LIQUIDITY MANAGEMENT

Financial Flexibility

Financial Flexibility

We understand there are occasions when you need extra liquidity to grasp an investment opportunity or to meet unexpected cash needs. At Citigold Private Client we offer you various financing products.

Portfolio Power

  • Secured by your eligible deposits and investments, it can provide you with additional liquidity for general use e.g. business needs, tax payments, personal spending etc.
  • This single credit line allows both overdraft and term loan (with tenor of 1, 3, 6, 9 or 12 months) drawdown depending on customers’ needs.

Investment Plus

  • Wide selection of investment products used as collaterals including bond, mutual funds, structured products and equities
  • Leverage up to 5X1 of your investment holdings and deposits.
  • Additional capital can be used for the reinvestment of bond, mutual funds and structured products
  • Enjoy loans with interest as low as 1.38% p.a.2.
  • Make repayments every three months instead of every month.

Treasury Plus

  • Leverage up to 5X1 your current deposits.
  • Invest the additional capital from the revolving loan credit line in Premium Account and/ or foreign exchange.
  • Enjoy a choice of 9 major loan currencies to suit your investment needs:
    HKD, USD, AUD, CAD, EUR, GBP, JPY, NZD and CHF
  • Withdraw and repay the loan anytime during office hours, enabling you to grab every investment opportunity.

Remarks:

  • Depending on individual investment products (e.g. mutual funds, bonds, structured products and equities) being purchased and total available deposit and investment in designated currencies in Currency Manager Account. 5 times is an example of pledging an eligible deposit. The approved credit can be up to 83.33% of your investment holdings/ pledged capital with us, depending on individual collateral used.
  • 1.38% p.a. interest rate is referenced to an "Investment Plus" USD term loan as of April 29, 2015. Interest rate(s) is/are for reference only and is/are not guaranteed. The actual interest rate(s) will be dependent on loan currency and loan drawdown date and may be subject to change from time to time.

To borrow or not to borrow? Borrow only if you can repay!

Important Notice, Important Disclaimer and Terms and Conditions for Portfolio Power:Important Notice, Important Disclaimer and Terms and Conditions for Portfolio Power:

Important Disclaimer:

"Portfolio Power" is a leveraged product and is subject to a number of risks, including:

• Leverage risk

The use of leverage means that relatively small price movements will have a multiplying effect on customers’ corresponding gains or losses or the overdraft credit limit and the degree of investment risk customers face is greatly increased. Thus, the risk of loss in foreign exchange margin trading, leveraged investments or derivatives can be substantial. Customers may sustain losses in excess of their margin funds. Placing contingent orders, such as “stop loss” or “stop limit” orders, will not necessarily limit losses to the intended amounts. Market conditions may make it impossible to execute such orders. Customers may be called upon at short notice to deposit additional margin funds. If the required funds are not provided within the prescribed time, their positions may be liquidated. In the event that the market deteriorates rapidly beyond the margin call level and reaches the forced sell level, the bank reserves the right to close out all or part of the outstanding positions without notice and without any margin calls. Customers will remain liable for any resulting deficit in their accounts. This brief statement cannot, of course, disclose all the risks and other significant aspects of trading in currencies/derivatives or any other leveraged investment products. Customers should therefore carefully study the market before they trade.

• Price Risk

Leveraging on customer’s existing margin deposits and/or securities such as stocks, mutual funds, bonds, notes, Premium Accounts is highly speculative and risky and is subject to the risk of market fluctuation. The value of customers’ holdings may be reduced as a result.

-
The use of leverage means that relatively small price movements will have a multiplying effect on customers’ corresponding gains or losses. Customers should have sufficient net worth to be able to assume the risks and bear the potential losses of leveraged investments.

• Interest Rate Risk

The interest rates for loan may vary during the period for investment or utilization of the overdraft credit line, the interest costs for customers may therefore also vary. This may affect the net return on investments or overdraft credit limit.

• Liquidity Risk

During adverse market conditions, the customers may not be able to liquidate all or any part of their holdings.

