Date*: The Hong Kong Special Administrative Region Government (the "Hong Kong Government") for the account of the Exchange Fund (the Issuer ) Issue of HKD 800,000,000 1.61 per cent Fixed Rate Note due December 2018 Important Risk Warning: This is an investment product. The investment decision is yours but you should not invest in this product unless the intermediary who sells it to you has explained to you that the product is suitable for you having regard to your financial situation, investment experience and investment objectives. This Note is NOT equivalent to a time deposit. Issuer's risk - This Note is subject to both the actual and perceived measures of credit worthiness of Hong Kong Government. There is no assurance of protection against a default by the issuer in respect of the repayment obligations. In the worst case scenario, you might not be able to recover the principal and any coupon if the issuer defaults on the note. Additional risks are disclosed in the section of Risk Factor below. Please refer to it for details. WARNING The contents of this document have not been reviewed by any regulatory authority in Hong Kong. You are advised to exercise caution in relation to the offer. If you are in any doubt about any of the contents of this document, you should obtain independent professional advice. IMPORTANT If you are in doubt as to any aspect of this offer, you should consult a licensed securities dealer, bank manager, solicitor, certified public accountant or other professional adviser. Unless otherwise specified in this Term Sheet, any capitalised terms used but not defined in this Term Sheet shall have their meanings as set out in the offering documentation of the Notes. * If you receive this Term Sheet via email, the date of the Term Sheet is the date as stated on the email to which it is attached. If you receive this Term Sheet via fax, the date of the Term Sheet is the date as stated on the document header or on the cover letter which accompanies the Term Sheet. If you are viewing this Term Sheet over the internet, the date of the Term Sheet is the date as stated on the webpage to which it is shown. 1
Issuer: Guarantor: Type: Rating: (A rating is not a recommendation to buy, sell or hold notes and may be subject to suspension, change or withdrawal at any time by the assigning rating agency. Please contact HSBC staff if you wish to obtain (if any) updated ratings information prior to making your investment.) Status of the Note: Issue Date: Maturity Date^: Coupon: Coupon frequency: Termsheet The Hong Kong Special Administrative Region Government for the account of the Exchange Fund (the Hong Kong Government ) N/A Series No: N/A Tranche No: N/A Fixed Rate Senior Unsecured Notes ISIN Code: GSB10Y1812 Issuer s rating: Aa1 (Moody s) / AAA (S&P), as at 16 May 2014 Guarantor s rating: N/A The Notes rating: Aa2 (Moody s) / AA+ (S&P), as at 29 September 2017 (Source: Bloomberg) The Notes will constitute direct, unsecured, unconditional and general obligations of the Hong Kong Government for the account of the Exchange Fund and will rank pari passu with all other unsecured indebtedness of the Hong Kong Government for the account of, and payable from, the Exchange Fund from time to time outstanding. 10/12/2008 (DD/MM/YYYY) 10/12/2018 (DD/MM/YYYY) 1.61 per cent. per annum Semi-Annual The Information Memorandum dated August 2007 (the Offering Documentation@ Information Memorandum ) and Tender Result ( Tender Result ) Currency & Amount of the HKD 800,000,000 issue: Interest Commencement 10/12/2008 (DD/MM/YYYY) Date HKD 500,000 and integral multiples of HKD 50,000 in excess Denomination: thereof Minimum Investment Per investor : HKD 50,000 Amount: Redemption at maturity: At par (100%) Interest Payment 10 th June and December every year commencing on 10 th June Dates(s)^: 2009 up to and including the Maturity Date Listing and Pricing# The Notes are listed on the Hong Kong Stock Exchange (the (Please contact HSBC staff Exchange ). for (if any) updated pricing information prior to making Certain information with regards to the price and turnover (if 2
your investment.) Description of the Issuer: (from page 8 of the Information Memorandum) any) of the Notes may be available on the Exchange website at http://www.hkex.com.hk/eng/index.htm. The information with regards to the last closing price and historical prices of the Notes, which is required by the Securities and Futures Ordinance Schedule 7 Part 1 Section 1(b), (c), (d) and (e), are not included in this Term Sheet because: there is no record of any trading activity of the Notes on the Exchange; the historical prices including but not limited to the closing price on the last trading day immediately preceding (a) this offer, (b) the public announcement in relation to this offer, and (c) each of the 6 months immediately preceding this offer, as well as the highest and the lowest closing prices during the period of last 6 months, are not available publicly through the Exchange and/or other public sources and there has been no public announcement in relation to this offer. The Fund was constituted by the Currency Ordinance of 1935, later renamed the Exchange Fund Ordinance (Chapter 66 of the Laws of Hong Kong). Section 3(1) of the Ordinance as amended specifies that the Fund shall be under the control of the Financial Secretary and shall be used primarily for such purposes as the Financial Secretary thinks fit affecting, either directly or indirectly, the exchange value of the currency of Hong Kong and for other purposes incidental thereto. In addition the Financial Secretary may use the Fund as he thinks fit to maintain the stability and the integrity of the monetary and financial systems of Hong Kong, with a view to maintaining Hong Kong as an international financial centre. Contact Information of Issuer Fees & Charges Stamp Duty On 3 March 1993, the Financial Secretary announced in the 1993/94 Budget Speech that it was his intention to replace the Government Bond Programme with the Exchange Fund Notes Programme. Exchange Fund Notes ( Notes ) are issued under the Exchange Fund Ordinance (Chapter 66 of the Laws of Hong Kong) and for the account of the Exchange Fund. Registered Office Address: Hong Kong Monetary Authority 55/F, Two International Finance Centre 8 Finance Street, Central, Hong Kong Safe Custody Waived Interest Collection Waived Redemption at Maturity Waived No Hong Kong stamp duty is payable on the purchase of the Notes 3
