HSBC Global Asset Management Limited Conflicts of Interest Policy Summary

HSBC Global Asset Management Limited is a global organization which provides a wide range of financial products and services. From time to time, it, or a company with whom it has an association, may have interests which conflict with the interests of its clients or with the duties that it owes to its clients. Such conflicts include those arising between the interests of HSBC Global Asset Management, its associates & employees, the interests of its clients, as well as those among clients.

We have established procedures that are designed to identify, prevent and or manage such conflicts. These include organizational and administrative arrangements to safeguard the interests of our clients.

Potential Conflicts of Interest

Detailed below are some of the frequent conflicts that we aim to identify and resolve by applying our Conflicts of Interest Policy.

Examples of conflicts include:

  1. One client versus another; by virtue of the fact HSBC Global Asset Management is responsible for managing the assets of multiple clients across different investment strategies
  2. HSBC Global Asset Management versus a client; where HSBC Global Asset Management has an incentive to favor itself in its decisions rather than a client
  3. An employee versus client; in respect to personal conflicts of interest
  4. An employee versus HSBC Global Asset Management; where an employee has an interest in the outcome of services provided to a client or may make a financial gain/loss
  5. One part of HSBC Group versus HSBC Global Asset Management; due to the breadth of activities across the group

How HSBC Global Asset Management deals with conflicts

HSBC Global Asset Management’s organizational structure is designed so that behavior that could lead to conflict is not rewarded or incentivized. Where necessary, we restrict the flow of information to certain employees in order to protect the interests of our clients.

HSBC Global Asset Management has procedures in place to:

  • Identify types of potential conflicts that could reasonably arise in the context of its activities;
  • Maintain registers of all potential conflicts identified;
  • Prevent or manage conflicts on an ongoing basis;
  • Disclose conflicts where appropriate; and,
  • Maintain evidence of all occurrences of conflicts that cannot be managed.

How we identify conflicts

At HSBC Global Asset Management we consider the types of potential conflict relevant to the specific services and activities we carry out.

For example, potential conflicts are considered when:

  • Developing a new product;
  • Establishing or amending any cross-referral, revenue sharing or joint venture arrangement;
  • Transferring businesses, activities or operations (or parts thereof) to another part of the HSBC Group.

When potential conflicts involve clients, we also assess whether the Group and/or any employee:

  • Is likely to make a financial gain or avoid a financial loss at the expense of any client;
  • Has an interest in the outcome of a service provided to a client, or of a transaction carried out on behalf of the client, which is distinct from the client’s interest in that outcome;
  • Has a financial, or other incentive to favor the interest of one client (or group of clients) over another; and/or
  • Receives or will receive an inducement in relation to a service provided to the client from a person other than the client.

At HSBC Global Asset Management, we are careful to maintain internal registers, documenting and evaluating all identified potential conflicts. These registers also record the mitigating controls in place to manage each type of conflict.

Preventing or managing conflicts

The remuneration, deployment and management of employees at HSBC Global Asset Management has been structured in a way that minimizes conflicts.

Our conflict clearing procedures ensure that conflicts are escalated and managed before commitment to a transaction is made.

In some cases, we will consider declining to act for one or more clients. For example, if:

  • A conflict is too great;
  • Confidentiality obligations prevent adequate disclosure (see disclosure, below); and/or,
  • Informed consent cannot be obtained, or is an insufficient control to manage a conflict.

A dedicated Conflicts Management Office, reporting to the Regulatory Compliance department, is the point of escalation for significant conflicts, and resolution of cross-business conflicts brought to its attention. Written reports on the services and activities reflected in the Registers of Conflicts are presented to senior management of the Group at least annually.

Disclosure

Where HSBC Global Asset Management has used all reasonable efforts to manage a conflict, but the risk of damage to a client or third party’s interest remains, a specific disclosure to the third party about the presence of a conflict will be made.

Disclosures will be made prior to the conclusion of a contract, in a durable medium, and include sufficient detail, taking into account the nature of the client, to enable that client to take an informed decision.

Employees

HSBC Global Asset Management requires its employees to apply good judgment and to act with integrity, taking all appropriate steps to:

  1. Avoid personal conflicts (for example, in their personal account dealings); and,
  2. Proactively escalate personal conflicts that do arise.

