HSBC SECURITIES (USA) INC.

HSBC Securities (USA) Inc. - Form ADV Part 2A & 2B Brochure Supplement Form ADV Part 2A HSBC Prism Advisory HSBC Securities (USA) Inc. 66 Hudson Boulevard East, New York, NY 10001 Tel: 800-662-3343 Website: WWW.US.HSBC.COM September 2025 This managed account program brochure provides information about the qualifications and business practices of HSBC Securities (USA) Inc. (“HSBC Securities”, “We”, “Us”, or the “Firm”) and its HSBC Prism Advisory program (the “Prism Program” or “Program”), that should be considered before investing. If you (“Client”, “You”, or “Your”) have any questions about the contents of this brochure, please direct your written inquiry to the address listed above or contact your Investment Adviser Representative (IAR). The information in this Brochure has not been approved or verified by the United States Securities and Exchange Commission (“SEC”) or by any state securities authority. Additional information about HSBC Securities is also available on the SEC’s website at www.adviserinfo.sec.gov. HSBC Securities is a federally registered investment adviser with the SEC. Registration with the SEC or with any state securities authority, the use of the term “registered investment adviser”, and descriptions of HSBC Securities and some of our associates as “registered” does not imply a certain level of skill or training. Investment Products: MAY LOSE VALUE ARE NOT FDIC INSURED ARE NOT GUARANTEED BY THE BANK OR ANY OF ITS AFFILIATES ARE NOT A DEPOSIT OR OTHER OBLIGATION OF THE BANK OR ANY OF ITS AFFILIATES ARE NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY All decisions regarding the tax implications of your investment(s) should be made in consultation with your independent tax advisor. 1  HSBC Securities (USA) Inc. - Form ADV Part 2A & 2B Brochure Supplement Item 2: Material Changes to Our Part 2A of Form ADV Firm Brochure There was no material changes made to the HSBC Securities Form ADV Part 2A (commonly referred to as the “Brochure”) since the initial version of the Brochure in April 2025. 2  HSBC Securities (USA) Inc. - Form ADV Part 2A & 2B Brochure Supplement Item 3: Table of Contents: Section: Page Number: Item 2: Material Changes to Part 2A of Form ADV Firm Brochure 2 Item 3: Table of Contents 3 Item 4: Advisory Business 4 Item 5: Fees and Compensation 12 Item 6: Performance-Based Fees and Side-By-Side Management 15 Item 7: Types of Clients and Account Requirements 15 Item 8: Methods of Analysis, Investment Strategies and Risk of Loss 16 Item 9: Disciplinary Information 28 Item 10: Other Financial Industry Activities and Affiliations 29 Item 11: Code of Ethics, Participation or Interest in Client Transactions and Personal Trading 31 Item 12: Brokerage Practices 32 Item 13: Review of Accounts 35 Item 14: Client Referrals and Other Compensation 36 Item 15: Custody 39 Item 16: Investment Discretion 40 Item 17: Voting Client Securities 41 Item 18: Financial Information 41 3  HSBC Securities (USA) Inc. - Form ADV Part 2A & 2B Brochure Supplement Item 4: Advisory Business HSBC Securities has been in business as an investment adviser registered with the SEC under the Investment Advisers Act 1940, as amended (the Advisers Act) since 2005. HSBC Securities is also a broker-dealer, which was originally formed in December 1969 under a predecessor name. HSBC Securities is a Delaware corporation headquartered in New York City. HSBC Securities is also a wholly owned subsidiary of HSBC Markets (USA) Inc. and an indirect wholly owned subsidiary of HSBC Holdings plc. References to “HSBC” refers to HSBC Holdings plc and any of its global affiliates. As of May 2025, HSBC Securities will be offering to its Private Banking clients discretionary and advisory services which provide clients with mutual funds, ETFs, SMA and UMA models for a fee. Our Services as an Investment Adviser and Relationship with You under the Prism Program HSBC Securities provides services under the Program in their capacity as a registered investment adviser under the Investment Advisers Act of 1940, as amended (the “Advisers Act”). The Prism program is only offered to clients of the HSBC US Private Banking Division of HSBC Bank USA, N.A. (HSBC Bank). To obtain the Prism Program services, you will enter into a written agreement with us (the “Agreement”) that expressly acknowledges our investment advisory relationship with you and describes our obligations to you under the Program. This Brochure describes the advisory services that we provide, the fees you will pay, our role and that of our personnel, our other business activities and financial industry affiliations, and economic and other benefits and arrangements we have that create conflicts of interest in certain situations. Our relationship, legal duties and capacities to you are described in our Client Relationship Summary on Form CRS (“Form CRS”) and in the HSBC Brokerage Brochure. These documents are available at https://www.us.hsbc.com/investments/customer-relationship-summary/ HSBC Securities has certain fiduciary obligations in providing services under the Program. As a fiduciary, we will act in your best interest and will endeavor to provide you with access to material facts and information relating to the Program services. This Brochure is a key element in meeting this disclosure obligation. The fiduciary standards we aim to follow are established under the Advisers Act and, where applicable, state laws. The information provided in this Brochure applies to the Prism Program. This Brochure is meant to help you understand the nature of the advisory services offered in the Program, whether those services are right for you, and the potential conflicts of interest associated with your participation in the Program. You should review it carefully prior to your decision to invest. HSBC Securities charges a Program Fee for each Account. This Brochure provides information about the Program Fees. Please review the section “The Program Fee and Other Charges” carefully. HSBC Securities supervises the services of our IARs and other personnel in accordance with our obligations under the Program guidelines that HSBC Securities establishes from time to time and the ethical standards required. There are certain material relationships and conflicts of interest discussed in this Brochure, including those described in Item 9 at the sections “Compensation, Conflicts of Interest and Material Relationships” and 4  HSBC Securities (USA) Inc. - Form ADV Part 2A & 2B Brochure Supplement “Participation or Interest in Client Transactions and Conflicts of Interest.” Please review these sections carefully before you make a decision to enroll an account in the Program. For Retirement Accounts, we provide Program Services as a “fiduciary” under Section 3(21) of the Employee Retirement Income Security Act of 1974 (“ERISA”) and under the Internal Revenue Code of 1986 (the “Code”). For Retirement Accounts subject to ERISA that are discretionary accounts managed by us, we provide the relevant Services as an “investment manager” under Section 3(38) of ERISA. It should be noted that retirement accounts will not be offered during the initial launch of the program. You work with your dedicated personal advisor to determine if the Program is appropriate for you given your financial goals and circumstances. The term “Investment Adviser Representative” (“IAR”) refers to an (Relationship Manager) or (Investment Counselor) except where otherwise indicated. Those IARs with the title “Relationship Manager and/or Investment Counselor” are eligible under our policies to offer the full complement of Program strategies and investment solutions available under the Program provided they meet certain qualifications. Your IAR is required to provide you with a disclosure document called the “Form ADV Part 2B – Brochure Supplement,” which describes information about the IAR, their designation (if any), role and the services they can provide, among other things. You should discuss the investment strategies and solutions that are available to you through your IAR. HSBC Securities is the sponsor of the Prism program, a multi-product, fee-based managed account program The Prism program is designed for its private banking clients, based in the United States and outside the United States, including individuals, and entities. The services offered under the Prism program include asset allocation advice, risk profiling, professional asset management, trading, model and drift management, custody, and ongoing monitoring. The program is suitable for clients: • • seeking investment guidance from an IAR seeking access to professional management of their portfolios with specific attention to their asset allocation by way of rebalancing or tactical allocation, seeking ongoing monitoring of their accounts and implementation vehicles. • The program is not suitable for clients: • who prefer to buy, hold and trade frequently, • who are not aiming to have an asset allocation approach and • are not willing to pay an ongoing management fee. The minimum account opening balance requirements will be higher than other programs offered through HSBC Securities. See Item 7 for additional details on account opening requirements. Upon reasonable request, HSBC Securities will make a best effort to make available the appropriate service provider HSBC Bank or a third-party manager personnel for consultation concerning the management of the client’s account in the Program. 5  HSBC Securities (USA) Inc. - Form ADV Part 2A & 2B Brochure Supplement Types of Accounts Prism offers two options: Prism Discretionary and Prism Advisory solutions. Both accounts are designed to match investments with clients’ objectives, risk appetite, time horizon and liquidity needs. IARs work with clients to determine the clients’ preference for the appropriate solution. HSBC Securities has entered into an agreement with HSBC Bank to perform portfolio management services. These services will include discretionary management for asset allocation models, equity, and fixed income strategies in the form of models and separately managed accounts and overlay management for Prism Advisory accounts. HSBC Bank (providing portfolio management services) will also be referred to as the (HSBC Portfolio Management Team or HSBC Manager) as appropriate. As Overlay Manager, the HSBC Portfolio Management Team will provide portfolio implementation and coordination services for the client’s account. In addition, HSBC Securities may at its sole discretion engage an unaffiliated Overlay Manager upon thirty (30) days' written notice to the client. Prism Discretionary Prism Discretionary is designed for clients that are willing to grant discretion over the asset allocation and implementation vehicles to the HSBC Portfolio Management Team. IARs will guide clients on the appropriate asset allocation solutions given the client’s investment objective, risk profile, time horizon and liquidity needs. Prism Discretionary consists of various asset allocation solutions managed by the HSBC Portfolio Management team. Once the asset allocation solution is established, IARs will guide clients to an appropriate model. The following asset allocation solutions are available under Prism Discretionary: • Asset Allocation models implemented through Exchange Traded Funds (ETFs) and mutual funds. Models are designed for clients with 5 risk profiles: Preservation, Conservative, Moderate, Growth and Aggressive Growth. The models are anchored to a Strategic Asset Allocation (SAA) which is updated on an annual basis. The SAA is complemented by a Tactical Asset Allocation (TAA) process. • Asset Allocation models are implemented through HSBC and Third-Party Manager models and Separately Managed Accounts (SMAs), Mutual Funds and ETFs. Models are designed for clients with 7 risk profiles – Preservation, Conservative, Moderate, Growth, Aggressive Growth and All Equity or Fixed Income. The SAA is complemented by a TAA process. • Asset Allocation models implemented through equity and fixed income strategies exclusively designed and managed by the HSBC Portfolio Management Team. Models are designed for clients with 5 risk profiles Preservation, Conservative, Moderate, Growth, Aggressive Growth and specific investment goals such as Income or Total Return or a combination of both. The models maintain strategic weights which are actively managed through tactical allocation. 6  HSBC Securities (USA) Inc. - Form ADV Part 2A & 2B Brochure Supplement For the Discretionary Program, when HSBC Securities or its delegate, recommend a Fund for removal from the Program, HSBC Securities will not notify the client of Fund changes, as the Program is a fully discretionary program. The HSBC Bank Portfolio Management Team has discretion over removing/adding funds and managers as long as the implementation solutions are approved (see due diligence section). For Prism Discretionary accounts, any asset allocation solution that may be demised or determined to be unsuitable will require client consent to move to another program within Prism Discretionary. Clients may instruct the portfolio to be liquidated for cash or deliver securities into a Brokerage account of their choice. If there is no client instruction within 30 days of communication, the portfolio will be liquidated for cash. For more information on Portfolio Management discretion please see Item 16. Prism Advisory Prism Advisory is designed for clients who would like to provide their input in terms of the asset allocation and investment vehicles to be incorporated in their account. IARs will recommend to clients the asset allocation and investment vehicles from a recommended list. This guidance will take into account the client’s investment objective, risk profile, time horizon and liquidity needs. IARs may use the SAA reference models, with investment objective and risk tolerance ranging from Preservation/Very Low Risk, Conservative/Low Risk, Moderate/Moderate Risk, Growth/High Risk and Aggressive Growth/Very High Risk as a tool to guide clients. Prism Advisory selections will consist of a recommended list of approved investments which include ETFs, Mutual Funds, HSBC (managed by the HSBC Portfolio Management team) and third-party Manager models and Separately Managed Accounts. Clients may choose to implement their portfolios in multiple ways as described below. HSBC Securities will select from a variety of U.S. and non-U.S. registered Mutual Funds and Exchange Traded Funds (ETFs) (collectively “Funds”) that have investment objectives and policies corresponding to the client’s investment risk tolerance and allocation for use in the Prism Program. HSBC Securities will recommend an asset allocation and a menu of recommended investment strategies in each asset class. The client can also indicate their own personal preference for an asset allocation based on their unique financial circumstances and subject to certain guidelines for each asset class. The client, in consultation with the IAR, will select one or more of the investment strategies subject to certain guidelines and instrument types to fulfill each asset class. Client adjustments to recommended asset allocation, investment strategies, investment restrictions and preferences may materially affect the composition and performance of investment portfolios. In addition, each client’s account begins investing at different times in different market conditions, which can also have an effect on the account’s investment return. The timing of the client’s contributions to or withdrawals from the account also can affect account performance. For these reasons, the performance and investment returns of Program client accounts with the same or similar investment objectives will differ. • Unified Managed Account (UMA): Comprises models, mutual funds and ETFs per the asset allocation agreed to and approved by the client. A single manager model can also be held in this account. Clients are required to hold at least four securities other than cash if a model or SMA manager is not selected. 