^ Actual payment dates are subject to the payment received from the relevant custodian which maybe beyond the stated date due to time zone difference and different lead time required by individual paying agent. @ The financial data and business and operational information included in the Offering Documentation (if applicable) may not reflect the latest financial, business or operational conditions of the Issuer/ Guarantor. Also, they should not be taken as an indication of future results or performance. For Notes listed in Stock Exchange of Hong Kong (SEHK), investors should note the disclaimer in the offering document that the SEHK takes no responsibility for the contents of the offering document, makes no representation as to its accuracy or completeness and expressly disclaims any liability for any loss howsoever arising from or in reliance upon the whole or any part of the contents of the offering document. # Listing of the Notes is not to be taken as an indication of the merits of the Issuer, the Group or the Notes. In making an investment decision, investors must rely on their own examination of the Issuer, the Group and the terms of the offering, including the merits and risks involved. 4
Risk Factors There are investment risks involved in buying the Notes (including the risks set out in the Risk Factors below and the risks disclosed in the relevant offering documentation of the Notes). Before applying for any of the Notes, you should consider the risks involved in investing in the Notes and consider whether the Notes are suitable for you in light of your own financial circumstances and investment objectives. If you are in any doubt, you should get independent professional advice. Risk factors relating to the Notes in general The Notes are mainly for medium to long term investment, not for short term speculation. You should be prepared to invest your funds in the Notes for the full investment tenor; you could lose part or all of your investment if you choose to sell the Notes prior to maturity. The Notes are not equivalent to, nor should they be treated as a substitute for, time deposit. They are NOT protected deposits and are NOT protected by the Deposit Protection Scheme in Hong Kong. Receipt of any interest and principal amount at maturity of the Notes is subject to the credit risk and default risk of the Issuer. In case of default, the holder of the Notes may not be able to receive back the principal amount invested or any interest payable on the Notes. The holder of the Notes bears the credit risk and the default risk of the Issuer and has no recourse to HSBC unless HSBC is the Issuer itself. One or more independent credit rating agencies may assign credit ratings to an issue of the Notes and the Issuer. Credit ratings may not reflect all of the risks related to the Notes, the Issuer and other factors that may affect the value of the Notes. Credit ratings do not guarantee the creditworthiness of the Issuer. A credit rating by the rating agency is not a recommendation to buy, sell or hold securities and may be subject to revision, suspension or withdrawal at any time. A suspension, reduction or withdrawal at any time of any rating assigned to the Notes may adversely affect the market price of the Notes. The market price of the Notes may fluctuate with market changes. Factors affecting the market price of the Notes include, but are not limited to, fluctuations in interest rates, credit spreads, and liquidity premiums. In particular, investment in the Notes is susceptible to fluctuations in interest rates which may adversely affect the value of the Notes. The price of the Notes may generally fall when the interest rates rise. The fluctuation in yield generally has a greater effect on prices of longer tenor notes. There is an inherent risk that losses may be incurred rather than profit made as a result of buying and selling the Notes. The Issuer may have the right (but not the obligation) to early redeem the Notes prior to maturity date upon occurrence of certain events (please refer to the offering documentation of the Notes for details). If the Issuer exercises its right to redeem the Notes before they mature, you may suffer a substantial loss under the Notes and you may not be able to enjoy the same rates of return when you re-invest the amount received under such early redemption in other investments with similar risk parameters. 5
If you wish to sell the Notes, HSBC may but is not obliged to repurchase them based on the prevailing market price under normal market circumstances, but the selling price may differ from the original buying price due to changes in market conditions. There may be exchange rate risks if you choose to convert payments made on the Notes to your home currency. Notes may have no established trading market when issued, and one may never develop. Even if a secondary market does develop, the secondary market for the Notes may not provide significant liquidity or may trade at prices based on the prevailing market conditions and may not be in line with your expectations. Therefore, you may not be able to sell the Notes easily before maturity or at prices that will provide you with a yield comparable to similar investments that have a developed secondary market. Please refer to the offering documentation of the Notes for other risk factors relating to the Issuer and the Notes. 6
Investor s Commitment and Acknowledgements (i) (ii) (iii) (iv) (v) have read and understood this Term Sheet, including the risks of investing in the Notes as explained in the section Risk Factors before making any investment decision; understand that you should refer to the relevant offering documentation of the Notes, for further details on the terms of the Notes and risks involved before making any investment decision; confirm that you are prepared to invest your funds in the Notes for the full investment tenor; you could also lose part or all of your investment if you choose to sell your Notes prior to maturity; understand that this document is not intended to provide and should not be relied upon for tax, legal or accounting advice, investment recommendations or credit worthiness or other evaluation of the Issuer; prospective investors should consult their tax, legal, accounting and/or other advisors; and understand that you should avoid excessive investment in a single type investment, with regard to its total proportion of your overall portfolio, in order to guard against overexposure to any single investment. How to find out the current market value of your investment after purchase? The current market value of your investment will be available upon request. Please contact our staff at any HSBC branch in Hong Kong. Note: If you have any feedback or complaint about any aspect of the service you have received, please contact our Hong Kong branches, call (852) 2233 3322 for HSBC Premier customers, (852) 2748 8333 for HSBC Advance customers or (852) 2233 3000 for Other Personal Banking customers, or write to the Customer Relations Department at P.O. Box