A synthetic security in which the payoff is based on the performance of an individual stock or an equity index. The underlying equity of performance-linked-to-equity-securities (PERLES, for short) is typically a foreign investment to the holders. This structure is particularly attractive to investors seeking to avoid withholding taxes. The PERLES belongs to the performance product category which serves the needs of investors with medium to higher risk tolerance. Typically, these investors seek to obtain an access to a specific equity market or to outperform an underlying equity. Investors can use this product to replicate the performance of the underlying equity and the at the same time to gain a full participation in its upside or downside movement without any protection. In other words, the PERLES product provides investors with easy and efficient access to an equity investment with unlimited upside participation as well as straightforward and flexible trading in the secondary market. However, if the underlying has declined, the investor is exposed to the full downside risk without any protection.

The redemption (principal repayment) of this product is linked to the performance of the underlying equity.