Principal Brochure of HSBC Mandatory Provident Fund

Principal Brochure of HSBC Mandatory Provident Fund

Principal Brochure HSBC Mandatory Provident Fund – ValueChoice

L -MPF002B(VC) v12/1118 (1118) HSBC MPF where your future comes first. Please note that this ‘Principal Brochure’ is comprised of three parts: (1) Product Information, (2) Fund Structure and (3) Fee Table which should be read in conjunction with each other. The Hongkong and Shanghai Banking Corporation Limited and HSBC Provident Fund Trustee (Hong Kong) Limited have prepared and accepted responsibility of the ‘Principal Brochure’. The contents in the ‘Principal Brochure’ are accurate as of 1 November 2018.

Issued by The Hongkong and Shanghai Banking Corporation Limited and HSBC Provident Fund Trustee (Hong Kong) Limited

1 L-MPF002B (VC) v02/0519 (0519) Second Supplement to the HSBC Mandatory Provident Fund – ValueChoice Principal Brochure 24 May 2019 This second Supplement forms part of the ‘Principal Brochure’ and should be read in conjunction with the ‘Principal Brochure’ dated 1 November 2018 and the first Supplement dated 1 April 2019. If you are in doubt about the meaning or effect of the contents of this document, you should seek independent professional advice.

Please note that the ‘Principal Brochure’ of the HSBC Mandatory Provident Fund – ValueChoice has been amended as follows, with effect from 17 June 2019: Part II: Fund Structure Page 26 The Hang Seng China Enterprises Index is the major index that tracks the performance of: (i) H-shares, which are shares in Mainland incorporated enterprises that are listed on the SEHK and primarily traded in Hong Kong; (ii) Red-chips, which are securities of companies that are incorporated outside of the PRC that are listed on the SEHK, have more than 50% of their sales revenue (or profits or assets, if more appropriate) derived from Mainland and are directly or indirectly controlled by organisations or enterprises that are owned by the state, province or municipalities of the PRC; (iii) P-chips, which are securities of companies that are incorporated outside of the PRC that are listed on the SEHK and have more than 50% of their sales revenue (or profits or assets, if more appropriate) derived from Mainland but are not H-shares or Red-chips.

The universe of the Index includes H-share, Red-chip and P-chip companies that have their primary listing on the Main Board of the SEHK. The total number of constituents of the Index is fixed at 50. It is constructed to reproduce the performance of a hypothetical portfolio of such stocks, with an interest in each stock proportional to each stock’s market value. It is calculated on a 2-second basis during trading hours of the SEHK and its closing value is based on official closing prices of the constituent of the Hang Seng China Enterprises Index announced by the SEHK.

2 Page 27 The Hang Seng China Enterprises Index currently comprises 50 constituent stocks and the aggregate market value of these stocks accounts for about 57%# of the total market capitalisation of all Hong Kong listed Chinese enterprises of all H-shares listed on the Main Board of the SEHK, the Red-chips and the P-chips. # Simulated figures based on 12-month average market capitalisation of the end of September 2018. As at 25 March 2019, the respective weightings of the top 10 largest constituent stocks of the Hang Seng China Enterprises Index are: Stock Code Stock Name Weighting (%) 700 Tencent 10.08 939 CCB 9.85 941 China Mobile 9.60 2318 Ping An 9.06 1398 ICBC 8.25 3988 Bank of China 5.48 883 CNOOC 4.64 386 Sinopec Corp 3.08 2628 China Life 2.92 3968 CM Bank 2.69 Real-time update of the Index can be obtained through the SEHK Teletext System, Thomson Reuters, Bloomberg and the website of HSIL at www.hsi.com.hk.

Other important news relating to the Hang Seng China Enterprises Index will be available through press releases and at the HSIL website, www.hsi.com.hk.

The list of constituent stocks which comprise the Hang Seng China Enterprises Index is reviewed by HSIL on a quarterly basis. The composition of the Hang Seng China Enterprises Index may change and its constituent companies may be substituted with other companies as determined by HSIL. The Hongkong and Shanghai Banking Corporation Limited and HSBC Provident Fund Trustee (Hong Kong) Limited have prepared and accepted the responsibility for this document. The contents in this document are accurate as of 24 May 2019.

  • 1 L-MPF002B(VC) v01/0419 (0419) First Supplement to the HSBC Mandatory Provident Fund – ValueChoice Principal Brochure 1 April 2019 This first Supplement forms part of the ’Principal Brochure’ and should be read in conjunction with the ’Principal Brochure’ dated 1 November 2018. If you are in doubt about the meaning or effect of the contents of this document, you should seek independent professional advice. Please note that the ’Principal Brochure’ of the HSBC Mandatory Provident Fund - ValueChoice has been amended as follows, with effect from 1 April 2019: Important notes
  • MPF Benefits, AVC Benefits and TVC Benefits payable on a Member’s 65th birthday or early retirement on or after his/her reaching age 60 can be paid in one lump sum or in instalments, at the Member’s election (in such form and on such terms as the Trustee may, to the extent not prohibited by the ’MPF Ordinance’ or General Regulation, prescribe). Please refer to the ’Payment of MPF Benefits, AVC Benefits and TVC Benefits’ section under ’Payment of benefits’ in Part I – Product Information of the ’Principal Brochure’ for full details.

Part I: Product Information Page 2 Glossary ’TVC’ means tax deductible voluntary contributions. ’TVC account’ has the same meaning as ascribed to it in the MPF Ordinance. ’TVC Account Holder’ means a person with a TVC account held in the HSBC Master Trust. ’TVC Benefits’ means benefits derived from TVC which comprise the value of a Member’s TVC account as determined in accordance with the relevant application form and the ’Master Trust Deed’ constituting the HSBC Master Trust.