No. 71169 Kowloon Central Post Office, or send an email to feedback@hsbc.com.hk. We will respond to a complaint within a reasonable period of time normally not exceeding 30 days in general circumstances. If you are not satisfied with the outcome of your complaint, you have the right to refer the matter to the Banking Services Complaints of Hong Kong Monetary Authority at 55th Floor Two International Finance Centre, 8 Finance Street, Central, Hong Kong. For monetary dispute, you have the right to refer the matter to the Financial Dispute Resolution Centre at Unit 3701-4, 37/F, Sunlight Tower, 248 Queen s Road East, Wan Chai, Hong Kong. References to websites References to the websites stated in this document where further information may be obtained are intended as guides for you to access further public information on the securities. Information appearing on such websites is not part of the offering documents. HSBC accept no responsibility whatsoever that such other information, if available, is accurate and/or up-to-date, and no responsibility is accepted in relation to any such information by us and our respective affiliates. 7
Disclaimer The Hongkong and Shanghai Banking Corporation Limited ( HSBC ) has issued this document. The information contained in this termsheet is derived from sources HSBC believes to be reliable, but which HSBC has not independently verified. HSBC makes no representation or warranty (express or implied) of any nature nor is any responsibility of any kind accepted with respect to the completeness or accuracy of any information, projection, representation or warranty (expressed or implied) in, or omission from, this document. The information in this document does not constitute a solicitation for the purchase or sale of any securities, commodity or the Notes. Any opinions expressed therein are given in good faith, but are subject to change without notice. No liability is accepted whatsoever for any direct, indirect or consequential loss arising from the use of this document. Please note that the above rates or prices are for indicative purposes only and may vary in accordance with changes in market condition. Distribution of this document may be restricted by law in certain jurisdictions and the information contained herein is to the recipients and may not be reproduced or otherwise disseminated. HSBC and its affiliates and/or officers, directors and employees may have positions in any instruments or currencies mentioned in this document and may from time to time add to or dispose of such instruments or currencies. User of the information is advised to make independent judgment with respect to any matter contained herein. Issued by The Hongkong and Shanghai Banking Corporation Limited ( HSBC ) registered at 1 Queen s Road Central, Hong Kong The Hongkong and Shanghai Banking Corporation Limited is the distributor which is a wholly owned subsidiary of HSBC Holdings plc, the holding company of the HSBC Group. The Hongkong and Shanghai Banking Corporation Limited Authorised and Regulated by Hong Kong Monetary Authority A registered institution under the Securities and Futures Ordinance, with Central Entity Identity Number AAA523 Registered Office: 1 Queen s Road Central, Hong Kong Tel: +852 2996 6730, Member HSBC Group 8
日期 *: 香港特別行政區政府 ( 香港政府 ) 以外匯基金發行 ( 發行人 ) 發行 800,000,000 港元 1.61% 定息票據 2018 年 12 月到期 重要風險通知 : 此乃投資產品 投資決定是由閣下自行作出的, 但閣下不應投資在該產品, 除非中介人於銷售該產品時已向閣下解釋經考慮閣下的財務情況 投資經驗及目標後, 該產品是適合閣下的 本票據並不相等於定期存款 發行人風險 本票據表現受發行人的實際和預計借貸能力所影響 就償債責任而言, 本票據不保證發行人不會拖欠債務 在最壞情況下, 如果發行人不履行契約, 本票據持有人可能無法取回本票據的利息和本金 以下 風險因素 部份將列出其他風險因素, 詳情請參閱有關部份 警告 本文件的內容未經在香港的規管當局審核 你應就有關要約謹慎行事 如你對本文件的任何內容有任何疑問, 你應尋求獨立專業意見 重要提示 如你對此要約的任何方面有疑問, 應諮詢持牌證券交易商 銀行經理 律師 會計師或其他專業顧問 除本條款表另有說明外, 本條款表的英文版本所使用但並未作出定義的任何大寫術語應具有本票據發售文件所載的涵義 * 如閣下透過電郵收取本條款表, 則條款表的日期為條款表的郵件所載日期 如閣下透過傳真收到本條款表, 條款表日期即文件頁首或條款表附函所示的日期 如閣下透過互聯網閱讀本條款表, 則條款表的日期為網頁所示日期 9
發行人 : 擔保人 : 類別 : 評級 : ( 評級並不代表建議購買 出售或持有票據, 且可由授予評級之機構隨時終止 更改或撤銷 倘若閣下希望在作出投資前獲得更新的 ( 如有的話 ) 評級資料, 請聯絡滙豐的職員 ) 票據的地位 : 條款表 香港特別行政區政府 ( 香港政府 ) 以外匯基金發行 不適用 定息高級無抵押票據 序列號 : 不適用 票據號 : 不適用 ISIN 編碼 : GSB10Y1812 發行人評級 :Aa1 ( 穆迪 )/AAA( 標準普爾 ), 截至 2014 年 5 月 16 日 擔保人評級 : 不適用 票據評級 :Aa2( 穆迪 )/AA+( 標準普爾 ), 截至 2017 年 9 月 29 日 ( 資料來源 : 彭博資訊 ) 本票據將構成香港政府為外匯基金賬戶之直接 無抵押 無條件及一般債務, 並將與香港政府為外匯基金賬戶及外匯基金不時應付的未償還所有其他無抵押債務享有同等地位 發行日期 : 10/12/2008 ( 日 / 月 / 年 ) 到期日期 ^: 10/12/2018 ( 日 / 月 / 年 ) 票息 : 每年 1.61% 票息頻率 : 發售文件 @ 貨幣及發行金額 : 每半年 日期為 2007 年 8 月的資料備忘錄 ( 資料備忘錄 ) 及投標結果 ( 投標結果 ) 800,000,000 港元 計息開始日期 : 10/12/2008 ( 日 / 月 / 年 ) 面額 : 最小投資額 : 500,000 港元及超過部份按 50,000 港元的整數倍計算 每位投資者 :50,000 港元 到期贖回 : 按面值 (100%) 利息支付日期 ^: 上市及定價 #: ( 倘若閣下希望在作出投資前獲得更新的 ( 如有的話 ) 定價資料, 請聯絡滙豐的職員 ) 自 2009 年 6 月 10 日開始至到期日 ( 包括當日 ) 每年 6 月 10 日及 12 月 10 日 本票據在香港聯交所 ( 交易所 ) 上市 有關本票據價格及成交額 ( 如有 ) 的若干資料可於交易所網站 http://www.hkex.com.hk/chi/index_c.htm 查詢 須根據證券及期貨條例附表 7 第 1 部份第 1(b) (c) (d) 及 (e) 節予以提供的有關本票據最後收市價及過往價格的資料並無載入本條款表, 原因是 : 本票據並無於交易所交易的任何記錄 ; 過往價格包括但不限於緊接 (a) 本發售,(b) 有關本發售的公佈及 (c) 緊接本發售前六個月各月之前的最後交易 10
發行人簡介 ( 摘自資料備忘錄第 8 頁 ): 日的收市價 以及最後六個月期間的最高及最低收市價無法透過交易所及 / 或其他公開來源取得 ; 及並無有關本發售的公佈 該基金根據 1935 年的貨幣條例 ( 其後更名為外匯基金條例 ( 香港法例第 66 章 )) 成立 條例第 3(1) 節 ( 經修訂 ) 規定, 基金 須受財政司司長控制, 且須主要用於財政司司長認為適當的用途, 以直接或間接影響香港貨幣的匯率及作其他相關用途 發行人聯絡資料 : 服務收費 此外, 財政司司長可 在其認為適當的情況下使用基金維持香港貨幣及金融系統的穩定及完整, 以 保持香港作為國際金融中心的地位 於 1993 年 3 月 3 日, 財政司司長在其 1993/94 年度預算案中宣佈, 其有意將政府債券計劃替換為外匯基金票據計劃 外匯基金票據 ( 票據 ) 乃根據外匯基金條例 ( 香港法例第 66 章 ) 發行, 且乃為外匯基金賬戶發行 註冊辦事處地址 : 託管服務豁免代收利息豁免到期贖回豁免 香港金融管理局香港中環金融街 8 號國際金融中心二期 55 樓 印花稅購買本票據無須支付香港印花稅 ^ 有關款項的實際支付日期視乎收到相關託管人的付款日期 基於時差原因或個別支付代理不同的處理時間, 有關款項的實際支付日期可能遲於日期所述 @ 發售文件中的財務數據及其他業務或營運信息 ( 如適用 ) 可能未反映發行人 / 擔保人最新的財務 業務或營運狀況 另外, 該等信息不應視為將來表現的指標 對於香港聯合交易所 ( 港交所 ) 上市的票據, 投資者亦應留意發售文件中, 關於港交所對發售文件之內容準確性 完整性及因內容全部或任何部分內容而產生或因依賴該等內容而引致的任何損失承擔任何責任的免責聲明 # 於交易所上市的票據並不代表發行人 發行機構或票據的優勢 作出投資決定前, 投資者應考慮發行人 發行機構及票據條款, 包括其優勢及相關風險 11
風險因素 購買本票據涉及投資風險 ( 包括以下 風險因素 所載風險及本票據相關發售文件披露的風險 ) 在投資於本票據之前, 投資者應考慮投資本票據所涉及的風險, 並就本身的財政狀況及投資目標, 考慮是否適合投資於本票據 如有任何疑問, 應諮詢獨立專業顧問的意見 本票據涉及的一般風險因素 本票據主要提供中長期的投資, 並不是短線投機的工具 閣下應準備於整段投資期內將資金投資於本票據上 ; 若閣下選擇在到期日之前提早出售本票據, 可能會損失部份或全部的投資本金額 本票據並不相等於定期存款, 亦不應被視為其替代品 本票據並非受保障存款, 且不受香港存款保障計劃之保障 於本票據到期日收回利息和本金需受發行人的信貸及違約風險影響 如果發生違約, 票據持有人可能無法取回本票據的利息和本金 票據持有人須承擔發行人的信貸及違約風險, 且不能向滙豐追討任何賠償, 除非滙豐本身為該票據之發行人 一家或多家獨立評級機構可能會向發行的票據及發行人授予信用評級 信用評級可能不會反映票據及發行人的所有相關風險以及可能影響票據價值的其他因素 信用評級並不能對發行人的信用水平提供保證 評級機構的信用評級並非買入 出售或持有票據的建議, 可能隨時修訂 暫停或撤回 倘若評級機構於任何時間暫停 下調或撤回對本票據的評級, 則可能會對本票據的市價造成不利影響 本票據的市價可能會隨著市場變化而波動 影響本票據市價的因素包括, 但不限於, 利率 信貸息差及流通性溢價的波動 特別是, 投資本票據易受市場利率波動影響, 或將對本票據價值產生不利影響 本票據價值或會因利率上升而下跌 而孳息率的上落對越長年期的票據價格影響一般較大 買賣票據帶有風險, 投資者未必能夠賺取利潤, 可能會招致損失 於發生若干事件的情況下, 發行人可能有權 ( 但無責任 ) 在到期日前提早贖回票據 ( 詳情請參閱票據發售文件 ) 倘發行人在到期日前行使其權利贖回票據, 則閣下或可能因本票據承受重大損失, 當閣下將該次因提早贖回獲得的金額再投資於其他風險相近的投資項目時, 亦未必能夠獲得相同的回報率 如閣下打算出售經滙豐代閣下購入的票據, 滙豐可但並無責任在正常市場下, 按市價進行有關交易 但基於市況變動, 賣出價與最初的買入價可能不同 倘若閣下選擇將票據所支付的付款兌換為本國貨幣, 可能須承受匯率波動的風險 12
