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HSBC Holdings PLC HSBA Scrip Dividend Circular



  HSBC Holdings PLC (HSBA) - Scrip Dividend Circular

RNS Number : 5252Q
HSBC Holdings PLC
07 November 2012
 



The  following  regulated  information,  disseminated  pursuant  to  DTR6.3.5, 
comprises the scrip dividend circular for the third interim dividend for  2012 
which was sent to shareholders of HSBC Holdings plc on 7 November 2012. A copy
of the scrip dividend circular is available at www.hsbc.com/dividends.

 

THIS DOCUMENT IS IMPORTANT AND REQUIRES  YOUR IMMEDIATE ATTENTION. If you  are 
in any doubt  about this document  or as to  the action you  should take,  you 
should consult  a  stockbroker,  solicitor, accountant  or  other  appropriate 
independent professional adviser.

If you sold or transferred all or some of your ordinary shares on or before 23
October 2012, but those shares  are included in the number  shown in box 1  on 
your Form of Election, Entitlement  Advice or Dividend Notification email  for 
the third interim dividend  for 2012, you should,  without delay, consult  the 
stockbroker or other agent through whom the sale or transfer was effected  for 
advice on the action you should take.

Hong Kong Exchanges and Clearing Limited  and The Stock Exchange of Hong  Kong 
Limited take no  responsibility for  the contents  of this  document, make  no 
representation as to its accuracy  or completeness and expressly disclaim  any 
liability whatsoever for any loss howsoever  arising from or in reliance  upon 
the whole or any part of the contents of this document. The ordinary shares of
HSBC Holdings plc trade under stock code 5 on The Stock Exchange of Hong  Kong 
Limited.

 

                                                               7 November 2012

Dear Shareholder

SCRIP DIVIDEND SCHEME AND PAYMENT OF DIVIDENDS IN UNITED STATES DOLLARS,
STERLING OR HONG KONG DOLLARS

On 9 October 2012, your Directors declared a third interim dividend for 2012
of US$0.09 per ordinary share, payable on 12 December 2012. You may elect to
receive:

1.   a scrip dividend of new shares at a 'Market Value' of US$9.8255 (£6.
1138) per ordinary share;

2.   a cash dividend in United States dollars, sterling, or Hong Kong dollars;
or

3.   a combination of cash and scrip dividend.

For illustration,  using the  exchange rates  on 30  October 2012,  the  third 
interim dividend per ordinary  share in sterling and  Hong Kong dollars  would 
have been approximately £0.0560 and HK$0.6975. The precise amounts which  will 
be payable per ordinary share  in either sterling or  Hong Kong dollars on  12 
December 2012 will be converted from United States dollars using the  exchange 
rates on 3 December 2012 as explained on page 3.

Please read this letter carefully.

In the absence  of other  instructions the  dividend will  be paid  to you  as 
described below. If  you intend to  give alternative instructions  on how  you 
wish to  receive  this  dividend  they  must  be  received  by  the  Company's 
Registrars by close  of business  on 28 November  2012. As  an alternative  to 
returning a printed Form  of Election to  make an election  or writing to  the 
Registrars to  revoke a  standing instruction  for new  shares, you  may  give 
instructions electronically through  the Registrars' Investor  Centre, at  the 
appropriate website address given on page 12. Instructions must be received by
close of business  on 28 November  2012. Before using  this facility you  will 
need to register  with the Registrars'  Investor Centre and  you should do  so 
without delay so that the formalities can be completed in time for you to give
your instructions for this dividend by close of business on 28 November  2012. 
The use of the Registrars' Investor Centre to give your dividend  instructions 
to the  Registrars  is referred  to  throughout  this document  as  giving  an 
Electronic Instruction. If you provide an email address to receive  electronic 
communications  from  HSBC  we  will  send  notifications  of  your   dividend 
entitlements by email. If you have not given a standing instruction to receive
new shares you  will, in  addition to  the email  notification (the  "Dividend 
Notification email"), be sent  a printed Form of  Election until such time  as 
you register with the  Registrars' Investor Centre and  are able to give  your 
instructions electronically.

HSBC Holdings plc

8 Canada Square, London E14 5HQ, United Kingdom Web: www.hsbc.com

Registered in England: number 617987. Registered Offi ce: 8 Canada Square,
London E14 5HQ Incorporated in England with limited liability

1.    Scrip dividend

If you have already  given standing instructions to  receive new shares  under 
the Scrip Dividend Scheme, you will have been sent an Entitlement Advice.  You 
need take no further action  if you wish to receive  the number of new  shares 
shown on the Entitlement  Advice. If you  do not wish  to receive the  maximum 
entitlement to new shares, a  letter revoking your standing instructions  must 
be received by the appropriate Registrars, at the address given on page 12, or
an Electronic Instruction must be given,  by close of business on 28  November 
2012. If  you wish  to receive  new shares  in respect  of only  part of  this 
dividend, or if you wish to receive  your cash dividend in any combination  of 
United States  dollars,  sterling  and  Hong  Kong  dollars,  please  ask  the 
Registrars for a Form  of Election in time  to return it to  them by close  of 
business on 28 November 2012, or give an Electronic Instruction by that time.