• Credit Risk

The approved line amount granted is dependent on the loan-to-value ratio allowed for each margin deposit and/or security.

-
The loan-to-value ratio is subject to change by the Bank without notice.
-
The loan-to-value ratio for securities like bonds and notes is impacted by negative/downgrade ratings. Any security that falls below the Bank’s designated minimum rating by Moody and S&P may result in the security not being marginable and a margin call or force sell could be triggered as a consequence.

• Currency Risk

If the currency of the loan is different from the currency of the underlying investments and / or deposits, foreign exchange rate risk implications may affect the value of the loan, underlying investments, and / or deposits. Relatively small movements in the exchange rate will have a multiplying effect on customers’ corresponding gain or loss and resulting in the possibility of margin call and force-sell.

• Marked-to-market Losses

The customers’ leveraged position is marked-to-market intraday, daily, weekly or monthly, whichever is applicable, and they may be called upon at short notice to deposit additional funds to avoid a forced sell of their leveraged positions.

-
Losses may exceed the amount of initial deposits and/or securities that are pledged by customers as collateral.
-
Customers shall remain liable for any resulting deficit in their account(s).

• Pre-margin Call

For Portfolio Power, in the event that the erosion of the Initial Equity Position (that is, loan outstanding divided by weighted loan-to-value ratio, then minus the loan outstanding at the relevant time) falls within the region of 0%<x<25%, Citibank shall have the absolute discretion to exercise the right:

  • to decline the execution of any type of transaction of the customer in respect of any eligible investments and/or eligible deposits; or,
  • to apply any settlement proceeds to restore the Initial Equity Position to below 0% or such lowest possible percentages.

Margin Call

The implications of margin call levels for the leveraged facility and positions may be liquidated at the discretion of the Bank if a margin call is not complied within the stipulated time period. The margin call levels are also subject to change by the Bank without prior notice and the Bank has no obligation to notify customer of the aforesaid event, therefore it is customer’s duty to monitor the same. For Portfolio Power, margin call trigger is set at the level where the Initial Equity Position erodes for 25% or above. If a margin call is triggered, customers need to top up the shortfall margin within 7 calendar days.

Force-Sell

The implications of forced sell levels for the leveraged facility, including all or any part of customers’ margin deposits and/or securities may be realized for settling all or any part of their outstanding without notice. In the event that the market deteriorates rapidly beyond the margin call level and reaches the forced sell level, the bank reserves the right to close out all or part of the outstanding positions without notice and without any margin calls. The forced sell levels are also subject to change by the Bank without prior notice. For Portfolio Power, forced sell trigger is set at the level where the Initial Equity Position (that is, loan outstanding divided by weighted loan-to-value ratio, then minus the loan outstanding at the relevant time) of the customer portfolio erodes for 50% or above.

Important Disclaimer:

Portfolio Power (the "Facility") is a general purpose credit facility. The credit limit of the Facility is determined with reference to the aggregate margin value of the eligible deposits in the Currency Manager and/or the aggregate margin value of the eligible investment products and may be revised by the Bank from time to time. If the Security Margin is not complied with, customers may be required to restore the Security Margin by either depositing with the Bank additional sums and/or securities acceptable to the Bank, or repaying part of the total amount outstanding. If customer fails to bring in additional funds and/or securities, the Bank has the discretion to apply any eligible deposits, realize all or any part of the pledged investment products or terminate the Premium Account before its maturity date for settling all or any part of the amount then outstanding under the Facility without notice. The losses may be substantial as a result of such redemption of investment products or early termination of Premium Account and customers will remain liable for any resulting deficit in their accounts.