A Specific Investment Instruction applies to all types of contributions, including without limitation, employer’s mandatory and voluntary contributions, employee’s mandatory and voluntary contributions, Flexi-Contributions and TVC.

  • 2 Page 4 HSBC Mandatory Provident Fund SFC authorization is not a recommendation or endorsement of an MPF scheme or pooled investment fund nor does it guarantee the commercial merits of an MPF scheme or pooled investment fund or its performance. It does not mean the MPF scheme or pooled investment fund is suitable for all scheme participants or fund holders nor is it an endorsement of its suitability for any particular scheme participant or fund holder. Page 4 Constituent Funds as feeder funds SFC authorization is not a recommendation or endorsement of an MPF scheme or pooled investment fund nor does it guarantee the commercial merits of an MPF scheme or pooled investment fund or its performance. It does not mean the MPF scheme or pooled investment fund is suitable for all scheme participants or fund holders nor is it an endorsement of its suitability for any particular scheme participant or fund holder. Page 16 Application for participation in the HSBC Master Trust
  • any person who is eligible to open a TVC account in accordance with the MPF Ordinance (for details, please refer to the sub-section headed ’Eligibility for opening a TVC account’ under the section ’Tax deductible voluntary contributions’).

Page 16 Withdrawal from participation in the HSBC Master Trust Please refer to the sub-section headed ’Withdrawal and Termination of TVC’ under the section ’Tax deductible voluntary contributions’ for details on a TVC Account Holder’s withdrawal from participation in the HSBC Master Trust.

3 Page 16 Benefits transfer from the HSBC Master Trust Transfer of TVC Benefits Please refer to the sub-section headed ’Portability of TVC’ under the section ’Tax deductible voluntary contributions’ for details on how to transfer TVC Benefits from the HSBC Master Trust.

Requesting a transfer of MPF Benefits, AVC Benefits and TVC Benefits Requests to transfer MPF Benefits, AVC Benefits (excluding any part of the AVC Benefits derived from an Employee Member or Deferred Member’s Flexi-Contributions) and TVC Benefits from the HSBC Master Trust should be made to the Administrator accompanied by a transfer form completed by all relevant parties. Processing is subject to contributions being paid to date at the time of the requests, to the extent permitted by the General Regulation and to other circumstances which can affect the processing time of such requests. Page 17 Contributions Tax deductible voluntary contributions Any person who fulfils the eligibility requirements as mentioned in the sub-section headed ’Eligibility for opening a TVC account’ below can set up a TVC account and pay TVC into such account.

TVC paid into the account will be eligible for tax deduction in accordance with the Inland Revenue Ordinance. With effect from 1 April 2019, the HSBC Master Trust offers TVC accounts to eligible persons.

The characteristics of TVC are as follows:
  • TVC can only be made directly by eligible persons into a TVC account of a Registered Scheme in order to enjoy tax concessions, subject to relevant conditions. Please refer to the sub-sections headed ’Tax concession arrangements for TVC’ and ’Eligibility for opening a TVC account’ below for details;
  • Involvement of employers is not required;
  • Though it is voluntary in nature, TVC is subject to the same vesting, preservation and withdrawal restrictions applicable to mandatory contributions. Accordingly, any accrued benefits derived from TVC (including any TVC made in excess of the maximum tax deduction limit during a tax assessment year) will be preserved and can only be withdrawn upon retirement at age 65 or on other statutory grounds under the MPF legislation. Please refer to the sub-section headed ’Withdrawal and Termination of TVC’ below for details.

4 Tax concession arrangements for TVC The maximum tax concession amount for TVC in each year of assessment is set out in the Inland Revenue Ordinance and, in the year of assessment 2019/2020, is HK$60,000. It should be noted that such tax concession amount is an aggregate limit for both TVC and other qualifying annuity premiums rather than TVC only, and any claim for tax deductions will be applied to TVC before other qualifying annuity premiums. To facilitate the tax return filing by TVC Account Holders, the Trustee will provide a TVC summary to each TVC Account Holder if TVC is made by the Member to the HSBC Master Trust during a year of assessment.

Such summary will be made available around 10 May after the end of the relevant year of assessment (i.e. before the end of a period of 40 days (unless the 40th day is not a Business Day, then the next Business Day) from the beginning of the next tax assessment year commencing on 1 April).

Eligibility for opening a TVC account Any person who falls under any one of the following categories may open a TVC account:
  • a current employee member of a Registered Scheme;
  • a current self-employed member of a Registered Scheme;
  • a current personal account holder of a Registered Scheme; or
  • a current member of an MPF exempted ORSO scheme. Each eligible person can only have one TVC account under a Registered Scheme. The Trustee may reject any application to open a TVC account in the event of (i) having reason to know that information and documents provided to the Trustee are incorrect or incomplete; (ii) failure of applicants to provide information and documents as required by the Trustee to ensure compliance with applicable laws and regulations relating to anti-money laundering/tax reporting; and/or (iii) other circumstances which the Trustee may consider appropriate. Contribution of TVC TVC can only be made into a TVC account, which is separate from a contribution account or a personal account. Any other forms of voluntary contributions that are not made into the TVC account are not TVC (for example, voluntary contributions that are made by Employee Members through their Participating Employer will not be eligible for claiming TVC tax deduction). For compliance purposes, there could be circumstances (such as (i) to (iii) in the preceding paragraph) that TVC may be rejected. Any rejected TVC (with no interest) will be refunded within 45 days of receipt of any such TVC unless for some exceptional regulatory reasons the Trustee is unable to effect a refund within such a timeframe. TVC is subject to the same vesting, preservation and withdrawal requirements applicable to mandatory contributions. This also applies to contributions that exceed the maximum tax deductible amount per assessment year.

There is no maximum limit imposed on the amount made to the TVC account, unless otherwise specified in the relevant application form. TVC will be fully vested in the Members once it is paid into the HSBC Master Trust. TVC Account Holders can make regular TVC by monthly direct debit from as little as HK$300, or simply by paying a lump sum of HK$1,000 or more at the time of Member’s choice.