If you have not previously given  standing instructions to receive new  shares 
under the Scrip Dividend Scheme and you wish to receive new shares in lieu  of 
the cash  dividend, you  should either  complete and  sign a  printed Form  of 
Election and return it to the  appropriate Registrars at the address given  on 
page 12,  or  give an  Electronic  Instruction, by  close  of business  on  28 
November 2012. If you take no action, you will receive the dividend in cash in
the currency  indicated on  your  Form of  Election or  Dividend  Notification 
email.

We will calculate  your entitlement to  new shares using  a 'Market Value'  of 
US$9.8255 (£6.1 138) for each new share. An explanation of the calculation  of 
'Market Value'  and  the basis  of  allotment of  new  shares is  set  out  in 
paragraphs 2 and 3 of the Appendix  to this letter. Since fractions of  shares 
cannot be issued, if you have elected to receive new shares in relation to all
or part of your holding of ordinary shares, any residual dividend  entitlement 
will be  carried  forward in  United  States dollars  and  added to  the  next 
dividend.  Residual  dividend  entitlements  carried  forward  will  not  bear 
interest.

The scrip  dividend alternative  will enable  shareholders to  increase  their 
holdings of  shares without  incurring dealing  costs or  stamp duty.  To  the 
extent that shareholders elect to receive new shares, the Company will benefit
by retaining cash  which would otherwise  be payable by  way of dividend.  The 
Appendix to this  letter sets  out details of  the Scrip  Dividend Scheme  and 
provides a general outline of the tax considerations in the United Kingdom and
overseas.

Please read the next section regarding the payment of dividends in cash, even
if you wish to receive your dividend in the form of new shares.

2.    Cash dividend

If your shares  were recorded  on the Hong  Kong Overseas  Branch Register  at 
close of  business on  25 October  2012, you  will automatically  receive  any 
dividends payable  to  you in  cash  in Hong  Kong  dollars, unless  you  have 
previously elected to receive payment in United States dollars or sterling.

If your shares were recorded on the Principal Register at close of business on
26 October 2012, you will automatically  receive any dividends payable to  you 
in cash in sterling, unless you have previously elected to receive payment  in 
United States dollars or Hong Kong dollars. However, if your address is in the
United States you will automatically receive  any dividends payable to you  in 
cash in United States dollars, unless  you have previously elected to  receive 
payment in Hong Kong dollars or sterling.

If your shares were recorded on the Bermuda Overseas Branch Register at  close 
of business on 26 October 2012,  you will automatically receive any  dividends 
payable to you in  cash in United States  dollars, unless you have  previously 
elected to receive payment in Hong Kong dollars or sterling.

The currency in which any dividends payable to  you in cash are to be paid  is 
stated on your Form of  Election, Entitlement Advice or Dividend  Notification 
email. If you wish to give standing instructions to receive such dividends  in 
one of the other available currencies (United States dollars, sterling or Hong
Kong dollars), you should either complete the One Currency Election on page  2 
of a printed  Form of Election  or Entitlement Advice,  or give an  Electronic 
Instruction. Completion  of the  One Currency  Election on  the reverse  of  a 
printed Form of  Election or  Entitlement Advice  will not  revoke a  standing 
instruction to receive the maximum entitlement  to new shares under the  Scrip 
Dividend Scheme.

3. Combination of cash and scrip dividend

If you  wish  to receive  this  dividend in  a  combination of  the  available 
currencies or  in  a combination  of  cash and  new  shares, you  must  either 
complete Section B on  page 1 of  the Form of Election  or give an  Electronic 
Instruction. If you  have received  an Entitlement Advice  and not  a Form  of 
Election and you wish to receive your dividend in cash, in any combination  of 
the available currencies,  or in  a combination of  cash and  new shares,  you 
should either write to the appropriate Registrars at the address given on page
12 to revoke your standing instructions  for scrip dividends and to request  a 
Form of Election  in time  to return it  to them  by close of  business on  28 
November 2012, or give an Electronic Instruction by this time.

Dividends payable in sterling or Hong Kong dollars on 12 December 2012 will be
converted from United States dollars at  the forward exchange rates quoted  by 
HSBC Bank plc in London at or about 11.00 am on 3 December 2012. The  exchange 
rates will be announced to the London, Hong Kong, New York, Paris and  Bermuda 
stock exchanges.

Dividend warrants and, where applicable,  new share certificates are  expected 
to be mailed to  shareholders entitled thereto  at their risk  on or about  12 
December 2012.

Whether you  elect to  receive your  dividends in  cash or  in shares,  it  is 
recommended  that  you  provide   payment  instructions  either  through   the 
Registrars' Investor  Centre  or  by completing  and  returning  the  Dividend 
Payment Instruction on  page 2 of  a printed Form  of Election or  Entitlement 
Advice, so that any dividends payable to you in cash can be sent to your  bank 
account(s) as you  require. It  is not necessary  for you  to provide  payment 
instructions if you have already given  instructions for cash dividends to  be 
sent direct  to  your  bank account  and  you  do not  wish  to  change  those 
instructions.