7  HSBC Securities (USA) Inc. - Form ADV Part 2A & 2B Brochure Supplement • Separately Managed Accounts (SMA): HSBC and Third-Party Separately Managed Account Strategies, including Equity and Fixed Income, are implemented where the SMA manager has account responsibility for trading. The SMA Manager will determine the securities to be purchased, held or sold for an account and the weightings thereof, subject to any reasonable investment restrictions or limitations imposed by client, properly communicated in writing to HSBC Securities and accepted by the SMA Manager(s). In the Prism Advisory Program, the HSBC Portfolio Management team serves as the Overlay Manager and will manage the client’s portfolio allocation within prescribed drift bands. Portfolios can shift away from intended target allocation due to market movements and portfolio events such as additions or redemptions. Portfolios will be allowed to drift away in pre-determined ranges known as drift bands. Drift bands are established and managed at the asset class level and implementation level. In instances where the account’s allocation weight breaches beyond the drift bands, the account is rebalanced back to within the drift bands at the discretion of the overlay manager. HSBC Securities is authorized to make changes to the Funds held in Accounts and/or to reallocate assets at any time, without consulting clients, for any reason it deems appropriate, including, without limitation, to respond to general market or macroeconomic circumstances, or to rebalance the investments periodically to restore the original allocation percentages or target weights. For Prism Advisory accounts, HSBC Securities can remove an implementation vehicle (fund/ETF/manager) from the recommended list due to a variety of reasons. IARs will reach out to discuss the removal of the recommended status and the replacement vehicle recommended by the Firm. If no action is taken or the client cannot be reached on a timely basis, HSBC Securities has the authority to remove the non-recommended vehicle and invest in the default vehicle chosen by HSBC Securities. Notice will not be provided before the fund replacement is completed. Other Programs Sponsored by HSBC Securities: In addition, HSBC Securities also offers a mutual fund asset allocation service known as the Spectrum Account Program (the “Spectrum Program”) and the HSBC Spectrum II Account Program (the “Spectrum II Program”). HSBC Securities also offers the Offshore Spectrum Account Program (“Offshore Spectrum”) which is available to qualified Non-Resident Aliens who reside in approved jurisdictions. HSBC Securities also offers a wrap fee account program referred to as the Managed Portfolio Account Program (“MPA” or “MPA Program”), which is a multi-product, fee-based separately managed account program. MPA offers two investment account options: Separately Managed Accounts (“SMA”) and Unified Managed Accounts (“UMA”). HSBC Securities does not offer any non-proprietary or third-party advisory programs through HSBC Securities (USA) Inc. The above programs are only available to our Premier client segment. 8  HSBC Securities (USA) Inc. - Form ADV Part 2A & 2B Brochure Supplement The most current version of Form ADV Part 2A documents relating to the above programs can be accessed through the following website under Important Documents: https://www.us.hsbc.com/investments/asset- allocation/ Special Consideration for Offshore Clients: Offshore Funds are made available to clients who are not considered US Persons. Certain investments made available to offshore clients are not registered in the U.S. and are generally not offered for sale or sold in the U.S., except in a transaction exempt from the registration requirements of the Securities Act of 1933, as amended. HSBC Securities will select from a variety of non-U.S. registered Mutual Funds and Exchange Traded Funds (ETFs) that have investment objectives and policies corresponding to the client’s investment risk tolerance and allocation. In addition, if a client moves to a jurisdiction that is not approved by a specific fund company, HSBC Securities will be required to redeem that holding(s) and in the case of certain fund companies, HSBC Securities may cause your Account to be terminated with all account holdings required to be redeemed. For the Advisory Program, clients should refer to the individual fund prospectus/offering documents or Key Investor Information Document (KIID) and Supplementary Information Document (SID) for additional information on underlying charges and fund expenses before investing. Administration of the Program The Funds and strategies made available through the Program include both funds and strategies advised by non- HSBC investment advisers (third party Funds) and funds advised by HSBC Global Asset Management (USA) Inc. (“AMUS”) and its affiliates (proprietary Funds). Money market funds utilized in the Program can include the AMUS money market funds or third-party funds for sweep purposes. Third party Funds and strategies used within the Program are those that have been researched and approved for use by HSBC’s Global Manager Selection team (referred to as “GMS”) and/or HSBC Alternative Investments Limited (HAIL). HAIL provides certain due diligence services for the Program related to alternative funds. HSBC Securities and HSBC Bank compensate GMS and HAIL for these services. GMS and HAIL evaluate Funds included in the Program on a continuous basis. If they no longer have conviction in the management of the fund, HSBC Securities and HSBC Portfolio Managers in their respective capacity can recommend funds for removal from the Program. The Firm has entered into an intercompany agreement with its affiliate HSBC Bank to perform certain advisory, portfolio management and administrative services, for compensation, for the Program. Under that agreement, HSBC Securities compensates HSBC Bank for these services. For the Prism program, HSBC Securities, through the Managed Account Oversight Committee (“Committee”), oversees the operation of the Program as well as the services provided by HSBC Bank and any other material vendor. The Committee is chaired by HSBC Securities and consists of members and invitees who are employees of HSBC Securities and HSBC Bank. Employees of HSBC Bank will have no authority to make decisions or otherwise influence approvals of the Committee. 9  HSBC Securities (USA) Inc. - Form ADV Part 2A & 2B Brochure Supplement Client Services HSBC Securities offers the Program to its clients, and aside from sponsorship, is responsible for Account opening services (including Know Your Client and Anti-Money Laundering reviews), suitability, relationship management, communications, investment advice, trading, trade servicing, Account maintenance, custody of client assets and overall operational support for the Firm’s investment advisory products. Custodial and portfolio management services will be performed by HSBC Bank which has been hired by HSBC Securities to perform these services for the Program through an intercompany agreement. For additional information on custody, please see Item 15. Please also refer to the Prism Investment Management Agreement (“IMA”) for additional terms and conditions related to the Program. The scope of our investment advisory relationship is defined in the IMA. Termination of your Agreement will end that investment advisory fiduciary relationship and will cause your account to be removed from management. If your account is removed from management, your IAR will contact you to seek disposition of funds and securities, however, HSBC Securities reserves the right to liquidate the securities that are in your account and return the un-invested funds to you. Further to the above services, HSBC Securities provides certain ongoing client services that include the following: • Periodic portfolio review and consultation with clients through our IARs. Your dedicated IAR gets to know you on a personal and financial level and works with you to identify your financial goals and objectives. • You and your IAR work together on a personalized financial strategy based on your financial situation, including your investment objective, risk tolerance, liquidity needs, and time horizon. • You select the way you want your investment portfolio to be managed either on a discretionary or advisory basis and choose from an offering of investment solutions, including those from HSBC affiliates and third- party managers. • Handling subsequent transactions (additional investments and redemptions). • Responding to client inquiries about their Accounts and issues pertaining to their Accounts. You access your IAR as needed to update them and HSBC Securities as your financial goals or priorities change or considering market conditions. • HSBC Securities or your IAR will at a minimum, annually request an in-person, telephonic or other electronic (e.g., zoom) meetings with clients, or will otherwise meet the regulatory requirements for an annual meeting, to discuss the account and any changes to the client’s investment objectives or reasonable investment restrictions. Investments For both Discretionary and Advisory Programs, HSBC Securities uses the services of third parties, including affiliates, for administrative and operational support in performing its obligations under the IMA. The investments will include Funds and securities that HSBC Securities determines are appropriate and, in the aggregate, consistent with a client’s investment goals, risk preferences and financial needs. All or a portion of an Account may temporarily be held in cash. Money market funds available will be those managed or advised by an affiliate of HSBC Securities or third-party managers. HSBC Securities does not take taxes into account in making investment decisions for client Accounts. 10  HSBC Securities (USA) Inc. - Form ADV Part 2A & 2B Brochure Supplement Tax Loss Harvesting is available on request. You are solely responsible for determining and directing HSBC Securities Inc, (HSBC) in whether to use Tax Loss Harvesting (TLH) in your account and if you would find it beneficial in doing so. You retain that responsibility notwithstanding any general guidance that HSBC provides based on your reported income and tax rate. HSBC makes no guarantee regarding the timing and amount of TLH for any account. HSBC’s ability to harvest losses is dependent on each client’s situation. Your ability to utilize TLH will depend upon your individual circumstances, including whether you realize any capital gains in the same or future years as losses are harvested. We do not provide tax, accounting or legal advice. Before directing HSBC to use TLH you should consult with your tax advisor to discuss any concerns related to participating in TLH. The IRS website at www.irs.gov also contains information that would be prudent for you to review about the consequences of engaging in TLH. HSBC Securities will not invest client assets in Funds that impose front-end, contingent, or installment sales charges. However certain fund complexes can charge redemption fees for sales made within a certain number of days after purchase. For these purposes, the term “sales charges” does not include (a) underwriters’ compensation for offerings of closed-end funds, or (b) fees payable by a fund or its distributor, including shareholding servicing fees and Rule 12b-1 (distribution) fees, and HSBC Securities and its affiliates are expressly authorized to accept those fees, where permitted by law. However, when HSBC receives 12b- 1 fees, the Firm will credit the Account with the amount of 12b-1 fees received. HSBC Securities does not credit its IARs for any 12b-1 fees that are earned in the Program. Special Trade Considerations Due to longer trade settlement times for offshore funds, activities such as liquidations, purchases, and model changes may delay your account from being fully invested until all trading activity has settled. Securities Backed Line of Credit We do not use leverage as an investment strategy for managed accounts. However, where appropriate, an eligible client, as detailed in the Account Control Agreement and Risk Disclosure statement, may use a Securities- Backed Line of Credit (“SBLOC”), which is a bank line of credit collateralized by the assets of the managed account, as well as other collateral the client may hold at HSBC Bank or HSBC Securities. SBLOC enables clients to take out a loan that is secured by that client’s advisory portfolio. The maximum amount of the loan depends on the lending value of the client’s portfolio, as specified in the Credit Agreement entered into with HSBC Bank. SBLOC creates additional risks for managed account clients including being subject to a collateral call due to a drop in the account’s value caused by downward market movement, market volatility, investment changes and credit exposure. All these can lead to collateral shortfalls and may cause HSBC Bank, as the lender, to ask the managed account client for additional collateral or to sell assets in the account to satisfy the collateral shortfall. In the event that you are required to sell assets in your account, a drop in an advisory portfolio account’s value could cause the account to fall below the amount required to participate in the Program, resulting in termination of the Account. 11  HSBC Securities (USA) Inc. - Form ADV Part 2A & 2B Brochure Supplement Any securities-based lending fees and interest are separate and in addition to Program fees. Neither HSBC Securities, its IARs nor its affiliates, will act as an investment adviser to a client as to the sale of securities subject to a collateral shortfall or credit line loan demand. In addition, as creditors, we and our affiliates at times will have interests that are averse to you. Assets under Management The Prism Programs were established in May 2025 and there are no assets to report at this time. 12  HSBC Securities (USA) Inc. - Form ADV Part 2A & 2B Brochure Supplement Item 5: Fees and Compensation Prism Program Fees Clients are charged the Prism Program Fee by HSBC Securities for the Program Services provided under the IMA for each Account. The HSBC Prism program adopts a fee structure which includes a program fee which is based on asset tiers, a manager fee as well as other additional fees, such as trading commissions and model fees (for the Advisory program). The Prism Program Fees cover the Program Services which includes, investment advice, guidance, access to asset allocation programs, investment vehicles (except for managers in Prism Advisory accounts), ongoing monitoring, custody, overlay management and reporting. All other fees applicable to the account will be the responsibility of the client. For managers in Prism Advisory accounts, the client will be responsible for manager fees, whether third party or affiliated managers. For Prism Discretionary Accounts, HSBC Securities will pay a portion of the program fee to HSBC Bank and any underlying third-party managers. The Program Fee Range is based on the amount of assets in the account. Please consult our Prism Advisory Fee Schedule for full details of our fees and charges. For the Advisory or Discretionary Strategy Program Fee: Program Fees range from 1.2% -0.30% Manager Fee Ranges: If the clients choose to use an HSBC or Third-Party Manager Model or Separately Managed Account in Prism Advisory, the client is charged the manager fee in addition to the program fee. The Manager Fee is a flat fee based on the assets in strategy. The following fee ranges apply and subject to change: Fixed Income Only Strategies: 0.08% -0.40% Equity Strategies: 0.20% -0.50% For the Discretionary Strategy: Trading commissions will depend on the program. Prism Liquidity Management (minimum AUM $25,000,000): 0.35%-0.20%. Special Fee Considerations For purposes of determining your program fees from such schedule, we will consider your Account assets in the Prism program held by you and/or others in your designated relationship as determined by us. The designated relationship is typically a grouping of accounts that has a common family or business purpose and will be agreed with you and by your IAR subject to the Firm’s approval. In considering your Account assets and certain assets held by you and/or others in your designated relationship at HSBC Securities can result in a program fee rate that is lower than the one that would have been applicable to your Account, if only the value of your Account assets were used in making such determination. Once determined, the applicable program fee rate will apply to all assets in your Account. The program fee rate applicable to your Account will adjust based on the level of assets at the end of a billing period and whether there have been changes in the grouping of accounts in your designated relationship. It may vary from month to month but generally will not change within any given month. At any time, upon notice to you, we may decide to no longer qualify these assets as part of a relationship. 