2. Background information

Transcription

1 Customer Guide

2 Customer Guide 1. About this guide HSBC Bank International Limited (HBIB), trading as HSBC Expat, is a wholly-owned subsidiary of HSBC Bank plc (HBEU). This guide provides further information about the proposal to transfer the business of HBIB to the Jersey branch of HBEU, and what it means for you. The transfer will be carried out using a Jersey legal process referred to as a Scheme. If the Scheme is approved by the Royal Court of Jersey and there is no objection from the Jersey Financial Services Commission (JFSC), the transfer will take effect from am on 1 October 2017 (Effective Date). Accompanying this guide is a Statement which summarises both the Scheme and the Independent Auditor s Report. Details of how to obtain the full Scheme document and the Independent Auditor s Report are outlined later in this guide. Please get in touch with us if you have questions or concerns about the transfer. This guide is intended to provide you with information about the transfer and does not provide tax advice. You may wish to seek independent professional advice if you have any questions or concerns regarding your specific circumstances. 2. Background information 2.1 About us HBEU is a part of the HSBC Group and is authorised by the Prudential Regulation Authority (PRA) and regulated by the Financial Conduct Authority (FCA) and the PRA in the UK. For further information about the HSBC Group, please visit The Jersey branch of HBEU is regulated by the JFSC for the activities it carries on, in or from Jersey. HBIB is also regulated by the JFSC. After the transfer, the activities carried on by the Jersey branch of HBEU will continue to be regulated by the JFSC. 2.2 What s happening and why? We re proposing to transfer the business of HBIB to the Jersey branch of HBEU. This means that your HSBC account(s) which are currently held with HBIB will, in future, be held with the Jersey branch of HBEU. HSBC Group is undertaking this internal reorganisation to consolidate its operations in the Channel Islands and the Isle of Man. If the JFSC provides no objection to the Scheme, and the Royal Court of Jersey approves the Scheme, it is proposed that this change will take effect from the Effective Date. The court hearing is due to take place at am on 27 July 2017 at the Royal Court of Jersey, Royal Square, St Helier, Jersey JE1 1JG. Any updates regarding the transfer, the court hearing and its approval will be posted on our website: You can also call us after the court date, on the numbers provided in this guide, to find out if the transfer has been approved. At the same time, we are proposing to transfer separately the business of our Guernsey entity, HSBC Private Bank (C.I.) Limited, to the Guernsey branch of HBEU. This will be done by way of a separate legal process in Guernsey. If you are also impacted by this transfer, you will receive a separate notification. 2

3 2.3 Independent Auditor s Report Ernst & Young LLP (Independent Auditor) has conducted a limited assurance review of the financial position, liquidity and capital adequacy of HBIB and the Jersey branch of HBEU, both before and after the transfer. On the basis of the work undertaken under the terms of that review, the Independent Auditor concluded that the proposed transfer would not disadvantage the customers or creditors of HBIB or the Jersey branch of HBEU as a whole. A summary of the Independent Auditor s report is enclosed with this guide. If you would prefer to receive a full copy of this report, please refer to the section entitled How do I get more information if I have questions or concerns about the transfer? 3. What does this mean for HSBC Expat customers? 3.1 What stays the same? You will continue to be an HSBC Expat customer and we will continue to provide you with the same products and services that you currently use. There will be no change to your key account details or day-to-day operation of the products and services; for example, your account information, account number and sort code will all remain the same. For customers based in Hong Kong and Dubai, HSBC will continue to have a presence in these jurisdictions. 3

4 3.2 What changes? If the JFSC provides no objection to the transfer, and the transfer is approved by the Royal Court of Jersey, your accounts and services will transfer from HBIB to the Jersey branch of HBEU. We will be updating account statements, documentation and other marketing communications to reflect this change in service provider. We will also be updating your terms and conditions to reflect, amongst other things, the change in service provider. We will send you a separate message setting out in more detail the changes to your terms and conditions in due course. 3.3 Depositors Compensation Scheme Your entitlement to claim compensation under the Jersey Bank Depositors Compensation Scheme (DC Scheme), in the unlikely event that HBEU fails, will not be impacted by the transfer of the business of HBIB to the Jersey branch of HBEU. The DC Scheme offers protection for eligible deposits of up to 50,000. The DC Scheme will continue to apply to all eligible deposits. The maximum total amount of compensation is capped at 100 million in any 5-year period. Full details of the DC Scheme are available on the States of Jersey website at or on request. 4. What if I believe I will be adversely affected by the transfer? If you have any questions or concerns about the transfer, please call us. If you believe that you will be adversely affected by the transfer, you have the right to raise your concerns by appearing at the Royal Court of Jersey in person or by a representative, such as a lawyer (in either case, at your own cost). If you would like to appear at the hearing, please register your intention by writing to us as soon as possible, to reach us at least five working days prior to the court hearing date by: Post: Customer Relations, HSBC Bank International Limited, HSBC House, 3rd Floor, Esplanade, St Helier, Jersey JE1 1HS expat.customer.care@hsbc.com Your letter should state your concern and why you believe that you will be adversely affected by the transfer and be marked Transfer Concern ATTEND HEARING. If you do not want to appear at the court, you can write to us with your concern and why you believe that you will be adversely affected. Please send your letter as soon as possible, to reach us at least five working days prior to the court hearing date. Your concern and how it has been handled will be drawn to the attention of the court. Your letter should be marked as Transfer Concern NOT ATTENDING HEARING. 4