Yours sincerely

 

R G Barber

Group Company Secretary

APPENDIX

SCRIP DIVIDEND SCHEME ('THE SCHEME')

1. Terms

The Scheme, authority for which shareholders renewed at the Annual General
Meeting on 25 May 2012 for a further five-year period, will apply in respect
of the third interim dividend for 2012.
As stated in the announcement of the third interim dividend for 2012 made on 9
October 2012, any
person who had acquired ordinary shares registered on the Hong Kong Overseas
Branch Register
should have lodged the share transfer with the Hong Kong Overseas Branch
Registrar before 4.00 pm

on 25  October 2012  in order  to receive  the dividend.  Any person  who  had 
acquired ordinary shares registered  on the Principal  Register in the  United 
Kingdom or on  the Bermuda  Overseas Branch  Register should  have lodged  the 
share transfer with  the Principal  Registrar or the  Bermuda Overseas  Branch 
Registrar before 4.00 pm on 26 October 2012 in order to receive the dividend.
Holders of ordinary shares on the Hong Kong Overseas Branch Register as at the
close of business in
Hong Kong on 25 October 2012 or on  the Principal Register as at the close  of 
business in England on
26 October 2012 or on the Bermuda Overseas Branch Register as at the close  of 
business in Bermuda

on 26 October 2012 (other than those shareholders referred to in paragraph  6) 
will be able to elect to receive new shares in respect of all or part of their
holdings of shares as an alternative  to receiving the third interim  dividend 
for 2012 of US$0.09 per ordinary share in cash.

The new ordinary shares will be issued subject to the Articles of Association
of the Company and will rank equally with the existing issued ordinary shares
in all respects.

2. Market Value

The 'Market Value'  is the  average of the  middle market  quotations for  the 
ordinary shares  on the  London  Stock Exchange,  as  derived from  the  Daily 
Official List, for the  five business days beginning  on 24 October 2012.  The 
Market Value  of £6.1  138  converted into  United  States dollars  using  the 
exchange rate quoted by HSBC Bank plc in London at 11.00 am on 30 October 2012
is US$9.8255 for each new share.

3. Basis of allotment and examples

Your entitlement to new shares is based on:

(a)   the Market Value (as defined in paragraph 2 above) of US$9. 8255 per
share;

(b)  the cash dividend of US$0.09 per share; and

(c)  the number of  ordinary shares held  by you on the  record date being  25 
October 2012 on the Hong Kong Overseas Branch Register and 26 October 2012  on 
the Principal Register or the Bermuda Overseas Branch Register.

The formula used for calculating your entitlement is as follows:

Number of shares held at the record date x cash dividend per share + any
residual dividend entitlement brought forward = maximum dividend available for
share election

Maximum dividend available = maximum number of new shares

Market Value                       (rounded down to the nearest whole number)

You may elect to receive new shares in respect of all or part of your holding
of ordinary shares. No fraction of a share will be issued.

If you elect  to receive  the maximum  number of new  shares in  lieu of  your 
dividend,  a  residual  dividend  entitlement  may  arise,  representing   the 
difference between the total  Market Value of the  new shares and the  maximum 
dividend available on  your shareholding. This  residual dividend  entitlement 
will be carried  forward in United  States dollars (without  interest) to  the 
next dividend (see Example 1).

Example 1

If you have 1,000 ordinary shares and a residual dividend entitlement brought
forward of US$4.00, your maximum entitlement will be calculated as follows:

Your cash dividend (1,000 x
US$0.09)                                                                            
US$ 90.00

Plus residual dividend entitlement brought
forward                                                           US$ 4.00

Maximum dividend
available                                                                                              
US$ 94.00

Number of new shares = US$94.00         =
9.5669                                               = 9 new shares

US$9. 8255

Total Market Value of 9 new shares = 9 x
US$9.8255                                                    US$ 88.43

Plus residual dividend entitlement to be carried forward (US$94.00 -
US$88.43)        US$ 5.57
                                                                                                                                                US$
94.00

If you elect to  receive only part  of your dividend as  new shares, you  will 
receive the balance  in cash.  Any residual dividend  entitlement relating  to 
that portion of your holding in respect of which you have elected to receive a
scrip dividend of new shares will be carried forward in United States  dollars 
(without interest) to the next dividend (see Example 2).

Example 2

If you have 1,000 ordinary shares and a residual dividend entitlement  brought 
forward of US$4.00 your maximum entitlement will be 9 new shares, as shown  in 
Example 1.  Should you  wish to  elect  for new  shares on  only 600  of  your 
existing 1,000 ordinary shares, you should insert the number 600 in the box in
Section B  (i) of  a printed  Form of  Election or,  if giving  an  Electronic 
Instruction, in  the relevant  box  in the  Registrars' Investor  Centre.  The 
election for  new  shares, the  cash  balance due  to  you, and  the  residual 
entitlement to be carried forward to  your next dividend, would be  calculated 
as follows:

Your cash dividend (1,000 x
US$0.09)                                                                            
US$ 90.00

Plus residual dividend entitlement brought
forward                                                           US$ 4.00

Maximum dividend
available                                                                                              
US$ 94.00

600 existing shares on which you wish to receive new shares (600 x
US$0.09)          US$ 54.00

Plus residual dividend entitlement brought
forward                                                           US$ 4.00

Total available to elect for new
shares                                                                             
US$ 58.00

Number of new shares = US$58.00 = 5.9030                                     =
5 new shares

US$9. 8255

Total Market Value of 5 new shares = 5 x
US$9.8255                                                    US$ 49.13

Plus residual entitlement to be carried forward (US$58.00 -
US$49.13)                     US$ 8.87

Plus balance of maximum dividend available to be paid in cash

(US$94.00 -
US$58.00)                                                                                                     
US$ 36.00

Maximum dividend
available                                                                                              
US$ 94.00

In addition to the 5 new ordinary  shares, you will receive a cash balance  of 
US$36.00 and US$8.87 will be carried forward in United States dollars (without
interest) to your next dividend. The cash  balance will be paid to you in  the 
currency indicated in the Dividend Notification email or in box 4 on the  Form 
of Election, unless you  give instructions to the  contrary by indicating  the 
currency/ currencies you wish to receive in the boxes in sections B (ii) to  B 
(iv) of a printed Form of Election or, if giving an Electronic Instruction, in
the relevant  boxes in  the Registrars'  Investor Centre.  An example  of  how 
Section B of a printed Form of Election might be completed is given on page 6.