票據發行時可能並無一個已建立的交易市場, 亦可能永遠不會建立 即使二手市場已建立, 交易本票據的二手市場或不能提供龐大的流通量或按現行市價買賣, 且可能與閣下之預期不符 因此, 閣下或許不能於到期日前輕易出售本票據, 或按可為閣下提供可類比有已建立二手市場的投資工具所獲收益的價格出售 請參閱本票據的發售文件, 了解有關發行人及本票據的其他風險因素 13
投資者責任及聲明 投資者向分銷商購買本票據時, 投資者將被視為作出一系列承諾及聲明, 包括 : (i) (ii) (iii) (iv) 於作出任何投資決定前, 已閱讀及理解本條款表, 包括 風險因素 部分所說明的有關投資本票據的風險 ; 明白於作出任何投資決定前, 應參閱本票據相關發售文件, 以便獲得有關本票據條款及所涉及風險的進一步詳情 ; 確認準備於整段投資期內將資金投資於本票據上 ; 若投資者選擇在到期日之前提早出售本票據, 可能會損失部份或全部的投資本金 ; 明白本文不擬提供稅務 法律或會計意見 投資建議或對發行人的誠信或其他方面進行評估, 投資者亦不應依賴本文作上述用途 準投資者應諮詢其稅務 法律 會計及 / 或其他顧問 ; 及 (v) 明白就於閣下整體投資組合所佔比例而言, 閣下應避免過度集中於一個投資類型, 以防止集中於某個投資類型而增加投資風險 在投資票據後, 怎樣查詢票據的市值? 閣下可聯絡滙豐在香港的各分行查詢票據的市值 注意:如閣下對我們的服務有任何意見或投訴, 請聯絡我們在香港的任何分行 致電 (852) 2233 3322( 滙豐卓越理財客戶 ),(852) 2748 8333( 運籌理財客戶 ) 或 (852) 2233 3000( 其他個人理財客戶 ) 致函我們的客戶關係部 ( 九龍中央郵政局郵政信箱 71169 號 ) 或電郵至 feedback@hsbc.com.hk 我們在一般情況下會於合理的時間 ( 通常 30 日 ) 內回覆客戶的投訴 若閣下對投訴結果仍有不滿, 閣下有權將個案轉交香港金融管理局的銀行服務投訴組處理, 地址為香港中環金融街 8 號國際金融中心 2 期 55 樓 有關金錢糾紛, 閣下有權將個案轉交金融糾紛調解中心 ( 香港灣仔皇后大道東 248 號陽光中心 37 樓 3701-04 室 ) 處理 關於網站的提述 本文件有提述若干網站, 其中或可提供進一步資料, 以指引閣下取得有關證券的更多公眾資料 該等網站所載的資料並非發售文件的一部份 滙豐對該等其他資料 ( 如有 ) 是否準確及 或最新概不承擔任何責任, 且本集團及本集團相關聯屬公司對任何該等資料概不承擔責任 14
免責聲明香港上海滙豐銀行有限公司 ( 滙豐 ) 刊發本文件 本條款表所載資料取自滙豐相信為可靠之來源, 惟滙豐並未對其進行獨立核實 滙豐概無作出任何性質的聲明及保證 ( 明示或暗示 ), 亦不對本文件所載任何資料 預測 聲明及保證 ( 明示或暗示 ) 之完整性或準確性或任何遺漏承擔任何責任 本文件所載資料並不構成買賣本票據的招攬銷售或建議 本文件所載資料並不構成買賣本票據的招攬銷售或建議 本文件內發表之意見乃真誠地發表, 惟可未經通知而改變 滙豐概不就使用本文件所導致之任何直接或間接或相應而生之損失接納任何責任 謹請注意, 上述利率或價格乃僅供參考, 並可能根據市況而變動 若干司法管轄區之法律可能限制派發本文件, 而本交件中所載之資料乃僅供收件人閱覽, 不得複製或以其他形式傳佈 滙豐及其聯屬公司及 / 或高級職員 董事及僱員可能就本文件所述之任何金融工具或貨幣持倉, 並可不時增加或出售有關金融工具或貨幣 使用資料之人士務請就其中所載之任何事宜作出獨立判斷 由香港上海滙豐銀行有限公司 ( 滙豐, 註冊地址為香港皇后大道中 1 號 ) 刊發 香港上海滙豐銀行有限公司是分銷商, 為滙豐集團旗下控股公司 滙豐控股有限公司的全資附屬公司 香港上海滙豐銀行有限公司經由香港金融管理局授權及監管根據 << 證券及期貨條例 >> 註冊為註冊機構, 中央註冊編號為 AAA523 註冊辦事處 : 香港皇后大道中 1 號電話 :+852 2996 6730, 滙豐集團成員 15
IMPORTANT Investors should read the Information Memorandum before deciding whether to buy the Notes. Investors are advised to seek independent advice from financial consultants, legal advisers, professional accountants or other professional advisers, as appropriate, on the risks of investment in the Notes before making their investment decisions. Investors must decide themselves whether the Notes meet their investment needs. Exchange Fund Notes are not available to US persons or residents of Canada. Hong Kong Monetary Authority 55/F, Two International Finance Centre 8 Finance Street, Central, Hong Kong Telephone : (852) 2878 8783 Email : hkma@hkma.gov.hk www.hkma.gov.hk
Summary of the Terms of the Notes Issuer Currency Method of Sale Form of Notes Maturities Interest Rate Interest Payment Interest Period Tender Arrangements Underwriting Arrangements Settlement Repayment Status Legal Title Taxation Governing Law Listing Secondary Market Issuing Agent Paying Agent The Hong Kong Special Administrative Region Government (the Hong Kong Government ) for the account of the Exchange Fund. Hong Kong dollar. By competitive tender on a bid-price basis or by non-competitive tender, in each case subject to a minimum bid of HK$50,000. Each tender bid must be for an integral multiple of the minimum denomination of Notes. Applicants submitting bids in a competitive tender must indicate the quantity of Notes applied for and the bid price. Applicants submitting bids in a non-competitive tender only need to indicate the quantity of Notes for which they are applying. Successful bidders in a competitive tender will be allotted Notes at the price which they bid. Successful bidders in a non-competitive tender will be allotted Notes at the lowest accepted price of the successful competitive tender bids. Computerized book entry form in Securities Accounts maintained with the Monetary Authority. Notes will be issued in denominations of HK$50,000 each and higher integral multiples thereof. The maturity date of each issue of Notes will be announced in advance of each tender. Each issue of Notes will bear a fixed interest rate announced in advance of each tender. Interest will be paid semi-annually in arrears according to the actual number of days in an interest period and on the basis of a 365-day year. The first interest period shall be the period from and including the issue date to but excluding the first interest payment date. Thereafter interest periods will run from and including each interest payment date to but excluding the next interest payment date. Competitive tenders must be submitted through Recognized Dealers which are also appointed as Eligible Market Makers by 10:30 a.m. on the relevant tender day. Non-competitive tenders, which are open to Hong Kong Securities Clearing Company Limited ("HKSCC"), must be submitted through HKSCC, by 10:30 a.m. on the relevant tender day. Non-competitive tenders, which are open to Recognized Dealers appointed as Retail Exchange Fund Notes Distributors, must be submitted through such Recognized Dealers by 12:00 noon on the business day falling immediately before the relevant tender day. Tender results will be announced not later than 3:00 p.m. on the relevant tender day. Recognized Dealers which are also appointed as Eligible Market Makers may be required by the Monetary Authority to subscribe for Notes which have not otherwise been subscribed pursuant to valid tenders. Settlement will be effected on the first business day immediately following the relevant tender day. The Notes will be redeemed at par on their respective maturity dates. The Notes will constitute direct, unsecured, unconditional and general obligations of the Hong Kong Government for the account of the Exchange Fund and will rank pari passu with all other unsecured indebtedness of the Hong Kong Government for the account of, and payable from, the Exchange Fund from time to time outstanding. Legal title to Notes is vested in the holder of the Securities Account, to which the relevant Notes are credited, maintained with the Monetary Authority. The Notes are exempt from profits tax and stamp duty in Hong Kong. The Laws of Hong Kong. The Stock Exchange of Hong Kong Limited. Recognized Dealers which are also appointed as Market Makers have undertaken to quote bid and offer prices for Notes during normal money market hours (9:00 a.m. to 12:00 noon and 2:00 p.m. to 4:00 p.m. Monday to Friday). Monetary Authority. Monetary Authority. This Information Memorandum is published in English and Chinese. The English version shall be the authoritative version for the purpose of interpretation of words and expressions used in this Information Memorandum whereas the Chinese version is intended merely for ease of reference. In the event of any inconsistency between the English version and the Chinese version of this Information Memorandum, the English version shall prevail. 1
