A structured note (SN) in which full principal is not protected (guaranteed) at maturity, contrary to a principal protected note (PPN). The holder is enabled to customize risk/ return trade-offs in a way that better addresses his/ her needs. This note provides an alternative to traditional equity holdings: where return is enhanced if the underlying equity appreciates in value- upside potential; and there could be varying levels of capital / principal protection if the underlying loses value- partial downside protection. A holder can customize the level of upside participation and required exposure to equities, as well as the amount of downside protection desired.

Non-principal protected notes can be linked to a variety of underlying equity investments such as equity-based indexes, single stocks, industry sectors, commodities, currencies, and stock portfolios.

Broadly, these notes can be classified in two main groups: long-equity non-principal protected notes (long-equity NPPNs) and options-based non-principal protected notes (options-based NPPNs).