Harbour USD Eurostoxx50 Autocall 2016 Brochure and Application Form
Investment Objectives The Harbour USD Eurostoxx50 Autocall ( Autocall ) is a structured product, listed on the London Stock Exchange ( LSE ). The investment product is designed to provide investors with an attractive return even if the market makes only modest returns over the investment term. The investment provides currency exposure in dollars ( USD ) with a high degree of capital protection, provided the market does not fall by more than 30% from the Initial Index Level (as defined below) at maturity. A defined enhanced return is paid, in USD, in the event of any positive equity market performance. The Autocall offers investors the potential to earn significantly enhanced returns relative to cash and fixed income investments. The issuer of the Autocall is Investec Bank Plc, and is fully collateralised with Barclays Bank Plc. The Investor does not take risk on Investec Bank Plc as issuer. Summary of the investment offering A maximum five year USD investment linked to the performance of the Eurostoxx50 Index ( Index ). This Autocall will mature at the end of year five but may be redeemed subject to Automatic Early Redemption at the end of years one, two, three and four. The automatic early redemption feature may lead to the investment terminating prior to the five year term. The Autocall pays a 10% cumulative enhanced return per annum, if the Index is positive on an Automatic Early Redemption Date, as defined in the Terms below ( Exercise Date ). 100% capital protection in USD at expiry provided the Index has not fallen by more than 30% below the Initial Index Level on the Maturity Date. Investments from USD 10,000 and increments of USD 1,000 thereafter. Daily pricing on the LSE and monthly statements from your Stockbroker. Liquidity is provided by Investec Bank Plc, who undertake to act as sole market maker. Investors will have credit exposure to Barclays Bank Plc when purchasing the Harbour USD Eurostoxx50 Autocall 2
Why invest in the Harbour USD Eurostoxx50 Autocall? The Autocall is a structured product listed on the LSE, designed to provide investors with an attractive return even if the market makes only modest returns over the investment term. Global interest rates remain at all-time lows and a defined enhanced return, in USD, is paid in the event of any positive equity market performance on a predetermined Automatic Early Redemption Settlement Date (as defined in the Terms below). The Autocall offers investors the potential to earn significantly enhanced returns relative to cash and fixed income investments. How is the return calculated? The initial level of the Index is recorded on the Strike Date ( Initial Index Level ) and the closing level of the Index is then observed at each Exercise Date; this will be the basis for calculating whether the Index has risen or fallen over the investment period. The Initial Index Level and Final Index Level are the closing level of the Eurostoxx50 Index as published by Bloomberg on the relevant dates. If the Index level is higher than the Initial Index Level on any of the Exercise Dates, the investment will redeem early and pay an amount equal to the investor s initial capital investment plus a predefined return of 10% in USD. For example, if on the first Exercise Date the Index level has increased by 5%, investors will receive their initial capital plus an enhanced return of 10%. If however, the Index level on the Exercise Date is below the Initial Index Level, then the investment remains intact and continues to the next Automatic Redemption Valuation Date. On the second Exercise Date, the Index level is again reviewed. If the Index is above the Initial Index level, the investment will redeem and the investor will receive two times the enhanced return of 10% (2 x 10%). If the Autocall has not been redeemed at the end of five years and the Index is equal to or below the Initial Index Level at expiry, the investment redeems and investors will receive 100% of their initial investment in USD, provided the Index has not fallen below 70% of the Initial Index Level ( Barrier ). 3
What happens if the Barrier is breached? If the Index falls by more than 30% at the close of business on the Maturity Date, the investor will have exposure to the downside on a one for one basis. For example, if the Index level falls 40% and ends down 40% on the Expiry Date, the investor will make a capital loss of 40% at maturity. What are the risks of the Harbour USD Eurostoxx50 Autocall? The Autocall provides capital protection only in the event that the Index does not fall by more than 30% below the Initial Index Level at maturity. If the Index falls below this level, the capital protection falls away and the investor is exposed to the full downside of the Index at expiry. Sales of the investment before the relevant Exercise Date or Final Maturity Date may result in a capital loss even if the product is capital protected (the capital protection is only at expiry). The Index value fluctuates and changes to these levels cannot be predicted. Past performance of the Index should not be seen as an indication of future performance. Investors should note that the Autocall is a listed instrument under the Investec Bank Plc Zebra Capital Plans Retail Structured Products Programme ( Base Prospectus ) and that they take full credit risk on Barclays Plc. The enhanced returns, on each Exercise Date are fixed as per the Terms set out below and investors will not get any additional benefit in the growth of the Index above the Initial Index Level. Is this investment right for you? This investment may be right for you if: You think that the Eurostoxx50 Index will be above current levels over the next five years. You are looking for an investment that offers enhanced upside and potential to limit the downside exposure. You do not need immediate access to your money for the term of the investment. You have a minimum of USD 10,000 to invest. This investment may not be right for you if: You want 100% capital protection under all conditions. You think the Eurostoxx50 Index may be up more than 10% per annum. You want to receive regular dividends and income. You cannot commit to the full term of the investment. You do not want to take exchange rate risk. You do not want to take credit risk on Barclays Bank Plc If you are unsure how this listed instrument works or whether it is suitable for your investment needs please seek advice from your investment manager. 4
How to invest and monitor the investment? By reading this brochure and by completing and signing the attached application form and returning it to your investment manager by the due date. As the Autocall is listed on the LSE, Investec Bank Plc will be making an unwind price available daily. Statements will be sent to you by your stockbroker monthly and will contain details of the number of Autocalls you hold and the closing level of the Index on the LSE for the month. What fees are charged? Harbour Advisory receives a distribution fee of 1.25% upfront (ex. Vat), paid by Investec Corporate and Institutional Banking, a division of Investec Bank Limited ( IBL ), who has been appointed by Investec Bank Plc as dealer under the Base Prospectus for purposes of the Autocalls. This fee is built into the cost of the Autocall and the investor will have 100% of their funds allocated to the product. All other listing, administration and ongoing custody fees have been priced into the product, however investors will pay brokerage costs if the investment is sold before the Final Maturity Date. How is the Autocall taxed? It is incumbent upon potential investors to seek independent professional legal, tax and accounting advice so as to consider the investment in the light of the investor s particular circumstances. Prospective investors should obtain independent advice in respect of the tax treatment of this product. Investec Bank Plc and IBL provide no investment, tax or legal advice and make no representation or warranty about the suitability of this product for a particular client or circumstance. What happens at expiry? When the Autocall expires or redeems early, on any Exercise Date, under the conditions set out above, the relevant settlement amount will be credited to the investor s stockbroking account. Important Notes An enhanced return level of 10% will be targeted, however due to the volatile nature of the underlying Index, we reserve the right not to proceed on Strike Date should the level of the enhanced return be below 9.00%. While Investec Bank Plc does provide a daily price for the product, the nature of the product is such that the capital protection is only available at expiry. During the life of the product the value could be lower than the stated protection level irrespective of the Index level at the time. Investec Bank Plc will provide bid and offer prices for the product under normal market conditions (subject to internal policy and applicable laws and regulations), however liquidity could be limited. 5
The return received is dependent on the Index and past performance of any investment is not a guide to future returns, neither Investec Bank Plc, IBL nor Harbour Advisory, gives any warranty as to the performance or profitability of these investments. Product Provider For further information about Investec Structured Products or any of our products or services please see our website www.investec.co.za/autocalls or contact us on the details below: Brian McMillan +27 11 291 3180 bmcmillan@investec.co.za Kate Langlois +27 11 286 9450 Kate.Langlois@investec.co.za Duncan Mackenzie +27 11 291 3281 Duncan.Mackenzie@investec.co.za As required by the Financial Advisory and Intermediary Services Act ( FAIS ), please find below the details of the product supplier: Product supplier Investec Corporate & Institutional Banking Physical location 100 Grayston Drive, Sandton, Sandown, 2196 Postal PO Box 785700, Sandton, 2146 Telephone details 011 286 7000 Contractual relationship None Compliance officer Poendree Reddy Address 100 Grayston Drive, Sandton, Sandown, 2196 Telephone number 011 291 3183 6
