This free writing prospectus relates to
an offering of notes linked to the Reference Asset. The purchaser of a note will acquire a senior unsecured debt security of HSBC
USA Inc. We reserve the right to withdraw, cancel or modify the offering and to reject orders in whole or in part. Although the
offering of notes relates to the Reference Asset, you should not construe that fact as a recommendation as to the merits of acquiring
an investment linked to the Reference Asset or any component security included in the Reference Asset or as to the suitability
of an investment in the notes.
You should read this document together
with the prospectus dated March 22, 2012, the prospectus supplement dated March 22, 2012, and the Equity Index Underlying Supplement
dated March 22, 2012. If the terms of the notes offered hereby are inconsistent with those described in the accompanying prospectus
supplement, prospectus or Equity Index Underlying Supplement, the terms described in this free writing prospectus shall control.
You should carefully consider, among other things, the matters set forth in “Risk Factors” beginning on page FWP-8
of this free writing prospectus, page S-3 of the prospectus supplement and page S-1 of the Equity Index Underlying Supplement,
as the notes involve risks not associated with conventional debt securities. We urge you to consult your investment, legal, tax,
accounting and other advisors before you invest in the notes. As used herein, references to the “Issuer”, “HSBC”,
“we”, “us” and “our” are to HSBC USA Inc.
HSBC has filed a registration statement
(including a prospectus, prospectus supplement and Equity Index Underlying Supplement) with the SEC for the offering to which this
free writing prospectus relates. Before you invest, you should read the prospectus, prospectus supplement and Equity Index Underlying
Supplement in that registration statement and other documents HSBC has filed with the SEC for more complete information about HSBC
and this offering. You may get these documents for free by visiting EDGAR on the SEC’s web site at www.sec.gov. Alternatively,
HSBC Securities (USA) Inc. or any dealer participating in this offering will arrange to send you the prospectus, prospectus supplement
and Equity Index Underlying Supplement if you request them by calling toll-free 1-866-811-8049.
We are using this free writing prospectus
to solicit from you an offer to purchase the notes. You may revoke your offer to purchase the notes at any time prior to the time
at which we accept your offer by notifying HSBC Securities (USA) Inc. We reserve the right to change the terms of, or reject any
offer to purchase, the notes prior to their issuance. In the event of any material changes to the terms of the notes, we will notify
you.
On the Maturity Date, for each note you
hold, we will pay you the Final Settlement Value, which is an amount in cash, as described below:
Under these circumstances, you will lose
1% of the Principal Amount for each percentage point that the Reference Return is below the Buffer Level.
You should be aware
that if the Reference Return is less than the Buffer Level, you will lose up to 90% of your investment.
If any payment is due on the notes on a
day that would otherwise be a “business day” but is a day on which the office of a paying agent or a settlement system
is closed, we will make the payment on the next business day when that paying agent or system is open. Any such payment will be
deemed to have been made on the original due date, and no additional payment will be made on account of the delay.
We or one of our affiliates will act as
calculation agent with respect to the notes.
INVESTOR SUITABILITY
The notes may be suitable for you if:
|
The notes may not be suitable for you if:
|
|
|
}
You seek an investment with a return linked to the Reference Asset and you believe that the level of the Reference Asset
will not decrease or will not increase above the Digital Upside Return over the term of the notes.
}
You are willing to invest in the notes based on the Digital Upside Return, which will limit your return at maturity.
}
You are willing to make an investment that is exposed to the negative Reference Return on a 1-to-1 basis for each percentage
point that the Reference Return is less than the Buffer Level.
}
You are willing to accept the risk and return profile of the notes versus a conventional debt security with a comparable
maturity issued by HSBC or another issuer with a similar credit rating.
}
You are willing to forgo dividends or other distributions paid to holders of the stocks comprising the Reference Asset.
}
You do not seek current income from your investment.
}
You do not seek an investment for which there is an active secondary market.
}
You are willing to hold the notes to maturity.
}
You are comfortable with the creditworthiness of HSBC, as Issuer of the notes.
|
}
You believe that the Reference Return will be negative or that the Reference Return will exceed the Digital Upside Return.
}
You are unwilling to make an investment that is exposed to the negative Reference Return on a 1-to-1 basis for each percentage
point that the Reference Return is less than the Buffer Level.
}
You seek an investment that provides full return of principal.