13  HSBC Securities (USA) Inc. - Form ADV Part 2A & 2B Brochure Supplement The Program fee and manager fee rates are subject to change from time to time, upon notice to you. Your continued use of Program Services will constitute your agreement to the change in the program fee rate and/or manager fee rate. HSBC Securities’ Program fees do not include: • brokerage transaction fees or commissions associated with Trading Away • dealer markups or markdowns that are embedded in the price of certain securities, executed on a “net” basis, (e.g. fixed income securities). foreign exchange transaction fees • • certain commission charges on individual securities • any fees imposed by regulatory or governmental authorities (including those imposed by the Securities and Exchange Commission) • wire transfer and other miscellaneous fees incurred as a result of moving funds into or out of the Prism account • costs associated with special requests by a client; or • any management, administrative, distribution or other operating fees or expenses of a mutual fund (including a money market fund) or ETF held in the Account. These separate operating fees and expenses are disclosed in the fund’s or ETF’s prospectus. • Affiliate Trust Services Fees (Please refer to the HSBC Trust Fee schedule) Fees for the Discretionary and Advisory Program are charged and collected in accordance with the Prism IMA. The client authorizes the Custodian by your agreement to invest in the Program, to deduct the program and manager fees directly from the client’s Account. This can result in actions that generate cash in your account to pay for the applicable account fees. The Program Fee will be charged quarterly in arrears, based on the average daily balance. The assets in a relationship as described above will be considered to determine the fee per the breakpoint schedule. On an exception basis, discounts on Program fees may be given at the sole discretion of HSBC Securities based on relationship and other reasons and are subject to approval. Fee discounts are reviewed periodically and can be removed at HSBC Securities’ discretion for any reason with appropriate notice. Fee discounts will not be given on Manager Fees, or any other non-program fee described above. A pro rata portion of any fees will be calculated and billed, in the event of termination of the account agreement. For information regarding the structure, fees, and risks associated with investing in Mutual Funds and ETFs, see applicable SEC’s Investor Bulletins under Investor Alerts and Bulletins | Investor.gov 14  HSBC Securities (USA) Inc. - Form ADV Part 2A & 2B Brochure Supplement Comparison Cost of Service The Prism program can cost clients more or less than purchasing such services separately depending on the frequency of trading in the client’s account, commissions charged at other broker-dealers or investment firms (including through other account types available at HSBC Securities) for similar products, advisory fees charged by other investment firms, and other factors. Please consult the IMA, accompanying schedule of fees, and fund prospectuses for other terms, conditions, representations and disclosures relating to the program. HSBC Securities encourages clients to review each recommended third-party Manager’s Firm Brochure for their respective conflicts of interest, trading, privacy policies, codes of ethics, etc. Account Funding Clients can fund their account with cash equivalents or shares in Funds acceptable to HSBC Securities or a combination thereof. All other products will be required to be liquidated to fund your Prism account. If a prospective client intends to fund a Program account with assets from the redemption of mutual funds, the surrender of an insurance product, early withdrawal from a certificate of deposit, or the sale of any other financial instruments, the client should consider the cost of any possible sales charges or commissions previously paid or to be paid upon the redemption or sale, or any penalties that the client will incur in order to surrender or withdraw from, such an instrument. It can be costly or inappropriate for the client to fund an Account in this manner. An ACH (automated clearing house) transaction is a bank transfer that occurs between financial institutions at your direction and authorization. Please note there can be limits to the amount of money that you can transfer electronically from your account. As these limits are subject to change, please contact your Representative for additional information. 15  HSBC Securities (USA) Inc. - Form ADV Part 2A & 2B Brochure Supplement Item 6: Performance-Based Fees and Side by Side Management The Firm does not charge performance fees to clients in the Program. Side by Side Management HSBC Bank offers multiple discretionary programs which will run in parallel to Prism. The portfolio managers of these accounts can utilize substantially similar investment strategies and invest in substantially similar assets for both Prism and other discretionary programs. This portfolio management relationship is often referred to as side- by-side management. The side-by-side management of accounts can create a conflict of interest because there is an inherent incentive for the portfolio manager to favor accounts with the potential to receive greater fees. To address these types of conflicts, the HSBC Portfolio Management team has adopted a trade rotation policy that is designed to ensure that trades are not done in a manner that intentionally favors any accounts in the trading process. The rotation schedule is designed as an internal control so that accounts are treated fairly and equitably over time to the extent practicable. Item 7: Types of Clients and Account Requirements Prism is designed for its private banking clients, based in the United States and outside the United States. Prism offers different account registrations, including but not limited to individuals, transfer on death, trusts, estates or charitable organizations; and corporations, limited liability companies and/or other business entities. In addition, separate agreements may be required for some registration types. Some SMAs and UMA models within the Prism program can be offered to qualified non-resident aliens who reside in certain foreign jurisdictions, as approved by the Firm and in accordance with the local laws of those jurisdictions. Not all models, strategies and Funds are available in all countries or to all clients. For specific restrictions please speak to your IAR about your particular situation. It should be noted that if a client moves to another jurisdiction that is not approved for investments used in the program, it can cause the Account to be terminated. If the account is terminated the client will have the option to liquidate or move the positions to another account at HSBC or another financial institution. Clients should consider legal and/or tax implications when considering their options. Clients should consult with their attorney or tax advisor. Program Minimums HSBC Securities requires a minimum Account opening balance starting at $500,000 or higher depending on the underlying strategy/model selected for both the Discretionary and Advisory Programs. HSBC Securities reserves the right to increase or decrease the minimum Account size if deemed necessary. HSBC Securities can establish other or lower minimum account sizes for other types of accounts. Accounts that fall below the program minimums can be removed from management at HSBC Securities’ sole discretion, which results in termination of the account. Clients should discuss all investment options with their IAR. 16  HSBC Securities (USA) Inc. - Form ADV Part 2A & 2B Brochure Supplement Item 8: Methods of Analysis, Investment Strategies and Risk of Loss The HSBC Portfolio Management team uses a risk model that consists of a multitude of risk factors that identify the sources of risk in the portfolio and where potential losses, i.e. downside risk, may occur. The model is used to understand and monitor clients’ portfolios holistically and understand the impact of investment decisions. Each HSBC SAA has a defined risk band, i.e. lower and upper tolerance of downside risk bands. The downside risk represents the maximum risk tolerance which is considered acceptable for clients’ Prism accounts and is determined based on the portfolio risk of the HSBC SAA which aligns with the client’s risk tolerance as agreed to in the Investment Policy Statement (IPS). The tool underpinning the risk model also incorporates investment guidelines and performs concentration checks. The tool is used to generate proposals which can incorporate the desired risk tolerance, referred to as the sub-account risk grade. The tool can evaluate clients’ proposed portfolio implementation and trigger warnings for risk tolerance, investment guidelines and concentration breaches. Post implementation, the tool monitors clients’ accounts daily and performs portfolio checks on risk tolerance, investment guidelines and concentration breaches and generates alerts. IARs will reach out to their clients in Prism Advisory accounts regarding relevant alerts and discuss a course of action, within a reasonable amount of time after the occurrence if necessary. Investment Strategy Evaluation HSBC Securities contracts with HSBC’s Global Manager Selection – Funds and ETFs team (referred to as “GMS”) and HSBC Alternative Investments Limited (HAIL), to research and recommend investment strategies that are aligned with the asset classes offered within the Prism Program. GMS also reviews proprietary HSBC strategies. The due diligence process employed by GMS for this (proprietary strategy) assessment is distinct and different from the approach GMS typically applies to third party mutual funds. Several aspects typically covered in third party reviews are not included in the proprietary due diligence process around common enterprise and oversight functions. HSBC Securities makes all final decisions regarding investment strategies in the Prism program. GMS researches and recommends third party investment strategies (mutual funds, ETFs and separately managed accounts) using a variety of quantitative (e.g., investment performance returns, peer rankings, tracking error, expense ratio, risk metrics and periodic performance comparisons against representative benchmarks) and qualitative (e.g., firm, people, investment strategy and process, portfolio construction, performance attribution, analyze portfolio holdings and assess liquidity and capital erosion) factors. GMS also conducts ongoing monitoring of the investment strategies using similar criteria as the initial review process. HAIL conducts a similar extensive due diligence process for alternative funds. The HSBC Portfolio Management team leveraging the funds researched by GMS does have discretion in the choice of Funds to be used in Prism discretionary strategies. Based upon its findings during the ongoing monitoring, GMS may change the status of an investment strategy to “Hold.” If the factors that led to a Hold status remain unresolved, GMS can change the status of the investment strategy to “Not Approved/Not Recommended.” A Fund’s status may change directly to “Not Approved/Not Recommended” in case the concerns are material requiring immediate action. 17  HSBC Securities (USA) Inc. - Form ADV Part 2A & 2B Brochure Supplement In certain cases, where there is a significant change affecting the investment strategy, HSBC Securities can recommend the immediate removal without a hold period. For the Advisory Program clients are notified via their IAR and will be provided with information on a selected replacement Investment Strategy. HSBC Securities will not notify the client of Fund changes, for the Discretionary Program. Depending on the circumstances, HSBC Securities reserves the right to stop trading in the client’s Account until the replacement investment strategy is established within the Prism program. The transition process from one investment strategy to another may result in transactions that can generate realized gains or losses. Availability of Environment, Social and Governance (ESG) Funds: The only ESG Strategy available in Prism program is ESG Leaders. US ESG Leaders primarily invests in US stocks and follows an equity investment process with an ESG overlay framework to select large cap U.S. companies that meet and exceed various Environmental, Social, and Governance (ESG) standards. Each company’s rating is a weighted ESG combination from which 30 ESG sector combinations derived from industries covered by broad ESG related indices. Certain funds available within the Program that are not labeled as sustainable investment funds can include sustainability considerations in their investment processes, but any such funds are not included for their sustainability considerations but instead for other qualities of their investment focus or strategies. Share Class Evaluation In the options where mutual funds can be held, some mutual fund share classes charge distribution fees (12b- 1 fees), shareholder servicing fees, and/or sub-transfer agency fees. Some mutual fund sponsors or distributors also pay a portion of their fees to offer their shares in other programs, a practice called “revenue sharing.” HSBC Securities credits 12b-1 fees received and does not accept revenue sharing payments from any of the mutual funds. However, when HSBC receives 12b-1 fees, the Firm will credit the Account with the amount of 12b-1 fees received. HSBC Securities does not credit its representatives any 12b-1 fees that are earned in the Programs. We endeavor to provide you with the lowest cost share class of a Fund if available and the fund company permits. Some institutional share classes are not available to retail investors, in or outside of the Program. When we offer a share class in the Program that is not the lowest cost class, you will pay higher Fund fees and expenses, which will reduce your returns and lower the performance of your Account. Some lower cost share classes are available outside the Program, but you will not receive the Program services and benefits. There will be no cost to you if HSBC Securities initiates a share class conversion; however, you may have tax consequences. Risks Investing in securities involves risk of loss that clients should be prepared to bear. While