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Frequently Asked Questions

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In this section we have composed the answer to a number of Frequently Asked Questions. If you need further information, please contact the help line on 0203 100 8880, or email at enquiries.sgifa@sgcib.com


 

What is a Deposit Plan?

Societe Generale Deposit Plans are Structured Deposits. The Financial Conduct Authority describes a Structured Deposit as follows; a deposit paid on terms under which any interest or premium will be paid, or is at risk, according to a formula which involves the performance of an index (or combination of indices) (other than money market indices), a stock (or combination of stocks); or a commodity (or combination of commodities).


What happens to my client's money before a Deposit Plan Start Date?

Before the Start Date, your client's money will be transferred by the Plan Administrator to a segregated interest bearing client money account held by the Plan Administrator with Barclays until the Deposit Plan's Start Date. On a the Start Date, your client's money will be transferred to an account of the Trustee with the Deposit Taker. From the Start Date your client's deposit will be held by the Deposit Taker. The Deposit Taker is legally required to repay your client's deposit to the Plan Administrator when a Deposit Plan matures (at the end of the Investment Term) as well as any return that is owed.

If Barclays were to become insolvent during this period, your  client's initial deposit might be lost. In this instance they may be able to seek compensation from the FSCS. See below for more information regarding compensation arrangements.


What happens to my client's money on a Deposit Plan Start Date?

On a Deposit Plan Start Date, the money held for your client on deposit with Barclays will be transferred to SG Hambros and placed on deposit for investment in a Deposit Plan.


What charges/expenses will my client have to pay on a Deposit Plan?

No charges or fees are taken away from the original deposit or the potential Maturity payment, and there are no annual management charges. If your client withdraws from a Deposit Plan early, or a Deposit Plan is a Cash ISA and your client decides to transfer their money to another ISA Manager, an Early Termination Cost will apply. The amount of this charge will depend on the costs incurred by the deposit taker. We will not be able to advise you or your client of the amount of this charge prior to processing the cancellation request. Please see below ‘What if my client needs their money before Maturity?’.


What is the level of commission involved in a Deposit Plan?

Societe Generale may pay a commission for the arrangement of an investment into a Deposit Plan to the Financial Adviser, and Gilliat Financial Solutions in their role as Plan Administrator and Distributor. Details of the commission can be found in the Plan Product Guide. This is allowed for in the terms offered by the Deposit Plan. Your client should seek clarification about any commission payable from you before investing if they are unclear. Your client will receive written details of the commission paid on their chosen Deposit Plan.


What is the tax treatment outside of a SIPP or ISA?

Any return paid as part of a Deposit Plan may be subject to Income Tax if held directly outside of a Cash ISA, SIPP or SSAS*.


What happens when a Deposit Plan matures?

Approximately six weeks prior to the Plan Maturity Date, the Plan Administrator will contact investors to confirm what they want us to do with the cash proceeds of their Plan. On the Plan Maturity Date, where requested by investors, the Plan Administrator will attempt to pay the cash proceeds of their Plan using the details that are held on record for them. Therefore it is important that you or your client notify the Plan Administrator of any change in their address or bank account details. If for some reason, the relevant bank cannot pay the cash amount due to your client using the account specified by them, the Plan Administrator will instruct the relevant bank to retain such cash amount in the omnibus client money account until we receive further instructions. If their investment is an ISA Account and you or your client do not provide instructions within a reasonable timeframe, in accordance with the ISA Regulations the Plan Administrator will remit the proceeds to your client.


What if my client needs their money before Maturity?

A Plan is typically designed to be held for the full Investment Term. If your client needs to cash in their Plan early, a Total Withdrawal (either Partial Early Withdrawal or Total Early Withdrawal) from the Plan may be requested by written notice to the Plan Administrator before the Early Withdrawal Notification Deadline. Following receipt of this notice, the Plan Administrator will calculate your client’s Early Withdrawal Amount.

Investors should only invest in these Plans if they do not need access to their money for the full Investment Term. Early withdrawal may result in loss of capital.

Should you wish to obtain an indication of the amount your client would receive upon an Early Withdrawal (minus any Early Termination Costs), please contact:

Deposit Plans

The Structured Product Team at Gilliat Financial Services on 020 7012 2811.

Investment Plans

Walker Crips Structured Investments on 020 3100 8880 or James Brearley & Sons, responsible for custody and administration of Mariana Plans, on 01253 831100 or Investec Bank Plc on 0344 892 0942.