}
You prefer the lower risk, and therefore accept the potentially lower returns, of conventional debt securities with comparable
maturities issued by HSBC or another issuer with a similar credit rating.
}
You prefer to receive the dividends or other distributions paid on the stocks comprising the Reference Asset.
}
You seek current income from your investment.
}
You seek an investment for which there will be an active secondary market.
}
You are unable or unwilling to hold the notes to maturity.
}
You are not willing or are unable to assume the credit risk associated with HSBC, as Issuer of the notes.
|
RISK FACTORS
We urge you to read the section “Risk
Factors” beginning on page S-3 in the accompanying prospectus supplement and on page S-1 of the accompanying Equity
Index Underlying Supplement. Investing in the notes is not equivalent to investing directly in any of the stocks comprising the
Reference Asset. You should understand the risks of investing in the notes and should reach an investment decision only after careful
consideration, with your advisors, of the suitability of the notes in light of your particular financial circumstances and the
information set forth in this free writing prospectus and the accompanying Equity Index Underlying Supplement, prospectus supplement
and prospectus.
In addition to the risks discussed below,
you should review “Risk Factors” in the accompanying prospectus supplement and Equity Index Underlying Supplement including
the explanation of risks relating to the notes described in the following sections:
|
}
|
“— Risks Relating to All Note Issuances” in the prospectus supplement; and
|
|
}
|
“— General Risks Related to Indices” in the Equity Index Underlying Supplement.
|
You will be subject to significant risks
not associated with conventional fixed-rate or floating-rate debt securities.
Your investment in the notes may result
in a loss.
You will be exposed to the decline in
the level of the Reference Asset beyond the Buffer Level of -10%. Accordingly, if the Reference Return is less than -10%,
your Payment at Maturity will be less than the Principal Amount of your notes. You may lose up to 90% of your investment at
maturity if the Reference Return is less than the Buffer Level.
Your return on the notes, if any, is
limited to the Digital Upside Return, regardless of any appreciation in the level of the Reference Asset beyond the Digital Upside
Return.
If the Reference Return is greater than
or equal to zero, you will receive a positive return on the notes equal to the Digital Upside Return, regardless of the appreciation
in the level of the Reference Asset, which may be significantly greater than the Digital Upside Return. Under no circumstances
will your return exceed the Digital Upside Return. Accordingly, the return on the notes may be significantly less than the return
on a direct investment in the securities included in the Reference Asset.
The amount payable on the notes is not
linked to the level of the Reference Asset at any time other than the Final Valuation Date.
The Final Level will be based on the Official
Closing Level of the Reference Asset on the Final Valuation Date, subject to postponement for non-trading days and certain market
disruption events. Even if the level of the Reference Asset appreciates during the term of the notes other than on the Final Valuation
Date but then drops on the Final Valuation Date to a level that is less than the Initial Level or the Buffer Level, the Payment
at Maturity may be less, and may be significantly less, than it would have been had the Payment at Maturity been linked to the
level of the Reference Asset prior to such decrease. Although the actual level of the Reference Asset on the Maturity Date or at
other times during the term of the notes may be higher than the Final Level, the Payment at Maturity will be based solely on the
Official Closing Level of the Reference Asset on the Final Valuation Date.
Credit risk of HSBC USA Inc.
The notes are senior unsecured debt obligations
of the Issuer, HSBC, and are not, either directly or indirectly, an obligation of any third party. As further described in the
accompanying prospectus supplement and prospectus, the notes will rank on par with all of the other unsecured and unsubordinated
debt obligations of HSBC, except such obligations as may be preferred by operation of law. Any payment to be made on the notes,
including any return of principal at maturity, depends on the ability of HSBC to satisfy its obligations as they come due. As a
result, the actual and perceived creditworthiness of HSBC may affect the market value of the notes and, in the event HSBC were
to default on its obligations, you may not receive the amounts owed to you under the terms of the notes.
The notes will not bear interest.
As a holder of the notes, you will not
receive interest payments.
Changes that affect the Reference
Asset may affect the market value of the notes and the amount you will receive at maturity.
The policies of the reference sponsor concerning
additions, deletions and substitutions of the constituents comprising the Reference Asset and the manner in which the reference
sponsor takes account of certain changes affecting those constituents may affect the level of the Reference Asset. The policies
of the reference sponsor with respect to the calculation of the Reference Asset could also affect the level of the Reference Asset.