the market may increase in value and your account(s) could enjoy a gain, it is also possible that the markets may decrease in value and your account(s) could suffer a loss. It is important that you understand the risks associated with investing in the market, are appropriately diversified in your investments, and ask us any questions you may have. 18  HSBC Securities (USA) Inc. - Form ADV Part 2A & 2B Brochure Supplement The Programs, and shares of Funds including money market funds, are not a deposit or other obligation of HSBC Bank or any of its affiliates; not FDIC insured or insured by any federal government agency of the United States; not guaranteed by HSBC Bank or any of its affiliates; and are subject to investment risk, including possible loss of the principal amount invested. Set forth below are certain material risk factors that are often associated with the risks of investing in an advisory program that uses models, and with the risks of investing in securities (Funds) relevant to most of HSBC Securities’ clients. The information included in this Brochure does not include every potential risk associated with each model or that applies to a particular client account. Not all risks apply to all models. Clients are urged to ask questions regarding risk factors for a particular strategy or Fund, read all Fund prospectuses and fund offering documents and determine whether a particular model or type of Fund is suitable for their account in light of their circumstances, investment objectives, risk tolerance, time horizon and financial situation. Risks of Investing in the Program • Allocation Risk: This is the risk that HSBC Securities’ target asset and sector allocations and changes in target asset and sector allocations cause the model to underperform other similar models or cause the client to lose money, and that the model may not achieve its target asset and sector allocations. • Cyber Security Risk:With the increased use of technology such as the Internet to conduct business, HSBC Securities, as with all businesses and digital platforms that store, process, transmit or transact information via networked technology, is susceptible to a breach of confidentiality, loss of data integrity or disruption in availability of its networked systems. Cyber vulnerability continues to be leveraged by criminals to perpetrate crimes at an increasing rate and poses a significant threat to economic, social and geopolitical stability for private firms and countries. HSBC Securities faces sophisticated cyber threats from state-sponsored attackers, hackers for hire, organized cyber syndicates, and other threat actors seeking our critical corporate and client information. Cyber incidents can result from deliberate internal or external attacks. Cyber-attacks can include, but are not limited to, gaining unauthorized access to computer systems (e.g., through “hacking” or malicious software (aka Malware) denial-of-service attacks on websites (i.e., efforts to make network services unavailable to intended users). Unintentional cyber incidents can occur, such as the inadvertent release of confidential information that could result in the violation of applicable privacy laws. A failure in or a breach of our operational or security systems or infrastructure, or those of our third-party vendors and other service providers, including as a result of cyber-attacks, could disrupt our businesses, result in the disclosure or misuse of confidential or proprietary information, and may adversely impact our businesses. Data quality and integrity are critical for decision making, enterprise risk management and operational processes, as well as for complying with applicable regulation. Our businesses are dependent on our ability to process a large number of complex transactions, most of which involve, in some fashion, networked computing devices. If any of our financial, accounting, data processing or other recordkeeping systems and management controls fail, or are subject to cyber-attack that could compromise integrity, availability or confidentiality of our systems or data, we could be materially adversely affected. 19  HSBC Securities (USA) Inc. - Form ADV Part 2A & 2B Brochure Supplement Cyber security failures or breaches at HSBC Securities or at service providers (including, but not limited to, sub- advisers, accountants, custodians, transfer agents and administrators), and the issuers of securities in which HSBC Securities invests on behalf of its clients, could result in the loss or theft of client data or funds, the inability to access electronic systems, loss or theft of proprietary information or corporate data, physical damage to a computer or network system, or costs associated with system repairs. Cyber security failures or breaches can result in financial losses, interfere with our ability to calculate a fund’s net asset value, impede our trading, and prevent clients and shareholders from transacting business. These failures or breaches can cause violations of applicable privacy and other laws, regulatory fines, penalties, reputational damage, reimbursement or other compensation costs, or additional compliance costs. In addition, we could incur substantial costs to prevent any cyber incidents in the future. HSBC Securities relies on cybersecurity risk controls that are managed enterprise wide for HSBC Holdings plc in order to ensure that threats are identified and mitigated properly. While HSBC Holdings plc (a corporate parent company of HSBC Securities) has preventative, detective and mitigation technologies in place as well as mature business continuity and resiliency plans in the event of cyber-attacks, it is not possible to identify and create mitigation measures for every type of event that might result in a service disruption. • Underlying Fund Selection Risk:The risk that a portfolio may invest in underlying funds that underperform other similar Funds or the markets more generally, due to poor investment decisions by the investment adviser(s) for the Funds or otherwise. Underlying funds also have their own expenses, which the portfolio bears in addition to its own expenses, which the client’s portfolio bears in addition to its own expenses. • Model Risk: A model is defined as a quantitative method, system, or approach that applies statistical, economic, financial or mathematical theories, techniques, and assumptions to process input data into quantitative estimates. Quantitative methodologies or systems whose inputs are (partially or wholly) qualitative or based on expert judgment may be classified as a model providing that the outputs produced by the model are quantitative in nature. HSBC Securities, in conjunction with HSBC Bank, utilize models to assist in the investment decision making process, to analyze the investment risks borne by a fund or client account, to measure the liquidity in a fund or client account, to conduct stress tests and for other reasons. Model risk is defined as the risk of Funds or HSBC Securities and/or affiliates experiencing an actual or potential financial loss, or the breach of a regulation or client restriction, owing to the misspecification or misapplication of a model in relation to its intended use, or the improper implementation or incorrect execution of a model. • Regulatory Risk: US regulators and legislators have amended a wide range of rules and pending and ongoing regulatory reforms (e.g., the Dodd Frank Act) continue to have a material impact on the advisory business. These regulations and reforms may significantly change the operating environment, and the ultimate effect cannot be adequately predicted. Any further changes by the SEC or additional legislative developments may affect a Program’s operations and investment strategies. Securities Risks • Asset-Backed Security Risk:Asset-backed securities are debt instruments that are secured by interests in pools of financial assets, such as credit card or automobile receivables. The value of these securities will be influenced by the factors affecting the assets underlying such securities, changes in interest rates, changes in default rates of borrowers and private insurers or deteriorating economic conditions. 20  HSBC Securities (USA) Inc. - Form ADV Part 2A & 2B Brochure Supplement During periods of declining asset values, asset-backed securities may be difficult to value or become more volatile and/or illiquid. Asset-backed securities may not have the benefit of a security interest in collateral comparable to that of mortgage assets, resulting in additional credit risk. • Banking Risk: Investments in securities issued by U.S. and foreign banks can be sensitive to changes in government regulation and interest rates and to economic downturns in the United States and abroad, and susceptible to risks associated with the financial services sector. • Capitalization Risk: Some Funds invest in large capitalization companies. Stocks of large capitalization companies may be volatile in the event of earnings disappointments or other financial developments. Medium and smaller capitalization companies may involve greater risks due to limited product lines, market and financial or managerial resources, as well as have more volatile stock prices and the potential for greater declines in stock prices in response to selling pressure. Small capitalization companies generally have more risk than medium capitalization companies. • Convertible Bond Risk: Convertible bonds are subject to the risks of equity securities when the underlying stock price is high relative to the conversion price (because more of the security’s value resides in the conversion feature) and debt instruments when the underlying stock price is low relative to the conversion price (because the conversion feature is less valuable). A convertible bond is not as sensitive to interest rate changes as a similar non-convertible debt instrument and generally has less potential for gain or loss than the underlying equity security. • Counterparty Risk: The risk that the other party to an investment contract, such as a derivative (e.g., ISDA Master Agreement) or a repurchase or reverse repurchase agreement, will not fulfill its contractual obligations or will not be capable of fulfilling its contractual obligations due to circumstances such as bankruptcy or an event of default. Such risks include the other party's inability to return or default on its obligations to return collateral or other assets as well as failure to post or inability to post margin as required by the applicable credit support agreement. • Commodity Related Investments Risk:The risks of investing in commodities, including investments in companies in commodity-related industries may subject a fund to greater volatility than investments in traditional securities. The potential for losses may result from changes in overall market movements or demand for the commodity, domestic and foreign political and economic events, adverse weather, discoveries of additional reserves of the commodity, embargoes and changes in interest rates or expectations regarding changes in interest rates. • Concentration Risk:When a model or client account invests in a concentrated number of securities, asset classes or sectors, a decline in the value of these securities, asset classes or sectors may cause your overall account value to decline to a greater degree than that of a less concentrated model. Models that invest a large percentage of assets in only one asset class or sector (or in only a few) are more vulnerable to price fluctuation than models that diversify among a broad range of asset classes or sectors. Some mutual funds and ETFs focus investments on a small number of stocks, bonds, industries, foreign currencies or particular countries which increases risk. These funds are more susceptible to risks associated with a single economic, political or regulatory occurrence than a more diversified fund might be. 21  HSBC Securities (USA) Inc. - Form ADV Part 2A & 2B Brochure Supplement • Currency Risk: Fluctuations in exchange rates between the U.S. dollar and foreign currencies, or between various foreign currencies, may negatively affect a fund’s investment performance. • Custody Risk: Some funds invest in securities markets that are less developed than those in the U.S., which may expose a fund to risks in the process of clearing and settling trades and the holding of securities by foreign banks, agents and depositories. The laws of certain countries may place limitations on the ability to recover assets if a foreign bank, agent or depository enters bankruptcy. In addition, low trading volumes and volatile prices in less developed markets may make trades more difficult to complete and settle, and governments or trade groups may compel local agents to hold securities with designated foreign banks, agents and depositories that may be subject to little or no regulatory oversight or independent evaluation. Local agents are held only to the standards of care of their local markets. • Debt Instruments Risk:The risks of investing in debt instruments include: > High-Yield Securities (“Junk Bond”) Risk:Investments in high-yield securities (commonly referred to as “junk bonds”) are often considered speculative investments and have significantly higher credit risk than investment-grade securities and tend to be less marketable (i.e., less liquid) than higher rated securities. The prices of high-yield securities, which may be more volatile and less liquid than higher rated securities of similar maturity, may be more vulnerable to adverse market, economic or political conditions. > Interest Rate Risk: Fluctuations in interest rates may affect the yield and value of investments in income producing or debt instruments. > Credit Risk:A fund could lose money if an issuer or guarantor of a debt instrument fails to make timely payments of interest or principal or enters bankruptcy. This risk is greater for lower- quality bonds than for bonds that are investment grade. > Inventory Risk: The market-making capacity in some debt markets has declined as a result of reduced broker-dealer inventories relative to portfolio assets, reduced broker-dealer proprietary trading activity and increased regulatory capital requirements for financial institutions such as banks. Because market makers provide stability to a market through their intermediary services, a significant reduction in dealer market-making capacity has the potential to decrease liquidity and increase volatility in the debt markets. > Prepayment Risk: During periods of falling interest rates, borrowers may pay off their debt sooner than expected, forcing a fund to reinvest the principal proceeds at lower interest rates, resulting in less income. > Extension Risk:The risk that during periods of rising interest rates, borrowers pay off their debt later than expected, preventing a fund from reinvesting principal proceeds at higher interest rates, increasing the sensitivity to changes in interest rates and resulting in less income than potentially available. • Depositary Receipts Risk:Investments in depositary receipts, such as ADRs and GDRs, may entail the special risks of international investing, including currency exchange fluctuations, government regulations, and the potential for political and economic instability. 