What if my client's Plan is held within a Cash ISA?

If your client decided to withdraw from a Plan after the 14 day cancellation period has ended and the investment is held in a Cash ISA, they will lose their Cash ISA allowance for the year and will not be able to invest in another Cash ISA in the same year.

If your client had invested via a Cash ISA transfer, they will lose any tax shelter on that investment unless they are transferring their deposit to another ISA Plan Administrator. The amount transferred to the new ISA manager is likely to be less than originally invested and less than would be received if a Plan were to be held until Maturity. Further information on procedures for cashing in a Plan early is provided in the Terms and Conditions section of a Plan Brochure. 


How will inflation affect the value of my client's investment?

Unless the performance of a Plan is above the rate of inflation, the real value of their money will decrease over the six year term.


How can I monitor the performance of a Plan?

Your client will be sent an investment confirmation after their application is received and then statements twice a year. The statements will help them understand the progress of their investment and will include the level of the Index on which their return will depend.


What is the counterparty risk on Deposit Plans?

The Deposit Taker is SG Hambros Bank Limited (SG Hambros). This means that receiving the initial deposit and any returns owed to the holders at Maturity are dependent on SG Hambros paying back the amounts due under its obligations to the Deposit Plan. This is called Counterparty Risk or Credit Risk.

Credit ratings can be a useful way to assess the level of Counterparty Risk. They can help compare the Credit Risk associated with different product providers and related investments and as such can be useful in assessing how likely an entity is to meet their obligations to repay any money due to investors. Credit ratings are assigned by independent companies known as ratings agencies and reviewed regularly.

As the Deposit Taker, the money is invested in the Trustee’s account with SG Hambros and therefore, the main Counterparty Risk is with SG Hambros. SG Hambros is a subsidiary of Societe Generale Group but is a completely separate UK entity. It is managed in the UK and authorised and regulated by the Financial Conduct Authority (‘FCA’). SG Hambros was founded in 1839 and employs over 520 people in the UK.

- Hambros Bank was founded in London in 1839

- Societe Generale was founded in France in 1864 and has been operating in the UK since 1871. It is one of the leading financial services groups in the Eurozone

- Hambros Bank joined the Societe Generale Group in February 1998.

In order to provide the performance for a Deposit Plan, the Deposit Taker will enter into a linked transaction with Societe Generale Corporate & Investment Bank ("SG CIB"). This means that your client also has a degree of Counterparty Risk with Societe Generale. If Societe Generale were to become insolvent, and the Deposit Taker was unable to match the terms of the linked transaction with another provider, the Deposit Taker may not be able to maintain the potential return. In this instance the return holders receive from a Deposit Plan may be less than the potential return . The Counterparty Risk with Societe Generale relates only to the terms of the return which can be offered by a Deposit Plan. The solvency of Societe Generale has no affect on your actual deposit


Counterparty Risk on Societe Generale Investment Plans

As an alternative to a more traditional plan where investors can lose up to 100% of their investment if the Issuer were to default or become insolvent, Societe Generale Investment Plans are designed to mitigate Counterparty Risk through the use of Collateral whilst also diversifying Investment Risk.

Instead of being 100% exposed to SG Issuer as the Issuer of the Plan, or Societe Generale as the Guarantor, Counterparty Risk is mitigated by the introduction of a pool of Collateral Assets, which can be sold to recover the value of your client’s investment should the Issuer default or become insolvent.

In addition, the Plans are exposed to the Investment Risk of 4 major UK or global institutions with UK 4 and Global 4 Plans or the UK Government with UK Gilts Plans.


What impact does spreading investment risk across the UK Three / UK Four give to potential returns?

Let's then look at a UK Three Plans as an example.