The reference sponsor may discontinue or suspend calculation or dissemination of the Reference Asset. Any such actions could affect
the value of the notes and their return.
The notes are not insured or guaranteed
by any governmental agency of the United States or any other jurisdiction.
The notes are not deposit liabilities or
other obligations of a bank and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental
agency or program of the United States or any other jurisdiction. An investment in the notes is subject to the credit risk of HSBC,
and in the event that HSBC is unable to pay its obligations as they become due, you may not receive the full Payment at Maturity
of the notes.
The Estimated Initial Value of the notes, which will be determined
by us at the time the terms of the notes are set, will be less than the price to public and may differ from the market value of
the notes in the secondary market, if any.
The Estimated Initial Value of the notes
will be calculated by us at the time the terms of the notes are set. We will determine the Estimated Initial Value by reference
to our or our affiliates’ internal pricing models. These pricing models consider certain assumptions and variables, which
can include volatility and interest rates. Different pricing models and assumptions could provide valuations for the notes that
are different from our Estimated Initial Value. These pricing models rely in part on certain forecasts about future events, which
may prove to be incorrect. The Estimated Initial Value will reflect the implied borrowing rate we use to issue market-linked securities,
as well as the mid-market value of the embedded derivatives in the notes. As a result of the difference between our implied borrowing
rate and the rate we would use when we issue conventional fixed or floating rate debt securities, the Estimated Initial Value of
the notes may be lower if it were based on the levels at which our fixed or floating rate debt securities trade in the secondary
market. In addition, if we were to use the rate we use for our conventional fixed or floating rate debt issuances, we would expect
the economic terms of the notes to be more favorable to you. The Estimated Initial Value does not represent a minimum price at
which we or any of our affiliates would be willing to purchase your notes in the secondary market (if any exists) at any time.
The price of your notes in the secondary market, if any,
immediately after the Pricing Date will be less than the price to public.
The price to public takes into account
certain costs. These costs, which will be used or retained by us or one of our affiliates, will include our affiliates’ projected
hedging profits (which may or may not be realized) for assuming risks inherent in hedging our obligations under the notes, the
costs associated with hedging our obligations under the notes, and the costs associated with issuing the notes (such as costs associated
with creating and documenting the notes). If you were to sell your notes in the secondary market, if any, the price you would receive
for your notes may be less than the price you paid for them. The price of your notes in the secondary market, if any, at any time
after issuance will vary based on many factors, including the level of the Reference Asset and changes in market conditions, and
cannot be predicted with accuracy. The notes are not designed to be short-term trading instruments, and you should, therefore,
be able and willing to hold the notes to maturity. Any sale of the notes prior to maturity could result in a loss to you.
If we were to repurchase your notes immediately after the
Original Issue Date, the price you receive may be higher than the Estimated Initial Value of the notes.
Although not obligated to do so, for a
predetermined period of time after the Original Issue Date, if we were to buy back your notes, the purchase price you would receive
(and which may be shown on your customer account statements) is expected to exceed the Estimated Initial Value, assuming all other
market conditions remain the same. This pricing differential is only temporary and the excess amount is expected to decline on
an approximate straight line basis to zero over a period of approximately six months from the Original Issue Date. The length of
this period is generally dictated by market conditions. Thereafter, if you are able to sell your notes, the price you would receive
would be based on the market value of the notes at that time, which would take into account factors including, but not limited
to, then-prevailing market conditions, the relevant Reference Asset, our creditworthiness and transaction costs.
Small-capitalization risk.
The RTY
tracks companies that may be considered small-capitalization companies. These companies often have greater stock price volatility,
lower trading volume and less liquidity than large-capitalization companies and therefore the respective index level may be more
volatile than an investment in stocks issued by larger companies. Stock prices of small-capitalization companies may also be more
vulnerable than those of larger companies to adverse business and economic developments, and the stocks of small-capitalization
companies may be thinly traded, making it difficult for the RTY to track them. In addition, small-capitalization companies are
often less stable financially than large-capitalization companies and may depend on a small number of key personnel, making them
more vulnerable to loss of personnel. Small-capitalization companies are often subject to less analyst coverage and may be in early,
and less predictable, periods of their corporate existences. These companies tend to have smaller revenues, less diverse product
lines, smaller shares of their product or service markets, fewer financial resources and competitive strengths than large-capitalization
companies, and are more susceptible to adverse developments related to their products.
