The Hongkong and Shanghai Banking Corporation Limited (incorporated in Hong Kong with limited liability under the Companies Ordinance of Hong Kong)

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1 This announcement appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for the CBBCs described below. Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited (the stock exchange) take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. This is a derivative product or a structured product which involves derivatives. Do not invest in it unless you fully understand and are willing to assume the risks associated with it. You are warned that the price of the CBBCs may fall in value as rapidly as it may rise and you may sustain a total loss of your investment. You should fully understand their potential risks and rewards and independently determine that they are appropriate for you. You should consult with advisers if necessary. Bull CBBCs issued by The Hongkong and Shanghai Banking Corporation Limited (incorporated in Hong Kong with limited liability under the Companies Ordinance of Hong Kong) Non-collateralised Structured Products Announcement We intend to issue the following bull CBBCs detailed below (the CBBCs). Stock Code Unit Fund (1) Style Type Category Settlement method Issue size Issue price Call price Strike price Launch date (for all series) Issue date (for all series) Observation commencement date (for all series) Existing issued units of the Fund ishares FTSE A50 China Index ETF European Bull R Cash Settled 50,000,000 CBBCs HK$0.27 per CBBC HK$5.96 HK$ January February February

2 Stock Code Expiry date 16 January 2017 Valuation date Board lot Entitlement Number of CBBCs per Entitlement Funding cost per CBBC as of launch date (3) The trading day (2) immediately preceding the expiry date 1,000 CBBCs One Unit Ten CBBCs HK$0.005 Effective gearing (4) 3.15x Gearing (4) 3.15x Premium (4) 0.59% Liquidity provider HSBC Securities Brokers (Asia) Limited (Broker ID: 9727) Levels 17 and 18, HSBC Main Building, 1 Queen s Road Central, Hong Kong Tel: (852) (1) All rights in the FTSE China A50 Index (the Index ) vest in FTSE International Limited ( FTSE ). FTSE is a trade mark of the London Stock Exchange Group companies and is used by FTSE under licence. The CBBCs have been developed solely by us. The Index is calculated by FTSE or its agent. FTSE and its licensors are not connected to and do not sponsor, advise, recommend, endorse or promote the CBBCs and do not accept any liability whatsoever to any person arising out of (a) the use of, reliance on or any error in the Index or (b) investment in or operation of the CBBCs. FTSE makes no claim, prediction, warranty or representation either as to the results to be obtained from the CBBCs or the suitability of the Index for the purpose to which it is being used by us. The name of the Fund is included here for identification purposes only. ishares and BlackRock are registered trademarks of BlackRock, Inc., or its subsidiaries in the United States and elsewhere. The CBBCs are not sponsored, endorsed, sold, or promoted by BlackRock. BlackRock makes no representations or warranties to the owners of the CBBCs or any member of the public regarding the advisability of investing in the CBBCs. BlackRock has no obligation or liability in connection with the operation, marketing, trading or sale of the CBBCs. BlackRock is not connected to and do not sponsor, advise, recommend, endorse or promote the CBBCs. (2) trading day means a day on which the stock exchange is scheduled to be open for trading for its regular trading sessions. (3) The funding cost is calculated in accordance with the following formula: Funding Cost = Entitlement x (Strike price x funding rate x n/365) Where: (i) (ii) n is the number of days remaining to expiration; initially, n is the number of days from (and including) the launch date to (and including) the trading day immediately preceding the expiry date; and the funding rate will fluctuate throughout the term of the CBBCs as further described in the relevant supplemental listing document in respect of the CBBCs. As of the launch date, the funding rate in respect of stock code was 0.87% p.a.. (4) The gearing, effective gearing and premium may not be comparable to similar information provided by other issuers of structured products as each issuer may use different pricing models. 2