22  HSBC Securities (USA) Inc. - Form ADV Part 2A & 2B Brochure Supplement • Derivatives Risk: Use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments and could increase the volatility of a fund’s net asset value and cause losses. Risks associated with derivatives include the risk that the derivative is not well correlated with the security, index or currency to which it relates; the risk that derivatives may result in losses or missed opportunities; the risk that the fund will be unable to sell the derivative because of an illiquid secondary market; the risk that a counterparty is unwilling or unable to meet its obligation; and the risk that the derivative transaction could expose the fund to the effects of leverage, which could increase the fund’s exposure to the market and magnify potential losses, particularly when derivatives are used to enhance return rather than offset risk. There is no guarantee that derivatives, to the extent employed, will have the intended effect, and their use could cause lower returns or even losses to the fund. The use of derivatives by the fund to hedge risk may reduce the opportunity for gain by offsetting the positive effect of favorable price movements. • Diversification Risk: Diversification is a risk management strategy that mixes a wide array of investments within a portfolio. A diversified portfolio contains a mix of distinct asset types and investment vehicles in an attempt at limiting exposure to any single asset or risk. It does not guarantee a profit or protect against a loss in a declining market. It also cannot eliminate risk of fluctuating prices and uncertain returns. • Emerging Markets Risk: Investments in emerging market countries are subject to all of the risks of foreign investing generally, and have additional heightened risks due to a lack of established legal, political, business and social frameworks to support securities markets, including: greater market volatility and illiquidity, lower trading volume, delays in trading or settling portfolio securities transactions; currency and capital controls or other government restrictions or intervention, such as expropriation and nationalization; greater sensitivity to interest rate changes; pervasiveness of corruption and crime; currency exchange rate volatility; and higher levels of inflation, deflation or currency devaluation. The prices of securities in emerging markets can fluctuate more significantly than the prices of securities in more developed countries. The less developed the country, the greater effect such risks may have on an investment. • Environmental Social Governance (ESG) Investment Risks: Sustainable Investments is a broad term that refers to any form of financial services integrating Environmental, Social and Governance (ESG) criteria that aims to generate long-term financial returns while advancing sustainable solutions and outcomes. As a result of the ESG screening criteria utilized by these funds, the investment opportunities may be more limited than that of other funds, and as a result using an ESG investment approach may produce more modest gains than using another investment approach. There is no guarantee that an investment approach that considers environmental, social and governance (ESG) factors will produce returns similar to those that do not consider these factors. Investment approaches that consider ESG factors may diverge from traditional market benchmarks. Also, some asset classes might not be available in the Program. 23  HSBC Securities (USA) Inc. - Form ADV Part 2A & 2B Brochure Supplement There is currently no generally adopted industry criteria/standards for what qualifies as an ESG investment, how to measure performance of ESG investments, and the impact of ESG investments on performance. This can result in discrepancies in results and approach in the calculation of ESG data. An ESG portfolio is not guaranteed to outperform (financially) similar investments that do not meet ESG criteria. There is no guarantee that the ESG characteristics a manager or HSBC Securities uses will be aligned with those of the client’s or that these characteristics will match the client’s expectation of ESG investing. Also, each fund manager can have different ESG assessment criteria and exclusion criteria. ESG investment is an evolving area, and an investment that is considered ESG today may not meet those standards at some point in the future. Therefore, the range of ESG investment strategies that any underlying fund in the Program employs may change in the future. • Equity Securities Risk: The prices of equity securities fluctuate from time to time based on changes in a company’s financial condition or overall market and economic conditions. As a result, the value of equity securities may fluctuate drastically from day to day. The risks of investing in equity securities also include: ⮚ Style Risk: The risk that use of a growth or value investing style may fall out of favor in the marketplace for various periods of time. Growth stock prices reflect projections of future earnings or revenues and may decline dramatically if the company fails to meet those projections. A value stock may not increase in price as anticipated if other investors fail to recognize the company’s value. ⮚ Issuer Risk: An issuer’s earnings prospects and overall financial position may deteriorate, causing a decline in a company’s stock value. • Exchange Traded Fund Risk: An investment in ETFs involves risk, including the loss of principal. ETF shareholders are necessarily subject to the risks stemming from the individual issuers of the fund’s underlying portfolio securities. Such shareholders are also liable for taxes on any fund-level capital gains, as ETFs are required by law to distribute capital gains in the event they sell securities for a profit that cannot be offset by a corresponding loss. Shares of ETFs are listed on securities exchanges and transacted at negotiated prices in the secondary market. Generally, ETF shares trade at or near their most recent net asset value (‘NAV”), which is generally calculated at least once daily for indexed based ETFs and potentially more frequently for actively managed ETFs. However, certain inefficiencies may cause the shares to trade at a premium or discount to their pro rata NAV. There is also no guarantee that an active secondary market for such shares will develop or continue to exist. Generally, an ETF only redeems shares when aggregated as creation units (usually 20,000 shares or more). Therefore, if a liquid secondary market ceases to exist for shares of a particular ETF, a shareholder may have no way to dispose of such shares. • Financial Services Risk:The adviser’s investments in the financial services group of industries may be particularly affected by economic cycles, interest rate changes, and business developments and regulatory changes applicable to the financial services group of industries. For example, declining 24  HSBC Securities (USA) Inc. - Form ADV Part 2A & 2B Brochure Supplement economic and business conditions can disproportionately impact companies in the financial services group of industries due to increased defaults on payments by borrowers. Interest rate increases can also adversely affect financial services companies by increasing their cost of capital. In addition, financial services companies are heavily regulated and, as a result, political and regulatory changes can affect the operations and financial results of such companies, potentially imposing additional costs and possibly restricting the businesses in which such companies may engage. • Foreign Securities Risk: Investments in foreign securities are generally considered riskier than investments in U.S. securities, and are subject to additional risks, including international trade, political, economic and regulatory risks; fluctuating currency exchange rates; less liquid, developed or efficient trading markets; the imposition of exchange controls, confiscations and other government restrictions; and different corporate disclosure and governance standards. • Frontier Market Countries Risk:Frontier market countries generally have smaller economies and even less developed capital markets or legal, regulatory and political systems than traditional emerging markets. As a result, the risks of investing in emerging market countries are magnified in frontier market countries. Frontier market economies are less correlated to global economic fluctuations than developed economies and have low trading volumes and the potential for extreme price volatility and illiquidity. The government of a frontier market country may exercise substantial influence over many aspects of the private sector, including by restricting foreign investment, which could have a significant effect on economic conditions in the country and the prices and yields of securities in a fund’s portfolio. Economies in frontier market countries generally are heavily dependent upon international trade and, accordingly, have been and may continue to be adversely affected by trade barriers, exchange controls, managed adjustments in relative currency values and other protectionist measures imposed or negotiated by the countries with which they trade. These economies also have been and may continue to be affected adversely by economic conditions in the countries with which they trade. Brokerage commissions, custodial services and other costs relating to investment in frontier market countries generally are more expensive than those relating to investment in more developed markets. The risk also exists that an emergency situation may arise in one or more frontier market countries as a result of which trading of securities may cease or may be substantially curtailed and prices for investments in such markets may not be readily available. • Government Securities Risk:There are different types of U.S. government securities with different levels of credit risk. U.S. government securities issued or guaranteed by the U.S. Treasury and/or supported by the full faith and credit of the United States have the lowest credit risk. A U.S. government sponsored entity, although chartered or sponsored by an Act of Congress, may issue securities that are neither insured nor guaranteed by the U.S. Treasury and are riskier than those that are. • Index Fund Risk:The risk that a fund’s performance will not correspond to its benchmark index for any period of time and may underperform the overall stock market. • Initial Public Offering Risk: Investments in securities purchased at an initial public offering ("IPO") or secondary public offering are often subject to a broader set of market impacts such as investor perception and market opinions of companies that were previously privately held. As such, prices of securities purchased at an IPO or secondary public offering may be more volatile or fluctuate more rapidly than other types of securities. Additionally, to the extent an account is smaller in size, investments in securities purchased at an IPO or secondary public offering may have a more significant impact on the account's 25  HSBC Securities (USA) Inc. - Form ADV Part 2A & 2B Brochure Supplement performance or value than the securities would on an account larger in size as those securities may represent a larger proportion of the overall securities held by a smaller account. • Issuer Risk:The risk that the issuer’s earnings prospects and overall financial position will deteriorate, causing a decline in the value of the fund. • Leverage Risk: Leverage created by borrowing or investments, such as derivatives, can diminish the fund’s performance and increase the volatility of the fund’s net value. • Liquidity Risk/Illiquid Securities Risk: The risk that the fund could lose money if it is unable to dispose of an investment at a time that is most beneficial or be unable to meet redemption demand. • Market Risk:Issuer, political, or economic developments such as a global pandemic can affect a single issuer, issuers within an industry or economic sector or geographic region, or the market as a whole. In the short term, equity prices can fluctuate dramatically in response to these developments. Different parts of the market and different types of equity securities can react differently to these developments. For example, large-cap stocks can react differently from small-cap or mid-cap stocks, and “growth” stocks can react differently from “value” stocks. • Mortgage- and Asset-Backed Securities Risk: Mortgage- and asset-backed securities are debt instruments that are secured by interests in pools of mortgage loans or other financial assets. Mortgage- and asset-backed securities are subject to prepayment, extension, market, and credit risks (market and credit risk are described elsewhere in this section). Prepayment risk reflects the risk that borrowers may prepay their mortgages faster than expected, thereby affecting the investment’s average life and perhaps its yield. Conversely, an extension risk is present during periods of rising interest rates, when a reduction in the rate of prepayments may significantly lengthen the effective durations of such securities. • Participatory Note Risk: Even though a participatory note is intended to reflect the performance of the underlying securities on a one-to-one basis so that investors will not normally gain or lose more in absolute terms than they would have made or lost had they invested in the underlying securities directly, the performance results of participatory notes will not replicate exactly the performance of the issuers or markets that the notes seek to replicate due to transaction costs and other expenses. Investments in participatory notes involve risks normally associated with a direct investment in the underlying securities. In addition, participatory notes are subject to counterparty risk. Participatory notes constitute general unsecured, unsubordinated contractual obligations of the banks or broker-dealers that issue them, and an investment in these instruments is relying on the creditworthiness of such banks or broker-dealers and has no rights under the participatory notes against the issuers of the securities underlying such participatory notes. There can be no assurance that the trading price or value of participatory notes will equal the value of the underlying value of the securities they seek to replicate. • Political Risk: The risk that an investment’s return could suffer as a result of political changes or instability in a country. Instability affecting investment returns could stem from a change in government, legislative bodies, other foreign policy makers, or military control. Political risk is also known as “geopolitical risk” and becomes more of a factor as the time horizon of an investment gets longer. 