5 For the avoidance of doubt, the protection of accrued benefits under the MPF Ordinance is not applicable to the TVC account, meaning that TVC Benefits will generally be vested in the trustee-in-bankruptcy or official receiver as part of the property of the bankrupt TVC Account Holder. TVC Account Holders can make their own fund selection or choose to invest in DIS under the HSBC Master Trust according to their risk tolerance level and financial circumstance. If a TVC Account Holder fails to submit to the Trustee a valid Specific Investment Instruction or does not make any investment choice at the time of TVC account opening, his/her TVC will be invested in DIS. Please refer to the sub-section headed ’MPF Default Investment Strategy’ under the section ’Introduction’ of this ’Principal Brochure’ for details of the DIS arrangement. Portability of TVC TVC is portable and TVC Account Holders should note that:
  • TVC Account Holder, may at any time, choose to transfer the TVC Benefits to another Registered Scheme that offers TVC;
  • The transfer must be in a lump sum (full account balance);
  • The TVC account in the original scheme from which the accrued benefits are transferred (resulting in zero balance) may be terminated upon such transfer;
  • For the avoidance of doubt, transfer of accrued benefits derived from a TVC account to another TVC account of the Member in another Registered Scheme cannot be claimed as deductions for taxation purpose; and
  • Transfer of TVC Benefits to another TVC account of the member in another Registered Scheme will also be subject to the same preservation and withdrawal restrictions applicable to mandatory contributions in the MPF regulations. Withdrawal and Termination of TVC As with accrued benefits derived from mandatory contributions, the TVC Benefits will be paid in the following withdrawal conditions only:
  • on a Member’s 65th birthday;
  • on a Member’s death (in which case the benefits are paid to the Member’s legal personal representatives);
  • on the total incapacity of a Member;
  • on the terminal illness of a Member;
  • on the early retirement of a Member on or after his/her reaching age 60;
  • upon a Member’s permanent departure from the Hong Kong SAR; or
  • upon a Member’s claim on small balance under section 162 (1)(c) of the General Regulation.
6 In addition, the Trustee must provide instalment options to the following withdrawal conditions:
  • on a Member’s 65th birthday; and
  • on the early retirement of a Member on or after his/her reaching age 60. Apart from the withdrawal of accrued benefits, the Trustee may terminate the Member’s TVC account if: 1. the balance of the TVC account is zero; and 2. there is no transaction activity in respect of the TVC account for 365 days. Page 18 Allocation of contributions Page 18 Changing investment options Page 19 Payment of benefits The value of a Member’s (including a Deferred Member’s or a TVC Account Holder’s) benefits is the total of the MPF Benefits, the AVC Benefits and TVC Benefits as provided in the ’Master Trust Deed’ of the HSBC Master Trust.

TVC Benefits Please refer to sub-section headed ’Withdrawal and Termination of TVC’ under the section ’Tax deductible voluntary contributions’ for details on when TVC Benefits are payable.

7 Payment of MPF Benefits, AVC Benefits and TVC Benefits Requests for payment of MPF Benefits, AVC Benefits and TVC Benefits by a Member (including a Deferred Member or a TVC Account Holder) should be made to the Administrator and accompanied by a completed request of payment form. Processing time of such requests may be affected by whether there are any outstanding contributions/contribution surcharges, whether properly completed payment form and such documents as may be required by the General Regulation or the Trustee (to the extent permitted by the General Regulation) have been received, and any other circumstances which can affect the processing time of such requests.

MPF Benefits, AVC Benefits and TVC Benefits payable on a Member’s 65th birthday or early retirement on or after his/her reaching age 60 can be paid in one lump sum or in instalments, at the Member’s election (in such form and on such terms as the Trustee may, to the extent not prohibited by the ’MPF Ordinance’ or General Regulation, prescribe). Page 21 Taxation (d) TVC Account Holders will be able to deduct the TVC paid into their TVC accounts, subject to a maximum deduction per tax assessment year as specified in the Inland Revenue Ordinance. More information can be found under the sub-section headed ’Tax deductible voluntary contributions’.

  • Page 21 Reports and accounts
  • If TVC is made by a Member to the HSBC Master Trust during a year of assessment, a TVC summary will be made available to the TVC Account Holder around 10 May after the end of the relevant year of assessment (i.e. before the end of a period of 40 days (unless the 40th day is not a Business Day, then the next Business Day) from the beginning of the next tax assessment year commencing on 1 April).

8 Part III: Fee Table Page 31 (C) Fund operating charges and expenses of constituent funds The Hongkong and Shanghai Banking Corporation Limited and HSBC Provident Fund Trustee (Hong Kong) Limited have prepared and accepted the responsibility for this document.

The contents in this document are accurate as of 1 April 2019.

1 Notice to Participating Employers and Members of the HSBC Mandatory Provident Fund – ValueChoice (collectively, ‘Scheme Participants’, ‘you’ or ‘yours’) The Hongkong and Shanghai Banking Corporation Limited and HSBC Provident Fund Trustee (Hong Kong) Limited have prepared and accepted responsibility of this notice. The contents in this notice are accurate as of the date of its issuance. March 2019 Important: This notice is important and requires your immediate attention. If you are in any doubt about the content of this notice, you should seek independent professional advice. Restructuring of the HSBC Mandatory Provident Fund – ValueChoice (the ‘HSBC ValueChoice’), and the HSBC Mandatory Provident Fund – SuperTrust Plus (the ‘HSBC SuperTrust Plus’) (each, a ‘Scheme’ and collectively, the ‘Schemes’) This notice is in relation to the restructuring of the Schemes whereby the HSBC ValueChoice is to be merged with the HSBC SuperTrust Plus (the ‘Merger’) with effect from 1 July 2019 (the ‘Effective Date’), subject to the relevant regulatory approval.

