FTSE 100 Step Down Kick-Out Plan 42 - BNP Version
A maximum six year structured investment plan linked to the performance of the FTSE 100 Index. Potential for maturity each year from the end of year 2 onwards with a fixed payment equal to 5.43% per annum (not compounded) if the FTSE 100 is equal to or higher than a reducing percentage of its starting level. These percentages are 100%, 95%, 90%, 85% and 80%.
- Market / index link: FTSE 100 Index
- Counterparty: BNP Paribas
- Investment term: 6 years (maximum)
- Kick-out / Early maturity: Yes
- Barrier type: End of term
- Barrier level: 60%
The closing date for ISA transfer applications is 17 March 2021.
Product Literature & Forms
You should always read the relevant plan brochure and any other plan documentation, for full details of the plan’s features, including any risks, and the terms and conditions. In addition to the plan brochure and terms and conditions there are other important documents, including a Key Information Document ('KID'), that you should consider, before deciding to invest in the plan.
If you do not fully understand the risks or are unsure as to the suitability of the investment, please contact us
How to Invest?
Applications for the Plan must be submitted via Best Price Financial Services and received by 5pm on 30 March 2021 for bank transfer applications.
The closing date for applications by cheque is 30 March 2021
The closing date for ISA transfer applications is 17 March 2021.
This will enable us to process your application and forward it on to the structured product provider.
1 Firstly, print off and complete our Appropriate Assessment Questionnaire. All applications require two proofs of identity - see the questionnaire for more information.
2 Next download, print and complete the application form available. Note that product applications will have multiple documents, so please choose the one relevant to you.
3 Place all completed documents - questionnaire, proofs of identity, application form and cheques for payment - in an envelope and post to:
Best Price Financial Services,The Tythe Barn, 5 Eglwys Nunnydd,
Margam, Neath Port Talbot
SA13 2PS
Further Information
The aim of the Plan is to provide an investment return even if the FTSE 100 falls by 20% and return your initial investment at the end of the 6 year term, or earlier if the Plan matures early
There is potential for maturity each year from the end of year 2 onwards with a fixed payment equal to 5.43% per annum (not compounded) if the FTSE 100 is equal to or higher than a reducing percentage of its starting level. These percentages are 100%, 95%, 90%, 85% and 80%.
If the Plan runs for the full 6 years and the FTSE 100 is equal to or higher than 60% of its starting level but lower than 80% of its starting level, your investment will be returned with no additional return.
If the Plan runs for the full 6 years and the FTSE 100 finishes lower than 60% of its starting level, your initial investment will be reduced by 1% for every 1% fall in the FTSE 100 over the Plan Term.
Please refer to the ‘How does the Plan Work’ section of this brochure for more information, including the use of Averaging.
What are you investing in?
You are investing in a 6 year Securities-based Plan. Investec Bank plc is the Plan Manager and administrator of this Plan. Under the terms of this Plan, Investec Bank plc will use your investment to purchase Securities and hold them on your behalf.
The Securities are structured to generate the returns that are described in this brochure. These Securities are a type of debt issued by a bank. In effect you are lending money to the Issuer for the duration of the Plan.
The Issuer of the Securities is BNP Paribas Issuance B.V., a subsidiary of BNP Paribas. The obligations of the Issuer are guaranteed by BNP Paribas (the Guarantor).
Your credit risk relates to BNP Paribas (the Guarantor). BNP Paribas has a credit rating of Aa3 with a stable outlook, as rated by Moody’s. BNP Paribas has a credit rating of AA- with a negative outlook, as rated by Fitch.
BNP Paribas has a credit rating of A+ with a negative outlook, as rated by Standard & Poor's. For more information on BNP Paribas please visit: www.group.bnpparibas/en/group
This Plan has been designed for investors who are looking for equity-linked returns over a 6 year period, but can accommodate receiving their money back before the end of the term. The payoff profile has been designed to suit investors who are cautious on equity market growth. Investors are likely to have a medium to high attitude to risk and be prepared to risk their capital in order to potentially achieve higher returns. This product is aimed at a more market cautious investor who has high financial sophistication.
Don’t forget the risks
All investments carry risk. It is identifying those risks, understanding how they may affect an investment and assessing whether an investment is suitable for your circumstances that is important.
The potential returns of most structured products and repaying the money invested are usually linked to the level of a stock market index and also depend on the financial stability of the issuer and counterparty bank. You should only consider investing if you understand and accept the risk of losing some or all of any money invested.
You should always read the relevant plan brochure and any other plan documentation, for full details of a plan’s features, including any risks, and the terms and conditions. In addition to the plan brochure and terms and conditions there are other important documents, including a Key Information Document (‘KID’), that you should consider, before deciding to invest in a plan.
Structured products should only be considered as part of a diversified and balanced portfolio.
Below is a summary of some of the main risks usually associated with an investment in structured products plans:
Market risk to potential returns
Whether or not a plan generates the potential returns for investors usually depends on the closing level of the relevant index on the relevant dates for the plan, i.e. the kick-out anniversary dates for kick-out products; the early maturity dates and end dates for growth products; the annual income dates for income products.
If the index closes below the level needed, for the plan or plan options chosen, on all of the relevant dates, the plan or plan options will not generate a return.
Market risk to repayment of money invested in 'Capital-at-Risk' plans
If the closing level of the relevant index is below the level needed on all of the kick-out anniversary dates or early maturity dates, if relevant for the plan or plan options chosen, and on the end date, repaying the money invested at maturity will usually depend on the closing level of the index on the end date..
Different structured products use different types of protection barriers. Some products use barriers that are observed every day that can therefore be breached on any day during the investment term, while some products use barriers that are only observed at the end of the investment term and that cannot therefore be breached during the investment term.
Market risk to the repayment of money invested on the end date will depend on the type of barrier and its level.
For example, for a product with an end of term barrier, set at 60% of the start level, if the index for the plan closes at or above 60% of the start level, on the end date, money invested will be repaid in full (less any agreed adviser fees and withdrawals). However, if on the end date the index closes below 60% of the start level, the amount of money repaid (less any agreed adviser fees and withdrawals) will be reduced by the amount that the index has fallen. For example, if the index has fallen by 45%, the repayment of money invested will be reduced by 45% (meaning that investors will get 55% of their investment back).
'Protected' types of structured products
Some structured product plans are designed so that they are 100% protected from stock market risk at the end date.
It is important to understand that even if a structured product plan is designed with 100% protection from stock market risk, at the end date, it will still usually have issuer and counterparty bank risk. In other words, both the potential returns of the plan and repaying the money invested at the end date will depend on the financial stability of the issuer and counterparty bank. If the issuer and counterparty bank become insolvent, or similar, or fail to be able to meet their obligations, it is likely that investors will receive back less than they invested.
Issuer and counterparty bank risk
Both the potential returns and repaying the money invested of most structured products depend on the financial stability of the issuer and counterparty bank. If the issuer and counterparty bank become insolvent, or similar, or fail to be able to meet their obligations, it is likely that investors will receive back less than they invested.
Financial Services Compensation Scheme ('FSCS') protection
It is important to understand that it is not usually possible to claim under the Financial Services Compensation Scheme if the issuer and counterparty bank fail to meet their obligations or if the stock market index that a plan links to falls.
Structured deposits
Structured deposit plans are deposit-based and will usually be fully protected from stock market risk at the end date and also benefit from the protection of the Financial Services Compensation Scheme, if the bank or building society is a licensed UK deposit taker.