What is a Certificate?

A Certificate is a financial instrument issued by a financial intermediary that allows the investor to take a position on an underlying financial asset, such as shares, a stock index, a currency, a commodity or an interest rate. The obligation of payment flows due to the holder of the Certificate is paid for by the issuing financial institution, which details the specific characteristics of each financial instrument in the appropriate information prospectus edited at the time of issue. By virtue of the multiplicity of payoffs offered by the different types of Certificate, these financial instruments respond to the different risk/reward requirements of investors. Depending on its features, the Certificate allows investments to be made on different time horizons and on different market views: it is possible to find suitable Certificates with upward, downward or lateral prospects of values for a wide range of underlying financial assets on which they are issued. This allows the investor to achieve financial solutions suitable to meet his own requirements and an adequate risk-return profile. Depending on the characteristics of the type of instrument, Certificates also allow for the development of strategies designed to benefit from rises and falls, even moderate ones, in the underlying financial asset and from markets characterised by phases with substantial lateral movements. Through the use of Certificates, investors are able to develop strategies to optimise the overall risk of their portfolio through the geographic and sector diversification offered by the wide range of underlying financial assets. As they are instruments issued by a financial intermediary, Certificates expose the investor to the issuers' risk, that is to say the risk linked to the issuer's ability to fulfill its obligations.

Classification

Depending on the investors attitude to risk tolerance, Certificates also allow for different types of capital protection: from those which do not guarantee protection to those that ensure partial or conditional protection if certain parameters - established at the time the Certificate was issued - are met, and also including those generally suitable for investors with a preference for low risk investments which guarantee total capital protection. ACEPI, the Italian Association of Certificates and Investment Products places Certificates into four categories depending on their specific characteristics and the level of capital protection offered to the investor. These are: Leverage Certificates, Capital Protected Certificates, Conditional Capital Protected Certificates and Non Capital Protected Certificates.

GLOSSARY

CAPITAL PROTECTED CERTIFICATES

CONDITIONAL CAPITAL PROTECTED CERTIFICATES

NON CAPITAL PROTECTED CERTIFICATES

LEVERAGE CERTIFICATES

CAPITAL PROTECTED CERTIFICATES

Capital protected certificates are financial instruments that offer the opportunity to invest in the underlying assets guaranteeing the protection of all or part of the capital invested, if underwritten at the placement stage and if held until maturity.

equity protection

In the Long or Short versions of these certificates, the first allows you to participate in upward movement of the underlying financial asset and the second in the downward movement, while protecting the issue price or a percentage of it to maturity.

DISCOVER EQUITY PROTECTION

digital

Allows for the receipt of a regular income if at the evaluation date the underlying share is at a level equal to or higher than the initial evaluation, protecting the capital or part of it on maturity.

DISCOVER PROTECTED DIGITAL

CONDITIONAL CAPITAL PROTECTED CERTIFICATES

Conditional Capital Protected Certificates are financial instruments that allow you to participate in the movement of the underlying financial assets, providing a partial guarantee of capital, subject to the non-achievement of certain barrier levels established at the time of issue.

bonus

This type of Certificate allows you to participate in the upward (or downward) movement of the underlying asset, while providing additional income as long as the underlying asset does not reach the barrier level.

DISCOVER BONUS

express

Express Certificates have the peculiarity of being able to expire prematurely returning the issue price plus a premium if on one of the predetermined dates the underlying asset is higher than or equal to a predetermined level.

DISCOVER EXPRESS

Twin Win / One Win

Participation in the upward and downward movement of the underlying asset at maturity, subject to the presence of a barrier level which if breached provides less capital protection for the certificate.

DISCOVER TWIN WIN

credit Linked

A product offering the opportunity to achieve regular premiums which are conditional on the state of "non-default" of one or more reference entities.

DISCOVER CREDIT LINKED

digital

Provides a regular income if at the evaluation dates, the underlying asset is at a level equal to or higher than that of initial evaluation. The capital protection is conditional upon failure to reach the barrier level.

DISCOVER DIGITAL

accelerator

A product that participated in the upward or downward movement of an underlying financial asset. The main feature of this certificate is the proportional replication of the underlying trend, as well as the presence of an AirBag which attenuates losses in the event of downward movement.

DISCOVER ACCELERATOR

Premium Certificate

Premium Certificates pay fixed premiums over the life of the instrument regardless of the performance of the underlying asset. At maturity, the capital protection is conditional upon failure to reach the barrier level.

DISCOVER PREMIUM

cash Collect

Cash Collects reward the investor with fixed premiums for a number of months during the life of the certificate. In addition it pays extra premiums for the following months if the value of the underlying asset is equal or above the barrier level. At maturity, the capital protection is conditional upon failure to reach the barrier level.

DISCOVER CASH COLLECT

NON CAPITAL PROTECTED CERTIFICATES

The certificates without capital protection are products that replicate the performance trends in the values of the underlying assets. Some products provide for participation in the underlying movements proportionally.

Benchmark

They replicate, upwards or downwards performance of the underlying financial asset without having a leverage effect.

DISCOVER BENCHMARK

LEVERAGE CERTIFICATES

Leverage Certificates are financial instruments without capital protection that amplify the performance of a Reference Asset by applying a Leverage Factor.

Constant Leverage

Constant Leverage Certificates are financial instruments that offer the opportunity to invest with the aim of replicating the performance of a Leverage Index. The Leverage Index in turn amplifies the daily performance of a Reference Asset (such as, for example, a stock index, a share, a commodity or its related future contract) by applying the Constant Leverage, with an upward (Long Leverage Indices) or downward (Short Leverage Indices) strategy.

DISCOVER CONSTANT LEVERAGE

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The offer of the Securities (the "Offer") is made to the general public in a specific jurisdiction and any offer, solicitation of an offer, distribution of marketing material relating to the Securities will not be made in the United States of America, Canada, Australia, Japan or any other country where such acts are forbidden without specific exemptions or authorizations from the relevant competent authorities (the "Other Countries").

No Offer may be made in the United States of America, or to any citizen, resident, taxable person in the United States of America ("U.S. Person" or "United States Person" within the meaning of U.S. Securities Laws or other relevant local regulations, a US Person) and no distribution of any documents relating to the Offer may be made in the United States of America. The Securities have not been and will not be registered nor under the United States Securities Act of 1993, as from time to time amended, neither under any financial rules applicable in the United States of America. Neither the Securities and Exchange Commission ("SEC") nor any other supervisory authorities in the United States of America has approved or has not approved the issuance and/or the Offer of the Securities or has taken any position as to the accuracy or inaccuracy of the Prospectus and/or the Final Terms/Condizioni Definitive of the Securities. According to the provisions of the United States Commodity Exchange Act, trading in the Securities has not been approved by the United States Commodity Futures Trading Commission ("CFTC").

The Securities have not been and will not be registered under the existing Securities rules applicable in Canada, Japan, Australia or in the Other Countries, and therefore they may not be, directly or indirectly, offered, sold or otherwise delivered in Canada, Japan, Australia and in the Other Countries or to any citizen, resident, taxable person in Canada, Japan, Australia and the Other Countries and the documentation relating to the Offer may not be distributed in Canada, Japan, Australia and the Other Countries. In any event no person, being US Person under the US Securities Laws or under any other local applicable rule or resident in Canada, Japan, Australia and the Other Countries, may join the Offer.
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