Terms and Conditions:

  • The grant of Portfolio Power is subject to the approval of Citibank (Hong Kong) Limited ("the Bank") and terms and conditions.
  • Investments are not bank deposits and are not protected under any deposit protection scheme or authority.
  • Acceptance of deposits and investments as collaterals is subject to the approval of Citibank (Hong Kong) Limited.
  • Citibank (Hong Kong) Limited reserves the right of final decision upon disputes.
  • Not eligible for U.S. persons and might only be applicable to limited jurisdictions.
  • The facility is subject to our annual review whereupon we will re-assess based on our annual review criteria (as determined by us from time to time) which may include, but are not limited to: your (a) credit history, (b) bankruptcy check, (c) net worth and (d) customer segment (Citigold or Citigold Private Client). You may be required to provide additional information or documentary proof upon request. We may renew the Facility (with the same of different Facility Limit and on the same or different terms) or terminate the Facility.
  • The bank reserves the rights to liquidate any or all of the eligible deposit or collateral held with the bank and/or set off any credit balance in any of your accounts (or your joint accounts with other person(s)) against any outstanding balances and terminate Portfolio Power services.

Important Notice & Terms and Conditions for Investment Plus:Important Notice & Terms and Conditions for Investment Plus:

Important Notice:

"Investment Plus" is a leveraged product and is subject to a number of risks, including:

• Leverage risk

The use of leverage means that relatively small price movements will have a multiplying effect on customers’ corresponding gains or losses or the overdraft credit limit and the degree of investment risk customers face is greatly increased. Thus, the risk of loss in foreign exchange margin trading, leveraged investments or derivatives can be substantial. Customers may sustain losses in excess of their margin funds. Placing contingent orders, such as “stop loss” or “stop limit” orders, will not necessarily limit losses to the intended amounts. Market conditions may make it impossible to execute such orders. Customers may be called upon at short notice to deposit additional margin funds. If the required funds are not provided within the prescribed time, their positions may be liquidated. In the event that the market deteriorates rapidly beyond the margin call level and reaches the forced sell level, the bank reserves the right to close out all or part of the outstanding positions without notice and without any margin calls. Customers will remain liable for any resulting deficit in their accounts. This brief statement cannot, of course, disclose all the risks and other significant aspects of trading in currencies/derivatives or any other leveraged investment products. Customers should therefore carefully study the market before they trade.

• Price Risk

Leveraging on customer’s existing margin deposits and/or securities such as stocks, mutual funds, bonds, notes, Premium Accounts is highly speculative and risky and is subject to the risk of market fluctuation. The value of customers’ holdings may be reduced as a result.

-
The use of leverage means that relatively small price movements will have a multiplying effect on customers’ corresponding gains or losses. Customers should have sufficient net worth to be able to assume the risks and bear the potential losses of leveraged investments.

• Interest Rate Risk

The interest rates for loan may vary during the period for investment or utilization of the overdraft credit line, the interest costs for customers may therefore also vary. This may affect the net return on investments or overdraft credit limit.

• Liquidity Risk

During adverse market conditions, the customers may not be able to liquidate all or any part of their holdings.

• Credit Risk

The approved line amount granted is dependent on the loan-to-value ratio allowed for each margin deposit and/or security.

-
The loan-to-value ratio is subject to change by the Bank without notice.
-
The loan-to-value ratio for securities like bonds and notes is impacted by negative/downgrade ratings. Any security that falls below the Bank’s designated minimum rating by Moody and S&P may result in the security not being marginable and a margin call or force sell could be triggered as a consequence.

• Currency Risk

If the currency of the loan is different from the currency of the underlying investments and / or deposits, foreign exchange rate risk implications may affect the value of the loan, underlying investments, and / or deposits. Relatively small movements in the exchange rate will have a multiplying effect on customers’ corresponding gain or loss and resulting in the possibility of margin call and force-sell.

• Marked-to-market Losses

The customers’ leveraged position is marked-to-market intraday, daily, weekly or monthly, whichever is applicable, and they may be called upon at short notice to deposit additional funds to avoid a forced sell of their leveraged positions.

-
Losses may exceed the amount of initial deposits and/or securities that are pledged by customers as collateral.
-
Customers shall remain liable for any resulting deficit in their account(s).