The notes lack liquidity.
The notes will not be listed on any securities
exchange. HSBC Securities (USA) Inc. is not required to offer to purchase the notes in the secondary market, if any exists. Even
if there is a secondary market, it may not provide enough liquidity to allow you to trade or sell the notes easily. Because other
dealers are not likely to make a secondary market for the notes, the price at which you may be able to trade your notes is likely
to depend on the price, if any, at which HSBC Securities (USA) Inc. is willing to buy the notes.
Potential conflicts.
HSBC and its affiliates play a variety
of roles in connection with the issuance of the notes, including acting as calculation agent and hedging our obligations under
the notes. In performing these duties, the economic interests of the calculation agent and other affiliates of ours are potentially
adverse to your interests as an investor in the notes. We will not have any obligation to consider your interests as a holder of
the notes in taking any action that might affect the value of your notes.
Uncertain tax treatment.
For a discussion of the U.S. federal income
tax consequences of your investment in the notes, please see the discussion under “U.S. Federal Income Tax Considerations”
herein and the discussion under “U.S. Federal Income Tax Considerations” in the accompanying prospectus supplement.
ILLUSTRATIVE
EXAMPLES
The following table and examples are provided
for illustrative purposes only and are hypothetical. They do not purport to be representative of every possible scenario concerning
increases or decreases in the level of the Reference Asset relative to its Initial Level. We cannot predict the Final Level. The
assumptions we have made in connection with the illustrations set forth below may not reflect actual events, and the hypothetical
Initial Level used in the table and examples below is not expected to be the actual Initial Level. You should not take this illustration
or these examples as an indication or assurance of the expected performance of the Reference Asset or the return on your notes
.
The Final Settlement Value may be less than the amount that you would have received from a conventional debt security with
the same stated maturity, including those issued by HSBC. The numbers appearing in the table below and following examples have
been rounded for ease of analysis.
The table below illustrates the Final Settlement
Value on a $1,000 investment in the notes for a hypothetical range of Reference Returns from -100% to +100%. The following results
are based solely on the assumptions outlined below. The “Hypothetical Return on the Notes” as used below is the number,
expressed as a percentage, that results from comparing the Final Settlement Value per $1,000 Principal Amount to $1,000. The potential
returns described here assume that your notes are held to maturity. You should consider carefully whether the notes are suitable
to your investment goals. The following table and examples assume the following:
}
|
Principal Amount:
|
$1,000
|
}
|
Hypothetical Initial Level:
|
1,000.00
|
}
|
Hypothetical Digital
Upside Return:
|
10.50% (The actual Digital Upside Return will be determined on the Pricing Date and will be between 10.50% and 12.50%).
|
The actual Initial Level will be determined
on the Pricing Date.
Hypothetical
Final
Level
|
Hypothetical
Reference Return
|
Hypothetical
Final
Settlement Value
|
Hypothetical
Return
on the Notes
|
2,000.00
|
100.00%
|
$1,105.00
|
10.50%
|
1,800.00
|
80.00%
|
$1,105.00
|
10.50%
|
1,600.00
|
60.00%
|
$1,105.00
|
10.50%
|
1,400.00
|
40.00%
|
$1,105.00
|
10.50%
|
1,300.00
|
30.00%
|
$1,105.00
|
10.50%
|
1,200.00
|
20.00%
|
$1,105.00
|
10.50%
|
1,105.00
|
10.50%
|
$1,105.00
|
10.50%
|
1,100.00
|
10.00%
|
$1,105.00
|
10.50%
|
1,050.00
|
5.00%
|
$1,105.00
|
10.50%
|
1,020.00
|
2.00%
|
$1,105.00
|
10.50%
|
1,010.00
|
1.00%
|
$1,105.00
|
10.50%
|
1,000.00
|
0.00%
|
$1,105.00
|
10.50%
|
990.00
|
-1.00%
|
$1,000.00
|
0.00%
|
980.00
|
-2.00%
|
$1,000.00
|
0.00%
|
950.00
|
-5.00%
|
$1,000.00
|
0.00%
|
900.00
|
-10.00%
|
$1,000.00
|
0.00%
|
850.00
|
-15.00%
|
$950.00
|
-5.00%
|
800.00
|
-20.00%
|
$900.00
|
-10.00%
|
700.00
|
-30.00%
|
$800.00
|
-20.00%
|
600.00
|
-40.00%
|
$700.00
|
-30.00%
|
400.00
|
-60.00%
|
$500.00
|
-50.00%
|
200.00
|
-80.00%
|
$300.00
|
-70.00%
|
0.00
|
-100.00%
|
$100.00
|
-90.00%
|
The following examples indicate how the
Final Settlement Value would be calculated with respect to a hypothetical $1,000 investment in the notes.