Hong Kong Special Administrative Region Government Exchange Fund Notes Introduction On 3 March 1993, the Financial Secretary announced in the 1993/94 Budget Speech that it was his intention to replace the Government Bond Programme with the Exchange Fund Notes Programme. Exchange Fund Notes ( Notes ) are issued under the Exchange Fund Ordinance (Chapter 66 of the Laws of Hong Kong) and for the account of the Exchange Fund. 2. Currently Notes of two years, three years, five years, seven years and ten years to maturity are being issued at such times as the Monetary Authority may determine. Notes of other maturities may be offered from time to time at the discretion of the Financial Secretary. The specific amounts and maturities of Notes on offer through competitive or non-competitive tender on any given tender day will be announced at least four business days in advance of that tender day. In this Information Memorandum, any reference to a business day shall not include a Saturday. 3. This Information Memorandum sets out the relevant details of the Notes programme, including the tender arrangements and the procedures for application, payment and settlement. It also describes the arrangements envisaged for promoting secondary market liquidity in the Notes. These arrangements will be kept under regular review and a further Information Memorandum (or supplements to this Information Memorandum) will be issued if material changes are made. Description of the Notes 4. The Notes will be issued by the Hong Kong Government for the account of the Exchange Fund under the Exchange Fund Ordinance (Chapter 66 of the Laws of Hong Kong). 5. Notes with a maturity of two years and upwards may be issued under this programme. Notes with a maturity shorter than 2 years may be issued from time to time at the discretion of the Financial Secretary. The Notes will be issued in denominations of HK$50,000 each and higher integral multiples thereof as described in more detail in the section on tender arrangements. Status 6. The Notes will constitute direct, unsecured, unconditional and general obligations of the Hong Kong Government for the account of the Exchange Fund and will rank pari passu with all other unsecured indebtedness of the Hong Kong Government for the account of, and payable from, the Exchange Fund from time to time outstanding and without preference one over the other by reason of priority of date of issue or otherwise. Information about the Exchange Fund is included in Annex A of this Information Memorandum. Taxation 7. The Notes are exempt from profits tax and stamp duty in Hong Kong. Currency 8. The Notes will be denominated in Hong Kong dollars. All payments in respect of subscription, redemption and interest will be made in Hong Kong dollars. Form of the Notes 9. The minimum denomination of Notes is HK$50,000. Notes will be issued in computerized book entry form only, through Securities Accounts maintained with the Monetary Authority. The Monetary Authority will operate Securities Accounts for Recognized Dealers and others through Recognized Dealers on request (see paragraph 54). Instructions to debit/ credit the Securities Accounts to effect secondary market transactions will be accepted only through Recognized Dealers. Interest 10. Each issue of Notes will bear a fixed rate of interest which will be announced in advance of each tender. Interest, rounded to the nearest cent (half a cent being rounded upwards) and calculated on the actual number of days in an interest period (being a period from and including an interest payment date (or in the case of the first interest period, the issue date of the relevant Notes) to but excluding the next interest payment date) (as may be adjusted in the manner described in paragraph 37) and on the basis of a 365-day year, will be paid semi-annually in arrears. 2
Redemption 11. The Notes will be redeemed at par at maturity in the manner described in the section of this Information Memorandum on settlement arrangements. Governing Law 12. The Notes will be governed by and construed in accordance with the Laws of Hong Kong. Tender arrangements 13. Tenders will be held at such time as the Monetary Authority may determine. If for any reason (e.g. typhoon) the tender day is not a business day, tenders will be held on the immediately succeeding business day (which shall then be regarded as the tender day). At least four business days in advance of each tender day, the Monetary Authority will announce the amount(s) on offer through competitive or non-competitive tender, the issue date(s), the maturity date(s) and the interest rate(s) of the Notes on offer. The announcement will be published on the Reuters screen (HKMAOOD), Bloomberg and in the press, or by any other means specified by the Monetary Authority. Applicants for Notes (including institutional and individual applicants) may apply through both competitive and non-competitive tender held on the same tender day but Recognized Dealers are not permitted to apply for Notes for themselves, directly or indirectly through other Recognized Dealers, in non-competitive tenders. Competitive Tender Procedure 14. Tenders will be open only to Eligible Market Makers. Anyone wishing to apply for the Notes on offer through the competitive tender procedure can only do so through an Eligible Market Maker. 15. All tenders must be made in a form similar to the sample which is at Annex B of this Information Memorandum or in any other form prescribed by the Monetary Authority. Tenders must reach the Monetary Authority not later than 10:30 a.m. Hong Kong time on the tender day. They should be transmitted via a Central Moneymarkets Unit Terminal, tested facsimile or tested telex using the numbers already provided to Eligible Market Makers or by any other means as may be advised by the Monetary Authority. All tenders submitted in a competitive tender will be binding and will not be revocable from 10:30 a.m. on the tender day. 16. Tenders must be made on a bid-price basis, subject to a minimum bid of HK$50,000 each. Tenders above this minimum must be in integral multiples of HK$50,000. 