Section B  Complete this section with the relevant numbers of shares if you
wish to receive your dividend
                  in cash in a combination of the available currencies or in a
combination of cash and new shares

I/We wish to receive my/our dividend in shares and/or in cash, based on the
number of ordinary shares shown in box 1 above, as follows:
in shares  (i) Number of shares on which I wish to receive new
shares                                      600 shares
in cash     (ii) Number of shares on which I wish to receive cash in
sterling                    GBP     134 shares
                (iii) Number of shares on which I wish to receive cash in US
dollars              USD    133 shares
                (iv) Number of shares on which I wish to receive cash in Hong
Kong dollars  HKD  133 shares
Total number of existing shares (the sum of (i) to (iv)) shares
                                                                                                                                              1000

If you wish to receive a specific number of new shares, you may calculate the
number of existing shares on which you need to elect as follows:

Number of new shares you wish to receive x Market Value         =       Number
of shares on which to elect to receive new shares

Cash dividend of US$0.09 per
share                                                        (rounded up to
the nearest whole number)

4. Payment of residual dividend entitlements

Residual dividend entitlements will be payable in cash (without interest) if,
at any time, you:

·  dispose of your entire holding; or

·  receive the full cash dividend on the whole of your holding; or

·  revoke your standing instructions to receive scrip dividends; or

·  so request in writing to the appropriate Registrars.

5. How to participate in the Scheme

(a)    If you have already given  standing instructions to receive new  shares 
under the Scheme, you will have been sent an Entitlement Advice. You need take
no further action unless you wish  to revoke your standing instructions or  to 
elect to receive a  smaller number of  new shares. If you  do not revoke  your 
standing instructions by 28 November 2012, you will receive the number of  new 
ordinary shares shown in box 4 on the Entitlement Advice.

If you do  not wish  to receive  new shares,  a letter  revoking the  standing 
instructions to receive scrip dividends must be received by the Registrars  at 
the appropriate  address given  on the  Entitlement Advice,  or an  Electronic 
Instruction must be received, by close of business on 28 November 2012. A cash
dividend will then be paid on your entire holding in the currency shown in box
6 on the Entitlement Advice.  If, however, you wish  to receive new shares  in 
respect of only part of this dividend, or if you wish to receive any  dividend 
payable to you in cash in a currency/currencies other than that shown in box 6
on the  Entitlement Advice,  please also  ask  the Registrars  for a  Form  of 
Election in time to return it to  them, or give an Electronic Instruction,  by 
close of  business on  28 November  2012. In  any event,  if you  revoke  your 
standing instructions you will receive, for any future dividends to which  the 
Scheme applies, a printed Form of Election or Dividend Notification email and,
if you register with the Registrars' Investor Centre, you will be able to give
an Electronic Instruction.

(b)    If you have not previously  given standing instructions to receive  new 
shares under the Scheme and you wish to  receive new shares in lieu of a  cash 
dividend on this occasion only, an election to participate in the Scheme  must 
be made on a printed Form of  Election or by giving an Electronic  Instruction 
through the Registrars'  Investor Centre,  each of which  should be  completed 
after reading  this  letter. If  you  wish to  elect  to receive  the  maximum 
entitlement to new shares for this dividend, you may do so by inserting an 'X'
in the box in Section A (i) of  a printed Form of Election or by electing  for 
new shares when  giving an  Electronic Instruction. If  you wish  to elect  to 
receive a smaller number  of shares than the  maximum entitlement, you  should 
complete Section B of the printed  Form or make the appropriate election  when 
giving an  Electronic Instruction.  To be  valid in  respect of  the  dividend 
payable on 12  December 2012,  a printed Form  of Election  must be  completed 
correctly, signed and received by the Registrars at the address given on  page 
2 of the  Form, or an  Electronic Instruction  must be received,  by close  of 
business on 28 November 2012.

(c) If you  have not  previously given  standing instructions  to receive  new 
shares under the Scheme and you wish to receive the maximum entitlement to new
shares automatically for this and for subsequent dividends to which the Scheme
applies, you may do so by inserting an 'X'  in the box in Section A (ii) of  a 
printed Form of Election or by making the appropriate election when giving  an 
Electronic Instruction. To be valid in  respect of the dividend payable on  12 
December 2012  a Form  of Election  must be  completed correctly,  signed  and 
received by the Registrars at the address given  on page 2 of the Form, or  an 
Electronic Instruction must be received, by  close of business on 28  November 
2012.

Completing Section  A (ii)  of  the printed  Form  or making  the  appropriate 
election when giving an  Electronic Instruction will  ensure that you  receive 
your maximum entitlement to  new shares offered in  lieu of the third  interim 
dividend for 2012 payable  on 12 December 2012  and for subsequent  dividends. 
Your standing instructions may be revoked  by giving signed notice in  writing 
to the appropriate  Registrars or by  giving an Electronic  Instruction on  or 
before the final date for receipt  of printed Forms of Election or  Electronic 
Instructions in  respect of  that dividend.  Your standing  instructions  will 
lapse automatically if at any time you cease to hold any ordinary shares.

