the Bank makes no representation as to its accuracy or completeness. Nothing in this document is to be 9/12

10 construed as a solicitation or offer of legal, investment, tax or other advice or a recommendation to engage in any transaction. Additional Notice The Bank owes no fiduciary duty to the Investors and the only legal duties and obligations of the Bank to the Investors are as expressly set out herein. Investors of this Investment are not covered by the compensation fund under the Capital Markets and Services Act 2007, as amended from time to time. The compensation fund does not extend to Investors of this Investment who have suffered monetary loss as a result of a defalcation, or fraudulent misuse of moneys or other property, by a director, officer, employee or representative of the Bank. Where Investors suffer monetary loss in the above circumstances related to the acts of the Bank s employee, Investors may lodge a complaint with the complaints handling unit of the Bank. Investors who are not satisfied with the decision of the Bank may refer his/her case to the Financial Mediation Bureau or Bank Negara Malaysia within 180 days of receiving a final decision from the Bank. Investors should note that his/her complaint will only be dealt with by either one of the above channel that the Investors choose to refer his/her case to. In the event of any inconsistency, conflict, ambiguity or discrepancy between the English text or any other version of the Product Agreement, Product Highlights Sheet and/or Risk Disclosure Statement (collectively, the Agreements ), the English version shall prevail. Where request is made by the Investors for the Bahasa Malaysia version of the relevant Agreements herein, the Bank shall provide the same and allow the Investors to complete the relevant forms and sign the Agreements relating to this Investment in the Bahasa Malaysia version and such version in Bahasa Malaysia signed by the Investors shall form the basis of the contract between the Bank and the Investors relating to this Investment. FEES & CHARGES 8. What are the fees and charges involved? No fees and charges applicable. VALUATIONS AND EXITING FROM INVESTMENT 9. How often are valuations available? On request basis. 10. How can I exit from this Investment and what are the risks and costs involved? This Investment is NOT principal guaranteed should a Conversion Event occur, in which the Investor s Principal Amount may be returned in the form of the Convertible Reference on Maturity Date. The Investor should note that the Investment is a type of investment that is intended to be held until maturity. However, the Investor may, subject to the Bank s prior consent and approval, request for an early redemption. If the Investor chooses to redeem the Investment 10/12

11 early, or due to an Early Termination, the Investor may not necessarily receive the full rate of return in respect of the Investment, including the possibility of some degree of principal loss. CONTACT INFORMATION 11. Who should I contact for further information or to lodge a complaint? Should you require additional information about investment, please refer to the banking info booklet on Investing Your Money, available at all our branches and the website. 1. For internal dispute / complaints, if any, relating to any matter herein can be made and sent to the following address of CIMB and/or by contacting CIMB by telephone and/or facsimile at the following numbers: (i) Customer Resolution Unit (CRU) (a) via phone to : (b) via fax to : (c) via to : CRU@cimb.com (d) via letter to : 19th Floor, Menara Bumiputra Commerce 11, Jalan Raja Laut Kuala Lumpur 2. If you are dissatisfied with the outcome of the internal dispute resolution process, please refer your dispute to the following: (i) Bank Negara Malaysia Laman Informasi Nasihat dan Khidmat (LINK) (a) via phone to : extension 8950 / 8958 (b) via website : (ii) BNMTELELINK (a) via phone to : LINK ( ) (b) via fax to : (c) via to : bnmtelelink@bnm.gov.my (d) via letter to : Jabatan Komunikasi Korporat Bank Negara Malaysia P.O. Box Kuala Lumpur 3. You can also direct your complain to the Securities Commission. To make a complaint, please contact the Securities Commission s Investor Affairs & Complaints Department: (i) Securities Commission s Investor Affairs & Complaints Department (a) via phone to the Aduan Hotline at : (b) via fax to : /12

12 (c) via to : aduan@seccom.com.my (d) via online complaint form available at (e) via letter to : Investor Affairs & Complaints Department Securities Commission Malaysia No 3 Persiaran Bukit Kiara Bukit Kiara Kuala Lumpur ADDITIONAL INFORMATION 12. What do I need to do if there are changes to my contact details? It is important that you inform us of any change in your contact details to ensure that all correspondences reach you in a timely manner by notifying the relevant sales representative or visiting the nearest CIMB Bank branch. 13. Previously issued Investments Linked to Derivatives product. USD Denominated Non Principal Protected Autocallable Gold Linked Structured Product. 12/12