17. Applicants will be required to state in the tender the price (P0), expressed as a percentage and rounded to two decimal places, and the nominal amount of Notes (F0) tendered for at that price. The amount of payment (A0) to be effected on settlement day should be calculated by the following formula : A0 = F0 x P0 18. Tenders accepted will normally be allotted in descending order of price bid from the highest to the lowest accepted price. Applicants whose tenders are accepted will be allotted at the price at which they tendered. Subject to paragraph 24, tenders which are accepted and which are above the lowest accepted price will be allotted in full; those which are accepted and which are at the lowest accepted price may be allotted in full or in part only. In the case of allotment in part, a calculation will be made of the amount of Notes available for allotment at the lowest accepted price as a percentage (the pro-rata percent ) of the total amount of Notes applied for at that price. As far as possible the pro-rata percent will be applied to the amount of Notes tendered for by each applicant at the lowest accepted price and the result rounded down to the nearest multiple of HK$50,000. Non-competitive Tender Procedure 19. The Monetary Authority may reserve a portion of any issue of Notes for offer on a non-competitive tender basis, through HKSCC which is a Recognized Dealer. All applicants for these Notes must submit tender bids through HKSCC. In addition, the Monetary Authority may reserve an additional portion of any issue of Notes for offer on a non-competitive tender basis under the Retail Exchange Fund Notes Programme. Non-competitive tenders in respect of Notes available under the Retail Exchange Fund Notes Programme will be open only to Recognized Dealers which are also appointed by the Monetary Authority as Retail Exchange Fund Notes Distributors. All applicants must therefore submit tender bids in respect of these Notes through a Retail Exchange Fund Notes Distributor (a list of whom, as at 1 June 2007, is included at Annex D of this Information Memorandum and an updated list will be available on the Hong Kong Monetary Authority s website). Accordingly, references in this Information Memorandum to Recognized Dealers in the context of the non-competitive tender procedure and the settlement arrangements therefore shall, where the context so permits, be references to those Recognized Dealers which are appointed as Retail Exchange Fund Notes Distributors and HKSCC (as the case may be) (provided however that for the avoidance of doubt the references to Recognized Dealers in the prohibition in paragraphs 13 and 40 shall be references to all Recognized Dealers and not just Retail Exchange Fund Notes Distributors and HKSCC). In non-competitive tenders which are open to Retail Exchange Fund Notes Distributors, only one non-competitive bid may be submitted for the benefit of any one person through the same Retail Exchange Fund Notes Distributor. Multiple applications or suspected multiple applications in a non-competitive tender made through the same Retail Exchange Fund Notes Distributor are liable to be rejected by the Retail Exchange Fund Notes Distributor. 3
20. HKSCC must submit non-competitive tenders in a form similar to the sample at Annex C of this Information Memorandum or in any other form prescribed by the Monetary Authority. Tenders must reach the Monetary Authority not later than 10:30 a.m. Hong Kong time on the tender day. They should be transmitted via a Central Moneymarkets Unit Terminal, tested facsimile or tested telex using the numbers already provided to HKSCC or by any other means as may be advised by the Monetary Authority. All tenders submitted in a non-competitive tender will be binding and will not be revocable from 10:30 a.m. on the tender day. 21. Retail Exchange Fund Notes Distributors must submit non-competitive tenders in a form similar to the sample at Annex C of this Information Memorandum or in any other form prescribed by the Monetary Authority. Tenders must reach the Monetary Authority not later than 12:00 noon Hong Kong time on the business day falling immediately before the tender day. If for any reason (e.g. typhoon) the business day falling immediately before the tender day ceases to be a business day, the tenders must reach the Monetary Authority not later than 10:30 a.m. Hong Kong time on the tender day. They should be transmitted via a Central Moneymarkets Unit Terminal, tested facsimile or tested telex using the numbers already provided to Retail Exchange Fund Notes Distributors or by any other means as may be advised by the Monetary Authority. All tenders submitted in a noncompetitive tender will be binding and will not be revocable from 12:00 noon Hong Kong time on the business day falling immediately before the tender day or, if the business day falling immediately before the tender day ceases to be a business day for any reason (e.g. typhoon), from 10:30 a.m. Hong Kong time on the tender day. 22. Non-competitive tenders submitted by Retail Exchange Fund Notes Distributors or HKSCC on behalf of applicants will be required to state in the tender the nominal amount of Notes (F1) tendered for. The lowest price (P1) accepted at the competitive tender held on the same tender day, expressed as a percentage and rounded to two decimal places, will be the price required to be paid by successful bidders in the non-competitive tender. The amount of payment (A1) to be effected on settlement day should be calculated by the following formula : A1 = F1 x P1 23. Non-competitive tenders submitted by Retail Exchange Fund Notes Distributors or HKSCC on behalf of applicants which are accepted will be allotted Notes at the lowest price accepted at the competitive tender. Subject to paragraph 24, allotment in respect of non-competitive tenders will be made according to the following rules: (a) if the total subscription amount applied for through non-competitive bid is equal to or smaller than the amount of Notes on offer through non-competitive tender, all applicants will be allotted the full amount for which they tendered; (b) if the total subscription amount applied for through non-competitive bid exceeds the amount of Notes on offer through non-competitive tender AND the number of applications received is equal to or smaller than the quantity of Notes (based on the minimum denomination of HK$50,000) on offer through non-competitive tender, a minimum of HK$50,000 of the Notes will be allocated to each applicant. Notes remaining, if any, will be allocated to each applicant on a pro rata basis to the remaining quantity of Notes applied for by each applicant, rounded down to the nearest whole Note and in the case of Notes remaining after rounding, by ballot; and (c) if the total subscription amount applied for through non-competitive bid exceeds the amount of Notes on offer through non-competitive tender AND the number of applications received is larger than the quantity of Notes (based on the minimum denomination of HK$50,000) on offer through non-competitive tender, a ballot will be held in respect of all non-competitive tender bids and those applicants who are successful in the ballot will each be allotted a Note of HK$50,000 denomination. Other tender arrangements 24. The Monetary Authority will set no minimum price on the Notes offered through competitive tender and will expect to allot the whole amount on offer. If the amount of Notes reserved for non-competitive tender is under-subscribed, the Monetary Authority may add the