5 5. What is ring-fencing? 5.1 What is the UK Banking Reform and ring-fencing? You may have heard that after the global economic crisis, the UK government put new rules in place, the UK Banking Reform, to protect the economy and taxpayers in case something similar happens again. As a result, HSBC will have to keep its retail and commercial arms separate from its wholesale and investment banking operations. This is sometimes called ring-fencing. HSBC is changing the way it is structured in the UK and creating a new ring-fenced bank, HSBC UK, for retail and commercial customers. The rules require the changes to be complete prior to 1 January However, to be able to achieve this, HSBC intends to complete the changes ahead of this deadline. All customers of non-uk branches of HBEU, including Channel Islands and Isle of Man customers, are staying with HBEU, the non ring-fenced bank. The ring-fencing rules do not allow non-european Economic Area (non-eea) branches of HBEU to be part of the ring-fenced bank. HBEU has several non-eea branches, including in the Channel Islands and Isle of Man, all of which will remain in the non ring-fenced bank. For further information, please visit: What is the expected credit rating of the non ring-fenced bank? The financial resources and credit ratings of the HSBC Group and HBEU may be affected by the implementation of the UK Banking Reform. The ring-fenced bank and the non ring-fenced bank will continue to be a core part of the HSBC Group. Therefore we do not expect HBEU s credit rating to change significantly from its credit rating today. It is expected that HBEU will continue to have a robust investment grade credit rating following implementation of the UK Banking Reform. 5.3 Will I be impacted by ring-fencing? Following the establishment of the ring-fenced bank, HSBC Expat customers will continue to receive the same service that they currently receive today. We will continue to focus our services specifically on your needs and you will still have full access to knowledge and support from HSBC internationally. If you have any UK accounts, you may experience some changes and you will be notified of these changes as they occur. 5

6 6. How do I get more information if I have questions or concerns about the transfer? As always, we re here to support you and help answer any questions you may have. You can call our 24/7 Contact Centre on: Premier customers * Advance customers * *Please remember to have your 10 digit Personal Banking Number (PBN) and your 6 digit Personal Identification Number (PIN) to hand whenever you call us. A full copy of the Scheme, the Independent Auditor s Report and the application to the Royal Court of Jersey to approve the Scheme are available free of charge. For a copy, please contact us using the details above, or visit: Jersey HSBC House, Esplanade, St Helier, Jersey JE1 1HS, Monday to Friday (excluding public holidays). Hong Kong HSBC Main Building, Level 5, 1 Queen s Road Central, Hong Kong S.A.R., Monday to Friday (excluding public holidays). Dubai HSBC Building 5, Emaar Square, Dubai, UAE, Sunday to Thursday (excluding public holidays). 6

7 Frequently asked questions The transfer Q1. Do I need to do anything? A. No, unless once you have read through the letter, this guide and these FAQs, you still have any concerns or questions, or we have separately contacted you in relation to a particular security arrangement (see question 8). Q2. What if I have concerns or questions about the transfer? A. You can call us, or write to us if you have any concerns or questions about the transfer. For further details, please see the section in the guide entitled What if I believe I will be adversely affected by the transfer, or get in touch with us: Premier customers * Advance customers * Q3. Will you help me with this? A. You can raise your concerns by writing to us: Post: Customer Relations, HSBC Bank International Limited, HSBC House, 3rd Floor, Esplanade, St Helier, Jersey JE1 1HS expat.customer.care@hsbc.com We will make every effort to address your concerns. Alternatively you can raise your concerns by either appearing at the Royal Court of Jersey in person or by being represented by a lawyer at your own cost. For further details, please see the section in this guide entitled What if I believe I will be adversely affected by the transfer. Q4. Where can I get tax advice in respect of the transfer? A. This guide is intended to provide you with information about the transfer and is not intended to provide tax advice on the tax consequences of the transfer. If you are resident for tax purposes in the United Kingdom or Jersey, the transfer should not result in a taxable disposal of your products. However, as we do not provide tax advice to customers, if you are subject to tax in a jurisdiction other than the United Kingdom or Jersey, or if you are in any doubt about the tax implications of the transfer, you should consider seeking independent professional tax advice. Q5. Can anyone go along to the court hearing? A. Yes, it is a public hearing and anyone can attend. *Please remember to have your 10 digit Personal Banking Number (PBN) and your 6 digit Personal Identification Number (PIN) to hand whenever you call us. 7