26  HSBC Securities (USA) Inc. - Form ADV Part 2A & 2B Brochure Supplement • Real Estate Risk:Real estate related investments will expose a Fund to risks similar to those associated with direct ownership of real estate, including losses from casualty or condemnation, and changes in local and general economic conditions, supply and demand, interest rates, zoning laws, regulatory limitations on rents, property taxes and operating expenses. • Redemption Risk:A fund may experience a redemption(s) resulting in large outflows of cash from time to time. This activity could have adverse effects on performance if the advisor were required to sell securities at times when it otherwise would not do so. This activity could also accelerate the realization of capital gains/losses and increase transaction costs. • Regulatory Risk in Other Countries:Disclosure and regulatory standards in emerging market countries are in many respects less stringent than U.S. standards. Therefore, disclosure of certain material information may not be made, and less information may be available. Additionally, regulators in many countries continue to review the regulation of such funds. Any further changes by a regulatory authority or additional legislative developments may affect a fund’s operations, investment strategies, performance and yield. • Repurchase Agreement Risk: The use of repurchase agreements, which are agreements where a party buys a security from another party (“seller”) and the seller agrees to repurchase the security at an agreed- upon date and price (which reflects a market rate of interest), involves certain risks. For example, if the seller of the agreements defaults on its obligation to repurchase the underlying securities at a time when the value of these securities has declined, a fund may incur a loss upon disposition of the securities. There is also the risk that the seller of the agreement may become insolvent and subject to liquidation. • Short Sale Risk: The risk of entering into short sales, including the potential loss of more money than the actual cost of the investment, and the risk that the third party to the short sale may fail to honor its contract terms, causing a loss to the fund. • Sovereign Debt Risk:Sovereign debt instruments, which are instruments issued by foreign governmental entities, are subject to the risk that the governmental entity may be unable or unwilling to repay the principal or interest on its sovereign debt due to, among other reasons, cash flow problems, insufficient foreign currency reserves, political considerations, the relative size of the governmental entity’s debt or its failure to implement economic reforms required by the International Monetary Fund or other multilateral agencies. A governmental entity that defaults can ask for additional loans or for more time to pay its debt. There is no legal process for collecting sovereign debts that a government does not pay nor are there bankruptcy proceedings through which all or part of the sovereign debt that a governmental entity has not repaid may be collected. • Stable NAV Risk:The following applies to money market funds that maintain a stable price of $1.00 per share. The fund may not be able to maintain a Net Asset Value (“NAV”) per share of $1.00 (a “Stable NAV”) at all times. The failure of other money market funds to maintain a Stable NAV (or the perceived threat of such a failure) could adversely affect the fund’s NAV. Shareholders of a money market fund should not rely on or expect the Adviser, the fund's adviser or an affiliate to help a fund maintain a Stable NAV. Pending money market fund reform changes may also impact Stable NAV policies of funds. 27  HSBC Securities (USA) Inc. - Form ADV Part 2A & 2B Brochure Supplement • Stand-by Commitments Risk: Stand-by commitments are subject to certain risks, which include the ability of the issuer to pay when the commitment is exercised, the fact that the commitment is not marketable, and the fact that the maturity of the underlying obligation generally differs from that of the commitment. • Swap Risk: The use of swap agreements, agreements to exchange the return generated by one instrument for the return generated by another instrument (or index), and similar instruments involves risks that are different from those associated with ordinary portfolio securities transactions. For example, the fund bears the risk of loss of the amount expected to be received under a swap agreement in the event of the default or bankruptcy of a swap agreement counterparty. If a counterparty defaults on its payment obligations to the fund, this default will cause the value of the fund to decrease. Swap agreements also may be considered to be illiquid. • Underlying Fund Selection Risk: The risk that a portfolio may invest in underlying Funds that underperform other similar Funds or the markets more generally, due to poor investment decisions by the investment adviser(s) for the underlying Funds or otherwise underlying Funds also have their own expenses, which the portfolio bears in addition to its own expenses. • Variable Rate Securities Risk: Variable (and floating) rate instruments have interest rates that are periodically adjusted either at set intervals or that float at a margin above a generally recognized rate. Variable (and floating) rate instruments are subject to the same risks as fixed income investments, particularly interest rate risk and credit risk. Due to a lack of secondary market activity for certain variable and floating rate instruments, these securities may be more difficult to sell if an issuer defaults on its financial obligation or when a fund is not entitled to exercise its demand rights. “When-Issued” Securities:The price and yield of securities purchased on a “when-issued” basis is fixed on the date of the commitment, but payment and delivery are scheduled for a future date. Consequently, these securities present a risk of loss if the other party to a “when-issued” transaction fails to deliver or pay for the security. In addition, purchasing securities on a “when- issued” basis can involve a risk that the yields available in the market on the settlement date may actually be higher (or lower) than those obtained in the transaction itself and, as a result, the “when-issued” security may have a lesser (or greater) value at the time of settlement than a fund’s payment obligation with respect to that security. 28  HSBC Securities (USA) Inc. - Form ADV Part 2A & 2B Brochure Supplement Item 9: Disciplinary Information In the past, we have entered into certain settlements with our regulators and other third parties and have been the subject of adverse legal and disciplinary events. Below are summaries of certain events that may be material to your decision of whether to retain us as an investment adviser. You can find other information on our Form ADV Part 1, available at www.adviserinfo.sec.gov. On March 16, 2020, HSBC Securities (USA) Inc. (“HSBC Securities”) entered into a settlement with the U.S. Securities and Exchange Commission (“SEC”) concerning HSBC Securities’ disclosures to advisory clients and prospective clients from November 2015 through August 2017 regarding how it compensates its dually registered investment adviser and broker representatives (“IARs”). The SEC determined that HSBC Securities’ disclosures were false and misleading because they failed to disclose conflicts of interest about how IARs’ compensation was determined. The SEC’s Order recognizes that HSBC Securities disclosed to all brokerage customers in its Customer Agreement that conflicts of interest between customers and IARs may arise with respect to recurring income HSBC Securities receives. But in separate disclosures to advisory customers, HSBC Securities stated that IARs were compensated based solely on non-financial factors, and not on the fees paid to HSBC Securities. The SEC found that HSBC Securities did consider financial factors in setting IAR’s discretionary bonuses, including the amount of quarterly advisory fees Spectrum and Managed Portfolio Account (“MPA”) program clients paid to HSBC Securities, which gave IARs an incentive to generate those fees. The SEC further determined that HSBC Securities lacked sufficient policies and procedures reasonably designed to prevent violations pertaining to its representations about IARs’ compensation. On March 16, 2020, without admitting or denying the SEC’s findings, HSBC Securities agreed to a censure and to pay a fine of $725,000. HSBC Securities amended its disclosures in March 2018 and was not required to engage in any remediation. Disclosures are under Item 14 “Client Referrals and Other Compensation”. On June 30, 2017, HSBC Securities agreed to a settlement with FINRA regarding allegations that it failed to maintain electronic brokerage records in non-erasable and non-rewritable format known as the “Write Once, Read Many” (WORM) format, that is intended to prevent the alteration or destruction of broker-dealer records stored electronically. HSBC Securities failed to retain in WORM format brokerage order memoranda records relating to approximately 12.36 million transactions in preferred exchange-traded funds, equities, and fixed income products. Other affected records included a limited number of HSBC Securities’ general ledger, certain internal audit records, risk management control records, unusual activity reports and certain policy manuals. The findings also stated that HSBC Securities failed to notify FINRA at least 90 days prior to retaining a vendor to provide electronic storage. HSBC Securities is also alleged to have failed to implement an audit system regarding the inputting of records in electronic storage media. HSBC Securities is alleged to have failed to obtain an attestation from their third-party vendor. Additionally, HSBC Securities failed to establish maintain and enforce written supervisory procedures reasonably designed to achieve compliance with applicable Securities Exchange Commission Rule for record retention requirements. HSBC Securities’ written supervisory procedures failed to specify how the Firm should supervise its compliance with record retention requirements under the rule. On June 30, 2017, without admitting or denying the findings, the Firm agreed to a censure and fine of $1,500,000. The Firm also consented to a written plan of how it will undertake a comprehensive review of the adequacy of its policies and procedures. 29  HSBC Securities (USA) Inc. - Form ADV Part 2A & 2B Brochure Supplement In February 2016, HSBC Finance Corporation, HSBC Bank USA, N.A HSBC Mortgage Services Inc. and HSBC North America Holdings entered into an agreement with the U.S. Department of Justice, the U.S. Department of Housing and Urban Development, the Consumer Financial Protection Bureau, other federal agencies ("federal parties") and the state Attorneys General of 49 states and the District of Columbia ("state parties") to resolve civil claims related to past residential mortgage loan origination and servicing practices. The settlement is similar to prior national mortgage settlements reached with other U.S. mortgage servicers and includes the following terms: $100 million to be allocated among participating federal and state parties, and $370 million in consumer relief. In addition, the settlement agreement sets forth national mortgage servicing standards to which HSBC U.S. affiliates will adhere. All except $32 million of the settlement is allocable to HSBC Finance Corporation. This matter was settled within the amount reserved. Item 10: Other Financial Industry Activities and Affiliations Conflicts HSBC Securities has policies and procedures that are reasonably designed to mitigate conflicts of interests and comply with the regulatory requirements in selling securities including mutual funds. Our business is that of an Investment Advisor and broker-dealer. We engage in a full range of primary and secondary securities activity in the U.S. and international markets, including acting as a primary dealer in corporate bonds, U.S. and international equities, and as a broker in futures and options. We are registered with the Securities and Exchange Commission, FINRA, and other regulatory bodies. Our Firm uses the clearing and execution facilities of third-party broker dealers. Trades are executed through HSBC Bank for all securities transactions executed within an Account, subject in all cases to best execution obligations and applicable law. HSBC Securities is registered as a futures commission merchant, and some of our management persons are associated persons of that entity. It should be noted; clients can have similar securities in their commission-based brokerage accounts as they do in their Prism Program Account. Material Relationships with Related Persons HSBC Securities and/or our management persons have a material relationship with the following related person(s) as follows. HSBC Bank is a national bank organized and existing under the laws of the United States and a member of the Federal Reserve. HSBC Securities has entered into an agreement with HSBC Bank, to perform certain services, for compensation, in the Prism Program. HSBC Bank provides, investment management, overlay management, administrative and custodial support services to HSBC Securities for the Prism Program including from time to time advice as to proposed asset allocations, Funds and portfolio managers and various operational and trading services. Fees paid by HSBC Securities to HSBC Bank for services rendered are based on average assets invested in the Prism Program. 30  HSBC Securities (USA) Inc. - Form ADV Part 2A & 2B Brochure Supplement In addition, HSBC Bank, provides certain office space and certain administrative services such as payroll and benefits processing to HSBC Securities. Certain employees and officers of HSBC Securities are officers of HSBC Bank and report into the HSBC North America Holdings Company. HSBC Securities is a member of the New York Stock Exchange, Financial Industry Regulatory Authority, Securities Investor Protection Corporation. HSBC Securities is a sub-distributor of the HSBC Funds. HSBC Global Asset Management (USA) Inc. (“AMUS”) is wholly owned by HSBC USA, Inc. (」HSBC USA”), and is indirectly owned by HSBC Holdings plc (“HSBC Group”). HSBC Group is a publicly owned corporation based in London, England and trades on various stock exchanges around the world. AMUS is registered with the SEC as an investment adviser pursuant to the Investment Advisers Act of 1940, as amended (the “Advisers Act”). AMUS is an entity within HSBC Asset Management (“AM”), which is made up of a group of companies in countries and territories throughout the world that are engaged in investment advisory and portfolio management activities. AMUS has been in business since January 29, 1986. Certain HSBC Funds also have subadvisors, not always affiliated with AMUS that receive fees for providing various services to the funds. Funds outside of the HSBC Fund family are also offered as options in the HSBC Prism Program and may be advised by investment managers affiliated or unaffiliated with HSBC Securities, who also receive a fee for their investment services. AMUS and its affiliates receive compensation (such as mutual fund advisory fees, and other compensation for HSBC funds). To the extent HSBC Securities includes an AMUS or AMUS affiliate advised fund as the option into which an Account could be invested, the receipt of such additional compensation creates a conflict of interest. There may be situations where the program selects to have idle cash balances swept into funds which are managed by AMUS or its affiliates who provide investment advisory services, and for which AMUS or its affiliates receives advisory fees. Clients will pay these fees as well as their Program fee as permissible by law. Clients are informed both verbally and in writing that investments are offered by HSBC Securities (USA) Inc. (HSBC Securities), member NYSE/FINRA/SIPC. HSBC Securities is an affiliate of HSBC Bank USA, N.A. Investment Products: Are not a deposit or other obligation of the bank or any of its affiliates; Not FDIC insured or insured by any federal government agency of the United States; Not guaranteed by the bank or any of its affiliates; and are subject to investment risk, including possible loss of principal invested. Presently, IARs are not licensed insurance agents, However, they can refer clients to certain employees who are licensed insurance agents with HSBC Insurance Agency USA, Inc. In this capacity, we can offer advisory clients of our Firm insurance products for which we receive compensation. HSBC Securities has policies and procedures that are reasonably designed to mitigate conflicts of interests and comply with the regulatory requirements in selling insurance products. However, if they choose to do so, the IAR at times will receive additional compensation as described in Item 14 “Client Referrals and Other Compensation” section. IARs of HSBC Securities are also securities-licensed Registered Representatives of HSBC Securities, and in their capacity as Registered Representatives engage in the sale of securities-related products and services outside of the Program. Clients are under no obligation to purchase or sell securities products and services through HSBC Securities or to