Application Form and Product Term Sheet Terms Name of Structure Harbour USD Eurostoxx50 Autocall 2016 Generic Structure Issuer Dealer Credit Reference Currency Autocallable Note with Capital at Risk (Digital Return) Investec Bank Plc Investec Bank Limited Barclays Bank Plc USD Index Details Index Index Sponsor Bloomberg Code Eurostoxx50 Eurostoxx50 SX5E Index Notional TBC Specified Denominations USD 1,000 Issue Price Per Note 100% Purchase Price Per Note 100% Term 5 years Issue Date January 2017 Listing Date Expected to be on or about the Issue Date Strike Date xx January 2017 Initial Index Level (IIL) The Reference Level on the Strike Date Maturity Date January 2022 Final Settlement Date Automatic Early Redemption Settlement Dates Settlement Currency Automatic Early Redemption Dates Automatic Early Redemption Amount Maturity Date + 3 Business Days Automatic Early Redemption Date + 3 Business Days USD 1. Trade date + 1 Year 2. Trade Date + 2 Years 3. Trade Date + 3 Years 4. Trade Date + 4 Years 1. 110% of Issue Price 2. 120% of Issue Price 3. 130% of Issue Price 4. 140% of Issue Price 7
Automatic Early Redemption Averaging Automatic Early Redemption Event Reference Level Final Averaging Final Index Level (FIL) Valuation Time Barrier Observation Period Barrier Trigger Event Final Redemption Amount Not applicable On any Automatic Early Redemption Date, if the Reference Level is higher than the Initial Index Level The level of the Index published by the Index Sponsor at the Valuation Time Not applicable The Reference Level on the Maturity Date The time at which the Index Sponsor publishes the closing level of the Index At the Valuation Time on the Maturity Date 70% of the Initial Index Level The Reference Level trades below the Barrier during the Barrier Observation Period If the Final Index Level is greater than the Initial Index Level: 150% of Issue Price If the Final Index Level is less than or equal to the Initial Index Level and Trigger Event has occurred: Notional x FIL/IIL If the Final Index Level is less than or equal to the Initial Index Level but no Trigger Event has occurred: 100% of Issue Price General terms Delivery Mechanism Medium term note issued by Investec Bank Plc under its 4,000,000,000 Zebra Capital Plans Retail Structured Products Programme - 2013 Capital Security Calculation Agent Business Days Exchange Related Exchange Index Modification Capital is not protected at maturity from any fall in the Index if a Trigger Event has occurred Investec Bank Plc London London Stock Exchange 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 Index, 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 Index 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 Index on such temporary substitute exchange or quotation system as on the original Related Exchange). Adjustment or redemption at the discretion of the Calculation Agent 8
Index Cancellation Index Disruption Governing Law Change in Law Trading Listing Settlement Method Note Clearing System ISIN Code SEDOL Adjustment or redemption at the discretion of the Calculation Agent Adjustment or redemption at the discretion of the Calculation Agent English Law Applicable London Stock Exchange Plc Official List of the United Kingdom Financial Conduct Authority Cash CREST TBC TBC Investor declaration I/We warrant that all the information given in this application, and in all documents which have been or will be signed by me/us in connection with the proposed investment, whether in my/our handwriting or not, is true and complete. I/We have read and understood the Base Prospectus, and this product term sheet and have acquainted myself/ourselves with the charges of Harbour Advisoryand/or Investec Bank Ltd and its custodians. I am/we are not resident in the United States of America and its territories or resident in any jurisdiction where investments in the Autocalls would be unlawful or otherwise not permitted. I am/ We are aware that taxation consequences might be relevant to the acquisition, holding or disposal of the Autocalls and that I/we will take appropriate tax advice in this regard and ensure that I/we comply with all laws applicable to my/our country of residence. I/We agree that neither Investec Bank Plc, Investec Bank Limited nor Harbour Advisory can be held responsible for any tax liability that arises as a result of purchasing or holding the Autocalls. I/We acknowledge and agree that this offer to purchase is the sole record of the agreement between the Investor and Investec Bank Ltd as seller and that this offer to purchase may be accepted by Investec Bank Ltd. I/We declare that neither this transaction nor any funds flowing will result in a breach by me/us of any applicable allowance/limit prescribed by the Financial Surveillance