Investment Notes FAQs

What are Investment Notes?

A group of financial instruments with varying terms, payouts and risk profiles based on a range of underlying assets, that are listed on the London Stock Exchange and are tradable on a daily basis (online and over the telephone).

 

What’s new about them?

They are very similar to traditional structured products but the main difference, or new feature, is that they’re listed and tradable on the London Stock Exchange. This means they’re more accessible than traditional structured products.

 

Why haven’t they been accessible before now?

They have traditionally been popular with Independent Financial Advisors and Institutional Investors. Barclays Stockbrokers and Barclays Capital are working together to bring these investment opportunities to self directed retail investors on an execution only basis – no advice is provided.

 

 

 

How do I know if I should buy/invest in them?

Ultimately, it’s up to individual clients to judge whether an Investment Note is the right investment choice for them. If you’re unsure about the suitability of Investment Notes for your investment objectives you should contact an Independent Financial Advisor.

 

I don’t understand how they work, where can I get help with this?

Further information can be found on the Term Sheets, alternatively contact an Independent Financial Advisor.

 

Where can I get more information on the Investment Note I’m interested in?

You can find more information on the Investment Note you’re interested in on the Investment Note Term Sheet. This will describe all the features of the Investment Note and, most importantly, it will let you know what the specific terms of that particular Investment Note are. You can find the Term Sheet on our website. Alternatively call our Contact Centre on 0845 601 7788 where we will be glad to help you.

 

 

 

How much can I invest and is there a minimum?

Each Investment Note has a minimum investment of £500. There is no maximum investment amount within a nominee account. If you choose to invest in an Investment Note through an Investment ISA the maximum investment is £7,200 per tax year.

 

What charges are applied when I purchase an Investment Note?

There are no initial charges or ongoing fees related to the product. All costs for structuring and issuing the Investment Note are built into the initial product and are reflected in the terms of the Investment Note and these charges will not normally exceed 4% of your original investment. You will pay a dealing commission for buying the investment, the rates will depend on the account the investment is to be held in.

 

How do I invest in an Investment Note?

First of all, you need two things, an account with us, and cash available in the account to invest. If you have both of those, it’s simply a case of deciding if buying an investment note is the right choice for you, then either go online or call us to place your investment instructions.

 

 

 

What are the Offer Period and the Investment Date?

The offer period is the period when the offer to invest in the Primary Market will be available. Once the offer period closes we will not be able to accept any further applications and all orders received will be executed on the investment date.

 

What’s the primary market and secondary markets?

The primary market is where the first tranche of Investment Notes are first made available to investors (similar to an Initial Public Offer (IPO)). These are issued at par i.e. one unit will be worth £1. Once the investment date has passed the Investment Note will be available to buy and sell on the secondary market similarly to stocks and shares. In the secondary market the price of the investment can go down as well as up.

 

 

 

Why do I need a MarketMaster®, Investment ISA or SIPP account?

Investment Notes must be held in a Nominee Account and can’t be held in certificated form with Barclays Stockbrokers. MarketMaster® and Investment ISAs are our two leading types of nominee account– a MarketMaster® is our popular trading account and an Investment ISA provides a tax efficient environment for your investments.

 

If I make an investment, can I change my mind?

It is only possible to change your mind if the Investment Note you have placed an order on is still in the primary market. A change is also feasible providing it is done within two weeks of the original order placement or before the primary offer ends (whichever comes first). It is not possible to change your mind if your order is placed via the secondary market. In this case you would have to sell your investment just like any other order

If you do change your mind within the timeframe stated above, please contact us immediately where we will action in a timely manner.

 

What’s a Term Sheet?

A Term Sheet is the document that identifies the key information regarding an Investment Note. It covers areas such as fees, trade date, calculation date and maturity date.

 

 

 

What’s Capital Protection?

Some Investment Notes will have a capital protection element built in. This means that as well as having a pre-determined investment objective, the initial investment (capital) will have a structured level of protection e.g. if an Investment Note has 100% Capital Protection you will get all of your money back if the Investment Note is held to maturity. Alternatively there may be Capital Protection such that you get your money back at the end of the term if certain conditions are met, for example, that an index has not fallen by more than 40% anytime during the term.

 

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.

 

What will I receive when I invest?