  • About the Merger
  • With effect from the Effective Date, the Members and the Participating Employers of the HSBC ValueChoice immediately before the Effective Date will automatically become scheme participants of the HSBC SuperTrust Plus. As part of the Merger, the assets of each constituent fund under the HSBC ValueChoice will be transferred to the corresponding constituent fund under the HSBC SuperTrust Plus. Each corresponding constituent fund under the HSBC SuperTrust Plus share the same name, investment objectives and policies, fee level and fees and charges structure with the relevant constituent fund under the HSBC ValueChoice.
  • You need not undergo any formality for completing such transfer. However, if you wish to opt out from the Merger, you must submit a valid transfer instruction through the transferee trustee (i.e. the trustee of the Registered Scheme which you wish to transfer to) and such instruction must reach The Hongkong and Shanghai Banking Corporation Limited (‘HSBC Bank’), the Administrator of the HSBC ValueChoice. Please refer to 2.5(b) of this notice for details. Benefits of the Merger
  • The Merger will enable you to enjoy the economies of scale that will allow fixed costs associated with the constituent funds to spread over a larger asset base, with an aim that the fund expense ratio could be lower in the long run.
  • A wider and more diversified choice of funds will be offered to you. For details, please refer to 2 of this notice.
  • The Merger will be in the interests of the Scheme Participants of the HSBC ValueChoice and there will be no adverse impact on their accrued benefits. In particular, if you are investing in the Core Accumulation Fund under the HSBC ValueChoice, although 2.4(d) of this notice refers to the unit price of this fund differs from that of the Core Accumulation Fund under the HSBC SuperTrust Plus, the balance held by you in respect of the Core Accumulation Fund will be the same immediately before and after the Merger. Please refer to 2.4(d) of this notice for details.
  • Also, after the Merger, you will be able to continue to enjoy the services they currently enjoy under the HSBC ValueChoice.

HSBC_VC_SM_Eng (2019-03)

  • 2 Quick facts of the Merger
  • The board of directors of HPFT (as defined on page 2 of this notice) has endorsed the Merger. Also, the Merger has met the requirements set out in the ‘Master Trust Deeds’ of each of the HSBC ValueChoice and the HSBC SuperTrust Plus. In particular, the ‘Master Trust Deed’ of the HSBC ValueChoice confers on HPFT to undergo the Merger without the need to obtain Members’ consent.
  • The costs of the Merger will be borne by HPFT and HSBC Bank (as defined on page 1 of this notice), as agreed between themselves. No costs of the Merger will be borne by the Scheme Participants.
  • There will be suspension of services due to the Merger. Please refer to 2.5(a) of this notice for details. Also, please observe the cut-off dates/times for certain instructions, as set out in 2.5(b) of this notice if you wish to have your relevant valid instructions to be effective under the HSBC ValueChoice before the Merger. How to know more about the Merger
  • Seminars will be held to brief the Scheme Participants on the Merger. Further details of the seminars will be available on HSBC MPF website www.hsbc.com.hk/mpf in or around April 2019.
  • If you have any questions or concerns about the Merger, please contact the HSBC MPF Member Hotline (852) 3128 0128 or HSBC MPF Employer Hotline (852) 2583 8033. We, HSBC Provident Fund Trustee (Hong Kong) Limited (‘HPFT’, ‘we’ or ‘us’), are the trustee of the Schemes. The information accompanying this notice contains details of the restructuring of the Schemes that is the Merger, pursuant to clause 21A of the trust deed of the HSBC ValueChoice. The Merger is scheduled to take effect on the Effective Date, subject to the relevant regulatory approval. Terms not defined in this notice have the same meaning as in the Principal Brochures of the Schemes.

As your accrued benefits under the HSBC ValueChoice will be automatically transferred to the HSBC SuperTrust Plus as a result of the Merger, you must read this notice carefully. Any valid request to transfer-out of the HSBC ValueChoice by a Scheme Participant who does not wish to be transferred to the HSBC SuperTrust Plus under the Merger must be submitted through the transferee trustee and reach HSBC Bank, the Administrator of the HSBC ValueChoice, by the Transfer-out Date. Any such transfer-out, as with the usual transfer-out, will not be subject to any withdrawal conditions, limitations, charges or penalties.

For the purpose of this notice, unless this notice otherwise specifies, a Scheme Participant immediately before the Merger and whose benefits and membership will be automatically transferred to the HSBC SuperTrust Plus is referred to as ‘Transferring Participants’.

1. Key operators and financial year HSBC ValueChoice and HSBC SuperTrust Plus have the same key operators, that is HPFT being the Trustee and Custodian and HSBC Bank being the Sponsor and Administrator. Both Schemes have the same financial year end, that is 30 June. 2. Constituent fund(s) (‘CF(s)’) 2.1 Reasons for merging the CFs HPFT believes that the Merger will enable the Scheme Participants who invest in the CFs under the HSBC ValueChoice to enjoy the economies of scale that will allow fixed costs to spread over a larger asset base. Therefore, HPFT expects that there will be no prejudice to the interests of the Scheme Participants of the HSBC ValueChoice as a result of the Merger.

Details of the CFs under the respective HSBC ValueChoice and HSBC SuperTrust Plus are set out below.