The UK Three Plans not only aim to meet the diversification needs of investors, but also to exceed their expectations in terms of potential returns. We can demonstrate this by looking at the following product as an example, and showing the affect that the UK Three model has on the Potential Coupon

Product example: a SG Collateralized Investment Plan

Product Type Kick Out Plan
Securities Issuer SG Issuer
Guarantor Societe Generale
Counterparty Risk Mitigated through the use of a pool of Collateral Assets
Collateral Assets Gilts, Investment Grade Bonds and/or equities comprising the FTSE 100 Index, the S&P 500 Index, the Nikkei 225 Index, the EuroStoxx 600 Index, the Hang Seng Index and the SMI Index
Underlying Asset FTSE 100 Index
Investment Term Maximum 8 year
Potential Early Expiry Annual from year 2 of the Investment Term
Kick Out Levels 100% in years 2-8

 

Potential coupon payments based on the Plan above

  UK Three Plan Collateralised Plan
Diversified Investment Risk Spread equally across 4 major UK institutions (33.33% per institution) N/A
Potential Gross Coupon Payment 9.90%(not compounded) 8.25%(not compounded)

 Source: Societe Generale. Pricing as of August 20, 2018.

The risk / return tradeoff

The SG Collateralised Investment Plan would provide a potential annual Coupon Payment of 8.25%. The Counterparty Risk to Societe Generale has been mitigated by the introduction of a pool of Collateral Assets, and no further Investment Risk has been applied.

Conversely, the UK Three Plan provides a higher potential annual Coupon of 9.90%. The Counterparty Risk to Societe Generale has again been mitigated by the introduction of Collateral Assets. However, in addition, the UK Three Plan is equally exposed to the Investment Risk of three institutions,  which in the case of the above are Barclays PLC, Lloyds Banking Group PLC and HSBC PLC. As such, if any one of these institutions were to default or become insolvent, 25% of your client’s capital would be at risk at Maturity. Investors are compensated for this risk with an increased Potential Coupon.


 *The tax statement is only a general guide. The tax treatment of investments will depend on the investor's individual circumstances. If they are in any doubt as to their tax position, they must consult with an appropriate professional tax adviser. This statement of the UK tax treatment of a Deposit Plan is based on our understanding of the laws and practice in force as of the date of this document and is subject to any changes in law and the interpretation and application thereof, which changes could be made with retroactive effect.


 

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Terms & Conditions


This website is issued by the London Branch of Societe Generale. Societe Generale London Branch is authorised by the ECB, the ACPR and the Prudential Regulation Authority (PRA) and subject to limited regulation by the Financial Conduct Authority (FCA) and the PRA. Details about the extent of our authorisation, supervision and regulation by the above mentioned authorities are available from us on request.

 

This website is published by Societe Generale:

 

Société Anonyme with a capital stock of € 1 009 897 173, 75 as of December 11th, 2017

Paris Trade Register No. 552 120 222

APE No.: 651C

Registered Office: 29 Boulevard Haussmann 75009 Paris

VAT No: FR 27 552 120 222

 

Publication Manager: Mr. Frédéric OUDÉA, Chief Executive Officer

Editorial Manager: Mirela Mardare

Contact: enquiries.SocieteGeneraleifa@SocieteGeneralecib.com

 

This website is governed by French law, except to the extent where its content refers to financial services provided in United Kingdom in which case the law of United Kingdom shall apply.

 

The information, services and products on this website are intended for use only by financial advisers (herein “Financial Advisers”) and are not aimed at or intended for use by retail investors or persons who are residents of any other jurisdiction, other than the United Kingdom.


PROFESSIONAL REGULATIONS

 

Societe Generale is a licensed French credit institution supervised by the Autorité de Contrôle Prudentiel et de Résolution, (“ACPR”: 4 place de Budapest CS 92459 75436 Paris Cedex 09), controlled by the Autorité des Marchés Financiers (“AMF”) and under the prudential supervision of the European Central Bank (ECB). In accordance to the provision of French Code Monétaire et Financier (Monetary and Financial Code), Societe Generale, as a credit institution licensed for the provision of investment services, is authorized to carry out all banking operations and provide all investment services except for the investment service of the operation of a multilateral trading facility (“MTF”) or an organized trading facility (“OTF”).

 


CONTENT OF THIS WEBSITE

 

Societe Generale shall make its best efforts to ensure that the information displayed on this website is accurate and up-to-date. Societe Generale reserves its right to amend the content of this website at any time, without prior notice. However, Societe Generale is not able to guarantee that the information herein is complete or that it will not be modified by a third party (malware). Societe Generale shall not be held liable for any difficulty or impossibility to access the website due to an internet connection problem.

Societe Generale shall not be held liable for any indirect consequential loss or damage, including, but not limited to: any damage or loss arising from any transaction carried out on the basis of the information herein, any loss of profit, loss of business, or any other loss arising from a service interruption due to an internet connection problem.

