How is capital protection influenced if I purchase an investment note in the secondary market?
If an investment note offering a level of capital protection is purchased in the secondary market an investor may receive either an enhanced or a reduced level of protection. If the market price is less than the issuance price (£100 per note) the investor will receive capital protection at the issuance price and therefore receives an enhanced level of capital protection. If the market price is above the issuance price, an investor in the secondary market would receive a lower level of capital protection, as this will be limited to the £100 nominal amount. Where an investment note offers soft protection an investor in the secondary market should also verify whether a particular note has breached the level of soft protection that is offered. You can find this information on the relevant pricing chart on the research section of our website.