participate in the Prism Program; however, if they choose to do so, clients should be aware that 31  HSBC Securities (USA) Inc. - Form ADV Part 2A & 2B Brochure Supplement the Registered Representative at times will receive additional compensation which creates a conflict of interest. Please see Item 14 “Client Referrals and Other Compensation” section for additional information. IARs of the Firm are employees of HSBC Bank. Certain IARs also serve as bank officers of HSBC Bank, engaging in the sale of bank related products and services. This position is in conjunction with their roles as IARs and Registered Representatives with HSBC Securities. Specific roles are noted in each IAR’s ADV Part 2B Brochure. HSBC Securities provides investment advisory and brokerage advice outside of the Prism Program. As a registered broker-dealer with the Financial Industry Regulatory Authority (“FINRA”), HSBC Securities sells securities for a commission as a broker, outside of the Prism Program (and other Managed Account Programs) and is permitted to receive 12b-1 (distribution) and/or shareholder servicing fees from the sale of mutual funds. All fund sales charge information is disclosed in the mutual fund prospectus or offering document that is provided to the customer. Item 11: Code of Ethics, Participation or Interest in Client Transactions and Personal Trading HSBC Securities has adopted a Code of Ethics and Staff Dealing Policies and Procedures that governs employee personal securities transactions ("Code of Ethics"), designates access persons, protects material nonpublic information, and requires employees to comply with all relevant securities laws. The Code of Ethics reflects our belief in the absolute necessity to conduct business at the highest ethical and professional levels. HSBC Securities requires all personnel to report their personal securities accounts to the Compliance Department and requires pre-approval of personal trades in accordance with the HSBC Securities’ policies and procedures. Firm personnel are required to submit an annual acknowledgement and certification attesting to their compliance and reporting requirements as well as compliance with all other aspects of our Code of Ethics. The Code of Ethics encourages internal reporting and protects employees who report violations from retaliation. Any violations of the Code of Ethics must be reported to the Chief Compliance Officer or other designated personnel. A copy of our HSBC Securities’ Code of Ethics will be furnished upon request. HSBC Securities and its employees at times will buy or sell securities for its or their own account, including the same securities that it recommends to clients, and at the same or different times as client trades on those securities, in accordance with the Code of Ethics. Employees of HSBC Securities, or its advisory affiliates, at times will hold the same or similar securities in their personal accounts, as clients may hold in their own portfolios, and from time to time will recommend such securities for purchase or sale in clients’ portfolios in the normal course of business. HSBC Securities has established informational barriers and has adopted various policies and safeguards in order to address conflicts of interest that may arise from such activities. 32  HSBC Securities (USA) Inc. - Form ADV Part 2A & 2B Brochure Supplement Item 12: Brokerage Practices Soft Dollar HSBC Portfolio Managers participate in soft dollar business arrangements and receives research or services that the Firm would consider a factor in selecting or recommending a particular broker-dealer. The Firm does not engage in directed brokerage transactions. The primary objective in broker-dealer selection is to comply with its duty to seek best execution of orders for clients. Best execution does not necessarily mean the lowest commission or price, but involves consideration of a number of factors. Subject to the best execution policy, a portion of the commissions generated when executing client transactions is used to pay for external research and brokerage services ("soft dollar benefits") is consistent with the "safe harbor" requirements of Section 28(e) of the Exchange Act. The products and services obtained from the use of client commissions qualify as permissible under the “safe harbor” of Section 28(e). Under the Section 28(e) safe harbor, as it has been interpreted by the SEC, the HSBC Portfolio Manager may utilize client’s equity trading commissions to purchase eligible brokerage and research services where those services provide lawful and appropriate assistance in the decision-making process, and the amount of the client commission is reasonable in relation to the value of the products or services provided by the broker-dealer. While the Adviser generally seeks the most favorable price in placing its orders, an account may not always pay the lowest price available, but generally orders are executed within a competitive range. The HSBC Portfolio Manager will review commission rates within each market to determine whether they remain competitive. The HSBC Portfolio Manager may select brokers who charge a higher commission than other brokers, if the Adviser determines in good faith that the commission is reasonable in relation to the services provided. On a semi-annual basis, the HSBC Portfolio Manager utilizes a defined framework which compares and assesses the value of the research received from research providers (both traditional brokers and independent research providers). In general, the HSBC Portfolio Managers’ soft dollar arrangements relate to its equity trading. The Adviser does not currently have any soft dollar arrangements with broker-dealers for fixed income transactions. Trading Authorization Clients authorize and direct all transactions in their account as detailed in their investment management agreement, except as provided below, to be affected by or through designated broker-dealers. HSBC Securities delegates trading authority to HSBC Bank. HSBC Bank Portfolio Managers use the clearing and execution facilities of third-party clearing brokers, for all securities transactions executed within an Account, subject in all cases to best execution obligations and applicable law. Please see the Trading Away section below for additional information. Please refer to an SMA manager’s Form ADV or equivalent disclosure document (for entities which are exempt from registration as investment advisers) for information about its selection of broker- dealers. Trading Away for Managers • Clients should be aware that some managers, particularly those specializing in fixed income, will place all or substantially all of their client trades with a broker-dealer other than HSBC Bank’s designated broker- dealer for execution, also known as “trading away”. Some managers also trade away in foreign securities, ADRs or U.S. equity securities. The level of this trading away varies by manager. 33  HSBC Securities (USA) Inc. - Form ADV Part 2A & 2B Brochure Supplement • • Managers trade away for various reasons, including because it can be more efficient to place a single trade for all clients rather than a series of trades for their clients in different wrap programs. Please refer to a manager’s Firm Brochure for information about its selection of broker-dealers. If the manager executes trade orders with a broker-dealer other than HSBC Bank’s designated broker- dealer, you will incur trading costs in addition to the Program Fee. The trading costs can include commissions, markups, mark downs or “spreads” paid to market makers in addition to the Program Fee. They will be embedded in the price of the security and not shown on a confirmation or statement. Best Execution and Brokerage Services Each manager including affiliated managers, have the discretion to select broker-dealers to execute trades and is responsible for selecting broker-dealers in a manner consistent with its obligation to seek best execution. For affiliated managers’ clients are encouraged to contact his/her IAR for further information about our brokerage practices. For non-affiliated Manager’s brokerage practices please refer to the Non-Affiliated Managers brochure. Managers will generate trade recommendations and orders through a variety of methods and transmit those orders to a designated broker-dealer. When the Manager directs transactions for execution with or through broker-dealers other than designated broker-dealers, the client will incur additional transaction costs not included in the Program fee. Depending on the Manager and the type of trade, these transaction costs may not be shown on the statements or trade confirmations as they are embedded in the price of the security. HSBC Bank can aggregate transactions in securities in or for the Program Accounts, other than shares of open- end investment companies, for execution with transactions of its other clients and HSBC Bank will allocate trades among all clients in a manner that HSBC Bank believes to be fair and equitable pursuant to its trade allocation policy. HSBC Bank generally will use the executing and clearing facilities of unaffiliated third parties for all securities transactions executed within an Account. HSBC Bank or one of its affiliates may act as agent for both the buyer and seller in securities and other investment transactions when appropriate and permitted by law. HSBC Bank will not execute a trade when it believes such execution would be inconsistent with the principles of best execution or would violate applicable State or Federal law or regulations, or regulations of any self-regulatory body. Brokerage commissions and related transaction fees (other than brokerage commissions and fees paid by a fund in which the Account is invested) are not included in the Program Fee, although it is expected that no commissions will be charged on purchases for an Account of open-end funds managed or advised by an affiliate of HSBC Securities or third parties. HSBC Bank can purchase or sell the same security for a number of clients, who are in different programs at the same time. Because of market fluctuations, the prices obtained on such transactions within a single day can vary substantially. In such a case, to more fairly spread those market fluctuations among clients, transactions in the same security for a number of clients can be "batched". Employees of HSBC Bank and HSBC Securities, or its advisory affiliates, at times will hold the same or similar securities in their personal accounts as clients can hold in their own accounts, and from time to time will recommend such securities for purchase or sale in clients’ accounts in the normal course of business. HSBC has established informational barriers and has adopted various policies and safeguards in order to address conflicts of interest that can arise from such activities. 34  HSBC Securities (USA) Inc. - Form ADV Part 2A & 2B Brochure Supplement Principal or cross trade transactions will not be placed in the Prism Program. Principal transactions are generally defined as transactions where an adviser, acting as principal for its own account or the account of an affiliated broker-dealer, buys from or sells any security to any advisory client. An agency cross transaction is defined as a transaction where a person acts as an investment adviser in relation to a transaction in which the investment adviser, or any person controlled by or under common control with the investment adviser acts as broker for both the advisory client and for another person on the other side of the transaction. Tax Considerations Clients should understand that rebalancing can trigger tax consequences as well as redemption fees charged by certain Funds. Accordingly, clients should confer with their tax advisor. Clients sometimes pay exchange or similar fees to third parties, including but not limited to fees to convert foreign shares to American Depository Receipts as well as foreign taxes. All of these charges are in addition to the Prism Program fee. Reasonable Restrictions A client can request reasonable restrictions on the investments in the account. All restrictions must be requested by the client in writing. Restrictions are subject to approval by the manager. For example, a client may request that the manager not buy a particular stock or stocks from a particular industry. If a restriction request is so overly broad as to make it not possible to manage the account according to the strategy as determined by the applicable portfolio manager, the client should work with the IAR to determine a potential alternative. Please note that reasonable restrictions will not apply to securities that are part of commingled funds (Funds and ETFs) or any other type of pooled vehicle purchased for your portfolio. Once a restriction is implemented, the allocation to restricted securities in models will be prorated across the other non-restricted securities in a model. Market Timing From time to time, certain of the Funds in the Program have or can adopt policies and procedures that, although designed to prevent market timing, can delay (or even prevent) a purchase of such Funds for Accounts. HSBC Securities can be delayed in purchasing shares for an Account if the Account sold shares of the same Fund as a result of, for example, rebalancing an Account within a prescribed period of time before the proposed Fund purchase date. Information about market timing policies and procedures, if applicable, can be found in each Fund’s prospectus or fund offering documents. 