non-subscribed portion back to the amount on offer through competitive tender. The Monetary Authority reserves the right to vary the allotment in respect of non-competitive tenders by adopting other methods based on a pro-rata form of distribution as the Monetary Authority may consider appropriate. The Monetary Authority reserves the right not to allot all the Notes on offer or to scale down the allotment to a successful bidder, either in competitive or in non-competitive tenders, though he would only consider doing so in exceptional circumstances, e.g. where the tender is made at an unacceptably deep discount to the prevailing market level or to avoid disproportionate market share by a market participant. The Monetary Authority reserves the right to acquire Notes at a tender at the lowest accepted price bid in the event of undersubscription. The Monetary Authority reserves the right to require evidence from a Retail Exchange Fund Notes Distributor to verify that it has not accepted multiple applications, and/or submitted more than one tender bid in a non-competitive tender, for the benefit of any one person. 25. Where, in any issue of Notes, the amount of Notes applied for through competitive tender is less than the whole amount on offer through competitive tender (including any unsubscribed Notes in a non-competitive tender which are added back to the amount on offer through competitive tender), the Monetary Authority may call upon any Eligible Market Maker which has subscribed less than the Average Amount at the competitive tender to subscribe for the unsubscribed Notes: (a) at the Average Accepted Price at the competitive tender; and (b) in an amount which is no more than the difference between the Average Amount and the amount of Notes subscribed by that Eligible Market Maker at the competitive tender. The Monetary Authority may, without notice or other formality, exercise the above right by notifying each relevant Eligible Market Maker of the amount of Notes for which it is required to subscribe through the issue of an allotment notification report upon completion of the relevant tender. In this Information Memorandum, the term "Average Amount" shall mean the whole amount of Notes on offer through competitive tender as described above in this paragraph 25 divided by the total number of Eligible Market Makers and the term "Average Accepted Price" shall mean the weighted average price of accepted bids in a competitive tender. 4
26. The Monetary Authority may reopen a particular issue of Notes, in which case the original maturity of the Notes will remain unchanged. However, the amount to be paid for the new Notes in the reopened issue will include the settlement amount A 0 in paragraph 17 for successful competitive bids or A 1 in paragraph 22 for successful non-competitive bids, plus an amount equal to the interest accrued from the last interest payment date to the allotment date of the relevant new Notes. The accrued interest payable per minimum denomination of HK$50,000 of the new Notes will be announced at least four business days in advance of the tender day. 27. Pursuant to the undertaking given in paragraph 42 of this Information Memorandum, the Monetary Authority will act as the last resort supplier of Notes to Market Makers and, for this purpose, additional Notes may be issued. If for any reason the amount of Notes allotted in any competitive tender is less than the full amount on offer, the unissued amount may be added to the amount of additional Notes and may be made available at any time before maturity. 28. Eligible Market Makers, Retail Exchange Fund Notes Distributors and HKSCC, whose tenders have been successful in whole or in part will be notified of their allotment of Notes and the amount payable as soon as practicable after the allotment. The amount of Notes allotted through competitive or non-competitive tenders, the Average Accepted Price and the lowest price at which Notes have been allotted will be announced not later than 3:00 p.m. on the tender day on the Reuters screen (HKMAOOE), Bloomberg or by any other means specified by the Monetary Authority. Settlement arrangements 29. Payment for, and registration through the computerized book entry system of, Notes issued by tender will be for value on the issue date. By submitting a tender on behalf of an applicant, the relevant Eligible Market Maker, Retail Exchange Fund Notes Distributor or HKSCC agrees to pay for Notes awarded as a result of such tender. Settlement of payments will be made in the manner described in paragraphs 30 and 31 below. Settlement of payments between Eligible Market Makers, Retail Exchange Fund Notes Distributors or HKSCC (as the case may be) and their clients will continue to depend on the interbank payment system and traditional payment methods. 30. In the case of an Eligible Market Maker or Retail Exchange Fund Notes Distributor which is a licensed bank, payment in Hong Kong dollars will be effected through its settlement account maintained with the Monetary Authority. 31. In the case of a HKSCC or an Eligible Market Maker or Retail Exchange Fund Notes Distributor which is not a licensed bank, payment in Hong Kong dollars will be effected as follows: (a) the Monetary Authority will debit the settlement account of the correspondent bank of that Eligible Market Maker, Retail Exchange Fund Notes Distributor or HKSCC (as the case may be); and (b) the correspondent bank will debit the appropriate account of that Eligible Market Maker, Retail Exchange Fund Notes Distributor or HKSCC (as the case may be). 32. The Monetary Authority will, on the issue date, credit the nominal value of the Notes allotted to the relevant Eligible Market Makers, Retail Exchange Fund Notes Distributors or HKSCC (as the case may be) to their Securities Accounts maintained with the Monetary Authority upon receipt of payments. 33. On the maturity date for any Notes issued, the Monetary Authority will arrange for the relevant computerized entries in the Securities Accounts to be reversed and for the settlement accounts of Recognized Dealers which are licensed banks to be credited in Hong Kong dollars with the relevant amounts of principal and interest payable upon maturity of the Notes. Payments to Recognized Dealers which are not licensed banks will be by way of credit to their bank accounts via their correspondent banks which will in turn have their settlement accounts credited. Settlement of payments between Recognized Dealers and their clients will continue to depend on the interbank payment system and traditional payment methods. 