CBA and HSBC told to change structured product adverts

Commonwealth Bank and HSBC have changed their advertising of structured investment products in response to the Australian Securities and Investments Commission's concerns that the material was potentially misleading.

ASIC said in a statement issued yesterday that a Commonwealth Bank brochure that compared direct investment in shares with using a protected loan failed to subtract the interest cost of the loan.

The brochure said protected loan customers could "walk away with no loss" at maturity if share prices fell. ASIC said this was potentially misleading because the cost of the loan and the protection were not considered.

ASIC said warnings that said returns could be negative because of interest costs were not prominent enough.

ASIC said HSBC's website material promoting certain structured products was inappropriate because it created the impression that the investments were low risk and comparable to bank deposits. "For some products this was not the case," it said.