3 The CBBCs are in global registered form and exercisable only in the relevant trading board lots specified above. What is a mandatory call event? What happens if a mandatory call event occurs? A mandatory call event occurs if the spot price is at or below the call price at any time during a trading day in the observation period. A mandatory call event occurs if the spot price is at or above the call price at any time during a trading day in the observation period. Spot price means: (1) in respect of a continuous trading session of the stock exchange, the price per unit concluded by means of automatic order matching on the stock exchange as reported in the official real-time dissemination mechanism for the stock exchange during such continuous trading session in accordance with the Rules of the Exchange (the trading rules), excluding direct business (as defined in the trading rules); and (2) in respect of a pre-opening session or a closing auction session (if applicable) of the stock exchange (as the case may be), the final indicative equilibrium price (as defined in the trading rules) of the unit (if any) calculated at the end of the pre-order matching period of such pre-opening session or closing auction session (if applicable) (as the case may be) in accordance with the trading rules, excluding direct business (as defined in the trading rules), subject to such modification and amendment prescribed by the stock exchange from time to time. A trading day means a day on which the stock exchange is scheduled to be open for trading for its regular trading sessions. The observation period means the period from the observation commencement date to the trading day immediately preceding the expiry date (both dates inclusive). Upon the occurrence of a mandatory call event, the CBBCs will terminate automatically and you will receive from us the residual value (if any) in Hong Kong dollars calculated as follows, less any exercise expenses: Residual value per board lot = Entitlement x (minimum trade price strike price) x one board lot If the residual value is a negative amount it shall be deemed to be zero. Minimum trade price means the lowest spot price during the MCE valuation period (being the period commencing from and including the moment upon which the mandatory call event occurs and up to the end of the following trading session on the stock exchange, subject to any potential extension). Residual value per board lot = Entitlement x (strike price maximum trade price) x one board lot If the residual value is a negative amount it shall be deemed to be zero. 3

4 Maximum trade price means the highest spot price during the MCE valuation period (being the period commencing from and including the moment upon which the mandatory call event occurs and up to the end of the following trading session on the stock exchange, subject to any potential extension). How do we calculate the cash settlement amount at expiry? If no mandatory call event occurs during the observation period and on the expiry date, the value of the cash settlement amount is greater than zero, the CBBCs will be automatically exercised. You are not required to deliver any exercise notice and you will receive from us the cash settlement amount (if any) in Hong Kong dollars calculated by us as follows, less any exercise expenses: Cash settlement amount = per board lot Entitlement x (closing price strike price) x one board lot If the cash settlement amount is a negative amount it shall be deemed to be zero. Cash settlement amount = per board lot Entitlement x (strike price closing price) x one board lot If the cash settlement amount is a negative amount it shall be deemed to be zero. Closing price is the closing price of one unit (as derived from the daily quotation sheet of the stock exchange, subject to adjustments) on the valuation date. Where can you obtain further information? Our base listing document dated 20 April 2015 (the base listing document), the addendum to the base listing document dated 14 August 2015 together with any additional addenda or successor document, our supplemental listing document to be dated 2 February 2016 and our latest publicly available annual report and interim report will be available for inspection, together with their Chinese translations, during usual business hours at our office, which is presently at HSBC Main Building, 1 Queen s Road Central, Hong Kong. Information on us can also be found on the website of the group of companies to which we belong, which is How will the liquidity provider provide quotes? The liquidity provider will provide liquidity by responding to requests for bid and ask quotes. A quote may be obtained by calling its telephone number. Additional information The CBBCs constitute general unsecured contractual obligations of us as the Issuer and of no other person and will rank equally among themselves and with all our other unsecured obligations (save for those obligations preferred by law) upon liquidation. If you purchase the CBBCs, you are relying upon the creditworthiness of us, and have no rights under the CBBCs against the Fund, the manager or trustee of the Fund. If we become insolvent or default on our obligations under the CBBCs, you may not be able to recover all or even part of the amount due under the CBBCs (if any). 4

5 An application will be made to the stock exchange for the listing of, and permission to deal in, the CBBCs on the stock exchange. The date of commencement of dealings in the CBBCs is expected to be 3 February We are a licensed bank in Hong Kong regulated by the Hong Kong Monetary Authority, and a registered institution under the Securities and Futures Ordinance (Cap. 571) of Hong Kong. Our long-term debt ratings are AA- (stable outlook) by Standard and Poor s Ratings Services, a division of The McGraw-Hill Companies, Inc. and Aa2 (stable outlook) by Moody s Investors Service, Inc., New York. The Hongkong and Shanghai Banking Corporation Limited 27 January