Example 1: The level of the Reference
Asset increases from the Initial Level of 1,000.00 to a Final Level of 1,050.00.
|
|
Reference Return:
|
5.00%
|
Final Settlement Value:
|
$1,105.00
|
Because the Reference Return is positive,
the investor receives the Digital Upside Return, and the Final Settlement Value would be $1,105.00 per $1,000 Principal Amount,
calculated as follows:
$1,000 + ($1,000 × Digital Upside
Return)
= $1,000 + ($1,000 × 10.50%)
= $1,105.00
Example 1 shows that you will benefit from
the Digital Upside Return at maturity when the Reference Return is positive.
Example 2: The level of the Reference
Asset increases from the Initial Level of 1,000.00 to a Final Level of 1,600.00.
|
|
Reference Return:
|
60.00%
|
Final Settlement Value:
|
$1,105.00
|
Although the Reference Return is greater
than the Digital Upside Return, the investor still receives the Digital Upside Return, and the Final Settlement Value would be
$1,105.00 per $1,000 Principal Amount, calculated as follows:
$1,000 + ($1,000 × Digital Upside
Return)
= $1,000 + ($1,000 × 10.50%)
= $1,105.00
Example 2 shows that you will receive the
Digital Upside Return if the Reference Return is positive, but you will not participate in increases in the Reference Asset beyond
the Digital Upside Return.
Example 3: The level of the Reference
Asset decreases from the Initial Level of 1,000.00 to a Final Level of 950.00.
|
|
Reference Return:
|
-5.00%
|
Final Settlement Value:
|
$1,000.00
|
Because the Reference Return is less than
zero but greater than the Buffer Level of -10%, the Final Settlement Value would be $1,000.00 per $1,000 Principal Amount (a zero
return).
Example 4: The level of the Reference
Asset decreases from the Initial Level of 1,000.00 to a Final Level of 600.00.
|
|
Reference Return:
|
-40.00%
|
Final Settlement Value:
|
$700.00
|
Because the Reference
Return is less than the Buffer Level of -10%, the Final Settlement Value would be $700.00 per $1,000 Principal Amount, calculated
as follows:
$1,000 + [$1,000 ×
(Reference Return + 10%)]
= $1,000 + [$1,000
× (-40.00% + 10%)
= $700.00
Example 4 shows that you
are exposed on a 1-to-1 basis to declines in the level of the Reference Asset beyond the Buffer Level of -10%. YOU MAY LOSE UP
TO 90% OF THE PRINCIPAL AMOUNT OF YOUR NOTES.
THE Russell
2000
®
INDEX
Description of the RTY
The RTY is designed to track the performance
of the small capitalization segment of the United States equity market. All 2,000 stocks are traded on the New York Stock Exchange
or NASDAQ, and the RTY consists of the smallest 2,000 companies included in the Russell 3000
®
Index. The Russell
3000
®
Index is composed of the 3,000 largest United States companies as determined by market capitalization and
represents approximately 98% of the United States equity market.
The top 5 industry groups
by market capitalization as of June 30, 2013 were: Financial Services, Consumer Discretionary, Technology, Producer Durables, and
Health Care.
For
more information about the RTY, see “The Russell 2000
Ò
Index” beginning on page S-21 of the accompanying Equity
Index Underlying Supplement.
|
Historical Performance of the RTY
The following graph sets forth
the historical performance of the RTY based on the daily historical closing levels from July 10, 2008 through July 10, 2013. The
closing level for the RTY on July 10, 2013
was 1,020.42. We obtained the closing levels below from the Bloomberg Professional
®
service. We have not undertaken any independent review of, or made any due diligence inquiry with respect to, the information
obtained from the Bloomberg Professional
®
service.
|
The historical levels
of the RTY should not be taken as an indication of future performance, and no assurance can be given as to the Official Closing
Level of the RTY on the Final Valuation Date.