3 2.2 CFs available under the HSBC ValueChoice and under the HSBC SuperTrust Plus We set out in the table below: (a) the CFs available under the HSBC ValueChoice and the HSBC SuperTrust Plus respectively before the Merger; and (b) the CFs available under the HSBC SuperTrust Plus after the Merger: Types of Fund Constituent Funds Available under the HSBC ValueChoice (Before Merger) (each, a ‘HSBC ValueChoice CF’) Available under the HSBC SuperTrust Plus (Before Merger) (each, a ‘HSBC SuperTrust Plus CF’) Available under the HSBC SuperTrust Plus (After Merger) Money Market Fund MPF Conservative Fund ✓ Bond Fund Global Bond Fund ✓ Guaranteed Fund Guaranteed Fund ✓ ✓ Mixed Assets Fund Age 65 Plus Fund ✓ Core Accumulation Fund ✓ Stable Fund ✓ ✓ Balanced Fund ✓ ✓ Growth Fund ✓ ✓ ValueChoice Balanced Fund# ✓ ✓ ~ (to be launched on the Effective Date) Equity Fund Global Equity Fund# ✓ ✓ ~ (to be launched on the Effective Date) North American Equity Fund ✓ ✓ European Equity Fund ✓ ✓ Asia Pacific Equity Fund ✓ ✓ Hong Kong and Chinese Equity Fund ✓ ✓ Chinese Equity Fund ✓ ✓ ValueChoice US Equity Fund# ✓ ✓ ~ (to be launched on the Effective Date) ValueChoice European Equity Fund# ✓ ✓ ~ (to be launched on the Effective Date) ValueChoice Asia Pacific Equity Fund# ✓ ✓ ~ (to be launched on the Effective Date) Hang Seng Index Tracking Fund* ✓ ✓ ✓ Hang Seng China Enterprises Index Tracking Fund# ✓ ✓ ~ (to be launched on the Effective Date) * Those under the HSBC ValueChoice are the ‘Matching HSBC ValueChoice CFs’ and those under the HSBC SuperTrust Plus are the ‘Matching HSBC SuperTrust Plus CFs’, for the purpose of this notice.

These CFs under the HSBC ValueChoice are, for the purpose of this notice, ‘Original HSBC ValueChoice CFs’. ~ These CFs to be launched under the HSBC SuperTrust Plus are, for the purpose of this notice, the ‘Replicate HSBC ValueChoice CFs’.

4 2.3 Fund mapping It is proposed that each CF available under the HSBC ValueChoice will be merged into the relevant corresponding CF available under the HSBC SuperTrust Plus with the same names, investment objectives and policies, fee levels and fees and charges structure. Please refer to the diagram below: HSBC ValueChoice HSBC SuperTrust Plus MPF Conservative Fund ⇧ MPF Conservative Fund Global Bond Fund ⇧ Global Bond Fund Age 65 Plus Fund ⇧ Age 65 Plus Fund Core Accumulation Fund ⇧ Core Accumulation Fund ValueChoice Balanced Fund ⇧ ValueChoice Balanced Fund (to be established) Global Equity Fund ⇧ Global Equity Fund (to be established) ValueChoice US Equity Fund ⇧ ValueChoice US Equity Fund (to be established) ValueChoice European Equity Fund ⇧ ValueChoice European Equity Fund (to be established) ValueChoice Asia Pacific Equity Fund ⇧ ValueChoice Asia Pacific Equity Fund (to be established) Hang Seng Index Tracking Fund ⇧ Hang Seng Index Tracking Fund Hang Seng China Enterprises Index Tracking Fund ⇧ Hang Seng China Enterprises Index Tracking Fund (to be established) What fund offering structure do the HSBC ValueChoice and the HSBC SuperTrust Plus have in common? (a) A Matching HSBC ValueChoice CF shares the same name, investment objective and policy, fee level and fees and charges structure with the relevant Matching HSBC SuperTrust Plus CF.

There are altogether five Matching HSBC ValueChoice CFs.

(b) Each of the Matching HSBC ValueChoice CFs and the Matching HSBC SuperTrust Plus CFs, other than the Hang Seng Index Tracking Fund, is a feeder fund investing solely in an underlying approved pooled investment fund (‘APIF’). Each underlying APIF is established in the form of a unit trust. Hang Seng Index Tracking Fund is a feeder fund investing in an approved index tracking collective investment scheme (‘approved ITCIS’) with a similar investment objective. The underlying APIF and/or (in the case of Hang Seng Index Tracking Fund) approved ITCIS, of each of the Matching HSBC ValueChoice CFs is identical to that of the relevant Matching HSBC SuperTrust Plus CF.

What fund offering the HSBC ValueChoice has while the HSBC SuperTrust Plus does not? (c) Six Replicate HSBC ValueChoice CFs will be launched under the HSBC SuperTrust Plus on the Effective Date. The six Replicate HSBC ValueChoice CFs have the same names, investment objectives and policies, underlying APIF/approved ITCIS (as the case may be), fee levels and fees and charges structure as the corresponding Original HSBC ValueChoice CFs. The issue price of each Replicate HSBC ValueChoice CF will be the same as the unit price of the corresponding Original HSBC ValueChoice CF immediately before the Merger.

(d) The establishment of the Replicate HSBC ValueChoice CFs will diversify the CFs offering such that the number of CFs under the HSBC SuperTrust Plus will be increased from 14 to 20. In particular, three CFs with preference towards ITCIS, namely, the ValueChoice Balanced Fund, the ValueChoice US Equity Fund and the ValueChoice European Equity Fund, will be added to the HSBC SuperTrust Plus. What fund offering will the HSBC SuperTrust Plus have upon the Merger? (e) The six Replicate HSBC ValueChoice CFs, together with the five Matching HSBC SuperTrust Plus CFs, will be having the investment objectives and policies, fee levels and fees and charges structure the same as those for the existing eleven HSBC ValueChoice CFs now.

5 (f) The establishment of the Replicate HSBC ValueChoice CFs, together with the Balanced Fund, the North American Equity Fund and the European Equity Fund, which are actively managed and already included in the HSBC SuperTrust Plus, will offer the Transferring Participants a set of actively managed funds and funds with preference towards ITCIS(s) on one platform in the same asset classes. The HSBC SuperTrust Plus will provide a platform with more comprehensive choices to the Transferring Participants to meet their own preference and risk profile.