You will receive a contract note from us. This will have all the details of your investment, such as the name of the Investment Note you purchased, the commission charged and so on. You should keep your contract note for future reference.

 

What happens at the end of the term?

At the end of the term, the Investment Note will be redeemed. This means that we will automatically sell the investment note and credit your stockbrokers account with the payout you are due. If you want the cash to be withdrawn from your stockbrokers account, you just need to give us that instruction over the phone or use our online cash management service.

 

 

 

How will I get my money?

It will be paid to your stockbrokers account on the redemption date or when you choose to sell the investment note.

 

Can you tell me which investment to choose?

No, Barclays Stockbrokers is an Execution Only Stockbroker. This means that we cannot offer you any advice or guidance – you have to make your own investment decisions. If you are unsure about the suitability of the product for your investment needs, you should consult your Independent Financial Advisor.

 

I don’t have an account with Barclays Stockbrokers – how quickly can I invest?

It typically takes two days providing clients pass the standard Know Your Client (KYC) checks. This is achieved by clients providing proof of address, identification and bank account details.

 

Who do I make my cheque payable to?

You should make a cheque payable to Barclays Stockbrokers Limited and post it to the New Business Team, Barclays Stockbrokers, 300 Bath Street, Glasgow G2 4LH.

 

 

 

When will I know the price of the deal?

The price of the deal will be stated on your contract note. If you place your trade online the full cost of your trade will be confirmed to you before you place your trade.

 

How do I keep track of my investment?

You’ll receive a statement every six months which will provide an update on the valuation of your portfolio. The Investment Note you invest in will be one of the holdings listed on this valuation. You can also check the value in the interim period by logging onto our website and viewing your portfolio online. Alternatively, you can telephone our Contact Centre where we’ll be glad to provide you with this information.

 

Is there any income paid out?

There can be, it will depend on the particular Investment Note, some will pay income (or coupon) and some won’t. This will be detailed in the terms for each Investment Note, which you can find on the Term Sheet.

 

 

 

Is there a growth cap on my investment?

It depends on the type of Investment Note you invest in. Some Investment Notes will provide a growth cap – you will be informed of this on the Term Sheet when this is applicable. Equally, where there is no growth cap and therefore unlimited potential for capital growth, you can find details on the Term Sheet.

 

How much can I potentially lose?

Your risk with any investment note is that you could lose some or all of your original investment. The performance of the Investment Note is still reliant on the underlying i.e. the securities or indices that make up the structure of the Investment Note so if it doesn’t have any capital protection your invested capital will be at full exposure to the markets.

 

Who issues Investment Notes?

Barclays Capital are issuing these notes with Barclays Stockbrokers providing clients with the opportunity to deal in them through our stockbrokers trading service.

 

If I sell my Investment Note before the redemption date is there a redemption penalty?

Firstly, you should not invest in this if you are not likely to hold it for its full term. If you sell early you might not get back your initial investment. However, there’s no specific redemption penalty.

 

 

 

What is a SCARP?

It stands for Structured Capital at Risk Product. It is a financial product that provides an agreed level of income or growth over a specified period but also exposes the customer to a range of outcomes in relation to the return on the initial capital. The amount of capital returned is generally dependant on the performance of an index or other factor, and in some circumstances may result in the loss of some or all of the initial capital.

 

Should I expect the returns from my investment to qualify for Capital Gains Tax?

Returns from Investment Notes would normally be subject to Capital Gains Tax though UK resident individuals have an annual exemption. You should seek taxation advice before investing. The bases and levels of taxation can change. The value of relief depends on your individual circumstances.

 

What are the advantages of investing in Investment Notes?

• Provides exposure to a broad range of assets
• Share in the growth potential of the underlying assets
• Invest for the full term or sell whenever you want to without penalty
• You can include your Investment Notes in an ISA and SIPP account and benefit from the tax efficient environment. (Investment Notes with a term less than 5 years will be ineligible to be held within an ISA or SIPP)

 

What are the disadvantages of investing in Investment Notes?

• Unlikely to get regular income from the Note
• Long-term investment strategy not suitable for clients looking to make a profit in the short term
• Risk element – you could lose what you put in depending on how the Investment Note is structured

 

Who is Barclays Capital?

Barclays Capital is the market leading investment-banking arm of Barclays Bank.