• Pre-margin Call

For Investment Plus, in the event that the erosion of the Initial Equity Position (that is, loan outstanding divided by weighted loan-to-value ratio, then minus the loan outstanding at the relevant time) falls within the region of 0%<x<25%, Citibank shall have the absolute discretion to exercise the right:

  • to decline the execution of any type of transaction of the customer in respect of any eligible investments and/or eligible deposits; or,
  • to apply any settlement proceeds to restore the Initial Equity Position to below 0% or such lowest possible percentages.

Margin Call

The implications of margin call levels for the leveraged facility and positions may be liquidated at the discretion of the Bank if a margin call is not complied within the stipulated time period. The margin call levels are also subject to change by the Bank without prior notice and the Bank has no obligation to notify customer of the aforesaid event, therefore it is customer’s duty to monitor the same. For Investment Plus, margin call trigger is set at the level where the Initial Equity Position erodes for 25% or above. If a margin call is triggered, customers need to top up the shortfall margin within 7 calendar days.

Force-Sell

The implications of forced sell levels for the leveraged facility, including all or any part of customers’ margin deposits and/or securities may be realized for settling all or any part of their outstanding without notice. In the event that the market deteriorates rapidly beyond the margin call level and reaches the forced sell level, the bank reserves the right to close out all or part of the outstanding positions without notice and without any margin calls. The forced sell levels are also subject to change by the Bank without prior notice. For Investment Plus, forced sell trigger is set at the level where the Initial Equity Position (that is, loan outstanding divided by weighted loan-to-value ratio, then minus the loan outstanding at the relevant time) of the customer portfolio erodes for 50% or above.

Terms and Conditions:

  • This material is for information purpose only and does not intend to constitute any offer or solicitation or advice to buy or sell any investment products. The investment decision is yours but you should not invest in "Investment Plus" unless the intermediary who sells it to you has explained to you that the product is suitable for you having regard to your financial situation, investment experience and investment objectives.
  • Investments are not bank deposits and are not protected under any deposit protection scheme or authority.
  • Investors should have sufficient net worth to be able to assume the risks and bear the potential losses of investing in "Investment Plus".
  • Leveraged transactions carry high degree of risks. Investors may therefore wish to seek independent advice before making a commitment to enter into a position of "Investment Plus". In the event that investors choose not to seek independent advice, you should carefully consider whether "Investment Plus" is suitable in the light of your own investment objectives, financial position and risk profile. For more information on the collateralized investment products, investors should also carefully read the relevant terms and conditions.
  • Investors should not rely on the content of this material / website alone to make investment decisions. You should also read other relevant documents for details including the risk factors. If you have any inquiries, please seek independent professional advice prior to subscription.
  • Past performance is not indicative of future performance.
  • Investors' investments are subject to the insolvency and credit risk of Citibank (Hong Kong) Limited (the "Bank"). There is no assurance of protection against a default by the Bank in respect of payment obligation. In case of insolvency of the Bank, you may lose your entire investment irrespective of the performance of the market or segment invested and the terms of the investment.
  • .Investment products are not available for US persons and might only be applicable to limited jurisdiction.
  • The facility is subject to our annual review whereupon we will re-assess based on our annual review criteria (as determined by us from time to time) which may include, but are not limited to: your (a) credit history, (b) bankruptcy check, (c) net worth and (d) customer segment (Citigold or Citigold Private Client). You may be required to provide additional information or documentary proof upon request. We may renew the Facility (with the same of different Facility Limit and on the same or different terms) or terminate the Facility.
  • The bank reserves the rights to liquidate any or all of the eligible deposit or collateral held with the bank and/or set off any credit balance in any of your accounts (or your joint accounts with other person(s)) against any outstanding balances and terminate Investment Plus services.

