HSBC France € 20,000,000,000 Euro Medium Term Note Programme

any Note as a result of the imposition of such withholding tax. If a withholding tax is imposed onpayment made by a paying agent, the Issuer will be required to maintain a paying agent in a MemberState that will not be obliged to withhold or deduct tax pursuant to the Savings Directive.The European Commission has proposed certain amendments to the Savings Directive which may, ifimplemented, amend or broaden the scope of the requirements described above.Investors who are in any doubt as to their position should consult their professional advisers.U.S. Foreign Account Tax Compliance Withholding may affect payments on the NotesSections 1471 through 1474 of the U.S. Internal Revenue Code (FATCA) impose a new reportingregime and potentially a 30% withholding tax with respect to certain payments to any non-U.S.financial institution (a "foreign financial institution", or "FFI" (as defined by FATCA)) that (i) does notbecome a "Participating FFI" by entering into an agreement with the U.S. Internal Revenue Service(IRS) to provide the IRS certain information in respect of its account holders or (ii) is not otherwiseexempt from or in deemed-compliance with FATCA. The new withholding regime will be phased inbeginning in 2014 for payments received from sources within the United States and will apply to"foreign passthru payments" (a term not yet defined) no earlier than 2017. This withholding wouldapply to (i) any Notes characterized as debt (or which are not otherwise characterized as equity andhave a fixed term) for U.S. federal tax purposes that are not yet outstanding as of the date (the"grandfathering date") that is six months after the date on which final U.S. Treasury regulationsdefine the term "foreign passthru payments" or are materially modified after the grandfathering dateand (ii) any Notes characterized as equity or which do not have a fixed term for U.S. federal taxpurposes, whenever issued. If Notes are issued before the grandfathering date, and additional Notes ofthe same series are issued on or after that date, the additional Notes may not be treated as exempt fromFATCA Withholding, which may have negative consequences for the existing Notes, including anegative impact on market price.The United States and a number of potential partner countries have announced their intention to enterinto intergovernmental agreements to facilitate the implementation of FATCA (each, an IGA), andafter consultation with these countries, the United States released a model IGA. Pursuant to FATCAand the model IGA, an FFI in an IGA signatory country could also be treated as a "Reporting FI" notsubject to FATCA withholding on any payments it receives. Such an FFI would also not be required towithhold under FATCA or an IGA (or any law implementing or complying with, or introduced in orderto conform to an IGA) (FATCA Withholding) from payments it makes, but the model IGA leavesopen the possibility that such an FFI might in the future be required to withhold on foreign passthrupayments that it makes. A Reporting FFI would be required to report certain information in respect ofits account holders to its home government.If the Issuer becomes a Participating FFI under FATCA or a Reporting FI pursuant to an IGA, theIssuer and financial institutions through which payments on the Notes are made may be required towithhold FATCA Withholding if (a) any FFI through or to which payment on such Notes is made isnot a Participating FFI, a Reporting FI, or otherwise exempt from or in deemed-compliance withFATCA or (b) an investor (other than an exempt investor) does not provide information sufficient todetermine whether the investor is a U.S. person or should otherwise be treated as holding a "UnitedStates Account".If an amount in respect of FATCA Withholding were to be deducted or withheld from interest,principal or other payments on the Notes, neither the Issuer nor any paying agent nor any other personwould, pursuant to the conditions of the Notes, be required to pay additional amounts as a result of thededuction or withholding of such tax. As a result, investors may receive less interest or principal thanexpected. If any FATCA Withholding is imposed, a beneficial owner of Notes that is not a foreignfinancial institution generally will be entitled to a refund of any amounts withheld by filing a U.S.38