Dodd Frank Act – External Business Conduct
Dodd Frank Act – External Business Conduct Required Disclosures
It is important to us that you understand everything you need to know about a swap or security-based swap transaction before entering into an agreement with us.
The following documentation and links contain important information that you should read and understand about swap and security based swap products which HSBC Bank plc or HSBC Bank USA N.A. ("HSBC") may make available to you and which align with industry standards.
HSBC is obliged to provide you this information as a result of its ongoing commitment to work with international regulators to create safer swap/security-based swap markets.
By viewing the information on this website, you agree to be bound by the following obligations and limitations.
Where this refers to "we" or "HSBC" it refers to the relevant HSBC entity with which you are transacting (HSBC Bank USA N.A. or HSBC Bank plc as applicable) and where this refers to "you" it refers to you or your organisation.
Before transacting with a HSBC Swap Dealer or Security Based Swap Dealer entity, counterparties should adhere to the ISDA Dodd-Frank Protocols or adhere via a bilateral agreement.
The ISDA DFA August 2012 Protocol and March 2013 Protocol are part of ISDA’s Dodd Frank documentation initiative, designated to facilitate industry compliance with certain CFTC swap rules. As more fully described in HSBC SBS FAQs (PDF, 2MB), ISDA have published additional protocols designed to facilitate compliance with the equivalent SEC SBS rules:
- ISDA 2021 SBS Protocol – International Swaps and Derivatives Association
- ISDA 2021 SBS Top-Up Protocol – International Swaps and Derivatives Association
Details of all ISDA Protocols are available on the ISDA Website.
For counterparties that do not adhere to the ISDA Dodd-Frank Protocols or do not have a bilateral agreement in place, the required representations will need to be provided within the relationship documentation during the on-boarding process.
By entering into a swap or security based swap with HSBC you acknowledge that we have provided, on a pre-trade basis, the required disclosures pursuant to CFTC and/or SEC Regulations. The following disclosures are required, but not limited to;
- the material risks of the swap or security based swap, including market, credit, liquidity, foreign currency, legal, operational and other applicable risks;
- the material characteristics of the swap or security based swap, including all material economic terms, operational terms, and the rights and obligations of the parties during the term of the swap or security based swap, and;
- the material incentives and conflicts of interest that may apply with respect to the swap or security based swap.
Further information is available on the Material Risk Disclosures page.
With respect to Scenario analysis, we hereby notify you that prior to entering into a swap transaction you have the right to request scenario analysis.
Scenario analysis may help you assess potential exposure in connection with a swap or security-based swap transaction. If you wish to receive scenario analysis, please contact your relevant Sales person. Note: Scenario analysis is unavailable when trading on a designated contract market or swap execution facility.
The names of the clearing agencies that accept security based swaps for clearing and which HSBC Bank plc or HSBC Bank USA, N.A. are permissioned are as follows:
|Clearing Agency||HSBC Bank plc||HSBC Bank USA, NA|
|ICE Clear Europe||Yes||-|
|ICE Clear Credit||Yes||Yes|
For Security Based Swap classes not subject to the SEC clearing requirement, counterparties may elect to require clearing, through the above listed clearing agencies.
For a list of the clearinghouses that clear Securities Based Swaps please visit the ISDA website.
HSBC is not responsible for providing you with legal, tax or other specialist advice and you should make your own arrangements in respect of this accordingly.
Last updated: 7 October 2021