2.4 Merger of the CFs In order to achieve the merger of each HSBC ValueChoice CF into the relevant Matching HSBC SuperTrust Plus CF or Replicate HSBC ValueChoice CF (as the case may be), it is proposed that: (a) Given the investment objective and structure of each HSBC ValueChoice CF are the same as the relevant Matching HSBC SuperTrust Plus CF or Replicate HSBC ValueChoice CF (as the case may be), each HSBC ValueChoice CF will be merged into the relevant Matching HSBC SuperTrust Plus CF or Replicate HSBC ValueChoice CF (as the case may be).

(b) The accrued benefits of each Transferring Participant will be redeemed and utilised to subscribe for units in the relevant Matching HSBC SuperTrust Plus CF or Replicate HSBC ValueChoice CF (as the case may be) on the Effective Date, based on the applicable redemption and subscription prices as of the valuation day immediately before the Effective Date, that is the last dealing day of the HSBC ValueChoice. We consider that the above arrangement will be able to minimise any potential market risks and fluctuation in the price of the investments. Further, the redemption will be in specie and not in cash to avoid out-of-market exposure arising from a cash redemption.

The balance held by a Transferring Participant under the HSBC ValueChoice immediately before the Merger will be the same as that held by the Transferring Participant under the HSBC SuperTrust Plus immediately after the Merger. (c) Other than the Core Accumulation Fund, because the unit price of a HSBC ValueChoice CF is the same as the relevant Matching HSBC SuperTrust Plus CF or Replicate HSBC ValueChoice CF, the total number of units and the value of those units in a Matching HSBC SuperTrust Plus CF or Replicate HSBC ValueChoice CF (as the case may be) held by a Transferring Participant immediately after the Merger would be the same as the total number of units and the value of those units in the HSBC ValueChoice CF held by the Transferring Participant immediately before the Merger.

The tables below illustrate how the same number of units and unit value is to be transferred from a HSBC ValueChoice CF to a Matching HSBC SuperTrust Plus CF or Replicate HSBC ValueChoice CF: Before the Merger – HSBC ValueChoice# Fund Code Unit Price (HK$) immediately before the Merger* Account Balance – Employer Mandatory Contribution Account Balance – Member Mandatory Contribution No. of units HK$ No. of units HK$ HSIF 25.00 10.000 250.00 10.000 250.00 GBF 20.00 20.000 400.00 20.000 400.00 Total: 650.00 Total: 650.00 After the Merger – HSBC SuperTrust Plus# Fund Code Unit Price (HK$) immediately after the Merger* Account Balance – Employer Mandatory Contribution Account Balance – Member Mandatory Contribution No.

of units HK$ No. of units HK$ HSIF 25.00 10.000 250.00 10.000 250.00 GBF 20.00 20.000 400.00 20.000 400.00 Total: 650.00 Total: 650.00 HSIF refers to Hang Seng Index Tracking Fund and GBF refers to Global Bond Fund. Note: # The above is hypothetical illustration that applies to all HSBC ValueChoice CFs except the Core Accumulation Fund. The hypothetical illustration is for reference only.

The unit price will be calculated using the fund price as at 28 June 2019, the last dealing day immediate before the Effective Date.

6 (d) The unit price of the Core Accumulation Fund under the HSBC ValueChoice is, however, not the same as that of the Matching HSBC SuperTrust Plus CF. This is because the Core Accumulation Funds under each of the HSBC ValueChoice and the HSBC SuperTrust Plus were established through converting the ValueChoice Stable Growth Fund and the Stable Growth Fund under these Schemes respectively, and the fund prices of the stable growth funds immediately before the conversion were not the same.

As such, the number of units held by the Transferring Participant in the Matching HSBC SuperTrust Plus CF after the Merger will be lesser (because the unit price per unit in the Matching HSBC SuperTrust Plus CF is higher), but the balance held by a Transferring Participant under the Core Accumulation Fund under the HSBC ValueChoice will be the same as the balance held by the Transferring Participant in the corresponding HSBC SuperTrust Plus CF after the Merger. The unit price difference will not have any financial impact, whether immediate or ongoing, on the Transferring Participant. The tables below illustrate how the number of units and unit value is to be transferred from the Core Accumulation Fund under the HSBC ValueChoice to the Matching HSBC SuperTrust Plus CF: Before the Merger – HSBC ValueChoice Fund Code Unit Price (HK$) immediately before the Merger Account Balance – Employer Mandatory Contribution Account Balance – Member Mandatory Contribution No.

of units HK$ No. of units HK$ CAF 12.00 100.000 1,200.00 100.000 1,200.00 After the Merger – HSBC SuperTrust Plus Fund Code Unit Price (HK$) immediately after the Merger Account Balance – Employer Mandatory Contribution Account Balance – Member Mandatory Contribution No. of units HK$ No. of units HK$ CAF 15.00 80.000 1,200.00 80.000 1,200.00 CAF refers to Core Accumulation Fund Note: The above is hypothetical illustration and for reference only. As of 31 January 2019, CAF unit price under the HSBC SuperTrust Plus and the HSBC ValueChoice is HK$17.76 and HK$12.09 respectively.

(e) No bid and offer spreads or other transaction costs will be levied in respect of the redemptions and subscriptions of units of the CFs of the Schemes or underlying APIFs or approved ITCISs to effect the Merger. (f) As the overall fees and charges payable by the Transferring Participants under the HSBC SuperTrust Plus in respect of the Matching HSBC SuperTrust Plus CFs and Replicate HSBC ValueChoice CFs immediately after the Merger will be the same as the overall fees and charges payable by them under the HSBC ValueChoice immediately before the Merger, the Merger will not in itself have any adverse financial impact on the interests of the Transferring Participants.