ON THE ASSUMPTION THAT  NO RESIDUAL DIVIDEND  ENTITLEMENT IS BROUGHT  FORWARD, 
SHAREHOLDERS WITH A HOLDING AS AT THE  RECORD DATE OF FEWER THAN 110  ORDINARY 
SHARES WHO HAVE GIVEN  STANDING INSTRUCTIONS TO  RECEIVE SCRIP DIVIDENDS,  AND 
SHAREHOLDERS WHO GIVE AN ELECTION TO RECEIVE SCRIP DIVIDENDS ON FEWER THAN 110
ORDINARY SHARES, WILL  NOT RECEIVE ANY  NEW SHARES ON  THIS OCCASION AND  WILL 
HAVE THEIR DIVIDEND ENTITLEMENT  RELATING TO THOSE  SHARES CARRIED FORWARD  IN 
UNITED STATES DOLLARS (WITHOUT INTEREST) AS DESCRIBED ON PAGE 2.

6.   Overseas shareholders

No person receiving a copy of this document, a Form of Election or a  Dividend 
Notification email in any  jurisdiction outside the  United Kingdom ('UK')  or 
Hong Kong may  treat the  same as  offering a right  to elect  to receive  new 
shares unless such  offer could lawfully  be made to  such person without  the 
Company  being  required  to  comply  with  any  governmental  or   regulatory 
procedures or any similar formalities. It is the responsibility of any  person 
outside the UK and Hong Kong who wishes to receive new shares under the Scheme
to comply  with  the  laws  of the  relevant  jurisdiction(s),  including  the 
obtaining of any governmental or other consents and compliance with all  other 
formalities. It is  also the  responsibility of  any person  who receives  new 
shares in lieu  of a  cash dividend  to comply  with any  restrictions on  the 
resale of  the shares  which  may apply  outside the  UK  and Hong  Kong.  For 
example, shareholders in Ontario  who have scrip  dividend shares allotted  to 
them must  ensure that  the first  trade  of their  scrip dividend  shares  is 
executed on a stock exchange outside Canada.

7.   Issue of share certificates and listing of new shares

Application will be made to the UK  Listing Authority and to the London  Stock 
Exchange for the new shares to be admitted to the Official List and to trading
respectively, to  the  Stock  Exchange  of  Hong  Kong  for  listing  of,  and 
permission to deal in, the new shares, and to the New York, Paris and  Bermuda 
stock exchanges for listing of the new shares.

Existing ordinary  shares on  the Principal  Register may  be held  either  in 
certificated  form,  or  in  uncertificated   form  through  CREST.  Where   a 
shareholder  has  holdings  of  ordinary  shares  in  both  certificated   and 
uncertificated form, each holding will  be treated separately for the  purpose 
of calculating entitlements to new shares.

Definitive share certificates for  the new shares issued  under the Scheme  in 
respect of  holdings  in  certificated  form are  expected  to  be  mailed  to 
shareholders entitled thereto at their risk  on or about 12 December 2012,  at 
the same time  as warrants in  respect of  the cash dividend  are mailed.  New 
shares issued under the Scheme in respect  of holdings of shares which are  in 
uncertificated form will also  be issued in  uncertificated form. The  Company 
will arrange for  the relevant  shareholders' stock  accounts in  CREST to  be 
credited with the appropriate numbers of new shares on 12 December 2012.
Dealings in the new shares in London, Hong Kong, Paris and Bermuda, and in the
American Depositary Shares in  New York are expected  to begin on 12  December 
2012.

8.   If you have sold or transferred your shares

If you sold or transferred all or some of your ordinary shares on or before 23
October 2012 (the  date on  which the shares  eligible for  the third  interim 
dividend for 2012  were last  quoted cum-dividend  on the  London, Hong  Kong, 
Paris and Bermuda stock exchanges), but those shares are nevertheless included
in the number shown in box 1  on your Form of Election, Entitlement Advice  or 
Dividend  Notification  email,   you  should,  without   delay,  consult   the 
stockbroker or other agent through whom the sale or transfer was effected  for 
advice on the action you should take.

9.   General

If all shareholders were to elect to take up their entitlements to new  shares 
under  the  Scheme  in  respect  of  the  third  interim  dividend  for  2012, 
approximately 168,576,695 new shares would be issued, representing an increase
of 0.92 per cent in the issued ordinary share capital of the Company as at  30 
October 2012.

The total cost of the third interim dividend for 2012, ignoring any  elections 
for the scrip alternative, is  approximately US$1,656 million. The  applicable 
tax credit is the sterling equivalent of approximately US$184 million.

Whether or not it is to your advantage to elect to receive new ordinary shares
in lieu of a  cash dividend or  to elect to receive  payment in United  States 
dollars, sterling or Hong Kong dollars is a matter for individual decision  by 
each shareholder. HSBC cannot accept any responsibility for your decision. The
effect  on  the  tax  position  of   any  shareholder  will  depend  on   that 
shareholder's particular circumstances. If you are in any doubt as to what  to 
do, you should consult your professional advisers.

No acknowledgement of receipt of a printed Form of Election will be issued.