Important Information, Risk Disclosure & Important Disclaimer for Treasury Plus:Important Information, Risk Disclosure & Important Disclaimer for Treasury Plus:

Important Information

  • The investment decision is yours but you should not invest in the Treasury Plus unless the intermediary who sells it to you has explained that the product is suitable for you having regard to your financial situation, investment experience and investment objectives.
  • Treasury Plus involves leveraged investment and is subject to a number of risks.
  • Leveraged investments carry a high degree of risk in which a relatively small market movement will have a proportionately larger impact on the funds you have invested or will have to invest. An investor may sustain a total loss of initial margin funds and any additional funds deposited to maintain his/her position. If the market moves against his/her position or margin requirements are increased, an investor may be called upon to pay substantial additional funds at short notice to maintain his/her position.
  • Premium Account is not a bank deposit and involves risks including the possible loss of the principal amount invested. Please refer to relevant brochures for the details and risks involved for Premium Account.
  • Investors should not rely on this document/content of this leaflet alone to make investment decisions. They should also read other relevant documents for details including the risk factors. If you have any enquiries, please seek independent professional advice prior to subscription.
  • Past performance is not indicative of future performance.
  • Investor's investments are subject to the insolvency and credit risk of Citibank (Hong Kong) Limited (the "Bank"). There is no assurance of protection against a default by the Bank in respect of payment obligation. In case of insolvency of the Bank, you may lose your entire investment irrespective of the performance of the foreign currency market, the terms of the Premium Account and Treasury Plus.
  • This material is issued by Citibank (Hong Kong) Limited, a licensed bank regulated by the Hong Kong Monetary Authority.

Risk Disclosure

Leverage Risk
The use of leverage means that relatively small price movements will have a multiplying effect on customers' corresponding gains or losses and the degree of investment risk customers face is greatly increased. Thus, the risk of loss in leveraged investments via Treasury Plus can be substantial. Customers may sustain losses in excess of their margin funds. Placing contingent orders, such as "stop loss" or "stop limit" orders, will not necessarily limit losses to the intended amounts. Market conditions may make it impossible to execute such orders. Customers may be called upon at short notice to deposit additional margin funds. If the required funds are not provided within the prescribed time, their positions may be liquidated. In the event that the market deteriorates rapidly beyond the margin call level and reaches the forced sell level, the bank reserves the right to close out all or part of the outstanding positions without notice and without any margin calls. Customers will remain liable for any resulting deficit in their accounts. Customers may be engaged in leveraged investments in Premium Account and/or other foreign exchange currencies through pledging of deposits (including local and foreign currencies) and/or Premium Account. Minor market fluctuations (including but not limited to fluctuations in currency exchange rate) may multiply customers' losses and lead to substantial deficit. Customers may sustain losses in excess of their collaterals and have resulting deficits in their accounts.


Price Risk
Treasury Plus is highly speculative and risky and is subject to the risk of market fluctuation. The value of customers' holdings may be reduced as a result. Customers should have sufficient net worth to be able to assume the risks and bear the potential losses of leveraged investments.


Interest Rate Risk
Our Bank only offers overnight tenor for Treasury Plus. As the interest rates for Treasury Plus loan may vary during the period of investment, the interest costs may therefore also vary. This may affect the net investment return.


Liquidity Risk
Premium Account cannot be terminated before maturity. For customers who pledged Premium Account as collateral, any loan repayment or top up requirement before maturity will have to be covered by other pledged deposit and/or additional funds. If customers do not have sufficient pledged deposit and/or fail to bring in additional funds, the Bank has the discretion to terminate the Premium Account before its maturity date to repay the Treasury Plus loan outstanding. Such early termination may be made at a loss to customers and they will remain liable for any resulting deficit in their accounts.


Credit Risk
The approved line amount granted is dependent on the quantum of finance allowed for each margin deposits and/or Premium Accounts. The quantum of finance is subject to change by the Bank without notice.


Currency Risk
If the currency of the loan is different from the currency of the underlying investments and/or deposits, foreign exchange rate risk implications may affect the value of the loan, underlying investments, and/or deposits. Relatively small movements in the exchange rate will have a multiplying effect on customers' corresponding gain or loss and resulting in the possibility of margin call and forced sell.


Marked-to-market Losses
Customers' leveraged position is marked-to-market daily and they may be called upon at short notice to deposit additional funds to avoid a forced sell of their leveraged positions.


