What should you do before you invest?

1. Read the relevant Prospectus in full

The terms of each Hybrid are different and so it is important that you read the information in the relevant prospectus in its entirety before deciding to invest.

The prospectus for a Hybrid issue will generally be published on the issuing bank’s website and on the ASX.

In considering whether to invest in a Hybrid, it is important to consider all risks and other information regarding that investment in light of your particular investment objectives, financial situation and needs, as the information in the prospectus will not take those into account.

2. Obtain advice as to whether the Hybrid is suitable for you

Hybrids are not suitable for all investors.  An issuer of a Hybrid is obliged to determine the target market for the issue of the Hybrid.  The targert market is the class of retail investors for whom the acquisition of a Hybrid when it is first issued is likely to be consistent with the likely objectives, financial situation and needs of a person within that class (the “Target Market”).  The Target Market for the issue of the Hybrid will be described in the prospectus and in a document called a “Target Market Determination”, which the issuer must make available to the public.

If you are a retail investor and wish to apply for a Hybrid, it is important that you are within the Target Market. You should not apply for the Hybrid if you are a retail investor and are not within the Target Market.   You should seek professional advice as to whether you are within the Target Market and the investment in the Hybrid is suitable in light of your particular objectives, financial situation and needs.

If you are a retail investor and are considering acquiring a Hybrid that has already been issued (for example, by purchasing it on ASX), we also recommend you seek professional advice as to whether the Hybrid is a suitable investment for you.

Professional advice is advice from a person who is licensed by ASIC to give that advice. ASIC has published guidance on how to choose a professional adviser on its MoneySmart website. You can also search ‘choosing a financial adviser’ at www.moneysmart.gov.au.

3. Consider the ASIC guidance for retail investors

ASIC has published guidance on Hybrids and other similar securities on its MoneySmart website which may be relevant to your consideration of an investment in Hybrids. The guidance includes a series of questions you should ask before investing in Hybrids.

4. Obtain further information about the issuing bank and the relevant Hybrid

Bank issuers of Hybrids typically publish information on the ASX which may have a material effect on the price of a Hybrid, including financial disclosures. You should consider reading this information before deciding to invest in Hybrids.