10. Tax return

To assist shareholders who receive a scrip dividend, we will send a Notional
Tax Voucher which may be needed for tax returns. This will contain the
following particulars:

·  number of ordinary shares  held by you at close  of business on the  record 
date being 25 October 2012  on the Hong Kong  Overseas Branch Register and  26 
October 2012  on  the  Principal  Register  or  the  Bermuda  Overseas  Branch 
Register;

·  number of new ordinary shares allotted;

·  total dividend payable;

·  residual  dividend  entitlement  (if any)  brought  forward  from  previous 
dividend;

·  residual  dividend  entitlement  (if  any)  carried  forward  to  the  next 
dividend;

·  cash equivalent of the new shares allotted; and

·  amount of UK income tax treated as paid on the new shares.

11. Taxation

The precise tax consequences  for a shareholder receiving  a cash dividend  or 
electing to receive new shares in lieu of a cash dividend will depend upon the
shareholder's own individual circumstances. The following is a general outline
of the tax  consequences in  the UK  and overseas,  based on  current law  and 
practice. This outline  assumes that  a holder of  American Depository  Shares 
("ADSs") is the  beneficial owner  of the  underlying ordinary  shares for  UK 
direct tax purposes.  Based on  recently-published guidance  by Her  Majesty's 
Revenue and Customs it is expected that  holders of ADSs should be treated  as 
such by  Her Majesty's  Revenue  and Customs.  However,  the guidance  is  not 
considered in any detail  in this outline and  holders of ADSs should  consult 
their own professional advisors.

No tax  is  currently  withheld  from dividends  paid  by  the  Company.  Such 
dividends carry a tax credit equal to one-ninth of the dividend.

(i) Cash dividends

UK resident individuals
Individual shareholders, who are resident in the UK for tax purposes, will
generally be subject to
income tax on the aggregate amount of the dividend and associated tax credit.
For example, on a cash dividend of US$90 an individual would be treated as
having received dividend income equal to the sterling equivalent of both the
US$90 dividend received and the associated tax credit of US$10 and as having
paid income tax equal to the sterling equivalent of US$10 (the associated tax
credit).

Individual shareholders who are  liable to income tax  at the basic rate  only 
will have  no  further  tax  to  pay, as  the  tax  liability  will  be  fully 
extinguished by the associated tax credit.

Individual shareholders who are not liable to income tax are not able to
recover the tax credit.

Individual shareholders subject  to income tax  at the higher  rate of 40  per 
cent or the  additional rate  of 50  per cent  will be  liable to  tax at  the 
dividend upper rate of 32.5 per cent  or the dividend additional rate of  42.5 
per cent respectively on the aggregate of the dividend and the associated  tax 
credit. For example, if  a higher rate  or additional rate  tax payer were  to 
receive a dividend of US$90, he/she  would for income tax purposes be  treated 
as receiving dividend  income equal  to the  sterling equivalent  of both  the 
US$90 dividend received and  the associated tax credit  of US$10. The  related 
tax liability would be the sterling equivalent of US$32.50 (for a higher  rate 
tax payer)  or US$42.50  (for  an additional  rate  tax payer).  However,  the 
associated tax credit equal to the  sterling equivalent of US$10 would be  set 
against the tax liability, leaving the individual  with net tax to pay of  the 
sterling equivalent of US$22.50 or US$32.50 respectively.

UK resident trustees

Trustees of discretionary trusts, which are  usually liable to pay income  tax 
at the rate of 50 per cent, may  be required to account for additional tax  on 
UK dividend  income at  42.5 per  cent  of the  aggregate amount  of  dividend 
received and the  associated tax credit,  against which the  effective 10  per 
cent tax credit may be offset.

UK resident companies

Corporate shareholders (other than  certain insurance companies and  companies 
which hold shares  on trading account)  are not liable  to corporation tax  or 
income tax in respect of dividends received from the Company.

UK resident gross funds/charities

There is no entitlement, for either a gross fund or charity, to a tax credit
and consequently no claim to recover the tax credit will be possible.

US resident shareholders

The summary information  on US federal  income tax  does not purport  to be  a 
comprehensive description of all the  tax considerations that may be  relevant 
to a holder  of shares and  must not be  used for the  purpose of avoiding  US 
federal tax penalties.

Shareholders who are  subject to US  federal income taxation  on a net  income 
basis must include cash dividends  in income on the  date that such holder  or 
the depository holder of the ADSs receives them.

Subject to certain  exceptions for positions  that are held  for less than  61 
days or are hedged,  and subject to a  foreign corporation being considered  a 
'qualified foreign corporation'  (which includes not  being classified for  US 
federal income tax purposes as a passive foreign investment company),  certain 
dividends ('qualified  dividends') received  by an  individual US  shareholder 
before 2013 generally will be subject to  US taxation at a maximum rate of  15 
per cent. Based  on the  Company's audited financial  statements and  relevant 
market and shareholder data,  HSBC does not anticipate  being classified as  a 
passive foreign investment company. Accordingly, dividends paid on the  shares 
or ADSs generally should be treated as qualified dividends.

Distributions made on shares or ADSs and  proceeds from the sale of shares  or 
ADSs that are paid within the US, or through certain financial  intermediaries 
to US shareholders, are subject to information reporting and may be subject to
a US 'backup' withholding tax unless, in general, the US shareholder  complies 
with certain  certification procedures  or is  a corporation  or other  person 
exempt from such withholding tax.