Department of the South African Reserve Bank. This offer to purchase may only be completed and submitted by the investor to whom this offer document was addressed. The issue of and/or sale of the Autocalls does not constitute an offer of securities to the public for subscription or acquisition in terms of the Companies Act of 2008, nor is it a solicitation to the public within the meaning of the Collective Investment Schemes Control Act of 2002 or solicitation of or advertising for deposits from the general public within the meaning of the Banks Act of 1990. Accordingly, the Autocalls do not comply with the Companies Act or the conditions imposed by the Collective Investment Schemes Control Act of 2002 for promotion and solicitation of foreign collective investment schemes to members of the public in 9
the Republic of South Africa and the Company is not registered as a bank in terms of the Banks Act of 1990. I/We, the undersigned, have read and understood the product term sheet and agree to be bound by the terms and conditions thereof and warrant that the particulars supplied are true and correct, and hereby offer to purchase from Investec Bank Ltd Autocalls to the value of the Investment Amount, on the terms and conditions set out herein. This offer shall be irrevocable and remain open for acceptance by Investec Bank Ltd until 17h00 on the Issue Date. Investec Bank Ltd s acceptance of this offer shall be evidenced by the settlement of the Autocall to the Investor within 2 Business Days of the Issue Date. By signing and agreeing to the terms and conditions set out herein. Application Form Investor Name Stockbroker Name Email Address Telephone Number Stockbroking account Account Number Investor Signature Date 10
Selling restriction General As described in detail in the Base Prospectus. United States of America Notes may not be sold or offered within the United States of America or to or for the benefit of U.S. Persons (as defined in Regulation S under the U.S. Securities Act of 1933, as amended, or as defined in the U.S. Internal Revenue Code of 1986, as amended). European Economic Area This Term Sheet is addressed solely to (i) Persons outside the European Economic Area and/or (ii) Qualified Investors (as defined in the Prospectus Directive) (all such persons in (i) and (ii) together being referred to as relevant persons ). By being in receipt of this Term Sheet you acknowledge, represent and agree that (i) You will not distribute, forward, copy, reproduce or otherwise pass on this Term Sheet to any person who is not a relevant person, (ii) You are aware of and understand the requirements of the Prospectus Directive including any relevant implementing measures in each Member State of the European Economic Area in which the Prospectus Directive has been implemented and (iii) You will comply with the provisions of the Important Notice section below: Important Notice - European Economic Area - Prospectus Directive In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a Relevant Member State ), you represent and agree that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the Relevant Implementation Date ) you have not made and will not make an offer of the Notes to the public in that Relevant Member State except that you may, with effect from and including the Relevant Implementation Date, make an offer of the Notes to the public in that Relevant Member State: a) Approved Prospectus: in the period beginning on the date of publication of a prospectus in relation to those Notes which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive and ending on the date which is 12 months after the date of such publication, provided that the Base Prospectus has subsequently been completed by the Final Terms contemplating such Non-exempt Offer, in accordance with the Prospectus Directive, in the period beginning and ending on the dates specified in such prospectus or final terms, as applicable and the Issuer has consented in writing to its use for the purpose of that Non-exempt Offer; or b) Qualified investors: at any time to any legal entity which is a qualified investor as defined in the Prospectus Directive provided that no such offer of Notes referred to in above shall require the Issuer or any dealer to publish a prospectus pursuant to Article 3 of the Prospectus Directive, or supplement a prospectus pursuant to Article 16 of the Prospectus Directive. 11