35  HSBC Securities (USA) Inc. - Form ADV Part 2A & 2B Brochure Supplement Item 13: Review of Accounts A client’s IAR conducts annual Account reviews with the client to determine if the client’s profile remains current in addition to other factors. The IAR also reviews the Account’s proposal and Fund selections. The client’s Account activity is reviewed to determine if the asset allocation continues to be suitable, that any client mandates and restrictions continue to be met, and if the client’s financial situation and investment objectives must be updated or re-confirmed. This review is done with the client in person if possible, or by other means such as a phone call or a video call and based on the documented investment objectives and strategy of the Account. The IAR can review client Accounts more frequently than described above. Among the factors that can trigger an off-cycle review is a change in the client’s investment profile, a change in major market or economic events, the client’s life events, requests by the client, etc. 36  HSBC Securities (USA) Inc. - Form ADV Part 2A & 2B Brochure Supplement Item 14: Client Referrals and Other Compensation HSBC Securities does not pay referral fees to non-HSBC Securities persons for the referral of their clients to our Firm. Representative’s Compensation Your IAR is paid a salary with the opportunity to receive annual discretionary variable pay, which creates conflicts between you, us and your IAR. We base discretionary variable pay (or individual variable pay decisions) on the IAR’s personal performance measured against established key performance indicators and objectives. When measuring your IAR’s overall performance and ability to meet objectives, we consider factors like gathering assets (including market fluctuation) and income for HSBC Securities so your IAR has incentives to recommend that you invest assets with us and purchase investments. This also includes deposits and lending products (such as checking, savings, CDs, credit cards and mortgages). Please refer to the Compensation from Other Affiliates for Services Offering Securities and Other Products section below for additional information on Bank related activities. We earn more income from some investment recommendations (such as variable annuities) than others (such as mutual funds), for example, which gives your IAR an incentive to recommend products that will pay us more. When providing account recommendations, your IAR will provide information about the income generated by recommendations of different products and services generally, and point to other materials, like prospectuses for example, that will describe the income we receive more specifically for the products you purchase. Should you also have a brokerage account, please consider that information in connection with your IAR ’s compensation and conflicts. The differences in the amount of income and the frequency of the income generated to HSBC Securities has an impact on your IAR’s opportunity to receive a discretionary variable pay, and an impact on the amount of any potential award. This impact and the conflict exist because income is among the factors considered by us in judging your IAR’s overall performance and ability to meet objectives. Another of the financial factors impacting measurement of performance is the amount of assets gathered, including assets that are brought to us for the first time through your IAR’s recommendations. This impact and the conflict exist because the amount of money brought into and maintained in accounts serviced by that IAR and the growth of the assets in accounts such as yours are also among the factors considered when judging your IAR’s overall performance and ability to meet objectives. Additional factors beyond asset gathering and income are also part of measuring your IAR’s overall performance. We consider factors such as compliance with rules, policies, procedures, code of ethics, industry regulations and standards of conduct. We consider your IAR’s activities in meeting with you and serving your financial needs. We will also assess the quality of your IAR’s sales presentations to you. The various factors of our discretionary variable pay decisions create conflicts, as your IAR has an interest in establishing a relationship with you, and for recommending our products and services. Certain supervisors are also eligible for discretionary variable pay affected by your IAR’s recommendations. To the extent that supervisors are reviewing and approving transactions that generate income and assets for the accounts serviced by IARs, they also have a conflict of interest. We mitigate that conflict through policies and procedures and by measuring the overall performance of those supervisors when considering whether and how much of a potential discretionary variable pay they may receive. 37  HSBC Securities (USA) Inc. - Form ADV Part 2A & 2B Brochure Supplement Internal Recognition Programs. Your IAR at times will be eligible to participate in HSBC internal recognition programs, consistent with industry practice and regulatory requirements, based upon overall personal performance. That personal performance is based on the factors noted above, including the gathering of assets and income to HSBC Securities, creating further incentives to recommend that you invest with us. We also consider factors, such as compliance with rules, their activities in meeting with customers and fulfilling customers’ financial needs. Title Designations. Along with years of experience, factors such as the income generated by your IAR’s recommendations of products and services, as well as the assets that they gather and maintain for us are considerations when determining if a IAR will be rewarded with honorary titles distinct to their seniority and/or promotions to such distinct titles partially based on their ability to meet internal goals. The opportunity to obtain such an honor further incentivizes your IAR to generate income and gather assets for us through the recommendation of our products and services to you. Other Benefits. Your IAR is eligible to receive other benefits based on the amount of their compensation. Non-Qualified Deferred Compensation Plan (NQDCP) • Elective plan for those who are eligible based on their total compensation at or above $250,000 • Eligible participants have the option to elect to defer a portion of their fixed pay or variable pay on a pre- tax basis in the form of an investment account. Deferral on Variable Pay • All HSBC employees are subject to a deferral on a portion of their annual total variable pay that is awarded at or above $100,000 • The standard deferral is granted in the form of Restricted Share Units. The deferrals are under guidelines established by our parent corporations’ deferral plan which allows them to defer the receipt of compensation. This does not represent additional compensation, and there is no benefit beyond the deferral of income taxes at the employee’s election. This ability to defer income however further incentivizes your IAR to generate income and gather assets and otherwise impact the factors considered in determining his or her discretionary variable pay. While HSBC Group maintains global sustainability goals, and a portion of certain global variable pay pools may have considerations based on these goals. However, IARs and related supervisors are not provided with additional incentives to sell ESG. Compensation from Other Affiliates for Services Offering Securities and Other Products Your IAR will also be authorized to act on behalf of HSBC Bank USA, N.A., in some cases directly providing deposit accounts and lending products or introducing you to colleagues for additional bank services. For IARs serving Private Banking customers, these products offered through HSBC Bank may also include certain securities products and services that US national banks may offer directly. In most cases, your IAR will also be authorized to refer additional insurance products through HSBC Insurance Agency (USA) Inc., including traditional life insurance products and certain property and casualty insurance (all for third party insurance carriers). 38  HSBC Securities (USA) Inc. - Form ADV Part 2A & 2B Brochure Supplement These products and services compete with certain products and services offered through HSBC Securities, and can earn more income for our affiliates. Acting for multiple affiliates and being compensated by them presents conflicts because these factors are considered in your IAR’s objectives and measures of overall performance, which in turn impacts his or her opportunity for variable compensation through variable pay. HSBC Securities reserves the right, at its discretion and without prior notice to change the methods by which it compensates its sales professionals. IAR’s Outside Business Activities In addition to approved roles acting on behalf of our affiliates, your IAR is permitted, subject to our review and approval, to engage in certain other business activities, other than the provision of brokerage and advisory services through us. Your IAR could also engage in another business including a family owned business, or serving as an officer, director, partner or employee of or consultant to another business organization. These outside business activities can cause conflicts with the brokerage or advisory services your IAR provides to your brokerage account. Because your IAR could receive fees from the outside business, and he or she could have an incentive for you to engage or transact through the outside business to earn additional compensation. HSBC Securities has policies and procedures as well as our Code of Conduct to mitigate these conflicts. Gifts, Gratuities, Entertainment and Non-Monetary Compensation From time to time, HSBC or its employees will, as is generally consistent with customary industry practice and in accordance with HSBC’s policies and procedures, receive nonmonetary compensation (other than cash or cash equivalents), such as promotional items (e.g., coffee mugs, calendars or gift baskets), meals, entertainment (e.g., tickets to sporting events) and access to certain industry related conferences, from individuals or institutions (including investment sponsors) with whom they transact business or with whom they can engage in business dealings on behalf of clients. In addition to the receipt of gifts by HSBC or its employees, HSBC or its employees may also engage in providing such gifts, meals and entertainment which may also generate a conflict of interest to the extent they create an incentive for the recipient or beneficiary to use, recommend, offer or include products or services of HSBC Securities. The giving and receipt of gifts and other benefits are subject to limitations under internal HSBC Securities policies and procedures. Product Provider Payments and Conferences From time to time, HSBC Securities (and its affiliates) will receive marketing and training support payments, conference subsidies, and other types of financial compensation and incentives from mutual fund companies and other product providers, broker-dealers and other vendors to support the sale of their products and services to our clients. Note that the level of vendor support or other payments is not dependent on or related to the level of assets invested in or with the products or services of the particular vendor, but the receipt of these payments presents HSBC Securities with a conflict of interest in recommending these parties’ services and products to clients. HSBC Securities deals with that conflict through disclosure in this Brochure. 39  HSBC Securities (USA) Inc. - Form ADV Part 2A & 2B Brochure Supplement Item 15: Custody Currently, HSBC Securities has entered into an agreement with HSBC Bank, to act as the custodian for the Program. HSBC Bank is located at 66 Hudson Boulevard E. New York, NY 10010. HSBC Bank has the capacity to delegate their custodial services of which SEI will serve in a sub-custodian capacity. SEI is located at 1 Freedom Valley Drive Oaks, PA 19456. The Custodian will furnish monthly, but no less frequently than quarterly, account statements summarizing account activity during the period. Custodian facilitates the production and mailing of quarterly performance reports to clients in the Program. The performance reports are intended to inform clients as to how their accounts within the Program have performed during the period and are not intended to replace the statements of the Custodian. Confirmation Suppression Option Clients can elect not to receive separate trade confirmations for an Account by making an election at account opening or by contacting your IAR. Information from the confirmations will be reported at least quarterly to the client, in lieu of separate trade confirmations. Prospectus Delivery Clients with Advisory accounts will receive fund prospectuses in the Prism Advisory program where appropriate. 40  HSBC Securities (USA) Inc. - Form ADV Part 2A & 2B Brochure Supplement Item 16: Investment Discretion As described in Item 4, HSBC Securities provides both discretionary and non-discretionary investment advisory services. HSBC Securities and client execute an investment management agreement authorizing HSBC Securities to act on behalf of the client's account. HSBC Securities has delegated this authority to HSBC Bank. The execution of such agreement authorizes HSBC Bank to manage and direct the investment and reinvestment of assets in the client’s account on the client’s behalf and at the client’s risk. The scope of the discretionary authority is defined by the terms of its written agreement with each client, which may include certain limitations. These terms include investment objectives and investment guidelines that the client establishes for the account. Prism Discretionary Accounts Prism Discretionary is designed for clients that are willing to cede discretion over the asset allocation and implementation vehicles to the HSBC Portfolio Management Team. IARs will guide clients on the appropriate asset allocation solutions given the client’s investment objective, risk profile, time horizon and liquidity needs. Prism Discretionary consists of various asset allocation solutions managed by the HSBC Portfolio Management team. Additionally, HSBC Securities has ongoing responsibility as the program sponsor and provides regular and continuous monitoring of the Account(s). Prism Advisory Accounts Prism Advisory is designed for clients who would like their views/perspectives in terms of the asset allocation and investment vehicles to be incorporated in their account. IARs will guide clients on the appropriate asset allocation and investment vehicles from a recommended list. This guidance will take into account the client’s investment objective, risk profile, time horizon and liquidity needs. For Prism Advisory accounts, HSBC Securities in their sole discretion can remove an implementation vehicle (fund/ETF/manager) from the recommended list due to variety of reasons. IARs will reach out to discuss the removal of the recommended status and the replacement vehicle recommended by the Firm. If no action is taken or the client cannot be reached on a timely basis, HSBC Securities has the authority to remove the non- recommended vehicle and invest in the default vehicle chosen by HSBC Securities. In certain conditions, a notice will not be provided before the fund replacement is completed. Discretion Common to the Programs In the Programs, to fulfill its responsibilities for regular and continuous monitoring of the Account, HSBC Securities has discretion to reallocate assets at any time (including an allocation into a new asset class), without consulting clients, for any reason it deems appropriate, including, without limitation, to respond to general market or macroeconomic circumstances, or to rebalance the investments periodically to restore the original allocation percentages or target weights. HSBC Securities can change the Funds or their weightings in a model to reflect changes such as the introduction of new asset classes or new model options, or to remove asset classes or models. 41  HSBC Securities (USA) Inc. - Form ADV Part 2A & 2B Brochure Supplement Item 17: Voting Client Securities Clients in the Prism program can elect to retain the right to vote proxies solicited by or with respect to the Funds or any other securities held in the Account themselves as applicable. Alternately, the clients can delegate voting authority to HSBC Securities. For third-party SMA strategies where the manager has the trading authority, they may retain the right to vote proxies. Additional information on a third party managers’ proxy voting procedures can be obtained in the SMA’s Form ADV Part 2. When delegated to HSBC Securities, Institutional Shareholder Services (“ISS”), acts as an independent voting agent on behalf of HSBC Securities through HSBC Bank. ISS provides proxy analysis and voting recommendations, manages the operational process, and votes proxies based on HSBC’s guidelines. If there is a conflict or need for clarification ISS refers the proxy to the HSBC Portfolio Management team, which will review it as part of the services provided to the Program. The Portfolio Management team will use any research provided by ISS in rendering its decision and submitting the proxy vote. A copy of the Proxy Voting Policy and information about how proxies were voted is available upon client request. A client can vote proxies for their Account by notifying HSBC Securities in writing. HSBC Securities is not liable or responsible for the timely delivery of proxies or the results thereof. Item 18: Financial Information HSBC Securities does not require, nor do we solicit prepayment of more than $1,200 in fees per client, six (6) months or more in advance. Therefore, we have not included a balance sheet for our most recent fiscal year. There are no financial commitments to likely impair our ability to meet contractual obligations to our clients, and we have not been the subject of a bankruptcy petition at any time during the past ten years. 42