(g) The costs of the Merger will be borne by HPFT and HSBC Bank, as agreed between themselves. No costs of the Merger will be borne by the Scheme Participants. 2.5 Suspension (a) Suspension of services To facilitate smooth transition and system migration for the purpose of the Merger, the webpage ‘MPF/ ORSO’ on Personal Internet Banking and interactive voice response system (the ‘IVRS’) will be suspended from 4 pm, 27 June 2019 to 11.59 pm, 1 July 2019 (both days inclusive). A message regarding the suspension of services will be posted at HSBC MPF website and recorded in the IVRS. During the above suspension period, no dealing instruction and enquiry can be made via Personal Internet Banking (excluding enquiry of ‘Projection on MPF Benefits’ on Personal Internet Banking) or IVRS.

7 For the avoidance of doubt, other than the suspension period specified above, dealing instructions through Personal Internet Banking or IVRS will be processed in the normal business manner, subject to the terms already set out on the relevant webpage or IVRS. In particular, dealing instructions through Personal Internet Banking or IVRS received before the suspension period will be completed before the Effective Date, subject to the terms already set out on the relevant webpage or IVRS (as applicable).

Kindly note however that Business Internet Banking and its webpage will not be suspended. (b) Cut-off dates/times for dealing instructions Scheme Participants may submit valid dealing instructions to the Administrator by the following respective cut-off dates/times in order to have their instructions processed under the HSBC ValueChoice before the Effective Date: Instruction Received on or before Participating Employers and Members Contribution Via Business Internet Banking: 11.59 pm, 20 June 2019 By DDA – 20 June 2019 By Cheque – 21 June 2019 By Direct Credit – 24 June 2019 Via paper form: 17 June 2019 By DDA – 17 June 2019 By Cheque – 18 June 2019 By Direct Credit – 19 June 2019 Members Portfolio rebalance1 /asset switch of existing balance2 /contribution redirection3 Via Personal Internet Banking or IVRS^ : 4 pm, 27 June 2019 Via paper form: 21 June 2019 Redemption* (including all types of claim reasons, but excluding transfer-out) Via paper form: 11 June 2019 Participating Employers and Members Transfer-out* Any valid transfer instruction# through the transferee trustee must reach the Administrator by:
  • Scheme – 11 June 2019
  • Member o Non ECA (Employee Choice Arrangement) – 11 June 2019 o ECA – 13 June 2019 (each date in this cell is the ‘Transfer-out Date’) * These instructions cannot be processed via Business Internet Banking, Personal Internet Banking or IVRS. ^ Asset switch of existing balance instruction cannot be processed via IVRS. # Any valid request to transfer-out must be accompanied by a transfer form completed by all relevant parties, including the transferee trustee.

The respective dates in the table above were determined by reference to the time required for the relevant transactions to be processed in the normal business manner, and the Effective Date of the Merger. Valid dealing instructions given by the Scheme Participants after the respective dates in the table above will also be processed in the normal business manner. However, note that dealing instructions cannot be given via Personal Internet Banking or IVRS during the period from 4 pm, 27 June 2019 to 11.59 pm, 1 July 2019 (both days inclusive) as described in (a) of this section above. 1 Change the investment allocation of existing investments, new contributions and transfer-in benefits.

2 Change the investment allocation of existing investments only. 3 Change the investment allocation of the new contributions and transfer-in benefits.

8 If any instructions (including any transfer-in instructions) cannot be effected under the HSBC ValueChoice before the Effective Date, they will be carried out under the HSBC SuperTrust Plus as soon as practicable after the Effective Date as if the instructions were given under the HSBC SuperTrust Plus. In particular, any valid request to transfer-out of the HSBC ValueChoice by a Scheme Participant who does not wish to be transferred to the HSBC SuperTrust Plus under the Merger must be submitted through the transferee trustee and reach the Administrator by the Transfer-out Date. All other instructions, such as updating members’ records and particulars, will continue to be handled and processed in the normal business manner.

Where the Scheme Participant also participates in the HSBC SuperTrust Plus, his/her dealing instructions with respect to the HSBC SuperTrust Plus CF will not be subject to the cut-off dates/times in the table above. 3. Transfer of membership 3.1 Generally With effect from the Effective Date, Transferring Participants will become scheme participants of the HSBC SuperTrust Plus. The HSBC SuperTrust Plus Trustee will maintain accounts in respect of each Transferring Participant under the HSBC SuperTrust Plus.

3.2 Participation agreements and other instructions under the HSBC ValueChoice (a) On and with effect from the Effective Date, all participation agreements, application forms, enrolment forms, investment mandates and any other agreements or instructions including direct debit instructions and any outstanding instructions (including any amendments thereto) validly executed or given to the HSBC ValueChoice Trustee by the Transferring Participants will become applicable to the participation of such Transferring Participants in the HSBC SuperTrust Plus and will take effect as if the same had been executed or given to the HSBC SuperTrust Plus Trustee under the HSBC SuperTrust Plus.

In addition, the governing rules of the HSBC SuperTrust Plus will apply to the Transferring Participants after the Merger. (b) On and with effect from the Effective Date, investment mandates for the HSBC ValueChoice CFs shall become investment mandates for the respective Matching HSBC SuperTrust Plus CFs or Replicate HSBC ValueChoice CFs (as the case may be). The investment mandates will apply to the future contributions and transfer-in benefits paid to the HSBC SuperTrust Plus. The investment allocation of the accrued benefits to be transferred from the HSBC ValueChoice to the HSBC SuperTrust Plus immediately after the Merger will be the same as the investment allocation applicable to such accrued benefits immediately before the Merger.