For the purposes of this provision, the expression an "offer of Notes to the public" in relation to any Notes in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Notes to be offered so as to enable an investor to decide to purchase or subscribe the Notes, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State, the expression "Prospectus Directive" means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in the Relevant Member State and the expression "2010 PD Amending Directive" means Directive 2010/73/EU. You further represent and agree that, with effect from and including the Relevant Implementation Date, you are not making any offer of the Notes to the public in a Relevant Member State in reliance on the exemption set out in Art 3.2 (b) of the Prospectus Directive (namely, the offer of securities addressed to fewer than 100 natural or legal persons per Member State or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150, natural or legal persons, other than qualified investors exemption). Any re-offer or re-sale, by an initial purchaser or financial intermediary, of Notes in relation to which a prospectus has not been approved by the competent authority in a Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive, will be unlawful unless made (i) Pursuant to one of the exemptions set out in Article 3.2 of the Prospectus Directive; or (ii) In any other circumstances which do not require the publication by the Issuer of a prospectus pursuant to Article 3 of the Prospectus Directive. South Africa The issue of the Autocalls does not constitute an offer of securities to the public for subscription or acquisition in terms of the South African Companies Act of 2008, nor is it a solicitation to the public within the meaning of the South African Collective Investment Schemes Control Act of 2002 or solicitation of or advertising for deposits from the general public within the meaning of the South African Banks Act of 1990. Accordingly, the Autocalls do not comply with the Companies Act or the conditions imposed by the Collective Investment Schemes Control Act of 2002 for promotion and solicitation of foreign collective investment schemes to members of the public in the Republic of South Africa and the Issuer is not registered as a bank in terms of the Banks Act of 1990. In relation to the offer of any Autocalls into South Africa, you represent and warrant that you have taken and will take all reasonable steps necessary to comply with the relevant provisions of the Banks Act, the Companies Act, the Exchange Control Regulations and any other applicable laws and regulations of South Africa relevant to the offer and sale of the Autocalls. In purchasing any Securities from Investec Bank Plc as a regulated financial institution, the investor is acting as Principal only. It agrees with and represents to Investec Bank Plc on the Trade Date and the Issue Date with respect to the Securities being purchased that: (i) It is acquiring the Securities as Principal (and not in any other capacity); (ii) It has the capacity legal and otherwise to act as Principal with respect to the purchase of the Securities; (iii) It confirms that it has carried out in accordance with applicable rules and regulations and its usual practice, all regulatory checks and requirements including suitability and appropriateness checks and has determined that these Securities are a suitable investment such that any such Principal fully understand the product and proposed transaction; and 12
(iv) It is fully authorised to procure the performance of the relevant purchase of these Securities and it has not received notice that such authorisation has been revoked. Index provider disclosure Index Disclaimer STOXX and its licensors (the Licensors ) have no relationship to Investec Bank other than the licensing of the Euro STOXX 50 Index and the related trademarks for use in connection with the Notes. STOXX and its Licensors do not: sponsor, endorse, sell or promote the Notes. recommend that any person invest in the Notes or any other securities; have any responsibility or liability for or make any decisions about the timing, amount or pricing of the Notes; have any responsibility or liability for the administration, management or marketing of the Notes; consider the needs of the Notes or the owners of the Notes in determining, composing or calculating the Euro STOXX 50 Index or have any obligation to do so. STOXX and its Licensors will not have any liability in connection with the Preference Shares or the Notes. Specifically, STOXX and its Licensors do not make any warranty, express or implied and disclaim any and all warranty about: the results to be obtained by the Notes, the owner of the Notes or any other person in connection with the use of the Euro STOXX 50 Index, and the data included in the Euro STOXX 50 Index; the accuracy or completeness of the Euro STOXX 50 Index and its data; the merchantability and the fitness for a particular purpose or use of the Euro STOXX 50 Index and its data; STOXX and its Licensors will have no liability for any errors, omissions or interruptions in the Euro STOXX 50 Index or its data; and Under no circumstances will STOXX or its Licensors be liable for any lost profits or indirect, punitive, special or consequential damages or losses, even if STOXX or its Licensors knows that they might occur. The licensing agreement between Investec Bank Plc and STOXX is solely for their benefit and not for the benefit of the owners of the Notes or any other third parties. 13