Financial instruments and related risks
Each investor is willing to maximise the returns on investment. However, there is always a risk that the overall return on investment may be negative, which means that the result of the investment in such a case would be a loss or the whole investment sum may be lost.
In providing investment services SEB Bank has divided financial instruments into five risk categories.
Financial instruments are classified according to their type, complexity and investment risk. Very low risk financial instruments tend to have a fairly simple structure, and the risk they involve is the lowest, whereas very high risk financial instruments tend to have a more complex structure and involve the highest risk.
An equity (also called a share, stock) is a security that represents a proportional share in the equity capital of a company and provides its owner – the shareholder – with certain rights. There are two main types of equities: common stock and preferred stock.
Bonds are debt instruments with which an investor loans money to an entity for a defined period at a floating or fixed interest rate. Bonds are used by companies, municipalities, states and sovereign governments to raise money and finance a variety of projects and activities.
Exchange traded products
One of the products - exchange-traded fund (ETF) which is similar to an investment fund because it is a pool of funds provided by investors which are used for investment into underlying assets, but unlike a regular investment fund ETFs are traded on the stock exchange similarly to equities.
An investment fund is a pool of assets established for collective investment and generally with no maturity. An investment fund usually has numerous investors and the fund is managed by a management company. When investing in a fund, your assets are usually placed into many different asset classes, such as equities, bonds or alternative asset classes. It reduces the effect of a single investment in the asset pool.
Derivative instruments, such as options, forwards, futures, etc., is a contract between two or more parties to buy or sell underlying assets including equities, bonds, commodities, currencies, price indexes etc. Derivative contract may or may not include delivery of the underlying asset.
What should I know before I start investing if I am married?
According to the Lithuanian legal acts it is presumed that invested and other assets acquired in marriage are considered to be a joint ownership of the spouses, except for cases when the spouse proves that the assets belong to him / her by personal ownership.
Orders to transfer the securities belonging by joint ownership or restrict the rights to them should be submitted by both spouses jointly, except for cases when one of the spouses provides an authorization issued by the other spouse.
The authorization of a spouse to enter into a transaction in respect of the securities admitted to trading on a regulated market or multilateral trading facility, as well as in respect of redemption of units or shares of a collective investment undertaking may be issued in a written form.
A written authorization is accepted if it is signed in the bank‘s branch or is signed digitally (Smart-ID or m-signature). A spouse’s authorization regarding transactions to transfer of other financial instruments or to restrict the rights to them shall be duly notarised.
Taxation of investment return
Income from investments must be declared with relevant tax authorities.
The taxation depends on the client‘s personal situation. Taxation regimes may vary depending on, for instance, the investor’s tax residency, legal form, income type or other circumstances. Taxation rules may provide favourable tax incentives for investing in some type of securities.
For more specific information, please consult the tax office of the jurisdiction relevant to you or contact your tax advisor. Please note that the bank does not advice on taxation matters. Information provided by the Lithuanian tax authority may be accessible from the following source.
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We recommend that you carefully read the terms and conditions of any financial services contract and, if necessary, consult the bank's staff before entering into any agreement.
This document contains information of a promotional nature about the investment services provided by SEB. This information shall not be construed as a recommendation, instruction or invitation to buy or sell specific financial instruments or to use a specific investment service and shall not form the basis of, or form part of, any subsequent transaction. Although the content is based on sources believed to be reliable, SEB shall not be liable for any inaccuracies or losses that may arise from such information. Information relating to taxation may change in the future and may not be suitable for your particular case. Returns on investments are subject to risk and may decrease or increase in value and the fact that returns have been positive in the past does not mean that they will continue to be so in the future. In some cases, losses may exceed the amount of the original investment. If the Funds or you invest in financial instruments denominated in foreign currencies, changes in exchange rates may affect the return on your investment. You are responsible for the investment decisions you make and before making them you should familiarise yourself with the detailed information, inter alia, prospectuses, key information documents and other information on the Funds, structured products and other financial instruments available at www.seb.lt. Please note that the services mentioned herein are not intended for investors in jurisdictions other than those of SEB Bank's branches providing these services and that it may be unlawful to offer investment opportunities, to authorise investments and to invest in locations in certain jurisdictions, including the United States of America, Canada, Japan and Australia. SEB Bank may not provide investment advice, promote investments or offer or solicit investments where it may be illegal to do so. If you reside in, or read the information on this website from a location outside the same jurisdiction as the SEB Bank branch providing the information, you are responsible for compliance with any laws and regulations to which you may be subject. Please contact the Bank's staff for further information.