No employee is permitted to advise a client on any matter in which they have a personal interest, nor take commercial decisions on behalf of the Group if those decisions are connected to their personal or external business affairs until steps have been taken to satisfactorily manage the conflict.

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This information contained on this webpage does not constitute investment advice, a solicitation or a recommendation to buy, sell or subscribe to any investment. It is not intended to provide and should not be relied upon for accounting, legal or tax advice.
HSBC Global Asset Management is the marketing name for the asset management businesses of HSBC Holdings Plc. HSBC Global Asset Management (USA) Inc. is an investment adviser registered with the US Securities and Exchange Commission. HSBC Global Asset Management (USA) Inc. serves as the investment adviser to the HSBC Funds. Foreside Distribution Services, L.P., member FINRA, is the distributor of the HSBC Funds and is not affiliated with the adviser. HSBC Securities (USA) Inc., member NYSE, FINRA and SIPC, is a sub-distributor of the HSBC Funds. Affiliates of HSBC Global Asset Management (USA) Inc. may receive fees for providing various services to the funds.

Unless and until HSBC Global Asset Management (USA) Inc. and you have entered into an investment management agreement, HSBC Global Asset Management (USA) Inc. is not undertaking to provide impartial investment advice, or to give advice in a fiduciary capacity, to you, or to any retirement account(s) for which you act as a fiduciary.

Risk Considerations:
Past performance is no guarantee of future results. There is no assurance that a portfolio will achieve its investment objective or will work under all market conditions. The value of investments may go down as well as up and you may not get back the amount originally invested. Portfolios may be subject to certain additional risks, which should be considered carefully along with their investment objectives and fees. Equity investments fluctuate in value based on changes to an individual company’s financial condition and overall market conditions. Investments in foreign markets involve risks such as currency rate fluctuations, potential differences in accounting and taxation policies, as well as possible political, economic, and market risks. These risks are heightened for investments in emerging markets which are also subject to greater illiquidity and volatility than developed foreign markets. Frontier markets generally have smaller economies or less developed capital markets than traditional emerging markets, and therefore investing in frontier markets can magnify the risks of investing in emerging markets. Fixed income is subject to credit and interest rate risk. Credit risk refers to the ability of an issuer to make timely payments of interest and principal. Interest rate risk refers to fluctuations in the value of a fixed income security that result from changes in the general level of interest rates. In a declining interest rate environment, a portfolio may generate less income. In a rising interest-rate environment, bond prices fall. Investments in high yield securities (commonly referred to as “junk bonds”) are often considered speculative investments and have significantly higher credit risk than investment grade securities. The prices of high yield securities, which may be less liquid than higher rated securities, may be more volatile and more vulnerable to adverse market, economic or political conditions. Risk is inherent in all investing. You could lose money by investing in the Money Market Fund (‘MM Fund’). Although the MM Fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the MM Fund is not a deposit of HSBC Bank USA, N.A. and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The MM Fund's sponsor has no legal obligation to provide financial support to the MM Fund, and you should not expect that the sponsor will provide financial support to the MM Fund at any time. For complete risk considerations, please refer to the fund's prospectus.

Investors should consider the investment objectives, risks, charges, and expenses of the investment company carefully before investing. The prospectus contains this and other important information about the investment company and the mutual fund. For clients of HSBC Securities (USA) Inc., please call 1-888-525-5757 for more information. For other investors and prospective investors, please call the Funds directly at 1-800-782-8183. You can download the fund prospectus from this site. Investors should read the prospectus carefully before investing or sending money.

US persons (both entities and individuals) are subject to US taxation on their worldwide income and may be subject to tax and other filing obligations with respect to their US and non-US accounts. The Foreign Account Tax Compliance Act (FATCA) is a US law designed to prevent the use of non-US accounts or non-US entities to avoid US taxation of income and assets. To meet this objective, FATCA imposes on US and non-US entities certain documentation, due diligence, withholding and reporting requirements with respect to accounts and certain payments. Investors should consult their independent tax advisors about investment tax implications. 

Investment products are offered by HSBC Securities (USA) Inc. (HSI), member NYSE/FINRA/SIPC. HSI is an affiliate of HSBC Bank USA, N.A.

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