Generally, US residents will not be subject  to any UK taxation in respect  of 
UK dividend income nor will they be able to recover the associated tax credit.

Other non-UK residents

Generally, non-UK residents will not be subject to any UK taxation in respect
of UK dividend
income nor will they be able to recover the associated tax credit.Non-UK
resident shareholders may be subject to tax on UK dividend income under any
law to which that person is subject outside the UK. Non-UK resident
shareholders should consult their own tax advisers with regard to their
liability to taxation in respect of the cash dividend.
There are special rules which apply to non-UK resident discretionary trusts in
receipt of UK dividends. (ii) Scrip dividends

UK resident individuals

The tax consequences of electing to receive new shares in lieu of a dividend
are similar to those of receiving cash dividends.

Individual shareholders who  elect to  receive new shares  in lieu  of a  cash 
dividend will be treated  as having received income  of an amount which,  when 
reduced by income tax at 10 per cent, is equal to the 'cash equivalent'  which 
would have  been received  had they  not elected  to receive  new shares.  For 
example if a shareholder elected to receive new shares in lieu of a US$90 cash
dividend, they would  for UK tax  purposes be treated  as receiving income  of 
US$100 and as having paid tax equivalent to US$10.

Individual shareholders who are  liable to income tax  at the basic rate  only 
will have no further tax to pay. Individual shareholders liable to tax at  the 
higher rate of  40 per  cent or the  additional rate  of 50 per  cent will  be 
liable to pay additional  tax at the rate  of 22.5 per cent  or 32.5 per  cent 
respectively of the aggregate of the cash equivalent and associated tax credit
(which equates to the sterling equivalent of US$22.50 or US$32.50 respectively
in the example above).

For income tax  purposes, HM Revenue  and Customs will  substitute the  market 
value of the shares  on the first day  they are dealt in  on the London  Stock 
Exchange for the 'cash equivalent' if the difference between the cash dividend
and the market value equals or exceeds 15 per cent of the market value.

For capital gains tax purposes  the new shares will  be treated as a  separate 
holding. The base cost  of these shares will  equal the 'cash equivalent'.  If 
the difference  between the  cash  dividend and  the  market value  equals  or 
exceeds 15 per cent of the market value  on the first day that the shares  are 
dealt in on the London Stock Exchange,  then the base cost will be the  market 
value.

UK resident trustees

Trustees of discretionary trusts,  which liable to account  for income tax  on 
the income of the trust will be treated as having received gross income  equal 
to the  'cash  equivalent' as  described  above.  Any tax  liability  will  be 
calculated in line with the cash dividend treatment described above (tax at  a 
rate of 42.5 per cent being partially offset by the effective 10 per cent  tax 
credit).

UK resident companies

Corporate shareholders will not be liable to corporation tax on the receipt of
new shares. For capital gains tax purposes the base cost of these shares will
be nil.

UK resident gross funds/charities

There is no entitlement, for either a gross fund or charity, to a tax credit
and consequently no claim to recover the tax credit will be possible.

US resident shareholders

The summary information  on US federal  income tax  does not purport  to be  a 
comprehensive description of all the  tax considerations that may be  relevant 
to a holder  of shares and  must not be  used for the  purpose of avoiding  US 
federal tax penalties.
Shareholders who are  subject to US  federal income taxation  on a net  income 
basis and who elect
to receive new shares in lieu of a cash dividend must include the fair  market 
value of such shares
on the dividend payment  date, and the  tax basis of  those shares will  equal 
such fair market value.

Subject to certain  exceptions for positions  that are held  for less than  61 
days or are hedged,  and subject to a  foreign corporation being considered  a 
'qualified foreign corporation'  (which includes not  being classified for  US 
federal  income  tax  purposes  as  a  passive  investment  company),  certain 
dividends ('qualified  dividends') received  by an  individual US  shareholder 
before 2013 generally will be subject to  US taxation at a maximum rate of  15 
per cent. Based  on the  Company's audited financial  statements and  relevant 
market and shareholder data,  HSBC does not anticipate  being classified as  a 
passive foreign investment company. Accordingly, dividends paid on the  shares 
or ADSs generally should be treated as qualified dividends.

Distributions made on shares or ADSs and  proceeds from the sale of shares  or 
ADSs that are paid within the US, or through certain financial  intermediaries 
to US shareholders, are subject to information reporting and may be subject to
a US 'backup' withholding tax unless, in general, the US shareholder  complies 
with certain  certification procedures  or is  a corporation  or other  person 
exempt from such withholding tax.

Generally, US residents will not be subject  to any UK taxation in respect  of 
UK dividend income nor will they be able to recover the associated tax credit.

Other non-UK residents

Individual shareholders will be treated for UK tax purposes as having received
income of an amount which, when reduced by income tax at 10 per cent, is equal
to the 'cash equivalent' which would  have been received had they not  elected 
to receive new shares. No UK tax assessment will be made on such  individuals, 
but the tax credit cannot be recovered.
However, a non-UK resident shareholder may be subject to tax on the new shares
received under
any law  to which  that person  is  subject outside  the UK.  Non-UK  resident 
shareholders should
consult their own tax advisers with  regard to their liability to taxation  in 
respect of the new shares.