EVENTS OF DEFAULT
AND ACCELERATION
If the notes have become immediately
due and payable following an Event of Default (as defined in the accompanying prospectus) with respect to the notes, the calculation
agent will determine the accelerated payment due and payable at maturity in the same general manner as described in “Payment
at Maturity” in this free writing prospectus. In that case, the scheduled trading day immediately preceding the date of acceleration
will be used as the Final Valuation Date for purposes of determining the Reference Return, and the accelerated Maturity Date will
be three business days after the accelerated Final Valuation Date. If a Market Disruption Event exists with respect to the Reference
Asset on that scheduled trading day, then the accelerated Final Valuation Date for the Reference Asset will be postponed for up
to five scheduled trading days (in the same manner used for postponing the originally scheduled Final Valuation Date). The accelerated
Maturity Date will also be postponed by an equal number of business days.
If the notes have become immediately
due and payable following an Event of Default, you will not be entitled to any additional payments with respect to the notes. For
more information, see “Description of Debt Securities — Senior Debt Securities — Events of Default” in
the accompanying prospectus.
SUPPLEMENTAL PLAN
OF DISTRIBUTION (CONFLICTS OF INTEREST)
We have appointed HSBC Securities
(USA) Inc., an affiliate of HSBC, as the agent for the sale of the notes. Pursuant to the terms of a distribution agreement,
HSBC Securities (USA) Inc. will purchase the notes from HSBC at the price to public for distribution to other registered
broker-dealers or will offer the notes directly to investors. HSBC Securities (USA) Inc. proposes to offer the notes at the
price to public set forth on the cover page of this free writing prospectus. HSBC USA Inc. or one of our affiliates mat pay
varying referral fees of up to 0.35% per $1,000 Principal Amount in connection with the distribution of the notes to other
registered broker-dealers.
An affiliate of HSBC has paid or may pay
in the future an amount to broker-dealers in connection with the costs of the continuing implementation of systems to support the
notes.
In addition, HSBC Securities (USA) Inc.
or another of its affiliates or agents may use the pricing supplement to which this free writing prospectus relates in market-making
transactions after the initial sale of the notes, but is under no obligation to do so and may discontinue any market-making activities
at any time without notice.
See "Supplemental Plan of Distribution
(Conflicts of Interest)" on page S-49 in the prospectus supplement.
U.S. FEDERAL
INCOME TAX CONSIDERATIONS
There is no direct legal authority as to
the proper tax treatment of the notes, and therefore significant aspects of the tax treatment of the notes are uncertain as to
both the timing and character of any inclusion in income in respect of the notes. Under one approach, a note should be treated
as a pre-paid executory contract with respect to the Reference Asset. We intend to treat the notes consistent with this approach.
Pursuant to the terms of the notes, you agree to treat the notes under this approach for all U.S. federal income tax purposes.
Subject to the limitations described therein, and based on certain factual representations received from us, in the opinion of
our special U.S. tax counsel, Morrison & Foerster LLP, it is reasonable to treat a note as a pre-paid executory contract with
respect to the Reference Asset. Pursuant to this approach, we do not intend to report any income or gain with respect to the notes
prior to their maturity or an earlier sale or exchange and we intend to treat any gain or loss upon maturity or an earlier sale
or exchange as long-term capital gain or loss, provided that you have held the note for more than one year at such time for U.S.
federal income tax purposes.
We will not attempt to ascertain whether
any of the entities whose stock is included in, or owned by, the Reference Asset, as the case may be, would be treated as a passive
foreign investment company (“PFIC”) or United States real property holding corporation (“USRPHC”), both
as defined for U.S. federal income tax purposes. If one or more of the entities whose stock is included in, or owned by, the Reference
Asset, as the case may be, were so treated, certain adverse U.S. federal income tax consequences might apply. You should refer
to information filed with the SEC and other authorities by the entities whose stock is included in, or owned by, the Reference
Asset, as the case may be, and consult your tax advisor regarding the possible consequences to you if one or more of the entities
whose stock is included in, or owned by, the Reference Asset, as the case may be, is or becomes a PFIC or a USRPHC.
Withholding and reporting requirements
under the legislation enacted on March 18, 2010 (as discussed beginning on page S-48 of the prospectus supplement) will generally
apply to payments made after December 31, 2013. However, this withholding tax will not be imposed on payments pursuant to obligations
outstanding on January 1, 2014. Additionally, withholding due to any payment being treated as a “dividend equivalent”
(as discussed beginning on page S-47 of the prospectus supplement) will begin no earlier than January 1, 2014. Holders are urged
to consult with their own tax advisors regarding the possible implications of this recently enacted legislation on their investment
in the notes.