Further, Societe Generale shall not be held liable neither for the results of any factor beyond their control nor for any eventual loss or damage to the technical environment of the website users, including, but not limited to, hardware, software, or any other equipment used to access this website or use the services and/or the information herein.

 


INFORMATION ABOUT FINANCIAL INSTRUMENTS

 

The potentials information or material about financial instruments on this website are provided for general information purposes only and should not to be construed as a solicitation or an offer to buy or sell any financial instruments, or any substitute for any form of advice or recommendation with respect to such financial instruments.

Societe Generale accepts no liability for losses or damages which may be directly or indirectly sustained by any visitor to the website or other person who obtains access to the material on the website. 


Any person wishing to obtain information about Societe Generale products or services is requested to contact Societe Generale to obtain the regulatory information document (where applicable), and any other relevant information on the availability, terms and conditions, and prices.


The Plans described within this website are not suitable for everyone. Investors’ capital is at risk. Financial Advisers should not advise their clients to invest in these Plans unless they understand their nature and the extent of their exposure to risk.


The value of these Plans may be exposed to fluctuations in rates of exchange, and these may have an adverse effect on the value or price of the Plan. Information in the website on past performance cannot be relied upon as a guide to future performance. The value of these Plans can go down as well as up and investors may get back less than their initial investment.


This disclaimer cannot disclose all the risks and other significant aspects of the Plans. You should study the risk factors attached to these products that are disclosed below and throughout this website.


This website does not constitute an offer for sale of securities in the United States and the securities will not be registered under the U.S. Securities Act of 1933, as amended (the « Securities Act »). The securities may only be offered, sold, pledged or otherwise transferred in an “offshore transaction” (as defined under Regulation S) to or for the account or benefit of a Permitted Transferee.  A “Permitted Transferee” means any person who (a) is not a U.S. person as defined in Rule 902(k)(1) of Regulation S and (b) is not a person who comes within any definition of U.S. person for the purposes of the U.S. Commodity Exchange Act (CEA) or any rule of the U.S. Commodity Futures Trading Commission (CFTC Rule), guidance or order proposed or issued under the CEA (for the avoidance of doubt, any person who is not a “Non-United States person” defined under CFTC Rule 4.7(a)(1)(iv), but excluding, for purposes of subsection (D) thereof, the exception for qualified eligible persons who are not “Non-United States persons,” shall be considered a U.S. person) and (c) is not a "U.S. Person" for purposes of the final rules implementing the credit risk retention requirements of Section 15G of the U.S. Securities Exchange Act of 1934, as amended (the U.S. Risk Retention Rules) (a Risk Retention U.S. Person).  The securities are available only to, and may only be legally or beneficially owned at any time, by Permitted Transferees.

 

 

Key risks for Investment Plans

 

Capital is at risk and investors could lose some or all of their capital.


If SG Issuer and Societe Generale were to default or become insolvent, the products will terminate immediately. The amount that your client receives back for their investment will depend on i) the market value of their Investment at that time and on ii) the value of the collateral assets at the time of expiry and your client may receive back less than your initial investment.


Liquidity risk: Societe Generale aims to provide a secondary market for the products during the investment term. However, certain exceptional market circumstances may have a negative effect on the liquidity of the products, and even render the products entirely illiquid, which may make it impossible to sell the products and result in the partial or total loss of the invested amount. There is no liquid market on which these products can be easily traded, and this may have a material adverse effect on the price at which these products might be sold. Therefore, the investor may lose part or all of the invested amount.


As with all similar structured investments, in the event of Counterparty or Issuer insolvency your client will not have recourse to the Financial Services Compensation Scheme.


Market risk: The products may be subject to significant price movement at any time before maturity, which may in certain cases lead to the loss of your entire capital invested.

 

 

Key risks for Deposit Plans

 

If Societe Generale Hambros Bank Limited becomes insolvent or fails to repay the amounts due, you could lose some or all of your initial deposit and any gross return owed to you on the Plan maturity Date. As with any deposit, if the Deposit taker fails to pay or becomes insolvent you may be eligible to claim under the UK Financial Services Compensation Scheme (“FSCS”) up to the scheme limits. For further information visit www.fscs.org.uk


In order to provide the performance of a Deposit Plan, the Deposit taker will enter into a linked transaction with Societe Generale. In the event an ‘Extraordinary Event’ were to occur whereby for example, Societe Generale becomes insolvent, and the Deposit taker was unable to match the terms of the linked transaction with another provider, the Deposit taker may not be able to maintain the returns or income stipulated for a Deposit Plan. In such circumstances the income or return investors receive from a Deposit Plan may be less than the headline rate. The investor’s Counterparty Risk with Societe Generale relates only to the terms of the income or return which can be offered by a Deposit Plan. The solvency of Societe Generale has no effect on the actual deposit.