Margin Call
The margin call level is set at present margin level equal to or exceeds 100%, computed as the ratio of (a) the aggregate of the outstanding amount(including accrued interest) at any time under the revolving credit facilities or otherwise under this account to (b) the aggregate of (i) the value of the eligible deposits (including for this purpose, accrued interest and the value of my investments under Premium Accounts) maintained with the Bank under this account and (ii) the value of the deposits (including accrued interest) to be established or Placements to be made with the Bank from the proceeds of any part of such advances, multiplied by such percentage as may be prescribed by the Bank from time to time (presently, 83.33%) (the "loan-to-security" ratio). If margin call is triggered, customers need to top up the shortfall margin to below 100% within 2 business days. Positions may be liquidated at the discretion of the Bank if a margin call is not complied within the stipulated time period. The margin call level is also subject to change by the Bank without prior notice and the Bank has no obligation to notify customer of the aforesaid event, therefore it is customer's duty to monitor the same.


Force-sell
The forced sell level is set at present margin level equal to or exceeds 103.44%, computed the ratio of (a) the aggregate of the outstanding amount(including accrued interest) at any time under the revolving credit facilities or otherwise under this account to (b) the aggregate of (i) the value of the eligible deposits (including for this purpose, accrued interest and the value of my investments under Premium Accounts) maintained with the Bank under this account and (ii) the value of the deposits (including accrued interest) to be established or Placements to be made with the Bank from the proceeds of any part of such advances, multiplied by such percentage as may be prescribed by the Bank from time to time (presently, 83.33%) (the "loan-to-security" ratio). All or any part of customers' margin deposits and/or securities may be realized for settling all or any part of their outstanding without notice. In the event that the market deteriorates rapidly beyond the margin call level and reaches the forced sell level, the bank reserves the right to close out all outstanding positions without notice and without any margin calls. The forced sell level is also subject to change by the Bank without prior notice.


Loan Interests
Treasury Plus is a revolving loan where interest is accrued daily. All the interest charged and other sum payable will be due and payable at any time forthwith on demand by the Bank. Customers should seek independent advice before making a commitment to apply for Treasury Plus. In the event that customers choose not to seek independent advice, they should carefully consider whether such leveraged investment account is suitable in the light of their own investment objectives, financial position and risk profile.

Important Disclaimer

  • The tenor of the Treasury Plus and the Premium Account are different. The Bank only offers overnight tenor for Treasury Plus. The interest rates for loan may vary daily without notice, customers' interest costs may therefore also vary. This may affect the net return on investments. Customers can inquire latest interest rate by calling the Bank's hotline or website.
  • The loan interest of Treasury Plus will be debited to respective loan accounts on the last calendar day of each month. If the last calendar day is not a bank business day, interest will be debited on the first succeeding business day (includes interest incurred in-between).
  • Customers' loan currencies in Treasury Plus can be different from investment currencies in Premium Account. In such a case for Treasury Plus, customer will be subject to more significant currency risk.
  • Foreign exchange rate fluctuation of the collateral currencies may reduce collateral value and may induce margin call and/or forced sell.
  • Unless after liquidation the outstanding position will not reach any margin call and forced sell level, customer-initiated liquidation of thepledged product will not be permitted if the liquidation proceeds are not for loan repayment.
  • Investment products are not eligible for U.S. persons and might only be applicable to limited jurisdictions.
  • The facility is subject to our annual review whereupon we will re-assess based on our annual review criteria (as determined by us from time to time) which may include, but are not limited to: your (a) credit history, (b) bankruptcy check, (c) net worth and (d) customer segment (Citigold or Citigold Private Client). You may be required to provide additional information or documentary proof upon request. We may renew the Facility (with the same of different Facility Limit and on the same or different terms) or terminate the Facility.
  • The bank reserves the rights to liquidate any or all of the eligible deposit or collateral held with the bank and/or set off any credit balance in any of your accounts (or your joint accounts with other person(s)) against any outstanding balances and terminate Treasury Plus services.