For a discussion of the U.S. federal income
tax consequences of your investment in a note, please see the discussion under “U.S Federal Income Tax Considerations”
in the accompanying prospectus supplement.
|
|
|
TABLE OF CONTENTS
|
|
You should only rely on the
information contained in this free writing prospectus, the accompanying Equity Index Underlying Supplement, prospectus supplement
and prospectus. We have not authorized anyone to provide you with information or to make any representation to you that is not
contained in this free writing prospectus, the accompanying Equity Index Underlying Supplement, prospectus supplement and prospectus.
If anyone provides you with different or inconsistent information, you should not rely on it. This free writing prospectus, the
accompanying Equity Index Underlying Supplement, prospectus supplement and prospectus are not an offer to sell these notes, and
these documents are not soliciting an offer to buy these notes, in any jurisdiction where the offer or sale is not permitted. You
should not, under any circumstances, assume that the information in this free writing prospectus, the accompanying Equity Index
Underlying Supplement, prospectus supplement and prospectus is correct on any date after their respective dates.
HSBC USA Inc.
$
Buffered Digital Notes linked to
the Russell 2000
®
Index
July
16, 2013
FREE
WRITING PROSPECTUS
|
|
|
Free Writing Prospectus
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|
General
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FWP-6
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Payment at Maturity
|
FWP-6
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Investor Suitability
|
FWP-7
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Risk Factors
|
FWP-8
|
Illustrative Examples
|
FWP-10
|
The Russell 2000
®
Index
|
FWP-12
|
Events of Default and Acceleration
|
FWP-13
|
Supplemental Plan of Distribution (Conflicts of Interest)
|
FWP-13
|
U.S. Federal Income Tax Considerations
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FWP-13
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Equity Index Underlying Supplement
|
|
Risk Factors
|
S-1
|
The S&P 500
®
Index
|
S-6
|
The S&P 100
®
Index
|
S-10
|
The S&P MidCap 400
®
Index
|
S-14
|
The S&P 500 Low Volatility Index
|
S-18
|
The Russell 2000
®
Index
|
S-21
|
The Dow Jones Industrial Average
SM
|
S-25
|
The Hang Seng China Enterprises Index
®
|
S-27
|
The Hang Seng
®
Index
|
S-30
|
The Korea Stock Price Index 200
|
S-33
|
MSCI Indices
|
S-36
|
The EURO STOXX 50
®
Index
|
S-40
|
The PHLX Housing Sector
SM
Index
|
S-42
|
The TOPIX
®
Index
|
S-46
|
The NASDAQ-100 Index
®
|
S-49
|
S&P BRIC 40 Index
|
S-53
|
The Nikkei 225 Index
|
S-56
|
The FTSE™ 100 Index
|
S-58
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Other Components
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S-60
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Additional Terms of the Notes
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S-60
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Prospectus Supplement
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Risk Factors
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S-3
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Risks Relating to Our Business
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S-3
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Risks Relating to All Note Issuances
|
S-3
|
Pricing Supplement
|
S-7
|
Description of Notes
|
S-8
|
Use of Proceeds and Hedging
|
S-30
|
Certain ERISA Considerations
|
S-30
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U.S. Federal Income Tax Considerations
|
S-32
|
Supplemental Plan of Distribution (Conflicts of Interest)
|
S-49
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|
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Prospectus
|
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About this Prospectus
|
1
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Risk Factors
|
1
|
Where You Can Find More Information
|
1
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Special Note Regarding Forward-Looking Statements
|
2
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HSBC USA Inc.
|
3
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Use of Proceeds
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3
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Description of Debt Securities
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3
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Description of Preferred Stock
|
15
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Description of Warrants
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21
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Description of Purchase Contracts
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25
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Description of Units
|
28
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Book-Entry Procedures
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30
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Limitations on Issuances in Bearer Form
|
35
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U.S. Federal Income Tax Considerations Relating to Debt Securities
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35
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Plan of Distribution (Conflicts of Interest)
|
51
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Notice to Canadian Investors
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53
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Notice to EEA Investors
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58
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Certain ERISA Matters
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59
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Legal Opinions
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60
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Experts
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60
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