3.3 Dual membership under both the HSBC ValueChoice and the HSBC SuperTrust Plus Where a Transferring Participant is also a member under the HSBC SuperTrust Plus, the above arrangement in 3.2 only applies to the Transferring Participant under the HSBC ValueChoice and will not affect his/her participation, including the arrangement of investment mandate and future contributions, in the HSBC SuperTrust Plus. No action is required of such a Transferring Participant in respect of his/her participation in the HSBC SuperTrust Plus.

3.4 Payment On and with effect from the Effective Date, all payments formerly made to the HSBC ValueChoice should be made payable to ‘HSBC MPF SuperTrust Plus’ or ‘HSBC Provident Fund Trustee (Hong Kong) Limited A/C HSBC Mandatory Provident Fund – SuperTrust Plus’.

9 4. Notification regarding the transfer Transfer and confirmation statements informing each Transferring Participant of the units and corresponding amounts that are transferred out of each relevant HSBC ValueChoice CF and transferred to the relevant Matching HSBC SuperTrust Plus CF or Replicate HSBC ValueChoice CF (as the case may be) will be sent by post to the last known address of each Transferring Participants in or around August 2019. The transfer-out amounts and transfer-in amounts stated in the transfer and confirmation statements will be in the same decimal places with exactly the same amounts (that is no deviation will be noted from the amounts including decimal places).

In the interim pending the receipt of the transfer and confirmation statements, from 2 July 2019 onwards, you may check the account balances via Personal Internet Banking, IVRS and ATM and check the transfer-in and transfer-out amounts from the HSBC MPF Member Hotline or HSBC MPF Employer Hotline (please refer to 6.3 below for details).

5. Recognition of scheme service years and benefit entitlement Notwithstanding the Merger, the scheme service years and benefit entitlement for all Transferring Participants under the HSBC ValueChoice will be recognised under the HSBC SuperTrust Plus after the Merger. 6. Default investment arrangement 6.1 The default investment arrangement under each of the Schemes is the MPF Default Investment Strategy (as described on pages 4 to 9 of the ‘Principal Brochure’ of the HSBC ValueChoice). Accordingly, where a Transferring Participant is currently under the MPF Default Investment Strategy (‘DIS’), the contributions payable by or in respect of him/her after the Merger will be invested according to the MPF Default Investment Strategy (as described on pages 4 to 8 of the ‘Principal Brochure’ of the HSBC SuperTrust Plus), the default investment arrangement under the HSBC SuperTrust Plus.

6.2 To ensure smooth transition and taking into account that both 29 and 30 June 2019 are not dealing days, no DIS de-risking under the HSBC ValueChoice will take place during the period from 28 June 2019 to 30 June 2019 (both dates inclusive). After the Merger, the first DIS de-risking under the HSBC SuperTrust Plus will take place on 2 July 2019, the first available dealing day after the Merger. 6.3 If you wish to have more details of the HSBC SuperTrust Plus, please visit HSBC MPF website www.hsbc.com.hk/mpf or contact the HSBC MPF Member Hotline (852) 3128 0128 or HSBC MPF Employer Hotline (852) 2583 8033.

7. Trust deed and Principal Brochure The Scheme Participants may wish to inspect copies of the master trust deed of the HSBC SuperTrust Plus by visiting the Administrator’s offices during normal business hours, free of charge or obtain copies from the Administrator at a cost of HK$500 each. Should you wish to visit the Administrator’s offices to inspect copies of the master trust deed, please call HSBC MPF Employer Hotline on (852) 2583 8033 or HSBC MPF Member Hotline on (852) 3128 0128 to arrange for an appointment.

To preserve the environment by reducing paper usage, the Trustee will not be sending a copy of the ‘Principal Brochure’ of the HSBC SuperTrust Plus to the Scheme Participants. Scheme Participants may wish to review the Principal Brochure to understand more about the details of the HSBC SuperTrust Plus. The ‘Principal Brochure’ of the HSBC SuperTrust Plus is available on HSBC MPF website for download. If you wish to request a copy of the ‘Principal Brochure’ of the HSBC SuperTrust Plus, please contact the HSBC MPF Member Hotline (852) 3128 0128 or HSBC MPF Employer Hotline (852) 2583 8033.

Seminars Seminars will be held to brief the Scheme Participants on the Merger. Further details of the seminars will be available on HSBC MPF website www.hsbc.com.hk/mpf in or around April 2019.

10 9. Impacts of the Merger on Scheme Participants As the Trustee of the Schemes, we are committed to ensuring that the interests of our scheme participants are adequately protected in the Merger and that the Merger would not create any adverse impact on the accrued benefits of the scheme participants of the Schemes. Also, after the Merger, the Transferring Participants will be able to continue to enjoy the services they currently enjoy under the HSBC ValueChoice. The Merger has been structured to ensure that accrued benefits of the scheme participants of the Schemes are adequately protected.

The Merger will be in the interests of the Scheme Participants of the HSBC ValueChoice and there will be no adverse impact on the accrued benefits and services currently enjoyed by the Scheme Participants of the HSBC ValueChoice. In this regard, note that you may continue to access Personal Internet Banking or Business Internet Banking (as the case may be) after the Merger by your existing username and password. We will keep you informed in case of any changes in the arrangements in relation to the Merger and will let you know if any actions need to be taken by you. In this connection, please notify us at your earliest convenience if there is any change of your correspondence address.

Frequently Asked Questions on the Merger have been posted at HSBC MPF website www.hsbc.com.hk/mpf. If you have any questions or concerns about the Merger, please do not hesitate to contact the HSBC MPF Member Hotline (852) 3128 0128 or HSBC MPF Employer Hotline (852) 2583 8033. Issued by The Hongkong and Shanghai Banking Corporation Limited and HSBC Provident Fund Trustee (Hong Kong) Limited Note: Investment involves risks. Past performance is not indicative of future performance. The value of financial instruments, in particular stocks and shares, and any income from such financial instruments, may go down as well as up.

For further details including the product features and risks involved, please refer to the relevant ‘Principal Brochure’.

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