34. If a Market Maker fails to close its short position (see the section of this Information Memorandum on Market Making Arrangements by Market Makers and the Monetary Authority) in a particular issue before its maturity, the Monetary Authority will, on the maturity date, debit the Market Maker s settlement account or the settlement account of its designated correspondent bank with an amount equal to the nominal value plus accrued interest of the short position in the manner described in paragraphs 30 and 31 above. 35. On an interest payment date of any Notes, the Monetary Authority will arrange for the settlement accounts of Recognized Dealers which are licensed banks to be credited with the relevant amount of interest in Hong Kong dollars. Payment of interest to Recognized Dealers which are not licensed banks will be by way of credit to their bank accounts via their correspondent banks which will in turn have their settlement accounts credited. Settlement of payments between Recognized Dealers and their clients will continue to depend on the interbank payment system and traditional payment methods. 36. If a Market Maker incurs a short position on the day immediately preceding an interest payment day, the Monetary Authority will debit the Market Maker s settlement account or the settlement account of its designated correspondent bank with the relevant amount of interest in the manner described in paragraphs 30 and 31 above. 5
37. If the issue date specified for any issue of Notes for any reason (e.g. typhoon) is not a business day, payment by the successful bidders will be postponed to the immediately succeeding business day which will then be deemed to be the issue date, however the interest payment dates and maturity date originally specified will remain unchanged. If the maturity date or any interest payment date specified for any issue of Notes is not a business day, the payment of principal plus interest or interest will be made on the immediately succeeding business day which will then be deemed to be the maturity date or interest payment date as the case may be. In the latter case, all subsequent interest payment dates and the maturity date specified for the issue will remain unchanged. In both cases, the interest payable will be adjusted to include interest accrued during the deferred period. Recognized Dealers should refer to the prevailing typhoon procedures specified by the Monetary Authority from time to time. Recognized Dealers, Market Makers and Eligible Market Makers 38. Competitive tenders will be accepted only from Eligible Market Makers and, in the case of a non-competitive tender procedure, non-competitive tenders will be accepted only from Retail Exchange Fund Notes Distributors and HKSCC (as the case may be). Eligible Market Makers are appointed by the Monetary Authority from Market Makers based on criteria determined by the Monetary Authority. Market Makers are appointed by the Monetary Authority from Recognized Dealers. A current list of Eligible Market Makers and Market Makers is available on the Hong Kong Monetary Authority's website. 39. Recognized Dealers are financial institutions appointed by the Monetary Authority which maintain Securities Accounts with the Monetary Authority to which Notes may be credited and debited (a list of Recognized Dealers, as at 1 June 2007, is included at Annex D of this Information Memorandum and an updated list will be available on the Hong Kong Monetary Authority's website). All Recognized Dealers in accepting their appointments shall give the following undertakings to the Monetary Authority: (a) to comply with market regulations that may be specified from time to time by the Monetary Authority; (b) to supply relevant statistics that may be required by the Monetary Authority to enable him to monitor developments in the market; (c) to allow the Monetary Authority or a person nominated by him to inspect their books and records relating to Notes to the extent permitted by law; (d) to give timely instructions to the Monetary Authority for any transfer of Notes in the manner specified by him; and (e) to inform their clients who are not Recognized Dealers that they may open a Securities Account with the Monetary Authority through a Recognized Dealer (see paragraph 54) and of the terms of issues of Notes. 40. In order to promote the Notes in the retail market, HKSCC as a Recognized Dealer is allowed to participate in noncompetitive tenders for Notes. The Monetary Authority may reserve a portion of any issue for this purpose. HKSCC and other Recognized Dealers are not allowed to submit bids for themselves, directly or indirectly through other Recognized Dealers, in non-competitive tenders. Moreover, the Monetary Authority may appoint a number of Recognized Dealers (including Market Makers) as Retail Exchange Fund Notes Distributors. The Retail Exchange Fund Notes Distributors are allowed to submit tenders on behalf of applicants to subscribe for Notes on offer through non-competitive tender under the Retail Exchange Fund Notes Programme where a portion of any issue of Notes is reserved for this purpose. The Retail Exchange Fund Notes Distributors and other Recognized Dealers are not allowed to submit bids for themselves, directly or indirectly through other Recognized Dealers, in non-competitive tenders. Retail Exchange Fund Notes Distributors are required to comply with certain standards in the distribution of the Notes in the retail market as promulgated by the Monetary Authority from time to time. 41. A number of Recognized Dealers have been appointed as Market Makers. Market Makers must give an undertaking to the Monetary Authority that they will maintain a market in the Notes by quoting bid and offer prices for the Notes during normal money market hours (between 9:00 a.m. to 12:00 noon and 2:00 p.m. to 4:00 p.m. Monday to Friday). Market Makers are expected to take an active part in the secondary markets. In addition, they are also expected to promote the Note Programme so as to broaden the investor base. 42. In return the Monetary Authority will give the following undertakings to Market Makers : (a) he will only buy and sell Notes in the secondary market through Market Makers; (b) he will make a bid to Market Makers for Notes they may offer; (c) he will act as last resort supplier of Notes to Market Makers subject to suitable arrangements being entered into with the Market Makers; and (d) he will announce the amounts of Notes outstanding on a regular basis. 43. A number of Market Makers have been appointed as Eligible Market Makers. All bids in competitive tenders must be submitted through Eligible Market Makers and in return for this exclusive right to participate directly in competitive tenders, Eligible Market Makers have agreed with the Monetary Authority that they will, if the Monetary Authority so requires, subscribe for unsubscribed Notes on the basis set out in paragraph 25 above. 6