NAB has prepared this guide for those considering investing in Hybrids issued by a Bank. NAB hopes this guide will help investors understand how Hybrids work, their key features and some of the key risks of investing in them.
Hybrids are complex securities and may not be suitable for all investors. The Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Act 2019 requires a Bank to issue a Target Market Determination in relation to any Hybrid it proposes to issue to retail investors on or after 5 October 2021. A Target Market Determination for a Hybrid will describe who the Hybrid may be suitable for based on likely needs, objectives and financial situation (target market), and will also set out who can distribute the Hybrid, how they can do this and situations when the Bank may need to review the target market.