Market risk: The deposit Plans may be subject to significant price movement at any time before maturity. If you were to withdraw from the Plan early you could get back less than your initial deposit.

 

 

Suitability test

 

The purpose of the suitability test is to ensure that the products and services offered meet the client’s investment objectives. In addition, it ensures that the client shall be able financially to bear the risks of the investment (including any relevant loss of capital) and that the client has the necessary experience and knowledge to understand these risks. When providing personal recommendations in relation to these Plans each Financial Adviser is required to and must have undertaken a suitability test and must only recommend products and services that are in accordance with the results of the suitability test.


Please note that Societe Generale does not provide investment advice.

https://www.handbook.fca.org.uk/handbook/COBS/9/

 


PRODUCT SUBSCRIPTION AND INVESTMENT SERVICES PROVISION

 

In accordance with its legal and regulatory requirements (particularly under the Market in Financial Instruments Directive (“MiFID”)), and depending on the type of financial instruments involved, Societe Generale may be required to verify that the financial instruments are suitable or appropriate to client investment objectives, financial situation, knowledge and experience. 

Any kind of request for subscription of a product or service offered by Societe Generale requires the acceptance of Societe Generale and implies the subscriber’s acceptance to the applicable terms and conditions, and prices.


The content of this website is provided for information purposes only. This information should not to be construed as a public offer, a solicitation from Societe Generale to the visitor of the website. None of the services and products target persons from countries which prohibit those services and products: Each person interested by subscribing products/services should assess with his/her own advisor whether his/her legal and fiscal status allows it.



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This entire website is governed by French and international legislation on copyright, trademark and database law and intellectual property in general, both as they are applicable to its form (editorial choices, layout, topics, means for accessing data, display, etc.), and to its content (text, images, etc.). 

Any reproduction, representation, diffusion or re-diffusion, in whole or in part, of the contents of this website on any medium or by any means whatsoever (including, but not limited to, caching, framing), as well as any sale, resale, retransmission or any other act tending to make such contents available to any third party in any manner whatsoever shall be prohibited, except preliminary written authorization of the publication manager. Failure to comply with these restrictions shall constitute a forgery engaging the civil and criminal liability of the forger.


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The trademarks quoted on the site are protected: their reproduction or use is forbidden.


Hypertext links: Societe Generale shall not be liable for the hypertext links towards other websites, and particularly for the contents of the linked websites.

Societe Generale shall not be liable for the hypertext links towards this website.



PERSONAL DATA

 

When you complete the contact form on the Societe Generale website, we will use your personal data to send you marketing communications about product related news, as well as sending you literature about our investment and deposit plans by post with your consent. 


Your personal data will be used by the Societe Generale UK IFA sales to provide this information to you. 


Unless otherwise stipulated by legal or regulatory provisions, the personal data are stored for the length of time you wish to receive this information and if you no longer wish to receive this information, please let us know. 


To the extent necessary for the fulfillments of the above purposes, Societe Generale may communicate some information to its entities, service providers and partners that are not members of the European Economic Area. These transfers are processed in a manner and guarantees that ensures appropriate security and confidentiality of the personal data. 


You are entitled to access your personal data, to obtain rectification and erasure, a right to restriction of processing, a right to object as well as a right to data portability from the following email address: LON-GDPR-SGLB@sgcib.com



DATA PROTECTION OFFICER

 

We have appointed a data protection officer (DPO) to oversee compliance of data protection laws. Our DPO can be contacted at dpo-sgil.lon@sgcib.com. You have the right to make a complaint at any time to the Information Commissioner's Office (ICO), the UK supervisory authority for data protection issues at the following address: 

Information Commissioner’s Office 

Wycliffe House 

Water Lane 

Wilmslow 

Cheshire 

SK9 5AF


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This website is protected by a high level of technical security, and it is under permanent monitoring. The algorithms and mechanisms, used to protect your communications with Societe Generale and the information that pertains you, comply with the French regulations in effect.