8 Products and services Q6. Will the transfer result in any changes to my existing products, services or the way my account is managed? A. No. Your existing products, services and day-to-day banking will remain unchanged by the transfer. The way you bank with us and the level of service you receive will not be affected. Q7. Will the transfer result in any changes to my interest rates or fees? A. The deposit and lending interest rates, tariffs and charges applicable to your service will not change as a result of the transfer. However, in line with our standard business practice, we may make changes to our interest rates, tariffs and charges before and after the transfer. These will be communicated in the usual way. Q8. If I have a loan, what will happen with any related security arrangements? A. It is intended that all loans and security arrangements will transfer from HBIB to the Jersey branch of HBEU. Your loan terms and conditions will remain the same. In exceptional circumstances, you may be required to sign additional legal documentation to enable the transfer of your security to the Jersey branch of HBEU (e.g. if your security is located outside Jersey). We will contact you separately if this is required. Companies incorporated in certain jurisdictions that have granted security in favour of HBIB may be required to update their internal register of charges or similar record to reflect that such security is granted in favour of HBEU on and from the Effective Date. This will vary depending on the jurisdiction and means that customers and/or grantors of security in countries, such as the Cayman Islands, will need to reflect the transfer of security to HBEU in the relevant corporate register. Q9. Will the business name be changing? A. No. The business name will continue to be HSBC Expat and will be retained and used by the Jersey branch of HBEU. Q10. Is there any change to the Hong Kong branch of HBIB or the Dubai representative office of HBIB? A. The current proposal is that there will be a restructure of the Hong Kong branch of HBIB and the Dubai representative office of HBIB (subject to obtaining the relevant regulatory approvals). Following this restructure, HSBC will continue to provide a service from both Hong Kong and Dubai. Personal data Q11. What happens to my personal data? A. From the Effective Date, any information that HBIB holds about you, or about your accounts or services, will transfer to HBEU, and HBEU will become the data controller or data user from a legal perspective. HBEU will use and process your information in the same way and for the same purposes as HBIB did prior to the transfer, as set out in our HSBC Expat Banking Terms of Business. 8

9 Depositors Compensation Scheme Q12. What is my entitlement under the Depositors Compensation Scheme (DC Scheme)? A. Your entitlement under the DC Scheme is not changing. The DC Scheme offers protection for eligible deposits of up to 50,000. The total amount of compensation is capped at 100 million in any 5 year period. The DC Scheme only applies to private individuals and charities, and does not extend to corporations, small and medium-sized enterprises, partnerships or trusts. Full details of the DC Scheme are available on the States of Jersey website at or on request. Q13. After the transfer, will I be covered by the UK s Financial Services Compensation Scheme (FSCS)? A. No, the FSCS established under the UK Financial Services and Markets Act 2000 does not cover deposits or services provided by Jersey branches of UK banks. Therefore, the FSCS does not currently apply to the Jersey branch of HBEU and will not apply to the Jersey branch of HBEU following the transfer. The EU Bank Recovery and Resolution Directive (BRRD) Q14. What is the BRRD? A. Under the UK s Banking Act 2009 (Banking Act), the Bank of England has certain powers to write down or bail-in the liabilities of a UK bank where, for example, the bank is in financial distress. Q15. How does BRRD affect me? A. The BRRD establishes a framework to deal with the failure (or likely failure) of certain EU incorporated banks and certain investment firms. This framework was created by the EU member states after the global economic crisis, and requires local law implementation by each European member state. This has been implemented in the UK under the Banking Act and the PRA and FCA rules. One of the legal requirements of the BRRD is for HBEU to insert a new clause in some contracts written under the respective laws of Jersey, Guernsey and the Isle of Man. This new clause requires contractual recognition of bail-in powers by counterparties in contracts governed by non-eea law (and that are not otherwise excluded). The purpose of this clause is to ensure equality of treatment between creditors who are party to contracts governed by the law of an EU member state (where the court would recognise bail-in) and those under other contracts. The impact of the new clause will be that, in the unlikely event of HBEU experiencing severe financial stress, the Bank of England would have the power to cancel, write down or modify the form of certain liabilities (including deposits) owed to clients and creditors of the Jersey Branch of HBEU. This is known as the bail-in power. In respect of deposits held by the Jersey branch of HBEU, the bail-in power may be exercised over certain deposits. In Jersey, the DC Scheme provides compensation and coverage of 50,000 for qualifying deposits and such compensation will remain available to such qualifying deposits. It should also be noted that there are broad safeguards protecting creditors in a bail-in and a principle of no creditor worse off to ensure that shareholders and creditors do not receive less favourable treatment than they would have received in an insolvency. If you have further questions about the BRRD, please contact us. HSBC Bank International Limited. Registered Number: Registered Office: HSBC House, Esplanade, St. Helier, Jersey JE1 1HS, Channel Islands. HSBC Bank International Limited, incorporated in Jersey with limited liability and trading as HSBC Expat, is regulated by the Jersey Financial Services Commission for Banking, General Insurance Mediation, Investment and Fund Services Business. To help us continually improve our services and in the interest of security, we may monitor and/or record your communication with us. CP170512/CN/146B 9