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RISK FACTORS |
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Is
this product right for me?
This Plan is designed for those customers who want
to benefit from the potential long-term growth of the Indices and
are prepared to accept a degree of risk to their capital in return
for the prospect of enhanced returns. Before investing, however, it
is important that you are comfortable with the Plan and the risks
that exist in return for the potential rewards.
You should also be aware that if you do not hold this Plan for the
full term, you may not get back the amount you invested. In
addition, please note that as this investment is linked to two
stockmarkets, it is different from depositing money in a Building
Society or Bank account, and access to your capital during the
investment term is restricted.
To help you decide if this Plan is right for you, below is a brief
list of pros and cons which you should consider before investing.
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Yes, I wish to invest because:
• I am willing to
invest for a set period of time, known as the investment
term; (see page 3 of the brochure)
• I am not likely to need access to my money during the
investment term; (see page 6)
• Although the Plan might pay out early I understand this is
a ten-year investment; (see page 4)
• I want the potential to benefit from any rise in the
Indices but do not want to invest directly in
stockmarkets; (see page 3)
• I know that the value of the Indices can fall as well as
rise; (see page 5)
• I understand that although the assets will be provided by
a major financial institution with a current credit rating
from Standard & Poor’s of ‘AA+’, there is a chance that they
may default on the payments due and this means that I may
lose some, or all, of my investment, known as the
counterparty risk; (see pages 3 and 9)
• I am prepared and can afford to accept the investment
risks; (see page 5 & 9) |
No, I don’t think I should invest because:
• I am not prepared to
accept any risk of loss to my capital; (see page 5)
• I may need access to my money before the end of the
investment term; (see page 6)
• I want an income from my investment;
• I don’t want to lose the dividend income that I may get if
I invest in shares or other similar investments;
• I don’t want an investment where the returns are linked to
the stockmarkets; (see page 3)
• I don’t fully understand how the Plan works; (see page 3)
• I don’t have any other savings or investments; (see page
6). |
What are the risks involved with
investing?
• The investment return you
receive will depend on the performance of the FTSE100 & the
EuroStoxx50 and it is possible that you might not receive any
investment return at all. Please see the ‘How are my returns
calculated?’ section on page 3 and table on page 4 of the brochure.
• If the early maturity conditions are achieved you will receive
12.5% (not compounded) for each year the Plan has been in force. If
the Indices have grown by more than this you will not receive the
benefit of any growth over the predetermined levels stated.
• The payment and timing of the maturity proceeds will depend on the
closing levels of the I dices on the measurement dates, as set out
in the ‘How are my returns calculated’ section on pages 3 & 4. The
Plan may therefore be affected by short-term market fluctuations.
• The capital return at maturity will also depend on the performance
of the Indices and it is possible that you could lose some, or all,
of the amount you invest. The capital return will only be affected
if one or both of the Indices are 50% or more than down on their
Opening Levels at the end of the investment term. Please see the
‘How is the capital return calculated?’ Section on page 5.
• If your circumstances change and you need to withdraw your
investment early we will have to sell your Securities back to the
Issuer and the value will depend on the price they are prepared to
pay. You will also have to pay an administration charge. You should
note that while the asset provider intends to make a secondary
market a material change in market or corporate conditions could
affect this.
• When you invest in the Plan, we will use your money to acquire, on
your behalf, financial instruments (“Securities”) which are designed
to have the characteristics required to achieve the investment
objectives of the Plan. The Securities will be issued by BNP
Paribas, a major financial institution with a current credit rating
of AA+ (with stable outlook) by Standard and Poor’s. As with any
similar investment the security of your Plan depends of the security
of the financial institution. If BNP Paribas were to fail to meet
the repayments due to you could lose some, or all, of your
investment. All references to the credit rating are correct as at
the date of this brochure.
• If you tell us that you want to cancel your investment after we
have bought the Securities you will only get back the value of the
Securities when we sell them, which is likely to be less than
your original investment.
• The values of any tax reliefs will depend on your individual
circumstances. You should note that the levels and bases of taxation
could change in the future.
What are the risks of transferring my
ISA?
• Your existing ISA must be transferred in cash, which means that
your existing Plan Manager will sell your investment holdings.
• Your existing Plan Manager may charge you an exit or transfer fee.
There is the potential for loss of income or growth if markets
should rise while your transfer remains pending.
• Please note that to ensure your funds are received from your
existing Plan Manager in a timely manner, we will not normally
accept ISA transfer applications after 14th November 2008.
Please refer to the Brochure and the Terms & Conditions for full
details.
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