HSBC 2010 Annual Report Download - page 341

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Overview Operating & Financial Review Governance Financial Statements Shareholder Information
All the above subsidiaries are included in the HSBC consolidated financial statements.
Details of all HSBC subsidiaries will be annexed to the next Annual Return of HSBC Holdings filed with the UK
Registrar of Companies.
All the above make their financial statements up to 31 December except for HSBC Bank Argentina S.A., whose
financial statements are made up to 30 June annually.
The principal countries of operation are the same as the countries of incorporation except for HSBC Bank Middle
East Limited which operates mainly in the Middle East and HSBC Life (International) Limited which operates
mainly in Hong Kong.
Subsidiaries which experience significant restrictions on their ability to transfer funds to HSBC in the form of cash
dividends or to repay loans and advances
During 2010 and 2009, none of the Group’s subsidiaries experienced significant restrictions on paying dividends or
repaying loans and advances.
Subsidiaries excluding SPEs where HSBC owns less than 50% of the voting rights
At 31 December 2009, HSBC consolidated HSBC Private Equity Fund 3 (‘HPEF3’) but only had a 38.8% interest in
its equity capital. HSBC had control under IAS 27 because it was the investment adviser/manager of the fund and had
a significant equity interest.
On 30 November 2010, the Group completed the sale of an 80.1% interest in HSBC Private Equity (Asia) Limited
(‘HPEA’) to HPEA’s management. As a result, the Group no longer controls HPEF3. The Group previously
consolidated HPEF 3 by virtue of its control over HPEA, which in turn controlled HPEF3. Upon deconsolidation, the
group retains its 38.8% interest in HPEF3 as an available for sale investment. HPEF3 has been renamed The
Headland Private Equity Fund 3 Limited.
SPEs consolidated by HSBC where HSBC owns less than 50% of the voting rights
Carrying value of total
consolidated assets Nature of SPE
2010 2009
US$bn US$bn
Barion Funding Limited ................................................................. 4.5 4.4 Structured investment conduit
Bryant Park Funding LLC .............................................................. 3.0 3.8 Conduit
HSBC Affinity Corporation I ......................................................... 4.2 4.9 Securitisation
HSBC Auto Receivables Corporation ............................................ – 1.3 Securitisation
HSBC Corporate Money Fund (Euro) ........................................... – 0.8 Money market fund
HSBC Funding Inc V ..................................................................... 5.4 5.3 Securitisation
HSBC Home Equity Loan Corporation I ....................................... 2.8 3.1 Securitisation
HSBC Home Equity Loan Corporation II ...................................... 2.8 3.3 Securitisation
HSBC Investor Prime Money Market Fund ................................... – 10.7 Money market fund
HSBC Receivables Funding, Inc I ................................................. 3.7 5.4 Securitisation
HSBC Receivables Inc Funding II ................................................. 2.0 1.8 Securitisation
HSBC Sterling Liquidity Fund ....................................................... – 7.5 Money market fund
HSBC US Dollar Liquidity Fund ................................................... – 23.4 Money market fund
Malachite Funding Limited ............................................................ 3.9 4.3 Structured investment conduit
Mazarin Funding Limited ............................................................... 10.3 11.3 Structured investment conduit
Metrix Funding Ltd ........................................................................ 1.4 3.7 Securitisation
Metrix Securities plc ....................................................................... 1.0 4.2 Securitisation
Regency Assets Limited ................................................................. 6.3 6.8 Conduit
Solitaire Funding Ltd ...................................................................... 13.5 12.8 Conduit
Turquoise Receivable Trustee Ltd ................................................. – 0.5 Securitisation
In addition to the above, HSBC consolidates a number of individually insignificant SPEs with total assets of
US$10.6bn. For further details, see ‘Special purpose entities’ on page 361.
In each of the above cases, HSBC has less than 50% of the voting rights, but consolidates because it has the majority
of risks and rewards of ownership of the SPE, or the substance of the relationship with the SPE is such that its
activities are conducted on behalf of HSBC according to its specific business needs so that HSBC obtains benefit
from the SPE’s operation. The consolidation of SPEs sponsored by HSBC is discussed on page 251.