Residual dividend entitlement

A UK resident shareholder will not be subject to UK tax on any amount  carried 
forward as a residual dividend entitlement until either a new share or cash is
received. The tax treatment of the new ordinary share will be the same as that
of any other new ordinary share issued  at the same time as a scrip  dividend. 
Any payment in cash will be taxed as a cash dividend.

A non-UK resident  shareholder may  be subject to  tax on  any amount  carried 
forward as a residual dividend entitlement under any law to which that  person 
is subject outside the UK.  Non-UK resident shareholders should consult  their 
own tax advisers with regard to their liability to taxation in respect of  the 
residual dividend entitlement.

                             Timetable of events

Ordinary shares quoted ex-dividend in London, Hong Kong,       24 October 2012
Paris and Bermuda
American Depositary Shares quoted ex-dividend in New York      24 October 2012
Record date for the third interim dividend for 2012 for        25 October 2012
holders on the Hong Kong Overseas Branch Register
Record date for the third interim dividend for 2012 for
holders on the Principal Register or the Bermuda Overseas      26 October 2012
Branch Register
FINAL DATE FOR RECEIPT BY REGISTRARS OF FORMS OF ELECTION,
REVOCATIONS OF STANDING INSTRUCTIONS FOR SCRIP DIVIDENDS AND  28 November 2012
ELECTRONIC INSTRUCTIONS
Exchange rate determined for payment of dividends in sterling  3 December 2012
and Hong Kong dollars
Payment date - dividend warrants mailed; new share
certificates or Bermuda Overseas Branch Register Transaction  12 December 2012
Advices and Notional Tax Vouchers mailed; and shares credited
to stock accounts in CREST
Expected first day of dealings in new shares in London, Hong
Kong, Paris and Bermuda; and in American Depositary Shares in 12 December 2012
New York

 

Shareholders may at  any time  choose to receive  corporate communications  in 
printed form  or to  receive  notifications of  their availability  on  HSBC's 
website. To receive future  notifications of the  availability of a  corporate 
communication on HSBC's website by email, or revoke or amend an instruction to
receive such notifications by email, go to www.hsbc.com/ecomms. If you provide
an email address to receive

electronic communications from HSBC  we will also  send notifications of  your 
dividend entitlements  by  email.  If  you  received  a  notification  of  the 
availability of this document  on HSBC's website and  would like to receive  a 
printed copy  of  it,  or  if  you would  like  to  receive  future  corporate 
communications in printed form,  please write or send  an email (quoting  your 
shareholder reference number)  to the  appropriate Registrars  at the  address 
given below. Printed copies will be provided without charge.

Further copies of this letter, replacement Forms of Election and a Chinese
translation of this and future documents may be obtained from the Registrars.

                                       

Principal
Register                                                               Hong
Kong Overseas Branch Register

Computershare Investor Services PLC                  Computershare Hong Kong
Investor Services Limited

The
Pavilions                                                                        Rooms
1712-1716, 17th Floor

Bridgwater
Road                                                                Hopewell
Centre

Bristol                                                                                       183
Queen's Road East

BS99
6ZZ                                                                                  Hong
Kong SAR

United
Kingdom                                                                    Telephone:
2862 8555

Telephone: (44) 0870 702 0137                                      Email:
hsbc.ecom@computershare.com.hk

Email via
website:                                                                Investor
Centre:

www.investorcentre.co.uk/contactus                          www.computershare.com/hk/investors

Investor Centre:

www.computershare.com/investor/uk

Bermuda Overseas Branch Register                              US Shareholder
helpline

Investor Relations
Team                                                     Telephone: 1 866 299
4242

HSBC Bank Bermuda Limited

6 Front Street

Hamilton HM 11

Bermuda

Telephone: 299 6737

Email: hbbm.shareholder.services@hsbc.bm

Investor Centre: www.computershare.com/investor/bm

Persons whose shares are held on their behalf by another person may have  been 
nominated to receive communications from HSBC  pursuant to section 146 of  the 
UK Companies Act  2006 ("nominated persons").  The main point  of contact  for 
nominated  persons  remains  the  registered  shareholder  (for  example  your 
stockbroker, investment manager,  custodian or  other person  who manages  the 
investment on  your behalf).  Any  changes or  queries relating  to  nominated 
persons' personal details and  holding (including any administration  thereof) 
must continue to  be directed  to the  registered shareholder  and not  HSBC's 
Registrars. The only exception is where HSBC, in exercising one of its  powers 
under the UK Companies  Act 2006, writes to  nominated persons directly for  a 
response.

Within this document the Hong Kong Special Administrative Region of the
People's Republic of China has been referred to as 'Hong Kong'.

The Directors of HSBC Holdings plc are D J Flint, S T Gulliver, S A Catz^†, L
M L Cha^†,

M K T Cheung^†, J D Coombe^†, J Faber^†, R A Fairhead^†, J W J
Hughes-Hallett^†, W S H Laidlaw^†, J P Lipsky^†, J R Lomax^†, I J Mackay, N R
N Murthy^†, Sir Simon Robertson^† and J L Thornton^†.

† Independent non-executive Director

Produced by Computershare Investor Services PLC, Bristol, UK Printed by The
Westdale Press Limited, Cardiff, UK

001 CSN
0674                                                                                                                                                                                                                                                                                       
11XROD D01

                     This information is provided by RNS
           The company news service from the London Stock Exchange
 
END
 
 
MSCBRBLTMBBMMIT -0- Nov/07/2012 10:14 GMT
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