Bank of China Hong Kong (BOCHK) has been given the green light by the Securities and Futures Commission to launch its first equity-linked investment tied to a single share.
BOCHK Single ELI is a flow product and the bank's first issue in this series, according to SRP's database. The new product line launch follows an April approval by the SFC for the company to issue equity-linked deposits.
The product will include six payoff variations divided between accrual and reverse convertible types. Some variations of the product feature knockout and protected tracker payoffs based on which category the sub-type falls into. The product will offer accrued variable coupons on each distribution payment date. If the closing price of the unspecified linked stock on the valuation date is at or above the put strike price, investors will receive initial capital at maturity plus the coupon payable for the period, a featured shared among some of the six variations. Otherwise, investors will receive the physical shares or an equivalent cash amount plus the coupon.
The product also features an autocall profile and two other variations of the product also provide downside protection, which will be triggered if the share price drops but still remains above the initial put strike price.
The investment tenor of the product generally ranges from one month to three years.
BOCHK Single ELI appears in recent additions (Hong Kong).