Term: up to 5 years 1-week Potential returns of 8.50% p.a. if the FTSE 100 is at or above 100% of Initial Level at the Observation Dates
Issuer: SG Issuer
The Plan is subject to Counterparty Risk
The Plan puts all your Capital at Risk
Société Générale FTSE™ 100 Kick Out Plan – Issue 1
This Plan provides investors with the opportunity to earn 8.50% p.a. if the Underlying market Index remains flat or rises. If the closing level of the Underlying Index on any early observation date (set out on page 3 of the brochure) before the Final Valuation Date is at least equal to or above the Kick Out Trigger Level, the Plan will kick out, i.e. mature early and make a gross investment return of 8.50% for each year that the Plan has been in force.
The first early observation date is the 18 March 2022, one year after the Plan Start Date. If the Plan has not matured early, and the closing level of the Underlying Index on the Final Valuation Date (the ‘Final Levels’) is at least equal to or above Kick Out Trigger Level, the Plan will provide an investment return at the Maturity Date equal to 142.50% made up of 100% of your investment plus a 42.50% return, (5 x8.50%) of the money you invested.
Capital Protection Barrier
At the final observation date, if the Underlying Index is at or above 65% of its Initial Level, then full capital is returned. Otherwise, if the Underlying is below 65% of its Initial Level, your capital will be at risk. The capital will be reduced by 0.10% for each day the Index has closed below the 65% barrier during the life of the Plan. For example, if the Underlying has fallen below 65% of its Initial Level for 50 days during the life of the Plan, 5% of capital will be deducted from the initial investment (0.10% x 50 days = 5%). A full capital loss may be sustained if the Underlying Index is below the Capital Protection Barrier for 1000 days or more.
What is the aim of using a daily Capital Protection Barrier?
The aim of the daily Capital Protection Barrier is to reduce the risk of a capital loss being sustained based on one observation date only (i.e. at maturity). Any capital loss will instead be accrued based on the number of days the Underlying Index closes below the Capital Protection Barrier. The goal of such a feature is to prevent significant losses occurring due to one off large drops, when in fact the investors general view of the Underlying Index may have been correct during most of the Plan’s life.
What else should be considered with a daily Capital Protection Barrier?
The capital loss you might incur at maturity will be accrued throughout the life of the Plan. The longer the Underlying Index remains below the Capital Protection Barrier the greater the capital loss at maturity.
A capital loss will be sustained at maturity if the Underlying Index is below the defined Capital Protection Barrier at maturity.
The size of the capital loss will be determined by the number of days the Underlying index has been below the Capital Protection Barrier during the Plan’s life.
If the Underlying Index declines sharply at inception or for a long period of time during the investment period, the capital loss may be significantly higher than the loss you would have suffered by a direct investment in the Index.
